SPEED: What’s the significance of Italian automaker FIAT purchasing a 35-percent stake in Chrysler? What’s the future hold?
Bob Golfen: Those of us who remember the funky Fiats of the ‘60s, whose ‘Fix-It-Again-Tony’ reputation eventually turned away even their most loyal fans, should know that FIAT today is a multinational company with a global dealer and supply network. But like most automakers, their sales dropped like a stone in 2008.
What FIAT would get out of this Chrysler deal is a re-entry to the U.S. market for both its Fiat and upscale Alfa Romeo brands, a goal that otherwise has eluded the company, with a ready U.S dealer chain in Chrysler and Dodge stores, and manufacturing capability through Chrysler plants.
What Chrysler gets would be a range of small cars, and cool ones at that, from both brands, followed by midsize cars, platforms and drivetrains. The cars would be sold under their Italian names as well as Chryslers and Dodges.
My initial reaction to all this was incredulity. Chryslers built by FIAT? Alfas sold by Dodge dealers? And can the Italians step in and turn things around where the Germans failed? The last Chrysler/Italian product that I remember was the Chrysler TC by Maserati, which is best not remembered.
Yet it all makes sense in these desperate times, when Chrysler is hemorrhaging red ink and FIAT is slipping into a black hole. It’s a plan the two companies have been working on for more than a decade while the global marketplace has emerged, so such resource-sharing concepts now make plenty of sense. The future for Chrysler with FIAT is certainly brighter than the future of Chrysler without FIAT.
SPEED: How does General Motors regain the market share it’s lost to Toyota? What’s Toyota’s advantage?
Golfen: If I knew the answer to that, I’d sell it to GM for $10 million. Besides, Toyota’s upstaging of GM in 2008 resulted not so much from more sales than fewer leftovers. Toyota also saw a significant decline last year, just not as bad as GM’s.
So let’s answer the second question first. Toyota’s advantage is simply this: people trust the company’s products. The Japanese automaker has built a sterling reputation of reliability for its full line of vehicles, including Lexus, ranging from bulletproof pickup trucks to care-free luxury cars.
That, and Toyota has delivered what U.S. drivers want when they want it. We have a whole generation of drivers now in their 30s and 40s who would never consider anything but a Japanese car, mainly Toyota or Honda. Yet Toyota fails to resonate with the youngest drivers, who consider Toyotas to be their parents’ conservative set of wheels. Honda rules in that arena.
And unlike GM, Toyota is not so much strapped by the burdensome pension and health-care payouts, or costly worker’s union concessions.
After years of missteps, GM seems to be hitting the right buttons these days, although its stubborn reliance on SUVs and pickups finally came home to roost when gas prices spiked last year and nobody wanted them. Hummer H2 anyone? But such things as the excellent new Malibu (which should have received a new name) and its adoption of Opel products, finally, bodes well for the future.
GM is closing in on the Japanese brands in quality and reliability. Hopefully for GM, consumers will take notice.
SPEED: Which foreign or domestic automaker is best positioned to come out of the recession in great shape?
Golfen: I just read somewhere that the only automakers with actual sales gains during 2008 were Mini and Subaru. Go figure. This question might be more appropriate for an economist than a car guy; my brand loyalties might color my speculation. And I don’t really know all the financial back stories for most of this mess.
Perilous times indeed for GM, Ford and Chrysler, as well as Volvo, Saab, Jaguar and Mitsubishi, in no particular order. Who survives and who succumbs seems like a tossup.
If you look back to the 50s and 60s, when such great U.S. brands as Packard, Hudson, Nash, Rambler and Studebaker hit the skids, you might see some parallels with today’s automotive shakeup. In hindsight, many of their problems came from failing to adapt to new market parameters and misreading the desires of consumers.
Of the U.S. brands, Ford still has some money in the bank and made a splash recently with some new products, notably the updated Mustang. So of them, I’d have to go with Ford, though this FIAT deal might be golden for Chrysler. GM will likely emerge as a leaner entity, with all the layoffs and hardships that go along with such a retraction.
Of the imports, Toyota and Honda are the obvious picks for survival, with Mazda and Subaru likely winners as well. Hyundai and its partner, Kia, should come out OK. Mercedes-Benz, BMW, VW/Audi, those guys are all pretty solid.
Yet the world economy is still writhing, so who knows? Another $10 million question for which I wish I knew the answer.
SPEED: How will the new rules – giving states the right to set their own fuel standards – effect the decisions the automotive industry will have to make?
Golfen: The automakers will be forced to build vehicles that comply with the state mandates across the board; it would be tough to sell a sedan that gets 40 mpg in California but only 32 mpg in Kansas. States with less-stringent requirements would line up to adopt the toughest codes from the most aggressive states.
What this does is generally shift the responsibility of setting mileage goals away from the feds and over to the states, not really a good way of setting national policy. Some of the state goals seem draconian and could eliminate entire classes of vehicles that drivers and their families may want or need.
We need to have a national discussion that puts it all in one place, with consideration of gas prices and their effect on the marketplace, air quality and other important issues. The automakers must be at the table as well; they are the ones who know what’s feasible.
Then again, technology could save the day. Chevy Volt and other plug-in hybrids, or clean diesel, could raise the bar and change the automotive landscape altogether.
SPEED: What should GM do with Pontiac & Saturn?
Golfen: Lose Pontiac? That would stink. And Saturn just when its getting first-rate products? And if it wasn’t for China’s great love for Buick, well …
So much of this stuff comes down to marketing and perception (see Toyota above) that you can’t help but feel that if vehicles were properly presented to the public, nothing from GM would need to be lost. OK, maybe Hummer. And Saab will most assuredly go its own quirky way once again.
GM needs to do what critics have been saying for years: better differentiate its brands with unique products instead of transparently badge engineering. The brands could share platforms and drivetrains, but how about making them distinctive enough so that each marque has its own powerful identity? Look at how well it worked for Cadillac.
SPEED: Talk about the new content and topics you will be bringing to SPEEDtv.com.
Golfen: My plan is to development a first-rate automotive component for SPEEDtv.com, filled with all kinds of information geared for both consumers and dedicated gearheads. Coming from a long background in newspapers and other publications that you can hold in your hands, the web site is a new creature for me, but I’ve learned to appreciate its immediacy and its wide reach.
I intend to bring everything automotive to SPEEDtv.com, with enhanced content focusing on industry news, new-car features and reviews, car hobbies and collecting, and key automotive happenings, such as our recent in-depth coverage of the Barrett-Jackson Collector Car Event.
We will host a variety of automotive experts to share their reporting and insights about industry trends and lifestyles, and through a variety of online partnerships, provide the best coverage from other sites and publications.
In this troubled economy, we also will keep you abreast of the latest automotive news as today’s economic turmoil plays out.
Some new features I plan to create: a calendar of major automotive events nationwide; a question-and-answer column regarding new vehicles and automotive products; a similar column regarding mechanical issues answered by a repair expert; and maintaining blogs and chats on automotive topics.
I’m just getting started in rolling out the Cars section of SPEEDtv.com, so keep watching for new content. And in this interactive age, I most certainly welcome and seek your feedback and suggestions.