Car Guy

Lee Iaccoca, who died this past week at the age of 94, will be remembered as a majestic but flawed automotive genius.  Trained as an engineer, he made his name as a salesman. And one trait balances out the other, given the complex career he had as the president of the Ford Motor Company and the chairman of the Chrysler Corporation.

Iaccoca rose to fame in the sixties when he sought to create a product for Ford's namesake brand that would capture the youth market, and he and Ford product planner Hal Sperlich devised a low-slung, sporty coupe that would be based on the humble Ford Falcon sedan.  That car became the Mustang, and it would soon evolve from a fashion statement into a serious sporting machine, begetting numerous high-performance variations like the Shelby models, the Mustang GT, and the turbo-four-powered Mustang SVO (my favorite), many developed long after Iaccoca left Ford.  The Mustang (the first-generation model shown below with Iaccoca) is now the last passenger car in Ford's North American lineup.  

When he moved to Chrysler, just as the company was dealing with bankruptcy, he went to Washington for a government bailout of $1.5 billion in loan guarantees and caused great skepticism from legislators (including Gary Hart, then representing Colorado in the Senate) who didn't want to sink money in a failing enterprise.  Iaccoca got the loans.  Then he helped bring the compact K-cars - sold as the Dodge Aries and, below, the Plymouth Reliant, then later as the second-generation Chrysler LeBaron - to market, and their basic engineering, ample passenger room, and front-wheel-drive layout made them huge successes and ushered in an era of front-wheel-drive cars that would persist well into the twenty-first century.  On the strength of that success, Chrysler paid back its loans in 1983 - seven years in advance.

Incredibly, small front-wheel-drive sedans were an idea Iaccoca brought to Ford chairman Henry Ford II, who said no to the idea, and Ford nixed another idea suggested by Hal Sperlich - a compact "people mover" car, in the shape of a delivery van, that could fit into a garage.  At Chrysler, where Sperlich was already working when Iaccoca arrived, both men gave the "people mover" project top priority . . . and the modern minivan was born.  Although Dutch auto dealer Ben Pon is regarded as the father of the minivan for suggesting to Volkswagen in the late forties that a van could be built on the Beetle's chassis, it was Chrysler under Iaccoca that made the minivan a mainstream passenger vehicle rather than the funky hipster wagon that the Volkswagen Microbus was.  Below is the Dodge Caravan from its first model year, 1984.

However, Iaccoca also had his blind spots.  Though he rightly gets credit for coming out with the right products at the right time, he staked his reputation on some rather crummy cars as well.  The most notorious example is the Ford Pinto, which became infamous for its gas tank being placed so dangerously close to the rear bumper that a rear-end collision could cause it to explode.  I always wonder why, if Iaccoca felt that a subcompact Ford was necessary for the U.S. market in 1971, he simply didn't have the early-seventies European Escort (not to be confused with the American Ford Escort of the 1980s or 1990s) made here.   

Also, Chrysler's main product under Iaccoca was obviously pedestrian, as the K-cars and the K-car-based minivans were meant to be basic transportation for Middle America.  There's nothing wrong with that.  What was wrong was when Chrysler tried to build different models for different and more exotic market segments.  Iaccoca, recognizing the versatility of the K platform, chose to develop all future models on the same mechanicals that supported a Plymouth Reliant or a Dodge Caravan.  This led to some cars that were automotive poseurs, like the Dodge Daytona sports car, shown below in Turbo Z trim.

Looks pretty slick, huh? Well, appearances can be deceiving.  It's based on the same bland Aries sedan that populated the driveways of America at the time, with the same 135-cubic inch inline four, only the Daytona Z, as you have already gathered, had a turbocharger (but the base model didn't). I entered a contest to win a Daytona when it first debuted as a 1984 model, and I even test-drove one, a mid-level turbo model. Nice ride, but not remarkable.  I wasn't so disappointed when I didn't win one.  (Someone in Georgia did.)

Then Iaccoca tried to convince us that this sedan was worthy of taking on German sport sedans.

The Dodge Lancer looked sort of sharp, and it had a European-style hatchback with a notchback roofline, but under the hood was that same 135-cubic-inch inline four - with a turbocharger, of course - and the car rode on the same basic, bland K platform.  (Which is why Tom and Ray Magliozzi, the hosts of NPR's "Car Talk," once called Iaccoca the "master of smoke and mirrors.")  Many times, to create new cars, Iaccoca had the basic K platform stretched or shortened for longer or shorter wheelbases, respectively, but the engineering remained meat-and-potatoes even when it should been something closer to gourmet.  Iaccoca had a simple strategy - stick with a winning platform, develop all your cars on it for different market segments, and you can't go wrong.  This strategy helped Chrysler do good business for awhile, but it hindered development of newer, more sophisticated platforms and suspension.  Not to mention engines - Chrysler stuck with the same basic four-cylinder engine design throughout the eighties while other manufacturers were developing multiple-cylinder-valve technology and coming up with more advanced fuel injection systems.   

As for luxury cars, Chrysler's experience with them in the Iaccoca age are a mixed bag.  Iaccoca was a product of the 1940s, and his tastes reflected that.  To him, a real luxury car had plush seats, a sumptuous ride, maybe wire wheels or wire-wheel hubcaps, and chrome - lots and lots of chrome.  While he did aim at baby-boomer tastes with cars like the Lancer, his heart was in re-creating the well-appointed luxury cars of Detroit's golden age that his generation had always coveted - and many times he reproduced that glitz and glitter in small packages, like the 1982 LeBaron, and also in one of his big accomplishments - the LeBaron convertible, which arrived on the market six years after the "last" domestic convertible rolled off a Cadillac assembly line.

We all laughed, didn't we? Especially when they came with fake wood paneling, like this 1983 model?  But it brought convertibles back in vogue in a big way and led to other domestic marques - including Cadillac - to introduce new convertibles of their own.  (The 1987 LeBaron convertible featured cleaner styling.)

Iaccoca even brought back the Imperial as a two-door coupe for 1981 on the company's antiquated rear-drive J platform, and though it was a sales flop, it was a beautiful car with an aura of exclusivity to it (Chrysler planned to make only 25,000 Imperial coupes a year but never made more than 9,700 a year in its three years of existence). It was definitely classier than the big coupes Cadillac and Lincoln offered at the time.

Less successful was when Iaccoca tried to make a full-blown land yacht, with all the gaudy touches that implied, out of a smaller car.  Below is the early-nineties Imperial sedan.

Bob Lutz, the legendary auto executive who has worked at all three major American automakers, had an Imperial sedan while at Chrysler, but it was customized to look and feel more European, as Lutz found Iaccoca's tastes to be rather tacky when it came to cars.

Iaccocca was still successful enough to be seriously considered for the Presidency, which he ultimately resisted.  A moderate independent, Iaccoca was a man whose politics were ambiguous but whose identity politics were well-defined; as an Italian-American, his ethnic pride was reflected in some of the decisions he made as Chrysler CEO, like buying Lamborghini (now owned by Volkswagen).  And the less said about the TC, the car he developed with Maserati, the better.

Iacocca's reliance on the tried-and-true could only work for so long, and by the early nineties both he and his cars had turned into parodies of themselves.  Always a star of Chrysler commercials, he began to seem ridiculous with his use of the catchphrase, "If you can find a better car, buy it!" - which was what happened when auto customers found Toyotas.  Quality control at Chrysler was always a problem, and his attempts to invest in defense and aviation companies didn't make the company any more financially secure.  But he ended his tenure as Chrysler chairman on a high note, introducing the LH sedans that pioneered cab-forward design, placing the driver's position farther to the front and creating more passenger room overall.  Also, it featured six-cylinder engines rather than turbo fours.  Below is the 1993 Dodge Intrepid, one of the cars produced on the LH platform.

Some of Iaccoca's accomplishments have been vindicated by time.  The exorbitant amount of money he paid to buy American Motors and acquire its Jeep brand in 1987 raised eyebrows, but it proved to benefit Chrysler in the long run, given the growing (and admittedly insufferable) popularity of SUVs.  And truth be told, the LH sedans would not have been possible without the sophisticated layout of the Premier, the sedan American Motors had developed with Renault before Chrysler inherited it.  He could also be duplicitous, though, as when he promoted the employment of airbags in Chrysler vehicles even though he had opposed federal airbag regulations while at Ford, or the fact that the original Chrysler minivans, while serving most people as station wagons, were registered with the government as trucks so they could comply with fuel economy standards less stringent than those for passenger cars.  (This discrepancy would provide all automakers in the U.S. market with the impetus to push sport utility vehicles over standard cars.)

Also, he had a big ego.  Part of the reason Henry Ford II fired him was because he couldn't stand his desire to be in the center of attention.  This may explain why Hal Sperlich, who, as noted, was instrumental along with Iaccoca in creating Mustangs and minivans, doesn't get the credit for them that he deserves.  But, on balance, Iaccoca was a great and endearing figure in the American automobile industry.  He was patriotic in his devotion to the American car business, and he gave back by leading the foundation that would restore the Statue of Liberty for its centennial and, later Ellis Island, as he was the son of Italian immigrants.  He pushed hard to create good product, he advocated hard work and persistence, and he never stopped believing that Chrysler could be the best car company not just in America but the world, as this old Chrysler commercial from the start of the 1985 model year - one in which he says his sport sedans can compete with the prestigious German marques - demonstrates.

I close with a first-person reminiscence. I admired Lee Iaccoca for his gumption, and I liked some of the cars Chrysler made on his watch.  I too, like many others, thought he should run for President.  But I also had a connection to Iaccoca through two degrees of separation; his friend from his days in his native Pennsylvania, advertising man and sculptor Jay Dugan, was my great-uncle.  I'm sorry my great-uncle Jay never introduced me to Lee Iaccoca, because I know I would have loved talking cars with him.  I might have even made some suggestions to him regarding Chrysler product, and as you can guess from this blog entry, I would have had plenty of them.  But his competitive nature and his drive to succeed, something lacking among us Americans these days, will be as missed as much as Iaccoca himself.  RIP.      

Honda: The Power Of Nightmares

On my way home this afternoon I passed by the trio of demonstrators pictured below outside Montclair Acura, a car dealership located in Verona, New Jersey. I parked my own car in a lot nearby, took this picture, then went over to talk to them in the interest of finding out what their protest was all about.

They were auto transport drivers who make their living carrying cars by tractor-trailer to Honda and Acura dealerships. They were protesting a recent decision by Honda to drop their contracts with unionized car carrier companies and hiring smaller companies that have right-to-work labor policies.

These non-union car carriers, most of which are fly-by-night firms with dubious reputations, have less experience in transporting cars to dealers and use trucks that are poorly suited for the purpose. The cars would be improperly secured to the carriers they ride on. This would save money for Honda but likely create serious damages to the underpinnings of the cars - mainly to tires, rims, axles and even the overall frame - that customers could not see before driving that Civic coupe or Acura sedan off the lot. Honda would not be liable once the car is purchased, but the consumer would be left with costly repair bills and compromised safety. The car carriers themselves are likely to less safe and less reliable. Wayne State University in Detroit recently completed a study finding that highway safety is at risk, and that "a shift away from established car carrier companies will lead to higher crash rates" for car carriers.

Cars that are damaged on delivery will hurt the consumer - literally - if disreputable car carriers with little if any experience are widely used. And what's more, the union busting that is threatened by actions like Honda's will destroy good jobs that pay living wages. It's not just Honda that's involved; Chrysler is attempting to switch to non-union car carriers that transport cars improperly.

Learn more at CarBuyersBeware.com.

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 . . .

Fallen Pentastar

Chrysler declared bankruptcy today. This is the biggest blow to the American auto industry since Tuesday.

The nation's third-largest (read smallest) major automaker almost avoided this fate. Chrysler managed to negotiate respectable deals with its banks and with the American and Canadian autoworkers' unions to stay in business, but a consortium of forty hedge funds refused to renegotiate their loans with the company and so Chrysler entered Chapter 11. What David Riccardo, Dieter Zetsche, Cerebrus, products like the Dodge Daytona and the Chrysler LeBaron GTS, the Eagle brand, and a series of other missteps and disasters over the past thirty years couldn't do, a bunch of greedy investors managed to do in one fell swoop.

Needless to say, President Obama was not happy with the hedge fund investors. But he does hope to help shepherd Chrysler through the even more difficult period it's now entering. Bankruptcy does not mean going out if business; rather, it means a restructuring of operations, a reworking of debts, and a fresh start once it's through. And with Fiat guaranteed a 35 percent stake in the company, along with the workers owning 50 percent, the federal government will take an eight percent share (with the Canadian federal government getting the remaining two percent) with $8 billion of aid from Washington. And of course, there will be new product, like the upcoming new Jeep Grand Cherokee, as well as small cars from the Fiat connection.

But who will by cars from a bankrupt company? The Chrysler reorganization sounds promising, but will consumers have any faith in it?

Chrysler already has new product creating a buzz, like the newly revived Dodge Challenger, but that may not be enough. After all, Studebaker impressed everyone with the Avanti in 1963 and was gone in five years.

Chrysler Hanging On, Pontiac Gone

Being able to by a Fiat in America for the first time since 1984 is one step closer to reality as Chrysler has reached a tentative agreement with the Canadian Auto Workers Union, with only the UAW in America to negotiate with. Once both unions finalize these deals, Chrysler's big bondholders - mostly banks whose loans are secured by Chrysler's assets - need to take care of any remaining business. Hopefully, the dirty work will be done by the Thursday deadline, and we'll soon know whether Chrysler will survive with a little help from Turin. As for the Dodge and Chrysler vehicles we can expect, well, let's not get any half-baked collaborations. (The Chrysler-Maserati TC was bad enough, thank you.)

Meanwhile, events are moving quickly at General Motors. In a bid for more cutbacks to save the company, GM is expected to announce that Pontiac will be discontinued. It's a sad end to a once proud brand. As GM's performance division, Pontiac put out sporty cars usually far more interesting than the similar product from Chevrolet's lineup. The Firebird Trans Am was distinguished by an optional 301-cubic inch turbo V8 in the seventies, and the styling of later Firebirds was far more daring than their Camaro cousins. They also had those magnificent 305 V8s with port injection. The original GTO - a mild-mannered family sedan turned into a powerful performance vehicle - was the first "muscle car." More recent sports sedans include the Bonneville SE and the 6000 STE. And who can forget the Fiero, the first mid-engined two-seat sports car from a major U.S. manufacturer? Sadly, most people have. Lasting only five years in the eighties, it's mostly thought of as a Reagan-era relic, the automotive equivalent of a Members Only jacket, a running joke on "How I Met Your Mother."

Sadly, more recent Pontiac product hasn't caught on. The reborn GTO was a flop, as was the rakish G6. The Solstice - a roadster that marked Pontiac's return to the two-seat sports car market segment - has generated more interest than sales. Many of Pontiac's product of late hasn't even been developed at home. The aforementioned GTO was a Holden from Australia, as is the G8 sedan. Pontiac isn't even an autonomous division anymore; it's just a brand name now, sharing floor space at dealerships with Buick and GMC.

I should have realized that the brand's days were numbered back in 2004 when Oprah Winfrey gave away a G6 to everyone in her studio as a promotional stunt for both the brand and for herself. If even Oprah couldn't get people into Pontiac-Buick-GMC showrooms, no one could.

Rest in peace, Pontiac. :-(

Government Motors

President Obama pretty much had the government take charge of what's left of the American automobile industry, dismissing GM and Chrysler's survival strategies as insufficient and having them go back to the drawing board . . . and giving Chrysler only a month to finalize a partnership deal with Fiat that has only a slight chance of being completed in that time. The government will now back warranties for GM and Chrysler products, and GM chairman Rick Wagoner has been forced out of a job, with a severance package of $23 million. That's pretty good for someone leading an industry whose remaining employees are asked to make the kind of sacrifices the bankers don't have to worry about.

It seems weird to many that the automakers are being punished so severely for their bad business practices while the banks get even more money on top of the bailout funds they've already received for their bad business practices. But Obama has gotten caught in the devil's bargain. The banks are too big to fail, and money has to be pumped into the system to get credit flowing again. This is what most consumers need to buy a car.

Some of the government's policies in helping out Detroit make sense. GM and Chrysler are overrepresented by too many dealerships meant to cater to a market share that was once much larger than it is now, so dealerships have to be sacrificed. Also, many of GM's brands, which once dominated American highways,have become irrelevant and redundant. Pontiac, after trying to produce a distinctive high performance image for their cars, are once again becoming nothing more than Chevrolets with split radiator grilles; its "newest" model, the G3, is actually a rebadged Chevrolet Aveo. I used to insist that Dodges were Plymouths and Plymouths were Dodges and Chryslers were Dodges and Plymouths with upright grilles, plushly upholstered seats, and more chrome, but even with the Plymouth brand name long gone, Dodges and Chryslers are still rather redundant, and even the distinction of Jeep trucks and SUVs (made by Chrysler since 1987) is getting blurred as some Dodge trucks (like the Nitro SUV) derive much of their styling and engineering from the Jeep lineup.

GM should survive; even though new chairman Fritz Henderson (do you really want a guy whose nickname is slang for something that's broken?) has indicated that bankruptcy is "probable," its new product should help. Many of GM's latest models are more competitive with their Asian counterparts; my own cursory, unscientific census suggests that the all-new Chevrolet Malibu is selling well among the few Americans still buying cars. Chrysler is a question mark; even though some question the logic of its deal with Fiat, due to the fact that Chrysler's 1998 merger with Daimler-Benz was a fiasco, it's worth noting that Fiat makes more cars for the average buyer; its legendary 500 was and the retrograde 500 is the Italian equivalent of the Volkswagen Beetle. This deal will allow Chrysler to make and sell European-engineered cars prices for more of a mass market.

Ironically, despite Obama's call for Detroit to make greener cars, his administration has declared that the coming Chevrolet Volt hybrid is too expensive to turn things around for GM. Its sophisticated components are too costly to produce. And here's another dirty little secret; hybrids are only a small part of the car market. Most people in this country buy cars that use gasoline, and, as long as gas is cheap, prefer bigger cars that use more of it. Unless gas prices go up again and stay up - or unless gasoline subsidies in this country are eliminated and more punitive federal taxes for gas guzzlers are imposed - you won't see many more Aveos or G3s on the road, much less Volts. Which works out fine, since the Aveo/G3 twins are made in Korea anyway.

Obama hopes to save the American auto industry, and I hope he does a better job than the guys who actually ran the industry. But that industry could just as easily disappear, or be reduced to total irrelevance even in the best of circumstances. I'm somewhat skeptical myself. In fact, I saw something really eerie today. On the road, driving home from work, I saw a Model T going the other way. Okay, it was a collector's car, being driven by its eccentric owner. But even though Ford is doing relatively better than GM or Chrysler, the sight of a Model T Ford was still rather symbolic. The Model T is a ghostly symbol of Detroit's glory days, and the sight of one was like a premonition of the industry's death.

After all, Model Ts are black.

(Whew! I certainly didn't go out like a lamb tonight! It's March 31, 2009, and that's the end of the first quarter!:-D)