THE AUTOEXTREMIST

March 21, 2012

Left unchecked, the “Fiat Way” will ultimately lead to Fiat-Chrysler’s undoing.

By Peter M. De Lorenzo

(Posted 3/20, 1:00 p.m.) Detroit. The automobile business has been inundated over the years with “ways.” There was the infamous “Toyota Way” for instance, which once focused on a car-building regimen founded on measured improvement stressing quality above all else. And it served Toyota remarkably well, until they got greedy of course and became consumed with the idea of being No. 1. Then 35 years of slow and steady product improvement and quality leadership turned to crap in a matter of eighteen months. They’re still recovering.

Then there was the “GM Way” of the late 50s through the mid 70s when Alfred Sloan’s visionary “ladder” system took buyers from their initial car ownership years to their graves in a series of GM products, with Chevrolet giving way to Pontiac, Oldsmobile, Buick and then Cadillac. It worked extraordinarily well when GM dominated the market (to the tune of almost 50 percent at its peak) during those golden years, not so much after the import “invasion” changed – and eventually altered – the American auto market landscape for good. Now? GM is scrambling to deliver great mass-market machines under a withering cost-cutting regimen that leaves no margin for error. It’s the hard-knock life for GM from here on out.

Oh, there were plenty of other “ways” too. I’m not going to go into all of them but Mercedes-Benz once lived up to one of the most memorable automotive ad themes of all time – “Engineered Like No Other Car in the World” – by maniacally engineering its cars to the point that cost became an afterthought. It was the “Mercedes Way” and when it worked it worked beautifully, so much so that American consumers willingly ponied-up vast sums of money to bask in the aura of the three-pointed star. But that was a long ago era. Now? Mercedes is just another car company scrambling for their piece of the automotive pie while trying to convince potential buyers that they’re still the same Mercedes-Benz. Only they’re not, and most people are hip to that fact. Oh, when they put their minds to it they still can build memorable machines of course, but committing egregious mistakes in this market over the years has turned many of its former believers into doubters, or Audi and BMW customers, take your pick.

BMW also has its “way.” Remarkably enough driven by yet another brilliant ad theme in the modern era, “The Ultimate Driving Machine.” More often than not BMW actually has delivered vehicles that drove differently and performed with a certain panache that couldn’t be found anywhere else. They can still do that, of course, as evidenced by its perennial scene stealer, the 3 Series, but they have also lost their way more than a few times by chasing questionable niches. It’s all about the money now (not that there’s anything wrong with delivering a profit), and “The Ultimate Driving Machine” can also go by the sobriquet of “The Ultimate Money Machine” quite easily.

Some others? Audi’s “way” constitutes taking over the Mercedes mantle of over-engineering their cars for over-engineering’s sake (albeit to a more cost-driven degree), and that’s proved to be not a bad thing for the brand at all. Able to delve deep into the VW Group’s shared toolbox, Audi seemingly can over-engineer (within reason) to their heart’s content while delivering outstanding machines and massive profits, a winning combination the likes of which this business hasn’t seen in a good long while.

The “Honda Way” was once based on brilliant engineering driven by its legendary founder – Soichiro Honda – a “way” that delivered lithe, responsive machines that were fun to drive, efficient and satisfying to own. The “Motor” company consistently delivered outstanding, leading edge machines that were the envy of engineers throughout the industry and that attracted intensely loyal customers who wouldn’t drive anything else. Now? Honda is a mere caricature of its former self, fumbling and flailing away trying to rediscover its mojo. Kind of pathetic, actually, but true.

And I couldn’t leave this discussion without talking about the “Porsche Way.” The “Porsche Way” was perfectly summed up by Karl Ludvigsen’s groundbreaking, pivotal work, “Excellence Was Expected.” Yes, Porsche has been forced to delve into niches that would have made its founder ill, but remarkably enough Porsche’s “way” is very much intact. As I said previously, “… arrogant and cocky but with an uncanny knack for delivering what’s promised. This company has a resolute belief in its legacy and in the fact that they can build outstanding machines that represent the essence of Porsche in any segment they choose to compete in.” And that’s exactly what they do, their way.

And then there’s the “Fiat Way.” It must be disheartening for the True Believers out in Auburn Hills – and make no mistake, there are some extremely talented people at work on behalf of the former Chrysler legacy who are doing outstanding work – to see what passes for the “Fiat Way” these days. And what is the “Fiat Way” exactly?

Well, to begin with the “Fiat Way” of doing things hasn’t exactly yielded an impressive track record over the decades, has it? After all, wallowing in mediocrity if not flat-out incompetence doesn’t exactly constitute a “way,” does it? The Fiat legacy of relentless underachievement is well documented. And it’s not just a few bad patches over the decades, either. It’s a pattern of serial incompetence that’s breathtaking in its scope and its futility. And it has been compounded and exacerbated over the decades by the most malicious union movement on the face of the earth. Yes, the “Fiat Way” is certainly something to behold, all right.

Well, remarkably enough, the Italian executives charged (in their minds) with “rescuing” Chrysler can’t see anything wrong with the “Fiat Way” whatsoever. True to their maniacally oppressive (and insulting) arrogance, they really don’t see their track record as a point of contention whatsoever. As a matter of fact they believe that the rest of the industry is out of step with their perspectives, and that the sooner they all acquiesce to Fiat’s visionary brilliance, the better off the industry will be.

Really? Yes, really.

Remember folks; this is a company that except for the singular success of Ferrari has stunk up the joint for decades. Let me repeat that, decades. And yet these Italian executives actually believe that they’re bringing something to the table that hasn’t been invented in this business as of yet?

The chances that this Fiat executive mindset will derail all of the accrued goodness that has come Fiat-Chrysler’s way since the bailout are both real and something to fear, because these executives just don’t get it. After seeing countless examples of how it’s done over the years (see VW, Audi, Toyota and Honda’s glory days, and now the burgeoning Korean juggernaut of Hyundai-Kia, just to name a few) and looking back at the legacy of abject failure that Fiat has brought to this business over the decades, these executives still believe that their “way” not only has merit, but it should be revered.

Yes, really.

I will give you a glimpse of the “Fiat Way” as it's currently being practiced out in Auburn Hills (and thank-you to you moles out there annoyed by it enough to point it out in detail). Take the ingredients made up of obfuscation, stonewalling, pompousness and belligerence, then add in the strongest dose of “Not Invented Here” (aka our “way” is better, so don’t even think of telling us about what everyone else has been doing successfully for years) and unbridled arrogance imaginable, and you end up with a lethal cocktail of intransigence with a triple shot of “if you don’t like it we’ll find someone who will, and for half the price while we’re at it.”

Almost makes one long for those halcyon days of José Ignacio Lopez de Arriortua. Almost.

So there you have it folks. The talented people actually doing the heavy lifting out in Auburn Hills – aka the True Believers – are being hamstrung by a bunch of relentlessly arrogant, stonewalling Italian auto “executives” who actually believe they’re bringing something worthwhile to the party, when in fact they’re so out of touch with the best practices in this business and so lost in their delusional haze of misguided self-importance that they can’t even see that the auto world has moved on from where they’re at oh, a good 20 years ago, at least.

CEO Sergio Marchionne may intermittently get it - when he isn’t busy promoting his “Sergio” brand, that is (it’s a full time job unto itself, don’t you know), and trying to dream up his next big idea “merger” - but his legions of Italian henchmen, er, I mean executives don’t get it at all. They’re stuck in a time warp of their own making, a relentlessly delusional world where what they believe actually still matters, and they’re just waiting, impatiently, I might add, for the rest of the world to catch up to their brilliance.

Yes, really.

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

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