Less than three weeks after Chrysler filed for bankruptcy protection, it looks as if the Obama administration will pull off its goal of completing the carmaker’s restructuring by June, allowing it to emerge as a smaller, more viable contender in the global auto market.
Who pressed the Easy button? Reading between the lines, it’s clear that the New York Times editorial board’s faith in “new” Chrysler stems from the fact that they’re planning to build the kind of cars [theoretically] favored by people who live in large urban areas. Hence the fact that The Gray Lady uses the phrase “fuel-efficient” twice in two sentences.
So far, it looks as if Chrysler will emerge from its restructuring a more sensible company, linked up to Italy’s Fiat, which knows how to manufacture and sell fuel-efficient cars. The deal, which could give Fiat up to 51 percent of Chrysler, was designed under the eye of the government to increase Chrysler’s sales overseas and get Fiat to develop fuel-efficient vehicles in the United States by 2013.
To use one of my father’s old jokes, Chrysler’s like the man falling from the top of the Empire State Building. “How’s it going?” “So far so good.” Before we share the Gray Lady’s disquietude with the forthcoming GM C11, a quick aside, via Automotive News [AN, sub], on Chrysler’s small car future. Simply put, AN‘s not buying it.
Four of the six new vehicles from Fiat will enter the small-car segment, which Chrysler had abandoned. That crowded segment covers only 14 percent of the entire U.S. light-vehicle market.
The two other vehicles simply will replace current Chrysler vehicles.
So in the coming years, the bulk of Chrysler’s revenue still must come from current big-volume mainstays such as the Dodge Ram pickup and Dodge Caravan minivan.
God forbid these “mainstays”—which offer US taxpayers the best chance of recuperating some $18 billion from the ChryCo deal—should fall afoul of the Obama administration’s CO2-aversive tailpipe regs. Anyway, digression over. Back to the New York Times‘ Cassandra-like GM warning.
Even assuming G.M.’s likely bankruptcy ends felicitously, the automaker will have to pull off the trick of becoming an entirely different company — one that can make fuel-efficient cars to serve a future of expensive energy and environmental strain and then persuade American consumers to buy them. It has little experience with either.
Culling the Hummer and launching the Chevy Volt won’t be enough. G.M. must swiftly pare its gas-guzzling truck and S.U.V. lines, which last year accounted for 11 of its 20 top-selling brands. It must accelerate development of gas-electric hybrids and other higher-technology cars. Pulling this off successfully could well require further help from Washington to coax drivers to pay the premium for fuel-efficient cars.
Democratic talking points? The mind boggles, while my wallet cowers in fear.
Who will buy the cars of Government/Gettelfinger Motors?
I’ve asked this several times previously.
It doesn’t look promising.
Reporting like this is why The New York Times is facing it’s own end of life crisis; by it’s own admission it maybe has money to last just to 2011. Clueless reporting and editing mean that it’s an even bet to see who ends belly-up first: GM, Chrysler, or the NYT.
The bit that concerns me the most is that these companies are being redesigned based on the way some people want the world to be, not the way the world actually is.
Somebody at Fiat is probably engineering a slushbox for the 500 right now.
I wonder if they really base the Sebring replacement on the 159. That would be bizarre – a Chrysler on a GM Epsilon platform.
The New York Times: G.M. must swiftly pare its gas-guzzling truck and S.U.V. lines, which last year accounted for 11 of its 20 top-selling brands.
So, the way for GM to get back on its feet is by…culling its best-selling models?
With that kind of business sense, it’s no wonder that The Times is in big trouble, too.
Is this the plan? or is this posturing by the NY Times?
It would be interesting that the Caliber wouldn’t be replaced by the Grande Punto and that the Patriot would be replaced by that swoopy Muranoesque crossover. Its logical that the entire Caliber platform be “extinguished” and that the Patriot be put on a new platform, but I hope it would never look like that concept does.
The current look of the Patriot is quite good, its just that the rest of the vehicle is one hot mess.
The Panda crossover could only be a Dodge, The Jeep intepretation that I have seen is quite frankly… a joke.
So, if I’m getting this straight, we the people are paying for the privilege to be able to pick Japanese cars over Chrysler sold Fiats – Fiats that don’t appear anywhere near as reliable/durable as their Japanese counterparts. All in the name of US jobs. I think I got it.
Maybe the hoity toity East coasters reading the NYT see some economic, common sense or some other model that works for them, but I sure don’t. These ex-Saab buyers would do well to remember why they don’t buy Saabs anymore.
Cognitive dissonance, defined.
So basically we’ve pissed billions of dollars into Chrysler so that they can compete with everyone else for a scant 14% of the market? I fail to see why that was worth my tax dollars.
Chrysler has a much smaller footprint that GM does and can survive by doing relatively well in several niches. GM has the much bigger problem of being a much bigger problem!
“Culling the Hummer” sounds vaguely obscene.
To be fair, this was posted in the NYT Opinion section. Being said, it’s quite ridiculous and I was rolling my eyes while reading it last night.
Yeah, get rid of the best selling and high profit vehicles, that’s clearly the way to make more money. The part about making better cars is spot on, but it sure as hell shouldn’t be done at the expense of what they already do well.
what a mess.
at the end of it, we get italian cars, and that is a good thing. alfa, mmmmmm. fiat 500 ahhhhhhhh.
One can find Democratic party talking points in other places in the NYT besides the Opinion section, such as page one.
So in the same article where they claim to realize that Chrysler will need to keep selling minivans and trucks, they say that GM will need to go away from selling gas-guzzling trucks and suv’s.
Yes, let’s definitely get rid of all those gas-guzzling trucks. No reason we can’t pile all that crap in the back seat. Oh wait, the hybrid Pelosi GTSSXL doesn’t have a back seat. Well then, get a long stick, you can hang two bundles of crap on each side and carry it on your back.
This article doesn’t say as much about the future of car companies as it says about the future of the New York Times.
This is a very big gamble. The Fiat cars are good looking and probably a lot more fun to drive than the typical U.S. car but there are still many Americans who like to make noise and heat with large clumsy inefficient vehicles.
You guys sound amazingly like Detroit apologists here for once.
The days where families bought pickup trucks and monster SUVs are gone. Maybe forever. Don’t look at the product mix circa 1998 and assume that’s the way to be profitable; the last five years have either had expensive gas, VERY expensive gas, or somewhat expensive gas with a side of economic collapse (i.e. demand collapsed and price only dropped to around $2). Doesn’t look good for a resurgence of the SUV as the mainstay of the market to me.
Why the sour grapes when the article is pointing out what TTAC has been repeating repeatedly, Chrysler has no competitive products in the fat end of the sales spectrum? Good luck remaining a major automaker when you can’t build a decent small or even midsize vehicle.
As far as ascribing political attributes to the product offerings, if people were so hungry for Challengers, Magnums and 300C SRT-8s the company wouldn’t have needed a bailout in the first place. The fact that they’re high margin vehicles doesn’t mean squat when they’re just sitting on the lot.
And really, the NYT is still considered liberal? A better friend for making the case for pre-emptive war couldn’t be found (except for maybe the Washington Post…)
i simply cannot see americans taking to this Fiat ‘roadmap’ (such as it is) with any relish
it’s irrelevant if the cars are any good – they are just too alien to the american palate
at best it will be an unimpressive debut, at worst a disaster
If I understand it, the plan is to keep selling the trucks and minivans, but to change out the car line.
I think that we can debate whether Fiat cars will sell well, but there isn’t much argument that the ChryCo car lineup needs some serious revamping, and this is a way to revamp it quickly. The issue for Fiat is whether they can make this venture work with relatively low sales volume. If they can’t, then it’s dead, but there is upside in this if they can. A lot of the fixed costs are already covered, so they will need to make it work on the margins.
Chrysler’s (Fiat’s) success with small cars depends solely on the price of fuel (and the overall health of our economy). As we saw with the rise, and then fall, of fuel prices last year, Americans tend to only buy smaller fuel efficient cars when absolutely necessary. If gas prices stay anywhere south of $3.00/gallon, we will always prefer something bigger than a 500! Of course, right now people aren’t really buying much of anything, regardless of size or fuel economy. It’s a sham to think that Chrysler’s push to sell small cars based on Fiat platforms will make it any more “viable” than it ever was.
Quote: Michael Karesh: “The bit that concerns me the most is that these companies are being redesigned based on the way some people want the world to be, not the way the world actually is.”
+1….Well said.
The thing that so many people, NYT and otherwise seem to forget is that of all of the costs of owning a vehicle, the price of gas is amongst the smallest costs. I pay more per month for car insurance than I do fuel costs. In our household, if the price of gasoline doubled tomorrow, it would probably cost us an additional $80 a month in fuel costs. I can afford the $80 a month delta a lot easier than I can afford the $300-$700 per month for a new car payment…and if someone’s household budget can’t afford a doubling in the price of fuel, then they probably can’t afford a new vehicle payment either…no matter what kind of fuel mileage it gets.
The automakers should strive to improve fuel mileage across their entire product lines but to assume that auto sales will naturally increase if higher fuel mileage is achieved is irrespective of the current economy, unemployment numbers, and credit crunch. The days of the habitual vehicle buyer are gone.
Small cars from Europe are nice but are not going to fill America’s desire for big vehicles. I had a vivid reminder of why Americans like big cars when an old friend came to town a couple of months ago. He filled the front seat of my 3 Series like the jam in a jelly doughnut. He couldn’t wait to get out of it.
Given that something something like 32 percent of Americans are obese according to the CDC
http://www.cdc.gov/nchs/fastats/overwt.htm
the Fiat 500 is not going to be a big seller here and the demand for SUVs with roomy front seats is going to stay strong.
A little crackerbox car like a Corolla or a Prius is fine for a commuter car back and forth to the office, but I’m not putting my family in one for a road trip.
Our main car will still be a big, comfy sedan, minivan, or SUV. If they are not allowed to be sold, I’ll just keep my old one as long as possible.
the joys of a socialist economy – what the consumer wants to buy is of no concern to those who lord over us, and consider themselves smarter than the unwashed masses.
Americans will always buy large cars. We’ve become used to them. We have huge parking lots where most people shop. We can’t fit our 2 kids plus a full load of cargo from Costco in a Ford Focus. We need (or at least think we need) something at least as big as a Highlander or Explorer. I guess the NYT thinks everyone is single and/or childless and lives in an apartment in Manhattan.
People want space even if they don’t really need it. Where I live in Suburbia, at the soccer fields on saturday morning, every other vehicle is a Suburban, Tahoe, Odyssey, Explorer, Escalade, etc. with a bunch of gear in the cargo area and a few car/booster seats in the middle row. Most families will have at least one “large” car. They will just cut something else out of their budget to afford all of the costs associated with a big car.
Anyone have hands-on experience with the Alfa 159?
On paper the specs for the 3.2L V6 (aside from the available 6-speed stick) are break-even with a Sebring “Limited” but the aesthetics of the Alfa (from the pictures I have been able to Google up) make it look approximatley one million times more appealing as a potential ride.
I drive about 350 miles a week and one thing I’ve noticed is how rare it is to see a sedan with people sitting in the back seat. When I do see this, I do a double-take as if to say, WTF are those things in the back seat– OMG they’re people, and most likely, they’re on a very short trip somewhere.
What this tells me is that when families travel together, they do so in an SUV or minivan. I can’t think of one household with children that I know who doesn’t have at least one SUV or minivan. Heck, even a bunch of empty-nesters I know (like my parents) and childless couples have big SUVs.
It’s juust who we are. We may have to work until we’re 80, our kids will have to take out loans to pay for college, but god dammit, we’ll drive a big bad expensive car no matter what.
I think it all comes down to fuel prices.
If BHO and company plan to have $5/gal fuel, these roller skates will move off the lot. I assume this would be done via Cap N Trade so that the tax wouldn’t be directly viewed as a fuel tax.
If fuel stays around $2.50, SUVs and pickups continue to be predominant.
I fit the demographic that should theoretically favor these small Italian shitboxes economy cars, but they will have to pry the wheel of my gas-guzzling, carbon-spewing, foreign-worker-employing S4 out of my cold, dead hands.
These FIAT cars weren’t designed with U.S. regulations in mind. Bringing them over here may wind up being a non starter.
taxman100 :
May 18th, 2009 at 12:37 pm
A little crackerbox car like a Corolla or a Prius is fine for a commuter car back and forth to the office, but I’m not putting my family in one for a road trip.
Our main car will still be a big, comfy sedan, minivan, or SUV. If they are not allowed to be sold, I’ll just keep my old one as long as possible.
the joys of a socialist economy – what the consumer wants to buy is of no concern to those who lord over us, and consider themselves smarter than the unwashed masses.
+1 This really needs to be said and read over again. The wife’s 02 Camry is just fine for around town. When we hit the cross-country road the 4Runner is perfect – and since it is garaged, well-maintained, and we are only doing about 8000 miles/per year, it should last many years.
mmm…Alfa 159 with (hopefully) dodge badges. I don’t wanna wait 2 years. I’d throw a tantrum if I thought it would help.
on a side note:
Whomever said here last week that the 500, when it lands stateside should be a Plymouth Neon should be offered the COO position at Chrysler. Colt would also be acceptable for the Grande Punto, the Linea compact sedan should be a dart.
“Americans will always buy large cars.”
Not everyone does or will. It is easy to forget that a product can be very successful if it appeals strongly to 20% of the customer base. As a relatively small player, Chrysler has the advantage of not needing to appeal to everyone. Love it or hate it products can do very, very well.
I believe next to nothing from the NY Times. I’m surprised they didn’t blame Bush…
Chrysler has had a fair number of love-it or hate-it products for the past 10-15 years. Far more so than GM, Ford, Toyota or even Honda.
The original Neon and the cab-forward LH cars, the PT Cruiser, and the rear-wheel-drive Chrysler 300, Dodge Magnum and Dodge Charger were quite polarizing when new.
What kept Chrysler in business were Dodge Rams, the minivans and the Jeep Cherokee and Wrangler. And still, that wasn’t enough. I don’t see where the new Fiat-based Chryslers are going to change that.
Why is anyone still paying attention to the NYT???????????
Why two subcompacts? They’d be better off bringing over the Bravo than the Grande Punto.
“What kept Chrysler in business were Dodge Rams, the minivans and the Jeep Cherokee and Wrangler.”
All good examples of love ’em or hate ’em vehicles. The mini-Peterbilt styling of the redone Rams put about 70% of the buying public off … and was appealing enough to the rest that Ram sales doubled. For most purposes the Wrangler is a terrible vehicle, and so on.
I don’t see where the new Fiat-based Chryslers are going to change that.
If the company is restructured to run on a lower level of market share, then it might work.
Chrysler might end up being a much smaller firm, with trucks and minivans being produced to keep the lights on and the cars being sold as gravy. There is an obvious plan to downsize, and it would be interesting to see what they project as a sales level needed for profitability.
That being said, I’m skeptical about their odds of success. With Toyota and Honda owning quality and Hyundai owning price, they will need to hope that being different is enough. But that’s what VW tries to do, and you have to wonder how good that has been for them.
While I’m an optimist, I would say that the 14% statistic for the US car market would be expanded if the American consumer had a few more choices.
Are we actually complaining about Chrysler’s potential offering of small cars we’ve previously chastised them for not making?
This list of cars is kind of stupid it has to have been put together by the NYT. Fiat’s as Dodges might work, but there are too many small cars competeing for a small group of buyers. Alfa’s badged as Chrysler’s, no damn way. They cost too much to make to put a rock bottom priced Chrysler badge on the front. Call me a badge snob but I am not paying retail for a Chrysler with and Alfa under teh skin, and I actually want and have owned an Alfa. Sure if it’s badged as an Alfa and made in Italy I will pay the premuim, but if it’s made in America by Chrysler and badged as such I expect it to be $10,000 less. Does anyone really think anyone else will pay for a a nice premium for a Sebring even if it is a 159 under the skin.
I think Fiat has a least some brains and a plan but it sure isn’t this stupid one.
“And really, the NYT is still considered liberal?”
What color is the sky outside the window of your cell at the insane asylum in your world?
“I would say that the 14% statistic for the US car market would be expanded if the American consumer had a few more choices.”
I doubt it, there are actually already many choices in the subcompact and compact segments. Did GM bringing over the Opel Astra make a big splash in the compact market? No, it flopped. Do you really think a person looking at midsize sedans is going to cross-shop a 500 or Grande Punto?
With many small rural communities losing their local dealerships, will customers be willing to drive 50 miles or more to buy a new vehicle, and then be required to travel back to that dealership for service and/or warranty repairs. Many farmers with cars and work trucks (yes, gas hog trucks) will undoubtedly prefer to just keep their present vehicles repaired by local independent shops rather than purchase from someone unfamiliar to them. I just read a sad story from CNN about a small rural Chrysler/Dodge dealer. Check it out at this link
http://www.facebook.com/ext/share.php?sid=84493971842&h=r5mDO&u=b63ZD&ref=nf
Hey, sorry about that facebook link, the reporter and his wife are personal friends. Instead check this link:
http://www.cnn.com/2009/US/05/18/chrysler.dealer.claxton/index.html