January 5, 2011
The Industry’s future is so bright we’ll all need sunglasses - or something like that.
By Peter M. De Lorenzo
(Posted 1/3, 1:00 p.m.) Detroit. Here. We. Go. Another New Year, another seething cauldron made up of speculation, prognostication, pontification, hand-wringing, empty boasts, empty suits, savvy car executives, terminally clueless poseurs masquerading as “car guys,” stunning concepts, blown opportunities, unexpected product “hits,” predictable never-had-a-chance-in-hell product “misses,” marketing coups, advertising blunders, and a enough sheer din of coverage – much of it ill informed and relentlessly tedious - to make people weep uncontrollably. Yup, that’s the industry in a nutshell and truth be told we wouldn’t have it any other way.
After all, would we want predictable and boring? What fun is that? Would we want somber car executives spewing reasoned and calculated pap to the adoring media masses all the time? (Well, except for German car executives who do exactly that every year at the auto shows to mind-numbing effect.) No, we wouldn’t. We love it when an executive goes off and says exactly what he or she meant to say exactly the way they meant to say it. It’s fun, it’s life, and it’s great copy.
Well, except for Sergio Marchionne, whose bombastic pronouncements grew tedious months ago, and GM’s “Lieutenant Dan” Akerson, who thinks being plopped into his role as CEO – with no meaningful qualifications whatsoever, I might add – gives him enough street cred to come off like a bull in a china shop and get all haughty and combative on top of it. Akerson is our candidate for AE’s Least Welcome Addition to the Auto Circus 2011, hands-down.
But then again if we tallied all of the no-talent weasels, blithering idiots and so-called “executives” who have been promoted far beyond their station in this business we’d have to shift Detroit Metro’s air traffic to one-way routes out of town for a month to get rid of them all. But I digress.
Over the break (what break? – Ed.) I received a ton of questions about this business ranging from the incisive and compelling to the flat-out ridiculous, so in an attempt at providing a public service, I’m going to weigh-on on the high hard ones today.
Can Ford keep its momentum? And to that I say, why the hell not? As long as Alan Mulally and his team keep focused, and the products and marketing stay razor-sharp, Ford’s upward trajectory will continue. The biggest worry for Ford from where I sit? Complacency – thinking that the products are “good enough” when good enough isn’t even an option - and the creeping natural tendency to sit around and say to each other, “Hey, we’re pretty good.” The moment that crap starts Ford will get into deep trouble. And as we’ve seen in the past, it takes no time at all to start a downward spiral once you veer off the path. My bet? It won’t happen. Focused Consistency is what Alan Mulally eats for breakfast. These guys and gals will continue to be formidable.
Is GM for real? Well, the Wall Street types sure think it is, but as you might imagine that doesn’t hold much sway with me and it doesn’t count for much in the marketplace, either. GM has an excellent team of executives in place right now and they know how to design, build and market their products. Well, at least some of Joel Ewanick’s marketing troops know what they’re doing. I’m still not convinced that he has the right players in place in all of the key positions, and I’m definitely not convinced that the Chevrolet and Cadillac ad agencies fully understand what they’re doing, so it remains a giant “we’ll see” to me on that front. As far as the rest of it, the same concerns apply for GM as I mentioned for Ford. If even a whiff of complacency is allowed to fester at GM they’ll be burnt toast in a matter of minutes. The GM “renaissance” is that fragile. Oh, and “Lieutenant Dan” needs to stay far, far away from anything to do with product or product decisions. If he does, GM has a shot at real redemption. If he doesn’t, it will be a USS Enterprise-sized bowl of Not Good.
Are you done dissing Chrysler? Who me? “Dissing” had nothing to do with my commentary on Chrysler. Here are the facts, ladies and gentlemen: A tired, downtrodden car company was on its last legs and the Obama administration was looking for a way out because it knew if Chrysler was allowed to fail and be auctioned off lock, stock and barrel it would be devastating for vast reaches of the country and it might drag one of our founding industries down with it too. In strolls the Master Opportunist - His Royal Highness Sergio Marchionne – with a plan based on U.S. taxpayer money to be sure - to “save” Chrysler. Marchionne was basically handed the keys to Chrysler with little - or at least negligible - investment of his own required, and he set about on his quest to “fix” the terminally ill car company, or make it Fiat North America, whichever came first. Well, how’s it going so far? The Jeep Grand Cherokee is a hit – it was in the pipeline long before Marchionne was there, by the way – at least until we see $4.00 per gallon gasoline this spring, if not sooner. But the rest? I just witnessed the vast majority of the media fall over themselves gushing over what are, in a word, mild “freshenings” of products that were woefully stale and wildly uncompetitive. These products – the Chrysler 200 in particular – aren’t game changers by any stretch, they just signal that Chrysler is ready to get back on the playing field. Period. And the Fiat 500? It’s cute but it will be hot for say, five minutes in auto industry time, and after that, then what? And Marchionne’s Grand Plan to blend Chrysler’s and Fiats looks okay on paper, but if theoretical meanderings counted for something in this business these companies would all be swimming in endless profits. I wish all of the employees at Chrysler – and their long-suffering dealers – well, but Chrysler is still a giant Smoke and Mirrors Show to me. In the “old” days a rejuvenated Chrysler was reason to celebrate, and I wish for all concerned that those old days still applied. But with a manically-driven Hyundai in the waters, any longing for the impact of the old “feisty” Chrysler is just that, an exercise in nostalgia and that’s all. This is a different game and a different industry. Just “showing up” is never going to cut it.
And speaking of Hyundai? Confident, driven, focused and on a mission are the words that come to mind when I think of Hyundai. But there is another set of words that come to mind too: Creeping arrogance, more than a hint of cockiness and a distinct whiff of “we can do no wrong” is starting to show. 2011 will be a pivotal year for Hyundai’s future. They will either keep their mojo flowing, or they will get lost in their own delusions about who they are and what they can be. They’ve already announced that they plan on increasing their sales 10 percent globally, while hinting that they expect more than that. We’ll see. As long as Hyundai keeps focused they’ll be okay, but something tells me they’re about to make a wrong turn and start believing everything being written about them. Uh-oh.
VW is on a mission, now what? I was driving down the street the other day and I witnessed the manifestation of everything wrong with the Future of VW running right along next to me: it was a black, bone-stock, price-leader version of the new VW Jetta. As bland as any product ever regurgitated by Toyota – maybe even more so, in fact – and as forgettable and more frightening than I even imagined it could be, this thing was a rolling monument to tedium, a singular automotive atrocity of the highest order. In the old days Detroit used to put “dog dish” hub caps on cop cars and loss-leader “stripper” versions of their offerings and call it sufficient. What do you say when the whole car is “dog dish?” VW’s overlords, led by the maniacally over-blown, over-hyped - and recently canonized in a monthly publication that I will refrain from mentioning, Ferdinand Piech (aka Colonel Klink) - are hell-bent on becoming the biggest, baddest auto conglomerate in the world. But at what cost? If it means dumbing-down your products to the lowest common denominator to meet a price point in the U.S. market – one arbitrarily handed-down from above by the, ahem, detached-from-reality powers that be in Wolfsburg (to put it mildly) – then it’s a heaping, steaming pile of Not Good.
And the other questions just keep coming.
Toyota may regain its sales momentum from its loyal minions who thrive in a world of reduced expectations, but will they ever regain the public trust? Will Honda get back on track? Will Jaguar be able to live up to its fanboy status? Will BMW chase a Niche Too Far? Will Mercedes-Benz convince its customers that smaller displacement is better? Will Acura ever get a clue? Will Audi keep its focus? Will the whole Electrification deal ever get off of the ground?
I do know a few things for certain, and that is that this business is just a bad patch – or a recalcitrant union leader - away from being right back in a downward cycle. If things stay bright, I see a 13.4 million market in 2011, but that’s only if there isn’t a major, unforeseen national or international calamity to deal with. If something along those lines unfolds, then all bets are off, of course. But if things stay positive, then we’re heading for a pretty damn good year.
With one crucial proviso, of course, at least here in the U.S. market. And that is if Bob King sticks to negotiating a rational platform of profit sharing - instead of the obligatory, mind-numbing, less-work-for-more-pay UAW mantra that hastened the domestic auto industry’s road to ruin - when the new contract is put on the table next summer, this industry’s upward trajectory will continue. But if he and his new pal Jessie Jackson go down the belligerent “what have you done for us lately” shit-disturber road, then I assure you that the domestic auto industry will be one strike action away from being right back in The Shit all over again.
At this point on a bleak day in early January, it’s all a giant “we’ll see.”
And that’s the High-Octane Truth for this week.
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