July 7, 2010
A midsummer’s daydream: Five Things.
By Peter M. De Lorenzo
(Posted 7/6, 9:30PM) Detroit. After last week’s column generated enough buzz and controversy to get a whole bunch of people’s panties in a bunch, I thought it might be a fine time to assess some Things in the business now that we’ve reached the midpoint of another tumultuous year. You know, the kinds of Things that aren’t what they seem, or the kinds of Things that need to be exposed for what they are - without the spin - or the kinds of Things that just are, for no apparent reason other than the “we’ve always done it this way,” ingrained inertia. So here we go…
The Green Horde. The suspension of all rational thought in defense of a Green Nirvana that is simply notgonnahappen.com is just plain ludicrous and further proof that their pap “finger-snap” solutions for this nation’s energy future are not only misinformed and flat-out pathetic, but if we allow our energy future to be hijacked by their woefully misguided ideas and ideals we’ll be living in a third-world country in no time. If the Green Horde’s dogmatic attempts at subjecting the greater population of this country to a mantra of “learning to live without” - while we sit back and watch as our sacrifices make not one damn bit of difference in the Big Picture of things, especially given China’s insatiable desire for an elevated standard of living that will consume every last resource known to man at the rate they’re going - are successful, we will soon realize that the headlong rush to force questionable choices upon us when it comes to this nation’s transportation fleet will result in exorbitant vehicle prices, an overtaxed electrical grid and an unsustainable driving future. I keep waiting for someone - anyone - speaking on behalf of the so-called “Green Intelligentsia” to step forward and admit that this “all-in” stance on electric cars will only result in fulfilling a small part of our vehicle needs going forward - specifically in the urban arena - and to suggest otherwise is simply lunacy.
The blind embracing of Tesla – again, that glorified kit car company that hasn’t produced even a whiff of profit or even demonstrated even the remotest suggestion of being able to bring a mainstream electric sedan to market – is Egregious Example No. 1 and proof-positive that the Green Horde will suspend all vestiges of reality in order to shove their view of a transportation future down the rest of this nation’s throat, even if the infrastructure doesn’t exist to support it now, not to mention the funds to even begin paying for it are nowhere to be found on the horizon.
Blind faith in the “new” or the “next” is one thing - I can embrace and encourage blue sky thinking and innovation as much as the next person - but abject stupidity in the face of a burgeoning reality borders on the criminal.
Our sustainable driving future will be based on a kaleidoscope of options going forward including hybrid, electric, natural gas, diesel, cellulosic ethanol and yes, believe it or not, gasoline. And make no mistake, that last item – and the internal combustion engine that goes with it – will be the dominant motivating factor in our nation’s fleet for at least another two decades, not that you could get anyone from Planet Green to admit it.
That’s Thing No. 1.
Sergio, Sergio, wherefore art thou, Sergio? After trying to get through the beyond tedious “interview” - schmooze-fest conducted by the Wall Street Journal’s Paul Ingrassia over the weekend, I’m really trying to figure out this “thing” that some of the media have for Fiat-Chrysler’s Sergio “I’m smarter than you’ll ever know” Marchionne. Is it the fact that he turned around Fiat against all odds going on several years ago now? That seems to be a lot of it, although Fiat isn’t doing so hot at the moment and hasn’t been for quite some time, so what makes people think that this time around will be automatic for Sergio and Fiat-Chrysler? I simply don’t get it because the facts are stacked against success for Chrysler, and there’s nothing, and I mean n-o-t-h-i-n-g automatic about it. Throughout all of Marchionne’s grandstanding pronouncements it has always been the jaw-dropping volume numbers being bandied about that struck me as disingenuous to say the least. Take the new Grand Cherokee, for example. Make no mistake, it is a fine piece of work, but the assumption that consumers in this market - one that’s losing traction by the minute - will disregard all of the excellent choices out there and jump on board the Grand Cherokee bandwagon as if it were a fait accompli is simply laughable.
Remember, this is a company that has long been off of the consumer radar screens and is just now cranking up advertising and marketing initiatives to get its mojo back. But it’s not that easy and whenever Sergio suggests matter-of-factly that Fiat-Chrysler will meet all targets - no matter how fanciful they might be - his credibility takes another hit. The bottom line at this point is that the new Grand Cherokee will not only have to be a hit, it will have to be a runaway best-seller on top of it to make a dent in moving Sergio’s “Plan” forward. And that’s asking a lot.
But again, everything Sergio says asks for a lot. A lot of suspension of belief and rational thinking from where I sit, to be exact. But that’s just “Sergio’s Way” and we’re all supposed to go along with it. Well, I’m not buying it. Sergio’s plan has more than enough holes that you could easily question just about everything in it. It’s all based on one market number over here, and that assumptive chunk of the market number assigned to Fiat-Chrysler over there, and it’s all supposed to come out in the wash and come good, because after all, “I’ve done it before” as he likes to say.
Well, guess what? The market isn’t cooking like everyone thought it was going to be and the so-called “recovery” is going s-l-o-w. So slow, in fact, that Sergio’s master plan could soon end up in jeopardy, and then what?
Well “then” is what I’ve been saying all along: Sergio’s real “plan” was aimed at establishing Fiat North America in this market on the bones of Chrysler, with minimal investment and cash outlay on Fiat’s part. It wasn't a Chrysler or media-friendly idea at the time he was trying to get everyone's "buy-in" on the idea of Fiat's takeover, but I don't doubt for a moment that's what his true plan was all along. And now that his grandiose plans for Chrysler are so intricately dependent on everything falling into place "just so" - from the economy, to the successful execution of the products and marketing - it's going to be damn near impossible for Sergio to hit his targets. I've been in and around this business for going on too many years to count, and I will tell you that nothing ever comes together “just so” in this business. Ever.
And that’s Thing No. 2.
Toyota credibility? The Oxymoron of the Year. The fact that I’m still writing about Toyota’s problems at this point is simply shocking to me. How this company could fall so far, so fast will fill B-school case studies for decades to come. It’s simply the most stunning corporate implosion in recent memory, well, except for the BP debacle that is, which by the time the disaster in the Gulf plays out will go down as the biggest corporate collapse in recorded history, but I digress. With the latest recall of 138,000 Lexus models – and really, we’re still talking about Toyota product recalls at this point after everything that has transpired? - Toyota can no longer hide the fact that there is, or at least was a fundamental corporate culture at work in its hallways based on deliberate obfuscation, a pattern of stonewalling and a steadfast refusal to admit guilt for anything. It’s as if the powers that be at Toyota started to believe that they were in fact, infallible and that nothing of any consequence would happen to derail their inexorable march to the top of the mountain in the auto business. And that they couldn’t possibly be dropping the ball on quality, no, not possible. Well, it did and now they’re toast. Will they still sell boatloads of cars and trucks? Absolutely. But will Toyota ever enjoy the stature that it once did? In a word, no. It’s just another car company competing for the proverbial “jumpball” in the marketplace that plays out every single business day.
Not Good and Not Pretty by any stretch of the imagination.
And that’s Thing No. 3.
Oh, for the Honda of old. There was once was a pretty damn impressive little car company called Honda. Energized by its total gearhead founder, and reveling in the fact that its official corporate name was the Honda Motor Company, Honda was the car company that marched to a different drummer, fueled by imagination and creativity and powered by a willingness to take chances and push the outer limits of thought when it came to building cars. And build cars they did. Great cars that bristled with innovation and creative thinking while executed to a high standard. Yes, Honda was the one Asian automobile manufacturer that proudly waved its freak flag high, comfortable in the knowledge that what they were putting on the street at that very moment was the very best they could possibly do. Different from everyone else certainly, but usually wonderfully enticing nonetheless.
But alas, things got weird.
Honda got sidetracked chasing segments they didn’t belong in, while losing sight of its founder’s vision. In short they started playing it safe, pulling back on the throttle when in the past they would have pushed down harder. Soon creativity gave way to a sober predictability - both in their designs and in their thinking - and everything Honda became known for was systematically watered-down or neutered to the point that the company and its products were barely recognizable. Today, Honda is flailing about while clearly lacking focus and direction. Its products are woefully predictable - the new CR-Z is a massive disappointment with its blatantly “safe” execution, like they pulled up halfway through and called it good - and a car that would have never seen the light of day at the “old” Honda.
Honda, the company that once regularly stood this industry on its ear with its rampant creativity and innovational prowess, has been running on autopilot for too long now. A creeping conservatism has swept through its ranks and now the company is filled with upper management types who could easily blend in at any other car company, but who wouldn’t have passed muster at the “old” Honda not all that long ago.
Something has got to give. We need and want the “old” Honda back. This industry desperately needs the “old” Honda back to show how it’s done and to demonstrate what’s possible when you allow creative thinking to run unfettered and free.
And that’s Thing No. 4.
GM: A Giant in training or the two-steps forward, five-back mobile frustration app of yesteryear? I get that everything that GM is doing right now has a cadence and purpose. Big Ed is allowing his top lieutenants to do their thing and GM might just have the best team in place that it has had in years, maybe even decades, because in the recent past, when GM would have its financial shit together something else would be weak. Or if it had its engineering and design functions firing on all cylinders, its marketing would be pathetically out of touch. It was always something in the GM of yesteryear, whether it was the wrong people, the paralyzing structural bureaucracy or the mind-numbing processes, GM managed to bring any shred of momentum to a screeching halt before it even got out of the gate simply by the sheer force of its own ineptitude.
But everything has changed. And now, GM not only isn’t making excuses, it’s focusing on making the best cars and trucks possible, with everyone seemingly - remarkably enough - on the same page. I won’t bother throwing the names of the people who deserve the credit (they know who they are) around right now because there’s no need for anyone down at the RenCen to stop for anything. They need to have the attitude ingrained that nothing has been “fixed” and nothing has been “won” and if they stick to that they’ll be just fine.
But two things concern the hell out of me about this company. One is the Chevrolet Volt. The Volt will not be an automatic home run by any stretch of the imagination. Once the Green Swells in California and D.C. get their fill of it, then what? We’re talking about a car that has been dissected and displayed for going on two years now in its present, finished form. Once the novelty wears off I believe the Volt could be the toughest marketing job of this or any other year. It’s a giant “we’ll see” at the very least.
Secondly, as good as the Chevrolet Cruze is – and it best be better than they say it is – there’s no question that its conservative design language will play against it, no matter how good it is. The odd thing about the Cruze is that for all its built-in goodness it doesn’t have “new” written all over it. Instead it reeks of “familiar GM,” which is about the last thing that car needs.
It’s going to be interesting to say the least because those two vehicles are not only the future of Chevrolet - they’re the future of GM to boot.
And that’s Thing No. 5.
Halfway through 2010 and we’re just getting warmed up. Fasten your seat belts, ladies and gentlemen - it’s going to be a wild ride.
And that’s the High-Octane Truth for this week.
See another live episode of "Autoline After Hours" hosted by Autoline Detroit's John McElroy, with Peter De Lorenzo and friends this Thursday evening, at 7:00PM EDT at www.autolinedetroit.tv.
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