Mike Manley, Jeep CEO: 2012 interview... Wrangler, Trail Rating, and more
What’s the status on expanding the Wrangler plant in Toledo so that you can either boost production or make more variants?
Well, it’s something you really cannot predict... literally as we speak, because the demand has now been consistent and sustained for a long period of time, so we have to find ways of being able to fulfill that demand. We’re at the moment on crew shifts in the plant, and the guys there are literally working flat out. The options for us are to up the third shift, even though that won’t actually bring a huge amount of incremental production because of the flexibility from the guys who are working there at the moment on two shifts. So that’s one option for us. And you know, as we think about the next generation of potential variants, we’ll put together hopefully an accurate volume forecast for that and then see what that means from a capacity perspective in the plant and then try to get it as best as we can.
Is the plant currently flexible enough to make the variants that you’re thinking of?
You’re probably better off talking to Scott [Gaberdine] about that. My view is that it would be flexible enough, particularly if it was planned in at the beginning of a new variant because any changes that needed to be made for the line could be made at that stage. So you could build the flexibility and technical variants off of that.
Is it actually possible to physically expand the plant as it is now?
That’s a Scott question.
What do you see as the minimum capability that a Jeep has to have to differentiate Jeep from Ford or Chevy or Toyota?
Well, we have the most flexibility in our segment, and we have a trail-rated method where we rigorously test that capability, whether it’s articulation of approach angle, breakover angle, wading. So for each segment, we have a series of measurements, processes, and standards that we know our Jeeps have to meet on the trail-rated end, so we can be comfortable that we are true to what Jeep means. And that changes by segment. Wrangler, for example, has a much tougher series of measures than Compass. So in each segment, our aim is to have the most capable vehicle in that segment.
So the standards do vary by segment.
Yes, you can’t get Compass to do what Wrangler can do for example. But you can have a trail-rated Compass.
What about the non-trail rated lines? Are there any standards for those?
Oh, sure. We have capability standards for all of our vehicles – capability, safety, starting standards for every single vehicle in the range. But we know that at the upper end of capability, our customers look for the trail-rated. We make sure that those vehicles are capable of being trail-rated.
So if I look at say an all-wheel drive Jeep Patriot, does anything about it being a Jeep Patriot that’s not trail-rated mean that it would be better off-road than a similar Honda or Toyota?
Well apart from the fact that it’s a Jeep… if you think about our brand and our vehicles, all we build is SUVs. Because we’ve been doing that for 70 years, we have a dedicated group of engineers. I can’t talk in any detail about how our competitors determine their capabilities, but what I can say is that within Jeep we have 70 years of heritage in this segment. We have a group of engineers who live and breathe Jeep, designers, many passionate guys. And because of that, we have this sort of vast amount of experience.
Worldwide markets and regaining lost ground
Switching gears, if we look at the Jeep J8 AAV, how successful has that been in the target markets?
Well I don’t know that… well, you’re talking about our J8 military/humanitarian vehicle? I would say that its success is growing, because if you think about those particular target audiences, they’ve been through fairly dramatic cuts over the last few years, and overall the economy has suffered. So a lot of spending in the areas where that vehicle is applicable has been either delayed or reduced.
I think we’re now coming into a period where we’re going to see some more flexibility and investment in the segment the J8 plays in, and we have a lot of interest in that vehicle. We now have built up a lot of contracts over the last few years, so I think you’re going to see it’s becoming much more successful. We’re relatively pleased with where it is today, and under the contract that we’re working on.
Are there any plans to expand AAV production at all?
Are you looking at making a vehicle to replace the Tacoma or Hilux where it’s used by the US military [partly because it blends in, in Afghanistan, where Toyotas are common], or the G-Wagon where it’s used by the marines? Are you looking at any competitors to that?
Well, we do. I mean, for instance it’s a segment that we think the J8 can play in. We obviously look long and hard at what is serving those segments today, whether it’s a pickup truck or whether it’s an armored competitor. And we work with a number of companies that have very specialist skills in those areas so that we can provide a range of solutions that are applicable to J8. That would be everything for the engineering of the vehicle. So we can offer now the customers quite a wide range of use on that vehicle, from pickups to light armoring. It’s not just about the military. It’s also humanitarian and border guard. They’re a type of potential customers for that vehicle.
Do you have plans or are you working on higher penetration within Africa?
We have a very good business in South Africa. That business is going well. We have a number of general distributors that serve the broad or African continent, and so far this year that’s going well as well. I mean we’ve been in that market for many, many years. So far they’ve had a very good 2011 and they’ve got a strong start to 2012.
Other Wrangler variants
Now I know I’m not the first person to ask this question, but are you looking at the possibility of a steel-roof Wrangler to try to get some of where the Cherokee used to be?
I think that certainly on this generation Wrangler, you won’t see any move to a steel roof. One of the things that Wrangler clearly is known for is open-air functionality, the fact that it’s a four-door convertible and that’s important for our customers. I think that potentially, I’ve had some people say will we produce the steel-roof Wrangler to go back to Cherokee? I think we’re going to come up with a range of solutions that we think customers need, but certainly with this generation of Wrangler you won’t see a steel roof.
I was mainly asking about the next generation.
We’re a little bit away from that at this moment in time. The most important thing is that we continue with the very successful forming of the Wrangler, and that’s what we’ll be focused on as we get ready to replace the vehicle with next generation.
What about weight savings? What are you looking at in that department?
Well, we look very long and hard at weight savings, [including] the use of high-spec materials where we can take some weight out of it. Obviously to get the level of capability that we need in Wrangler, it comes with weight. That’s part of the formula. So we do work, and we do look to take weight out wherever we can, but it’s a balance, you know? How you make sure that the vehicle is true to purpose. So if we look specifically at Wrangler, there are opportunities. But we wouldn’t do it to sacrifice the capability of our vehicle. One of the things we said for example is the vehicle will remain body on frame for the best support.
Are there plans to make a special service version like there is now for the Durango and Ram?
No, no. No plans at this moment to try to make a special service version of Wrangler. I mean we have J8 that meets certain customers’ needs in terms of special service, but Wrangler production as we know it, no.
How about for the Liberty?
Mike Manley himself, as Jeep CEO
How do you handle criticism from the hard-core that you don’t understand what Jeep is about?
Well, I’ve not heard that criticism. I think if you look at the reactions to the work that we did on the Wrangler, for example, with the new powertrain, the new interior, the overwhelming response from the Wrangler customers that I’ve talked to – and I’ve talked to many, many customers — in fact I’ve just come back from Moab where this time of year, thousands of Wrangler owners descend onto the town. We’ve had unanimous feedback on Wrangler that the changes we made with powertrain have significantly enhanced the vehicle.
When you guide any brand, one of the most important things to do is stay connected to your customers and the things that they’re looking for. And I think with Jeep we have numerous ways that we do that and continuously try, so we’re always interested in feedback from our customers whether it’s on existing or potential future vehicles. The customer is a great source of ideas, inspiration and they’re at the end of the day our customers that make us… they’re the most important asset that we have.
The issue is not with Wrangler, which I don’t think anybody really criticizes, other than Consumer Reports, but with the Compass and Patriot, which were there when you showed up; but mostly with the plans as they’re known for the replacements for the Compass and Patriot and for the replacement for the Liberty.
Well, what we did with Compass when I came was to be able to make the Trail Rated version. Well, there were two things that I think were the main feedback that we received from customers. The first one was that it didn’t have the capability that Patriot has, for example, and [therefore] it wasn’t a Jeep. Secondly, the styling was a little bit polarized. So one of the first things that we did was to effectively refresh the styling and produce a version that carries the Trail Rated badge.
Now, we had to make engineering changes. We had to list it. We obviously had to meet the standards that were set for that segment. And when I think about the replacement, whether it’s the Liberty replacement or whether it’s the Patriot replacement, there will be a trail-rated version of those vehicles as well. That’s very important to us, because that’s DNA that traces our history all the way back to Wrangler as to be in each of our vehicles.
Now there are different levels of capabilities, but our aim is in the segment that those vehicles play in that we will offer a model that is the most capable, and that model will be trail-rated and the only way to be trail-rated is to meet the rigorous standards that we have.
Future Jeep Liberty / Cherokee
There’s talk now, and this might be where you say that, there’s been talk now that there’s going to be a rear-wheel drive D-segment vehicle that’s shared between Dodge and Alfa Romeo.
Between Dodge and Alfa Romeo?
It’s between a Chrysler brand and Alfa Romeo is actually what people have been saying.
There’s clearly a lot of speculation about platform sharing between the brands in the alliance. And I think one of the first things that I would say, when people talk about platform sharing, there are a lot of misconceptions about what does that mean? In the main, it means as much technology components that can be shared, but still enables you to produce a vehicle that’s very, very true to the brand.
I’ll give you a good example. If you take the Dodge Dart that we have out there, the Dodge Dart actually fits on the Giulietta platform. That platform originally was developed for the dynamics of Giulietta, transferred over in an appropriate fashion to Dodge. So for sure, that platform has been shared. Now whether that standard’s up to the D-segment, that we will have to wait and see, and whether the D-segment is front or rear wheel drive is one that will be announced at the time. But I think when I hear about platform sharing, it’s always useful for me to comment on the key focus that we still have on making sure the end result is a Dodge or is a Giulietta or ....
What about the two-speed transfer cases? Is that something that stays with Liberty? Is Liberty always going to maintain its position as the next-generation Cherokee derivative?
D-segment is the biggest SUV segment in the world. You have different customers coming from the D-segment ranging from needing a very, very capable vehicle to looking for great on-road driving dynamics, but very safe in incoming weather. So we have to be able to address the broadest population within that segment, which means that we have to use and think of technology in innovative ways. For us to be able to truly create a Jeep with this technology, with the technology required, but also keep up with the increase in requirements for better fuel economy, better on-road handling or lower noise levels.
I think you’ll find that when you see the new D-SUV which will be out next year, you’ll see that the engineers have been able to use technology in very good ways to create a true Jeep with great capability, but also will provide some of those other needs that have been emerging in the segment over the last 10 or 15 years.
Can we expect it to outperform the current Liberty, off-road?
What I can tell you is that the next generation of vehicle will be better than the current generation vehicle in a whole host of ways. You’re going to have to wait and see.
I’m patient. Good?
It’s going to be a big year in 2013.