WALTER P., LEE, AND ME?

1/10/11

Phil LeBeau, ace car reporter for CNBC, is being featured throughout this week on the nation’s premier business network because he is covering the North American International Auto Show in Detroit. Loyal readers remember that the Insightful Pontificator had its origins in a number of financial newsletters I once wrote and, given my lifelong fascination with cars and the car industry and my degree of expertise in such matters, one of the major topics of those missives (e.g., The Insightful Weekly Commentary, The Insightful Irregular Commentary, and various pieces I wrote for my various employers in the money business) was the car business. Though things automotive rarely find their way into the Insightful Pontificator, I suspect, but don’t promise, that Mr. LeBeau’s regular reports from Detroit may spawn more posts on cars this week than the one you are reading.

Chrysler seems to be the company on which everyone has their eyes. This baffles me. Those who have read my car commentary have noticed that I have not been overly impressed with the Chrysler product, this despite my having owned a Chrysler (a 2002 PT Cruiser, bright red and loaded with every option available but still with a manual transmission, a rare combination) for a longer period of time (five years) than I have owned any car. I loved that car, and when the car started giving me a few problems and, more importantly, I just got the itch, I was hoping that Chrysler would have put some money into the car rather than letting time pass it by. Unfortunately, that was not the case; Chrysler, as Ford had done with its two generations ago Taurus, just let the car die on the vine, with no updates or upgrades other than the mildly cosmetic. Further, finding a car with a stick and some decent equipment was impossible. So, though a series of convoluted dealings, I ended up replacing the candy apple red PT with the very picture of nondescriptness, a silver Honda Accord, and, no, I did not purchase this car out of a desire to go into the spy or bank robbery businesses. The silver Accord was the only car I could find with a nice level of equipment and a stick…and I got a GREAT deal. I fear, though, that this Accord, for all its anonymity, is such a great car that Chrysler, or any car company other than Honda, may have lost me as a customer forever, but I digress.

As I was saying, I have not been impressed with Chrysler’s product line. On 5/1/09, in my piece “CAN THEY MAKE IT? CAN THEY MAKE IT?”, I wrote:

I think Troy Allen, a third generation owner of a Chrysler-Jeep-Dodge dealer in Derry New Hampshire, put it best when he said, as quoted in the Wall Street Journal, that what the government and Fiat do won’t matter for the next few years when “we have the same product that isn’t selling.”

Mr. Allen is right that the product line isn’t selling. He may not agree with me on the reason, though. Chrysler product isn’t selling, and Chrysler would have failed eventually anyway, because it produces lousy products. It’s as simple as that. One looks at the Chrysler product line and one sees…well, maybe not nothing, but very close to nothing.

On 7/3/10, I wrote in my post “UH OH, SERGIO…”:

But to be impressed by Mr. Marchionne, and to be pulling for Chrysler, is not the same as to be sanguine about Chrysler’s future. As I have pointed out numerous times in the past, the car business is about product, and Chrysler just doesn’t have, for most part, competitive products. As I have also said ad nauseam in the past, there aren’t any bad cars out there any more, but of those that are close, a disproportionate number bear one of the Chrysler nameplates (of which there are too many, by the way). This does not mean that one should not buy a Chrysler if one can get a great deal on one, but companies don’t prosper selling their products exclusively to those seeking great deals.

I was startled, however, by recent editions of the buff books, specifically AutoWeek and Motor Trend, which sung the praises of the new Chrysler under CEO Sergio Marchionne, who also heads Fiat, which today announced that it is increasing its equity interest in Chrysler to 25%. I, of course, was skeptical, and attributed the excitement over the Chrysler product line on the part of the automotive press, which thentofore (not a word, I know, but one that deserves making up) had been as skeptical of Chrysler’s product line as I had been. I attributed this new found enthusiasm to Chrysler’s inviting the automotive journalistic community out to California for a few days of “product sampling” along the Pacific Coast Highway, and told AutoWeek so in a letter to the editor, which probably won’t be published and hence I am making available to you:

12/30/10

Until a few months ago, just about everyone with even a remote interest in cars, including the automotive press, agreed that Chrysler’s product line was nearly laughable, so weak that the company’s survival was questionable at best. But then Chrysler flies you out to the west coast for a quick look at the “new” product and a few drives along 101 and you fill almost your entire 12/6 issue with adulation about the renaissance of the company’s product, citing as evidence a new V-6 and interiors that finally might be up to industry standards and such jejune arguments as “the Chrysler 200 is unexpected competition for a barrel of monkeys” (McCluggage), “You can still see the bones of the old sedans underneath the freshened skin (of the 200) but it’s all so dramatically improved that you won’t believe it by reading it here…” (Wilson), and “The ride (of the Journey) is vaultlike in its silence.” (Paternie).

All this munificent praise for the mere price of a Pacific coast junket? You guys are easy.

Mark Quinn
Naperville, IL

But this morning Mr. LeBeau interviewed Bob Lutz, former product czar at GM, Chrysler president, and just about anything else in the car business. As long time readers know, I have immense respect for Mr. Lutz not only for his acumen in all things automotive but also for his lifetime eschewing of the normal corporate baloney that has so hobbled American business. He speaks his mind even though doing so has hurt him. He is what we used to call a man, and would be so even if he didn’t spend his spare time driving his collection of muscle cars, flying his own MIG fighter jet, and opining on anything that piques his interest, or his ire, despite his being well into his seventies.

Proceeding from this latest digression…

When Mr. LeBeau asked Mr. Lutz what company people should watch, Mr. Lutz replied that, in the popular market segment from an international perspective, Hyundai is the company to watch. Hard not to agree with that. But then Mr. Lutz said that the other company everyone should watch is Chrysler, adding

“It’s a resurgent company and they’re looking to do things right.”

Hmm… Bob Lutz likes Chrysler, the buff books like Chrysler. Maybe I should look into Chrysler more closely, but the supposedly wonderful new product is not yet on the market, with the exception of the new Jeep Grand Cherokee, which is selling well and seems quite nifty but may be the wrong product at the wrong time and, in any case, is incapable of saving Chrysler. So I will have to reserve judgment, maybe hope Chrysler comes up with a new PT, built on a Fiat platform, and perhaps venture another guess concerning Mr. Lutz’s newfound public enthusiasm for Chrysler: Maybe the never retiring Mr. Lutz is looking for a job.