The theme that’s emerged most clearly from my interview with Bob Lutz was, somewhat counterintuitively, compromise. Every vehicle that’s developed and built is the product of nearly countless compromises, on everything from performance to efficiency, and from weight and materials to cost. The question isn’t so much if you compromise when developing a new car, but how you compromise… as was demonstrated in our last Lutzian anecdote. And even during my interview, as the conversation bounced from GM to Chrysler, from mass-market products to niche halo cars, I was thrilled that this issue kept coming up. Why? Because this theme played perfectly into the question that was at the top of my list of prepared questions. After all, there has been a mystery haunting GM followers for some time now… a mystery that I’d never seen a journalist ever ask about. And there I was, sitting with one of the few people who was even capable of fully answering it. So I just waited for a pause, opened my mouth and asked:
Why do GM cars weigh more than other cars?
I had no idea what kind of answer to expect… but I definitely wasn’t expecting the answer I got.
NB: Chrysler 200 sold 3787 in August 2010, and Kia Optima sold 1714.
Well, it’s that time again TTAC fans: the Midsized wars roll on with Camry retaking the top spot to extend its advantage in YTD sales. Altima continued its consistent year with a second place showing, and improving over its August 2010 number better than any nameplate besides… the Chrysler 200? Yes, Chrysler’s updated Sebring stopgap outsold the freshly-chic Optima on the month, and passed it in YTD sales. Meanwhile, the Hyundai Sonata may still have been 10k off the Camry’s pace, but its August volume was a mere 37 units from tying Mazda6’s YTD volume (through August). All in all though, this wasn’t an incredible month for midsizers, as half of the best-selling nameplates failed to improve on their year-over-year numbers. But what this segment lacks in volume growth it makes up for in drama, as a falling Accord runs the very real risk of being passed by Malibu and Sonata. Camry may be back in control, but the fight for the rest of the podium is as tight as ever.
Today’s resignation of Chrysler’s chairman and two other government-assigned directors was hardly a surprise, as now-Chairman and CEO Sergio Marchionne had signaled that changes were coming in the wake of Chrysler’s “payback” of government loans. In fact, Rebecca Lindland of IHS Automotive predicted that chairman Robert Kidder, as well as the other two departing directors would be the ones leaving, telling the Freep
Three of the five Chrysler board members who are government appointees — Kidder, Stuart Scott and George Gosbee — are members of investment advisory firms.
“Now, you kind of need to have people that have distinctive automotive industry experience verses financial expertise,” Lindland said.
But Lindland was only half-right. She picked the departing directors perfectly, but Marchionne didn’t replace them with even a hint of “distinctive automotive industry experience.” But not being a dyed-in-the-wool “automotive guy” himself, he apparently had some slightly different qualifications in mind…
Welcome to Bob Lutz week at TTAC! I spent several hours recently with the auto industry’s most notorious executive, and elements of that interview will be the basis for much of my writing this week. We’ll also be capping the whole thing off by voting on the 2010-2011 Lutzie award for most unfortunate quote by an auto exec. And rather than jumping right into the meat of the interview, I want to kick off Lutz week by looking at a few cars that came up in our meandering conversation. After all, these are not just vehicles… when Lutz brings them up in an interview, they become stories, little encapsulations of his philosophy or the state of the company that made them. Let’s start with a car that I literally had never heard of before he mentioned it almost in passing: the Dodge Dakota Convertible. Eat your heart out, Murano CrossCabriolet… the Dakota was the original “WTF-vertible.”
even casual scrutiny of his vision reveals overwhelming obstacles. Let’s be plain: His plan is dead on arrival.
You won’t find a zinger like that in Bertel’s piece, but only because he keeps his head down detailing the entire bizarre history of McAuliffe’s venture, its roots as the “Hybrid Kinetic Motors” visa scheme, its ties to a couple of notorious former Brilliance boys and its money-first, product-later approach. Child’s takedown isn’t as well researched (nor does it contain anecdotes about former a Ambassador driving a lawnmower into a swimming pool), but the few remaining folks out there who think the former Democrat fundraiser might be on to something big should probably read on. After all, McAuliffe has put so much hype out there, this story is something of a target-rich environment for truth-tellers. (Read More…)
Bloomberg [via the Financial Post] reports that “one of the five biggest European banks” is “close” to loaning Saab $157m so that it may pay workers and suppliers, in order to move towards restarting production. According to DI.se, the deal is predicated on Saab securitizing the loan with shares of Saab Great Britain or other “alternative assets.” But apparently whatever the banks ask for, Saab will try to give, as Theodoor Gilissen Bankiers analyst Tom Muller explains
They need the money immediately. I hope they solve it this week, otherwise I think it’s over for Saab. It’s a very dire situation.
Knowing that some of the top PR professionals in the business are regular readers of TTAC (they could be anyone…), I can imagine a number of them shaking their heads in disapproval at the headline of this post. “It’s happened,” they’re probably muttering to themselves, “TTAC has finally lost the plot.” But instead of dismissing out of hand the seemingly preposterous premise of this post, I ask the assembled anonymous masses of PR pros to bear with me for a moment. As laughable as it might seem to postulate that the industry’s spin doctors can learn something from the most infamously “off the reservation” auto exec ever, the urge to write off this post is part of the very problem I hope to tackle. Allow me to explain… (Read More…)
Today’s announcement of a memorandum of understanding between Ford and Toyota, uniting the two firms’ pickup truck hybrid drivetrain efforts, took quite a few industry-watchers by surprise this morning. As the industry leader in hybrid technology, Toyota has limited past hybrid cooperation to licensing its drivetrain wholesale to Nissan and a patent-sharing agreement with Ford. Moreover, the last big alliance aimed at developing hybrid technology for full-sized pickups, the Two-Mode V8 hybrids developed jointly by GM, Chrysler, Mercedes and BMW, have been a huge flop on the market, with the German partners walking away from the technology after using it in only a single application each (X5/X6, and ML Hybrid). Though Toyota and Ford have worked together to prevent a messy patent war over hybrid technology, there was little to suggest that they would take the cooperation any further, let alone join forces to hybridize full-size pickups. But if you’re looking to the marketplace to explain the Ford-Toyota tie-up, you’re looking in the wrong place: this is all about the freshly-announced CAFE standard and its generous credit system. (Read More…)
Portland’s 82nd Avenue is one of those streets that exists in nearly every American city. Unofficially demarcating Portland proper (“the right side of the tracks”) from the extensive working-class suburbs that bleed into Gresham (“the wrong side of the tracks”), “Shady-Second” is home to a vast strip of wall-to-wall buy-here-pay-here lots, used-car hustlers, and small repair shops that line both sides of the road from Sandy Boulevard all the way down to Division. Like every other used-car strip in every other town in America, it’s where folks go when they need a car and don’t have much money to spend. Unlike most other low-cost car Meccas, however, 82nd Avenue is also home to Oregon’s last remaining Saab dealership. And it’s something of a symbol of the hell that Saab dealers are going through right now. (Read More…)
Few will be surprised to hear that Chrysler Group will end production of its Dakota compact pickup truck next Tuesday, as sales of all small-to-midsized pickups have cratered over the last decade. Indeed, the Detroit News reports that the end of Dakota production will result in the layoffs of only 39 employees, although that number may climb as high as 150. In any case, the end of Dakota production is just the tip of the iceberg: Ford’s Ranger goes out of production in December of this year, and GM’s Colorado/Canyon twins will be discontinued sometime next year. Though Dodge plans to bring a minivan-platform-based AWD “lifestyle pickup” to market as a 2014 model, and Chevy is planning to build a North American variant of its new Global Colorado for the 2015 model-year, we’re looking at a several-year interlude in which no American OEM will offer a small pickup in the US. And looking at this chart, you almost can’t blame them… (Read More…)
I know I’ve said this several times before, but the end really is near for Saab. The WSJ [sub] reports that Sweden’s Debt Enforcement Agency began auditing Saab’s finances after several debts came due earlier this week, and found only 5.1 Kroner ($796,291) in its Skandinaviska Enskilda Banken account. That’s barely enough to cover the 5.06m Kroner in debts that came due this week alone… and Saab’s total outstanding debt is ten times that amount, around 50m Kroner. And as if the financial trouble weren’t dire enough, key stakeholders are abandoning Saab in embarrassment, like Benny Holmgren, one of Sweden’s largest car dealers. Holmgren tells SvD.se that his contract to sell Saabs has expired and that he won’t renew, explaining
“For me, it is important to be proud of the brands that we have in our halls. Saab does not deliver cars they promised, they do not pay wages to their employees, nor debts to their suppliers while the owners pick out big money. It does not feel right for a [my] car dealers.”
But among the hardcore Saab faithful, today is not a day of sorrowful resignation… but a day of totally overblown and unrealistic hope for their dying brand. Yes, really… (Read More…)
Nissan’s “we have cars” ad may not meet with the approval of TTAC’s commenters, but it appears to be having some kind of effect. According to mid-month analysis by the A+ rated experts at Edmunds Autoobserver, Nissan’s looking at the strongest retail sales growth in the industry this month, building on last month’s already-strong performance. (Read More…)
I’m sure this headline will get Mopar fans’ backs up, but it’s the cold-hard truth: the American Consumer Satisfaction Index rated the Chrysler brand lowest of all automotive brands, with Jeep and Dodge tied with Mazda for second-to-last place. And though the graph above shows historical scores, the latest rating is based on interviews with US consumers in the second quarter of this year. Hit the jump for a graph of the latest ratings, but first check out those historical scores. I’m not generally a fan of this kind of survey, as exemplified by the infamous JD Power “Initial Quality” survey, but the most dramatic line on this jumbled graph, belonging to Hyundai, matches that brand’s sales progress amazingly closely. That tells me this “satisfaction index” says something about how well each brand serves its intended customer… which, as Hyundai proves, can (but doesn’t always) lead to sales growth. The counter-example: Cadillac has long been a top contender, even when it sold less-than-entirely-competitive products and was losing sales. With that in mind, let’s take a look at this year’s results.
For some time now, there’s been something of a low-scale war going on between OEMs and aftermarket parts suppliers just below the national media radar. The issue: whether or not aftermarket structural parts are as good as OEM parts. Ford has been a major proponent of the OEM-only approach, making the video you see above in hopes of proving that aftermarket parts aren’t up to the job. But the aftermarket is firing back, and they’ve made their own video in direct response to this one, which you can view after the jump. (Read More…)
Bloomberg BusinessWeek reports that Saab has to pay some $620,000 today in order to keep Sweden’s Debt Enforcement Agency at bay. Should Saab fail to pay suppliers Kongsberg Automotive and Infotiv within the next 24 hours, Swedish Debt Enforcement Agency officials say
The collection process that may start tomorrow would include investigating Saab’s bank accounts and potentially also other assets.
Assets will be frozen while Saab’s worth is assessed, a move that would essentially end the existence of Saab as it currently (barely) exists. Saab spokesman Eric Geers says
We’re of course totally aware of this situation with the collection agency, but I can’t comment on what we’re going to do,
but other than pulling out from the Frankfurt auto show in order to focus funds on restarting production and selling another tranche of value-diluting shares, Saab hasn’t done much to respond to the latest crisis. And with another $795m due to suppliers in “about a week,” time is slipping away. Luckily for the True Believers, there’s still a shred of hope-against-hope to hang on to, as Saab’s PR man Steve Wade says something called “The Deal” is in the works.
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