SAD NEWS FOR MOPAR WORKERS & ADMIRERS
Noted by Torrey H. Brinkley
Mead, Colorado
The automotive industry woes here in the Winter of 2008 have included some sad news that Chrysler Corporation has lost some of its financial support from Cerberus, the hedge fund giant. Mercedes Benz had severed ties less than 12 months ago with MOPAR. Without help from the US government, will Chrysler be able to stay afloat? As well, if private customers cannot get loans from banks and finance arms, how will dealers sell any of these $20,000 to $60,000 vehicles? Perhaps this is why Chrysler has decided to shutter all 30 of its manufacturing plants for 30 days.
This observer has seen many remarkable changes in design and marketing philosophy in the last 60 years for Chrysler Corporation. While some have always felt that MOPAR had some of the best engineering ideas in the American marketplace, their design department has seemed to be more like a bar of soap in the bathtub: interesting and clever, but hard to truly get ahold of.
Think back over the last 6 decades:
----1947-52 featured Chrysler and DeSoto vehicles with elegant and classic lines. Their grilles and bumpers had no peers in that post-war period. Even more lowly Dodge and Plymouth mirrored this fine-edged look. Interiors also showed nice design and high quality materials.
----1953-56 saw the company with evolutionary styling that was a bit more bolder, yet not winning over the masses. Perhaps the best design was the 1955 Chrysler (with 300 coupe being the best), which marketers labeled "the Million Dollar Look". Plymouth cars were #3 in sales right behind Ford and Chevy in the USA.
----1957-61 With the era of big & tall fins, Chrysler almost took the lead in rocket ship imaging. Nothing was as tall and bold as the 1957 Plymouth, Chrysler or DeSoto fins. But nothing got quite as ugly as the morphing of the 1959 & '61 Plymouth and '61 DeSoto (which was killed after that year). MOPAR gained some fans but lost many others during this period. Keep in mind that VW and other imports were entering our market during this time frame (with tiny & economical cars). The new Plymouth Valiant and Dodge Lancer had an odd European styling that was striking, but hard for many Americans to accept.
----1962-68 This was a period that was called the "Muscle Car Era". Plymouth and Dodge had Hemi engines in many of their high-powered cars, that were designed not to offend, but not exactly to inspire either. The best design from MOPAR during this period was clearly the 1967-68 Dodge Charger. Recent sales of vintage MOPAR muscle cars from this era show that many things were done right. Huge Imperial models were not appreciated then, nor are they much seen as collector cars today.
----1969-81 Several factors served to change the auto industry during the next 12 years: higher gas prices, government safety regulations, increasing competition from foreign automakers, and mounting inflation. Chrysler designers kept a "me-too philosphy" for most of their vehicles, thus not distinguishing themselves from other domestic competition. While MOPAR vehicles grew to the size of small barges, engines were choked down, and too many Chrysler interiors were described as much like a "Las Vegas bordello." Perhaps the best designed car was the 1975 Chrysler Cordoba coupe, having a twin Dodge Charger model. But restrictive anti-pollution controls and poor fuel economy gave the marketers a rough time. The Dodge Aspen and Plymouth Volare seemed to be a good design, but reliability issues made for tough re-sales.
----1982-93 A government bailout and shrewd leadership from Lee Iococca brought Chrysler from the verge of bankruptcy to re-define itself in the marketplace. All engines were now small 4-cylinders, and size/weights of new Dodges, Chryslers and Plymouths were trimmed way down. Initially the public liked a new cheaper way to drive, but lack of pep and reliability made for a tough sell, when other manufacturers stressed higher quality, bigger designs and more power. Best design for MOPAR was the invention of the minivan, which introduced a whole new segment in America, that gave Chrysler, Dodge and Plymouth segment sales superiority for a good 20 years. The Diamond Star car project with Mitsubishi also gave nice Eagle Talon & Plymouth Laser sporty cars for MOPAR showrooms for 1/2 dozen years.
----1994-2004 This was a period when MOPAR designers swung the pendulum back the other way. They decided to make a cab-forward design, with bigger and expansive vehicles. They started a new division called the Eagle, partnering with Mitsubishi to get engines and platforms. These were among the most stylish cars, but marketers had trouble selling cars that were less than reliable, especially in the transmission department. Plymouth did not receive any of the new larger designs, but got stuck with the Neon, a tiny car with plastic engine parts....and soon left the MOPAR scene. Perhaps the biggest design success was the new Dodge Ram pickup truck in 1994, resurrecting what had been a dying truck brand.
----2005-2009 Gradually foreign brands have sucked the life out of most US car makers, in almost all segments, and MOPAR sales had become anemic. Best design change was shrinking the big Chryslers and Dodges down, and the Chrysler 300 series was a big sales success, and the re-introduced Hemi V-8 engines helped sales and excitement (for Dodge briefly, too). But $4 a gallon gasoline choked off that new-found virility among male drivers. MOPAR designers and marketers sadly have no small economical 4-door 4-cylinder (or hybrid) sedan to offer the public. How did they and partners at Daimler not see this need coming? While it seemed like many people liked to buy SUVs, it was not wise for Chrysler, Dodge and Jeep showrooms to load up with 11 SUVs and crossovers, without any economical microcar offering.
Can Chrysler executives right this ship in the next 120 days? Stay tuned, but don't bet the mortgage on MOPAR stock.
Saturday, December 27, 2008
Tuesday, December 2, 2008
Bailing Out the Automakers?
Help For the American Automobile Companies
offered by Torrey H. Brinkley
Many and varied are the recent opinions about the condition of the Big 3 American Auto Companies, and what should be done with their financial woes.
Few voices are demanding that GM, Ford and Chrysler be saved from any possible collapse, even if thousands of jobs are lost, and home foreclosures soar any higher in Michigan and Ohio.
---The U.S. Congress, with billions of dollars at their disposal to dole out to financial institutions in dire straights, seem to balk at loaning/giving money to auto manufacturers who actually produce something tangible, that all Americans use and depend upon daily.
---Union leaders scream that up to 3 million jobs nationwide could be lost if production, distribution and sales of U.S. cars & trucks cease, yet union bosses themselves produce nothing, just control things like negotiations & benefits.
---Young workers & students in America have had nothing to do with U.S. cars all along, preferring skateboards, bikes, planes, motorcycles, snowboards and Toyotas/Hondas, and VWs (et al).
---Affluent engineers and urban yuppies also fret not about Chevy, Ford and Dodge products, preferring their jet skis, light aircraft, ski-doos, plus Audis, Porsches, Lexus, BMWs, Mercedes or Italian sports cars.
---America's poor and under-employed certainly can't fathom the job bank centers where idle GM employees go sit, do nothing and collect thousands each month while robots assemble $25,000 Malibus and $60,000 Escalades. If minimum wage folk can barely afford $700 a month apartment rent, they certainly can't comprehend $650 a month car payments (plus $100 a month insurance, $120 a month fuel costs, + tires, repairs and 30% a year depreciation on a newer car).
---U.S. lending institutions have washed their hands of the auto industry and their woes. One by one, banks across America have dropped out of the auto loan business......especially ones who had previously been heavily drubbed by the risky sub-prime housing loans. GMAC, Ford Credit and Chrysler Financial finally realized they couldn't put everybody on wheels.....especially when dealerships were rolling over customers who were $10 to $15,000 upside down in their previous car loans.
Some critics have blamed the Big 3 for bad products, not very economical or often reliable. Others have called for GM or Ford to bring over their European counterpart vehicles (which do have fine engineering and design advantages over most US economy cars). Yet, all such previous imports have flopped in the U.S. market. Besides, the United Auto Workers want to roadblock importing vehciles not made with their "union gloves." The image problem, not so much product design, has been killing the Big 3 recently. Consumer Reports magazine has noted that VW, Mercedes, Suzuki, Kia and Land Rover as much more trouble-prone than typical US products.
U.S. auto manufacturers have done so many things right for over 100 years, and they probably won't fail unless the entire U.S. economy collapses, or the world economy falters. Imagine this:
1) They have provided clean, safe, relaible, comfortable, speedy, personalized transport for rich and poor alike (the poorest driver in a $200 "beater" car shares the same roadway as the driver of a $350,000 Rolls or Bentley, and can arrive at similar destinations in the same time frame.
2) Thanks to American ingenuity, there are private automobiles for families; pickup trucks for tens of thousands of manual labor jobs & industries; sport utilities for scores of athletes & adventure seekers; and thousands of roomy, reliable, minivans to airporter vans for soccer teams & traveling musical choirs; plus fleets full of small, medium & large size trucks to haul food & goods nationwide across roads & interstate highways that connect the entire country!! Ever since the 1960s, many Americans likewise find their identity in the type and nameplate of vehicle they utilize.
3) Few jobs in the USA are not tied into our freely mobile society, compared to the horse-drawn buggy days, or compared to the more isolated localized societies that exist elsewhere. Much employment exists in auto assembly; parts & design manufacturing; service & sales shorooms; our highway departments; contractors building/maintaining garages, driveways, parking lots; our subdivision designers & builders; gas stations & car washes; rental & leasing companies (almost exclusively tied into the Big 3 Auto Companies); auto lending institutions; tire shops & lube centers; automotive computer & navigation systems; marketing, advertising agencies (TV, radio, newspaper, magazines & internet); and all the myriad of customizers of body & engine parts.
If Congress does not choose to bail out the Big 3, what should be done?
a) WAIT. Be patient. Let the US and world economic woes settle down before making rash decisions If the Ford F-150 pickup truck has been the top-selling vehicle in the USA by far for the last 30 years, then why scrap what Americans have been purchasing for something less useful? Remember that gasoline cost $4+ per gallon in early summer, and now we see it priced at $1.60 a gallon in late November.
b) MOVE vehicles the best ways possible. Sell them thru leases, loans or cash deals. We should perhaps consider encouraging businesses and government agencies to purchase autos for use by managers & execs, since they have easier access to cash. The Europeans have been doing this for decades.
c) SAVE money. Ask all Big 3 employees to accept pay cuts (deferred towards better times) from top executives down to union floor workers. Get that $73 per hour cost for a GM vehicle produced down to the $46 it costs Toyota (maybe the UAW would consider doing a little something to help out). Can GM somehow get rid of that $60 billion long-term indebtedness for the health benefits for its current and future retirees?
offered by Torrey H. Brinkley
Many and varied are the recent opinions about the condition of the Big 3 American Auto Companies, and what should be done with their financial woes.
Few voices are demanding that GM, Ford and Chrysler be saved from any possible collapse, even if thousands of jobs are lost, and home foreclosures soar any higher in Michigan and Ohio.
---The U.S. Congress, with billions of dollars at their disposal to dole out to financial institutions in dire straights, seem to balk at loaning/giving money to auto manufacturers who actually produce something tangible, that all Americans use and depend upon daily.
---Union leaders scream that up to 3 million jobs nationwide could be lost if production, distribution and sales of U.S. cars & trucks cease, yet union bosses themselves produce nothing, just control things like negotiations & benefits.
---Young workers & students in America have had nothing to do with U.S. cars all along, preferring skateboards, bikes, planes, motorcycles, snowboards and Toyotas/Hondas, and VWs (et al).
---Affluent engineers and urban yuppies also fret not about Chevy, Ford and Dodge products, preferring their jet skis, light aircraft, ski-doos, plus Audis, Porsches, Lexus, BMWs, Mercedes or Italian sports cars.
---America's poor and under-employed certainly can't fathom the job bank centers where idle GM employees go sit, do nothing and collect thousands each month while robots assemble $25,000 Malibus and $60,000 Escalades. If minimum wage folk can barely afford $700 a month apartment rent, they certainly can't comprehend $650 a month car payments (plus $100 a month insurance, $120 a month fuel costs, + tires, repairs and 30% a year depreciation on a newer car).
---U.S. lending institutions have washed their hands of the auto industry and their woes. One by one, banks across America have dropped out of the auto loan business......especially ones who had previously been heavily drubbed by the risky sub-prime housing loans. GMAC, Ford Credit and Chrysler Financial finally realized they couldn't put everybody on wheels.....especially when dealerships were rolling over customers who were $10 to $15,000 upside down in their previous car loans.
Some critics have blamed the Big 3 for bad products, not very economical or often reliable. Others have called for GM or Ford to bring over their European counterpart vehicles (which do have fine engineering and design advantages over most US economy cars). Yet, all such previous imports have flopped in the U.S. market. Besides, the United Auto Workers want to roadblock importing vehciles not made with their "union gloves." The image problem, not so much product design, has been killing the Big 3 recently. Consumer Reports magazine has noted that VW, Mercedes, Suzuki, Kia and Land Rover as much more trouble-prone than typical US products.
U.S. auto manufacturers have done so many things right for over 100 years, and they probably won't fail unless the entire U.S. economy collapses, or the world economy falters. Imagine this:
1) They have provided clean, safe, relaible, comfortable, speedy, personalized transport for rich and poor alike (the poorest driver in a $200 "beater" car shares the same roadway as the driver of a $350,000 Rolls or Bentley, and can arrive at similar destinations in the same time frame.
2) Thanks to American ingenuity, there are private automobiles for families; pickup trucks for tens of thousands of manual labor jobs & industries; sport utilities for scores of athletes & adventure seekers; and thousands of roomy, reliable, minivans to airporter vans for soccer teams & traveling musical choirs; plus fleets full of small, medium & large size trucks to haul food & goods nationwide across roads & interstate highways that connect the entire country!! Ever since the 1960s, many Americans likewise find their identity in the type and nameplate of vehicle they utilize.
3) Few jobs in the USA are not tied into our freely mobile society, compared to the horse-drawn buggy days, or compared to the more isolated localized societies that exist elsewhere. Much employment exists in auto assembly; parts & design manufacturing; service & sales shorooms; our highway departments; contractors building/maintaining garages, driveways, parking lots; our subdivision designers & builders; gas stations & car washes; rental & leasing companies (almost exclusively tied into the Big 3 Auto Companies); auto lending institutions; tire shops & lube centers; automotive computer & navigation systems; marketing, advertising agencies (TV, radio, newspaper, magazines & internet); and all the myriad of customizers of body & engine parts.
If Congress does not choose to bail out the Big 3, what should be done?
a) WAIT. Be patient. Let the US and world economic woes settle down before making rash decisions If the Ford F-150 pickup truck has been the top-selling vehicle in the USA by far for the last 30 years, then why scrap what Americans have been purchasing for something less useful? Remember that gasoline cost $4+ per gallon in early summer, and now we see it priced at $1.60 a gallon in late November.
b) MOVE vehicles the best ways possible. Sell them thru leases, loans or cash deals. We should perhaps consider encouraging businesses and government agencies to purchase autos for use by managers & execs, since they have easier access to cash. The Europeans have been doing this for decades.
c) SAVE money. Ask all Big 3 employees to accept pay cuts (deferred towards better times) from top executives down to union floor workers. Get that $73 per hour cost for a GM vehicle produced down to the $46 it costs Toyota (maybe the UAW would consider doing a little something to help out). Can GM somehow get rid of that $60 billion long-term indebtedness for the health benefits for its current and future retirees?
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