Everyone in every business everywhere thinks they are at least somewhat underpaid, and for most, there’s a certain amount of truth to the sentiment. But then, most Americans don’t have jobs that allow them to destroy billions of dollars in value over the course of their careers. Nor does the Detroit News give most of us a forum to whine about our perceived underpayment. Having helped lead GM into bankruptcy and bailout (with thousands of Americans losing their jobs along the way), Bob Lutz still isn’t happy about executive pay limits at GM, and he clearly has no compunction about airing his grievances to the DetN.
What you see is what you get, and it ain’t a lot. All I know is, right now, we are given our responsibility, and given the rigors of the job and demands and the accountability, I would say we are being paid way, way, way below market. Right now, that isn’t a problem, but over time, clearly a company that undercompensates senior executives is going to have a retention or recruiting problem
When GM axed four brands in bankruptcy, it seemed for one bright, shining moment that the era of America’s auto brand bloat was drawing to a close. No such luck. Both Chrysler and Ford passed up opportunities to hack off purposeless brands, and in doing so perpetuated some of the worst examples of brand engineering surviving in the US market. If there were one brand that needed the hatchet, it is and was Mercury. Now, after a decade of Jill Wagner-supplied life support, Ford is breaking the silence surrounding its entry-luxe brand, announcing that a Mercury-badged vehicle will be built “on the same platform” as the new Ford Focus. Put simply: the Mercury Tracer is coming back. (Read More…)
Having recently posted a nearly $5b loss, bailed-out auto finance giant GMAC says it needs more help from automakers to remain competitive. Automotive News [sub] reports that GMAC CEO Mike Carpenter told reporters that “the success of GMAC Financial Services hinges on more loan and lease subsidies from General Motors Co. and Chrysler Group,” and that “GMAC requires additional marketing funds from the automakers to provide competitive loans and leases to the GM and Chrysler dealer networks.” GMAC’s Chrysler business has nearly doubled in the last quarter of 2009, now providing about 26 percent of Chrysler’s retail financing and about 30 percent of GM’s.
As we fumble towards a more complete understanding of Toyota’s stunning fall from grace, we’ve only uncovered a single class of people who truly stand to benefit from the last several weeks of hysteria: the lawyers, of course. Thanks to Toyota’s deep reserves of cash, every single possible damage incurred in the last several weeks will be picked over for an opportunity to sue the world’s largest automaker, and already the suits have crossed over into the realm of the absurd. Automotive News [sub] reports on latest class-action suit charge against Toyota, which seeks damages from the automaker for diminished resale value and lost use of recalled vehicles. These charges have been filed as class-action suits in “at least 30 states,” and lawyers suggest that the damages could run as high as $2b. Ford paid Explorer owners $500 a piece when it settled similar class-action suits in the wake of its Firestone safety scandal.
The Orlando Sentinel reports that “a couple of years ago,” Seminole County’s Lake Mary High School made the curious decision to ditch its previous mascot (now known as “the old goat”), and adopt the Dodge Ram logo as its own. Chrysler only just found out, thanks to a local tipster, despite the logo’s presence on gym floors, t-shirts and athletic uniforms. Needless to say, a cease-and-desist showed up, and Lake Mary will be having to live with “the old goat” from now on. As Chrysler’s lawyer puts it [via Overlawyered]:
As I am sure you can appreciate from your years of work with the board, control of use of a mark by enthusiastic students and parents is quite simply not practical, and I know the school and board would not want to be in the position of censoring student expression associated with the design,
Fiat/Chrysler CEO Sergio Marchionne was supposed to give a speech in conjunction with the Chicago Auto Show today, but backed out at the last minute, sending Dodge honcho Ralph Gilles in his place. The Chicago Sun Times was able to snag an interview with the globetrotting CEO though, and it features some of Sergio’s more candid (if confusing) comments on the state of new product development at the New New Chrysler. Of particular interest is his very apt criticism of Cerberus’s mismanagement of new product development, specifically the decision to replace the 300 before the Sebring.
The biggest market segments in the United States are the C [midsize cars] and D [large luxury vehicles] segments. If you only have a dollar to spend that’s where you go spend it, especially if you’ve got products that are structurally not working.
The decision was made to invest elsewhere. So we developed a brand-new platform for the 300, a decision that took capital that may have been required elsewhere to go play in a different sandbox. Until you’re clear about where you need the money, where the money needs to be spent to ensure longterm survival – that part of it was substantially missing.
Despite spending $264.1 million on measured media in the first 11 months of 2009, up 16.5 percent from the year-ago period [per AdAge monitoring] while sales fell nearly 27 percent, Automotive News [sub] reports that Acura is upping its 2010 ad spend by 50 percent. According to Acura’s advertising boss Steven Center, Acura’s awareness levels have been consistently high, but consumers didn’t perceive it being as prestigious as other luxury brands. By boosting advertising of new products like the ZDX and TSX Sportwagon, Center hopes to close the gap with the premium perceptions of its German competitors. Center explains:
Our messaging for years has been too ill-focused and not about the product. The ads weren’t making the point and the point is: What is it about Acura that makes it better? We want to have the emotion of BMW without the hardware,
You know, instead of being seen as higher-content, uglified Hondas. Yeah, more advertising should help with that.
Yes, they’ve got themselves one heck of a problem down Pentastar way: the boffins have done the math and reckon some 67 percent of Chrysler Group minivan buyers are previous owners. That’s a good thing when it comes to polishing your R.L. Polk Owner Loyalty award, but it’s not exactly helping Chrysler make inroads on volume or market share. Which is where the “Minivan Pledge” comes in. “It’s Time To Drive Detroit Again: The Best Minivans In The Industry Just Got Better,” shouts the headline of Chrysler’s release announcing a 60-day money-back guarantee for buyers who trade in a competitive product towards a 2010 minivan. “‘Minivan Pledge’ gives competitive owners the peace of mind to ‘try us again,’” is the pitch. The only problem: everyone knows it takes at least 90 days for a Chrysler minivan to eat its own transmission.
Transportation Secretary Ray LaHood’s get-toughquotes during the Toyota recall have generated significant backlash against an administration that is already knee-deep in the automotive industry. The governors of Mississippi, Kentucky, Indiana and Alabama (all of which host Toyota plants) laid into the NHTSA and Obama administration in a letter covered by the Detroit News. The governors argue:
Despite the federal government’s obvious conflict of interest because of its huge financial stake in some of Toyota’s competitors … it has spoken out against Toyota, including statements U.S. government officials have later been forced to retract… Toyota must put the safety of drivers first and foremost. However, they deserve a level and reasonable response from the federal government – one that is not tainted by the federal government’s financial interest in some of Toyota’s competitors
Strangely, the governors of Texas and West Virginia, where Toyotas are also assembled declined to sign onto the letter. Still, the attack isn’t being simply written off has home-state selfishness. One bellwether for the issue is the fact that the Detroit News looked past its own hometown interests and ran an editorial by the Cato Institute’s Daniel Ikensen, amplifying the governors’ critique. And sure enough, Obama decided to take the issue on head-on in an interview yesterday. (Read More…)
Automotive News [sub] reports that Fiat/Chrysler will become the latest in a line of third-rate global automakers to form a joint venture with the Russian firm Sollers, with plans to produce half a million units of nine Fiat and Chrysler models at a new plant in Naberezhnye Chelny. Previously Sollers had formed joint ventures with such notable automakers as Ssangyong and Isuzu. Reuters reports that Russia’s state-owned banks will provide most of the venture’s $2.9b in start-up costs. But Fiat/Chrysler has a tough road ahead of it. An analyst for BrokerCreditService describes Sollers’ challenge thusly:
The main object of this plan is to take some, I think, little market share in Vladivostok and Primorsky Kray Russian region, because over 80 or 90% of cars in this region are used cars of Japanese production.
Chrysler has yet to prove that it can handle that kind of competition in the US market, and it will be interesting to see how new Chrysler models sell against the previous-generation Sebring/Stratus, which is produced in Russia as the GAZ Volga Siber.
The euro-trance exhaust note is what tipped us off. The GT3 R Hybrid is not planned for production, but will serve as a “racing laboratory” in the 24 Hours on the Nordschleife of Nürburgring, reports Green Car Congress. Williams Hybrid Power is reportedly exploring road-car applications of its Formula 1 KERS-derived “fly-brid” system. Technical details after the jump. (Read More…)
Hyundai and Toyota have done the math, and they know Americans almost always prefer big, crude and comfortable over slick, trim and stylish. In hopes Impala-ing this fat part of the mid-sized sedan market, Toyota and Hyundai have refreshed their Avalon and Azera sedans for 2011, and the results are… well, frankly, we can’t tell.
Is it me or has the new Odyssey Concept, which is supposed to preview the styling of the next-gen model, taken a few too many protein pills? Let’s hope that the production version (arriving this fall) will capture a little more of the original Odyssey’s clean, stripped-down look. Remember, if we’ve learned anything from the Nissan Quest, it’s that minivans can easily be overstyled into irrelevance.
We had a laugh at the Nissan Juke teaser images Nissan trotted out about a month ago, but apparently the Juke isn’t over. For some reason, Nissan has decided to announce that the Versa-based crossover is approved for the American market before the production model is even unveiled at the forthcoming Geneva Auto Show. Nissan accompanies the announcement with a gallery of shots that are labeled “Nissan Juke” but carry the caveat “model shown is European show car.” It’s clearly more production-y than the Qazana concept, which Nissan cites as the inspiration for the Juke, but could Nissan really be building a production model that’s this unforgivably ugly? At least we now know what the offspring of a Pontiac Aztek, a Fiat Multipla and a Nissan Versa would look like… though I’m still not sure why we needed to.
Here’s a challenge: try to find a review of the Toyota Corolla that doesn’t bemoan its numb steering. Now try with a Chevy Cobalt. Or a Venza, or Vibe, Or Rav4, or Equinox. What do these vehicles have in common? Column-mounted electric power steering systems from JTEKT, a Toyota spin-off supplier which has done a brisk business in these fun-eliminating steering systems. And though the motor press has been bashing electric power assist steering (EPAS or EPS) for its deleterious effect on handling, the explosive growth in these systems may put more at risk than mere enthusiast-approved steering feel. (Read More…)
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