Payday Loans

By 2g1c2 girls 1 cup

The proposed alliance between Chrysler and Fiat is full of controversy.  First, there was the outrage that Fiat would get 35% of Chrysler for no cash or other assets.  Then the gods of the Potomac decided that they couldn’t let a foreign automaker take control of Chrysler after Chrysler took the loans from the US taxpayers.  Fiat would get “control” by exercising its right under the agreement to claim an additional 20% of Chrysler (total would then be 55% for you math whizzes).  Never mind that that’s exactly what needs to happen for Chrysler to be “viable” – the main requirement of the loans.  Why let actual facts get in the way of good political theater?  As automotive mergers go, this one is a great match, as I have already written.

Ford Ka

Ford Ka

Today’s lesson is on the global auto industry and its many intertwined relationships.  Virtually all automakers are related to many others, sometimes in ways that you might not have guessed.  What if I told you that a potential beneficiary of the Chrysler-Fiat deal is none other than Chrysler’s Dearborn friend – Ford Motor Company?  Ford has made public its plan to begin producing some of its European small cars here in North America.  Production of the Expedition and Navigator SUVs has moved to Kentucky to make room for small car production at its Wayne, Michigan facility.  Fiesta for North American customers will be produced at Ford’s Cuautitlán Assembly Plant beginning in early 2010.  But there is one European car that Ford might like to sell here, but the volume would never support it – the Ka, Ford’s mini-compact entry in Europe.  Ka is very popular in Europe, but has always been considered too small for US tastes.  At the introduction of the new Ka in Paris last October (while gas prices were still high), Ford CEO Alan Mulally said, “I think the Ka could work in the US – the question is the volume.”  The new Ka, by the way, is based on the Fiat 500 and is built alongside the 500 in Fiat’s plant in Poland.

Now along comes the Chrysler-Fiat alliance.  From the beginning, what Fiat expected to get out of the deal is access to Chrysler’s excess assembly capacity and dealer network.  The 500 is expected to be one of the

Fiat 500

Fiat 500

products that they would sell here.  If the alliance goes through, and Fiat does produce the 500 for North American sales, it would be relatively simple to add production of the Ka as well.  Fiat would have a better business case for the 500 and Ford would be able to add the Ka to its North American lineup with minimal investment.  Ford would also not need to push more than the customers want to buy (read: add rebates).  They could (“gasp”) produce the amount actually demanded by customers!

Chrysler certainly had no intention of helping Ford with their proposed alliance with Fiat, but that’s the nature of the modern global auto industry.

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Bob Lutz Retires – sort of

11th February 2009

Bob Lutz

Bob Lutz

This week, General Motors announced that Vice Chairman – Global Product Development “Maximum” Bob Lutz will retire at the end of the year.  Effective April 1, Lutz will move to a “Senior Adviser” position in which he “will provide strategic input into GM’s global design and key product initiatives.” This means that he will be doing the same thing he is now, but without the formal title.  Although it’s an overused cliche, this truly marks the end of an era.  Lutz has been a towering figure in the industry for decades, and there may not be any like him again.

Lutz began his automotive career in September 1963 at GM, where he held a variety of senior positions in Europe until December 1971. For the next three years, he served as executive vice president of sales at BMW in Munich and as a member of that company’s board of management.  He then spent 12 years at Ford Motor Company, where his last position was executive vice president of truck operations. He also served as chairman of Ford of Europe and as executive vice president of Ford’s international operations. From 1982 to 1986, Lutz was a member of Ford’s board.

He then spent 12 years at Chrysler, where he led all of Chrysler’s automotive activities, including sales, marketing, product development, manufacturing, and procurement and supply. He began his service with Chrysler in 1986 as executive vice president and was shortly thereafter elected to the Chrysler Corporation board. Lutz also served as president and chief operating officer, responsible for Chrysler’s car and truck operations worldwide.  His 12 years with the company are chronicled in his 1998 book, Guts: The Seven Laws of Business That Made Chrysler the World’s Hottest Car Company. Guts was revised and updated in 2003 and retitled, Guts: 8 Laws of Business from One of the Most Innovative Business Leaders of our Time. He left Chrysler when they “merged” with Daimler-Benz in 1998.

After a stint at Exide Technologies, Lutz was named General Motors vice chairman of product development on September 1, 2001. On November 13, 2001, he was named chairman of GM North America and served in that capacity until April 4, 2005, when he assumed responsibility for Global Product Development. He also served as president of GM Europe on an interim basis from March to June 2004.

Lutz is known as a true “car guy”, but that title seems to imply that he doesn’t know about the running of the business.  That couldn’t be further from the truth.  As the above bio suggests, Bob knows all aspects of the business – functionally and geographically.  He, along with Lee Iacocca, presided over Chrysler when they were the most innovative and successful automaker in the world.  He has brought back GM’s design and engineering from the brink, and GM once again makes some of the best products you can buy.  Many don’t know it yet, or refuse to believe it, but customer perception very often lags reality.  The reality is that GM’s product lineup can stand with anybody’s, and GM owes that to Robert Lutz.

Bob was always a favorite of the press because he was so…quotable.  My favorite is, “Global warming is a crock of sh%^&*it.”  There are so many others.  If you have a favorite, click on Comment below and share it with the rest of us.


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