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Chrysler

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Growing up in Michigan, one of my first memories is my father traveling to Japan and returning with a bounty of exotic goods  — a rice painting for my mother and a red and blue silk kimono for me.  A few weeks later, a group of Japanese businessmen who worked for Mitsubishi came for dinner. They were working with Chrysler engineers on a project and there was a cultural exchange in the process. I remember the businessman as polite and they seemed to enjoy the American meal my mother prepared.  It was my first brush with Japanese culture growing up in Michigan, and my curiosity was piqued.

When I was in elementary school, Toyota brought a group of families to a nearby neighborhood, and as a result a flood of Japanese children came to my elementary school. I made friends with a fourth-grade Japanese girl who introduced me to the entire Hello Kitty lineup and who wrote notes with delicate penmanship. We learned much from each other, in the way that children do, without judgment or bias, unaware of the resentments building around us as Michigan jealously looked on at the Japanese car economy.  We stayed in touch when she went back to Japan.

At that time, the Big Three companies were struggling to find their place with the emerging power players in Asia — Toyota, Honda, Nissan, Mitsubishi, Subaru and Mazda.   The hardcore Detroiters felt that the Japanese had stolen business, but in reality, it was American companies that had lost that business to Toyota and Honda as the perception of American quality declined. In the 1986 Ron Howard film Gung Ho, Michael Keaton portrayed the frustration of the every man autoworker. It was reported in a 2007 Business Week article that Toyota executives used this film as a guideline for how not to manage American workers.  But when Americans car companies lost their customer, it was the employees who were angered, not the car-buying public. Sales showed that when it comes to buying American, the loyalty ends with Levis. For American buyers, U.S. executives became the trusted face of Toyota, as quality became paramount.

Yet, what’s most interesting about the recent troubles fallen upon Toyota’s quality department is that history indeed repeats itself.  Toyota has fallen prey to the same factors that dulled GM, Ford and Chrysler — growth that surpasses the ability to maintain standards. In the coming days Toyota will scramble to pick up and dust off it’s tarnished reputation, but if history is to be learned from, this lesson won’t come without painful side effects. The flurry of reports and the unmanaged messages coming from CEO Akio Toyoda will cause just as much damage as the actual problems facing the unsafe vehicles.  For Toyota the headache is two fold knocking out its most popular vehicles, and magnified in the brake problem in the Prius, Toyota’s symbolic leading vehicle of green innovation.  Experts are estimating the blow could cost 100,000 in vehicle sales according to CNN report. But without a united front of trust and swift moves to effectively demonstrate a recall, fickle consumer losses are hard to anticipate. Soon, top PR firms will take over this job and mitigate the damage, but the waters will be tricky if Toyota doesn’t stop and pay heed.

Toyota finds itself in unfamiliar territory — how to handle a crises in American confidence.  The company must look toward the past of American companies bitter battles with public perception. The most famous example — the 100-year relationship between Ford and Bridgestone/Firestone that was obliterated by the 1990 Ford Explorer tire controversy, and what Ford has spent much of the past two decades fighting to overcome.  In similar reports to the Toyota issue, it seems that company officials had some knowledge of a safety problem, but failed to address it, and instead got into  a blame game.  This was the final blow to American perception, though American cars did not lose their luster overnight.  They began to lose some of their sturdy quality marks in the early 70s with Chevy Vegas and Ford Pintos tainting their steadfast reputations.

Toyota can come back with swift moves to demonstrate a grasp of its’ manufacturing snafoos, but in this day and age of instant reaction, it doesn’t take much to taint American consumers.  Just as Americans felt no ill will about deserting their own, they certainly won’t with Toyota and Lexus.  Inevitably, this problem will trickle over into perceptions of other Japanese automakers, who could get caught in the friendly fire of stereotyping.

What remains for certain — with Ford  ( referred to in jest as “Fix Or Repair Daily” by American-car haters in past years) grabbing top-quality marks,  GM slowly earning more favorable remarks in its leaner product ine and Hyundai emerging as the luxury marque to beat, nothing about the car business is set in steel.

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The former General Motors Research Laboratory on 460 W. Baltimore, in known as the Argonaut Building, designed by legendary architect Albert Kahn. It was here that GM established its designers as company leaders, making the shape of the car, outside and in, forever interesting. The College of Creative Studies, an art school that is also one of the preeminent schools for car design in the world, has claimed the building along with a $145 million-dollar refurbishment, as home for it’s transportation design program.

Design is indeed back in fashion.
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Chrysler unveiled it’s long-term plans today and the first presentation established the definitive tone — it starts with the way things look and feel, so eloquently put as “soul by design.”

Well it’s not widely-touted, most cars feature similar technology, differentiated by function, space and performance demands. With the race to build leaner cars as a global mandate, car companies are joining together to work with universities and research institutions to make cleaner cars — that’s in everyone’s best interest. The point of differentiation, personality and style left to the consumer comes down to the outline — car design. Hello car, welcome to the era of car design. [click to continue…]

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Let’s be clear — that’s not me driving serious farming equipment at the launch of the 2010 Dodge Ram Heavy Duty. Hauling tractors doesn’t really gel with my urban mama style, but this is the kind of activity nearly half of all customers who drive these beefy trucks do on a daily basis. And yes, these buyers are important to understanding what’s going on at Chrysler, and important to keep in mind when assessing the vehicle. I did drive the new 2010 Ram Heavy Duty — Chrysler’s sole launch since the June turmoil — on a balmy October Thursday in Michigan, through glorious autumn foliage in the southeastern Michigan countryside, with a few take away reflections at the pique of the seasonal shift.

Chrysler hopes this is the season for turning a new leaf. Managing director of Fiat and CEO of Chrysler Sergio Marchionne has posted new leadership in a formula replicating Fiat’s internal structure. Texan marketer Fred Diaz Jr. is now president and CEO of the Dodge Ram brand. Design guru Ralph Gilles will be president and CEO of the Dodge Car brand, and continues as Chrysler’s head of product design.

The tide has shifted in an era of rough seas for Chrysler, as perhaps the hardest hit of any automaker. As one person pointed out in Ypsi, Chrysler is either all the way up (the banner minivan years, the launch of the Chrysler 300, or the glory days of the Hemi engine) or all the way down (in the wake of the Daimler pillage, or sub-par passenger cars and generally since car sales fell through the bottom of the ocean.) Chrysler doesn’t do well at status quo. One would hope at this point, there’s only way to go.

But then again, many skeptics didn’t think the Pentastar would make it this long, and low and behold, they still are producing vehicles in the segment they know best – burly trucks. Despite downsizing, cost-cutting and gloom and gloom, Heavy Duty still packs an uppercut. Here Chrysler has long been on it’s A-game, neck and neck with the Ford Super Duty and Chevy Silverado big dogs. While Toyota and Nissan loom, the Big Three knows the profitable truck business. Even if consumers are buying less, there’s more to be made on truck profits, which is why Toyota, Honda and Porsche jumped in to the SUV game several years ago. While trucks and SUVS may cause some green consumers to turn up their nose at the fuel-sucking Americas, let us pause and think what trucks are used for — building, moving and making. No matter what, in our action-packed society, we still need some payload.

Dodge Ram Heavy Duty is a trusty, solid contender in the full-size truck category, ideal for towing, snowplowing, construction and gardening, the kind of work that requires towing capacity, durability and functionality. In big Texas, aka truck country, the Texas Auto Writers like this one best, it was recently announced. To stand assertive, the Ram has a bigger grille, much like it’s 1500 model and that’s the kind of message, a projected Ram buyer would favor.

In my more pedestrian city-girl approach, I simply took and easy breezy fall drive and followed the route from Ypsilanti Marriott just off the campus of Eastern Michigan University and ended up at the Chrysler Proving Grounds in Chelsea, Michigan for about 130 minutes of seat time, feeling like a boss all the way.

The ride was smooth for such a big monster mobile, and the storage space, plentiful and sturdy. No spilling with secure cup holders like this on cold fall mornings. With all the torque and girth, I didn’t feel a bump in the road and despite the size, I easily maneuvered in and out of parking spots and across the road for lane changes. No swivel and swerve, just steady well-balanced power. I didn’t get much backseat time in the quad cab of the off road package I drove, nor the Laramie megacab, that I rode in on the way back, but finding a place to stash a bag was certainly no problem in either spacious cabin.
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The marketing numbers provide a composite of the traditional Ram buyer — my favorite stat — nearly 2/3 of Heavy Duty drivers own a dog. And apparently, these guys (90% men) also love bacon, which shows in their average 5 ft 11 200+ lbs frames.

Hence, here is the bread and butter of the Chrysler business. I’m not that guy, the one who will hoist myself up into the big truck, but I did grow up with them in rural suburban Michigan, the kind of dudes who haul around snow mobiles up north. I know some in New York, who like to haul classic cars with big truck like these. And my own father favors a crew cab in the 1500 model. They might like heated seats for freezing days and ventilated seats for sweaty days in the sunshine, but luxury — not so much. It’s about comfort for these outdoorsy types.

Here is the quintessential juxtaposition to the Fiat 500 (which I spotted parked in the Chelsea proving grounds parking lot) Here is the big time truck for all purposes practical, the business Mercedes let be.

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It also happens to be Chrysler’s biggest profit margin. One of every eight new vehicles purchased in the U.S. is a full-size pickup truck, Mark Heber, head of Dodge truck marketing, said.

Will commercial construction rebound, and will heavy-duty hobbyists have the cash for a new truck for big play things? That’s the uncertain waters that Chrysler faces in the coming months, but assuming things settle themselves in key markets, Dodge has managed to deliver a solid truck in the 2500 and 3500 that come respectively with a 5.7-liter Hemi V8 engine or a 6.7-liter Cummins turbo diesel engine. Wait stop — yes I did say diesel, and the 3500 lb only comes with diesel, which cuts down on big foot print emissions considerably. Fuel economy numbers are yet to be released, but are reportedly slightly better than previous generations. The pickup arrives in dealers in a few weeks, hoping to woo customers with a drop in prices from the previous gen models — starting at $28,165.

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Hurst Performance is a season performer in the car game. Founded in 1958, it’s responsible for beloved limited editions like the Hurst/Olds 442. The 1965 Barracuda provided the blueprint for the movement with Hurst Hemi Under Glass. Hurst went on to build a fleet of the Hemi Cudas for Chrysler, and the Dodge Dart, making it a Dodge-lovers’ icon. The last of the Hurst specialty vehicles was built in 1988, until the recent changing of the guard and alas the Hurst insignia is reborn. Now Hurst is back in the performance game with the surly 540 hp supercharged Challenger, marked by the Hurst signature black and gold hues.Everyone’s favorite car commentator Jay Leno weighs in on this bad boy:

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Small Block Chrysler
If I had a penny forever supposed automotive expert that told me Chrysler would be dead by spring, I’d have a full tank of gas. I couldn’t help it — I bet for Mopar every time. While the dangling Pentastar has taken a few nicks, it’s still glimmering with hope for Michigan people who lean tough on some aspect of the domestic automotive industry.

Here it is June, and the assembly lines are cranking up for first, second and third shifts, and pension checks have been sent out. Chrysler, who has long been the bronze contender of Detroit, is still hanging on as Big GM and Classic Ford switch from first to second.

Chrysler emerged from bankruptcy freeze last week. They’re not out of the woods, but they’re still in business. My father, a Chrysler loyalist forever, in his usual stoic die hard way has been forwarding me emails circulating amongst his fellow retirees, with cautious, skeptical splinters of pride. While many of those who bleed Chrysler blood have lost big this year — from line workers, to engineers and admin assistants to vps and 789 dealers and their employees — it’s still astounding that this scrappy company knows how to morph into viability. (How many new Chryslers are on the road? How many new cars, period, are leaving dealerships?)

It seems at last the company is back to business as usual — management reconfigurations. For as long as I’ve known Chrysler execs they’ve played musical jobs. At least some of their key players have held on, like everyone’s favorite 300C design chief Ralph Gilles.

A lot of work remains ahead and probably some more growing pains, as Chrysler attempts to blend with Italian leadership. This wasn’t a smooth process when Daimler swooped in after the then CEO sold his company out. I have my own war stories from a summer stint in the U.S. Newsroom in ‘98 racing to get the company clips out first.

There are positives in quality of life for workers with this exposure to the Italian way of doing business– expect really good coffee in the Auburn Hills cafeteria and possible shutdown at lunchtime. Fresh from my own adventures in Italy, I can help but think that some notion of irreverent romance will add a little sauce to the pragmatic Midwestern disposition.

Sometimes mergers produce twists of fate in the epilogue from — I’ve heard that for those Chrysler investors who didn’t dump stocks, their Daimler holdings are looking up. I’m not throwing my vintage Dodge gear on eBay anytime soon.

Here’s how company docs are explaining business as usual:
Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep®, Dodge and Mopar® brand vehicles and products. With the resources, technology and worldwide distribution network required to compete effectively on a global scale, the alliance builds on Chrysler’s culture of innovation, first established by Walter P. Chrysler in 1925, and Fiat’s complementary technology.

Headquartered in Auburn Hills, Mich., Chrysler Group LLC’s product lineup features some of the world’s most recognizable vehicles, including the Chrysler Town & Country, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group LLC to offer an expanded product line including environmentally friendly vehicles.

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If all goes according to plan, we as Americans, are making an investment. We are making an investment in the future of the American car, the global vehicle.
If all goes according to plan, GM will be put back together again in a structure more efficient than the former bloated structure.
If all goes Chrysler will make bella cars for small-car seeking American drivers, the way Fiat does across Europe.
If all goes according to plan, we are moving toward an energy efficient future.
If all goes according to plan, the dealers, suppliers, executives, UAW plant workers, retirees and contractors who’ve are in financial straits, will find new avenues for survival.
At least, that’s what the plan calls for. What remains to be seen is how this plan will play out on everyday lives, how unforeseen events will affect this game, how people will pick up the pieces, and how Americans are going to buy and sell cars to make all of this rebuilding possible. Or as Michigan Governor Jennifer Granholm put it today, “We’re starting to hit rock bottom. We know there is an end to this.” We have the plan, now the end of the story remains to be written.

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As my plane touched down this morning on a bright, sunny dry patch of runway at DTW in the McNamara terminal the familiar swell of homecoming filled me. Yet, as soon as I stepped on solid ground, I realized that this trip already feels different. Was I imagining it? Gone from people’s faces was the characteristic friendliness, the slow local amble was replaced by dullness, tight grimaces and flashes of trepidation.

At the airport in New York, the lines were pushing and urgent as people cut in front of one another to make it through the rush. Here people seemed more in a daze, looking to go somewhere. The look was on the face of the vendors in the shops, to the young guys in Detroit Tigers baseball cats carrying duffle bags. Or maybe it was just the usual Monday morning blahs.

I veered toward the Westin exit — an insider secret to Detroit airport pickups, the way to leave an airport in style with large windows exposing the 757 Boeings of the Northwest Airlines fleet. With my regular trips to Detroit, I’ve come to use this short cut several times a year, waiting for my ride.

The Westin lobby was nearly empty though it was Monday around checkout time and my footsteps echoed as I pushed the stroller through the dim glow of sophisticated decor. I noticed a small cluster of people sitting on benches with nervous faces — they didn’t look like business travelers. Then I saw the sign pointing to the section where they sat reading “Interviews.” My son’s innocent 8 month-old eyes took it all in, gazing at the tall lights.

My mother works downtown; my father is retired and works at home, so he was on chauffeur duty. He picked us up in front of the Westin entrance in mother’s Chrysler 300C complete with my son’s baby seat. They switched cars for the day to accommodate the growing family. My father’s Dodge proud, bright-red pick up truck isn’t built for Graco. Ever since I remember, my parents have driven new cars. In fact, the last car they own was in the early ’70s — before me. A Challenger perhaps? Or was it a Dodge Dart? They’ve almost forgotten themselves. That’s because lease cars were part of my father’s salaried contract. But, this Chrysler 300c is the last of the lease cars, my dad told me. My parents will be in the market soon.

In the car ride to my childhood home, we began to talk about the pension cuts at Chrysler. The uncertainty is everywhere, even with my parents, who are Midwest practically comfortable. These days I consider them one of the lucky ones.

Yet all my preoccupation vanished when we arrived home, and climbed out of the car in the driveway. I watched my son peer curiously around, the quiet, the gentle breeze, comforting him, the front door beckoning him of second home. He stretched out big and wide, enjoying all that extra air, the free space of Michigan to move around expressively, and to take his time. All at once I fell in love with home for him, for me.

And so the tone is set for my homecoming — where I will spend the next week looking at my town with subjective objectivity, trying to sort out what has happened here in the last five months, and to guess what is to come. It’s a question everyone’s asking. Yet, here I find myself in this odd place of a certain perspective — immersed in the politics, the history and the culture of Detroit, and what it means to come from here, covering this city for some 15 years as a journalist and ambassador, and on the other hand, surrounded by the insiders of the automotive industry, the realities of making cars as an automotive writer. What makes this time different, is that it feels like everything is changing, vanishing, replacing, and shuffling, and standing still and moving forward all at once. Everyone’s watching, but is anyone listening?

In some ways, just like my 8-month old son, I feel like I’m seeing it for the first time. It’s still good to be home. – TW

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Welcome to the great divide — the 50 United States, albeit one with a severed hand. Yes, Michigan, bankruptcy headlines are only the tip of the story. Chrysler’s woes are a big giant anchor on the viability of the state Michigan. As the courts dredge the forlorn company for viability, paralysis grips the entire state, and the epicenter of Detroit resonates with pain as plants close their doors and residents wring their hands in anticipation. Our friends echo the sentiment, “It’s terrible here.”

The media response hints at what people are feeling:
The Detroit Free Press doesn’t mince words, with the headline Chrysler Bankruptcy Slams State. The New York Times is skeptical in editorial about the process. The LA Times is cynical in their recap.

The bottom line is that the complicated economics and legal aspects of the bankruptcy have people scared, and economists we are not, but what we do know is that no optimal end is in sight soon. We’re hearing stories from the front lines from Auburn Hills to the Detroit River. We’ll continue to relay those to you.

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Dear President Obama,

You moved the nation with your speech to Congress last night. You called us to task and made us accountable. You treated us as citizens with civic responsibility and a roll to play in society. You told us, “Hope is found in unlikely places.”

And you admitted that mistakes would be made. That’s why when you got to the topic of the auto industry, we who frequent the automotive industry for our daily bread in Detroit and beyond, understand you still have a lot to learn about the historic roll of the automobile in American society, if you are to make wise decisions about it’s future.
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Chrysler pulled a fast one on the auto industry, or at least a deft lane change by turning over a 35% stake to Fiat. We’ll be watching this partnership unfold. Somehow, we can’t help but think back on Chrysler’s other foreign touchstones — Mitsu, Lambo.. the list goes on. But in those situations, the big dog was on the other side of the fence, that was until Daimler Dachsund came around. This whole thing still might not fly, according to the Detroit Free Press, with the complicated loan issues at stake if Fiat becomes a big investor.

Yesterday Chrysler and Fiat announced a “strategic alliance” wherein Fiat would take a big stake, cost-free, in the American company. Bells rang, whistles blew, cheers went up—mainly from the Cerberus boardroom. That company happily is giving away 35% of Chrysler, which it bought (80%) for $7.4 billion from Daimler Benz less than two years ago. And everyone loves the deal.

But enough of high finance. Most of us hope the deal works out. Chrysler would gain access to a range of excellent FWD, low-emission small cars that, rebadged and rebodied, it could begin selling relatively quickly. The company would finally have access to the European and South American markets. It would get critical help rebuilding and, maybe, succeed in convincing the Feds to cough up the conditional $3 billion in March that it needs.

Fiat gets a heckuva deal. Mainly it gets access to the U.S. market, both for manufacturing and distribution. Check our buddies at Cargurus.com, who supplied this text, and get their twist on the matter.

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