An Argument Against Bailing Out Car Companies

Fiat Chrysler Automobiles.

That's it, and that's all.  Considering the money the Obama administration spent to save what was left of Chrysler and helping Fiat buy it out and return to the U.S. market, we were probably better off spending that money on high-speed rail.  

When Fiat took over Chrysler's assets in 2009, it seemed like a dream come true for American enthusiasts of European cars - Alfa Romeo would finally make it back ti the States, the once-popular Fiat brand (it really was popular in the U.S. - back in the mid-seventies, the 128 sedan sold like hotcakes, and someone on my block owned one!) would be reborn in America, and the Dodge and Chrysler brands would be restored to their former glory.  Jeep, meanwhile, would retain its glory.     

Yeah, right.

The new car models put out by the Dodge and Chrysler brands - sold alongside Jeep and Ram (formerly Dodge) trucks in a four-brand dealer network devised by Fiat boss Sergio Marchionne  - got lost in the the U.S. market, maybe because they were overshadowed by all those Cherokees, Compasses and Ram pickups in the same showrooms.  Not to mention by Dodge-branded and Chrysler-branded SUVs as well.  As SUV and light-truck sales have soared, Fiat Chrysler has reduced the passenger-car lineups of the Dodge and Chrysler brands to almost nothing; the 200 sedan (above) is in its last year, having ceased production in December 2016.  The re-imagined Dodge Dart - meant to restore the brand's performance reputation - proved to be little too exotic and too Italian for American car buyers, as its independent multi-link suspension and its sophisticated engines.  Thus, the Dart is also going out of production.  There's a weird irony to this; after all the pseudo-Italian compacts Lee Iaccoca thrust on the American public in the 1980s, including the infamous Chrysler-Maserati TC (which combined Maserati's expertise in inexpensive cars with Chrysler's European-style engineering - yes, that was a joke!), Dodge gives us a car based on Alfa Romeo's Giuletta and it did no better than Iaccoca's decal-engineered insults, like the 1981 Dodge DeTomaso (below), based on - HORRORS! -the Omni.

So the Dodge and Chrysler brands are down to one or two sedans and a sport coupe between them, with minivans and SUVs filling the void.  Fiat, meanwhile, remains a specialty brand in the States, offering little more than the 500 retro car and some really silly crossover offshoots of the retro 500 itself.  Its most interesting model - the 124 Spider - is a cousin of the Mazda Miata.  

Fiat-Chrysler quality remains abysmal, reminding consumers of the all the crappy cars of yore that emanated from both companies before their merger (back in the 1970s, Fiat, whose name is the Italian acronym for Italian Automobile Factory of Turin, was said to stand for, "Fix It Again, Tony!").  And after having been fined by the government for not properly fixing automobiles under recall, which I examined in greater detail back in August 2015, it's under investigation again for the same problem Volkswagen is facing - cheating on diesel emissions!

Marchionne, in responding to the federal government's charges that computer software allowed Jeep SUVs and Ram pickups equipped with diesel engines to skirt emissions standards, insists that the software most likely had been misprogrammed by mistake , saying there was no intent to "break the bloody law."  Maybe.  Given Fiat Chrysler's ineptitude with product in the past eight years, that might very well be the case.   But if incompetent engineering is an alibi, it makes you wonder why Fiat Chrysler is still in business.

Gotta love that Alfa Romeo 4C, though.

Back in 1980, when Chrysler faced its first (but hardly its only) fiscal crisis, then-U.S. Senator Gary Hart voted against a federal bailout, saying he saw no reason to try to save a sinking boat.  What remains of Chrysler is going down for not the third but the fourth time (the second and third times being, respectively, the 1992 slump in the aftermath of the Bush 41 recession and the Cerberus purchase of Chrysler assets from Daimler AG in 2007).  I'm beginning to think Hart had the right idea.            

The Penske File

Roger Penske's auto parts company looks to a be a big winner in the shakeup affecting the American automotive industry. Penske's namesake transportation services company, which already sells Daimler's Smart car in the United States, has acquired GM's Saturn brand.

Why is this good? Well, it will keep Saturn dealers in business and save jobs. And, despite the brand's loss of direction in this past decade, it continues to have a good reputation for quality service and no-haggling deals. Penske will continue to sell GM-made cars for a couple of years - sorry, no Astras - and after 2011, the firm will sell cars from other manufacturers.

The sad irony is that Saturn started out as an effort by GM to win buyers back from imports, and it succeeded at first. But as subsequent product became more generic and efforts at carving out a new image for the division failed, the General has had to give up on the venture and concentrate on its more mainstream brands. Penske will have to find another source for Saturn vehicles, and there's no other domestic manufacturing base he can turn to, unless he wants to sell Fiskers or Texas-made DeLoreans. What's left? You got it.

Saturns for the 2012 model year might come from Renault or possibly even from a Chinese company.

Meanwhile. . . . After years of a huge German and Japanese presence in the U.S. automobile market, the pending sale of Chrysler's assets to Fiat of Italy seemed to complete the domination of the American highway by the old members of the Rome-Berlin-Tokyo Axis. Not so fast. Chrysler's stiffed bondholders, whose intransigence put the automaker in bankruptcy in the first place, petitioned the Supreme Court to block the sale approved by a New York bankruptcy judge, and Justice Ruth Bader Ginsburg - who must have had a bad experience with a Dodge - temporarily delayed the sale pending a review by her and her colleagues. If the delay goes on long enough, the Fiat-Chrysler deal could be scuttled and the company liquidated. Fiat CEO Sergio Marchionne, Il Duce, would not be pleased.

And if that happens, how would Marchionne get Fiat back into the U.S. market?

Hmm, maybe he should call Roger Penske . . .