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David Leggett's unique web log on the global automotive industry, key events, people and his own daily experiences. If you would like to offer your comments, opinions, suggest topics or just have a good rant, please feel free to email: David Leggett. |
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April 21 is date for Fiat Auto spin-off verdict
10th March 2010 13:58
Fiat's Sergio Marchionne is dropping lots of hints that there will be news of a possible Fiat Auto spin-off on April 21 when an investors' meeting is scheduled in Turin. There will also be a presentation of a five-year strategic plan then. Five years continuing as now? I doubt that, even if the spin-off isn't exactly imminent. Marchionne has been thinking about a spin-off for a while now and he'll be wanting to set out a future for a consolidated automotive company merged with Chrysler and looking out for still higher scale economies in alliance with others (PSA speculation will obviously continue).
ITALY: Fiat Auto spin-off rumours gain momentum
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Sudden acceleration - the early years
10th March 2010 13:34
The problem of 'unintended acceleration' is indeed a thorny one and the media is like a dog with a bone. It is becoming increasingly difficult to distinguish between a genuine issue and something that is contrived by an over-zealous journalist/publisher/broadcaster or simply an unfortunate incident blown up out of all proportion.
Anyway, we have come across a little ancient history that is interesting - below link. Poor old Audi. The small matter of being innocent of all charges (unless you count having the accelerator and brake pedals 'too close' - not an issue anywhere else) and being the victim of actively misleading media coverage couldn't rescue diving sales on the 5000.
Sudden Acceleration: The Early Years
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Geneva leftovers
8th March 2010 10:12
I have been going through my Geneva notes and there are a few nuggets picked up in interviews that didn't make it into articles that might be worth sharing anyway. So here they are, in no particular order:
- Toyota's Didier Leroy said that in Europe some 200,000 accelerator pedal recalls have been made out of 1.7m cars; also more than 16,000 of the Prius software changes have been made – out of 52,900.
- Lexus is aiming for around 28,000 European sales in 2010 – versus 27,000 last year.
- Bob Lutz pointed out that while General Motors the brand has attracted negative baggage, the brands underneath will often be viewed much more positively by the same people with negative views of GM. 'Hate the parents, don't blame the kids' was the phrase he used.
- I asked Lutz about the chances of a GM IPO this year. 'It will be done at the appropriate time' was his straight bat response.
- Should GM have kept Saab? Is there a danger that it will now be successful and GM will have sold something that it should have held on to? Lutz pointed out that GM was under strict instructions from the Obama task force to halve the number of brands and had little alternative but to divest loss-making Saab.
- Lutz said that the US market has changed in the sense that the formerly 'impregnable membrane' that appeared to divide the market into import and domestic brands has opened up with owners of cars in both categories now prepared to consider cars in the other category in a way that was not the case a few years ago.
- Nick Reilly thinks that alliances have more mileage in them.
- Allan Rushforth - who has worked in other OEMs - enjoys the speed and autonomy for Hyundai in Europe. 'It's not a culture based on endless committee meetings – we just get stuff done.' He also sees only a 'marginal business case' for hybrids in Europe, acknowledging the marketing benefit for companies with hybrids right now but questioning whether that advantage will be as strong in 18 months' time when there are many more hybrids around. He noted that there is still a lot to be done with clean diesel and improved performance of gasoline engines.
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Good wishes to Bob Lutz
4th March 2010 9:44
Whatever you make of GM's Bob Lutz, there are surely few who would begrudge him good wishes for his retirement. I saw him a couple of days ago in Geneva when he gave an interview to journalists and he was on his usual good form, as enthusiastic as ever at delivering his views on the industry.
There were some who portrayed him as a kind of relic from the past with old-fashioned attitudes. That is way too simplistic and, in fact, Lutz has always been a difficult guy to stereotype. A small example. In Geneva this week he mocked the 'right-wing radio talk show hosts' in the US for the way they portray the 'nationalisation' of General Motors. He pointed out that it was a free market Republican – Harry Wilson – who persuaded Democrats that the equity solution was preferable to loading GM with more debt to service. 'And now the poor Obama administration gets blamed for a left-wing socialist takeover of GM when in fact that solution was proposed by a free market Republican,' he said.
Is Lutz fond of RWD muscle cars? Do bears tend to defecate in the woods? Yes, bears do, but they will also go anywhere to answer the call of nature. Lutz is also the guy who has enthusiastically championed the Volt and understands that the auto business is rapidly changing.
One thing about Lutz is you always have the feeling he will say what he thinks and not slavishly follow the company line. I think he probably revelled in that image as the maverick, but he did seem to say things in a way that suggested his words were not exactly crafted by a PR person. I guess the 'global warming is a crock of shit' remark was a striking example of that. A stupid thing to say, or wonderfully provocative, brutally honest? Or all of the above? Discuss.
But he was not some kind of 'always shoot from the hip for maximum effect' idiot; far from it. He had a good grasp of the numbers and the big strategic picture. He also understood collective responsibility and I'd wager his colleagues would have liked having him on the board, bringing his considerable experience to the table. Have there been disagreements? I'd guess so, but Lutz doesn't seem the type to undermine people through media manipulation. Perhaps he is more team player than the maverick reputation suggests.
On a simple human level, you had to respect the guy's experience and history, his enthusiasm for the auto business and its products. Hard to believe Lutz is 78. I like the idea of him enjoying a good few years on his motorcycles/cars/airplanes, perhaps occasionally raising his head above the parapet to express some pithy and forthright views.
US: GM's Bob Lutz to retire (again)
GENEVA SHOW: Fuel prices key to small cars in US – Lutz
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Geneva press day
1st March 2010 19:13
I have been looking at my schedule for the first press day at the Geneva Show tomorrow (March 2). There are a number of formal interviews that have been arranged in advance. I'm seeing Didier Leroy of Toyota at 10:15am, Bob Lutz on the Chevrolet stand at 11:00am and Nick Reilly CEO of Opel/Vauxhall at 2:00pm. At 4:00pm there's Allan Rushforth at Hyundai. In between, there's a list of people who said 'let's meet up in Geneva', a few more stands to call in on and, lest we forget, some new automotive metal to have a good gander at.
It certainly won't be dull.
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Lotus proActive
1st March 2010 14:37
The latest Lotus proActive e-magazine is out and available for perusal. It includes the first half of an interview I did with Richard Parry-Jones, as well as some informative articles on emissions rules and two-stroke engines. The latter article poses the intriguing question: could upsizing be the new downsizing? And the interview with RP-J reveals who it was who inspired his '50-metre test'...
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Going, going, going...
26th February 2010 15:02
GM did this before. Saab was being wound-down after a planned sale had fallen apart, but it was made clear that new offers would get a hearing. So, step right up ladies and gentlemen. Hummer, creator of life-size Tonka Toys, is being wound-down but is also back in the shop window. Is it a duffer? Well, it doesn't exactly capture the spirit of the age perhaps, but we're talking niche here. Are there enough people in the globe who would buy a Hummer? Maybe. They were going mad for them in Russia a few years ago, too. If you can get the production economics right, it could be a brand that is less bonkers than it at first appears.
US/CHINA: GM approaches previous Hummer bidders
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JLR in the black
26th February 2010 13:56
Things seem to have turned up a bit lately over at Jaguar Land Rover. Sales have sparked into life for both brands – albeit off a low base when compared to early '09 – and Tata Motors has announced that JLR was in profit in the fiscal quarter ended Dec 31. That's not bad going when you consider how the recession seemed to be hammering both brands in the early part of last year. The contribution of cost-cutting is an interesting one. Clearly it has made a difference already and suggests that the JLR cost base isn't quite as ripe for radical surgery as some had feared (and taking a plant out after 2014 suggests further efficiency gains ahead). But the key thing, of course, will be maintaining progress in the coming quarters.
INDIA: Tata says JLR has turned profitable
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Keeping warm in an EV
22nd February 2010 18:28
There are some interesting observations in our forum area on the problem of heaters in EVs draining battery juice. Trading off cabin warmth for vehicle range might not be a fun choice if you live in a part of the world subject to occasional cold weather (and I guess the converse applies in hot/humid places where you might want the AC switched on more or less constantly).
Human ingenuity being what it is, solutions are being found that don't necessarily include long johns and woolly hats...
Diesel powered heaters for EVs
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If you can keep your head...
22nd February 2010 18:16
Learning new things is one of life's little joys. If you had asked me at the beginning of last week what a 'double McTwist 1260' was, I'd have probably guessed it was something to do with a well known fast food chain. It is not. It is the name for a snowboarding manoeuvre that involves quite a bit of twisting and flipping. I am not all that into winter sports, but the guy who pulled that one off in Vancouver last week had my undivided attention and considerable admiration (he already had the gold and didn't even have to do it). As, indeed, did some of the other competitors in other events.
I guess the thing is, whether you are a winter sports fan or not, the competition for Olympic medals is about human endeavour and competition on an epic scale. People train for years and then push themselves to the absolute limit. The guys who failed spectacularly in the two-man bob also got my attention last week. It had all gone horribly wrong for them but, again, I guess we can empathise on a certain level.
We have all failed at something at some time or another and we have hopefully learned something from that experience. Saying sorry and working hard to correct something that has gone wrong occasionally goes with this territory.
Dealing with Kipling's 'two imposters' of triumph and disaster is a part of life, whoever you are and whatever business you are in. And sometimes it's how you deal with the bad stuff that is particularly important; how you cope in a crisis can be more revealing about character than how you milk the plaudits in the good times.
Toyota president Akio Toyoda - new to the job last year - has had a pretty tough time of late and I would assume that his decision-making is governed by what he believes is in the best interests of his company and its customers. And of course, he is no doubt in receipt of plenty of good advice and wise counsel from his close associates.
He also needs to bear in mind how things are perceived and how the media interprets things. Sometimes the media is unfair in the way it treats things and we have seen plenty of evidence of that here in the UK since the 'Toyota recalls' story first broke last month. The media - in the broadest sense - is on the case and some of the nuances of what a recall actually is, quality versus safety concerns and so on, have been a little lost at times - especially in the non-specialist media.
To some degree, it is a no-win situation for Toyota. The bad PR is already out there and the priority is to limit damage and repair confidence (among customers, dealers, suppliers, employees) as soon as possible. Storms do eventually move off. Dire situations become less dire if you do the right things. Do Mercedes-Benz customers today worry about the firm's serious quality troubles of a few years ago? No. It was very effectively dealt with.
If there was ever a time for effective and decisive leadership at Toyota it is now. And anything that can be interpreted as prevarication or indecision - however unfair that interpretation may in fact be - is certainly not going to be helping.
US: Toyota confirms recall document subpoenas as president flies in
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