CAW President Buzz Hargrove has been in a feisty mood lately. After telling all of Detroit where it can stick two-tier wages, Hargrove got personal with Cerberus Capital Management, owners of Chrysler LLC. Bloomberg reports that Hargrove is irate at the three-headed hedge fund over promises its president made while seeking support for its purchase of Chrysler. Cerberus President Steve Feinberg had "promised that they weren't going to slice and dice and sell,'' Hargrove said in an interview. But with Chrysler cutting tens of thousands of jobs and slashing its model line, the CAW leader smells betrayal. "We were misled," says Hargrove, "(Feinberg's) trying to cut his way to profitability, as opposed to grow(ing) the business… (he) has never met with us since then to explain the shift in thinking." Of course, most people don't expect private equity groups like Cerberus to operate accountably, and strip-and-flip rumors have been plentiful since the Cerberus takeover. So what finally made Hargrove think that Cerberus wouldn't make good on its promises? The axing of Chryslers Pacifica CUV. Thats right, Hargrove calls the cancellation is "very concerning" because the crossover segment is hot at the moment and "they discontinued it without having a replacement." Anyone think Buzz ever looks at the sales numbers?
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You know, He’s right, though. The crossover segment IS hot, and Chrysler should be in it. If the Pacifica isn’t cutting it, then they should DESIGN A BETTER PRODUCT, not run from the segment.
By cutting the Pacifica, what they are saying is that they don’t have the chops to design a competitive product. Shame on them!
Obviously, Chrysler is betting their CUV on the new Dodge Journey. They’ve played up how the Journey is the anti-Pacifica. They may be planning to strip and flip, but the moves to consolidate dealers and reduce internal product overlap is necessary if Chrysler is to go forward.
What would Celine Dion do?
They have a CUV in the Dodge Journey. Not to mention Chrysler makes more little to not-quite-midsize SUV/trucklettes than any other company.
I’m sure Mr. Hargrove would love it if Chrysler went all GM and made six versions of every car they make, but Cerberus seems to be committed to downsizing.
The Pacifica was good. However, not over $35k good. People weren’t willing to shell out Infiniti level money for what they thought was a Chrysler minivan with HIDs and leather.
The Pacifica was a Gas Hog! A friend of ours who shows Dogs in Confirmation had one for almost a year, when she got out of Dog shows, she sold it almost right away because she said she could not afford the Gas for it, I note also that Consumer Reports said that its reliability was well below average, so I can see why it was dropped. I think the President of the CAW was thinking of the lost jobs in Windsor where the Pacifica was manufactured.
Of course they are going to cut their way to profitability. What does Buzz think Chrysler is, the US government?!
Whether they strip and flip is yet to be seen, but it makes sense to do what is necessary to return to profitability before trying to grow the company. It does no good to keep growing and building more debt when you aren’t making profits.
Did Buzz sleep through accounting/finance classes?
This might be a strech.. but i’m thinking rambler here.. Anyone remember how they tried to grow into a market? That didn’t work so well. If Chrysler can downsize and turn their products into something undeniably desireable they will be far better off than matching production of GM and Ford.. oh.. I mean Honda and Toyota. Not that i’m saying everyone was begging to buy a rambler… but you get the point.
Unfortunately for Buzz, the Journey is made in Mexico. Not good for profits, either – it’s got a $1000 rebate already.
Maybe Chrysler will have better luck with the Dodge Journey. It looks more promising, but will it suffer from Chrysler products’ usual issues with fit and finish, noise and harshness, and poor reliability?
Pacifica should’a been a contender. But the beltline was too high and the roofline too low, the gas mileage was poor, the rear bucket seats missed the market, reliability was below par, and the price was excessive in view of what the Chrysler brand has become. How does such a misfire reach production? It’s a shame that several thousand workers will lose their jobs because several dozen (if that) did theirs poorly.
I think Buzz is correct about the Pacifica as well.
The car had a positive reception when it was released, it was a segment defining vehicle and it sported rich looking styling with Chrysler’s best modern interior. The only issue it had was they produced too much of the expensive model and not enough of the affordable model.
Since then Chrysler has literally left it to whither while other crossovers came into the picture. Chrysler should have dedicated resources to giving the Pacifica a redesign instead of making Jeep soft-roaders, the Aspen atrocity and other questionable new vehicles. The Journey has nowhere near the appeal the Pacifica did when it was released.
Fight the power Buzz!! Keep up the great work -’cause I’m doing my MBA case study on you and the CAW.
You just can’t make this stuff up – and Lord knows; I’ve tried.
Buzz and reality don’t go well together, I’ve noticed. I wouldn’t expect this to be any different. The most obvious example is that keeping your workers on a single wage tier won’t help you compete with even the U.S. for new assembly opportunities – let alone Mexico, China, South America, etc.
This is the same guy who was trying to get new V-8 production from Ford the day before telling them to stuff their UAW contract – yeah, that seems an effective way to protect and win more jobs.
The Pacifica was a good automobile for what it was, but it highlights just about everything wrong with Chrysler still: poor quality, fleet selling sprees, and the inability to keep vehicles relevant.
Chrysler isn’t going to change that by growing more. Sorry, Buzz. Reality bites again.
George Labrador:
“I note also that Consumer Reports said that its reliability was well below average”
Another gift from those brilliant guys at Daimler. That’s quality German engineering don’t ya know.
50merc:
“Pacifica should’a been a contender. But the beltline was too high and the roofline too low, the gas mileage was poor, the rear bucket seats missed the market, reliability was below par, and the price was excessive in view of what the Chrysler brand has become. How does such a misfire reach production?”
See above. Pacifica was supposed to be the first example of the synthesis of German and American cooperation. Instead it was Daimler calling the shots and Chrysler saying “Jawohl”!
The Pacifica was killed because sales were abysmal. Buzz has never figured out that if you don’t sell the vehicles you can’t just keep making them to provide jobs for members of the CAW.
Chrysler took two successful chassi from Germany and made it their own. The 300 and the Crossfire. Its no surprise the 300 hit the mark. The Crossfire failed because the car made no sense… the slow/ softly sprung base model was offered with a sporting 6 speed manual, yet the stiffly sprung high hp SRT version recieved an automatic only. This could have worked had they kept the same successful formula Mercedes Benz had crafted.
Now with MB replacing many of their aging chassi, Chrysler should adopt a few more and try not to ruin it. The poor man Luxury idea works… don’t F it up again. If I owned Chrysler, Buzz would really be crying as I’d probably eliminate all but the 300, PT Cruiser, and Crossfire… although the Crossfire would get some heavy reworking to become a proper car. I would bring on an “SRT Bruiser” and bring back a freshly reworked SRT 6 Crossfire that makes sense.
Crossover’s are a hot segment, but also a heavily congested segment where crap like the Pacifica will sink.
We may have to expand next year’s Bob Lutz Award to include union officials as well as auto executives. This guy could be a shoo-in!
The CAW President is not the only Union leader to be affected by Cerberus, in time too, very short time too that Gettelfinger will feel the same too, that these two leaders? blindly accepted the new Management of Chrysler has a wonderful thing, it had come back to bite them in the neither regions!
Hargrove’s Old Tyme Unionism is as passé as wrap-around windshields and penny loafers. The Detroit-3 maintained Canadian car plants because the dollar traded at a substantial discount to the greenback and socialized medicine generated billions in benefit savings. Tolerating a buffoon every few years to keep the gravy train rolling was a profitable, manageable inconvenience. Buzz deluded himself into thinking his superb tactical negotiating skills made it all possible. In reality Lady Luck smiled on him; he was in the right place at the right time.
Expensive foreign military adventures and malfunctioning political, economic and regulatory systems devastated the U.S. dollar. A generation of buyers abandoned the domestic auto manufacturers. The Canadian petrodollar irrevocably changed domestic manufacturing economics and a strong federal government will not succumb to Hargrove’s extortion.
My guess is Buzz will retire, leaving the CAW’s inevitable decimation to a hapless successor, and jump into the political trough. Years of experience doing himself good with other people’s money make him a natural!
Have you sat in a Journey? Its interior is about the same quality as I recall in our old ’89 Caravan. Just awful.
The only way this vehicle will sell is based on price — certainly not on perceived value.
The Pacifica — another example of lousy execution.
If Chrysler (and Gm, Ford) need to rely on the Auto Workers union to survive – they won’t. I cannot see the business case for US unionized car factories, not ever again. The unions either need to back off, and be happy there are still jobs — or see them all go offshore.
Pete
The Pacifica was an expensive R type Mercedes, neither one could sell well, I was told in an auto show they tried to put 2 cars at opposite end. The R was even worse, who had any brain would part with 70 grand of hard earned money?
Going back to Merc, R perhaps the Maybach shall be dropped too.
Buzz for sure wanted to built as many cars at full steam. He’s looking for good times but not long time.
Not long ago Chrysler was over building cars, that almost rented all of Detroit’s empty lots.
That is probably the very same reason caused Chrysler’s divorce.
Few yrs back when Merc wasnt making $$ and Chrysler pulling in the dough, nobody at the DCX say anything. Soon as Merc in the black Chrysler painted too much Rouge, folks at DCX went banana.
“Chrysler took two successful chassi from Germany and made it their own. The 300 and the Crossfire. Its no surprise the 300 hit the mark.”
The 300 was already in process before the Germans took control of Chrysler and is not a German chassis.