I know that all of us in this room share in the admiration for the skill, courage and passion that made Dan a champion. As deserving as the award you have just received may be, Susie, we join you in mourning this tragic loss.

I want to say thank you for the kind words you used in introducing me tonight, and for the invitation to be part of this World Congress.

Starting speeches in a setting like this is always difficult. Especially directed to an audience that has just enjoyed a full meal and three exhausting days at an incredibly successful Detroit Auto Show.

And it is especially difficult for me, having just finished the year with an inordinate number of awards and flattery directed at me as a person and to Chrysler for the execution of its turnaround plan in 2011.

And so, I have decided to open up with a parable, the kind of story that is a mixture of fiction and reality and that we use to learn life lessons and pass them on to future generations.

It is a story about husbandry, a noble profession devoted to the breeding of crops and animals.

In this profession, the terms service or servicing are used to refer to the act of procreation or copulation between animals. So, for example, when a stallion mates with a mare, it is said that the stallion services the mare.

This parable is a story about bulls and cows, and it starts with three bulls that are grazing in a vast expanse of the Canadian prairies. A young bull, a middle aged bull and a much older one.

All of a sudden the young bull notices a group of appealing, attractive cows at the bottom of the hill, and he turns to the other two and says, “Let us run down the hill and service all those cows.” The more experienced and sensible middle-aged bull answers, “Let us walk down and service a few.”

And the road-tested old bull tops it all off by saying, “If we hide in the tall grass, maybe they will not see us.”

The moral of this story is simple.

There are times when hiding in the tall grass is the most sensible posture to take, and 2012 for me is the year.

The string of achievements we at Chrysler pulled off in 2011 cannot be replicated and we should not suffer from any illusions that we can. Starting with the Imported from Detroit Super Bowl ad in February to the December sales close, with U.S. sales up 37% for the month and 26% for the whole of 2011, we hit a number of balls right out of the park.

This string cannot be replicated.

And so, in 2012, the marching orders are for all of us, to keep our heads down, stay humble and keep on pushing.

Any other posture carries with it the inherent risk that we will be the victims of a servicing act by our competitors. Not a pleasant prospect, at best.

As an aside, just to load you up with cocktail conversation material, you should know that financial institutions use the terms service or servicing to refer to their relationship with their clients.

Which finally explains the high degree of discomfort I have always felt after a meeting with bankers on Wall Street.

Also, Keith, I would be remiss if I didn’t thank you for your holiday present, even though I know in my heart that the fruitcake was re-gifted.

As I understand your theory, there are only six or seven fruitcakes that exist, and they keep getting passed around, since no one actually eats them and they are basically indestructible.

So I think I can accurately predict that you will get this fruitcake back at some future occasion.

Just remember one thing, Keith, it’s the thought that counts.

But now enough with levities.

Good evening, ladies and gentlemen.

I had the privilege to speak to the World Congress two years ago.

Some, not many, things have not changed since then.

For example, my wardrobe choice.

Aside from my preference for black on black, many events over the past two years were not foreseeable, proving again something which I have always believed in, that the only constant is change.

Two years ago, no one could have forecast a massive oil spill would occur in the Gulf of Mexico, a tsunami would devastate Japan, and that protest movements would overthrow longstanding regimes in the Arab world.

All of these events deeply affected the lives of millions of people, and their effects have rippled through our business world with outcomes which are still unclear.
They also are a good reminder to us about the hazards of predicting the future.

Recently, a journalist, apparently younger than me, wrote this in the Montreal Gazette:

“As a child of the ’80s, I grew up with predictions of flying cars, space as the next suburban neighborhood, and domesticated robots to do all the housework. This was all going to happen by the dawn of the new millennium, but I have yet to see a flying car (although we are getting closer), no humans are living on Mars, and nobody I know has a robotic servant. No one can argue that civilization has not come a long way, but futuristic dreams have given way to survival and prevention … We are in the midst of a fascinating paradox. We face environmental, financial, technological and societal turmoil, but we are living in an era of remarkable transformation.”

Now, if you expect to hear about flying cars, I’m afraid you wandered into the wrong session.

What I really want to talk about is the need for what the writer referred to as “an era of remarkable transformation.”

I believe we are in a time of historical challenges for our industry, for our society, and for our planet. A time that demands that we think boldly about transformation, and not just traditional, incremental changes.

I believe the job ahead requires us to maximize our intelligence, our creativity and our ability to work together in order to imagine and build a more manageable new future.

I want to begin with a look at some of the economic forces that will affect our fate in the year that has just begun, recognizing that the uncertainty hanging over the global economies makes it difficult to provide reliable insight into what the future holds in store.

The current situation doesn’t favor a business like ours – an industry that is extremely capital intensive, requires thorough medium- and long-term planning, and is highly sensitive to economic downturns.

Today there are two significant threats fuelling fears on either side of the Atlantic: the specter of a faltering recovery in North America and the sovereign debt situation in Europe.

In the past five years, the certainties and points of reference that we had been able to construct for ourselves from the end of the Second World War were abruptly swept away.

As often happens in such dark moments, we went on the search for the guilty ones.

But I believe a different perspective is needed. We need to look further back in time, if we are to find the explanation for what we are currently living through.
The current uncertainty is a by-product of the improper, or at best incomplete, execution of two large experiments.

The first, clearly driven by the United States, had as a clear objective the liberalization and deregulation of financial markets.

The second, concocted in Europe, proposed the Single Market and Single Currency as THE solution to the political instability that had characterized Europe for hundreds of years and resulted, as a final act, in the tragic manifestation we know as WWII.

The first experiment brought us close to Armageddon.

The second has the potential to finish the job.

Just to put people’s minds at rest, I am not here to preach doom and gloom. In fact, I don’t subscribe to the more pessimistic scenarios.

Many Americans are very critical of their elected officials in Washington, and perhaps rightly so, because of the inability to reach consensus on balancing the budget and stimulating the economy.

The U.S. economic recovery has been agonizingly slow, but that is not unexpected considering the body blow that it took.

It is a sobering fact that the net home equity in American homes declined from $12.9 trillion during the housing bubble in 2007 to $6.2 trillion in 2011. A total of $6.7 trillion in household wealth was vaporized. To put it into perspective, that amount represents more than the 2010 total Gross Domestic Product of China.

This severe setback represents an important reason that U.S. new-vehicle sales have risen only modestly the past two years.

Notwithstanding the magnitude of the setback that the economy as a whole and the automotive sector in particular suffered in 2008 and 2009, the rebuilding of the U.S. automotive business over the past three years has been driven by a profound sense of responsibility coupled with extraordinary determination and resolve by everyone involved in the process, trade unions included.

The end result of this painful reconstruction has been good.

We’ve seen the pace of new-vehicle sales pick up in the past few months, with one factor being replacement demand, as the average age of vehicles on American roads is now at an all-time record of more than 10 years.

There are several other reasons for optimism about 2012, with consumer confidence creeping up and employment recovery beginning to gain momentum. Home sales are rising, as is spending on durable goods, especially cars.

So the trend is upbeat, even if total vehicle sales will still remain below the pre-recession levels.

Twenty-six months ago, when the new Chrysler Group revealed its five-year plan, we actually forecasted a U.S. market of 12.7 million vehicles in 2011, and the final number came in at 12.8 million — close enough for horseshoes and hand grenades.

Not too many years ago, the U.S. industry looked at a 16 million SAAR as a permanent fixture in the landscape.

Yet it endured a level of industrial inefficiency that yielded negative margins in the sale of vehicles, with positive margins coming from related activities such as financing.

In response to the recession in North America, all the players found the courage to make transformational changes. Automakers, governments, suppliers and labor unions faced up to the need to create a leaner, more competitive paradigm.

During the restructuring of the industry, every ounce of unnecessary capacity was taken out of the system.

The U.S. industry has been retooled to the extent that, speaking at least for Chrysler but probably for the other Detroit players, we can survive at a 10 million SAAR.

Making and selling great cars is once again at the center of the business, as it should be. The important thing is to maintain the discipline that the restructuring forced in 2008 and 2009.

While the pace of America’s economic bounce-back may be disappointing to some, you need to realize that you don’t always have to be good looking to win a beauty contest.

Sometimes, just being the least ugly person on the podium is enough. That is why the U.S. looks very attractive compared with the slowdown in emerging markets and the crisis in Europe.

The real problem we face right now on a global scale is Europe.

The Euro crisis, the currency itself and the alleged union it represents, are clearly the single largest issues causing nervousness in markets around the world.

Even though the European community is facing one of the most difficult periods since formation of the Union, the political priority for many member states is to resolve their internal issues.

This focus on narrow national interests creates the serious risk of destroying the dream of unity and solidity upon which the European Union was founded.

We keep hearing political leaders say that they are willing to embrace financial rigor and discipline, but we have yet to see how these austerity plans will be carried out. Some tough medicine will need to be part of the solution.

It’s an issue we are watching very carefully to understand the risks it poses to the market in general and the auto sector in particular.

The fallout from a European recession would not be confined. It would spread to North America, impacting banks and leading to a tightening of credit, as well as to a decline in U.S. exports to the Eurozone.

We can only make contingency plans to deal with the consequences and hope that we get a timely resolution.

But the current state of affairs also offers Europe a great opportunity to transform its structure and take its future into its own hands, to choose the path of political and economic union, in addition to monetary union, and to finally delineate a clear and well-defined arrangement that can sustain a prosperous future.

When Chrysler underwent its rebirth and entered into an alliance with Fiat in June 2009, Chrysler was barely off of life support and it was the U.S. economy that was a disaster.

Yet by 2011, Chrysler was back in the black, with operating profit expected to reach $2 billion.

Our sales and market share showed significant gains in both the U.S. and Canada. Independent surveys confirm that quality is markedly improved.

The company paid back every cent of its U.S. and Canadian government loans, with interest, six years early, rewarding the faith shown in us and freeing us to chart our own destiny.

The payback also cleared the way for Fiat to acquire a majority stake in Chrysler and the formation of a single leadership team for Fiat-Chrysler.

And because of the weakness of the European auto market, it was Fiat’s Brazilian operations and the profits from Chrysler that helped sustain Fiat.

In less than three years, the tables have turned as far as regional economies go. But the underlying rationale for the partnership remains the same: to create the mass and the efficiencies demanded by global competition.

The U.S. recession provided critical impetus to address structural issues that the industry had dragged behind it for years. Issues such as wastefulness, brand-destroying marketing strategies, and – at the root of it all – chronic overcapacity.

The Fiat-Chrysler relationship is a response to mutual opportunity designed to create value by leveraging the unique benefits each group could bring to the other.

Europe has so far failed to come to grips with overcapacity and is in denial over the reality that the natural level of sales will be lower in the next several years.

As Fiat and Chrysler go forward, our international presence will help us remain flexible to take advantage of changing conditions in different markets, giving us alternatives to supply production as long as we can maintain the same level of manufacturing integrity throughout the system.

From the beginning, we believed Fiat and Chrysler offered unique benefits to each other and that we could achieve possibilities that would elude either one of us alone.

Fiat provided Chrysler with technical know-how and important leadership skills honed from its own recovery from a near-death experience, just a few years earlier.

Chrysler’s leadership proved to be equally courageous in embracing the challenge to shape their own future. They understood the need for step changes in productivity, quality and speed, not just marginal improvements.

For Chrysler’s leadership team, this reimagining of the future meant going beyond long-time habits and traditional paths.

The first thing we did was to flatten the organization like never before in order to create a fast-moving team. Leaders took on broad spans of control to expedite decision-making, and about two dozen people reported directly to me as CEO.

We began implementing World Class Manufacturing, or WCM, which was pioneered by Fiat, a true step change that is based on a maniacal desire to remove waste from production processes.

WCM represents a radical change on the factory floor, and its success in improving safety, efficiency and quality relies on the intelligence, experience and creativity of the people who work in our plants.

In order to change the conversation about our products, we challenged our organization to bring out 16 all-new or substantially refreshed products.

You may have heard the story before, about how we accomplished this in only 19 months. It’s become sort of a mantra.

But the speed and the quality of that execution were beyond any conventional expectation. It took a fearless team effort to bring about such remarkable results.

We understood that consumer attitudes about Chrysler lagged behind the new reality that we were building. In order to draw attention, we set out to break the mold when it came to advertising.

Out-of-the-box thinking led us to approach Eminem, who had never before appeared in a commercial, and to craft a Chrysler 200 ad that paid homage to our industrial roots in Detroit and celebrated the resilience of the people who make up our Group, people who have been to hell and back and yet aspire to create a better future.

With this commercial, we took a chance and became the first marketer to run a two-minute commercial on the Super Bowl. It was a calculated, all-or-nothing risk. In fact, we needed special permission from the network and league to delay resumption of the game to run the spot.

As you know, the commercial was wildly popular during the game and on Youtube, it has surpassed 21 million views. It also won the award at the Cannes International Advertising Festival in France as the best automotive commercial in the world.

Some critics questioned whether it would also move the metal. The answer is in the numbers. For the full year, the Chrysler 200 ended up outselling its predecessor by 127 percent.

Another area where we have sought to create a new paradigm is in labor negotiations.

History has taught us that the old adversarial relationships will lead us all on a path of irrelevance in today’s global market. As Martin Luther King Jr. said, “We must learn to live together as brothers or perish together as fools.”

Our negotiations with the UAW were tough, but in the end both sides realized we could not afford to repeat the mistakes of the past, the same mistakes that brought us to bankruptcy. It would have been shameful to squander the incredible second chance that we had received from taxpayers.

All of our people, represented and non-represented, have worked together with unwavering dedication to bring Chrysler back from the brink. And it is only right that all should share in the success so far and in the wealth that we hope to create in the years ahead.

At the same time, we know that success is never assured. Our industry is cyclical, and we cannot leave ourselves vulnerable by taking on fixed costs that constrain our ability to survive inevitable downturns.

I believe the four-year agreement we reached with the UAW moves us toward this new path, and it is my hope it represents a new era that will yield positive results.

Last month, Fiat also reached a historic contract with Italian Unions that cleared the way for significant investments in that country. The key to the agreement was a common understanding that we collectively needed a new approach that reflects global standards for competitiveness.

Underlying all of the changes I have cited has been a transformation of culture at both Fiat and Chrysler.

We are bound together by values that are at the core of our organizations:

• honesty and integrity in our choices
• humility and respect in our dealings with others
• and an understanding that our actions have consequences far beyond the office walls.

These values are vital to us being able to confront the future.

They underpin our attempt to forge an international alliance.

We are cognizant that it is an enormous challenge, to bring together the best of the two groups without repudiating the distinct identities of either Fiat or Chrysler.

Rather than a merger that creates a homogenous entity, we are creating a mosaic, in which each piece keeps its identity but contributes to the whole picture.

Over at Cobo Hall, during the North American International Auto Show, you can see a significant proof point of what the alliance is capable of producing.

The all-new 2013 Dodge Dart C-Class sedan is the first Chrysler Group vehicle to feature a Fiat-derived architecture.

The Dart is based on the Alfa Romeo Giulietta, with its dimensions made wider and longer for American drivers’ preferences.

It’s an important product in and of itself because the C-sedan market is the biggest retail segment in the U.S., about 1.6 million vehicles, and for the first time in a long while we will have a competitive vehicle in that crowded field.

The Dart also is significant because it is the acid test of our ability to successfully execute the kind of technology transfer on which our collective future depends. By 2014, a majority of Chrysler’s worldwide car volumes will be based on donor architectures from Fiat.

Finally, the Dart represents a big step in fulfilling the commitment made by Fiat to help Chrysler introduce its fuel-efficient cars and engines to the North American market.

The fuel efficiency challenge is one of the biggest issues facing the industry, and not just because of daunting government regulations.

As an industry, we need to look beyond the narrow interests of our industry and embrace ecological responsibility because we owe it to future generations.

I believe in our industry’s ability to find solutions. Even with traditional combustion engines, we have only skimmed the surface of the ability to squeeze out higher fuel efficiency levels, allowing us to extract much more power out of smaller displacements.

I believe that if we unleash our engineering talent, we can find solutions that are both in line with sustainable mobility while also meeting the desires of our customers for vehicles that are a pleasure to drive.

As an industry, we can choose to reject the notion that we can’t do it.

We can choose instead to adopt the attitude expressed by the author Thomas Carlyle, who said, “Every noble work is at first impossible.”

The fuel-economy issue brings into focus an even larger question for all of our businesses: finding the equilibrium between industrial logic and social responsibility.
I will not pretend that the answer is easy. Philosophers, going back at least as far as Aristotle, have debated what makes a good person and a good citizen.

The question, “What makes a socially responsible company?”, has as many answers as there are business enterprises.

What is important is that the question itself must be part of our decision-making process.

In the end, our real focus is humanity, and the societies in which we live.

This is not an argument against the power and the necessity of free markets.

Capitalism rewards creativity and encourages people to develop their abilities to the fullest. The quest for profits drives our economic progress.

We have not found a better system to improve the standard of living for societies.

Profits allow us to employ workers and pay taxes that sustain schools and services. It creates wages that ripple through the economy, enabling other businesses to thrive.

Global competition forces us to focus our attention on eliminating waste.

The economic ups and downs of the past several years have driven home this absolute need for efficiency.

Ensuring survival is a paramount requirement for every business. It was the crucial consideration for both groups in the Fiat-Chrysler alliance.

However, market forces alone can’t solve larger social issues. In fact, they can be merciless if they are not influenced by human values such as integrity, compassion, and appreciation for people and for nature.

Globalization and the advance of technology increase efficiency, but they also contribute to the social crisis we are seeing in many parts of the world, from the Arab uprisings to the protests that formed spontaneously in many European countries and to the Occupy Wall Street movement.

Some commentators have begun referring to our times as the “age of outrage.”

In emerging markets, we see people fighting for their piece of the wealth created by globalization.

In mature markets, we see people who have been dislocated, robbed of their jobs, security and dignity by large global forces that they did not create.

Time magazine declared “The Protester” as its “Person of the Year.”

In explaining its selection, Time wrote: “All over the world, the protesters of 2011 share a belief that their countries’ political systems and economies have grown dysfunctional and corrupt – sham democracies rigged to favor the rich and powerful and prevent significant change.”

The fact is, even if we look at this trend only through the lens of business, this anger can have a significant impact.

Political instability is disruptive to an economy, and it discourages investment.

Taking this to an even higher level, a free society that wants to endure has a vested interest in supporting those affected by changes caused by movements in the market.

A factor that has heightened dissatisfaction is the realization that the gap between rich and poor has become a gulf. Anger is fueled further by the fact that some of the main architects of our economic mess walked away unscathed.

Some income inequality is a natural result of markets that operate freely.

But it is the narrowing of income gaps that creates mass markets for products such as new cars and trucks.

According to a study released a few months ago by the International Monetary Fund, societies with larger income inequalities find it harder to sustain growth. People on the lower end of the income continuum lack the finances to invest in education and entrepreneurial activity.

On the other hand, broad-based prosperity provides the fertile ground for long-term growth.

These issues call into focus the moral responsibility of our actions.

The leaders at Fiat and Chrysler recognize the need to respond in a way that helps our time become an age of hope and action.

Our actions start at home.

Our two groups have home countries that are integral to their identities.

Fiat has historic ties and a privileged relationship with Italy. And Chrysler owes its continued existence to taxpayers in the U.S. and Canada.

Last month, Fiat unveiled the new Panda that will be built at our Pomigliano plant.

The decision to locate production at our facility in southern Italy was not based on purely economic or rational considerations.

It was a decision based in part on recognizing a moral duty to protect and contribute to the welfare of those who live in the communities where we have our roots.

It was also a decision made possible by workers at the plant, who chose to join us in the challenge of remaking Italian competitiveness.

At the same time, Chrysler is living up to its commitment to rebuild the auto industry in North America.

Since June 2009, we have announced investments totaling $4.5 billion in the U.S. and Canada, and we have added nearly 9,000 jobs.

In December, we announced a plan to reopen the Conner Avenue Assembly Plant in Detroit to rebuild the next-generation SRT Viper, bringing 150 jobs back to the City of Detroit.

There is no question that the City faces enormous challenges.

We are committed to being part of the solution, to working with other stakeholders to reimagine the future and transform Detroit.

Not far from here is a memorial to Joe Louis, a hero of both the city and the nation. It is a 24-foot long arm and fist, held in balanced suspension, and it is one of the iconic scenes of Detroit that was featured in our Super Bowl commercial.

Joe Louis knew what it was to be defeated. In fact, he famously lost to the German boxer Max Schmeling in 1936, an outcome that was used as a propaganda victory for the Nazi regime’s claims of ethnic superiority.

In 1938, the two fighters met again.

This time, Joe Louis knocked out his opponent in the first round, in a historic fight filled with social and international overtones.

It was this ability to come back from a crushing defeat that defined Joe Louis’ character, just as the refusal to accept a death sentence is what sustained Chrysler through its crisis.

It is this kind of spirit that will transform Detroit. Our job as leaders is to harness the immense energy that is looking for direction.
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We owe a lot to this city and we have a moral obligation to help transform it into a better place.

This is why I have agreed to serve as the 2012 Campaign Chair for the United Way for Southeastern Michigan, and I hope some of the area’s other business leaders will become personally involved in this effort.

It’s not just a matter of raising money. Make no mistake, cash keeps the machine running, but I’m hoping for a commitment that goes deeper to help sustain and improve the communities where we live and work.

I want to close by telling you a few things you may not know about our Jefferson Avenue Assembly Plant, located just a few miles from here.

Even before the Fiat-Chrysler alliance was formalized in 2009, I toured the plant.

And it gave me pause about entering the relationship, as the factory had suffered obvious industrial neglect during Chrysler’s dark days.

In the fall of 2009 we shut the plant down for four weeks to begin the transformation to World Class Manufacturing and to allow for changeover to the all-new Jeep Grand Cherokee.

During this time, our 1,251 employees transformed the working conditions. They removed 38 tons of scrap and debris and applied 7,650 gallons of paint while cleaning and restoring basic conditions, an effort that allowed them to take ownership of their place of work. Team leaders were trained on WCM processes and workers identified 308 unsafe conditions that were addressed.

By May 2010 we began building the new Grand Cherokee, which has subsequently won more awards than any SUV in history.

It has proven to be a landmark vehicle in our effort to restore credibility to the house.

Two months later we added a second shift and President Obama visited the plant.

In December 2010 we launched a second product at the plant, the Dodge Durango.

Last week, we announced plans to add another 1,100 jobs and a third crew at Jefferson North in early 2013 in order to meet demand for the vehicles we are building there, including a new diesel version of the Grand Cherokee for North America.

In 2013, we will begin preparing the plant to build a Maserati SUV, with a Ferrari engine.

This is a story of revitalization in a company that was regarded as irrelevant, set in a city that has been disparaged as a failure.

It is just one example of how impossible feats of recovery can be achieved if we work together in good faith, realizing that we have a stake in each other’s success.

Fiat and Chrysler come from two different pasts, but they have something very strong in common.

Both have been to hell and back.

Both have lived through the experience of being sentenced to death: by the press, the financial world and the public at large.

Fiat lived it in 2004 and Chrysler just 3 years ago.

Both found the strength and courage to challenge destiny and change it.

Those who are put to such a test, who survive, will never be as before.

Those who survive, who find the strength and courage to stand and fight, will never be as before.

Survivors are different people, special people.

My colleagues and I are survivors.

We have learned to look at the future in a different way than before, in a different way than others.

We all gain strength from the experience of overcoming adversity.

We don’t shy away from making tough decisions, and we are able to adapt to challenges.

The decisions we make today at Fiat-Chrysler are informed by the experience of near-extinction and a resolve to never again get so perilously close to demise.

Everyone at Fiat and Chrysler has gained an appreciation of each moment in this new life that has been granted us.

We treasure what the experience has given us, which has changed us for good.

Because now we all know that ultimately, regardless of circumstances, we have the power to refuse our consent.

We have the power and a moral obligation to refuse our consent to decay, to industrial neglect, to wasteful activities, to disengage from competition – because ultimately, consenting to all these things would not only be a denial of our own right to life, but also of our duty to protect the welfare of our people.

What has happened in Detroit is proof certain that fundamental transformation can occur if we have the courage to pursue the challenge of rebuilding.
As leaders, it is up to us, individually and collectively, to choose hope, and to strive to make it a reality.