Poor Sergio Marchionne… the man can’t go anywhere without being interrupted. The Fiat/Chrysler CEO’s speech today in the buildup to the New York Auto Show was interrupted twice, once by the the ubiquitous Teamster protesters, and once by a test of the hotel’s fire alarm system. But then, maybe people would let him speak if he had more to offer than the same lukewarm assurances that everything is going marvelously in Chrysler-land. The Detroit News summarizes his speech by saying Marchionne believes Chrysler will sell the 1.1m vehicles in needs to break even this year, and that it will do so without getting pulled into an incentive war.Which would be hard to do anyway, considering Chrysler spends more on incentives at “normal” levels than any of its competitors.
Tag: Chrysler
Chrysler’s awkward, year-long fandango with unwanted dealers is poignantly encapsulated in a strange little anecdote hidden in the back of today’s Automotive News [sub]. Headlined, “Rejected-store worker’s chat with Sergio was just smoke,” the piece told of a chance encounter several weeks ago between Fiat/Chrysler CEO Sergio Marchionne and culled dealer Jim Casper, while enjoying a smoke at a seafood restaurant bar.
“Are you a rejected dealer?” Marchionne asked [after Casper introduced himself].
“I work for a rejected dealer,” Casper replied.
“Do you know why you were rejected?” the CEO asked.
“To be honest, sir, we have absolutely no idea,” Casper said.
Now why would Sergio guess that Casper was with a “rejected dealer,” a term used by dealers protesting Chrysler on Youtube? It could have been awkward if Casper were just a good soldier looking for a pat on the back from his CEO. Actually, on second though, it couldn’t have been any more awkward than what (apparently) actually happened.
In our recent 1984 Dodge Caravan Curbside Classic, we explored the origins of the minivan. The question as to who first penned the modern FWD people mover is a bit of thorny one, and one which has been argued endlessly. In that CC, I gave credit to Rootes (later Chrysler Europe) designer Fergus Pollock for his work in developing a van project that eventually ended up at Renault as the 1984 Espace. I thought I made it pretty clear that his work was specifically on a one-box approach, and that I had given him due credit for that, whereas Ital Design’s Megagamma had the vestigial hood that ended up on the 1981 Nssan Prairie/Stanza Wagon and the Chrysler minivans. But designers are (rightfully) a sensitive and protective bunch, and I got a rather terse e-mail from Mr. Pollock setting the record (somewhat) straight(er). (Read More…)
If you believed Chrysler’s bailout “viability plan” [paging Commissar Orwell…], you knew the new Chrysler 300 would be released in 2010. It’s a bit cut off at the top of the image above, but you can clearly see the words “…and the New Chrysler 300 in 2010.” And if you believed Chrysler’s five year plan, released last November, you knew the refreshed 300 would go on sale in 2010. That’s why there’s a little refresh icon by the 300 in 2010. But if you believe the latest word from the Wall Street Journal [sub], you now know that the 2011 Chrysler 300 will be released in… 2010. And that’s news how?
In June 2009, Fiat was handed 20 percent of a washed and rinsed Chrysler for no cash, and despite protests, the deal was rammed through. The UAW was given 55 percent, the U.S. and Canadian governments controlled 8 and 2 percent, respectively. Often overlooked, or forgotten, the deal came with an option for Fiat to raise its stake to 35 and eventually as high as 51 percent if it meets some rather vague financial and developmental goals, hashed out with the U.S. government.
Sergio Marchionne thinks the goals are met. He plans to increase Fiat’s holdings in Chrysler to 35 percent within two years, says Reuters. (Read More…)
In the leadup to its bailouts and bankruptcy, Chrysler seemed to have suddenly gotten religion about zero-emissions technology, parading around several ENVI electric vehicle prototypes. By the time Fiat had cleared the cobwebs from new product development in Auburn Hills, the EV vaporware had faded into nothingness. With the need to impress politicians ostensibly in Chrysler’s past, the ENVI program was rolled into Chrysler’s normal product development process, and we no longer had to choke back laughter at the idea that Chrysler would replace its unloved Sebring with the pure-electric 200C concept. Chrysler’s embarrassing Two-Mode hybrids were also hidden from view, with only a vague indication that a hybrid Ram might someday become available. When we talked to Ram CEO Fred Diaz at last November’s Five Year Plan announcement, he said that a hybrid Ram was still being considered. Now, egmcartech reports that the Ram hybrid is dead from a commercial standpoint, and that the program will turn into a plug-in hybrid test fleet for Chrysler’s best partner: The Department of Energy, which gave the form $48m to develop a fleet of 140 plug-in Rams. But don’t worry consumers, there’s an alt-energy Chrysler in your future… sort of.
The Detroit Free Press reports that Ford’s Alan Mulally made $12.8m last year, nearly double the $7.53m he made in 2008. Despite a considerable increase in Mulally’s overall compensation, his cash salary actually declined to $1.4m, from about $2m in 2008. In addition to the $12.85m he made in salary, bonuses and other compensation, Mulally banked a further $5.05m in stock options. Chairman Bill Ford Jr. continues to work without compensation, although he continues to accrue stock options worth $16.8m. Those options can not be exercised until the firm’s auto operations are profitable. And while Ford’s 2009 profits justify big executive payouts, federal pay czar Ken Feinberg has cut back on executive compensation at bailed-out automakers GM and Chrysler.
The legend of how Carroll Shelby was inspired by Ford’s very compact new V8 to create the Cobra by stuffing it into an elderly and underpowered little British roadster is well known. The fact that it had a copycat is not quite so legendary. That probably has everything to do with the choice of the car to be the beneficiary of the Ford V8 engine transplant: (Read More…)
There’s nothing truly original in the car business. Everyone begs, steals and borrows from everyone else. Or sometimes, the same (and usually obvious) idea ferments for years in various heads or companies, and then suddenly appears in the same format at the same time in totally different places. How about the modern FWD mini-van? It first bubbled up in two totally different branches of Chrysler, sat for years,and then suddenly sprang forth, one in the US, the other in France, both at the same time. Coincidence, or is it just that every idea has its day in the sun? For the minivan, that would be 1983. In France, it was the Espace; in the US it was the Dodge Caravan/Plymouth Voyager. (Read More…)
In their latest report, the Congressional Oversight Panel suggested that GM’s formerly captive finance arm GMAC shouldn’t have been split from the automaker it still supports. If this led you to believe that GM would take the troubled finance firm back under its corporate wing, you have another thought coming. The WSJ [sub] reports that
The idea appealed to GM, in part because auto maker would have more control over lending practices. GMAC’s move in 2008 to dramatically restrict leasing amid the U.S. financial crisis helped trigger the spiral that sent GM into bankruptcy the last year… But taking over GMAC would have many complications. GM sold a majority stake in GMAC in 2006 as a way to buck up the auto maker’s credit standing and its access to capital. As it turned out, GM still remains largely cut off from the markets.
Chrysler Group understands that the practice at this time may be a cause of concern among policymakers and among arbitrating dealers. As a measure of good faith, Chrysler Group will not proceed with network actions that directly impact an arbitrating dealer until the arbitrator has had a chance to rule in that case.
The biggest storyline right now for America’s bailed-out automakers is how little they’ve been able to capitalize on Toyota’s stumbles. While Ford and Hyundai made hefty sales gains last month, both GM and Chrysler’s performances were distinctly unimproved by Toyota’s woes. And now that Toyota is launching major incentive packages to recover lost sales momentum, Detroit has no remaining incentive to not revert to the bad old practices of incentive dependence. With GM and Ford diving into the zero-percent war, Global Insight’s George Magliano tells Automotive News [sub]:
Incentives are going to be here into the third quarter. We’re not going to wean consumers off incentives any time soon. We’re stuck with it. They’re all jockeying for position… After clunkers everybody backed off incentives. Now they’re going to the whip again
Anyone who follows the auto industry with any regularity will know that comparing Toyota and Chrysler by any measure is laughable. For mainstream media types, who flit from frenzy to frenzy, all the negative press about Toyota might have left some believing that it’s the worst-off automaker in America. Luckily CNN Money is on-hand to set the record straight, with a piece titled “Forget Toyota. Chrysler’s got the most problems.” It’s a standard litany of TTACian criticism: declining sales, fleet and incentive dependence, no new product, flatlining consideration, and general suckitude. All of which helps make a solid month of media frenzy over sticky accelerators look kind of silly, especially considering that Chrysler’s stunning underperformance comes courtesy of the American and Canadian taxpayers.
As an American citizen, it is tough on my part to pay tax dollars to an entity that can turn around and use those tax dollars to get my fellow American citizens to not do business with me. The government owns 60% of General Motors, and these American tax dollars are funding business activity for one company, with the express goal of negatively impacting another company
Paul Atkinson, President of Toyota’s National Dealer Council, manages to capture the central problem with government intervention in industry without resorting to the hyperbole that so often accompanies such lines of criticism [via Radio WAOI]. Examples?
GM’s recent reinstatement of 661 culled dealers has put pressure back on Chrysler to come to arrangement with the dealers it shed during last year’s bankruptcy and bailout. Rep. Chris VanHollen, the sixth ranking Democrat in the House or Representatives, tells Automotive News [sub] that with GM buckling to dealer pressure, the time has come for Chrysler to follow suit. “There’s no quicker or easier way to build this network than to reinstate its terminated car dealerships,” says VanHollen, who drafted much of congress’s dealer arbitration legislation. The Committee to Restore Dealer Rights contacted Chrysler CEO Sergio Marchionne “to discuss the reinstatement of the rejected dealers who had their franchises so abruptly taken and were unfairly terminated.” The response?
We believe that all communications concerning the subject matter of the arbitration should be between counsel and request that your clients follow this procedure in the future. Please ask them not to send such communications to Mr. Marchionne or any other Chrysler personnel.
Oh snap! Chrysler isn’t going down without a fight… even if that means taking on the representatives who have oversight of the government’s eight percent stake in the automaker.
(Read More…)
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