The Latest Auto Extremist
THE SMOKE FROM A DISTANT FIRE.
18 Sep 2018 at 12:55pm
By Peter M. DeLorenzo
Detroit. As this business careens toward The Future, it’s very clear to me that the autonomous/AI transformation of this industry is a long, long way away, no matter what the zealots at the participating companies say. The black clouds gathering on the horizon are there for all to see, and the hedging has begun in earnest. Why? Because the headlong rush into autonomous vehicles is a bet on the come that few companies are going to benefit from, and the notion that an entire industry is out over its skis is quickly gaining favor.
This perspective is anathema to the companies that are throwing billions up against the wall to see what sticks toward the autonomous movement, however, because many of the top executives at these companies have convinced themselves that it looks like the wave of the future, so they desperately want to get out front of it for fear of being left behind. But the question has to be asked, out front of what exactly?
Even under the most optimistic circumstances, autonomous technology will have very limited applications. Commercial usage where repetitive tasks and routes can be exploited will be the obvious first wave of this technology, and just may be the only application for a long time to come. As for mainstream consumers, the idea that a switch will be flipped and we’ll all be blissfully transported to our myriad destinations in a stupor? Well, the term “wildly optimistic” only begins to cover it.
This march to transformational technology hasn’t reached “Fool’s Errand” status as of yet, but it is definitely mired in technology for technology’s sake, and to what end is highly questionable at this juncture. Some of the companies betting billions on autonomous technology are going to get caught out, there’s just no way of getting around it. And the companies with the wherewithal to hedge their bets and keep both feet in separate transportation disciplines – the what's now and the what's next – are the ones that will survive, because this just in: The New Frontier of automotive technology has to go through electrification first, and even our highly-touted Electric Future is filled with burgeoning problems and questions of its own.
Just this week Audi unveiled its first production all-electric vehicle, the "e-tron" SUV, which will arrive in this market next spring. (Audi’s lower-case naming regimen is so tedious at this point that we can barely stand it so we're not going to do it, but please go to “On the Table” if you want to see it. -WG)
At first blush, the E-Tron seems competent and somewhat technically sophisticated, but a passage in the press release stood out to me as a clear warning that electrification on a mass scale is going to be fraught with problems. To wit:
“For charging on the go, the e-tron will be supported by a nationwide charging network, “Powered by Electrify America.” By July 2019, this network will include nearly 500 fast-charging sites complete or under development throughout 40 states and 17 metro areas. Offering advanced charging, Electrify America’s chargers are capable of delivering up to 350kW. With the purchase of the Audi e-tron, customers will receive 1,000 kWh of charging at Electrify America sites over four years of ownership.”
Sounds all well and good, right? Not so fast. Do you realize how pathetic the reality of “nearly 500 fast-charging sites” is in this vast country? And 17 metro areas over 40 states? That’s not even a teardrop in a raging river. But to put a finer point on all of this, this fully electric Audi SUV is just the beginning of a full-on electrification onslaught from the Volkswagen Group. It plans on building around 10 million electric vehicles – 27 different models across its four group brands – based on its new modular MEB platform by the end of 2022. And remember, that’s from just one manufacturer. The others are going to weigh-in in a big way too.
To say this nation isn’t ready for this transformation to electrification is an understatement. The infrastructure just isn’t there, no matter how optimistic the projections are for charging stations coming online. For instance, have you been to a large metropolitan airport lately? Have you seen the limited number of chargers available? Can you envision a whole floor of your airport's parking structure given over to charging stations? Yeah, I didn’t think so. But then again this is just one dimension of this “mass electrification” impetus that has to be dealt with.
The other? Widespread consumer acceptance of fully-electric vehicles is another issue altogether. I’m not talking about the early adopters here, because those people don’t have to be convinced; they’ve already bought in all the way. But what about the rest of the automotive shoppers out there in ConsumerVille? What about the people who make real monthly payments on vehicles they need and/or want? Do you think the notion of fully-electric vehicles will be a slam dunk to these consumers? Think again, because if that were the case the Chevrolet Bolt would be flying off the lots as Chevrolet’s top seller just this side of the Silverado pickup. And though the Bolt is an impressive, well-engineered vehicle and is doing fairly well of late, it’s not even close to that kind of retail acceptance. (And the same goes for the VW e-Golf too.)
And I haven’t even gotten to the cost of these BEV machines. The announced prices for Audi’s new E-Tron SUV are, ahem, impressive. The E-Tron is available in three trim levels: Premium Plus ($74,800), Prestige ($81,800) and First Edition ($86,700). And remember, this is for an Audi Q5-sized SUV. And with government incentives receding into the woodwork, do you really think consumers are going to rush in to go fully-electric? Let’s just say that I am highly skeptical. The marketing and advertising of fully-electric vehicles is going to be nothing short of the biggest single challenge facing automotive marketers in the coming years.
So here we are. Before this business can get its autonomy on, it’s going to have to get its electrification on. But before it can get its electrification on, this business has to deal with the fact that the vast majority of the cars and trucks being sold over the next ten years will be traditional, ICE-powered vehicles.
Maybe those black clouds off to the horizon aren’t clouds after all. Instead, maybe it’s the smoke from a distant fire that’s threatening to consume everything in this industry’s path.
And that’s the High-Octane Truth for this week.
WELCOME TO THE LAND OF SELF-AGGRANDIZEMENT.
11 Sep 2018 at 6:05pm
By Peter M. DeLorenzo
Detroit. Wandering through the auto landscape is always good for a few laughs, a few tears and a few eye-opening revelations. That this business chews people up and spits them out is well-documented. It’s a grind that bows to no other, and that includes the Valley of Silicon too. Here, you’re only as good as your last good decision (or wild guess), or as bad as your last bad decision, except that depending on the scope of that bad decision, you could be relegated to the slag heap of forgotten sorrows in a heartbeat.
Yes, there are other businesses with colorful dimensions, but the auto business is uniquely unrelenting. While you’re working on the latest new vehicle introduction, your mind is focused on what’s happening five years from now. And as you and your colleagues assure each other that what’s coming is The Answer, in reality you don’t even have a shred of a clue if it’s going to work or not. A sure-fire “hit” can be derailed by a wildly unpredictable market, with consumer tastes shifting dramatically three years into a five-year product cycle. That’s part of the fun of this business, believe it or not. And part of the profound agony too.
It’s also a land where self-aggrandizement is not only a cottage industry, it’s a way of life. It’s where luck and calculated hype can propel an otherwise mediocre executive into the rarefied air of self-importance and exaltation. And if he or she can time it just right, they’re able to parlay their flimsy credentials and manufactured star power to the point where they get an actual fiefdom to run inside one of the companies. And once an executive arrives at that level, it takes an egregious act – usually involving blatant stupidity – to force them to relinquish their throne.
Now this is nothing new in the auto business (and it’s nothing new when it comes to corporate America either), but the auto pursuit has its own particularly warped cadence, one that consumes everyone and everything in its path.
It’s inevitable that these executives on the road to their exalted fiefdoms can get lost in the sheer wonder of it all, blinded by the indelible glow of their own light, to be exact. When they occupy a world where oversolicitous minions hang – or cringe as the case may be – on every word, it’s hard to retain perspective. In fact, it’s damn near impossible.
And this situation is most magnified in the marketing function, which seems to attract a particular strain of dysfunctional executives, those who bask in the glow of their own brilliance, whether there’s any “there” there, or not. These people are notorious micromanagers who wreak havoc on the marketing function at their respective companies, reserving special attention for the advertising. This can be a very dangerous thing, because many of these self-promoting geniuses are singularly unqualified to do so.
And to make matters worse, many of these self-aggrandizing marketing “wizards” hold sway over the Public Relations function, too, even though these serial practitioners of pomposity have no business being anywhere near the task of image wrangling. The business of image wrangling is a tough and sensitive discipline. It’s not for the faint of heart and it’s not suited to the egomaniacal ramblings of the exalted executive trolls who fancy themselves experts on all things, but inevitably these are the people who end up having the PR function report to them, even if it’s a kaleidoscope of wrong.
It’s easy to tell the auto companies who are being poorly served when it comes to their so-called marketing “leaders.” The marketing is, at best, reactionary and misguided, and at worst, tone deaf and flat-out offensive. That too much of the car advertising today comes off as being relentlessly lame, piss-poor or just plain annoying should be no surprise. When you have marketing honchos who are amateurish, ego-driven, or simply not qualified for the job, those less-than-satisfactory results are inevitable.
Think of the car advertising that resonates today. If you squint really hard you should be able to put together an assemblage of car companies that actually seem to know what they’re doing, but those would add up to fewer than the fingers on one hand.
Take Ford for instance. Other than the advertising for the F150 pickup, Ford advertising is predictable, boring and damn near unwatchable, and that means both traditional advertising avenues and the all-important digital. This company is in the midst of a “review” of its main Ford account, which has become an exercise in futility as the incumbent agency - WPP’s GTB - was written off before it even started. In fact, the term “review” shouldn’t have even been used in this case, because this was a blatant railroad job to assuage marketing guru Jim Farley’s considerable – and runaway – ego. That Farley fancies himself as the “Crown Prince” of Ford and sees himself as the heir apparent of Jim Hackett’s temporary throne is there for all to see. And it has disaster written all over it. If there’s any hope at all for Ford, cooler heads – as in Bill Ford – will prevail.
And GM is in even worse shape. Never have so many done so little with so much than the marketing “experts” at GM. In my travels around I have never heard more unsolicited negative comments about car advertising than I have for the GM divisions’ work. And why is this, you might ask? It’s simple, really. It’s because Mary Barra and Dan “I Am” Ammann don’t have a clue as to what’s important when it comes to advertising and marketing. And by deferring to Alan Batey as their in-house marketing “expert” it has predictably been a complete farce of Brobdingnagian proportions. It must make the True Believers at GM wince whenever they see one of their stellar products diminished by the advertising.
But then again, the list of auto advertising underachievers is long. Audi? Have they done one single memorable thing of late? No. BMW? Which company are they trying to be today? Your sporty car purveyor, or your SUV buddy? Mercedes-Benz? That Jekyll and Hyde company is so lost it doesn’t even know what it represents internally let alone what they want to communicate.
I could go on, but I won’t. Is there an answer to this mayhem? Yes, in fact there is. Very few of these companies have real, qualified marketing talent on their boards of directors. Start by fixing that and then hold the people responsible for marketing accountable. I think having people tapping these “geniuses” on the shoulder saying, “Excuse me, but WTF?” would go a long way toward ending the mediocrity, and it would put a serious dent in the self-aggrandizement running amuck as well.
And that’s the High-Octane Truth for this week.
CRAPTASTIC ODES TO MEDIOCRITY, AND A LIFE OF ENDURING RESONANCE.
5 Sep 2018 at 9:20am
By Peter M. DeLorenzo
Detroit. Now that the summer has stumbled to a close, this business is a hunk of churning love right now, with car sales descending into the abyss, while truck and SUV sales are propping everything up. The best example of what this market has become is Porsche and its Macan SUV, which is now responsible for half of Porsche sales in the U.S. market. The days of fretting about what the Cayenne SUV would do to the integrity of the Porsche brand seem quaint and a long time ago now. Porsche is now a truck company that happens to produce sports cars to remind people what they used to be about.
Yes, there are pockets of bright spots in the August sales numbers, but there’s no doubt the overall market is slowing down and will continue to do so. What does that mean? There will be furious deals to prop up the numbers from here on out, especially on leftover 2018 vehicles that are piling up on car lots as new models are arriving. And the pickup truck sales battle, which is shaping up to be the most intense in automotive history, will be bloody and ongoing with only the profitability of these companies is at stake. In other words, it’s controlled chaos and business as usual.
Adding to this ongoing chaos is the dawning of The New Mobility, with car companies preparing to launch a whole series of BEVs (Battery Electric Vehicles), promising that they will be the greatest thing since sliced bread and hoping that they will be able to convince consumers that these fully-electric vehicles will somehow change their lives for the better. On paper these vehicles all promise a new, bright-eyed future centered around the concept of freedom, as in freedom from visits to gas stations, and freedom that comes from the reduced service required for these vehicles.
And that all might be true, but the reality for these vehicles is that they are functionally limited, with their use more suited to the urban slog. The infrastructure in this country – or lack thereof – for BEVs is so woeful that it is almost nonexistent, and to pretend otherwise is just delusional. So, needless to say, it has already been established that this will be the marketing challenge of this or any other century.
What will it come down to? Or, what does it always come down to? The efficacy of the product. ICE or BEV, it has always been about the product and it always will be about the product. And some of the vehicles on deck are interesting, like the new Porsche Taycan (for those in the $100,000 price range, that is). But some are flat-out puzzling, like the new Mercedes-Benz EQC introduced yesterday in Stockholm. The Mercedes-Benz PR minions said that, "With its seamless, clear design, it is a pioneer for an avant-garde electric look while representing the design idiom of Progressive Luxury." But as I said in this week’s On The Table: “The Mercedes-Benz EQC's lackluster design and uninspired look doesn't represent 'Progressive Luxury,' it represents a Design staff phoning it in.”
I am dumbfounded by Mercedes-Benz of late. How can Mercedes-Benz Design do such breathtaking concept cars like the Mercedes-Maybach 6 Cabriolet and then turn around and drop this craptastic ode to mediocrity – the EQC – and suggest that it’s avant-garde? But then again Mercedes has been a seething cauldron of contrasts of late, presenting vehicles that are either wildly good or incredibly bad, with nothing in between. But if the EQC signals the “Future of Mobility” for Mercedes-Benz, I am less than optimistic.
The Mercedes-Maybach 6 Cabriolet.
The Mercedes-Maybach 6 Cabriolet.
The Mercedes-Benz EQC.
In other topics this week, NASCAR has been rocked by the news that Furniture Row Racing, who provided the championship-winning Toyota for Martin Truex Jr. in 2017, is closing up shop at the end of the year. Now, no one does head-in-sand thinking and creative excuses better than the brain trust down in Daytona Beach; they’re experts, in fact. But there’s no amount of PR spin that’s going to make this sound the least bit good.
NASCAR has needed a fundamental makeover for so long that it’s a recurring joke. The antiquated business model that propelled its upward trajectory became obsolete more than a decade ago, and now, even its strongest teams are scrambling to attract sponsors, albeit at a reduced rate. The costs to field a front-line car have accelerated at a prodigious rate, while the ability to attract sponsors is becoming extremely difficult.
As I said early last month in “The NASCAR Mess”: The list of negatives created by these corporate bumblers at NASCAR is lengthy. NASCAR has the worse death march of a schedule in all of sports (and with the NBA and NHL in existence that’s saying something), and its steadfast refusal to even entertain any changes to its calendar has been a tediously recurring joke. On top of too many races, the repetitiveness of the schedule and the double visits to the same tracks each season is almost incomprehensible. Everything about NASCAR is stale, and the stench of sameness hangs over the enterprise like a black cloud. The racing organization’s relentless intransigence and its strict adherence to “we’ve always done it this way,” combined with the most virulent strain of “not invented here” that you’ll ever see, have created a moribund corporate entity in need of a giant kick in the ass.
Unfortunately, I don’t see a good end for NASCAR’s continued downward spiral. And the automobile manufacturers – GM, Ford and Toyota – NASCAR’s chief enablers, are not helping the situation by continuing to blindly dump money into the enterprise. NASCAR needs an all-hands-on-deck intervention, or it’s going to go back to being a regional nostalgia series within five years, if not sooner.
And finally, a note on John McCain. His military service was exemplary and beyond harrowing, and his continued dedication to this country over his entire career was admirable and an example of the way it should be done. Many have suggested that his funeral celebrated an end of an era that we’ll never see again, but I disagree. The current divisiveness will not hold, and the enduring resonance of the McCain era will serve to be a reminder of what this country stands for, and what it will be again.
And that’s the High-Octane Truth for this week.
A FULL-BLOWN MUSKIAN NIGHTMARE.
27 Aug 2018 at 12:06pm
By Peter M. DeLorenzo
Detroit. People who visit this website are well aware of the fact that I’m not a fan of “St. Elon” Musk. I’m not closed-mindedly dismissive of him, however. Far from it, in fact. On the one hand he is a true visionary, and the innovative American company that he leads and the success he has achieved are to be applauded. And though some of his mental meanderings are well, just slightly this side of crazy, others are truly eye-poppingly brilliant as well.
But it’s a different story when it comes to building automobiles. Yes, Musk pushed the idea of a not-so-affordable, fully-electric luxury automobile to the forefront of the automobile industry at a time when automobile companies had been dragging their feet. And yes, he did it – albeit with little fanfare – with the help of auto industry veterans in this region, because he couldn’t get his cars built without the experience of people who had been doing it day-in, day-out for years.
And, by virtue of the most blindly insatiable cult of personality this business has ever seen, Musk willed Tesla to becoming one of the most sought-after brands in this business. But, it was obvious that there were gaping holes in the Musk Miracle when it came to Tesla.
When Tesla took over the former NUMMI Toyota-GM plant, he insisted that he was going to take the moribund automobile industry to school and show it how things should be done. Remember, this was one of the most influential plants in automotive history, an exercise in just-in-time manufacturing that was simply remarkable in its efficiency. In its heyday, the NUMMI plant churned out 430,000 vehicles in 2006, with 4,700 employees.
Tesla hasn’t fared so well. Under Musk’s direction, the former NUMMI plant has been able to produce just under 100,000 cars annually in the former NUMMI plant, with 10,000 employees. The bloated workforce was the direct result of Musk & Co. being unable to build its cars with even a modicum of efficiency. But that wasn’t the only problem. The poor efficiency of the plant was compounded by the piss-poor quality of the vehicles delivered. Tesla models were saddled with some of the most egregious flaws the business has ever seen, but yet to his acolytes, “St. Elon” still could do no wrong, and the quality miscues were dismissed as “minor annoyances” when in fact many of them were fundamental assembly flaws that required major – and lengthy - repairs.
But that was really only the beginning of Tesla’s issues. When Musk predicted that the “affordable” Tesla Model 3 would tip the auto industry on its ear two years ago, and that Tesla would be churning out 500,000 cars annually by 2017, the lemming consumers signed up in droves for the “privilege” of getting on the build list for the Model 3. And then they waited. And waited. And waited.
At the time of the Model 3 announcement, I predicted that the vehicle would be Musk’s “Waterloo” and that he couldn’t deliver the vehicle on time or couldn’t come close to producing that many vehicles in a year. But even though I predicted that this car would be a disaster, even I was shocked at the depth and breadth of the futility Musk & Co. displayed while trying to bring the Model 3 to fruition.
The ugly reality is that Tesla simply couldn’t build the cars with any sort of production pace or even a shred of quality. And not only that, the lowball price that Musk announced at its overhyped introduction - $35,000 – instantly became $20,000 more, if you were lucky to even get one three years later.
But again, these are just some of the nasty realities of Tesla that his True Believers refused to acknowledge. The others? The automotive side of Tesla has never made a dime. Not even close, in fact. But despite that, some notable dupes on Wall Street kept running the stock up to ridiculous heights, and remember, this was for a company that never showed even an ounce of profitability and wasn’t forecast to deliver any in the foreseeable future either. Yet the stock frenzy continued, with the Tesla share price rising to unheard of heights for a company that again, wasn’t profitable in the least.
This understandably drove domestic automobile executives bat-shit crazy. They knew full well that if they showed up on an analyst call and announced that they were doing darn well, thanks for asking, but that their companies weren’t going to see any profitability anytime soon, uh, are you kidding me? The Wall Street-types would be camped outside of the Detroit-based car company headquarters with lit torches and raised pitchforks, demanding heads. And the mainstream media, on cue, would follow suit decrying “the inept” domestic auto manufacturers.
Yet Elon Musk was allowed to continue one of the biggest scams perpetrated in American corporate history with no profits, myriad production snafus, endless quality and people problems, a new model that was a complete and utter disaster, and on, and on, and on.
But the other dimension of this story that came to light is the exposed fragility of Musk himself. In a now-infamous interview in the New York Times ten days ago, Musk, when asked about his current state, had this to say: “This past year has been the most difficult and painful year of my career,” he said. “It was excruciating.”
This interview occurred not long after Musk had hastily erected a massive tent outside of the Tesla manufacturing facility to accelerate the build of Model 3s. (He’s even sleeping in the factory to focus on getting the Model 3 models built.) And then there was his infamous Twitter missive insisting he had a buyer for the company, funding secured. It was a mark of blatant desperation, a diversionary tactic that exposed Musk for who he truly is: someone who is quick to throw out ideas – rational or not – but who, when the chips are down is incapable of following up on them.
In the end, making brilliant pronouncements was easy for Musk, but delivering a quality, mainstream automobile was another thing altogether, and it would prove to be his undoing. In other words, a full-blown Muskian Nightmare.
Musk, it turns out, for all his bluster and swinging dick-ism, is no different from any other egomaniacal corporate leader who has come before him. I know this pains his blind loyalists who refuse to accept the fact that St. Elon is merely mortal, but so be it.
Yes, Musk is brilliant and visionary, but he’s burdened by the same thing that has vexed countless leaders who have come before him: an incredible level of unfettered hubris that is relentlessly untethered to accountability. No one tells Musk “no” and gets away with it, because after all, when he’s all-knowing and all-seeing, why ask why?
I predict that Musk will sell his automobile operations because he has painted himself into a corner, and there’s no elegant way to get out of the hole he’s put himself – and his company – in. Yes, he did some notable things in his automotive venture, but it wasn’t enough to sustain an actual profitable business model. Oh yes, and he will probably go out while castigating the “moribund” domestic automobile industry, insisting that he showed the world how it’s done.
But in the end, for all his brilliance, Elon simply couldn’t get it done.
And that’s the High-Octane Truth for this week.
A TALE OF TWO FORDS.
20 Aug 2018 at 10:44am
By Peter M. DeLorenzo
Detroit. "It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way..."
No, Charles Dickens didn’t write about the automobile industry, but he might as well have, as the Sturm und Drang and the semi-controlled chaos that are now part and parcel of everyday life in this industry have become magnified with each passing month.
And nowhere is this more on display than at the Ford Motor Company. That Ford has fallen into a kind of a Dr. Jekyll and Mr. Hyde swirling maelstrom of contradictory forces is no big secret. On the one hand, Ford is limned as a train station rehabbing, AI deal-making, Mustang Bullitt-purveying, F150-churning benevolent American icon. This is the Shiny Happy Ford, the car company brimming with indefatigable spirit and with roots that go back to the very beginnings of the auto business in this country.
That this version of the Ford image is carefully crafted and honed to a polished degree is no accident; this is the preferred image for the Ford Motor Company that chairman Bill Ford Jr. not only wants to portray but one that he believes in with all of his heart. And Ford lives up that ideal in terms of the countless examples of financial support the company gives to the greater Detroit community. That is to be commended and is truly appreciated by the denizens of the Motor City.
But as I indicated, there are two sides to this story. Though Ford operates as Benevolence Inc. and wears its heart on its sleeve while doing so, the company can’t control everything in terms of image and the burgeoning reality of how outsiders view the company.
Let’s take Wall Street for instance. It views Ford differently. It sees a company with the F150 and little else, a company struggling to get new product out while throwing everything against the AI and Autonomous wall to see what sticks. And it sees Jim Hackett, the Ford CEO, as someone who’s expert at platitudes but with little or nothing to offer beyond that.
Now I will be the first to admit that I am no fan of Wall Street and I’ve said so repeatedly in this column. We’re talking about a cynical institution that built up Elon Musk and Tesla while ignoring every single principal it stands for. They ran up Tesla stock with no signs of profitability on the horizon, and they duped the average investor into believing that Emperor Musk’s glittering ideas were more than enough to go on, while jamming the “it won’t be long now!” canard down everyone’s throats. It worked for a while, but now even Wall Street is shunning Musk – and quite deservingly so, I might add – and he’s become the new Poster Boy for a remake of the Emperor’s New Clothes.
Be that as it may, the Wall Street-types do have a point about Ford. Several of which I actually agree with.
To begin with, Ford’s forays into AI and autonomy are a little bit more than pipe dreams at this point, and the idea that Ford will be part of the New Mobility economy is a work in progress, at best. This is a noble notion that Ford has – believing it should be part of the future of transportation just as it was more than a century ago – but nothing about this idea is preordained, and there are so many talented and gifted players working on the same idea that it will remain a giant “we’ll see” for years to come.
Next, Ford’s product cadence is out of whack, and it shows. When Hau Thai Tang – Ford’s Product Chief – informed the media of the company’s future plans on Friday, it all sounded good, at least on paper. Thai Tang said Ford would be adding nine nameplates through 2023, seven of which will be utilities and pickups. This is all with the goal of having one of the newest product lineups in the industry by 2020. Now, Thai Tang is extremely talented and capable and one of the best and brightest at Ford, but a company that is notorious for tardy, problem-laden launches does not give one confidence that these new products will be any different. Just one example: The new Bronco, which by all accounts and early assessments looks to be a sure-fire hit, is late. At least two years too late. We won’t see it until the end of 2020 and that is simply inexcusable. Two years is a lifetime in this business, and Ford’s product cadence quite simply is consistently underwhelming, at best.
But the biggest issue Wall Street has is with Jim Hackett, and it’s no wonder why. The professorial, touchy-feely Hackett talks around and around suggesting the best ways for things to happen, and the way everyone should feel while things are happening, but in true “I’ve-been-lost-on-campus-so-long-I-have-grown-completely-irrelevant-and-out-of-touch” fashion, he is nothing more than an expert air salesman at this juncture. And as we well know – or at least you should know by now – selling air counts for exactly zero in this business. “Selling Air” is the modern-day sequel to the Emperor’s New Clothes, and it’s much ado about nothing because, well, it’s much ado about nothing. So, as much as I loathe the calculated fleecing that’s part of Wall Street’s relentless M.O., the professional scammers there understand when they’re being broadcast to by an air seller, and they don’t much cotton to it. I don’t either.
Now this has nothing to do about whether Hackett is a decent guy or not, because by all accounts he is, but it has everything to do with the projected image of the Ford Motor Company beyond this region. Here, we accept the fact that Ford does good things for the community but “out there” in the real – and ever hard-core – investor world, it’s all about “what have you done for us lately?” And Jim Hackett talking about how things are going to be and how we should all feel while these things are happening understandably leaves everyone cold.
It doesn’t help the fact that Hackett continues to talk up Ford’s “deep bench” either, because that is just flat out false. As I delineated in “Ford In Free Fall” last May, the idea that Ford has a “deep” bench is laughable. Sure, there are self-proclaimed princes operating their own little fiefdoms within Ford, like the ever-notorious Jim Farley, who remains unfettered by rational thought and untethered by accountability, but the fact of the matter is that the aforementioned Thai Tang is really the sole bench occupant who is actually worth the wait and a future star. And for a company with the depth and breadth of problems that Ford has, that isn’t nearly enough to go on.
So, Ford has a major league image problem, and much of it lies with the fact that Jim Hackett doesn’t exactly engender confidence on any level. And the Ford Motor Company simply can’t afford that kind of underwhelming image-wrangling, because blue-sky platitudes and touchy-feely experiential notions don’t add up to a winning hand.
So “the two Fords” is a thing, and it’s not a good thing by any means. Hackett is a decent and nice guy who should be leading a think tank somewhere for Ford, and if any ideas bubble up to the surface from it then congratulations will be in order.
But he is not a CEO. In fact, he is the wrong man, at the wrong time, at the wrong company.
And that’s the High-Octane Truth for this week.
BILL MITCHELL ? THE PASSIONATE DESIGN MAESTRO.
14 Aug 2018 at 10:39am
Editor's Note: With two of the biggest automotive events in this country unfolding over the next two weeks - the Dream Cruise here in the Motor City and Monterey Car Week in California - we decided to re-run one of Peter's most-requested columns - a look at the legendary Bill Mitchell and the glory days of GM design. This column was adapted from Peter's book, The United States of Toyota, and stands as an enduring reminder of GM's truly incredible design history. Needless to say, it was a different time and a different era. -WG
By Peter M. De Lorenzo
Detroit. To say that the ‘50s and ‘60s were a different era in automotive history is not painting a proper picture of just how different it was. Detroit was much more of a freewheeling mindset back then. Car executives were bold, decisive, conniving, creative and power-hungry personalities who inevitably went with their gut instincts – which could end up being either a recipe for disaster or a huge runaway sales hit on the streets. The only committees you'd find back then were the finance committees – and they never got near the design, engineering, marketing or even the advertising unless there was some sort of a problem. These Car Kings worked flat-out, and they partied flat-out, too, ruling their fiefdoms with iron fists while wielding their power ruthlessly at times to get what they wanted – and rightly so in their minds – as they were some of the most powerful business executives on earth. In short, it was a world that was 180 degrees different from what goes on in today's rigid, namby-pamby, never-have-a-point-of-view-and-never-take-a-stand automotive environment.
No one represented the spirit of the business back then more than Bill Mitchell. He was bold, powerful, flamboyant, recalcitrant, maniacal, brilliant, frustrating and probably every other adjective you can think of for someone who was one of a kind. He was smart enough to know and he had the innate sense to understand that he had inherited the legacy of the great Harley Earl, and he never for a second forgot that fact – or let anyone else forget it either. And he played it for all it was worth with a swagger and strut that haven't been seen since. He often bumped heads with the "suits" down at the corporation when they didn't "get" one of his design recommendations – but he usually won the battles and got his way.
Mitchell was, in fact, his own potentate within the GM monolith, and he did outrageous things and spoke his mind and generally didn't give a rat's ass about any of the other bullshit that was part of corporate life at GM at the time. Mitchell was a larger-than-life personality, and it just didn't sit well with a lot of the sober financial suits down on the "14th floor" of the old GM building. He swaggered and strutted his way around the Design Staff like it was his own personal kingdom – and make no mistake about it – it was.
To give you just a small glimpse into how Mitchell held sway over things at Design Staff, the Corvette was the one car that meant more to him than any other. And whenever a young designer did a version and started to gloat even just a little bit, Bill would always set things straight with the following famous Mitchell-ism: "Don't flatter yourself, kid – I'm the one who does Corvettes here." (As a brief aside, one of the most hilarious things I ever witnessed as a kid was watching the mercurial Mitchell attempt to play golf at the Bloomfield Hills Country Club. He was horrible at it, and his frustration level would grow exponentially with each hole – and you could see his complexion glow even more beet-red than it already was almost by the minute. He had absolutely no patience for the game whatsoever, and finally he'd inevitably storm off the course without finishing his round and jump into one of his concept cars – the original Sting Ray, the Mako Shark, the Monza SS – you name it, and then he'd peel out of the parking lot spinning the tires and grabbing gears all the way down Long Lake Road.)
I've heard countless firsthand stories about the man and his ballistic fits in studios while cajoling his troops to go further and reach higher – but I saw a slightly different side to him too.
Because, after all, he lived just a block away from our house...
And I'll never forget the day I discovered that fact. I was still in my bike-riding days back then, but I remember resting with my buddies one blistering Friday afternoon on a corner in our neighborhood after a long, hot day of riding around aimlessly – we did that often back then – when we heard a rumble and roar coming from off in the distance. I knew right away that it wasn't motorcycles and that it was more than one of whatever it was – and just then a pack of the most stunning cars we'd ever seen burst around the corner and came rumbling right past us – the sun glinting off the barking pipes and the canopy of trees shimmering off the perfect mirror finishes of the paint jobs. This "horsepower train" was led by the "original" 1959 Corvette Sting Ray racer in Silver, followed by the XP700 Corvette (a "bubble-top" show car with side pipes also in Silver – it was Mitchell's favorite color), the first Mako Shark Corvette and a concept called the Corvair Super Spyder (also in Silver), a wild racing-inspired show car with dual cut-down racing windscreens and three pipes curling out and around each side in the back. They were so loud we couldn't even hear ourselves screaming whatever it was we were screaming, but after a split second to think about it, we took off, pedaling our guts out after them. It was apparent that these machines were heading for our part of the neighborhood – and as we tried to keep them in sight I realized they were turning on to my cross street!
We came around the corner and saw them pull into a driveway, exactly one block from my house. We stopped right at the end of the driveway with our mouths gaping down to the asphalt, as the drivers of the other cars handed the keys to the driver of the Stingray and he took them up to the front door where a woman collected them. Then, an Impala pulled up and the four men got in it and were gone, leaving the cars sitting in the driveway all lined up ticking and spitting as their pipes started to cool.
This became the Friday Afternoon Ritual of the summer – at least when Bill Mitchell was in town.
He liked having his "toys" at his disposal on the weekends. And every weekend the collection was different, depending on the mood he was in when he made the call to the GM Styling garage. I would watch what cars would be delivered on Friday, and then I would ride over there on Saturdays and just linger out in the driveway studying every square inch of every car hoping to get an audience with The Man himself – and maybe, just maybe – a ride in one of the machines. One thing about Bill Mitchell is he never got tired of the cars, and he never got tired of seeing people's reaction to them or answering questions about them. After about the third weekend of this, I finally got the nerve to introduce myself to him one Saturday morning as he was getting ready to go somewhere in the Super Spyder. From that moment on I was okay in his book because I was "one of Tony's boys" and he said, "Hop in – I'm just running up to the drug store, but come on..."
I jumped in the passenger seat (the interior was done in Silver Metallic leather), and he made sure I fastened my seatbelt, even though he didn't bother with his – and we were off. The Super Spyder was a revelation to me (although I had to look through the cut-down windscreen or off to the side to see) because it was the first time I had been in anything other than a production automobile. Thanks to my brother, I had ridden shotgun in plenty of fast cars, but this was different – this one was exotic to me. The ride literally lasted five minutes up to the store and five minutes back, but from then on I was a fixture in the Mitchell's driveway for the rest of the summer.
I ended up riding in every one of GM's Concept Cars of that era. All but one of them being chauffeured by none other than Bill Mitchell himself. Just for the record, my favorites were the original 1959 Sting Ray racer, the Monza GT Coupe in Silver and the Monza SS Spyder in Red (look them up – they were the stunning Corvair-based show cars with the front ends that ended up on the racing Chaparrals).
And the one not chauffeured by Bill Mitchell? That was an unbelievably wild Pontiac show car called the XP400. It started out as a 1964 Nassau Blue Pontiac Bonneville convertible that had more of a '50s custom look to it (complete with a stowable hard tonneau cover that was way ahead of its time). Big deal, you say? Well, stuffed in the engine bay was a 421-cubic-inch, Mickey Thompson-prepared drag race motor with a 671 GMC blower producing, as Ken Eschebach (the gifted technician at "Styling" who basically kept everything running for Mitchell) said, "All Mickey said was that it had almost 700HP." Oh, and one more thing – it had a lever that you could engage that would open up un-muffled side-pipes any time you felt the urge to.
Bill Mitchell had the XP400 dropped off one summer day in 1964 for my older brother to play with for the weekend. I have two memories of that weekend: 1. Sitting in the back seat with two other guys (a total of five in the car) rolling down a two-lane road headed for Woodward Avenue – in first gear. My brother punched it, and that beast shrieked and howled as it charged down the road, spinning its rear tires in the first three gears, our necks snapping in unison with every shift. The acceleration almost took the wind out of me. He backed out of it at 125 only because we had to stop for a light. The thing was brutally fast – a truly nasty-beautiful machine in every sense of the word. And 2. Pulling into gas stations and getting out to check the oil just so we could see the expression on the attendant's face as we unlatched the hood. And we did that often because Mickey had set the motor up with "drag race piston rings" as Ken told us, so it used 21 quarts of oil in one weekend. Incredible...
Things weren't all blissful in those years. I heard rumblings of things being "different" in the Mitchell household, and the next thing I knew he had gotten divorced – and then he got remarried to a woman who lived around the corner from us, one block away in the opposite direction! I guess he liked the neighborhood.
At any rate, Bill Mitchell's new wife had a stepson (though several years younger than our crowd) who became part of our bike-riding gang. It was during this time that I really got to know Bill Mitchell beyond the occasional car rides. I used to hang out in his basement for hours with his stepson, and I'll never forget what a shrine to the automobile it was – a virtual museum of automotive art and automobilia. The man had his favorite drawings plastered all over the place – beautiful illustrations from the time he first started drawing cars as a young boy that were lit with little spotlights. He had personally signed photos of most of the all-time great Grand Prix drivers from the '30s, '40s, '50s and early '60s. He had a Plexiglas case containing the helmet, goggles and gloves that the great Rudolph Carraciola wore in one of his last drives for the Mercedes-Benz factory racing team (I finally understood why Mitchell's favorite color was Silver – he had Silver Mercedes-Benz and Auto Union stuff everywhere). He had other personal effects from famous drivers all over the place – a Stirling Moss helmet, gloves from the great Juan Manuel Fangio – you name the driver, and he had something personally signed by them and given to him. And there were countless models, original paintings, pictures, plaques and badges – a cornucopia of car stuff that is just staggering to think about now.
There were a few times when he would come down and spend time with us, and since I thought I wanted to be a car designer I'd pepper him with questions about anything and everything. I remember one particular day when he was in an expansive mood, and he took me on a personal guided tour of his collection of stuff – and it was one of the most fascinating experiences of my life. Here was a living automotive legend in every sense of the word taking the time to convey to a kid what all of this stuff really meant to him. What struck me right away was how he was as much of a pure fan and in awe of his favorite drivers as anyone. He expounded on every single piece of memorabilia – where it came from, how it came about, his personal experiences with the driver, etc. But the best part was when I'd ask him about a particular drawing he had done, and he'd go off for several minutes explaining every nuance, every line and every shape down to the last detail.
In that brief moment of time, I finally understood the passion, the intensity and the love for everything automotive that was Bill Mitchell. And I realized right then and there that my love for everything automotive had some sort of place in life – and maybe even a future – all because Bill Mitchell took the time to give a kid a tour of his personal automotive museum.
For all that has been said and written about Bill Mitchell – the tough-guy persona, the bluster, and all the stories and anecdotes of his temper tantrums in the studio – I think people forget what a truly gifted and talented man he was. And I also think people have forgotten how his relentless, unwavering passion for the automobile and automotive design inspired countless young designers and helped propel General Motors to the top of the automotive design world in his day. Something that was truly lost on this company for the longest time.
Right now, there are car guys and gals from many disciplines slogging away at every car company on the planet – and maybe even some will read this column. An elite few of them may have even managed to rise to the top in their car companies with their spirit and passion intact, which is no mean feat in this day and age.
But in the face of a business that grows more rigid, regulated and non-risk-taking by the day, there are still lessons to be learned from the legacy of Bill Mitchell. If anything, we must remember what really matters in this business above all else – something he instinctively knew in his gut – and that is to never forget the essence of the machine, and what makes it a living, breathing mechanical conduit of our hopes and dreams. And that in the course of designing, engineering and building these machines everyone needs to aim higher and push harder – with a relentless, unwavering passion and love for the automobile that is so powerful and unyielding that it can't be beaten down by committee-think or buried in bureaucratic mediocrity.
Bill Mitchell had an uncanny knack for getting the best out of the talented people around him. And he led the only way he knew how – and that was by fueling creativity with his passion and by the sheer force of his will. What he believed in is as true and vibrant today as it was in his era – and hopefully, at least in some quarters of a few car companies, that will always be the case.
And that's the High-Octane Truth for this week.
Bill Mitchell stands next to two of the most iconic GM designs under his reign: The 1959 Corvette Sting Ray racer concept (XP87), and the 1961 Corvette Mako Shark (XP-755) concept. A 19-year-old Peter Brock (who later went on to design the Cobra Daytona Coupe for Carroll Shelby), Larry Shinoda and Mitchell himself worked on the Sting Ray racer in 1957, which obviously influenced the fabulous '63 Corvette Sting Ray production car, and Shinoda and Mitchell worked on the Mako Shark concept. One of the countless anecdotes from the Mitchell era? He caught a Mako shark on a fishing trip in Florida and had it mounted on a wall in his office. He kept telling the designers that he wanted the paint job on the Mako Shark concept to look exactly like the shark on his wall, with the same color gradations. After Mitchell rejected several attempts at painting the XP-755 concept car and amid growing frustration, a few designers sneaked into his office late one night while Mitchell was out of town and removed the shark from his office wall. They then had the paint shop paint Mitchell's prized catch exactly like the latest paint job on the Mako Shark concept. They then put the shark back up on his wall and presented the new paint job on the Corvette Mako Shark concept to Mitchell, who pronounced it "perfect." -PMD
The stunning 1959 Corvette Sting Ray racer is still sensational to this day (and the Autoextremist's all-time favorite car). When (now retired) Ed Welburn took over GM Design, one of his first orders of business was to commission the complete restoration of this iconic vehicle, and it remains the unquestioned jewel of GM's collection of historic vehicles.
The 1963 Corvette Sting Ray is still fabulous to this day. The "split" rear window design was one of its signature design elements but it only appeared for one model year. Zora Arkus-Duntov, the famous Corvette Chief Engineer in its formative years and an automotive legend in his own right, vehemently despised the design detail and fought with Bill Mitchell tooth and nail over it in one of the monumental internal battles in GM history. Mitchell won that battle but Duntov won the war, as the design detail was gone on the 1964 model Corvette.
The introduction of the 1963 Corvette Sting Ray remains one of the most memorable debuts in American automotive history.
(Photo by Roger Holliday/The DeLorenzo Collection)
Bill Mitchell visits with Peter's brother Tony on the grid before the Daytona 24 Hour race in 1969. The Owens/Corning Corvette Racing Team made its official international racing debut at Daytona that year and Mitchell stopped by to say hello. Mitchell loved being around race tracks and would often bring advanced GM concept cars up to Road America in Elkhart Lake, Wisconsin, to take the pulse of racing enthusiasts. The 1959 Corvette Sting Ray racer used a spare chassis from the ill-fated, one-off, factory-entered Corvette SS, which appeared at Sebring in 1957. Mitchell took the Corvette SS chassis and re-bodied it into the Sting Ray racer and raced it privately on his own dime, with famous Corvette driver Dick Thompson, "The Flying Dentist" at the wheel. The Sting Ray racer made its debut at Road America in 1959, painted in its original red (below). Once the development of the 1963 Corvette Sting Ray production car program started taking shape, Mitchell "retired" the Sting Ray racer and painted it in gleaming metallic silver, which was reminiscent of the Mercedes Grand Prix machines from the 50s, his favorite racing cars.
The 1963 Corvair Super Spyder concept as it appears today - in black.
The 1961 Corvette Mako Shark I and the 1965 Corvette Mako Shark II, two iconic concepts from the Bill Mitchell design era at General Motors.
THE NASCAR MESS.
7 Aug 2018 at 9:17am
By Peter M. DeLorenzo
Detroit. The news that NASCAR CEO Brian France was arrested in Sag Harbor, New York, for DWI and in possession of oxycodone tablets over the weekend couldn’t have come at a more precarious time for the stock car racing organization.
It’s no secret that NASCAR has been on a precipitous decline for going on eleven years now. Propped up initially by television networks insatiable for content and willing to pay through the nose for the rights to broadcast NASCAR programming during its fleeting heyday (which ended in 2007) and fueled by its chief enablers at the auto manufacturers, NASCAR has suffered a steady erosion of TV ratings, and a notable drop in in-person race attendance has accelerated at an alarming rate. And even the most successful teams are struggling to find sponsors. NASCAR operatives have taken great pains to explain away the decline as part of the general shift in how consumers participate in sports viewing, but who’s kidding whom? NASCAR is on the ropes, and one man is directly responsible: Brian France.
Brian France has acted like an absentee landlord for a decade, barely involved in the day-to-day running of the organization and only parachuting in for his annual “State of NASCAR” speeches that always proved to be incredibly naïve and painfully out of touch. In his most recent remarks about the sport at the beginning of the season, France came off like a cousin of Alfred E. Neuman with his seemingly endless “What, Me Worry?” refusal to admit that anything was wrong with NASCAR, but he was clearly the only one who failed to see what was going on all around him.
France has now announced that he is taking a leave of absence, and other commentators are pressing the point that he shouldn’t come back, but here’s the thing, France was never there to begin with and his calculated nonparticipation has already proved to be devastating to his credibility and to NASCAR.
As if to underscore France’s screwup (this was the second DWI incident for him, by the way), NASCAR had one of its brightest days in years over the weekend at Watkins Glen, New York, as Chase Elliott (NASCAR legend Bill Elliott’s son) drove brilliantly to deliver his first win. It should have been the positive talking point that the sport so desperately needed to carry it through the rest of the season. Instead, the organization’s CEO stumbled out of his Lexus and destroyed any shred of positiveness associated with young Elliott’s win.
What a mess.
To compound matters, it’s no secret that the France family has been taking meetings about the possibility of selling the enterprise and needless to say, France’s bust certainly won’t help those discussions. Not that it matters, because the prime value for NASCAR peaked well over a decade ago and the France family missed their golden opportunity, just like they missed myriad chances over the years to right the ship. And now? Let’s just call NASCAR a diminished business opportunity and leave it at that, although the strong argument for acquiring the racing organization would be to blow it up and start over if it is ever going to see real momentum again.
And where does this leave NASCAR’s chief enablers – the auto manufacturers? Ford, GM and Toyota piss away $250 million+ a year combined in NASCAR for direct payments to teams, driver contracts, and associated promotional events and advertising. These manufacturers have continued to throw money around in NASCAR like drunken sailors, even in the face of the steady and burgeoning decline of the sport.
To what end? And why? There is no question that there is an incestuous relationship between certain operatives at the manufacturers and the NASCAR establishment, and it stinks to high heaven too. Some of the high-level relationships are so cozy that it’s hard to separate the executives at the car companies from their NASCAR counterparts. So, it’s no wonder that the auto companies rarely put pressure on NASCAR for substantive changes.
It’s no secret that I have been NASCAR’s most outspoken national critic for more than a decade now, but I’ve always made the distinction between the corporate NASCAR, and the drivers, teams and technical people involved in the sport. These are some of the most talented people in all of racing and it’s a flat-out shame that they’ve been saddled with some of the most relentlessly mediocre corporate overlords working in the sport.
The list of negatives created by these corporate bumblers at NASCAR is lengthy. NASCAR has the worse death march of a schedule in all of sports (and with the NBA and NHL in existence that’s saying something), and its steadfast refusal to even entertain any changes to its calendar has been a tediously recurring joke. On top of too many races, the repetitiveness of the schedule and the double visits to the same tracks each season is almost incomprehensible. Everything about NASCAR is stale, and the stench of sameness hangs over the enterprise like a black cloud. The racing organization’s relentless intransigence and its strict adherence to “we’ve always done it this way,” combined with the most virulent strain of “not invented here” that you’ll ever see, have created a moribund corporate entity in need of a giant kick in the ass.
With Brian France’s latest and hopefully final episode, the auto manufacturers have some decisions to make. They must finally take the gloves off and get directly involved in the future of NASCAR, because the way these manufacturers have been operating up until now - this "go-along-to-get-along" drill - is simply unacceptable. If the racing entity is to be sold, then the manufactures have to be included in all discussions because without their participation, whatever form NASCAR takes going forward simply wouldn’t be able to get off of the ground. There’s hope that in Jim France, NASCAR’s interim chief - who is everything Brian France isn’t in that he’s politically and racing savvy, sharply aware and decisive in action - NASCAR has a chance to right itself and move forward. But it’s a giant “we’ll see” at this point.
Changes for NASCAR have been long overdue. It’s ironic that Brian France’s giant flameout and permanent exit might just allow him to finally accomplish something good for the family business.
And that’s the High-Octane Truth for this week.
SHINY HAPPY RIDERS IN ZOMBIE CARS.
31 Jul 2018 at 1:46pm
Editor's Note: With the CAR Management Briefing Seminars churning away up in Traverse City this week, there is talk, more talk and more blah-blah-blah of how everything about this business will change exponentially, and how the Millennials will lead the transformation. In discussing this with Peter, we thought we'd present the following previously-run column from 2016. It still resonates today, perhaps even more so. -WG
By Peter M. De Lorenzo
Detroit. The incessant buzz emanating from every auto company executive, every lemming-like regurgitator in the media and every 30-second blurb that passes for news these days is that ride sharing with electrified autonomous cars is The Future of Mobility.
Soon, like by 2025 soon, auto company profits – at least the auto companies that were smart enough to buy in to the notion (and lawyer-up with the key tech companies holding the intellectual property that will help get it done) – will be exploding as our cities become hotbeds for autonomous electric vehicles and the concept of mass ride sharing. The automobile industry and our automobile culture as we’ve come to know it will be upended in favor of a Utopian future where the hoary notion of actually owning a vehicle will give way to a sublime, hassle-free lifestyle enhanced by the act of summoning zombie cars to go to the store, to do errands, to get you to a restaurant, etc.
It will go something like this: You will pay a monthly fee like you do with your cell phone to link up with a transportation company of your choice. This will allow you access to the cornucopia of delights of a car-owning-free society like no bills for insurance, gas, maintenance, upkeep, etc., etc., etc. The sky will be bluer and the grass will be greener, and nary a discouraging word or unpleasant encounter will be found.
And to make things even better - at least from the auto companies’ perspective - this will allow these car purveyors to take on a sheen of hipness unlike at any time in their history (they think) while lapping up tremendous profits approaching 20 percent (according to the most optimistic of estimates), because the mileage will pile up on these vehicles at a prodigious rate and they will have to be replaced at an equally furious pace.
(It should be pointed out at this juncture that this mobility Nirvana will only be available in a handful of the major cities at first, at least the ones that really, really want to do away with the hassles of owning a car en masse. As for the people in the rest of the country, you know, the ones who actually have to get somewhere and do mundane tasks like go over to the next county for work, they will be left behind for the most part to become known as The Expendables.)
The Future of Mobility, according to those who are all-in with the concept, will be a boon to our aging population as the geezer-behind-the-wheel factor will be eliminated, traffic accidents will become a thing of the past, and we’ll become a nation of Shiny Happy Riders as the concept of actually driving becomes part of the dismal past that the futurists would all like us to forget.
It also means – allegedly – that the idea of public transportation, and the use of buses and trains will become greatly diminished as well, as there will be no need for those antiquated solutions because we’ll all be whizzing around in autonomous electric cars with our personal destinations and habits locked in to the system in perpetuity.
This last notion has been made especially ironic – or moronic as the case may be – around these parts because the regional transportation brainiacs here in southeast Michigan have actually approved a 3.3-mile – count ‘em - light rail system in the city of Detroit for $140 million that does little for anybody except allow early drunk-riding between various hot spots in the resurrected parts of the city. (I say early because the system stops at 10:00 p.m.) The expenditure for this system - it’s eventually supposed to be built-out another five miles - will eventually top $500 million. This, remember, in a city that has such an embarrassing, crumbling infrastructure that it’s nothing short of criminal. To call it The Streetcar That Leaves A Lot To Be Desired is the understatement of this or any other year. But I digress.
The Motor City, as it was once quaintly known, will become The Autonomy City if industry overlords have their way. They’re not only betting on this Grand Transformation taking shape, they’re hell bent on leading the charge, because the idea of playing second fiddle to Silicon Valley when it comes to the future of mobility is abhorrent and unacceptable to the auto companies and their suppliers, which is perfectly understandable.
But this Grand Transformation presents an interesting dichotomy. On the one hand, the race to electric cars and full autonomy is the new Golden Ticket and everyone wants a piece of it. This – allegedly – will define the new transportation industry and The Future of Mobility. It just doesn’t get any bigger than that for industry futurists, I can assure you. On the other hand, there will still be hordes of people in this vast country of ours stuck in The Real (Old) World who will be left out of this New Enlightenment phase of personal mobility, and The New Mobility companies (formerly known as “the automakers”) will still have to make, sell and service “old school” vehicles that people need and rely on.
I predict that the transition to this Grand Transformation and the Future of Mobility is going to be a painful one. It’s not just the problems associated with the technology that are sure to come to light, it’s the fundamental phasing out of the idea of freedom that originally came with personal mobility that will become an issue.
This country was fueled by the freedom to roam, an enduring wanderlust that drove us to see, and to do, and to be. And we explored and settled its vastness with a relentlessness that knew no bounds. This individual freedom of mobility was part and parcel of the American spirit and it’s part of what made this country great. And now? We’re transitioning to a new dimension of mobility that will leave many out in the cold, and on many levels too.
The futurists are building on, remarkably enough, the pathetic concept of “over sharing” – the one that has paralyzed this country to the point that it has turned into a national nightmare fueled by the relentless din of social media – turning it into the defining platform for the future of our mobility.
The individual, as you might guess, will be marginalized, and for those who grew up with the concept of mobility being a form of individual expression, well, the sooner we shuffle off of this mortal coil, the better, because The Future of Mobility - as it’s being defined for us - will put a premium on nameless and faceless disengagement.
And the auto industry as we once knew it will be marginalized too. What once was considered to be the lower end of the market – the mundane, bottom-feeder “commodity” cars - will make up the vast majority of the transportation “devices” at our disposal. Yes, traditional brands will still exist at a premium – imagine an autonomous vehicle in a Mercedes or Porsche wrapper, for instance – so as to extract higher monthly fees, but that will be the extent of it. And remember, you might be willing to pay for that luxury wrapper, but you will still be “locked-in” to a system that will have zero tolerance for deviation.
What does this mean for the vibrant network of hot rod builders and gifted craftsmen and craftswomen who dot the landscape across the country, you might be wondering? I believe that they will in fact thrive in the gathering darkness of autonomy.
As long as there are people willing to seek out that last measure of individual expression and freedom of mobility on their own terms, there will be a shred of the American automobile culture, as we once knew it, left. And the gathering darkness of autonomy will be held at bay for a couple of decades, hopefully.
But let’s just hope that these mobility futurists don’t get a hold of a copy of Soylent Green anytime soon. That would be a giant bowl of Not Good.
And that’s the High-Octane Truth for this week.
AN UNFORTUNATE DENOUEMENT.
23 Jul 2018 at 9:03am
Editor-in-Chief's Note (6:00 a.m. 7/25): I wrote this column early Monday morning, when the extent of Sergio Marchionne's condition was not known, except that it was very serious. And when more detailed reports emerged, it was clear that the situation with Sergio was dire. The very sad news today is that Sergio Marchionne has passed away at the age of 66. As I said in my column, the likelihood that we will see another CEO like him is slim and none. He was the most colorful, shoot-from-the-lip leader this industry has seen in a long time. And even though I was his most consistent critic by far, I appreciated his passion, vision and enduring optimism. CEOs who tell it like it is, or how they think it is, are a lost and unique art. And there’s no question that Sergio Marchionne was artfully unique. Our deepest sympathies go out to Sergio's family and friends, and the people of FCA. -PMD
By Peter M. DeLorenzo
Detroit. When you wander around this planet long enough you experience how serious illness can devastate people’s lives and tear families apart. And with the news of Sergio Marchionne’s serious illness I would like to say right up front that I wish no ill health on anyone, and I wish the best for Sergio and his family, although the reports certainly are not good.
This is not the way Sergio deserved to leave his career – something he lived for 24 hours a day – and I really feel bad for him. To say Marchionne left his mark on this business is an understatement; because warts and all he was one of the most compelling leaders this business has ever seen.
Now, lest you think I am going to walk back countless negative columns about Sergio’s tenure at Chrysler (now FCA), you’re sadly mistaken, even though last week was clearly National Walk Back Week (didn’t you get the memo out there? -WG). Since the news of Sergio’s illness hit the media sphere, the countless words of praise about him piled up like cord wood, especially with local automotive scribes who were so gushing and effusive in their unbridled praise that I’m sure the push to canonization is well under way and that “Saint Sergio” is not far behind.
But I realized long ago that expecting cogent analysis from some of those card-carrying bootlickers in the automotive media is a fool’s errand. Rational thought and balanced perspective always give way to making sure that their asses are covered and their bread is buttered; after all, they don’t call ‘em “the go-along-to-get-along” posse for nothing. Enough about that; wasting words on some of the unfortunates in the automotive media is not a value-added activity.
As I’ve said repeatedly, in case you have forgotten, Sergio Marchionne is clearly a brilliant guy, but the fact that he reminded everyone within his company and outside of it that he was the smartest guy in the room – any room – was not one of his endearing qualities in a long list of less than enduring qualities. (He was certainly eminently qualified to be CEO, unlike Dan “Captain Queeg” Akerson, the legendary “Accidental Tourist” of a CEO/stumblebum who almost ran GM into the ground.)
Marchionne’s specialty was always deal making, especially with other people’s – and governments’ – money. The fact that he shrewdly surmised that the United States government was up against it with Chrysler’s bankruptcy, and that if he played his cards right he could be “gifted” Chrysler’s assets for a song, is indisputable. Sergio not only acquired Chrysler “all-in” for around $6 billion, Fiat didn’t have to make substantial payments on the deal until eighteen months after it was consummated. That’s “genius” stuff, and Marchionne certainly deserved that moniker.
But once Marchionne got a hold of Chrysler, he and his espresso-swilling minions (you didn’t think Peter would leave that one out, did you? -WG) descended on Chrysler in a blur of “we’re going to show you how it’s done.” Except that the reality was that how Fiat actually got things done back home was so antiquated and out of touch with the ways of modern automobile industry methods that Chrysler operatives were shocked and really had no idea how they were going to move the company forward with the over-caffeinated Italians getting in the way.
This was, of course, after Sergio staged a seven-hour death march of a media show/lecture that was a preview of the runaway hubris and self-aggrandizement that would mark his tenure at FCA from the get-go. In fact, that part of Sergio’s character only got worse as the years went by, especially when he realized that certain bootlicking members of the automotive media would carry his personal PR water for him, no matter what he said and how bombastic he got.
There were the blatant insults to every other auto company executive out there, marked by Sergio reminding everyone that he’d forgotten more than they would ever know; there was the hamfisted overtures to GM CEO Mary Barra that were blatantly insulting and woefully misguided; and there was the constant whining and bleating that the rest of the industry was just ill-equipped to deal with the realities of this business. He was, of course, but everyone else wasn’t. No, Sergio didn’t endear himself to anyone, and when he went around looking for partners to save his enterprise, his hubris wouldn’t allow him to believe that no one wanted to do business with him on his terms. He was genuinely mystified that they could be that shortsighted.
Was Chrysler better off with Sergio than without? No question. But Sergio pointedly swept the True Believers in Auburn Hills under the rug, taking credit for their hard work and creativity at every turn. In fact, it is the True Believers at Chrysler who actually saved the company. Their product ingenuity and savvy propelled the company forward, while Sergio and his posse pissed off suppliers with their calculated demands for lowball bids, and then once they got them insisting that the suppliers “do it for half of that.”
Make no mistake, Marchionne & Co. did not endear themselves to anyone in the trenches with the real nitty-gritty dealings of this business. Again, if it weren’t for the True Believers out in Auburn Hills, none of this latest Chrysler “miracle” wouldn’t have gotten off the ground, something that some of the homers in the automotive media don’t even bother mentioning.
I was also interested to read the glowing comments from certain dealers over the weekend, who insisted that without Sergio they’d be out of business. That may be true, but what about the dealers who bought into Sergio’s promises of world domination, but first they had to spend money on new brick and mortar for Fiat stores? And if they did that, they would be first in line to get a glittering array of Alfa Romeo products, the brand that would be “the next Audi.” I noticed that none of those dealers were asked for quotes, because there were countless numbers of them that lost their shirts because of Sergio’s calculated carnival barking.
And what about the constant shenanigans that FCA pulled with their sales reporting? Marchionne was so hell-bent on showing an uninterrupted monthly sales increase that the company misreported sales figures for six years, all the way back to 2011. It was another reminder of Marchionne’s almost unlimited hubris, that if he said it enough and pounded the table enough, the automotive media would believe it and dutifully spread the word accordingly. And he was right, until FCA got caught, and then Marchionne was strangely silent.
I have just barely touched upon all of Marchionne’s misdeeds at the helm of Chrysler. He was an absolute tyrant behind the scenes and easily in the Hall of Fame for Horrible Bosses. His egomaniacal insistence that only he knew what was best and only he knew what needed to be done lead to a withering 30+ direct reports, taking micromanaging to unheard of heights.
Oh well, enough. I only wish the serial offenders in the automotive media would have deigned to expose “the other Sergio” because there are at least two of him. And the less appealing one is petty, belligerent, egomaniacal and forever ungrateful.
As for Mike Manley, he was the logical successor to succeed Sergio. He was responsible for the upward trajectory of Jeep, and he knows the company inside and out. I will have more to say about Manley in future columns.
But today is about Sergio Marchionne. The likelihood that we will see another CEO like him is slim and none. Overlooking his Dark Side for a moment, he was the most colorful, shoot-from-the-lip leader this industry has seen in a long time. And even though I was his most consistent critic by far, I appreciated his passion, vision and enduring optimism. CEOs who tell it like it is, or how they think it is, are a lost and unique art. And there’s no question that Sergio Marchionne was artfully unique.
I wish Sergio and his family all the best in this most difficult time.
And that’s the High-Octane Truth for this week.
PMD UNPLUGGED, PART III.
18 Jul 2018 at 8:17am
By Peter M. DeLorenzo
Detroit. Editor’s Note: Peter churns out column after column, week after week, and produces a body of work every year that is simply staggering when you really think about it. But every once in a while, I feel it’s a good idea to find out what’s really on Peter’s mind. Not in column form, but through a series of rapid-fire, real-time questions. So, I conducted another email interview for a frenzied hour on Wednesday morning (7/18, 6:00 a.m.), and ready or not, here he is, PMD, in all of his unpluggedness. –WG
What’s your latest take on Elon Musk?
I have not changed my thoughts on “St. Elon” one bit. Smart? Certainly. A visionary? That too. But is he able to execute on his vision when it comes to automobile making? No. I said the Model 3 would be Musk’s Waterloo and I stand by my assessment. There’s an excellent reason why the major automakers are experts at mass production. And there are myriad reasons why Musk & Co. aren’t. His runaway ego won’t allow him to listen or believe that there are other companies out there in the real world that not only know what they’re doing but that they’re able to do it better and much more efficiently than the way Musk approaches things. And Musk absolutely refuses to accept that. Musk has had a good run, but when the major automotive brands start launching serious, all-electric vehicles into the market, Tesla’s fifteen minutes will be up. And rather than lose face – as if he hasn’t already with his latest self-inflicted embarrassments – Musk will sell Tesla and get out of the automobile business altogether, declaring the whole thing too tedious and boring for his brilliance.
Have your thoughts changed about the headlong rush to autonomous vehicles and the insistence by these auto companies – especially GM – and suppliers that they’re poised to make boatloads of cash in The New Mobility Economy?
In a word, no. And I remain beyond skeptical. First of all, the efficacy of the technology is suspect, because it’s fraught with fundamental issues and recurring problems. Anyone who thinks that a magic switch will be flipped and that we’ll all be suddenly awash in autonomous cars careening around faithfully doing what they’re supposed to do is simply wishful thinking. As for the companies lining up to be a part of The New Mobility Economy by cranking out cars for the masses to be squired around town in, on paper it all sounds good. The reality will be far less than that.
GM is insistent that they will be in the thick of The New Mobility Economy and that they will win. What do you make of this?
GM has been insistent about a lot of things over the years that haven’t panned out. What’s different about this time? They’re talking a good game, with Mary Barra and Dan "I Am" Ammann getting all puffed up about GM’s bullish future but it all remains to be seen. They are making a calculated shift to this “New Mobility Economy” but what they’re really doing is turning GM into a commodity company. And that may not end well for them.
So, what about the future?
Anyone who thinks that the idea – and the freedom – of personal mobility will give way to a blissful national mobility stupor dominated by robo cars is missing the mark. As I’ve said repeatedly, robo cars will have limited use and applications in urban centers, but beyond that this country is going to be moved by personal vehicles that people acquire of their own volition for decades to come.
And then what?
I do see a “transportation dichotomy” looming. Some manufacturers will completely throw over to building mass-use autonomous cars, while other manufacturers will retain brands – especially luxury brands – for people who want them, because they will remain profitable. I think in the future people will have a “gray” car, meaning an appliance for when they absolutely need one for mundane duty, but they will also continue to seek out real cars that they actually desire to own. The car companies that squander the legacy of their brands will simply disappear into the fog. Take GM for instance. I can see GM management’s judgment being clouded on the bet that obscene profits will come their way through the promised ride-sharing explosion. But that is a recipe for disaster. The smarter automobile companies will identify brands that they absolutely will not relinquish, and then they will continue to nourish them well into the future. I still have zero confidence that Barra and Ammann understand that.
And what about electric vehicles?
They’re coming hard and fast. And once the big players start cranking them out we’re going to see 25-30 percent market penetration in no time. But the fact that this country doesn’t have a cohesive plan for a national charging network is a travesty and simply inexcusable, and that is going to pose a huge problem. And let’s not forget that actually selling all-electric vehicles isn’t going to be a slam dunk for these automakers either. It’s going to take considerable marketing might to establish these vehicles as part of the national consumer consideration. I remain firmly convinced that in the long-term, hydrogen fuel-cell-powered electric vehicles will be the ultimate winning technology.
It has been a while since their debut, so what do you think of the monthly vehicle subscriptions now?
At first, I thought it was an interesting way of retaining brand loyalty. But when you really study the prices and realize that they’re completely out of whack for all but the most cash-flow rich consumers, I think the concept is a glorified fool’s errand. People who talk themselves into believing that these monthly subscriptions make financial sense are simply delusional, because when you factor in the real costs they’re anywhere from 30 – 50 percent higher than even the fattest leases. Monthly vehicle subscriptions will be a niche of a niche in the overall market, and that’s all they’ll ever be.
You’ve continued your relentless series of columns about The Future of Racing in “Fumes.” What are your latest thoughts on the subject?
I am the most pessimistic about racing as I have ever been. Racing is in deep, deep trouble. With the manufacturers chasing their tails on myriad mobility options, racing will continue to be pushed down the list of priorities. As I’ve gone on record repeatedly, the danger that all racing will become “vintage” racing is very real, as the disconnect between what’s going on in our street vehicles and cars used in competition grows wider by the day. The only hope in all of this is that certain manufacturers will understand that there will be money to be made with high-performance cars and parts for decades to come, and the manufacturers who want to continue to play in the personal high-performance vehicle market will want to be there.
What about the two very disparate racing series, Formula E and NASCAR?
My thoughts on Formula E are expanded in this week’s “Fumes,” and though I was optimistic about the formula at first, the reality of the slot car sounds and the uninvolving nature of those machines leaves me cold. Formula E is missing one crucial component that is an absolutely essential part of racing, and that is passion. The Formula E cars are soulless conveyances completely devoid of passion. Once you get past the novelty of the whole thing, the reality of what it actually is sets in almost immediately, and it's not compelling in the least. And that isn't going to change next year, even when the cars will be able to complete the race distance on a single charge. The consistent allure of racing since Day One has been the visceral appeal of the sound and the fury. The woefully benign sound signature of a Formula E machine has all the audio appeal of a slot car, as in Not Good.
As for NASCAR I have nothing good to say about it. It’s a nostalgia racing play and its appeal is fading faster than even I thought it would. The declining spiral of NASCAR’s popularity is actually accelerating, yet the powers that be in Daytona Beach steadfastly refuse to do anything about it, and NASCAR’s chief enablers – the participating manufacturers (GM, Ford and Toyota) – continue to be dupes of Brian France and his inept posse. NASCAR management’s relentless intransigence, combined with the litany of repeated mistakes, is killing that form of motorsport. It’s up to the participating manufacturers to extract meaningful changes from NASCAR, and that means – at the very minimum – a 25 percent reduction in that death march of a schedule, for starters. The next television contract will be a sobering two-by-four to the forehead of the NASCAR brain trust, because it could be as much a 70 percent less than the current overinflated contract. Maybe that’s why the France family is eagerly shopping the declining racing entity in hopes of cashing out. Too bad they’re about ten years too late, as in everything else they do.
What are your thoughts on the overall health of the market?
Unlike some other media outlets who insist everything is fine, we’re clearly at the end of the longest “up” cycle in recent memory. Transaction prices are going to go up – stumblebum tariffs, or not – because the manufacturers are going to be squeezed, which means incentives will be reduced. (Okay, maybe not in the pickup truck wars, but everywhere else.) Some analysts are insistent that there’s no reason that this current torrid pace in the market can’t continue. But it can’t, and it won’t. It’s just a question of how big the pullback is going to be. And any manufacturer that says it is prepared for whatever transpires in the future is kidding themselves, because they’re not prepared for what they can’t see, and what they don’t know.
On a final note, the winds of change blowing through this industry are ominous and cold. Seasoned, intelligent executives have convinced themselves that they’re on the cusp of a glittering, limitless future that will bury the traditional auto company model within the decade. Some of these executives are going to find out the hard way that their exuberant prognostications are not going to pan out. And because of that, some of the big-name auto companies that have become part of the American fabric will simply disappear.
As Bob succinctly said, A Hard Rain’s A-Gonna Fall.
And that’s the High-Octane Truth for this week.
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