As Colonel George Taylor would say, they’ve finally done it. Chrysler, the formerly bankrupt, federally-financed, Italian-owned carmaker has created a fourth automotive brand: Ram. As the company can’t come out and say they’re hiving-off Ram trucks to simplify Chrysler’s inevitable Chapter 7 fire sale, CEO Sergio Marchionne’s birth announcement blamed Dodge for the move (of all things). “This reorganization will allow us to protect and develop the unique nature of the product offerings within the Dodge Brand.” Yeah, ’cause all those Dodge Rams were muddying-up Dodge’s otherwise pristine image, used to such great effect with the Caliber and Avenger. To continue Dodge’s evolution towards filling Pontiac’s performance remit (I shit you not), Sergio’s appointed Ralph Gilles as the old brand’s new head, which will, presumably, no longer be that of a male sheep. As Gilles is the Canadian designer who unleashed the gangsta-riffic Chrysler 300, here’s hoping for an official name change to “The Dodge Boyz.” Meanwhile, The Detroit News [sub] is ROTFL about Sergio’s intentions to take Chrysler upmarket. Apparently, it’s going to be a “tough sell.”
Here, finally, is a Detroit News story that eviscerates of a boneheaded Motown plan. Never mind that they rely entirely on “analysts” for the disemboweling bit. It’s all good. I mean, bad.
– “GM spent $2 billion over 10 years on Cadillac — and it was already upscale,” said Rebecca Lindland, head of industry research for the Americas for IHS Global Insight in Lexington, Mass. . . .
– “At this stage of their rehabilitation, I think that’s real folly,” said analyst Joe Phillippi of AutoTrends Consulting Inc. in Short Hills, N.J.
– “To maintain anywhere near their former healthy volumes, they would be counting heavily on Dodge vehicles to capture current Chrysler buyers, which is in no way a given,” [John Sousanis, director of information content for Ward’s Information Products] said.
– “Fiat needs to do a tremendous amount of market research before jumping into this,” [Lindland] said.
– Libby said Chrysler would need a complete makeover of existing vehicles to justify raising prices and would have to radically change its lineup, including the addition of a flagship sedan in the $70,000 range, and its starting point is “not nearly as strong as Cadillac or Lincoln.”
– It would not be an easy shift, said John Casesa, managing partner of Casesa Shapiro Group in New York. “It’s much easier to go downmarket than upmarket.”
– “They’d be faced with the problem of introducing a new luxury brand to a public that already has misgivings about the Chrysler brand name in general,” [Sousanis] said.
– Quality issues have dragged down consumers’ perceptions of the brand, Phillippi said, and people shopping for a luxury car are unlikely to think of Chrysler.
All those in favor say “aye.” Anyone? Bueller?
Splitting the “Ram” as a separate brand means that Dodge as a brand will disappear. No more cars under the Dodge name. Chrysler will move “upscale” by replacing its vehicles with those of Lancia/Alfa Romeo…expect a name change there. Jeep stays as the SUV brand.
So the future three brands are Lancia or Alfa Romeo, Ram, and Jeep. You read it here first.
Q. What is the difference between the Titannic and Chrysler?
A. The Titannic had an orchestra!
And, the orchestra played loudest as the Titannic sunk.
Of course, part of the announcement was that Peter Fong “is no longer with Chrysler.” He was the guy who wanted to move Chrysler brand upscale. Does anyone in Auburn Hills have a clue?
News for TTAC and The Detroit News ….
Peter Fong, head of the Chrysler Brand has resigned for personal reasons. Michael Accavitti, head of the Dodge Brand has resigned to pursue other interests.
Marchionne must have told Fong, “I personally do not like you blabbing misinformation to the news media … yadda, yadda …..
To Accavitti, “I like and think you should try doing something else for a living”.
That’s called “resigned for personal reasons” .. the CEO’s personal reason! And go sell hotdogs at the street corner!
It’s about time someone is held accountable at an American Auto Co., just look at how much Lasorda got for staying as CEO, no go away, no stay …. Millions every time by Daimler then Cerberus.
Oh, the same news “media” that reported SHAP would stay open till 2012 got a dose of truth from Marchionne as few days ago.
“I can tell you right now, I have no plans on my desk that would suggest that the decision is going to be reversed. I think that we need to look at a variety of factors before commitments like this are made. It was part of a very thorough understanding of a manufacturing footprint that Chrysler had, so I don’t want anybody to start building up unfulfilled expectations. I think we need to be careful, and I think we need to walk before we start running here. I don’t know if I can be any clearer.”
The previous European owners at Chrysler dressed updated an outdated Mercedes sports car platform as the Chrysler Crossfire and an otherwise soon to be scrapped midsized sedan platform as the Chrysler 300.
Maybe new owner Fiat has plans to populate a luxury lineup with otherwise paid for and soon to be worthless Alfa, Lancia, Maserati — and gasp — Ferrari platforms???? Think about the market potential if you took a Maserati Quattroporte or GT then cut the cost by:
1.) swapping a big ass Hemi for the current Ferrari derived power plant
2.) replacing the handmade interior with the best plastic, that the lowest cost provider can come up with
3.) rebodying the whole thing with something with few enough curves that it can be stamped out at Magna’s hydroforming facility right next to Chrysler’s Brampton assembly plant.
Development costs for the next Viper, the next 300 and the next Charger just got shaved to pennies on the dollar and Fiat gets to re-coupe (bad joke) a bucket full of its stranded costs spent keeping Maserati and Ferrari in operation.
If the plastic isn’t too crappy and a bit of money is invested in improving build quality, they might actually sell a bunch of them.
When does FIAT have to actually start putting money into Jeep/Chrysler/Dodge? When the bailout $$ runs out? Seems they are slow to “take ownership”.
Chrysler no longer exists. It died long ago when the Gestapo “secret state police” took over during the “merger of equals”. They told Chrysler what to do and then depleted their cash reserves so they couldn’t do what the were told to do. Such a shame. Chrysler was never a “great” company but they did well enough to exist in a very competitive industry.
Ralph is a handsome brother. If he can make the cars half as good looking and reliable as he is they might stand a chance.
“In the rural markets, I’m a little worried about retaining the customers where we wound down a dealer. I’m nervous about that.” – Mark LaNeve
The Detroit-3 are closing small town Canadian dealers though this country was never as over-dealered as the U.S. Some are re-opening as Toyota stores, presumably because it offers pickup trucks.
Por enésima vez: look at what Iveco does with the companies they purchase…
RAM will eventually evolve into… you guessed it.
Instead of the (still awesome looking) RAM you will have a Daily *sigh*, a sensible, rational, commercial vehicle.
Then it’s time for the medium and heavy trucks… a market I’m sure they want to enter.
I don’t think they will bring the Fiat brand back. Alfa is ok, but Lancia will be a tough proposal as luxury (already is in Europe)
Sometimes I’d like to know why Magna or the Chrysler employees themselves didn’t got the chance to purchase the company when the Cerberus deal was being considered.
Spinning off a whole brand? Sounds expensive. I wonder who pays. “Aye” alright; !ay carumba!
dlfcohn,
“Think about the market potential if you took a Maserati Quattroporte or GT then cut the cost by: ”
You’re a mind reader, I thought about the same thing … now Ferrari Platforms?? I think you’re pushing it.
Good move. Putting the crosshairs grille on everything including the Caliber and Avenger was a ridiculous move that was clearly indicative of how far the car line had fallen.
Miraculously it did not completely demolish the truck line’s reputation, which continues to have a loyal following.
Luckily the Caliber and Avenger will soon be toast, and the Challenger and Charger’s days are numbered, from my read of the situation.
If Ch. 7 happens, they should just sell the tooling for the Grand Caravan to Ford. Ford can easily part with one or two of its superfluous SUV/CUV lines.
Chrysler really should have hired away Mark LaNeve to run Chrysler.
Look at the synergy… They are both completely INSANE.
Spinning off a whole brand? Sounds expensive. I wonder who’s paying. “Aye” alright; !ay carumba!
dlfcohn
Ferrari/Maserati run autonomously from the rest of the Fiat group. Ferrari manages to turn a profit and finance an F1 team completely on its own.
And to everyone else… Why does nobody want to point out the obvious that the Ram brand is going to be an outlet for Fiat’s commercial vehicles? It also gives the Dodge brand more room to align it’s future product with Fiat vehicles.
As for Chrysler moving upscale? Quality and true luxury will speak for itself when the right products come down the pipeline. Whoever thinks that Chrysler is just going to raise prices on the existing garbage-products is just completely ignorant on how the industry works.
BTW dlfcohn – The 300 (LX) platform is nowhere near “soon to be scrapped”. The LX platform is an integral part of Chrysler’s, and now Fiat’s, future prodct plans.
But then again… Marchionne may be wrong and all of you sitting behind a computer and bitching about “what should be done” are well-versed in running a car company. Right?
dlfcohn
Ferrari/Maserati run autonomously from the rest of the Fiat group. Ferrari manages to turn a profit and finance an F1 team completely on its own.
And to everyone else… Why does nobody want to point out the obvious that the Ram brand is going to be an outlet for Fiat’s commercial vehicles? It also gives the Dodge brand more room to align it’s future product with Fiat vehicles.
As for Chrysler moving upscale? Quality and true luxury will speak for itself when the right products come down the pipeline. Whoever thinks that Chrysler is just going to raise prices on the existing garbage-products is just completely ignorant on how the industry works.
BTW dlfcohn – The 300 (LX) platform is nowhere near “soon to be scrapped”. The LX platform is an integral part of Chrysler’s, and now Fiat’s, future prodct plans.
But then again… Marchionne may be wrong and all of you sitting behind a computer and bitching about “what should be done” are well-versed in running a car company. Right?
I really, really, don’t get Chrysler as a luxury brand.
Chrysler makes THE worst car being made in America today. It makes cheap minivans. I really think that if Fiat opened a dictionary, picked a word at random, and launched THAT as a luxury brand, they would have a better chance of success. At least they wouldn’t have to spend a few billion a decade or two just to get the brand cache back to neutral in the public mind.
Autojunkie :
October 5th, 2009 at 12:15 pm
Ferrari/Maserati run autonomously from the rest of the Fiat group. Ferrari manages to turn a profit and finance an F1 team completely on its own.
Agreed: However profitability is not enough in the world of capitalism, a company has to be as profitable as possible. Remember Fiat (and the conglomerate of companies of which it is a part) is not just competing for investors against the share prices of every other car company in the world, but every company listed on every stock market in the world. If they can find a way to squeeze more value out of their luxury brands by selling technology to other parts of the group, they will. The trick is, how to do it without ruining the brand reputations. Maybe that is impossible and why they won’t do it.
Autojunkie :
October 5th, 2009 at 12:15 pm
BTW dlfcohn – The 300 (LX) platform is nowhere near “soon to be scrapped”. The LX platform is an integral part of Chrysler’s, and now Fiat’s, future prodct plans.
But then again… Marchionne may be wrong and all of you sitting behind a computer and bitching about “what should be done” are well-versed in running a car company. Right?
I’m afraid I never wrote that the 300 is ‘soon to be scrapped’. I wrote that it was based on the platform of a soon to be scrapped (at the time) Mercedes, the outgoing E class platform to be precise.
I also never slagged Marchionne. If anyone in the auto industry is “qualified” to save Chrysler, it’s him. He is one of the true masters of doing more with less in the global manufacturing sector.
dlfcohn
Sorry I misunderstood what you meant by the “soon to be scrapped” comment. I agree now that I understand what you meant :)
And I do agree that Marchionne is the only qualified person who can save Chrysler. While I can honestly say that last year I would have been sad to see the Chrysler and Dodge brands go away, all I can think about now is that plants will stay open and no more layoffs will happen. Even if it means losing the brand names and replacing them with Alfa, Fiat, or whatever… This town has been through enough…
I strongly agree with Ken Elias; this is not a prelude to repositioning Dodge and Chrysler, this is a prelude to axing Dodge.
Well, it lets them do both. The Ram brand lets them kill Dodge and keep the pickups. And if the whole adventure fails, Fiat can pull the plug and auction off Ram and Jeep to the Chinese.
Sometimes I’d like to know why Magna or the Chrysler employees themselves didn’t got the chance to purchase the company when the Cerberus deal was being considered.
A) Because the employees would have to had to convert thier pension to equity, even they weren’t foolish enough to do that.
B) Magna did want to (I’m sure with alot of conditions still tied to Daimler), only Cerberus (is that the correct spelling?) was willing to take it in a way that left Daimler free and clear (this actually required daimler to pay them).
I remember reading a story about the first exec management meeting after the merger of equals. The chryco exec’s carpooled in minivans and the German’s rode in Merc. limos they had flown over, at this meeting the germans openly referred to chryco as “business unit #29”. If you were a cryco shareholder and got out after the sale, it was the best move the CEO could have made (they are who he serves after all) to everyone else, not so much so.
They’ll get Rammed for sure.
It seems that Autojunkie is the only one thinking here.
It was made clear that the 500 was to be the only Fiat branded vehicle sold here. It would make sense to keep that car a brand, just like Mini and smart.
The Dodge brand is going to be reworked to bring in the Fiat replacements for Avenger and Caliber. These car may be on Fiat platforms, but its probably a safe bet they will have be unique North American vehicles. This new brand will help Fiat make a more cohesive lineup and prepare it for the new cars.
I think the title of this article should change or the article should be republished as an editorial. You’re stating an opinion with subjective observations.
argentla:
“I strongly agree with Ken Elias; this is not a prelude to repositioning Dodge and Chrysler, this is a prelude to axing Dodge.”
–
From Autoblog:
“Product design SVP Ralph Gilles now also has responsibility for Dodge cars.”
If Dodge cars is to be sold/euthanized than why put someone so important in charge of it? Giles has said he wants design to be more organic (witness the 200c concept) and I bet Marchionne likes him some organic styling (he is Italian after all).
Also from Autoblog:
“Peter Fong, who had been put in charge of the Chrysler brand, has resigned for personal reasons and is being replaced by Lancia chief Olivier Francois who will also continue to oversee the Italian brand.”
Chrysler IS going up market, at least as far as Lancia, otherwise why put Francois in charge? And if they do go significantly upmarket then Dodge cars will have plenty of room to be the volume car brand.
I wasn’t sure about this plan. I have always thought of Dodge and Dodge trucks together. But it looks like Marchionne wants to force the management teams to focus more narrowly on either trucks or cars. Ford could have used something similar when they were churning out class leading F-150’s and Explorers but were leaving the Taurus to wonder in the wilderness. And what if the goal is to expand Dodge/Ram into a larger truck arena? Fiat and Iveco have product that will fit the American market – they are considering two vans to replace the Sprinter and expand on it’s market – and Dodge has a recognizable truck brand. What better way for Fiat to expand it’s truck business into the US?
Christopher:
“I think the title of this article should change or the article should be republished as an editorial. You’re stating an opinion with subjective observations.”
But then it would no longer be TTAC if they did that!
Q. What is the difference between the Titannic and Chrysler?
A. The Titannic had an orchestra!
And, the orchestra played loudest as the Titannic sunk.
And, all it took was some lifeboats to bail out the Titanic.
John
The plan doesn’t strike me as being all that bad, and actually has some advantages.
The trend is for automakers to provide their vehicles with a distinctive family face, so that all of them have a common look. This has been a problem for Dodge, given the strong identity with trucks.
That need for shared identity forces the car designers into a position in which they have to make these cars look like trucks. That’s not a great idea if you think that the truck market is going to permanently shrink.
The desire to niche Dodge into a performance brand tells me that the plan is to keep Dodge small while selling Fiats badged as Fiats. They may not admit to that now, but I would assume that politics would cause them to delay announcements that imply that Fiat’s primary mission wasn’t to rescue American brands.
I do question the move with Chrysler, though. The badge has long been associated with moderate prices, and I can’t see consumers seeing much reason to start paying premiums for vehicles with Chrysler badges attached to them. They might be better off keeping it as a mainstream brand and follow the Hyundai playbook — skip the luxury market for a prolonged period, before taking a single car and gradually morphing it into its own brand, as the plan seems to be with the Genesis. Chrysler has to walk before it can run.
Say what you will about GM’s C11 filing and the involvement of the automotive task force . . . but at least they came out with a credible business plan to resurrect GM. Whether or not GM can actually execute against that is another thing.
The same cannot be said about Chrysler. Why the task force allowed this company to survive—largely intact—never made any sense to me. And it makes less and less sense to me every day.
For example, Sergio picked the brand CEO’s because they were seen as change leaders/high potentials. But none of these guys had any real experience building a brand or leading a large organization. Now two of them are already gone for personal reasons?
Where’s the meat?
If Chrysler is going upscale as a Lancia analog, and Dodge is a performance brand, what’s going to be the mass market compact and midsize sedan brand?
aakk123 :
so true, so true.
its so sad to see a former autosalesman (TTAC’s highly admired RF, not by me tho) to think of himself being the know-it-all. awwww. Narcissism 101.
If Chrysler is going upscale as a Lancia analog, and Dodge is a performance brand, what’s going to be the mass market compact and midsize sedan brand?
Fiat.
I dislike the idea of spinning off Ram. It’s not going to make enough as a stand alone brand and who does it compete with? GMC?
Would be interesting if Chrysler revived the Fargo brand name as a truck-only brand.
http://en.wikipedia.org/wiki/Fargo_(truck)
I believe Ken’s comment #1 will be borne out. Fiat may think they’ll be able to do something with the Dodge name, but they’ll eventually realize they’ll be better off just going with their Fiat lineup.
Mi dos centavos…
Perhaps the “Dodge” (Mercedes) Sprinter will be replaced by a Fiat Ducato…
However plain I did alot of miles in diesel versions including airborne… VBG!
I think Fiat ought to get some new product over ASAP like the 500 and/or the Panda AWD.
GOOD time to be selling small cars.
@Ken Elias
You read it here first.
https://www.thetruthaboutcars.com/ask-the-best-and-brightest-gm-and-chrysler-gone-tomorrow/?cp=all#comment-1543391
I had some similar thoughts going before, hinting that Chrysler will try to go upmarket but ultimately will fail and be replaced by Alfa Romeo.