ON THE TABLE

January 21, 2009

Chrysler, Fiat. Well, well, well, Chrysler enters into a "non-binding alliance" with Fiat, with the Italian automaker taking a 35 percent stake in the Cerberus-owned automaker, with rumblings of a 55 percent stake later in 2009. What does it mean? There's no cash involved - which isn't a good thing for Cerberus but a great thing for Fiat - and Fiat will have access to this market for its sensational 500 small car and other product initiatives, but beyond that we just don't know. Is it a good deal, really? Does it really stabilize Chrysler's long-term viability as a domestic automaker? In a word, no, because Chrysler is still in desperate need for government cash and Fiat won't go forward with the alliance without that cash. This deal is about Cerberus getting out from under Chrysler, it's as simple as that. It could be okay for Fiat way down the road, but there's a long way to go before we find any of that out. Another giant "we'll see" for Detroit. More below...

Cerberus. The Wall Street Bumblers (aka Cerberus) and ex-GE brainiacs who thought they'd waltz into the car business, turn Chrysler around, and then walk away with a boatload of cash instead are in the process of slinking away with their tails between their legs after having tried to get out from under their Chrysler misadventure for over a year. The horrendous damage Cerberus has done to the domestic automobile business - with their utter futility in resurrecting Chrysler combined with their egregious mishandling of GMAC - is almost incalculable. Never have so few done so much damage to so many in the annals of this town, or this business. Suffice to say, the completely misguided infatuation for the car business by Cerberus will go down as one of the darkest chapters in automotive history.

Chrysler Dealers. Any Chrysler dealer who is sitting there thinking this "alliance" with Fiat will be a good thing is sadly mistaken. If we were a Chrysler dealer, we would quietly start thinking about other uses for our building and property. Even if everything goes just swell with Fiat and the Italian automaker takes full control over Chrysler in 2009, Chrysler is over-dealered for any kind of optimistic scenario by 75 percent. Doomsday was coming for its dealers under any scenario involving Chrysler's dissolution, but this scenario will be a giant bowl of Not Good for Chrysler dealers all across the country.

Akio Toyoda. The grandson of the founder of Toyota, Akio Toyoda, 52, has been named as its next president. The last family member to lead the company was his uncle, Tatsuro Toyoda, who stepped down in 1995. Will this move bring meaningful change, or is just a rearrangement of the deck chairs on a severely listing ship? This isn't the same car business, and it certainly isn't the same Toyota. It used to be that Toyota could do no wrong, but now they're floundering like everyone else. Our gut tells us that Toyota isn't going to pull out of this economic downturn without some serious residual issues, and Mr. Toyoda's impact - a mild changing of the guard, at best - will not amount to much.

GM. It's official - GM is now the second largest auto company in the world behind Toyota, ending a 77-year reign. GM sold 8.36 million vehicles last year to Toyota's 8.97 million. It was inevitable, as Toyota has been on a relentless surge since 2000. But is it news? Not so much, as GM has mentally been the No. 2 car company in the world for quite some time now.

WDIV. We decided to wait for the auto show hoopla to die down and let the "performance" of our local NBC affiliate (WDIV) sink in before we commented on it, and all we can say now is that it was predictable, overwrought, shallow and relentlessly tedious. But those are only the initial words that come to mind. How these people can possibly take themselves seriously is beyond us. And how they get away with their incessant gushing and flat-out misrepresentation of the subjects at hand is disgusting. This business and this town deserve so much better.

Barrett-Jackson. We're happy to say that the annual Greed Fest is not only running out of steam, but its entire "M.O." couldn't be more wrong for the times if they tried. Look at the down numbers from last week and the slide that their numbers have taken in just two years, and it's clear the bubble has burst. But true to form, B-J is the last to see it, or admit it. We're waiting for the manufacturers to wake up and step off of the B-J train - a train that's going nowhere fast.

(GM)
Chevrolet has introduced a Competition Sport Package for the 2009 Corvette Coupe 1LT and Z06 models. The package includes Competition Gray exterior stripes, wheels, and headlamps; Corvette Racing 'Jake' and CSR logos on b-pillar, headrest, and center armrest; ebony interior with titanium embroidery; Corvette racing pedals and a special engine cover. Geeky racing style numbers based on the build sequence of the cars will be installed by customers only, thankfully.

The Autoextremist Interview.

Publisher's Note: Paul Wilbur is the President and CEO of Aptera (www.aptera.com), one of the most forward-thinking car companies in the world. I thought it would be interesting to do an interview with Wilbur - an industry veteran with a high-performance resume - and see what the future of American automotive transportation might look like. - PMD

PMD: You left Detroit after a long and varied career, why?

Paul Wilbur: Last summer, in the midst of $4.00 per gallon gas, I was building super-high performance Mustangs and other Ford specialty vehicles with Saleen and that concept felt pretty career limiting. I felt like I was positioned on the wrong side of the macro-economic wave and we were pushing too hard against the grain. It was fun building 650HP Raptors, but it’s not going to change the industry. And I guess, at the heart of it, changing the industry (for the better) is exactly what I want as my legacy.

In my 25 plus years in this industry, I have seen a lot of change, and I can’t say that I am enamored with all of it. For example, I grew up loving Pontiac, but Pontiac today is not the same brand that John DeLorean once fostered. Some are doing better than others. I like some of what Jeep is doing, like the 4 door Wrangler. It is spot on. Some of the other stuff, maybe “not so much”. This market is changing, and the challenge is to change with it AND protect the core that makes America and automobiles synonymous.

So let’s call my move out of Detroit - a move related to life, liberty and the pursuit of happiness. Automobiles are my life (it’s the only industry I have ever worked in). There is something noble and liberating in the Aptera quest to make the most fuel-efficient vehicles in the world and running a new company that will change the world falls into the category of “pursuit of happiness”.

Even with gas back down to a very low $1.75 per gallon, I still believe in the basic fundamentals of moving off of fossil fuels into electric power, series hybrid drives, hydrogen fuel cells and other future propulsion technologies. If the world were not in recession right now, gasoline prices would be considerably higher. So it’s only a matter of time when we are faced with the scenario of change or die. I chose to change.

You could also say that I personally went from the highest to the lowest carbon footprint in America...in one career move.

PMD: What lured you to Aptera and what makes you think Aptera is distinct enough and that it will find its niche in the automotive universe of the future?

Paul Wilbur: The challenge of building the most efficient vehicle in the world lured me to Aptera. There is no silver bullet for energy independence in transportation. Aptera’s approach is to attack the vehicle “architecture” through aerodynamics, light weight composites, low friction components and use a powertrain “agnostic” approach. That much alone garnered my attention. Then you add the fact that we are targeting our vehicles to fit the way that people live, work and play and at a price that a larger part of the population can afford. This is EXACTLY opposite of a lot of the conventional thinking today. You have some that are attempting to shoehorn newer and higher technology powertrains into the same old architectures consequently yielding marginal benefits when the market is looking for breakthroughs. Then there are others who are making vehicles that are so far away from lifestyle of the average consumer that it is hard to rationalize their purpose in this market.

We want to be in the heart of the market and relevant. After our December research clinic, we are not worried about being distinctive. We’ve nailed that element inside and out. We delivered to the market a vehicle that has a form that is more about function and much less about styling, and the consumer gets it, and sees the beauty in it.

PMD: What is the vision for the company? And what makes the machine so special?

Paul Wilbur: The vision is to see Aptera build and sell upwards of 100,000 units a year across its full line of daily use, “efficiency” based products. This may take us the next 5 year or so but we believe that it is a realistic goal, if we stay focused.

We approach the vehicle “efficiency” as a primary product objective. It is our beginning and our inspiration. It is the reason for the unique aesthetic of the vehicle as well as the three wheel architecture. By looking at every part of the vehicle through a lens of “efficiency” from the very beginning, we maximize the potential value of every decision.

Now if you have ever driven on I-5 in Los Angeles (or I-75 in Detroit at rush hour) and watch the gridlock of thousands of cars, SUVs and trucks – all with only one person inside each vehicle, you will start to understand our vision.

Only in America can you live where you want to live, drive where you want to drive and be who you want to be. We want to ensure that we maintain these American qualities of life in the future. A vehicle like Aptera can preserve those values by virtue of its product attributes and cost proposition.

PMD: Where do you see Aptera fitting in this nation's future transportation fleet? As an "urban commuter" car, a green sports car alternative, or what? And what are your realistic projections for volume?

Paul Wilbur: I see the Aptera as the vehicle that you drive every day, (Monday to Friday for sure), and less on the weekends. That may be your daily commute, but it may also be your trip to the mall or a nice dinner with your spouse. We will leave the high performance sports cars and off-road weekend warrior business to someone else. The Aptera is the vehicle that you live with and will feel good about. Its primary mission is a daily “commuter” vehicle but as technologies improve, the breadth of the products appeal will also improve to be more of a primary vehicle, primarily in the major metropolitan markets.

PMD: My criticism of the "blue sky" new wave "green" automakers in northern California is that they're woefully short of reality and have trouble executing their vision because of their fundamental lack of knowledge in designing, building and manufacturing automobiles. Aptera seems to be different. They brought you on and you in turn have brought seasoned auto industry veterans with you. Do you view that as an essential ingredient for Aptera's future success, and how has that made a difference since you've been there?

Paul Wilbur: Yes - we would agree with that. The auto industry has existed for more than a century. Granted there are a number of things that are due for a change, but there is no way that more than 100 years of learning can be all wrong. By bringing people from inside the industry, we are bringing some of the learning that cannot be picked up in a book and the experiences that most people understand without living through it. Just think about all the engineering knowledge in Detroit. How can you replace that knowledge externally to the automotive industry? I think that automotive experience is essential to developing a new vehicle company. What we are doing at Aptera is combining that auto experience with attitude, energy and innovation of California. I think the result is where the magic happens. Our ideal mix is 50/50 because Lutz is right (making a car is a hell of a lot more difficult than people think) but we want to also constantly infuse our team with new critical thinking and new ideas that seem second nature to those that live in California, including a green mentality and the importance of creativity.

PMD: Traditional automotive advertising and marketing clearly would be out of place for this car. How do you plan on getting the word out about Aptera? Beyond going after the touchy-feely early adopter types, what's your plan to reach a broader audience?

Paul Wilbur: We agree. The first thing we need to communicate is integrity. American buyers like to know that you will do what you promise...no gimmicks, no tricks. These days, when you do that, people tend to talk about you. So, our first objective in marketing Aptera is to do what we say to the best of our ability. After that, we have to go into the market so that people can see and touch us and experience the promise for themselves. The last point is that we are going to engage them. The web is an amazing environment that is largely under-utilized in automotive marketing. Today, people can log on and touch base with people that they may not have seen in a decade. They trade recipes, catch up on gossip, and why not learn a little more about their vehicle and the people that are creating it for them. You see, since we are small, we will also be personal. That is a real strength that we have that many others do not. We have a few tricks up our sleeve relative to distribution, servicing, and our go to market strategy, but that will have to wait for another day. Thanks Peter.