Interviewed by David Zatz, April 2015, at the New York Show
I'm looking at the investor plan and I'm seeing that there’s two lines of Rams: Ram and Ram Commercial. If I look at a Ram 1500 in regular form and Ram Commercial form, what difference am I seeing?
Ram Commercial is our focus on the commercial side of the business. So when you look at a Ram 1500, you’re going to have a Tradesman edition that caters to the commercial-oriented customer. It will deliver on capability, functionality that a commercial-oriented customer will look for and expect in his pickup truck without all of the appointments that a retail-oriented customer would look for.
Those individuals will look for vinyl flooring if it’s a standard cab, crank windows, and basic interior appointments. But on the exterior, they’ll look for trailer tow package, spray-in bed liner, the integrated hitch. Those are the things that will make a difference between a commercial-oriented Tradesman and a retail-oriented package.
So you’re realigning the packages that you have now on different models?
We have taken our product portfolio and aligned it to the customer needs. You can look at both sides of that, whether it’s Ram Commercial or the just Ram brand; we’ll have an Express model that targets the young, first-time buyer with a great-looking exterior, with a monochromatic look, 20-inch wheels and tires, dual-exhaust, but basic interior appointments, all the way to the Laramie Limited that has every appointment for that customer who’s looking for that. We tailor the packages and the trim to meet those individual needs.
A lot of readers bring up, going back to the separation from Dodge, two basic questions — why did you separate, and is there ever a reconciliation in the future?
Well, I’ll answer the [second] one. No. [There will not be a reconciliation in the future.]
We separated so we could focus on the individual needs of each brand. On the truck side I just talked about, we’ve been able to focus on the core elements of that customer needs. At the same time, we can communicate to those customers. So we use Sam Elliott as the voice of Ram. It is, all indications from the research that we’ve done, a perfect fit for the Ram brand.
If we were connected with Dodge, with the direction that Tim [Kuniskis, Dodge brand CEO] has taken Dodge on the performance side, Sam Elliott may not be the best fit. So you look at that, he works with Gas Monkey Garage. He’s worked with Ron Burgundy. Those aren’t necessarily good fits for Ram, but they’re perfect fits for Dodge. So the separation allows us to communicate, and offer the right products that meet the customer needs.
... Certainly, it’s worked for both of us. What Tim has been able to accomplish with Dodge and the focus . . . you know, Hellcat is just a great example and you can take that energy and bring that to market. If you've seen some of the creative lately, the Dodge Law with the Monkey and Richard Rawlings, you'll have to go on and see them.
It works for that brand and where they want to be, youthful energy, power, whereas we are authentic and true to who we are even down to our spokespeople. Sam Elliott, some of the partnerships and relations we have, Miranda Lambert, you know, country, from Texas, down to earth, [it works for us]. So he’s got Mötley Crüe. It works for both of us, the identity, the separation. To bring those back together just doesn’t . . .
It’s the only brand that separated out, other than GMC which I don’t think counts. They sell Ford trucks, Ford cars. They sell Chevy trucks, Chevy cars, Toyota. I can go through the list but you know them all.
GMC’s the one that you could use. They do have the separation and they are focused on who they are.
With regard to the Promaster van, I noticed that the passenger van versions are all left to the aftermarket, whereas some of your competitors sell both. Can you tell me the reason for that?
When we were bringing that to market, we looked at where the volume of the given vans were, because we offer a cargo van in 14 different configurations. We also have chassis versions of that, and then we have a windowed variation as well that will allow the vehicle to be upfit. But the primary focus on the commercial side of the business that we target was delivery in services. This is where the heart of the market was, that we focused on.
I've seen the Winnebago campers. Do you have any other major upfitters that you've been working with?
There are a few that the fleet organization has worked with. The nice thing with Winnebago is they are connected with our sister brand, Fiat Professional. So with a Ducato in Europe, it’s the number one camper vehicle out there in the marketplace, and they do that with Winnebago. So it was a natural connection, a natural fit for us to continue that relationship.
There’s others that we’ve been working with. One of the brands that’s also looking to come from Europe is Hymer, and we’ve worked with them.
Are you getting any interest from ambulance services and school buses, things like that?
Not yet. Like I said, our focus has been primarily on the services side and package delivery, so we focus on that side of the commercial market. Delivery standpoint, obviously every day dropping off packages.
The wonderful thing about Promaster is the front-wheel drive configuration, so the turning radius is much tighter than a rear-wheel drive application. Also you know what the weather was like this winter here in the northeast and this vehicle, loaded, unloaded, going up inclines, it will perform very well versus competitive vehicles in a rear-wheel drive application struggle.
And it’s lower to the ground, which helps loading.
It’s nine inches lower. So in a delivery situation, when you’re getting in and out of the vehicle unloading packages all day, certainly it’s an area that the deliverymen really look forward to.
Nine inches? What’s that compared to?
That compares to our competitive set. You know, floor to ground.
Are you looking at any major contracts with companies like UPS?
Our fleet organization every day works with those major companies.
Can you tell me the market share of the Ram Chassis cabs last year? I'm talking about the traditional Ram Chassis cabs.
Our pickup trucks’ chassis – not the vans – were roughly 27% market share. And that’s the 3500, 45, and 55s, not getting into anything above that.
Comparable classes. Are we going to see any more niche Rams like Rebel and the revised Laramie Limited which came out along with Rebel. Is this a trend?
Well, it’s delivering on what our customers are looking for, asking for, from a lifestyle perspective. We also just did a concept truck that we revealed last week in Dallas with our connection with the Texas Rangers and the support that we have with the Texas Ranger Museum and Hall of Fame. ... We’re going to continue to look for opportunities, and if there’s something out there that customers are asking for, absolutely.
A while back there was some talk, and I know it was probably largely speculation, of Ram and CNH working on Class-8 tractors that would be sold as Rams. Is that still way out in the stratosphere, or has that been sort of dismissed by now?
I've never heard of that, and we haven’t worked with Case on anything like that.
Last time I asked that question was Fred Diaz and he said “We’re looking at it for a few years out,” ... but speaking more of vehicles that you actually make, the Ram 2500 is unique with link-coil suspension. I've spoken with Mike Cairns a little bit about this, but what’s been the reaction of customers to that who are used to link springs in that area?
Well, it’s been highly received by the customers from the standpoint of ride handling, the additional payload and capability that this delivers. Every customer that I've talked to regarding the link-coil, just like on the light-duty, rave about the ride and handling whether it’s loaded or unloaded.
Typically you'll get a situation with trucks, as you put weight in the bed, the ride is enhanced. With the 2500 with the link-coil, you get the lateral stability, so the back end doesn’t hop. And on top of that you get the nice, smooth ride from that link-coil setup. We’ve enjoyed the advantage on the light-duty, and now we’ve been able to bring it to the heavy-duty.
So have you seen extra market share from that?
Well, we were up 28% last year in our overall sales and grew three points of share.
We just announced our numbers through March. Year-to-date, we’re up 9% over last year, so continue that momentum. We’ve had 59 consecutive months of year-over-year sales growth. So it’s delivering on the four attributes that we’ve focused on.
[A spokesman later added that the market share of the Ram 2500 pickup, alone, grew from 20% to 24% from January 2014 to January 2015, more than an 18% gain and indicating a “favorable market (both fleet and retail) reaction to the link coil suspension.”]
Light-duty, it was all fuel economy. So deliver on best-in-class fuel economy. And with the EcoDiesel, we now get up to 29 miles per gallon.
And then delivering on capability on the heavy-duty side. So delivering on best-in-class power with 865 pound-feet of torque, the 35,000 pounds of towing, and the best-in-class payload. Those have been the key drivers as we’ve moved the brand, focusing on our customers’ wants and needs, and delivering on the attributes that are driving their market.
Going down to Mexico, you just launched the Ram 700 basically based on the Fiat Strada. And there’s been an announcement that you’re going to be using a Mitsubishi-based truck down there. Where does the Mitsubishi fit into the line between the Strata and 1500?
The only announcement I'm aware of is an announcement with Mitsubishi that Fiat Professional has. Ram is not connected.
What do you yourself drive?
I drive a 1500 Laramie Limited EcoDiesel.
Top of the line?
It is a wonderful truck. And before that I had previously an EcoDiesel and before that . . . I've been in trucks for the last ten years. So it’s a passion of mine.
Are you driving one of the new Laramie Limiteds, the ’15?
Hopefully real soon.
No. I have a current version. We’ll have the new 2015 Laramie Limited we introduced in Chicago out in the next few months.
I've heard the critical reaction to the new grill. Can you tell me about the public reaction that you've seen?
We’ve seen research on both the Rebel and the Limited and there’s both sides. There’s people who love it. They love the look, the refreshed front end. They love the Ram lettering on the tailgate. There’s certainly other sides where people say, “I love my crosshair grill.” And in both scenarios we’re okay because you look for some sort of polarization. You want some people that will love it, and you want some people that hate it. Then you know you’re going to have a product that’s going to be represented in the marketplace. If it’s just something that everyone says looks okay, typically it’s not going to perform very well in the market.
Is the Long Hauler still a possibility, or is it just not practical?
You know, the Long Hauler was a lot of fun. We took a number of different cues, either on the interior – we had airplane-style seats with leg rests that were motorized in the back. We had a refrigerator in the back. So everyone looked at long hauler as just the truck, per se, but we used it to research a number of different features.
If you remember on that truck, one of the cues that was on that was rear air suspension. And we brought rear suspension to market on our heavy-duty trucks. So there were items that we looked at, how did it resonate? But everyone looks at are you going to do that truck? It was more than that. It was a number of different features and elements that we wanted to test the market with.
We received the response, and then we’ve actually brought those pieces to market. The overall truck, certainly we’ll continue to look at it. It’s an interesting concept. Certainly it’s 24 feet long, so it’s not for everyone.
Yeah. Yeah, I remember people saying “Oh gosh, being able to transport my horses 24 hours without stopping for gas.” And I was thinking there’s other things you have to stop for, aren’t there?
This is a question that I've been asked to ask. In the 1990s, Dodge was doing well in the NASCAR Truck series. Does Ram have plans on going back into racing of any sort?
Not at this time.
If you could own any vehicle, new or old, on your own aside from Ram, what would it be?
Well, see, there you caught me because you said, “besides Ram.” One of the vehicles, and it is a truck, that I would just love – actually I'm going to give you two. I would love to get an old, original Power Wagon. I just think they are incredible. And trying to get your hands on one of those is extremely difficult.
The other one, it’s still an older vehicle as well, and I've never had the chance to drive one, is a Li’l Red Express. We showed one just as a concept and the dealer announcement show had it out at a few different events. We weren't ever able to meet the requirements today in the marketplace to bring it to market. But that is certainly a truck I’d love to drive, an old Little Red Express, and get my hands on both of those trucks.
I know somebody who has a Power Wagon. I think he’s selling it.
Oh boy. Yes. Yes, both of those are iconic for our brand and history with trucks. They’re just really cool vehicles.
There was a time when we were told that Ram would do pickups, and Jeep did SUVs, and there’s been talk of Jeep pickups forever and every time they do Moab, there are Jeep pickup concepts. Is this still an adamant separation?
You know, we’ll see where the market takes it. I worked on the Jeep brand for a little bit and worked with Mike Manley [Jeep CEO].
There is history on the Jeep side with pickups. You can go back in history, there was the Comanche. There was the Honcho. So there is history there as well. But we’ve focused our efforts on Ram to be the truck brand and the commercial vehicle brand. So there’s where our primary focus is. Mike’s out pushing his sports utility products out in the marketplace.
Is there going to be a Jeep pickup down the road? Time will tell. But right now we’ve got primary focuses in our individual areas.
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