The Latest Auto Extremist
19 May 2019 at 2:43pm
By Peter M. DeLorenzo
Detroit. For all of the creative thinking and instances of intermittent brilliance demonstrated by its talented True Believers, this business is plagued by an oppressive layer of rote thinking and lemminglike behavior that is beyond frustrating and that has routinely wreaked havoc on the proceedings over the decades.
Why, you might ask? Auto companies are obsessed with other auto companies when it comes to product and marketing and just about every other aspect of the business. Part of the reason is that this business is an inveterate gossipy sewing circle that ebbs and flows with the prevailing winds. Model intros, press events and auto shows are chock-full of news that flows through the media and out to the wider audience, which is, first and foremost, made up of the other auto executives and their minions who have an insatiable need for any and all information about their competitors. Throw in the fact that the suppliers are a hotbed of hearsay, and you have a kaleidoscope of rumors, conjecture, hard but inevitably garbled facts, advanced intel that is shockingly accurate (but gets lost in the fact that there’s a thread of disbelief associated with it), and everything else you can imagine swirling around at a furious pace. And thus, it was ever so.
The result of all of this is that eerie and just plain weird occurrences happen all the time. You see it most in design trends that appear and become the look of the moment spread across a wide spectrum of the business overnight. How does this happen, exactly? Especially when designs are created with crushing lead times in top secrecy? One reason is that young design talent is being trained with a new level of discipline and professionalism in this business, which is commendable. But there’s a sameness that develops in that indoctrination too. Similar perspectives, similar training and similar points of view rear their heads eventually. The other reason is that everybody talks in this business, especially designers who get together to shoot the breeze. It’s no wonder that trends and design “signatures” you see in the models developed and offered not only seem so similar, but they somehow arrive at the same time.
It doesn’t end there. Engineering and technical features are another hotbed of a kind of, “if Belchfire Motors is going with it, we’re not going to be left behind” type of behavior. Suppliers play a huge role in this, too, tipping off each other and their competitors alike about the latest gimmicks and come-ons that are on the way. And certainly, the explosion in AV and BEV research and development and the massive spend on new technologies has yielded, not surprisingly, similar pursuits – and results – with only subtle nuances to distinguish them from each other.
And then, of course, marketing isn’t left behind in all of this either. The strategic lingo used, the tone of the advertising, the executions, the national sales event advertising, the eerie similarities are all there right out in the open. And behind the scenes, trend words and industry jargon spread like wildfire because, after all, if you’re not on top of the latest marketing speak, you’re basically nowhere, which is a fate worse than death in this business, especially in the marketing arena. No other pursuit parses consumer information down to the last minutiae more than the auto business. The net result of all of this varies widely, because the genuine success of a marketing campaign ultimately hinges on hitting upon a compelling piece of creative, much to some marketing strategists’ chagrin. (After all, an accepted adage in this business – at least by clients – is that if a marketing campaign is a success, it’s because of the astute strategic thinking on the client’s part. If a campaign fails, however, it’s somehow always the ad agency’s fault.)
You only have the look as far as the new TV commercial for the Chevrolet Silverado called “Tailgates” to see what I mean. It’s more compelling and memorable than any of the launch advertising that was initially created for the new Silverado, and I’d be willing to bet that the idea didn’t originate on the client side, either.
But the largest and certainly most demonstrable lemminglike behavior in this business is model proliferation. It’s loosely based on the philosophy that if a car company utilizes its vehicle architectures efficiently to create more models, then the profits will follow and everyone will look like a hero. Except that it doesn’t really work that way.
The most strident proponents of the model proliferation philosophy are the German luxury auto manufacturers. There’s no question that they’re the OGs of this movement. They exist in a world of their own making that revolves around the credo that if model proliferation is a good thing, then even more model proliferation is an even better thing. The explosion of models from Audi, BMW and Mercedes-Benz started to go off the rails about a decade ago, when they decided en masse to not only attack the SUV market while churning out even more variations of their coupes and sedans, but they then added performance variations to everything, whether they deserved it or not. All of this was fueled, of course, by the fact that the German luxury competitors have spent the better part of the last decade jumping at the slightest whiff of a rumor of a new product from one of their competitors to come up with an answer to that product of their own.
This is about the time we started seeing BMW doing homely “GT” versions of some of their sedans and countless versions of their “X” vehicles. And Mercedes and Audi launching product answers of their own that ended up stepping on each other within their own showrooms to a shocking degree. Do you even remember when BMW was just about the 3, 5, 7 and 8 Series? Or when Mercedes-Benz was about the C-, E- and S-Class? Or Audi was about the A4, A6 and A8? It barely registers on the memory meter now. (Just an FYI, right now BMW offers the following models: X1, X2, X3, X4, X5, X6, X7; 2, 3, 4, 5, 6, 7, 8, Z4, M Models, i3 and i8. And that doesn’t even begin to cover the variations of each of those models).
And now, after chasing niche after niche – both real and imagined – the German auto manufacturers have come up for air to realize that they just can’t do it anymore. In the last few months the buzz across this business has been about cutting the number of models offered while reducing complexity. Coming up with all of these niche vehicles is one thing, but supporting them properly with marketing, advertising and dealer training is quite another. It has added costs upon costs, and the whole thing is about to come undone because with all of these companies investing billions in BEVs and other advanced driving technologies, they simply can’t afford to do it anymore. And the aforementioned German manufacturers aren’t alone, either, because Toyota, Honda and VW have launched similar initiatives.
But this is much more than the manufacturers wanting to reduce their own, self-induced internal chaos. It’s about the fact that the confusion for consumers in vehicle showrooms – as well as prices – has been escalating to an untenable level. It’s nice to have options when car shopping, of course, but when variations upon variations are offered – with subtle model differentiations on top of subtle model differentiations added for barely discernible effect – it doesn’t add to consumer confidence by any stretch. In fact, it creates just the opposite, turning off people by making their decisions wildly complicated and needlessly difficult.
To me the end of model proliferation for model proliferation’s sake is a very big deal. It has been such a part of this circus for so long that for the industry to now walk back from it is a measure of just how much the industry is in the throes of definitive change.
We’re not talking about a few wispy clouds in the industry’s coffee these days. No, these churning, 70,000-foot thunderheads are ready to unleash their fury on this business for decades to come.
And that’s the High-Octane Truth for this week.
13 May 2019 at 8:41am
By Peter M. DeLorenzo
Detroit. In the aftermath of the Carlos Ghosn rousting, it’s clear that the issues at Nissan run deeper than the fact that the Japanese executives just wanted to rid the company of its aggressively abrasive, megalomaniac of a CEO.
No matter where you come down on the side of the Ghosn situation, he was, after all, a distinguished graduate of Unctuous Prick University and an abusive dictator who lorded over his charges with impunity. But let’s not forget, the so-called Nissan executive management team at the time went along with his outsized demands and relentless goal-setting while approving his expenses because let’s face it, they didn’t have the first clue how to project a better idea or the backbone to do it. Until they apparently decided that they couldn’t put up with his runaway ego one more day.
But leaving that aside – I am not going to list the roster of the Japanese executives at the company who have distinguished themselves with serial incompetence – the fact remains that without Ghosn, Nissan is rumbling, bumbling and stumbling its way to a dark place.
It’s no secret that in many previous columns I have been less than flattering with the way Nissan has gone about its business here. The Nissan product cadence has been a recurring joke and its design executions have been repeatedly cringeworthy, but that’s only the beginning. Its marketing strategy basically revolves around laying massive incentives on the hood and turning out mediocre products to fill its dealer lots so that the “churn and burn” can continue. And when an automobile company conducts business this way it’s inevitable that it will lead to trouble. Needless to say, it has hurt the brand tremendously.
In my Brand Image Meter column last June, I had the following to say about Nissan:
“Nissan marketing is a dismal exercise in futility, and that’s on a good day. So, what is it, exactly? The only rational reason – and I am paraphrasing a hoary adage by H. L. Mencken here – is that no one ever went broke underestimating the intelligence of the American public. As in, mediocrity, when it comes to automobiles, is bliss for most consumers, because at the end of the day too many of them don’t understand the difference and couldn't be bothered to care. Confounding and tragic, but there you have it. And despite Carlos Ghosn’s promises of global dominance, nothing has changed to alter my assessment. (Can’t auto CEOs just be content with doing well without veering into talk about dominating the market? Ha! What was I thinking?) For those who revel in abject mediocrity, Nissan is just the ticket.”
Not exactly a rousing endorsement, but it’s much deserved. Nissan is one of those car companies that has evolved into a Twilight Zone of irrelevancy. The brand’s claim to fame only extends to the fact that it is present and accounted for in the market, and if that’s not enough to dilute its image, the brand takes it one further by jamming rental car fleets and exposing its relentless mediocrity to a wider, dismissive audience.
This just in: This simply isn’t sustainable. And everything I see coming out of Japan is that Nissan executive leadership is in such turmoil that they’re unable to lead their way out of this quagmire, with or without merger partners.
But there’s a Bigger Picture to Nissan’s chaotic situation too. It speaks eloquently as to the basic fragility of this business. Nissan has been able to muddle along for a long time with its “churn-and-burn” strategy, perpetuating its mediocrity year after year to a faction of the consumer public that has reduced expectations when it comes to transportation. But it’s clear that this shallow strategy is running out of steam, and time.
There are no givens in this business and there are fewer guarantees. An auto company can be rolling strong for years to the point that it becomes an assumption – internally and externally – that it will go on forever. But those are dangerous assumptions.
Take Audi for instance. It has been piling up sales records with what looked like an unstoppable momentum. But guess what? Audi is now in the throes of big-time trouble. Its sales have slipped almost nine percent in the first four months of the year, and it’s caused, according to Audi, by a mismanaged product supply to the U.S. due to emissions testing requirements in Europe. Which means its hottest selling Q3 model is out of stock, with the new one not hitting dealerships until late this year. That’s a heaping, steaming bowl of Not Good, because even Audi loyalists are wondering off to competitive brands. Just ask Audi dealers.
But that’s not all that’s going on with Audi, and it is part of the general malaise going on in the market too. As I’ve said repeatedly in the last few months, affordability has become a serious issue. Prices are just too high, and even luxury-oriented buyers are giving pause. And the manufacturers aren’t blameless in this, far from it, in fact. Look at the softening in Jeep sales. I’ve heard all of the excuses, but the fact remains that FCA has gotten seriously greedy with its pricing – particularly with its Jeep options – and people are beginning to get the fact that Jeeps aren’t nearly the value that they once were. Those are self-inflicted wounds that this business has been long famous for, which points to the fact that there’s nothing really new under the sun, especially when it comes to short-term thinking and flat-out greed.
Back to Nissan. If Nissan’s Japanese executives actually believe they can extricate the company from this mess in a short period of time, they are sadly misguided. Because of product cadence, poor product execution and a vacuous marketing strategy, it will take the better part of a decade for Nissan to get back on track. Suffice to say, Nissan’s continued presence in this market is not guaranteed by any stretch.
In fact, I wouldn’t be surprised if the company is merged or absorbed, because it’s clear that Nissan’s Japanese executives spend most of their time searching for a clue. And in a business that runs on “what have you done for us lately?”, that’s just not going to cut it.
And that’s the High-Octane Truth for this week.
FLEETING MOMENTS FUEL OUR IMAGINATION.
5 May 2019 at 4:52pm
By Peter M. DeLorenzo
Detroit. If you’ve arrived at a certain point in your life you realize that even the special moments are fleeting – they come and go when you want to hang on to them and make them last forever, but that’s not the way it works, unfortunately. Yet those living color memories stick with us and last for a lifetime. It’s our life currency, in fact. No, they’re not all we have to go on, of course, but they’re certainly the most enduring, and they continue to fuel our dreams to this day.
Having led a charmed car life from an early age, my fleeting moments are indelible and, in some respects, almost unbelievable, but they’re as fresh and vivid as if it all happened yesterday.
To say I had the opportunity to experience an incredible automotive life growing up is an understatement. Our father, Tony, was leader of GM Public Relations in the company's heyday, from 1957 to 1979, so many of the GM legends you've only read about – Ed Cole, Bunkie Knudsen, Zora Duntov and Bill Mitchell – just to name a very few, weren't just historical figures, but were living, breathing, larger-than-life figures who played a role in the cadence of our automotive lives. (You can read one of Peter's most-requested columns, about Bill Mitchell, here - WG)
By the time my brother Tony got the automotive bug (he is eight years my senior), our household was crawling with the latest and fastest cars GM made. Bunkie Knudsen sent over a hot Pontiac for my mom to drive every summer, usually a red Bonneville or Catalina convertible with the highest horsepower drivetrain Pontiac offered at the time (at first 389s with 3x2s, then a series of 421s). Bill Mitchell customized a '63 Corvair for us that had the Turbo engine in it before it was even offered to the public (we, of course, took it down to the Detroit Dragway to see what it would do). And then there were the Corvettes. My, oh my. There were so many I'm not sure I can recall them all, but suffice to say, it was beyond special.
We swapped and borrowed cars and got to experience many of the legendary machines in period, which I can tell you resonates even more when I think about what's happening today. Even Shelby Cobras. (You can read more about Peter’s car life well lived in “The Glory Days” Part I and Part II -WG.)
Again, fleeting moments. The where and the when, the what and the who, and the hot machines, always the hot machines. I have recounted many of these experiences before but not all of them. Not even close. Here are a few more.
Running up and down Woodward in Ed Cole’s personal company car – a 1961 409 Chevrolet 4-speed – which we had borrowed for the weekend. The only other 409 in existence at that time was in Dyno Don Nicholson’s drag car at the U.S. Nationals. Needless to say, it made a lasting impression with the car freaks on Woodward.
Watching on a Friday afternoon in the summer as a horsepower train made up of the ’59 Corvette Sting Ray racer, the Corvette Mako Shark, the Corvette XP700 “bubble top” and the Corvair Super Spyder rumbled through the neighborhood on the way to be dropped off at Bill Mitchell’s house, who lived on the next block over from us. He liked to have driving options on the weekends and drove all of them.
Riding up to the corner drug store with Bill Mitchell in the original Sting Ray racer, the Corvette Mako Shark I, the Corvair Sebring Spyder and Super Spyder, and the Corvette XP700 “bubble top” concept. It sounds beyond comprehension, but it happened and I lived it. And loved it.
And just for good measure there was the little known but memorable Pontiac XP400 concept equipped with a blown Mickey Thompson-built 421. We were told to check the oil at every gas stop – which was often over that weekend we borrowed it – because according to the guys who dropped it off, Thompson had "put drag racing piston rings in it." The mighty XP400 used 21 quarts of oil in two-and-one-half days.
Running hard and fast down Woodward Avenue in Ed Cole’s personal 1963 Sting Ray Coupe (Silver, fuel-injected, 4-speed), before the car was officially introduced to the public. It was still one of the most memorable car debuts of all time, and that Sting Ray remains an automotive icon.
Getting our hands on a Midnight Blue 1964 Pontiac GTO before anyone knew what it was. It had dog dish hub caps and no options, but the visceral appeal was undeniable.
Driving to Watkins Glen in a fuel-injected 1964 Chevrolet Corvette Sting Ray Coupe in Black (of course) with every high-performance option so my brother Tony could go through SCCA driver’s school. That trip was a book of experiences unto itself.
Driving from Birmingham, Michigan, to Notre Dame, Indiana, in a caravan of cars in 1965 that included a red ’65 Shelby Cobra; a White (with blues stripes) 1966 Shelby Mustang GT350; and Dolly Cole’s (Ed’s wife) personal driver: a 1965 Nassau Blue (with White interior) Corvette Sting Ray roadster (with hardtop attached). Her “Bluebird” as she called it had a pre-production 396-cu. in. V8 in it with side pipes and a 4-speed gearbox. Things were decidedly different back then…
Learning to drive a stick in a Shelby Mustang GT 350 in a shopping mall parking lot. I still shake my head at that one.
Tearing around in an early 260-cu. in. Shelby Cobra that we borrowed from Pontiac Engineering almost every weekend in the summer of ‘63. In fact, I was taught how to wash a car the right way on that Cobra.
Tony running the 1966 Marlboro (Maryland) 12-Hour in our “A Sedan” Corvair with Don Eichstaedt as his co-driver. We struggled throughout the race with our pit stops, even splashing so much fuel everywhere on one pit stop – including all over me – that I ended up dumping an entire bucket of water on my head to get some of the fuel off. Comical, but we did finish a rousing 23rd overall. We flat-towed that Corvair all over the country, but it worked out.
Riding out to the test track from the Chevrolet Engineering Lobby at the GM Tech Center in Warren, Michigan, in an Engineering toy – a Chevelle with a race-prepared big block 427 V8 in it with open headers – in order to meet up with Zora Arkus-Duntov. Zora had completely gone through the 1967 Corvette 427 L88 that my brother had ordered through Hanley Dawson Chevrolet and was preparing to race, but in true understated Zora fashion he only acknowledged that he had made “a few tweaks.”
Being at Road America in 1967 with that same 427 L88-powered Corvette, the first of a total of 20 built that year. Then back again in ’68 when Tony dominated “A” Production in the SCCA June sprints. That car and that livery - Black with Blue stripe - is still my favorite of all of our racing Corvettes (see below).
June 1968. The biggest SCCA National race at the time was the June Sprints at Elkhart Lake's Road America. Tony won "A" Production going away in his 1968 427 L88 Corvette.
Leaning over the pit wall to give pit signals to my brother at the 12 Hours of Sebring in 1968, as the ultra-low factory Porsche 907s blew by under my pit board at 140 mph.
Borrowing a Red/Black 1968 Z28 Camaro for the weekend and enthralling my high-school buddies with it. To me it was the Camaro that was the most fun to drive, and my all-time favorite Camaro design.
Taking our Black/Black 1969 Corvette L88 427 roadster with open side pipes out on Woodward Avenue and on the area freeways to keep it “exercised” while my brother was out of town. Talk about a bad-ass machine – that beast garnered unwavering respect out on the street. It was eventually converted to a race car and sold to a Lufthansa pilot friend of Tony’s who raced it in Europe.
Leaving at 9:00 p.m. in a 1969 Corvette 427/390 roadster from Detroit – with the top down – to deliver some parts to a friend who was racing a Corvair Yenko Stinger at Mid-Ohio. We – our friend Gary Cooper and I – roared down there, stopped to chat for fifteen minutes, handed over the parts, and then raced right back so Gary could get to work in the morning.
Making a run from East Lansing to Ann Arbor in my 1975 Porsche 911S Coupe – in 32 minutes flat – in June of ‘76. With the late afternoon sun behind me and extremely light traffic, I never dropped below 100 mph and went flat-out (140 mph +) for several minutes at a time. It was still the purest piece of high-performance street driving I have ever experienced. And it remains wonderfully vivid to this day. Editor's Note: This incredible event deserves a full telling. If you want to read the entire story go to "Reader Mail." -WG
As I said, these fleeting moments have stuck with me forever. And I have many, many more too. Don’t misunderstand, it’s not a wallowing in nostalgia exercise for me. Not at all. These fleeting moments have all contributed to the picture of who I am today. And every single one of you has a kaleidoscope of fleeting car moments of your own.
It’s okay to fuel our imaginations with these moments. It’s part of who we are.
And besides, we can’t know where we want to go unless we understand where we’ve been.
And that’s the High-Octane Truth for this week.
HERE'S TO THE ONES WHO DREAM.
30 Apr 2019 at 9:42am
Editor's Note: Peter has been struggling with an illness for going on two weeks now, so we're going to re-run one of our favorite columns from last year as he definitely needs the break. -WG
By Peter M. DeLorenzo
Detroit. Though I'm tired of using the term "swirling maelstrom" to describe this business, I have yet to find a more apt descriptor. It's a land where you're only as good as your last hit, a state of mind where you're forced to make what's happening right now work, while struggling to make what's happening next come into focus. It's a cruel, nonsensical world that punishes those who would deign to march to a different drummer, but it's only those who dare to break through that gauntlet who rise to the top.
It's easy to get mired in the minutiae of this business - the endless meetings, the constant "reviews," the endless hand-wringing and second (and third) guessing. Overthinking might be an operational component in corporate America, but in the automobile business it's a full-blown cottage industry, which makes effectual decisions extremely hard to come by. Why? Because 90 percent of the time is spent worrying about what an upper executive in question might want or might be thinking, which forces underlings to become interpreters and acquire the skill set of nuanced anticipation.
This business is unfortunately littered with so-called genius executives who parachute into the decision process, make a few pronouncements, then helicopter out. And the worst part of this phenomenon is that they come back six weeks later and question why a particular direction was undertaken, totally forgetting that's what he or she directed. Thus, time, effort and money are wasted at a prodigious rate because executives are too self absorbed to get their heads out of their asses and realize how destructive their behavior is. And no, it isn't exclusive to the automobile business, but it's decidedly more pathetic when product programs or advertising campaigns are on the line.
And yes, product. Product is the straw that stirs the drink, the raison d'etre of the automobile business. It's not selling air. It's not about what a company's vision of down the road will be. That's all well and good and fine and wonderful, but it's not the business now and it isn't the business for the next 36 months. It's about product cadence, which means having the right products, at the right time, for the right market segments. Whatever a company's vision is for the future doesn't matter if it isn't generating serious profits to fund that future.
Remarkably enough, some companies forget all of this. They get sidetracked and off kilter, they chase their tails, they start listening to the dulcet tones of their own thought balloons, and they become buried under the heavy mantel of their own hubris. In short, they lose their way and start making mistakes. Except this isn't a business that tolerates mistakes. It's not a strike three business, either. Two strikes and you're out. And in this league, playing catch-up is not only a brutally tough and long road, sometimes it just doesn't work out. And in the new reality of this globally-driven automobile business, some car companies are just not going to make it.
The companies stocked with True Believers, the ones unafraid to dream, the ones focused on delivering the best in all aspects of this business - Design, Engineering, Product Development, Marketing - will succeed. It not only requires savvy management, it requires a complete cessation of the normal bureaucratic cesspool that paralyzes these companies, which means loosening the reins of the True Believers so that they can do what they're capable of doing.
When it comes to The Future of this business, I will bet on the companies who value their True Believers, because those companies who refuse to do so will be ringing their death knells.
And that's the High-Octane Truth for this week.
A DANGEROUS MIND.
23 Apr 2019 at 10:59am
By Peter M. DeLorenzo
Detroit. The latest Muskian nightmare roiling this industry emerged at a press event yesterday in Palo Alto, California, when Elon Musk declared that: 1. Newly-developed Tesla autonomous technology will put a fleet of robotaxis on the road by the middle of 2020. 2. Up to one million Tesla vehicles will be configured to take advantage of this technology and become part of the shared robotaxi network, with no humans required. And 3. “The fundamental message that consumers should be taking today is that it’s financially insane to buy anything other than a Tesla. It will be like owning a horse in three years,” according to Musk.
Well, isn’t that special. The rocket impresario, who should stick to rockets by the way, is promising that he has discovered the magic technical silver bullet that will save his downward trending company and transform the transportation industry in eighteen months. We have certainly heard these outlandish statements from Musk before, as he furiously tried to will his boutique auto company into something more; but this time he has clearly lost all touch with reality. You have to remember that companies with far deeper pockets than Musk’s recurring corporate flim-flam act have been expending billions of dollars on AV technology, and not a single one of these companies is suggesting that their advanced autonomous technological developments are ready to be unleashed on the streets and byways of America sans driver.
That this latest charade from Musk is yet another desperate act in an attempt at saving his floundering company is obvious. Where it differs from other Muskian braggadocio is the fact that he is insisting that his AV technology is safe for mass application and consumption. Sorry to disappoint all of the St. Elon acolytes out there, but this is the insane part. Unleashing a fleet of zombie Teslas on the streets of America curated by a notorious nanosecond-attention-span personality such as Musk is the quintessential definition of flat-out crazy. You can’t even squint hard enough to suggest that this is, in some way, shape, or form, rational thought. It’s a case of an intermittently brilliant mind that has wandered over the line into the Abyss of Darkness. A dangerous mind that is so obsessed with pushing his perpetually sinking car company into some sort of elevated stratosphere that he is willing to treat real people as so much collateral damage.
This is insanity writ large, automotive or otherwise. The hubris on display by Musk in this unfolding debacle is almost incalculable. Think about this for a moment. Yes, Musk as an entrepreneur has accomplished much, and he can and should be lauded for his rocket achievements, but this is something entirely different altogether. Completely ignoring the very sketchy performance of his company's own "hands-free" driving features, Musk has now crossed over into that twilight dimension where his grip on reality has become fleeting.
He now steadfastly believes that all of his thought balloons are heroic and visionary, that everything he touches is beyond failure and that the rest of the world is just too ill-equipped to comprehend his greatness. After all, we’re collectively just too dim to understand. The final component of his slip into the Abyss of Darkness is on full display with this latest act, which can simply be expressed by the idea that if people are too dense to keep up with his brilliance, then he will do what’s best for them whether they understand it or not. And oh, by the way, while he’s at it he will propel Tesla to the pantheon of corporate America.
It’s encouraging that a large portion of the media and analysts on Wall Street have grown tired of St. Elon’s act. The countless overpromising followed by the reality of those boasts when they come up woefully short have taken its toll on the blind reverential loyalty that used to be reserved for every utterance by Musk. Now, it’s thankfully in very short supply. Yes, there were a few holdouts in Palo Alto who have had their Muskian chips surgically implanted at the base of their skulls and who chanted huzzahs at the feet of their Master, but this time Musk has gone too far.
And this time there should be consequences.
This country is 25 years away – at least – from widespread adoption of autonomous vehicles. Yes, there will be scaled deployment in limited, commercial applications primarily in urban centers over the next two decades, but driverless Teslas careening around less than two years from now? It is a recipe for disaster the likes of which simply defies calculation.
I have been around this business since childhood. First growing up in a hardcore auto family deeply immersed in the business, followed by my own exploits in advertising and marketing over two decades, then creating the content for this website for the last coming-up-on 20 years. And I am here today to tell you that I have never seen or heard anything more irresponsible and flat-out dangerous than what went down in Palo Alto yesterday.
Cooler heads must prevail, which ultimately means that Elon Musk must be prevented from getting even remotely close to executing this plan.
And that’s the High-Octane Truth for this week.
THE CONFLUENCE OF EVERYTHING.
16 Apr 2019 at 1:16pm
By Peter M. DeLorenzo
Detroit. The swirling maelstrom is running flat-out at the moment, as the world’s automakers scramble for their future piece of the pie, whatever form that may take.
For instance, Ford is counting on a two-front strategy as envisioned by CEO Jim Hackett, with one foot in the nitty-gritty, day-to-day, let’s-crank-em-out-and-make-some-dough-re-me mode, and the other in the we’re-going-to-be-a-factor-in-the-future-of-mobility-no-matter-what mode. It should be pointed out that this isn’t exactly original thinking by any stretch, as global manufacturers are hedging their bets and plodding toward the future in some form of pretty much the same strategy (GM embarked on a similar strategy six months ago).
I have confidence that Ford can deliver on the day-to-day making money part because Joe Hinrichs is in charge of that, but I have very little confidence that the company is going to deliver on the “we’re gonna be a factor in the future of mobility!” part. It didn’t help that Hackett put Jim “I’m a genius just ask me” Farley in charge of the esoteric spit-ballin’ future part. Hackett seems to think that Farley is some sort of visionary who understands all of this future stuff, saying, "Jim combines an innate feel for what customers want and need in vehicles and the ability to translate this into the vehicles and services of the future."
Really? I beg to differ. Farley invests a lot of time and energy in projecting himself as that guy, but in reality, his bona fides when it comes to knowing what consumers want and translating that into some future think is woefully transparent and razor thin. In fact, he is the acknowledged master of making it up as he goes along and changing course with the prevailing winds. To give you an idea of how whack Farley really is, he’s one of the chief devotees of the idea that our cars are going to eclipse our cell phones in terms of negotiating everyday life. Uh, wow, that ship sailed about fifteen years ago, but if you’re obsessed with being able to order a pizza from your car, go right ahead. But alas, he has too many of the top Ford execs – and some people in the media who should know better too – bamboozled into thinking that he’s The Guy, which is unfortunate because Ford is bound to find out the hard way that Farley’s vacuous smoke-and-mirrors act is going to backfire on them, Big Time.
But Ford isn’t the only auto manufacturer dancing too close to the flames of Crazy Town. Right now, there’s a Dr. Jekyll/Mr. Hyde dichotomy unfolding in this business that is unsettling, make that almost incomprehensible. On the one hand, we have European governments seriously talking about electronic speed limiters on cars –yes, even in Germany – and manufacturers are lining up to go along to get along with it. These will be mere warnings at first, but it’s a slippery – and short – slope to full-on electronic speed meddling that cannot be overruled by the driver.
Volvo was first with a self-imposed 115 mph limit on its cars, of course, because, well, what else can they sell besides a creative numbness behind the wheel? But make no mistake, this is a Gathering Darkness for the automobile industry as we know it, and it will have far-reaching ramifications as more and more manufacturers sign up for the program in an attempt at getting in good graces with… I don’t know, exactly, governments with misguided agendas and a frigid fealty to 1984? Sounds fraught with peril and a recipe for disaster to me. Oh well, I remember when U.S. safety bureaucrats mandated 85-mph speedometers in our cars, but this is, as you might expect, much worse. Electrified nannies are already rampant in the machines we buy, but limiting top speed? That’s a New – and Very Dark – Frontier.
Yet, while this is going on, manufacturers are lining up to produce multi-million-dollar “hypercars” that have little rhyme or reason for being, except to be the new, quintessential definition of swingin’ dick-ism in this business. Mercedes-Benz, Aston Martin, Bugatti, McLaren and several niche manufacturers you’ve never heard of are churning out these machines for the one tenth of one percent. These 1200HP+ machines can’t be driven on the road, and most of them will sit rotting in Versailles-like garages never to turn a wheel, but the bragging rights must count for something when you’re shelling out $3 million a pop and up.
The latest manufacturer to enter the fray? None other than Lotus. Newly flush with serious cash-ola from parent conglomerate Geely, Lotus showed up at the Shanghai Auto Show with an image of an electric hypercar concept that will leap tall buildings in a single bound, or whatever the hype du jour is. This from a tiny sports car manufacturer that has been on the ropes for decades.
The full-electric Lotus Type 130 hypercar concept.
That these established and assorted fringe manufacturers are lining up to create these cars is ludicrous, but if they can fleece enough customers to make it worth their while, well, I guess you can’t blame them. But the hype surrounding these vehicles has become so tedious that it’s getting painful. They don’t call them hypercars for nothing, apparently.
The aforementioned discussion is just the beginning of the chaos in this business right now, unfortunately. We have the ongoing trucks/SUVs/crossovers vs. “traditional” sedans hand-wringing; then there’s the looming economic slowdown that’s already starting to get its hands around the industry’s collective necks; the price of fuel is going up and no one is really sure what that will do to this nation’s obsession with “big” vehicles (but needless to say it can’t be good); and then there’s the $500-billion question concerning the marketing of Battery Electric Vehicles, as in, can you convince enough consumers to buy in to the all-electric conceit? Let me rephrase that, because the bet better work or there’s going to be a lot of blood on the tracks.
Seals and Croft once sang, We Will Never Pass This Way Again, and as it applies to the car business at this point in time, truer words were never spoken.
It really is the confluence of everything, all at once.
And that’s the High-Octane Truth for this week.
8 Apr 2019 at 5:05pm
By Peter M. DeLorenzo
Detroit. Unless you’ve just recently emerged from a cave, you’re probably aware that Jeep has a new pickup called the Gladiator hitting the market right about now. When we first saw it at the Detroit Auto Show a few months ago, we agreed that it had “hit” written all over it, but even we weren’t prepared for the clamor over this new truck.
I could take you through all of the strategic blah-blah-blah surrounding the new Gladiator if it would help to make more sense. Like the fact that Jeep Wrangler buyers now have a place to go in the Jeep lineup instead of wandering off to another brand when they need more room, or the fact that FCA marketers have shrewdly aimed the Gladiator at the heart of the mid-size pickup truck segment, which continues to grow. Or even the fact that FCA now has a more affordable truck alternative to the big-grossing Ram pickups, although that is proving to be an instant myth (more on this later).
Yes, all of that may be true and explains why the new Jeep Gladiator exists, but I will offer up a simple explanation as to why the frenzy over it seems to be growing by the day: It takes the fundamental design essence of the Jeep and turns it up to “eleven.” It’s beefier, ballsier and much more aggressive. And even though it’s noticeably longer than the Wrangler, it just might be the most Jeep looking of them all. In terms of its sheer on-road presence, the Jeep Gladiator is smokin’ hot.
We’ve been seeing Gladiators roaming the streets and byways around here for quite some time now, first in the ubiquitous camouflage and in other various guises and levels of finish, but now the finished trucks are out and their presence is unmistakable. Just the other morning I saw an FCA executive in a brand-new black, fully loaded Rubicon with manufacturer plates rumbling up Woodward Ave., and I couldn’t believe the people in their cars and trucks maneuvering in and around it in order to get closer for a look. And this is in a jaded car company town that’s used to seeing just about everything when it comes to the latest automotive stuff.
The PR minions at FCA out in Auburn Hills have to be absolutely thrilled over the full-on media frenzy that has been generated by the Gladiator. Not that the carpal-tunnel wretches aren’t malleable or anything, but still, the press coverage of the Gladiator has been staggering. The reports about the Gladiator have been gushing with nonstop praise for two weeks now, and it doesn’t seem to be easing in the least.
But the Gladiator frenzy doesn’t stop with the production truck. FCA has followed up with six new custom-built concept Gladiators for its annual Moab Easter Jeep Safari (see below), proving that the Gladiator will be a gold mine in terms of personal customization options.
Alas, the Jeep Gladiator isn’t perfect. FCA marketers appear to be getting greedy with the Jeep franchise, which has been earning huge profits for the company for years now. And it seems that with the Gladiator they decided that there would be even more profits to be gleaned from consumers, with the marketing formula being Jeep + Pickup = $$$$$.
Yes, you can get a new Gladiator for a base price starting in the $35,000 range, but that’s a vehicle that has very little of the good stuff. (I know FCA marketers will vehemently disagree with this, but go to the Jeep website and see for yourself. You’ll need an Overland to even get started with the good stuff, and that starts at more than $40,000.) From there, the options are pricey and add up quickly. Automatic transmission? $2,000. Premium Lighting Group? $995. Premium Audio Group? $1595. Active Safety Group? $995. Cold Weather Group? $695. Body-Color 3-Piece Hardtop? $2,295. And it goes on from there. The Overland I priced was $54,650. A full-zoot Rubicon pushed $60,000.
Not that there is anything wrong with making a profit, I should point out. Porsche has gouged its faithful for years with its exorbitant option pricing, and the industry has paid close heed to that specific albeit greedy example. FCA marketers are making the proverbial hay while the sun shines with the Gladiator, and they are pushing every advantage toward that direction. As they should. But… and there’s always a but.
A couple of months ago, I wrote a column entitled, “Affordability: The Next Frontier.” In it, I pointed out that the signs are off on the not-too-distant horizon that affordability is going to be the key for this industry going forward. Trucks and SUVs are being priced by their manufacturers into the stratosphere. $70,000+ circus wagon pickups and $100,000+ luxury SUVs are common now, but that pricing model simply isn’t sustainable. Affordability is gaining more importance by the day because consumers are simply being priced out of the market.
I applaud the denizens of Auburn Hills for the executional brilliance of the Jeep Gladiator; they’re going to print money with it, at least for a while. But FCA marketers better be thinking about up-contenting a cheaper Gladiator model without raising the price, because as people who have been around this business long enough have come to understand, nothing – especially the golden good times – lasts forever.
And that’s the High-Octane Truth for this week.
The 2020 Jeep Gladiator Launch Edition sold out in one day.
The 2020 Jeep Gladiator Launch Edition.
The Jeep Gladiator Gravity Concept.
The Jeep Five-Quarter “Resto-Mod” 1968 Jeep M-715 Gladiator-based military vehicle concept.
NEW AUTO CONGLOMERATE BASED IN CHINA SET TO REDEFINE THE GLOBAL AUTOMOTIVE IN...
1 Apr 2019 at 11:50am
Editor's Note: Dear readers, today is special (wait - what am I saying?! - every day is special here at Autoextremist!) - very special - because today we are re-running a true highlight from the AE archives. Yes, that's right, this is the famous April Fool's Rant from 2009 - the column that did indeed have many of you fooled, right until the very end. It was a crazy time in the industry (and that's really saying something!) - Chrysler would go on to file for Chapter 11 on April 30, followed by GM on June 1 of that year. Tensions were high, the mode was full-on chaos, and the mood beyond grim. Our April 1st announcement was quite the bombshell that only added to the insanity (and this is one of our Top Three of Peter's columns, all-time). We have included links throughout the Rant below, which provide some historical perspective and updates. WordGirl recommends, however, that you slip into 2009 mode and read the following in its entirety for full effect, saving the links for your second pass-through! -WG
Shanghai. (AP) Capping off a tumultuous week, the global automobile market is set to be turned upside down yet again after a stunning move to consolidate the auto industry has been announced by Endless Green Horizon, a newly-formed global automotive conglomerate based in Shanghai, China. "We are pleased to announce that our initiative into the global automobile market is progressing rapidly and that we're being welcomed with warm greetings,” said Co-chairman James "Jimmy" Fu. "We look forward to redefining the automobile industry and intend on being a significant player for decades to come." Mr. Fu's partner, S.L. "Sonny" King, added, "We live our lives to achieve this goal. This is no pretend moment. Our reality will become the industry's reality shortly."
Initial skepticism followed by a grudging acceptance.
Coming hard on the heels of President Obama's bludgeoning of GM and Chrysler this past Monday, including the forced removal of GM CEO Rick Wagoner, the secret negotiations and subsequent deal were announced abruptly overnight Tuesday, after rumors began to emerge late yesterday in Shanghai.
GM released the following prepared statement this morning: "When first approached by Mr. Fu and Mr. King we weren't able to ascertain the seriousness of their intentions early on, and admittedly, we were dismissive of the overture,” said CEO Fritz Henderson. "But over the last few weeks the complexion of their offer changed, as did the tone from the Obama administration, obviously, and it was clear that this whole thing with Washington was going nowhere good. Given all that has transpired in the last six months culminating in the chaos of the last few days, we feel Endless Green Horizon's offer was in the best interest for GM, its employees and retirees, our dealers, our suppliers, the United Auto Workers union, and all interested stakeholders including our bond holders and most important, the American taxpayer."
Jason Vines, the executive vice president and Director of Global Communications for the new automotive endeavor, said in a statement that a special media briefing would be held on Thursday morning, April 2, in Detroit, in the Wintergarden lobby of the RenCen. "As you can imagine, given the global impact of these developments it is imperative that we give everyone enough time to digest what has just happened. The press conference is scheduled for tomorrow morning at 10:00AM, and it will be broadcast live around the world for media sources unable to get here on such short notice."
Steve Harris, GM's PR chief, said there would be no additional comment forthcoming from Mr. Henderson or GM until the joint press conference scheduled for tomorrow morning.
A statement was also released by Robert Nardelli, the CEO of Chrysler LLC, this morning: "We were first approached by Mr. Fu and Mr. King a month ago, and we, too, were unable to muster the energy to take them seriously. That of course changed over the subsequent weeks. After long hours of consideration fraught with soul searching and hand-wringing, we believe this is the best deal for Chrysler, its employees and retirees, our suppliers, our dealers, the UAW and for our corporate parent, Cerberus. It is the end of an era for the American automobile business, but the beginning of a new chapter for the global automobile industry."
Mr. Nardelli was approached for a comment as he got into his car at the main entrance to Chrysler's headquarters, but he waved off reporters' questions with a brusque, "I really don't give a shit anymore. Buh-bye." Last seen, his car was seen peeling out of the driveway, heading to whereabouts unknown.
Ron Gettelfinger, the head of the UAW, refused to comment after his arrival at Solidarity House this morning, the labor union's headquarters in Detroit. "I can assure you that I'll have plenty to say later tomorrow when we have our own press conference," Mr. Gettelfinger said.
Secret negotiations climax in fifteen minutes that would change the automotive world forever.
Negotiations began in late February, according to sources, the timetable of which was later confirmed by Mr. Vines. "Initial overtures were made to GM and Chrysler in late February by Mr. Fu and Mr. King," Mr. Vines, a longtime industry PR veteran with notable stints at Ford and Chrysler, said. "It was made clear from the outset to both automakers that the offer being made by Endless Green Horizon was serious, legitimate and substantially funded,” Vines continued. "After GM and Chrysler leadership demonstrated their initial skepticism, actual common parameters emerged over a very brief period of time. This deal didn't come together until it was made quite clear by President Obama and his administration this past Monday afternoon that these two automakers were just north of being expendable, or as I carefully explained to Mr. Fu and Mr. King, they were toast."
Mr. Henderson made his first appearance in front of the assembled media as GM's CEO yesterday at the company's headquarters in Detroit. He talked about the car business and his plans to reinvent the company, a new customer assurance plan, how much he respected the Obama administration's automotive task force and the President himself, and other topics. There was no indication whatsoever that this deal was in the works. But things would soon change.
One administrative assistant who did not want to be identified was found at the Starbucks in the RenCen (GM's headquarters) staring off into space, pouring Kahlua in her Grande Iced Chai Soy Latte Triple Dirty. Asked about the news she shrugged her shoulders and said, "GM, Endless Green Horizon... what's the f---ing difference?"
The dramatic moment came just after 9:00PM EDT last night (9:00AM this morning in Shanghai), when Fritz Henderson called Mr. Fu at the end of a hastily called emergency board meeting led by newly-minted non-executive chairman of the board Kent Kresa and said, "We're done here. Let's do it." Thus ended 100 years of U.S. industrial history as the American corporate icon finally acquiesced to a complete takeover.
Mr. Henderson then had Mr. Nardelli informed of GM's decision immediately, and Mr. Nardelli called Mr. Fu and accepted the conglomerate's offer fifteen minutes later.
The financial details of this historic agreement were not released, but Mr. Vines made a point to a small group of reporters gathered in front of the GM building at 5:00AM this morning that the debt issues that were strangling both companies had been addressed by the Chinese conglomerate. "Complete financial details will be forthcoming at the press conference tomorrow morning," Mr. Vines said. "But I can safely say to you that the massive debt of these companies, something that's of primary interest to all of the parties involved, has been covered, in cash."
The details of how Mr. Fu, 61, and Mr. King, 59, accumulated their staggering wealth are, as a kilted Angus McPherson, the notably acerbic Scottish journalist stationed in Shanghai, put it, "...missing in action, a wee bit sketchy, I would say," as he stuffed his notebook back in his sporran. The two figures have operated in the shadows of the burgeoning Chinese industrial machine for years. Mr. Fu started manufacturing model cars in the late 70s and is now rumored to control every toy making concern in China, though none of this has actually been confirmed after years of investigations. Mr. King became partners with Mr. Fu after initially supplying the elaborate wheels and carefully detailed tires on Mr. Fu's model cars. The two have been partners ever since.
Said to be fond of younger women, fast American muscle cars, Knob Creek Kentucky Straight Bourbon and Gulfstream jets, Mr. Fu and Mr. King nonetheless pride themselves on avoiding the limelight. Both men were married and divorced in their 30s, but little is known about that part of their life stories. It is known now, however, that Mr. Fu is trying to push the career of a budding 26-year-old Chinese pop star, his current girlfriend, while Mr. King seems to be addicted to an endless succession of young female gymnasts nearing the end of their competitive careers.
Mr. Vines provided no details other than to say, "Mr. Fu and Mr. King are reclusive, talented workaholics who also enjoy life to the fullest. Other than that, I really have no further comment."
Shock in Washington.
President Obama's Press Secretary, Robert Gibbs, clearly caught off guard when asked by reporters of the development early this morning before a press briefing, said: "Huh?" to the news. "We know nothing about it, but, uh, er, you're kidding, right?" When assured the news was genuine, he cut off the media briefing and raced out of the press room.
A statement was released by the Obama administration just one hour later. "President Obama has been assured by the new owners of General Motors and Chrysler that all existing pension obligations will be met and that their crushing debt burden has been addressed. He looks forward to meeting with the new owners to hear of their plans to contribute to America's industrial fabric and help lead us to a sustainable, green driving future. The President is also pleased to announce that the additional money discussed for both GM and Chrysler on Monday will no longer be needed, and that the money initially borrowed by the two companies since last December has been paid back in full."
When pestered for more details on what the President knew and when he knew it, Mr. Gibbs said, "I got nothin'."
Mouths agape in Detroit.
The mood in Detroit was one of resignation when the news emerged. "People are walking around in a daze, looking like that '1984' Apple TV commercial," said one high-ranking GM executive. "First there was Monday's shocker and now this."
Another GM employee commented as he was leaving the building, "At this point, I'd prefer a couple of Chinese cowboys owning this place over those numb-nuts in Washington."
A homeless man, queried on the street corner in front of GM headquarters muttered, "Monica Conyers for President" as he walked away.
A UAW member speaking on condition of anonymity added, "That's fine, man, but what's in it for me?"
Stunning choice for CEO.
In another stunning development, Peter M. DeLorenzo, a longtime industry marketing veteran, was named to be the Chairman and CEO of the new company's North American operations - to be renamed Fu-King Motors - which will include the remnants of GM and Chrysler. Mr. DeLorenzo, capping off a controversial ten-year run as the man behind Autoextremist.com - the highly influential industry publication - was a surprise choice by Mr. Fu and Mr. King to lead its new venture.
Mr. DeLorenzo got the call moments after the deal was consummated, according to Vines. "It turns out that Mr. Fu and Mr. King stumbled upon Mr. DeLorenzo's website when they first became familiar with the Internet. As a matter of fact, both gentlemen learned English by having Mr. De Lorenzo's 'Rants' columns translated for them. They also learned to say some of Mr. DeLorenzo's patented sayings phonetically, like 'notgonnahappen.com,' 'halle-frickin'-luja,' and 'the Answer to the Question that Absolutely No One is Asking.' And when the two gentlemen used some of Mr. DeLorenzo's sayings in the negotiations with GM and Chrysler, the blood drained out of the faces of the Detroit executives, to put it mildly. Mr. Fu and Mr. King have been in contact with Mr. DeLorenzo for six years, after they first approached him at the Los Angeles Auto Show. When they first contacted GM and Chrysler about their interest, Mr. DeLorenzo became part of the behind-the-scenes team orchestrating this deal. Mr. Fu and Mr. King said that Mr. DeLorenzo was their clear choice for CEO from the very beginning."
"Mr. DeLorenzo will bring years of experience leading our company," said Mr. Fu. "He puts pedal down hard, no b.s.," Mr. King added, as they addressed a small group of reporters gathered in Shanghai. "And if he doesn't like something, NOTGONNAHAPPEN.COM!!!" they shouted in unison to the bemused expressions on the reporters' faces, as they clearly had no clue as to what the two men were talking about.
Mr. Vines said that Mr. DeLorenzo would not be available to the media until tomorrow's meeting.
Comments from around the world pour in.
The development was so swift and stunning that comments were just starting to pour in as we were completing this story. Volkswagen released a joint statement from VW's Ferdinand Piech and Porsche's Wendelin Wiedeking moments ago: "We look forward to hearing more details about what appears to be a fanciful quest to re-make the automobile industry. We know who we are and what we do best. We will crush them."
Ratan Tata, CEO of Tata Motors, was equally dismissive, saying, "It won't make a Nano-bit of difference to us."
Sergio Marchionne, the Fiat CEO, was apparently stunned at the news: "I do not understand, this can't be true. I mean, we kinda had a deal." And then he slammed down the phone.
Toyota released the following statement from CEO Katsuaki Watanabe: "We find this to be a perplexing development. We have no idea what this means, or why this is happening. We want the auto world to go back to the way it was, when we dominated everything. And it's not happening. Why?"
When contacted by cellphone for a comment about the choice of DeLorenzo, Robert Lutz, the Vice-Chairman of GM, who was on the roof of the RenCen, said, "Oh, hell yes. That's an inspired choice. He'll shake the rafters, kick ass, and will that company to greatness. I might just re-up to work with him!" Mr. Lutz then got into his helicopter to fly home.
And finally, Keith Crain, the Publisher of Automotive News had this to say: "It's a wonderful time to be in the automobile industry."
By Wang Liu for the Associated Press, with Vikram Bhan in Mumbai, Thurston Chesterton IV in London, Tammi Sue Jenkins in Detroit, Heather Elizabeth Wellesley in New York, and Masami Katsuta in Tokyo
WELCOME TO THE SEETHING CAULDRON.
26 Mar 2019 at 2:20pm
By Peter M. DeLorenzo
Detroit. As future scenarios go, what’s shaping up for the automobile industry for the next decade is getting uglier by the minute. The business is caught in a Twilight Zone that’s as vast as the Grand Canyon, with future tech and mobility occupying time, boatloads of money and strategic planning on the one hand; while on the other, the real business at hand is consuming everything in its path just in order for the companies to keep up.
The Volkswagen Group is making such a huge bet on Battery Electric Vehicles (BEVs) – based on the premise that its economies of scale can make them competitively affordable with traditional ICE vehicles – that the industry is reeling. Why? Because it has yet to be demonstrated that consumers are going to be willing to embrace BEVs en masse, which VW is absolutely counting on. If the powers that be at VW are right, the company will be miles ahead of the rest of the industry players by the time this unfolds over the next five years. If they’re wrong, or even miss to a notable degree, they could be swimming in unsold BEVs that nobody wants.
As I’ve said previously, marketing EVs will be the biggest advertising challenge in decades, and it will be interesting and in some ways excruciating to watch. We’ve all seen when EV marketing hasn’t been done properly. We have only to look at how badly the Chevrolet Volt and Bolt – two excellent if not outstanding vehicles – were mishandled by GM marketers. Believe me, marketing BEVs for the mainstream is going to be tough and unforgiving.
Meanwhile, traditional new models in the near-term transition have to be perfect, on target for the market and desirable. Assembly facilities have to be utilized near capacity and ultra-flexible for the vagaries in the market as much as possible. And this is no small task, which is why you see companies flip-flopping in their decision making as to what will be built and where.
Add to this chaotic mix the EV Startup of The Week Club, with seemingly every other day bringing an announcement of yet another EV automobile company funded on a wing and a prayer, and promising to be the greatest thing since sliced bread (or kale smoothies, depending on your personal barometer), one absolutely sure to shake the industry to its core with its remarkable brilliance. Listen closely to the chatter pushed out by these startups and it’s all remarkably similar: After 130 years of car-building they are going to reinvent the wheel, stand the business on its ear, and make every car company that came before them instantly obsolete. On top of that, they’re going to do it better, faster, and with more profitability than any other car company in history. Henrik Fisker, anyone?
To make matters worse, certain gullible members of the mainstream media are regularly lured in to cover the latest Vapor Ware on the EV front, giving publicity to the flimsiest of companies for no good reason whatsoever, much to everyone’s enduring disappointment. It’s so typical in this day and age, it’s hardly worth mentioning.
But then again, this is the business now. Welcome to the seething cauldron of projection, conjecture, bold decisions, half-baked promises, hand-wringing and calculated hedging. Always with the hedging. Everyone is right and no one is wrong at this point, or is it the other way around?
Those projections? They’re suspect – besides, they could go south at any moment. As for the conjecture, it’s everywhere, but nothing is etched in stone. Or if it is, it seems to wash away with the prevailing winds and rain. What about those bold decisions? They always come with a caveat, as in, don’t quote the executive in question who actually made the decision, remind him or her of that decision, or deign to hold them to it, especially eighteen months from now. And what about those half-baked promises? They happen by the baker’s dozen in this business, especially in this town. Besides, those half-baked promises come complete with furious hand-wringing and endless hedging. It’s as if every executive in this business wants to say “don’t quote me” on that, so as not to be held accountable. Unremarkably and thankfully enough, it doesn’t work that way.
Auto executives in this business deal with the seething cauldron in different ways. Some studiously avoid getting caught up in the negatives and go about their business using their accumulated knowledge and skill. Most of these executives qualify as the True Believers, because they steadfastly believe in the mission and deliver to the best of their ability every day. They understand implicitly that the age-old industry adage “you’re only as good as your last hit” is very much alive and well.
The other guys and girls? They’re the hand-wringing specialists and the serial hedgers and prevaricators. Part of the Legion of Recalcitrant Twerps that still find purchase somewhere in the system. Don’t hold them to it, whatever it is, because their consummate skill is to get lost in the crowd when the heat comes down.
The seething cauldron is most intense in this business right at this very moment. Executives’ careers are on the line, with the best and the brightest bound to be rewarded, while the slippery scam artists and faux geniuses are destined to be hammered and held accountable. Come to think of it, this is really no different than at any other time in the business, except now, the heat is intensified and the consequences are magnified, with the very future of these companies on the line.
As I mentioned last week, that famous line from The Godfather Part II says it best: “This is the business we’ve chosen.” And there doesn’t seem to be a damn thing anyone can do about it.
And that’s the High-Octane Truth for this week.
TAKING THE PULSE OF THE CADILLAC THING.
19 Mar 2019 at 1:43pm
By Peter M. DeLorenzo
Detroit. That the automobile business is unlike any other is duly noted. It’s humbling, all-consuming, never-ending and relentlessly grueling. No quarter is asked and none is given, and the business chews people up and spits them out with impunity. The highs are notoriously fleeting, and the lows are gut-wrenching and linger to an excruciating degree. But then again, as Hyman Roth, the mob boss in The Godfather Part II, memorably said, “This is the business we’ve chosen.”
Cadillac, GM’s luxury division, has occupied my thoughts a lot over the almost two decades of producing Autoextremist.com. I’ve written many, many columns about Cadillac over the years, and the surprising thing for me is that the subject never gets old.
Much of that has to do with the fact that Cadillac has a glorious history and remains one of the greatest brand names in the automobile industry. The stature of the Cadillac name has transcended the car itself and gone on to represent a sign of prestige and quality for many products, with the phrase “The Cadillac of…” still resonating even today, although the automotive landscape has irrevocably changed.
It could be argued that Cadillac never recovered from the onslaught of the German marques – Audi, BMW, Mercedes-Benz – in the U.S. luxury market. This coincided with the era when American cars in general were perceived as not being cool, and the lure of the German brands was almost too much for consumers to resist. (It didn’t help matters that Cadillac’s product lineup was woefully obsolete at that point.) The German onslaught was followed by the emergence of Toyota’s luxury show horse – Lexus – the brand that redefined the concept of automotive service and won the hearts and minds of many American car buyers. And Cadillac was subsequently left behind, no longer top of mind except for its most ardent brand loyalists.
But despite all of that Cadillac is still present and accounted for, and it still sells a lot of vehicles in the U.S. and in China, the world’s largest automotive market. That the brand remains an enigma is no secret – blessed with so much historical context and burdened with so much potential yet saddled with a promise that always seems to be somewhere down the road. It’s the “It won’t be long now!” syndrome writ large. That’s why Cadillac always seems to be churning, tossed around in the Sea of Indecision headed to the Straits of What Could Be.
The current state of Cadillac is really no different from the last decade – it remains a kaleidoscope of mixed messages and emotions. On the one hand, Cadillac has some excellent new products on the ground and in the pipeline; on the other, the constant hand-wringing over the soul of the company seems to rear its head at the least opportune times.
Take the new badging plan for its vehicles, for instance. Emphasizing torque over engine displacement seems perfectly logical, at least at first. After all, if Cadillac is going to be GM’s lead EV brand, communicating a vehicle’s torque first makes sense. But this just in: The Cadillac EV push is still well down the road, so communicating this now seems to be premature, at best. And the more you get into it, the more convoluted it gets.
I’m not going to get into the various permutations of this badging strategy, because it’s beyond tedious and it quickly falls apart. I appreciate Cadillac’s brain trust wanting to get out front with this strategy, but all it manages to accomplish now is to confuse people. (I realize that talking to yourselves and internal rationalizing is a cottage industry in this town, but, really? This is where they wanted to come out with this?)
And the other thing it does is to remind people that the Cadillac naming strategy for its vehicles is glaringly lacking. I get that traditional Cadillac names mean nothing to a lot of people, particularly in China, but the alphanumeric regimen that Cadillac is clinging to seems tired and forced.
What about the new Cadillac names – Ciel, Elmiraj, Escala – that debuted on some of the industry’s finest concepts of the last decade? They are perfectly “Cadillac authentic” and would go a long way toward eliminating the ongoing nameplate confusion. Cadillac needs to rethink its naming/badging strategy, like yesterday, as in, why can’t the Escalade be the foundation for an all-new naming strategy?
But that’s not the only confusion festering in Cadillac showrooms. To me, Cadillac’s pricing strategy has been fraught with peril and an albatross around the brand’s neck for almost a decade now. It started from a good place, ironically enough. The True Believers in GM Engineering, Design and Product Development were – and are – justifiably proud of the work they’ve been doing on behalf of Cadillac. The “V” cars are sensational and the overall dynamic performance of their vehicle offerings is indeed impressive. So, to the key people guiding the division it was perfectly logical to think that charging “all of the money” for its products made sense.
Except in the real world at the dealer level, that didn’t work at all, because as good as the new Cadillacs were, consumers just mentally weren’t ready yet and couldn’t get there. The fundamental issue was that consumers didn’t perceive that Cadillac was equal to the German machines and couldn’t justify paying for them, no matter how good the fanboy reviews were.
But that external, customer-focused issue was just one dimension to the ongoing Cadillac pricing mess. The other dimension to the problem was the internal difficulties being caused by overly optimistic pricing pushed by Cadillac marketing, evidenced by the train wreck occurring on dealer lots with the ATS bumping right up against the CTS in price. And that problem was magnified exponentially when the highly-touted CT6 sedan made its debut priced right on the nose with a fairly loaded BMW 5 Series. Well, as they say in the south, “that dog just wouldn’t hunt.” And it was disastrous. Loaded CT6 models started showing up on dealer lots priced at $75,000 and above. And needless to say, German car intenders weren’t amused or convinced, and the CT6 was damn near dead in the water in a matter of months.
Has this pricing situation been rectified by the “new” Cadillac? Apparently not. I just took delivery of a Cadillac XT4 AWD Sport to drive for a week (we will have a review up in “On the Table” soon -WG). Now granted, this is an absolutely loaded XT4 that stickers for $57,135 – with a jaw-dropping $14,345 in options. But this just in: the last time I checked you will be able to get the new XT6 AWD Sport for $58,090 (the base for the XT6 is $53,690 for the FWD model). So, a cursory review would suggest that Cadillac is still hamstrung by an untenable pricing strategy. And, as we like to say around here, that’s a giant bowl of Not Good. (I will say this, however, my initial impression of the XT4 is quite positive.)
And finally, the latest news from Cadillac is the new CT5 sedan. Now, for those who think that the passenger car market is dead, think again. There are plenty of people who want to drive cars, which is why Toyota and Honda are not walking away from building them. So, the fact that Cadillac isn’t abandoning building cars is a very good thing in my book. The CT5 shows promise, too, at least on paper, because it is built on an update of GM/Cadillac’s superb RWD/AWD “Alpha” vehicle architecture. The machine will feature a standard 2.0-liter Turbo and an available Twin-Turbo V6, each paired to a 10-speed automatic.
That’s all well and good, but the look of the new CT5 is shaping up to be problematic, to be charitable. Things start off well enough with a front end (below) heavily influenced by the striking Escala concept. And Cadillac PR minions were quick to provide a “go to” shot of that front end (shown below) in all of its Escala-esque glory. If you just went by this angle your propensity to strongly consider one would be high, because it’s beautiful and enticing. But unfortunately for Cadillac – and GM Design – that’s only about an eighth of the car.
The profile of the new CT5 is where the wheels come off. A quick perusal of the shape is derivative, at best. It’s almost as if GM designers decided to channel the Nissan Maxima for inspiration, which is unfortunate and offensive enough, but the detailing on the C-pillar is simply tragic. Why? There is simply nothing “premium” about it, as in, yikes. Andrew Smith, the executive director of global design for Cadillac, was quoted as saying, “Boring sedans are dead. I think awesome sedans are going to be around for a while.” I would wholeheartedly agree with that statement except what does that say about derivative sedans with profiles that don’t even remotely look like a Cadillac, but rather a mainstream rental car? Things apparently have gone downhill in a hurry for GM Design since the days of the CTS Coupe and the ELR, haven’t they?
Looking beyond the front end, from this angle the CT5 looks like a Chevrolet Cruze hatchback. That’s not very good, is it?
The toned-down C-pillar here is more benign, but still, how far has GM Design fallen? And with a design legacy so storied, how can this be happening?
So, in summary, needless to say, Cadillac has its challenges. But the brand has actual worth and genuine value as an acknowledged purveyor of American luxury. The powers that be seem to get sidetracked and lose focus too frequently, and the lack of consistency has seriously injured the brand, but still, with a rich historical legacy that other car companies would kill for, Cadillac has a treasure trove of positives that it can work with going forward. And a few superlatives too.
In short, I believe the Cadillac Thing is slightly more than alive, and on its way to being seriously well, if they don’t suffer any more setbacks.
Dynamically the new Cadillacs are truly excellent, they’re extremely composed and fun to drive. And for me that’s huge and shouldn’t be taken lightly, because so many automakers get it wrong. And when GM Design gets it right, a Cadillac’s “presence” on the road is worth noting and unmistakable. (The new Escalade is going to be certifiably hot, for instance.)
That said, the margin for error in this business has been reduced to a couple of millimeters. Cadillac’s pricing mistakes are capable of killing momentum for the brand before their products are even able to get started in the market. And that’s simply inexcusable.
Speaking of which, GM Design has to grow a set and get back to doing what GM Design used to do best, and that is to set the tone for the entire industry by creating eye-catching and emotionally compelling designs. And in particular, Cadillac should be leading the way.
As for the marketing and advertising, I can't leave today without mentioning Cadillac's advertising work of late. I found the ads on the Oscar broadcast to be weak and barely of interest. And the new CT5 Internet effort is a challenge, as in a challenge to hold my interest. Cadillac's marketing and advertising work has to be every bit as good – if not better – than the products they're promoting. That's certainly not a given these days – especially when you see some of the schlock work being presented by other automotive advertisers – but it's essential for the long-term success of the Cadillac brand. Cadillac marketers only have to ask themselves two questions as far as I'm concerned: 1. Why Cadillac? And 2. Why should I care?
Despite the challenges I’ve laid out, the Cadillac Thing has a better than even chance of survival, because Mark Reuss and Steve Carlisle and the assembled Cadillac troops understand that it’s fundamentally about the product. And that it always has been and always will be about the product.
And that’s the High-Octane Truth for this week.
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