I just returned from a media introduction for the Ram 4500 and 550 Chassis Cabs (“in showrooms now”) with an assortment of magazines, many of which included an article I’d contributed. And when I opened one and read about the new GM two-mode hybrid SUV, I started thinking about missed opportunities.
Of course I’d been thinking about at least one missed opportunity all the way from the Ram 45/55 event: more GCWR. TDR members know I’m not anti-Dodge, and when I feel the need to point out something that could be better I am usually not alone, have the objective numbers to back it up, or both, but part of me thinks Dodge may have missed an opportunity with the Ram 4500/5500 by not increasing GCWR over the pickups more than they did.
True, GVWR is up to 16,500 and 19,500 pounds, respectively, these values almost dictated by the class. But Gross Combined is up by “only” 2500 pounds over a big Ram pickup, to 26,000 pounds, and since these “medium-duty heavy-dutys” appear hefty, real towing capacity doesn’t seem much improved over the biggest Ram pickups.
Many Ram commercial buyers will find the tow rating more than adequate for their welding rig, cow tipper, generator or whatever, yet I know more than a few TDR members that need something more in tow capacity. And I think with Ford and GM both offering GCWR in the 30-33K range for their Class 5s, Dodge had better be working on the brakes, cooling, rear ends, gearboxes, or whatever else is a limiting factor in that 26,000 value.
On the other front I’ve heard that GM will eat some of the cost of the hybrid system on their full-size SUVs, but the story I saw today mentions some of the ways they “reduced mass” in these SUVs. These included aluminum hood, tailgate, bumper beams, driveshafts, and wheels, plus taking “almost 10 pounds” out of each seat.
I’d like to know how much more the aluminum bits cost relative the standard steel parts and standard aluminum wheels. And, why didn’t they do all this in the first place? If you can engineer 10 pounds out of each seat without sacrificing anything, surely the manufacturing costs couldn’t be more than what you spent on engineering seats for a new vehicle and then reengineering the same seats a year or two later.
Do you think all that weight saving on a Tahoe/Yukon hybrid should be standard on every Tahoe, and do you think the Ram 4500/5500 needs a boost in GCWR?
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I just read that the average American driver wastes nearly an entire work week each year sitting in traffic while commuting. Collectively, we sat in traffic jams for a total of 4.2 billion hours in 2005, up from 4 billion the year before according to Texas Traffic Institute's urban mobility report. That works out to an average of around 38 hours per driver.
TTI’s study (http://mobility.tamu.edu) estimated that we wasted 2.9 billion gallons of fuel while stuck in that traffic. Adding up the lost time, traffic delays cost the nation $78.2 billion, the study also estimated. I’m sure that doesn’t include the missed meetings, missed flights and missed business opportunities, nor the stress and road rage it caused.
High fuel costs seem to have cut non-essential driving, but not commuting. According to census data about three-quarters of all commuters drive alone. Los Angeles had the worst congestion, delaying drivers an average of 72 hours last year, followed by Atlanta, San Francisco, Washington D.C. and Dallas. Atlanta, which has the second-worst traffic in the U.S., had some surprising improvement. In 2005, drivers there wasted an average of 60 hours in traffic, down from 70 hours a decade prior. However, the population is growing so fast that planners are having a tough time dealing with the increase in traffic. Atlanta gained 890,000 people from 2000 to 2006, more than any other area in the country.
The study, which summed it up as "Too many people, too many trips over too short of a time period on a system that is too small," offers ways to reduce traffic congestion, including more roads or lanes, better public transportation and flexible work schedules, telecommuting and carpools. It seems like the way things are going, there’s going to be coast-to-coast gridlock.
What do you think needs to happen, and how can it be reasonably achieved?
Lacking the business acumen of big-buck bankers I never saw it coming: Cerberus announced August 5 that Robert Nardelli would be the CEO of the newly solo Chrysler Corporation. And I’m not the only one. Analyst John Casesa of Casesa Shapiro wrote in Automotive News (8/6/07) a piece titled, “Look for a hard-nosed Chrysler board” and referenced “the presumed chairman, former Chrysler COO Wolfgang Bernhard.” Yes, John Casesa was wrong too.
Bernhard, who’s been bounced around the top ranks of some sizable automakers the last few years, clearly has that “hard-nosed” air. Dodge is an –in-your-face car company and Bernhard’s an in-your-face kind of guy. What other car exec would ride into a major auto show on a Viper-powered motorcycle?
Nardelli comes most recently from nuts-and-bolts…CEO of the Home Depot. I consider Home Depot a retailer. In the car biz retailer has another name: Dealer. Chrysler needs to come up with the good product--cars like the 300, PT Cruiser and the Jeep JT “concept” –for the dealers to sell. Can Nardelli do that?
At Home Depot Nardelli doubled revenue in six years, much of it by opening more stores. More stores is something Chrysler doesn’t need. Home Depot didn’t have $19 billion in pension/retirement costs nor as many competitors either.
But Nardelli, who gets a rumored salary of a buck a year, wasn’t liked by Home Depot shareholders. Money books put last year’s earnings at $38 million and he would not answer questions at a May 2006 meeting. He was gone in January 2007 with a severance package that was a little over 210 million dollars and the stock price was no higher than when he started. In the words of an acquaintance, “the guy’s a crook. Anybody who takes that much away on essentially no investor return is a crook.”
So depending on your point of view, Chrysler has a crook or a savior running it. After last year’s loss of 680 million, give or take, the investors probably won’t give Nardelli more than a year to fix it. And the car biz runs considerably more lead time than new bricks and pipe.
Most recent Chrysler CEO Tom LaSorda is bumped to President and Vice Chairman but playing nice; hopefully his “turnaround” plan to make Chrysler profitable again in 2008 will work and he’ll get credit. Chrysler COO Eric Ridenour is leaving, no reason given.
Nardelli was quoted on a finance web page as “excited to be part of a team focused on re-establishing Chrysler as a standalone industry leader, with a renewed focus on meeting the needs of the customer.” Since customer satisfaction went through the floor while he was cutting costs at Home Depot I’m not holding my breath.
But if he and LaSorda can get Bernhard back as the head product guy (like GM’s Bob Lutz, just younger) they have a chance.
On August 3 Chrysler’s sale to Cerberus Capital Management was consummated. Cerebrus paid about $7.4 billion for 80 percent of the company, ending a rocky nine-year “marriage of equals” with the former Daimler-Benz company, which had paid $33 billion for the privilege. The last time Chrysler made a profit was in 2005, when it made $1.8 billion. A dismal 2006 with a loss of $618 million led to its eventual sale.
Chrysler announced that it will return to using its traditional pentastar logo and is replacing signage. The sale also makes Chrysler the first U.S. auto manufacturer held privately since 1956, when Ford went public.
The next shoe to drop was the hiring of Robert (Bob) Nardelli, who has been named chairman of the New Chrysler Group. Nardelli left Home Depot back in January under pressure from stockholders. He was averaging $25.7 million per year compensation and received an amazing $210 million severance package. According to early unconfirmed reports, Nardelli took the new job at Chrysler for $1 per year, with any additional income based on financial improvements.
As a Detriot outsider, union leaders are nervous about Nardelli, who is said to have demonstrated an aggressive, headstrong, arrogant style in the past that has alienated both union and white-collar employees. Some rumors have Chrysler Vice-chairman and President Tom LaSorda, who now is number two under Nardelli, quitting Chrysler as a result. However, LaSorda’s public statements don’t show this. LaSorda has a strong automotive background and seems to do well with the unions. Union cooperation is essential to Chrysler’s success, so this is an important piece of the puzzle.
Both Nardelli and LaSorda seem to agree on the major goals for saving Chrysler: Cutting excess production capacity, raising product quality and expanding in international markets. Chrysler is saddled with about $18 billion in retiree costs, so they still have to cut costs and maximize profits.
We hope everybody can get along and get on with this immense task at hand.
At a minimum Jay Leno would not have immediately alienated a majority of the customers, dealers, and employeees.
Or am I misguided? Nardelli supporters, speak up. You have a forum to do so at the end of this editorial.
Back to "am I misguided?" As I searched for editorial and talked to others in the business, I was directed to the following website, and this rant by Peter DeLorenzo.
I was looking for an insiders view, and I found it. DeLorenzo minces no words in his assessment of the New Chrysler.
Looks like we've got five years.
You know, Jay Leno is not such a bad idea. He's a great public figure with a spotless reputation. He is funny, and most importantly, he is a car guy. The American public would eat it up. Bring Roger Penske in to do the behind-the-scenes work. As one who was in the trucks at Cummins when Penske took over Detroit Diesel, it was amazing to watch him bring back a company that was down to only 5% of the Class 8 truck engine marketplace.
Leno and Penske . . . what do you think? My idea is nowhere near as absurd as Bob Nardelli.
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