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Detroit Auto Industry: Reckoning to Revival
Post-Crash Site

Five Scenes of a New Life

President Barack Obama greets auto workers during his visit to the Jefferson North Chrysler Plant in Detroit, Friday, July 30, 2010, where the Jeep Grand Cherokee is assembled. Photograph by Pablo Martinez Monsivais/AP

Chrysler CEO Sergio Marchionne drove the first new Jeep Grand Cherokee off the line at a ceremony on May 21, 2010, echoing Bob Lutz's famous roll-off 18 years earlier. This time, the breakthrough did not come via a glass wall. Rather, it was what the boss had to say.

"We are anticipating strong market acceptance of the Grand Cherokee," Marchionne said from a stage set up on the factory floor. "And in line with that, beginning on July 19, we will add a second shift, consisting of nearly 1,100 people, to Jefferson North."

The workers rose from their seats and roared.

Scott Garberding, the purchasing chief who had to cut off lawn service to Jefferson North a year earlier, said that was the moment he knew Chrysler would survive. "Here we were with the company's first new product after the bankruptcy and we all knew at this point that it was really good," said Garberding, now the highest-ranking former Chrysler executive at Fiat (F). "That's a day that will always stick with me because it was just so electric being in the plant. It was really very satisfying for us to all have gotten that far when it seemed like the whole world was betting against us."

Two months later, on July 30, 2010, it was President Obama's turn to take the stage at Jefferson North. He stood before the metal shell of a Jeep Grand Cherokee and declared: "You are proving the naysayers wrong."

Sergio Marchionne, chief executive officer of Chrysler LLC, speaks to the media following an event to celebrate the production launch of the 2011 Jeep Grand Cherokee at Jefferson North Assembly Plant on Friday, May 21, 2010. Photograph by Jeff Kowalsky/Bloomberg Close

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Sergio Marchionne, chief executive officer of Chrysler LLC, speaks to the media following an event to celebrate the production launch of the 2011 Jeep Grand Cherokee at Jefferson North Assembly Plant on Friday, May 21, 2010. Photograph by Jeff Kowalsky/Bloomberg

Reckoning to Revival: Rebuilding the U.S. Auto Industry
Ch. 1 Buckle Up: The Potholes Stay Where They Are
Ch. 2
Off-Road: The SUV's Ride From Peak to Valley
Ch. 3 Recalculating: Failed Talks and an Italian Wedding
Ch. 4 Rearview: Obstacles Closer Than They Appear
Ch. 5 Done Dealership: Collateral Damage to a War Hero
Ch. 6 Idling: Father and Son Live Through Layoffs
Ch. 7 Recall: Insourcing Workers From Detroit
Ch. 8 Trim: Moving the Assembly Line Outside
Ch. 9 High Gear: A New Jeep Every Minute
Ch. 10 Differential: The Divide Over Wages
Ch. 11 Ignition: 'Isn't That What America Is All About?'
Post-Crash Site: Five Scenes of a New Life

Ten months later, Chrysler posted its first quarterly profit in five years, earning $116 million in the first quarter of 2011, thanks in large part to the success of the Grand Cherokee. This year, Chrysler said it will earn as much as $2.2 billion. And those profits come from more than just SUVs and trucks. Like its Detroit rivals, Chrysler now offers its best lineup of cars in a generation.

When final sales results are in, the Detroit Three will probably all gain market share in the U.S. for only the second time in the last 20 years. Ford (F) recently raised its pretax profit prediction to more than $8 billion for this year.

On May 24, 2011, Marchionne mounted another factory stage, this time at a Chrysler car plant about 20 miles north of Jefferson North. By his side was Ron Bloom, then head of the automotive task force Obama had assembled to lead Chrysler and GM (GM) through bankruptcy. Behind them hung a red, white and blue banner that read "PAID" in large letters.

Video: GM's High-Tech Advantage: The Connected Car

Marchionne announced that Chrysler had that day paid back $7.6 billion in government loans it received for its rescue. The payment was made six years early. The scene was reminiscent of Lee Iacocca's dramatic early payback of his government bailout in 1983, staged before an enormous check, with the chairman raising a glass of champagne.

Yet Marchionne's tone was more measured, befitting a company that had faced its own mortality. "I urge you to never forget the experience we've been through," he told a subdued audience.

"We have collectively found the strength to fight against a death sentence put on our company from the very beginning," he said in his sotto voce Italian accent, a "PAID" button affixed to his crewneck sweater. "We found within ourselves the courage to act and to reverse our fate. And now we're living, day by day, a new life based on what we have learned from that experience."

The experience has changed Mark Harrington. He's more astute about the business side of his job. He has become acutely aware that the profit the Grand Cherokee generates puts Jefferson North at the top of pecking order. "If we were running out of transmissions," he said, "they would send them to us first."

These days, Harrington works as many as 60 hours a week, but he has no complaints about the pace. After all, anything over 40 hours a week is time-and-a-half, or about $42 an hour. So 60-hour weeks translate into annual earnings of more than $100,000. "You learn from bankruptcy, there's no such thing as too intense as far as working and getting a paycheck," he said.

The biggest lesson he learned was from his father: that there will always be a Chrysler. "We're not going anywhere," he said.

For chief designer Ralph Gilles, the moment he became convinced his company had a future came in a darkened conference room at headquarters, when he first was shown the commercial Chrysler crafted to introduce his creation. The 60-second spot was about more than a new model. It was a manifesto for a company -- and an industry -- on the crest of taking wing again.

Graphic: Sexy Sells: Detroit Booms on Stylish Vehicles

"The things that make us Americans are the things we make. This has always been a nation of builders," the ad's voice-over intones to the sound of clanging metal, with black and white images of factories, skyscrapers and World War II Jeeps.

"As a people we do well when we make good things and not so well when we don't. The good news is, this can be put right. We are ready. We are willing. And we are able. We just have to do it.

"And so we did."

A silver Jeep Grand Cherokee crashes through a raging river and blazes a muddy trail into the deep woods.

"This, our newest son, was imagined, drawn, carved, stamped, hewn and forged here in America. It is well-made and it is designed to work.

"This was once a country where people made things, beautiful things.

"And so it is again."

When the lights came up, Gilles had tears in his eyes.

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