No. 942
April 18, 2018

About The Autoextremist

Peter M. DeLorenzo has been immersed in all things automotive since childhood. Privileged to be an up-close-and-personal witness to the glory days of the U.S. auto industry, DeLorenzo combines that historical legacy with his own 22-year career in automotive marketing and advertising to bring unmatched industry perspectives to the Internet with, which was founded on June 1, 1999. DeLorenzo is known for his incendiary commentaries and laser-accurate analysis of the automobile business, as well as racing and the business of motorsports. Author. Commentator. Influencer. The Consigliere. Minister of the High-Octane Truth. DeLorenzo is considered to be one of the most influential voices commenting on the business today.

DeLorenzo's latest book is Witch Hunt (Octane Press It is available on Amazon in both hardcover and Kindle formats, as well as on iBookstore. DeLorenzo is also the author of The United States of Toyota.

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A bad week for miracles.

By Peter M. De Lorenzo

Detroit. Well, well, well, as October grinds to a close the “biz” is careening through some stuff, as they say. Let’s take the state of The Great Sergio, for instance. Not only is the bloom off of the rose, but the bountiful bouquet has shriveled up and been summarily dumped in the trash.

Bloomberg is reporting that the Chrysler Group LLC (Fiat-Chrysler to you and me) amended its initial public offering registration statement this past Monday, purging all of the classic Sergio bombast and replacing it with a tail-between-the-legs tone that is inescapable. To wit: Chrysler launches are no longer described as “successful,” which as people in the business already know, stopped cold with the Cherokee. Chrysler has also backed off its campaign of describing multiple vehicles as being “new” or “significantly refreshed” to indicate how much they had it goin' on, which is a painful retreat from the over-the-top boasts about the company’s new product cadence that Sergio was famous for (but couldn’t hope to back up if you bothered to read the fine print).

Not only that, Sergio has his proverbial coattails in a wringer, desperate to make a deal with the UAW over the healthcare trust to prevent the IPO that he wishes never happened from going through – even though he can’t go on record as saying it - because without a deal, Fiat is perched on the edge of oblivion. As in Not. Enough. Cash. To. Survive.

And as I predicted many months ago, it’s refreshing to see the media finally waking up to the fact that Sergio’s “act” is just that, a tired charade masking a carpetbagger’s scheme to use Chrysler's profits to save a broke-ass Italian car company whose better days ran aground decades ago.

Picture Marchionne in a darkened office wringing his hands - the only light coming from the glow of the “on” switch on the espresso machine - wishing and moaning it weren’t so, with his trusted PR Lieutenant, Gualberto Ranieri, at his side, assuring his boss it will all blow over. Well, unfortunately for Marchionne and his Chief Minion this isn’t blowing over anytime soon, and the clock is definitely ticking on Sergio’s “miracle.”

And then there’s Ford, who has learned the hard way yet again that technology for technology’s sake doesn’t necessarily yield positive dividends. The latest Consumer Reports survey blasts Ford for its MyFordTouch electronic driver interface, and it’s a painful pill for the company that has been on such a superb product roll of late.

The bottom line is this: There are still pockets of “NIHS” (Not Invented Here Syndrome) rampant throughout this industry. Even though there are brighter technical solutions ready to plug and play into vehicles - especially when it comes to electronics - some entrenched company silos insist they can develop things better, faster and cheaper on their own. But when the resulting product is years late and the performance is underwhelming and too often annoying, what have these companies gained by doing that? Do I really have to say how about a big fat zero? Apparently so.

This particular affliction is by no means exclusive to Ford, because “NIHS” is still – unsurprisingly - rampant throughout the industry. But this electronic “thing” is annoyingly interruptive to Ford’s upward trajectory “miracle” and it has to be pissing them off. (It should be noted and it’s very interesting, however, that when it comes to high-performance vehicles most engineers at auto companies around the world have no problem assembling the best ingredients for their high-performance machines, no matter where those pieces come from. It’s too bad that same attitude doesn’t apply to the development of some of the other critical systems in vehicles across the industry.)

And then we have Tesla, you know, the “new” car company that is the darling of the Green Intelligentsia and the movers and shakers on Wall Street who should know better. Tesla is suffering through another PR disaster due to a fire that broke out resulting from a crash of one of its vaunted Model S cars. It’s no big deal according to Tesla and to the rabid horde of Elon Musk acolytes, but this just in: It is. Boy, is it ever.

Why? Well, after doing this website for fourteen years I’ve gotten to know people, well-placed executives throughout the industry who know of what they speak about and who divulge things to me only when the time is appropriate.

And this is one of those times.

What I’ve found out about the Tesla is this: There is a reason for fires upon impact with the Model S and it has nothing to do with the batteries themselves but how the batteries are – or are not, as the case may be - protected in the vehicle.

We all know Elon is a genius and that Tesla is the miracle of the new automotive world, but the fact remains that the miracle workers at Tesla skipped a step. It’s something that GM – you know, that tired old rust-belt auto company from a bygone era – learned while developing the Volt. The GM engineering team zeroed in on a critical area of concern with the Volt’s batteries when it came to protecting them upon impact, something like, “Gee, if someone were to really crash one of these things there could be a problem with the batteries, so, we better do something about it.” So the GM development team triple-wrapped the Volt battery pack to reduce the chance of “piercing” during accidents.

And guess what? The “piercing” of the batteries is exactly what caused the two post-crash fires in the Model S. Why? The Tesla development team chose to single-wrap the Tesla batteries, thus leaving the batteries less protected and more exposed during incidents, which is a giant heaping, steaming bowl of Not Good, when it comes right down to it.

Memo to the fat-cat swells on Wall Street: Smell that? That’s the smell of the Tesla “miracle” and its grossly overinflated stock going up in flames by the side of the road.

Oh, how I love the smell of burning batteries in the morning...

And that’s the High-Octane Truth for this week.

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