H3llphyre
10-21-2003, 03:43 PM
Located at: The Car Connection (http://www.thecarconnection.com/index.asp?article=6526&sid=192&n=156)
Bob Lutz doesn't dump on people. The vice chairman of General Motors Corp. is one of those loyalty up and loyalty down guys. So if he is just the least bit critical, you should listen.
You recall that he was president and then vice chairman at Chrysler and leader of the product renaissance there. He left after the Daimler takeover and he is finally saying a few words about what went wrong.
They are in a new edition, revised and updated, of his book, Guts, $27.95
from John Wiley & Sons and worth the money, even if you read the old version.
Let me read what he says of the early days of the takeover at Chrysler:
"If the German top management didn't send in the troops, they sure did send the message that the projected sales, profit, and market share numbers were to be delivered, no excuse! Lacking familiarity with their new European bosses, it's perhaps not surprising that U.S. Chrysler team executives chose not to try to explain the inevitability of 'missing the numbers,' with a concomitant new, more realistic action plan, including cost cutting to follow."
In other words, things started to go wrong and the Americans were afraid to tell the Germans and deal with the problems realistically. Instead they put too many vehicles out on lease instead of cutting production and missing those numbers.
And get this:
"I personally believe it's fair to say that DaimlerChrysler CEO Juergen
Schrempp's bearing, demeanor, and speech do, perhaps unwittingly, trigger fear and intimidation. He is not your favorite jovial uncle who kicks back in the La-Z-Boy and kindly asks, "Having some problems, are we? Come and tell Uncle Juergen all about it. I'm sure we can find a solution."
"In the parlance of business, 'Desperate men do desperate things.' Needing to buy time, they (the Americans running Chrysler) gambled that an
incredibly buoyant used-car market two years down the road would soak up all those off-lease vehicles. It didn't."
In another situation I remember hearing another high-ranking German - this one headed the Premier Auto Group at Ford - lecturing Volvo people about "making the numbers." He was so offensive that one of the Volvo executives at my table exploded. "I don't have to take this. I'm quitting," he said then and there. He had a house in Colorado and some General Electric stock that had done quite well. He didn't have to take it.
Wagons ho?
Another problem I see coming at Chrysler. I was at a New York preview of the coming-next-spring Chrysler 300 and Dodge Magnum vehicles. These are rear-wheel drive, with a premium optional engine, the Hemi V-8.
Personally, I like these vehicles. Some auto writers don't but I do. But there's trouble. The Chrysler 300 is a sedan coming in four versions, priced, my guess, from $26,000 to near $40,000 with the Hemi. But there is no Dodge sedan to replace the old Intrepid. Instead there is a station wagon. They may call it a "sports tourer" but it is a station wagon. No large sedan for Dodge. I'm not saying it's not nice, but how many station wagons can you sell?
Look at Dodge Intrepid sales over the years:
2002 111,356
2001 109,098
2000 143,840
1999 144,355
This Intrepid is a pretty old car, but it still sells well. Chrysler says it's heavily sold to fleets but you've got to wonder why. The 2003 is on Consumer Reports' recommended list. It's good looking and roomy. It's probably been hurt by Chrysler's weak quality reputation and weak engines.
Sales have fallen off as it's aged and the Dodge dealers focused on trucks, meaning Caravan minivans, Dodge Ram and Dakota pickups and Durango SUVs, almost three trucks sold for each car.
But still, if there were a rear-wheel drive Dodge Magnum sedan replacing the old Intrepid, you would think it would sell well. But a station wagon?
Minivans and SUVs have generally replaced the wagon and for good reason, they can carry more. There are some high-priced Mercedes and BMW wagons sold, some. Ford's Taurus, which had the best-selling wagon, is down to about 30,000 a year and may be abandoned in another year.
When I saw the new Chrysler sedan and Dodge Magnum wagon, I asked who decided not to have a Dodge sedan. I got no answer.
Of course, it's possible to do a Dodge Magnum sedan if the wagon is not a home run, but that means two more years. Lots of bad things can happen in two years. And probably will.
Bob Lutz doesn't dump on people. The vice chairman of General Motors Corp. is one of those loyalty up and loyalty down guys. So if he is just the least bit critical, you should listen.
You recall that he was president and then vice chairman at Chrysler and leader of the product renaissance there. He left after the Daimler takeover and he is finally saying a few words about what went wrong.
They are in a new edition, revised and updated, of his book, Guts, $27.95
from John Wiley & Sons and worth the money, even if you read the old version.
Let me read what he says of the early days of the takeover at Chrysler:
"If the German top management didn't send in the troops, they sure did send the message that the projected sales, profit, and market share numbers were to be delivered, no excuse! Lacking familiarity with their new European bosses, it's perhaps not surprising that U.S. Chrysler team executives chose not to try to explain the inevitability of 'missing the numbers,' with a concomitant new, more realistic action plan, including cost cutting to follow."
In other words, things started to go wrong and the Americans were afraid to tell the Germans and deal with the problems realistically. Instead they put too many vehicles out on lease instead of cutting production and missing those numbers.
And get this:
"I personally believe it's fair to say that DaimlerChrysler CEO Juergen
Schrempp's bearing, demeanor, and speech do, perhaps unwittingly, trigger fear and intimidation. He is not your favorite jovial uncle who kicks back in the La-Z-Boy and kindly asks, "Having some problems, are we? Come and tell Uncle Juergen all about it. I'm sure we can find a solution."
"In the parlance of business, 'Desperate men do desperate things.' Needing to buy time, they (the Americans running Chrysler) gambled that an
incredibly buoyant used-car market two years down the road would soak up all those off-lease vehicles. It didn't."
In another situation I remember hearing another high-ranking German - this one headed the Premier Auto Group at Ford - lecturing Volvo people about "making the numbers." He was so offensive that one of the Volvo executives at my table exploded. "I don't have to take this. I'm quitting," he said then and there. He had a house in Colorado and some General Electric stock that had done quite well. He didn't have to take it.
Wagons ho?
Another problem I see coming at Chrysler. I was at a New York preview of the coming-next-spring Chrysler 300 and Dodge Magnum vehicles. These are rear-wheel drive, with a premium optional engine, the Hemi V-8.
Personally, I like these vehicles. Some auto writers don't but I do. But there's trouble. The Chrysler 300 is a sedan coming in four versions, priced, my guess, from $26,000 to near $40,000 with the Hemi. But there is no Dodge sedan to replace the old Intrepid. Instead there is a station wagon. They may call it a "sports tourer" but it is a station wagon. No large sedan for Dodge. I'm not saying it's not nice, but how many station wagons can you sell?
Look at Dodge Intrepid sales over the years:
2002 111,356
2001 109,098
2000 143,840
1999 144,355
This Intrepid is a pretty old car, but it still sells well. Chrysler says it's heavily sold to fleets but you've got to wonder why. The 2003 is on Consumer Reports' recommended list. It's good looking and roomy. It's probably been hurt by Chrysler's weak quality reputation and weak engines.
Sales have fallen off as it's aged and the Dodge dealers focused on trucks, meaning Caravan minivans, Dodge Ram and Dakota pickups and Durango SUVs, almost three trucks sold for each car.
But still, if there were a rear-wheel drive Dodge Magnum sedan replacing the old Intrepid, you would think it would sell well. But a station wagon?
Minivans and SUVs have generally replaced the wagon and for good reason, they can carry more. There are some high-priced Mercedes and BMW wagons sold, some. Ford's Taurus, which had the best-selling wagon, is down to about 30,000 a year and may be abandoned in another year.
When I saw the new Chrysler sedan and Dodge Magnum wagon, I asked who decided not to have a Dodge sedan. I got no answer.
Of course, it's possible to do a Dodge Magnum sedan if the wagon is not a home run, but that means two more years. Lots of bad things can happen in two years. And probably will.