It’s all over but the hand-wringing for Pontiac.

By Peter M. De Lorenzo

Detroit. It was nice to have the opportunity to drive the Pontiac G8 (as we mentioned in last week’s “On the Table”), but it was sad, too, because despite the exclamation point-drenched car magazine covers of-the-moment touting how great the G8 is - and it is a damn good car, by the way - it won’t be enough to save Pontiac from its inevitable demise.

GM’s ongoing circus juggling act - which revolves around propping up its divisional marketing and product aspirations on an as-needed basis - is finally unraveling in the worst automobile market the U.S. auto industry has seen in decades. GM is finding out the hard way that no matter how many excellent new products they’re able to bring to market, unless they can back those products with enough marketing and advertising horsepower it ultimately doesn’t matter. What good is a reinvigorated product offensive when the market is crumbling and you have too many divisional mouths to feed - and that’s before you even begin to address the competitive environment?

Not much.

Besides the too many models-too many divisions-too many dealers thing, I don't think it's possible within GM's sanitized and homogenized organizational structure for anyone to come along and fix Pontiac, let alone understand it. GM has demonstrated convincingly in its latest product renaissance that they only actually believe in product when their backs are pressed against the wall, which doesn’t say much for the corporation culturally. But then again the words “culture” and “GM” have never blended well.

It’s clear that the network of True Believers within GM responsible for its hotter products right now has succeeded in spite of the corporation, not because there has been a sea change at the top. Yes, Bob Lutz has done wonders since he came on board, as I’ve documented, but it has been compartmentalized and restricted to the product development side of their business. There’s no fundamental shift in how GM – as a company – views the automotive world, especially right here in the U.S.

I get the feeling that if Lutz were to leave tomorrow – besides the fact there are maybe only two people in the entire corporation who could take over his role (I’ll name them in a future column) – GM would revert right back to its standard operating procedure of having the finance guys call the shots, and that would turn out to be especially nasty without the commanding presence of a Bob Lutz to balance things out when it comes to making the right product decisions. And that’s a pathetic commentary on GM’s “culture” as much as anything.

In the new global scenario that defines the auto business today, cross-continent cost efficiencies are the GM financial brains’ raison d’etre, but that's still no guarantee of success and it’s still no substitute for the ability to deliver great products to market. You can’t cut your way efficiently to prosperity, and I’m not so sure the financial suits at the top of GM understand or believe that – even after all of the turmoil that has befallen that corporation over the last 20 years.

And here, trying to survive and thrive in this culturally bereft environment, is Pontiac, struggling and scavenging for marketing dollars - and for relevant products - and it’s not going well. Not going well at all, as a matter of fact.

Back when Bunkie Knudsen took the division over in the late 50s, Pontiac was a rickety organization churning out bland products to the point that it was beginning to have trouble justifying its existence within the GM divisional structure.

But Knudsen changed all that. He fired-up his engineers and the designers over at GM Styling assigned to his division and made them work to a new mission, a simple formula that distilled down to its essence went something like this: Flashy cars + Horsepower + Marketing Attitude x Swagger = Sizzling Sales.

And it worked like gangbusters. Pontiac became GM’s go-go division literally overnight, as each fall the new Pontiac lineup would set the market on its ear with innovative styling flourishes and big-time performance attributes.

Pontiac in its heyday was the GM “maverick” division that flew its pirate flag proudly from high atop its old-school administration building in downtown Pontiac. Pontiac specialized in rattling other GM divisional General Managers to no end (especially at Chevrolet), tweaking and taunting the corporate suits downtown at the old General Motors building, and giving the competition fits in every segment it competed in.

And Pontiac advertising from that era was some of the best ever done in automotive history. Both memorable and emotionally compelling, it not only stood apart from everything else, it created a “buzz” on the street for the brand that was simply irresistible.

But that, as they say, was then.

The “maverick” Pontiac couldn’t exist in today’s General Motors, because there’s no champion for the division or anyone left there who even remotely understands what Pontiac is all about. The one thing that Lutz has misjudged since he began his tenure at GM is that he never did "get" Pontiac. His idea that Pontiac should be the "affordable BMW" is flat-out wrong. Sometimes Bob’s Euro-sensibilities get the best of him, and his view of Pontiac is one of these times. Pontiac isn't an "affordable" BMW because it was never cut out to play that role. Pontiacs should be raucous, distinctly American cars with real attitude, appealing to people who enjoy marching to a different drummer and who like to go their own way.

Though I applauded Lutz at the time for trying to jump-start the division with the modern GTO, rushing that car to market glossed-over the real issue facing Pontiac, and that was that the division didn't stand for anything on the street anymore. And that was compounded by the fact that the modern day GTO was a mistake for a number of reasons. Not that it wasn't a good car and a terrific value by the end (when it was heavily discounted), but GM had allowed Pontiac's image to dry up in the marketplace, and by the time the "new" GTO came out, there was no legacy left. It didn't mean anything to younger enthusiasts, and for the older enthusiasts who remembered the great GTOs from the past, it didn't qualify as a "real" GTO (not that they knew necessarily what a "real" GTO should look like, they just knew that the Australian-sourced car wasn't it). It also didn't help that the "modern" GTO was a lackluster, totally uninspired design that was already showing its age by the time it made its debut.

Instead of doing their homework and coming up with a real plan to get Pontiac going again, GM squandered the opportunity to give the division a new lease on life. And now, even though the G8 is an excellent car, Pontiac still doesn't stand for anything in the U.S. market. And they don't have the fundamental marketing power at their disposal to turn things around, either.

If I had a clean sheet of paper for Pontiac I would create a smaller, rear-wheel-drive GTO as a coupe with a hot but small (2.5-liters) all-aluminum V8 that would sticker for $19,999 and weigh no more that 2800 pounds (with minimal options). But I wouldn't do it without a commitment from GM marketing that Pontiac would go back to its roots and that it would be properly supported - both financially and with new product.

And I would broom all the vehicles that didn't meet Pontiac’s "marching to the different drummer" persona too. That means no Vibe, no crossovers, no SUVs, no trucks and no bullshit nomenclature. I would do the GTO, a Trans-Am, a Grand Prix and a Bonneville, four vehicles that would bristle with innovation, performance and swagger. Everything else would go away - including the Solstice - because as long as Saturn has the Sky, the Solstice isn’t radical enough for the Pontiac product portfolio. (As for the G6? If GM can’t figure out how to make up the volume between the Chevy Malibu and Saturn Aura, then they’re in worse straits than anyone thought.)

And then I'd market the shit out of the new Pontiac lineup – with emphasis on the performance-per-dollar equation - and do it with an unflinching rebel attitude to boot.

But as we well know by now, Pontiac won’t get the proper support within GM because Chevy is the lead dog, and they have Malibu and Camaro to worry about, not to mention Silverado, the new Traverse and the rest of it. And Cadillac has the CTS, which needs constant reinforcement in the market. And then there’s Saturn, which has a burgeoning product lineup filling up with German Opel-based entries, and not enough marketing and ad money to get out of its own way. Oh, and don’t forget about GMC. And Hummer. And Saab. And even Buick too.

So the idea that GM can properly nurture Pontiac back to health in this market - with its cumbersome divisional lineup and with no one on the premises who “gets” what Pontiac is and what it could be again - is simply out of the question.

A few years ago Bob Lutz called Pontiac a “damaged brand.”

He was right, of course, even though his idea of resuscitation lacked the strategic fundamentals that the brand so desperately needed.

Given the corporation’s swooning performance of late in the U.S. market, and the fact that it has way too many irons in the fire, GM doesn’t have what it takes in terms of the talent, the passion or the funding to get its once-glorious “maverick” division off of life support.

And short of major reconstructive surgery, Pontiac cannot and will not survive.

It’s too bad, too, because Pontiac deserves better. A lot better.

Thanks for listening, see you next Wednesday.

Captain Kirk weighs in, and the turnaround story within the turnaround story.

By Peter M. De Lorenzo

Detroit. I have two topics this week because revolving my whole column around Captain Kirk Kerkorian seemed like a giant waste of time, so I won’t do it. Needless to say, his “M.O.” hasn’t changed one iota since he was a young businessman, some 60 years ago. It’s all about the m-o-n-e-y for Kerkorian, with the words “timing” and “opportunity” thrown in for good measure. Are we to take his expanded investment position in Ford on face value, that he’s just an enthusiastic investor who has burgeoning confidence in the crisply run Alan Mulally-driven Ford?

How about no?

Boredom had set in, apparently, for both Kerkorian and his Detroit-based bagman, Jerry York, and it was just time to start messin’ with the one member of the Detroit Three that they hadn’t messed with already. Ford doesn’t present the same outright ownership opportunity that Chrysler or GM presented, what with the Ford family controlling 40 percent of the company’s stock, but still, the Kirk and Jerry show has never been about being “passive” – not even remotely so, as a matter of fact.

They will be supportive of Mulally and his management team only as long as they see what they deem to be “acceptable” improvement. The problem with this is that Kerkorian and York’s version of acceptable, and the real-time progression of a solid turnaround plan usually have nothing in common. Let’s just say that having these two guys - Kerkorian and York - as your Cheerleaders in Chief is suspect, at best. It would be like calling those vultures circling over your head as you’re wandering around lost in a desert somewhere your “friends.”

Kerkorian is investing in Ford for one reason and one reason only, and that is to roil the stock upward – and in a big hurry – so he can reap a nice chunk of profit and go back into his cave. If he and York don’t see what they want to see, you can bet the whining by York will start in the media – which can’t seem to help but give the guy a forum – and then the agitation and harassment of Ford will really begin.

This exercise will probably be done sometime by mid-summer, and then we can all return to our regularly scheduled programming, but in the meantime we’ll have to put up with these guys again for a while.

Is any of this the least bit productive? Of course not. It’s all about “The Game” for Kerkorian. It keeps him busy and it keeps him alive, basically, and whether or not it’s good for the company in question – in this case Ford – has absolutely nothing to with it.

The SUV hangover gets U-G-L-Y.

Much has been written about the rapidly changing tastes of the American car-buying public over the last six months – as in the exodus away from big SUVs and pickups - but it was hard to anticipate just how dramatic it was going to be, until now. GM announced on Monday that it would cut production schedules at four plants - its full-size pickup truck assembly plants in Pontiac, Mich.; Flint, Mich.; and Oshawa, Ontario; and its full-size SUV assembly plant in Janesville, Wis. – to the tune of around 140,000 units, while costing 3,500 employees their jobs.

Gas prices aren’t helping, of course, but the painful reality is that a lot of American consumers who bought large SUVs at their faddish peak (and who never needed them to begin with) are now bailing out of that segment for good. GM and Ford in particular are struggling with the transition to make more cars and crossovers in order to keep these buyers from abandoning their companies completely, while their dealers are being inundated with used SUVs and big pickups that are piling up daily - and plummeting in value.

Should Detroit have anticipated this earlier? Absolutely. And now the transition is proving painful for everyone. On top of this country's dismal financial news that’s contributing to poor vehicle sales in the U.S. right now, add to it the fact that an entire segment - one that propelled Detroit profitability for years – is literally evaporating by the day.

Retooling Detroit plants to build more cars and crossovers is the turnaround story within the turnaround story in this business. The companies that have new entries either on the ground or due within the next 18 months are well-positioned for at least a shot at survival, but it’s only a shot.

Not surprisingly, the one constant in all of this turmoil, of course, is that in the midst of the constant drumbeat of bad news on top of more bad news, these companies must deliver excellent products that consumers will at least give serious consideration to, let alone buy. 

It'a amazing how it always comes down to the product, isn't it?

As always, the clock is ticking on Detroit, and it’s not getting any easier.

Thanks for listening, see you next Wednesday.

Same as it ever was for VW.

By Peter M. De Lorenzo

Detroit. “Das Auto” is the new global theme line for VW, and it is being presented here in the U.S. in a new, hipper-than-thou advertising campaign by Crispin Porter + Bogusky, the multi-decorated ad agency based in Miami (and Boulder, CO), featuring a “loveable” (VW’s words) Beetle named “Max” as talk show interviewer (with the obligatory German accent), and astronaut Richard Searfoss, Napster founder Shawn Fanning, coach Bob Knight, actor David Hasselhoff and leggy super model Heidi Klum as “guests” in separate spots. Out several weeks now, this new VW campaign has left a lot of people scratching their heads. And no wonder.

Look beyond the quirkiness of the advertising, and you’ll find it is business as usual for VW when it comes to marketing here in the U.S. It has basically become a formulaic exercise now for VW marketers, and it goes something like this: Hire ultra-hip ad agency of the moment, let them create their “magic,” unleash their esoteric and calculatingly ultra-cool advertising on the unsuspecting American car-buying consumer public, revel as the ad critics wax-on eloquently about how brilliant the advertising is, watch the sales needle move not one iota, then start the process all over again eighteen months later.

As part of VW’s perennial quest to find itself here in the U.S., this “Max” campaign is the latest attempt by the German automaker to somehow reconnect with the American car-buying consumer.

And it fails miserably.

Sure, the iconic Beetle is cool, but for whom? Are young consumers going to really give a damn about the cultural meaning of the Beetle to that certain generation who grew up in the 60s? No. Will the lame repartee between Max and his “guests” do anything to change perception or move the needle about VW? No again. Will the unbelievably overwrought print that goes with the TV resonate with any consumer demographic? Oh, Hell no.

This new VW campaign smacks of the classic Crispin Porter + Bogusky “M.O.” - which is to give consumers the following message right up front in everything they do: “WARNING: You’re far too unhip to understand this stuff, but trust us, it’s great and we’re brilliant.”

And predictably, some advertising “experts” have weighed-in attesting to the hipness of this new VW ad campaign, coming up with such pearls of wisdom like “it breaks through the clutter” and “it moves the needle.”

But what is it selling, and what is it telling us about VW, exactly? That VW can do quirky-crazy advertising? That VW is bringing back the ghosts of Beetles past? That VW’s ad agency does real cool stuff?

And by going back to the well one more time to capture the nostalgic magic of the Beetle - when there’s not one single attribute that made the reputation of that car alive and well in the company today - what is VW accomplishing, exactly?

Unless you actually believe that this campaign pushes the “re-set” button for the American consumer and everything is now beautiful and wonderful again for VW thanks to a cartoonish character named “Max,” I would say the campaign accomplishes a big fat zero.

VW’s hip and cool advertising may help pump-up CP+B’s already overblown and overhyped reputation, and it may give the ad critics something to write about on a slow day, but once again it does nothing for the VW brand in this country, and it does nothing to dissuade me from thinking that VW’s German overlords are just flat-out incapable of figuring out the American market or VW’s place in it. Not to mention the fact that VW marketers seem to be deathly afraid of being framed as being “unhip” themselves, because they can’t seem to say no to their ad agency to save their lives.

After the “Das Auto” spots run their course on TV and on YouTube, and after the print component (much of it flat-out offensive, by the way) disappears from the magazines, newspapers and Internet, then what?

VW will be left with a series of products that are overpriced for their image in the U.S. market - while perpetually reaching too far into Audi and BMW territory - and their dealers will be left scratching their heads realizing that the hipness of the campaign and the “buzz” of the moment have resulted in little or no meaningful increase in sales to speak of.

In other words, same as it ever was.

Thanks for listening, see you next Wednesday.

Carlos dreams big as the Chrysler-Nissan deal moves toward its inevitable conclusion.

By Peter M. De Lorenzo

Detroit. Well, it looks like Carlos Ghosn is finally going to get his way. Long interested in having an official link with one of the U.S. automakers – and after being rebuffed by GM in pursuit of a much larger deal – Ghosn instead has found a willing partner in the Cerberus-owned Chrysler LLC. Cerberus, which has seen the initial euphoria of the Chrysler deal turn sour in a big hurry, is rapidly running out of options – financial and otherwise - and running out of time. The combination of a faltering U.S. economy, tightening credit, and the fact that they went into the Chrysler deal with insufficient funding has crippled the capital management company’s quest to turn Chrysler into an entity of appreciating value.

The result?

Emerging from the rumors and the backroom discussions is the news that Nissan will begin assembling a Japanese-built small car for Chrysler in 2010 and that Chrysler LLC will build a pickup for Nissan in Mexico. This should come as no surprise because the hints have been out there for some time now, even if some observers refused to accept the writing on the wall.

But as significant as the event of the now-public and formal linkage of Chrysler and Nissan is, the more significant news happened last week, when several hundred million dollars of loans to Chrysler had to be sold off by one of its underwriters at a deep discount ($.61 on the dollar), according to Reuters.

When the original $7.4 billion deal to take Chrysler private took place - with Daimler AG selling Chrysler to Cerberus Capital Management - it was partially funded by a $7 billion term loan that was handled by Bear Stearns, Citi, Goldman Sachs, J.P Morgan and Morgan Stanley.

But with Cerberus running into serious headwinds in trying to get anything going with Chrysler – not to mention the horrendous state of the U.S. auto market - and the nation’s banks running into a tsunami of financial bad news, banks are now scrambling to get out from under the Chrysler debt.

The discount sale price on the Chrysler paper does not bode well for Cerberus’ chances to resurrect Chrysler’s fortunes in the U.S. market. With first quarter sales down 14 percent from the year before and a product portfolio that’s still too far removed from where the market is heading, there’s a growing feeling within the industry that there’s just not enough time left for Chrysler to realize any substantive gains before Cerberus has to cry “uncle.”

And despite the public pronouncements that have Chrysler and Nissan executives falling all over themselves insisting that there’s nothing more to this deal other than what has been announced, it’s clear that formal talks on a larger agreement in scope will be taking place in the not very distant future (if they haven’t begun already).

The bottom line in this deal is that Cerberus - for all of its savvy and gold-plated reputation – has run up against an industry it was ill-equipped to tackle in the first place at the exact worse moment in history to attempt to do so. Even with a strong U.S. auto industry firing on all cylinders – a scenario that hasn’t been seen since the heyday of the SUV frenzy – Cerberus would have been hard pressed to rejuvenate Chrysler.

Carlos Ghosn ultimately will present Cerberus with a golden opportunity to extricate itself from an agreement it never should have entered into to begin with. He will maximize the Chrysler facilities (at least the ones he deems worth saving), he will pump up the Jeep brand globally by putting real muscle behind it, he will weed out the Chrysler product lineup both current and future (not that it would take a genius to figure that out), and he will approach the U.S. market with a unified product strategy that he has so desperately wanted.

In short, Ghosn will get what he has always wanted, which is to become more than a second-tier player in the U.S. market.

As for Cerberus? They will fold their tent quietly, with the nasty realization that the “end game” money promised to all of the high-priced talent they’ve recruited won’t even approach a quarter of the original estimates - if that. Not to mention the fact that the company’s reputation will take a very serious hit because of their misguided auto industry “adventure.”

Will it all go the way Carlos dreams it will go? We’ll have to wait and see.

But that’s why they play the game.

Thanks for listening, see you next Wednesday.

A “What if?” scenario for GM.

By Peter M. De Lorenzo

Detroit. With industry sales estimates regularly dipping below 15 million units for the 2008 model year and the nation’s economy rapidly going into the tank, it doesn’t take much to see that the very existence of the U.S. auto industry is being threatened. Not since the earliest beginnings of the industry, when countless cottage auto manufacturers either went bust, were bought out or merged into other companies has the upheaval to this nation’s auto industry been so pronounced, or dramatic.

Right now, the fear of the unknown within the industry is starting to emerge in a series of “What if?” scenarios that no one really wants to think about. As in, what if the economy does go deep into a sustained national recession? Or, what if gasoline continues to go upward in price and the supply gets threatened?

And to make matters worse, there’s one giant “What if?” that has already become a reality, and that is that the light truck market has begun to contract at an alarming rate - and none of the Detroit automakers are even remotely prepared for it. Even Toyota has gotten caught up in the massive correction to the light truck market, as its brand new pickup truck plant south of San Antonio reminds them of their glaring overcapacity in trucks every single day.

In an industry that’s hanging by a thread as it is, those kinds of “What ifs?” - though not wildly unrealistic – are not the kind of advance planning scenarios that a car company can spend a lot of time on. They can’t ignore them to be sure, but they can’t dwell in them for very long, either, because after all, investment in the future for a car company means spending money on R&D and product development (its lifeblood) now, and to “short” funding for those essentials is inevitably a recipe for disaster.

But in GM’s case, for instance, what if things did go really bad, and as a result the company had an opportunity to retool its fundamental divisional structure in the U.S. to reflect its new reality?

I’ve been writing about GM’s ingrained “too many models-too many divisions-too many dealers” problem since the very beginning of this website, and each time yet another example of the true costs associated with GM’s structural Achilles Heel rears its ugly head, I’m reminded that this company is unlikely to ever make a profit in the North American market until it can reconfigure itself.

The latest example of this? GM’s Saturn division. Even with showrooms filled with a glittering array of new products, Saturn sales are down dramatically. Why? The most obvious explanation is that GM’s cycle of marketing money hasn’t reached Saturn because GM has been busy with other things, like the launches of the Cadillac CTS, the Chevrolet Malibu, the Buick Enclave, etc., etc. This is the reality of having a divisional structure that still reflects when GM controlled almost 50 percent of the U.S. market – now 40 years ago and counting – and the fact that GM is constantly juggling those divisional balls in the air at the same time, which means throwing money at the priority of the moment. The result of that is that some divisional balls are up, and some are down, and Saturn has been the “down” ball for some time now.

But since we’re dealing with “What if?” scenarios today, what if GM didn’t have to be saddled with its traditional divisional structure? What if it was a company that actually reflected a 25 percent share of the market? And what if the state franchise laws in this country didn’t exist so that GM could configure its dealers to reflect its new divisional structure?

Here is what my vision of newly configured GM would look like:

Small and Compact Cars: This means micro, “B” class cars and compacts, the kind we’re going to get more used to seeing in the U.S. what with the onset of $5.00 per gallon gasoline. These would be sold by Chevrolet.

Mainstream Sedans and Crossovers: Mid-size and full-size cars and crossovers, but not veering into luxury territory. Again, Chevrolet would be the lead division, think Malibu, Impala and Traverse.

Luxury Cars and Crossovers. Cadillac would occupy this position, with the CTS, a larger sedan (STS-DTS replacement) and two luxury crossovers, one smaller and one larger.

High-Performance and Ultra High-Performance: This category would allow for SS models from Chevrolet and of course, the Corvette and its supercar variants.

Luxury High-Performance: The “V” Series cars from Cadillac (with or without the XLR) would live here.

Pickup Trucks. Chevrolet would be the only brand of pickup, ending the GMC era.

Mainstream and Luxury Trucks: This would be a catch-all category encompassing everything from the Chevrolet Tahoe and Suburban to the Cadillac Escalade (at least as long as GM keeps making them anyway), and vehicles from Hummer.

A controversial list, to say the least. First of all, it’s obvious that when the dust settles GM, at least in North America, would have two main divisions – Chevrolet and Cadillac. Saturn vehicles would be faded into the new structure as needed. For instance, the Aura would no longer be necessary with the Malibu reestablished in the market, but the Vue would live to fight on for Chevrolet and possibly Cadillac. The rest of Saturn? Why? The Outlook doesn’t exist when you have the Chevrolet Traverse. Period. And the Astra would either find its way as a Chevy or just go away.

And as much as it pains me to say, Buick would only be sold outside of the U.S. I think the Enclave is the clear design statement of GM’s full-size crossovers, but with Cadillac getting the luxury version and Chevrolet the mainstream version, there’s no need for Buick to exist in this market any longer. Besides, GM can keep a plant going here to handle Buick exports to China, if needed.

The same goes for Pontiac. Spiritually my favorite GM brand, Pontiac gets caught in the crossfire of Chevrolet’s performance variants and the fact that GM can’t afford to sustain its presence in the market as a mainstream player. So it goes away too.

And GMC? At what price point does GMC exist between Chevrolet on the mainstream end and Cadillac on the luxury end? It’s simple, it doesn’t.

And yes, surprisingly enough, I would keep Hummer, because the upcoming H4 can justify the brand’s existence, it’s going to be that good. As for Saab, it’s a money-losing entity that GM will not be able to afford to keep much longer anyway.

Now, the most obvious criticism of my list will come from the pundits who say that I’m taking out too much volume and profitability and that it’s corporate suicide to do so.

And I would argue this: Are you suggesting that GM can’t replace that volume and profitability by focusing its engineering and design talent and marketing resources on fewer, class-leading brands and models instead of trying to justify the existence of its traditional divisions - just “because” - ?

I’ll argue that one with you until the cows come home.

Will this scenario ever happen in my lifetime? No. GM is too interesteded in keeping its entrenched divisional structure alive, and with the franchise laws the way they are they can only reduce their dealer count through attrition and consolidation.

But it’s nice once in a while just to say “What if” and envision a leaner, meaner, more competitive GM.

Thanks for listening, see you next Wednesday.

Great Design: The Ultimate I.P.D.

By Peter M. De Lorenzo

Detroit. Have you ever participated in a focus group? Better yet, have you ever participated in an automotive focus group? I’ve watched hundreds of them from behind the one-way observation glass, and I’ve even acted as the moderator in a few. From observing new product clinics to watching as ill-informed consumers play advertising “experts” for an hour reviewing new ad campaigns, I’ve seen it all, much of it painful and most of it irrelevant to making a car or truck – or an ad campaign – better.

Auto focus groups are remarkably similar in that one person in a session inevitably becomes the know-it-all car “expert” who dominates the group while the others sheepishly follow, being much more interested in the free food and the compensation they get afterwards than actually contributing something of value to the discussion.

Get a group of people in a room and ask what’s important to them when they consider the purchase of a new car or truck, and the answers are as predictable as the sun coming up in the East. The words that will be regurgitated back to the moderator are inevitably “safety,” “fuel economy,” “reliability” and of course, “quality.”

And manufacturers that actually take those responses as gospel do so at their peril, because everyone will recite those words when asked, but no one will actually go to a showroom or an auto show and abide by their own list of “must haves” when picking out a new car or truck.

Why? It’s simple, really. Words alone don’t motivate people to buy cars or trucks. There has to be an emotional connection on some level, no matter if you’re spending used car money or picking up a new Rolls-Royce Phantom Coupe. Great advertising can create an aura for a car or truck, there’s no doubt (e.g., Hal Riney’s original Saturn campaign), but that won’t matter if the vehicle in question has the emotional appeal of a rake.

This is where great design comes in. Some people in this business still need to be reminded of the real impact of great design, which is shocking to me. You only have to look as far as the new Malibu to be reminded of the power of great design. Do you remember the previous model? Didn’t think so. It was swiftly relegated to Rental Car Land because it had all the presence of a fax machine.

GM did a superb job on the 2008 Malibu in every respect, and they even spent proper, big-time money on a comprehensive launch - for the first time in its history - in order to get the car into the public’s consciousness. But if the new Malibu didn’t have great design language inside and out, it wouldn’t be having near the impact on the market – or on the company’s bottom line – that it is today (transaction prices are up anywhere from $4,000 - $5,000 over the previous Malibu).

That’s what great design can do. Back in Detroit’s heyday, great design was the only “Initial Product Differentiator” that really mattered. Today, people will argue that safety, fuel economy and quality, etc., are the only Initial Product Differentiators that matter. But I would say that those focus group-driven ingredients are merely the price of admission to compete in the business today.

Does safety sell? Sure it does, but no manufacturer has the market cornered on that anymore (despite what they say in their ads). Fuel economy? Sure. Reliability? Quality? Of course, but people expect all of those things now. And for the most part, every manufacturer delivers a basic package of those standard ingredients. Not one of those items put people over the edge to buy, however, because ultimately it comes down to the look and the feel of the vehicle inside and out that motivates people - that instant initial emotional impression that only thoughtful design can convey.

Now, before all of those readers out there fire up their keyboards to praise the Camrys, Corollas and other pertinent examples from the Blandtastic automotive universe, I will make one more point. I submit that the second generation Toyota Prius has been a success as much for its design as anything else. When it made its debut, the Prius II looked unlike anything else coming down the road, and it became seared in the public’s imagination as a new, contemporary, forward-thinking vehicle – and that was before the hybrid aspect of it was factored into the equation.

The bottom line is that people gravitate to excellent design, whether it’s a tea kettle, a perfect little black dress or an impactful piece of architecture. And when it comes to automobiles, that emotional pull is even stronger – and more immediate.

Some out there may insist that the old saying, “you are what you drive” has become obsolete in this touchy-feely, green-tinged world - but I’m not buying it for a second. People still have strongly-formed opinions as to what they’ll be seen in - and why – and that’s not likely to change anytime soon.

As I’ve said before, we should never forget the essence of the machine, and what makes it a living, breathing mechanical conduit of our hopes and dreams. Harley Earl understood it implicitly. Bill Mitchell revered and nurtured it. And now GM’s Ed Welburn is the latest proponent of its power. And automotive designers around the globe understand its power, too, which is why great design has reemerged in this business as the ultimate Initial Product Differentiator.

And as this business slowly but surely moves toward a common set of ingredients in our cars and trucks, the importance of great design will grow exponentially going forward.

Thanks for listening, see you next Wednesday.

The Voice of the Customer Gone Wild.

By Peter M. De Lorenzo

Detroit. Some people think that I’ve been far too hard on the folks out in Auburn Hills, after all, Cerberus CEO Stephen Feinberg has likened his company’s efforts to “save” Chrysler as being part and parcel of fighting for truth, justice and the American Way. Feinberg’s quest was even referred to as being his “patriotic” duty to do so by his Apologist in Chief, “Minimum Bob” Nardelli, the ex-Home Depot guy who so far has truly distinguished himself as being hands down the wrong guy at the wrong time in charge of the wrong company, by the way.

Memo to our AE readers: It’s not as if I have to go out of my way to find things to write about when it comes to Chrysler. As a matter of fact, I have studiously avoided writing about the highly-compensated bunglers out in Auburn Hills, because if I didn’t I could have easily written about them every week.

And now, here we go again, because those wacky, wonderful folks who give new meaning to the term utter futility are back front and center with yet another lame-brained scheme to engage America’s car-buying consumers.

Let’s review a few things first, shall we? Remember, Cerberus Capital Management is the company that professes to be visionary stewards of the fabric of America instead of the churn-and-burn specialists that they actually are. Lest anyone get the wrong impression here, they’re not the Little Sisters of Charity by any means. They’re in it for the money – and that’s fine, man, as The Dude would say – we’re into profit just as much as the other guy around here, I just don’t like it when Cerberus pretends to be something they’re not, which they seem to do on a daily basis.

Make no mistake, when Cerberus jumped head first into the idea of taking Chrysler off of Daimler’s hands (after the Germans had finished running it well and truly into the ground), they had gold-dipped sugar plums dancing in their heads – because there was gold in them thar Auburn Hills!

They’ve rarely been wrong before, and besides, how tough could the car business be? After all, the so-called Cerberus culture still hinges on the residual “Masters of the Universe” mentality left over from the 80s version of Wall Street, and they figured no one could outsmart them, especially a dying vestige of a rust-belt industry slumped against the ropes.

Oh how wrong they were.

Despite spouting glowing phrases like “we’re in this for the long haul” and “we’re going to do justice to this iconic American brand,” Cerberus found out in about ten minutes that they had gotten themselves into a mess that they were ill-equipped to handle. On top of a lurid set of negatives – a dismal product mix, disillusioned dealers, virtually nonexistent cash flow and the fact that the majority of the company’s manufacturing (at least in the plants that are still open) is going directly into the rental car fleets, Cerberus was sailing Detroit’s version of the Titanic into the iceberg-filled waters of the worst U.S. economy in years.

To make matters even worse, Cerberus went out and actually recruited Bob Nardelli to run the whole show, which made the efficacy of this enterprise suspect from the get-go. Then, they went out and hired a disgruntled Jim Press away from Toyota. Press, who had been moved up and out of the day-to-day fray at the Japanese automaker and who was just itching for something of substance to do after being disrespected by his Japanese handlers, yielded to the siren call of a giant backend payoff (estimated at $52 million) should the Cerberus turnaround of Chrysler succeed. That it required flipping his personal “switch” and disavowing 23 years of blatant anti-Detroit bashing while misleading the industry media on a regular basis - exposing his built-in duplicities for one and all to see - was something he hoped we’d all forget to notice. We didn’t.

Was this a corporate marriage made in heaven? Hardly. The fact that Press and Nardelli don’t speak is common knowledge. Though repeatedly denied, these two have about as much in common as Barack and Hillary. Press views Nardelli as an interloping mercenary lightweight who is grossly unfit to hold sway on key product decisions (and he’s dead right on this count, of course). While Nardelli is convinced that he’s the smartest guy in the room – any room - which tends to get in the way of listening, unless you fancy the dulcet tones of your own voice, or the sound of one hand clapping.

Oh, I almost forgot, added to this unwieldy clash of egos was one Deborah Meyer, an ex-Toyota marketing maven who was hired before Jim Press was hired. The problem? Jim Press doesn’t care for Ms. Meyer. The other problem? Nardelli has little use for Meyer either, trusting his personal marketing guru - the relentlessly overhyped Peter Arnell, instead.

So what does Ms. Meyer do to stake her claim in this mess? She comes up with the idea of recruiting up to 5,000 people to become members of something called the Customer Advisory Board, which will be an online forum where Chrysler employees will listen to direct input from interested parties – and then go forth to allegedly build better Chrysler products. This is all part of Meyer’s “We listen” ad campaign, which is trying to convince the American car-buying consumer public that by listening to its customers, Chrysler will make its future cars and trucks great.

Now, I don’t know about you, but this is akin to letting the inmates run the asylum, only this won’t be some modern day, feel good remake of One Flew Over the Cuckoo’s Nest. Rather, it will be the automotive industry equivalent of The Voice of the Customer Gone Wild.

Creating forums to listen to the voice of the customer? How about if they just set up listening kiosks at America’s shopping malls to soak up the kaleidoscope of cumulative wisdom generated by your average gaggle of Teen Queens about the vicissitudes of the car business?

Meyer was quoted as saying, “We want to harness insights and customer dreams into things we can use concretely with our different groups, such as engineering, design, marketing.”

Well, I guess if you can’t come up with the goods on your own, why not, right? Right. Grasping at straws doesn’t even begin to convey the lunacy of this move.

While Chrysler soaks up the white noise from their touchy-feely customer forums and contemplates the wonder of it all, other car companies (at least the good ones, anyway) will go about the serious business of designing, engineering and executing the best cars and trucks they can possibly bring to the street.

While Chrysler listens to its “Customer Advisory Board” and pauses to make sure everyone gets a collective group hug for their efforts, other car companies will put the pedal down – hard – and disappear down the road.

So, when it comes to the Gang Who Couldn’t Shoot Straight out in Auburn Hills, I guess I won’t run out of things to write about anytime soon.

After all, you just can’t make this shit up, as we like to say.

Thanks for listening, see you next Wednesday.

Pontiac’s resurrection gets lost in translation.

By Peter M. De Lorenzo

Detroit. I’ve written about Pontiac extensively over the years in this column, partly because I actually have a passion for the brand that goes way back to the late 50s (Bunkie Knudsen use to send the latest and greatest Pontiac to our house for my mom to drive every summer, usually a Bright Red Bonneville convertible with the hottest engine they could stuff in it at the time), and partly because I had the privilege to work on Pontiac advertising during one of the division’s last real heydays (in the early 80s).

Believe it or not, Pontiac used to actually mean something in the American car market, but that was so long ago that I feel it’s my duty to remind people about it now and again. At its high point, Pontiac was pressing Ford division in sales and enjoying the No. 3 position in the U.S. market. And Pontiac did it by selling hot cars with an unmistakable rebel attitude, creating a brand presence that was unique in the marketplace.

Pontiac not only marched to a different drummer within GM, they reveled in tweaking the corporate “suits” at every opportunity, causing major blowups and out-and-out war with GM’s fair-haired division – Chevrolet – on more than one occasion. And whenever Chevrolet execs would whine about yet another incident of egregious behavior by its brother division some 25 miles north of the city, executive honchos on the famed 14th Floor of the GM building at the time would only weakly admonish Pontiac, because after looking at the latest monthly sales figures they would do a collective shrug of the shoulders and then let Pontiac execs go back to doing exactly what they were doing with a wink and a nod. The Pontiac formula flat worked, and even the GM suits were smart enough not to mess it up.

The origins of this “hands-off, look-the-other-way" policy that the GM Brass employed with Pontiac defined the very essence of the brand, and it’s a story that bears repeating.

By 1963, GM was still in the throes (sort of) of adhering to the 1957 agreement with the Automobile Manufacturers Association to not promote speed and horsepower in automobile advertising for safety reasons, and to not race their products. I say sort of because unbeknownst to the execs down at headquarters, Zora Arkus-Duntov was feverishly working away at his answer to the Shelby American Cobra – the magnificent Corvette Grand Sport – and at the same time GM “mystery” V8s were showing up in blistering fast NASCAR Chevys at Daytona. (Ford had already bailed on the agreement by the summer of 1962 in order to jump into its “Total Performance” marketing campaign with both feet.)

John Z. DeLorean, the Pontiac chief engineer who had risen to become the youngest General Manager in GM history at 39, wanted to jump start Pontiac in a big way, because he had ambitions to run GM one day, and time was a wastin’ as they say. Bill Collins, along with Russ Gee, two of Pontiac ’s engineering gurus at the time, responded to John Z’s challenge with one of the classic automotive “What if(s)?” of all time, as in, “What if we stuffed one of our 389 cu. in. engines in our ‘intermediate’ Tempest?”

Now technically, Pontiac couldn’t do it because of GM’s publicly stated adherence to the AMA ban. The marching orders given to the GM divisions from the 14th Floor were clear: They not only couldn't race, they couldn’t promote speed and horsepower in a model. Period. But in an example of the inspired genius that would propel Pontiac to great heights throughout the 60s, DeLorean and his brain trust decided to build this new performance car as an option to the 1964 Tempest - neatly avoiding the model question completely - and it would carry the designation “GTO” - borrowing a bit of magic from the Ferrari GTO at the time. Add in Jim Wangers' uncanny knack for marketing and promotion and the rest, as they say, is one rip-roaringly glorious chapter in American automotive history.

Pontiac thrived on its persona of being GM’s “pirate” division, always testing the boundaries and always doing things right up against the redline with cool cars and in-your-face marketing that no one else could touch. And American car-buying consumers flocked to the rebellious brand in droves. That’s why to this day a lot of enthusiasts have a soft spot for Pontiac, at least what Pontiac used to be anyway.

But we’re all painfully well aware of what happened to Pontiac since its glory days: 1. Bad marketing decisions due to a loss of interest (and money) from the corporation as GM propped-up every other division but Pontiac in its quest to keep its divisional balls in the air. 2. A proliferation of ugly-ass vehicles, none of which had the swagger, personality and performance that a Pontiac should have. And, 3. A total loss of the division’s focus internally, which led to a total loss of the division’s persona on the street, as the people in charge buried the brand’s essence in a dizzying array of smoke and mirrors, damn near killing Pontiac once and for all.

So when GM embarked on a project to resurrect this once-glorious brand using its latest rear-wheel-drive architecture developed by its Holden division in Australia, I was encouraged.

(No, I haven’t changed my stance in that by trying to market eight distinct brands in North America GM is slowly but surely preventing itself from ever gaining an upward trajectory again in the American market, but as I’ve said many times before if you’re not going to give Pontiac its due - and by that I mean reaffirm the brand’s essence in no uncertain terms with worthy cars - then by all means put it out of its misery once and for all.)

By all accounts, the new G8 arriving at Pontiac dealers as you read this is very much true to the Pontiac that thrived in the 60s, despite its Aussie origins: Big, powerful and fast - with enough swagger and personality to boot – and with a price that doesn’t induce headaches. GM is, in effect, finally giving Pontiac its due with this car. And Pontiac is announcing an even hotter version - the 402HP G8 GXP - at the New York Auto Show this week (see below), which will hit showrooms by the end of the year.

But the glimmer of optimism that was starting to well up in me about Pontiac came crashing down when it was also announced that Pontiac would be offering a G8 sport truck in 2010, which drew a collective gasp of “WTF?” here at AE headquarters. A popular conveyance locally marketed by Holden, this El Camino-like vehicle should stay right where it belongs – in Australia – because there’s not a shred of logic to bringing the thing here and calling it a Pontiac, I don’t care what the performance numbers are.

Not to state the obvious, but there isn’t even a remote connection to faux El Caminos in Pontiac ’s storied history. Not even close. And on top of that, a 4,000-lb. sport truck is a niche vehicle that has no business being marketed here. I understand that Pontiac marketers are trying to zig in a zagging market, but wasn’t the lesson learned from the Chevy SSR example enough for GM? How about the Subaru BRAT? Do they really want to revisit why that didn’t work - and find out why it will even work less as a Pontiac? After all, once the couple of thousand or so (at best) El Camino nostalgia hunters ante up for a G8 with two seats and a 71-inch cargo bed, then what?

They’ll be piling up like so much cord wood on dealer lots all over the country, that's what.

To make matters worse, Pontiac marketers, in their quest to attract attention to this atrocity, are pulling out all the stops by offering consumers a chance to name this beast over the next month on a website. No, it’s not clever. And no, it’s not fun, either. It’s amateur-hour marketing at its lowest.

Let me remind Pontiac marketers of two great names that need no vetting on the Internet – GTO and Trans-Am. Why the Hell GM decided not to go ahead with basing either one of these vehicles off of the upcoming Camaro architecture (I’ve seen a design exploration for a Firebird Trans-Am that looks sensational) is completely beyond me. When you have names with that kind of residual brand equity gathering dust in this oppressively congested market, why wouldn’t you use them?

This move by GM – and I hope the idea is shelved long before it becomes an on-the-street reality – would finish off this once-proud division once and for all. The G8 sport truck (I can barely even type the words) would be the quintessential definition of the wrong vehicle, at the wrong time, from the wrong car company. As a matter of fact, it would retire the title from ever being used again, because there would be no other product misstep in recent automotive history that would even come close to this looming debacle, in my estimation. Not even the Aztek. Yeah, I know – that’s cold – but it’s the High-Octane Truth in this case.

The sad thing in all of this is that I believe the Pontiac brand can still thrive, even in this harsh new Green-dominated, $4.00+ per gallon automotive world we’re living in. But Pontiac doesn't have a glimmer of hope of resurrecting itself when bad product decisions are still being made on its behalf.

GM marketers either don’t get it, or they clearly only partly get it, which is even worse.

It’s times like these that try men’s souls - or something like that. Let’s hope this “thing” is a non-starter, because a Pontiac sport truck would be a flat-out disgrace if it ever sees the light of day.

Thanks for listening, see you next Wednesday.

(Photo courtesy of GM)
The G8 Sport Truck. Here’s hoping that it’s nevergonnahappen.com.

(Courtesy of GM)
The Pontiac G8 GXP will be arriving here by the end of the year.

The Buzz in the Biz.

By Peter M. De Lorenzo

Detroit. Anyone hoping that the people currently running amuck in the auto biz right now will come to their senses and miraculously see the light in an instant jolt of lucidity and clarity are sadly mistaken. The seriously misguided at work in the biz at this moment in time are all drinking from a frighteningly similar cocktail made up of one part delusion, one part runaway ego and one part abject stupidity, and the fog from the perpetual hangover they operate under permeates their organizations to the point of paralysis.

Example No.1, as I mentioned last week, is VW. I’m only going to mention them again briefly this week for the shocking notion that they’ve been floating to the media for a while now (and one we’ve mentioned before in “On the Table” – ed.), and that is that they intend on taking VW and Audi sales in the U.S. from 328,068 vehicles presently to 1 million units by 2018. Read between the lines of the typically soporific copy that the more conservative members of the automotive media are generating about VW’s quest and you can see that these journalists can barely contain their smirks, and that’s putting it kindly. Because VW’s goal isn’t akin to putting a man on the moon, it’s more like colonizing Mars and opening a VW dealership on the Red Planet by 2018 - that’s how wildly improbable of a scenario they’re embracing.

With a legacy of bone-headed product moves, horrendous service issues, woefully erratic dealers, pissed-off customers and an almost uncanny knack for doing the wrong thing at the wrong time – and doing it over and over and over again - VW will be lucky to maintain the “grip” on the U.S. market that it’s clinging to now.

VW’s chief spear carrier here in the U.S., CEO Stefan Jacoby, has even wondered out loud in comments to the media that it sounds a little crazy. Memo to Stefan: It’s not just a little crazy, it’s flat-out off the charts, cue-the-Twilight Zone music c-r-a-z-y. But then again, when it comes to German auto executives imposing their relentlessly clueless tunnel view of the world on the U.S. market, nothing ever changes. Not Good, Part I.

But then again, there's always the Koreans. Hyundai - the Korean auto conglomerate utterly devoid of common sense and rational thought – is hell-bent on pressing ahead into the teeth of a storm that threatens to swallow their listing ship whole.

The Koreans’ delusions of grandeur know no bounds. They set impossible fantasy sales goals and fail to meet them every time, and then they get rid of their U.S. executives – every time. Then they start the whole process all over again.

One minute they’re attacking the low-end market, insisting they’ll displace Toyota with its Kia brand in a matter of months; the next minute they’re going after BMW with a flourish, insisting that they belong in the pantheon of great premium automakers just for showing up. But it’s always the same scenario and endgame with the Koreans. They refuse to understand that there’s real blood, sweat and tears behind any of the premium automakers’ branding success, and they actually believe that they can just flip a switch back at headquarters, set improbable production and sales goals, and be a “player” overnight. And then, like clockwork, their U.S. operations implode from the sheer weight of their handlers’ suffocating stupidity.

And now, the buzz on the Koreans is assuming a more ominous tone. Hyundai and Kia models are piling up in storage lots all over the country (lots that no one, of course, is admitting to). The Korean overlords keep churning out product, and their handpicked, “hands-on” countrymen sent here to straighten things out keep insisting that they can sell every vehicle they can get - over the furious objections of their U.S. dealers.

We’ve been hammering away at the Koreans for some time now, but now the mainstream media is beginning to fire away too. A major, hard-hitting and excellent cover-length story on Hyundai in this week’s BusinessWeek headlined “My Way or the Highway at Hyundai” exposed Hyundai’s ingrained culture of corporate blockheadedness for all to see. And Automotive News weighed-in this week with a two-page piece carrying the following headline: “At hard-charging Hyundai, the plan is simple: More – now.”

More what, exactly? More cars and trucks that its dealers don’t want and can’t sell? More unrepentant, abject stupidity from the stumblebums back in Korea who not only can’t fathom the U.S. market, but by all indications couldn’t spell Automotive Marketing 101 even if you spotted them the “mark” and the “ing” - ?

We’re hearing from a wide array of sources that the U.S. dealers for Hyundai and Kia are nearing an apoplectic frenzy. From big dealer conglomerates to the mom and pop stores, talk of an open revolt is not out of the question. They’re tired of the bullshit and the bad decisions, and for many the promise of the next automotive “juggernaut” after Toyota - which was the initial premise envisioned for the Koreans (an image the Koreans did their best not to dissuade) - is coming apart at the seams.

I mean, when the Koreans actually put VW’s legendary delusional brain trust in a warmer, softer light, you know that things are bad. And that’s Not Good, Part II.

Oh, but just when you thought that these two shining examples of unfettered futility couldn’t possibly be topped, along comes “Minimum Bob” Nardelli and Chrysler. I have relentlessly pounded Cerberus and its Chief Apostle, Nardelli, for months now for a raft of egregious behaviors and sins, big and huge. Cerberus, the super-slick, cold-hearted mercenaries who couched their takeover of Chrysler in glowing, “we’re doing what’s right for America” terms, is like the (three-headed) dog in the neighborhood who chases cars from sun up to sundown, never catching one. Then, one day, the dog catches a car and hasn’t even the foggiest notion about to what to do with it. Cerberus is that dog, and Chrysler is its car.

This week, we get to witness another couple of stops on Chrysler’s Road to Ruin. First off was the announcement that the company was closing its Pacifica Design Center in Carlsbad, implying that it was redundant in Chrysler’s slim-dollar makeover. Chrysler suggested that its West Coast design center was no longer important, but the reality is that it's just another cost cut in Cerberus’ slow but sure dismantling of Chrysler in preparation for its ultimate sale.

But the other development at Chrysler that has the industry spinning is the fact that Nardelli has brought in alleged taste-maker Peter Arnell and given this overrated lightweight unrestricted access and input to all things Chrysler, including design, product planning, marketing and just about everything else. This development is horrifying not only to Detroit insiders but to the biz as a whole. Allowing this guy to have that kind of impact on Chrysler's day-to-day business is like asking the guy in charge of hanging the window trim to give advice on the structural build cadence of your new home.

Lunacy? This is beyond category idiotic. Arnell is the guy, after all, who shoved Celine Dion down Chrysler’s throat several years ago, a disastrous $20 million advertising boondoggle that did much to hype Arnell’s own self-inflated brand but that accomplished exactly zero for the automaker at the end of the day. But then again Arnell has always been more adept at self-promotion and spending clients’ money like water than delivering actual results.

Come to think of it, Arnell is probably a perfect foil for Nardelli because they've both made careers living off press clippings and making piles of money simply for being in the right place at the right time.

And these two misguided missiles working together to “save” Chrysler? Well, let’s just say it is the quintessential definition of Not Good.

When will it ever end? When the Cerberus “brain trust” admits to itself that buying Chrysler was the dumbest idea they’ve ever had as a company. But they will only admit that internally, because the endgame media release will say something like this:

“After months of tough decisions and sacrifices and a structural rebuilding effort executed to perfection by Bob Nardelli and his team, Chrysler has reemerged as a vibrant automobile company poised for success for years to come. We at Cerberus have accomplished great things in resurrecting an iconic American automotive brand, and we have exceeded the goals we initially set out to achieve beyond even our wildest expectations. With that, we are moving to secure Chrysler’s long-term viability for years to come by entering into an agreement to sell the company. Nissan-Renault CEO Carlos Ghosn will join Bob Nardelli in a joint press conference to discuss the details of the sale...”

Far fetched? Not in the least. The only question is when.

That’s the Buzz in the Motor City this week...

Porsche gobbles up VW. Next up? Brand chaos.

By Peter M. De Lorenzo

Detroit. It was announced on Monday that the supervisory board of the company that owns Porsche AG - Porsche Automobil Holding SE - gave its approval for the luxury automaker to take a majority stake in Volkswagen, Europe's biggest car maker. Porsche took great pains to say that Monday’s decision does not mean the two companies are merging, but who’s kidding whom? The companies may not be formally merging, but there’s only one guy who will be calling the shots, and that’s Wendelin Wiedeking, the Porsche CEO.

Wiedeking has repeatedly gone on record of late saying that he would be cracking the whip at VW and bringing the monstrous enterprise into compliance with his vision of what VW should be in the automotive world, which means emphasis on profit, first, and he’ll figure out the rest on the fly.

Wiedeking should by now be a familiar character to Autoextremist readers. He is the understudy of one Ferdinand Piech, the once-gifted racing engineer, Porsche scion and now legendary megalomaniacal ball buster who almost ran VW into the ground with his wild product mood swings and capriciously arrogant management style. Piech, deservedly dubbed by us as The Man Who Wouldn’t Leave because of his reluctance to give up control of anything for more than five minutes, has taught Wiedeking well, and now Piech’s chief apostle will go forward with his Master’s teachings, prepared to wreak havoc on anything and everything in his path.

Wiedeking, whose official new AE title is “Piech Too,” has rapidly grown into his self-inflated persona and has now achieved megalomaniacal ball buster status of his own, fueled by the slavish German automotive media, which has repeatedly used the term “genius” when referring to the Porsche CEO and has gone out of its way to canonize the executive at every opportunity. And Wiedeking has, of course, let all of this go to his head, which has been standard operating procedure for every German auto executive who has come before him, from memorable Col. Klinkian screw-ups like Piech and the now disgraced Jurgen Schrempp, all the way to the more polished but still misguided Dieter Zetsche.

And now that Wiedeking’s Reign of Terror on the moribund VW “culture” – or at least what passes for one – has well and truly begun, what does it mean for auto enthusiasts and VW and Porsche dealers here in the U.S. in particular, and why does it matter?

Well, for one thing, if I was a VW dealer and I was hoping for a modicum of clarity finally emanating from headquarters, I would go in full “duck and cover” mode because things aren’t going to get better, they’re going to get even worse.

VW tipped its hand at the North American International Auto Show by unveiling the Passat CC sedan, yet another attempt by VW to distance itself from its “German Driving Value” persona here in the U.S. As I’ve said in the past, the VW execs back in Germany chafe at the idea that VW can only be presented one way here, and they’re desperate to disprove that notion by shoving ever more expensive products down their dealers’ – and American consumers’ – throats.

How has that strategy worked so far? Disastrous would be the only word that comes to mind. And yet here is VW, pushing the Passat CC sedan, which loaded up will once again venture across the border into Audi territory, and for what reason exactly? Ego? Arrogance? Try both.

And on top of that, VW is seriously contemplating the idea of bringing the Phaeton back to this country. Uh, I would recommend that Wikipedia better make way for a new lead definition of “Blind Arrogance” because VW has the concept covered.

Add to VW’s own particularly inbred way of thinking the willful and egomaniacal leadership of one Wendelin Wiedeking and the meddlesome (and wildly irrational) “vision” of his mentor in crime, Ferdinand Piech, and you have a classic recipe for disaster.

I’ve often been taken to task by Porsche loyalists for having the temerity to criticize Wendelin Wiedeking for green-lighting the Cayenne SUV, seeing as in their minds the vehicle has ensured the company’s profitability and independence for years to come and allowed them to build really cool cars like the 911 GT3 RS.

And I’ve responded in kind with this: Promoting short-term profitability ahead of decades of accrued brand equity is a fool’s errand, one that will ultimately prove to have disastrous consequences. Sell enough Cayenne SUVs and the upcoming Panamera four-door sedans to people whose interest in the vehicles only goes as far as wanting a Porsche emblem – an emblem that’s being slapped on a wider array of vehicles totally disconnected from the brand’s raison d’etre – while being clueless as to why they’re buying it in the first place - and eventually they’ll displace the hard-core True Believers who bought into Porsche’s original brand essence in the first place.

And then what?

Well, then at that point you’re left with just another car company, which, under Wiedeking’s tutelage will be “the most profitable car company in the world,” but one with little connection to anything else, especially to the company’s own glorious but now rapidly fading history.

And by the way, that atrocity called the Panamera? That Porsche sedan masquerading as a “four-door coupe” in Porsche marketing speak? The vehicle that the magazines are already saying doesn’t look quite as homely as first indicated (how’s that for a ringing endorsement) but that flaunts its decidedly un-Porsche-ness from every angle?

Well, let’s see, the bodies will be built at the VW plant in Hanover, Germany. And the interior and engine will be mated to those bodies at the VW facility in Leipzig. In other words, except for the Porsche-designed engine and the crest on the hood, the Panamera is, for all intents and purposes, a new VW luxury sedan that will be marketed in the U.S. as a Porsche.

Let the chaos begin.

Thanks for listening, see you next Wednesday.