Reid Bigland: January 2012 interview with the Dodge CEO
Reid Bigland was CEO of Chrysler Canada when he was tapped to run Dodge in late 2011; he is now CEO of both Dodge and Chrysler Canada.
Q. I’ve been seeing the Canadian numbers keep on going up; how did you do that?
Really, at the end of the day it’s all about product. If you look at our success in Canada, the fastest growing auto maker for the past 2 years in a row, and the fastest growing auto maker here in the US with retail auto sales up 43%, I think it really gets tied back to when we launched the 16 all new or significantly refreshed products 12 to 18 months ago. Unquestionably, they resonated in the market place.
If you want to have sales success you have to have products, there is just no substitute for it. If we look at the awards that those products picked up, we talked about the Cherokee the most award winning SUV ever, the Jeep brand, now the number one domestic brand for quality according to Consumer Reports, the Durango the number one large SUV in the market according to Consumer Reports, eight Consumer Digest “best buys”, eleven IIHS top safety picks, it’s all right there. … it’s all traced back in my view to more horsepower and greater fuel economy out of the powertrains, not an either or but both; redesigning the exteriors and a dramatic improvement on the interiors.
We went too far on taking things out of our interiors and now it is almost to the point of me sounding like a reformed smoker, I can’t believe the interiors some of our competitors have! We have, if anything, overcompensated, and consumers have discovered that, they have driven our products, critics have driven our products, and they are coming back with a thumbs-up. From a sales person’s perspective I couldn’t be happier to sell these.
Then there is price, there are still some naysayers out there, but price is not a sustainable advantage in any business. When we didn’t have the products a few years ago, we were discounting and offering incentives and we still couldn’t gain any traction from a sales perspective. Now we have the products and we are competitive on price, I think the industry is more disciplined than it has been before and we are seeing that reflected in our share growth and our profitability.
Even before Chrysler “had the products,” Canada was performing better than the US, do you take any credit for that?
Well, it’s a good team in Canada. I think we were able to focus on some products there that were better aligned with the Canadian market and they seemed to really resonate. In Canada, if you have been following it, the Ram pickup truck is the second highest selling vehicle in the country, the F150 is number one, Ram is number 2, Caravan is the number 4 highest selling vehicle. The Journey is by far the number one selling crossover vehicle in the country out of 35 different nameplates to choose from. We have put a tremendous amount of focus on those products and they have really performed well for us in the Canadian market.
Would you say it is just a matter of focus? The Journey did very well in Mexico, it does very well in Canada, but it doesn’t do so well in the US.
If you look at the Journey, the Journey in Canada is, give or take, about the 15th highest selling vehicle in the country out of about 300-odd different nameplates. And as I said it is the number one best selling crossover hands down for the last three years, it blows everybody away. It does extremely well in Mexico and it does very well in Europe as the Fiat Freemont and now does very well as the Fiat Freemont in South America.
I think all that is to say that we have a tremendous amount of unrealized potential in the US with the Journey. I have shared that with the US dealers and I think we can do a better job. I think that product has attributes that can do well, and it does well everywhere, it does ok in the US but on a relative basis not nearly as well as it does in Canada, Mexico, Europe or South America.
To dissect that product, the reason it can do well, in my view, is that it is kind of the ultimate utility in full. It can compete in the compact car market with an entry level price point of $18,999. It can compete in the minivan marke with a 7 passenger seating configuration. Also it competes in the compact car market by having a 4-cylinder engine and good fuel economy. It competes in the SUV market by having available all-wheel drive. And then of course it’s all cross-over. So in a way the Journey is a bit of a one man game that can compete arguably in 60%-65% of the market with one product.
I think in the US it really hasn’t received a lot of focus, it still has a bit of an awareness issue [though] the intervention we made in the product was dramatic. We dramatically improved the interior; we installed the 8.4” touch screen, and installed the new Pentastar V6 engine in it. So I need to look myself in the mirror with respect to US sales of Journey and I think it can do a lot better.
Did you have anything to do with the recent commercial, the TV ad with the Swiss army knife.
Yes, a little bit involved trying to get that out. If you notice the tag at the end of that ad, I think that there are still a lot of people who are not aware that it has all-wheel drive, that it has 7-passenger seating configuration and that it has a very aggressive entry level pricing. If you look at those ads that we ran, they all had that kind of tag right at the end to try to increase awareness of Journey.
I don’t think a lot of people are really aware of the versatility that the Journey offers.
Can you summarize what Dodge is and what Dodge means, a way that I would be able to say, “Yes, that’s Dodge and not some other brand.”
Dodge is really a mainstream American brand. It is about value and performance. If you look at that value and performance, you have great value throughout the entire Dodge product portfolio. If you look at the portfolio split between people movers, Journey, Caravan, Durango, and then cars, Charger, Challenger, and Avenger, all of them share those characteristics even on the muscle car side. The value or cost per horsepower is uncharacteristically Dodge.
There has always been a performance element and always a value element throughout the entire line. I think that Dart epitomizes those two attributes of value and performance. The Dart has 184 horsepower, the power to weight ratio on that car is going to make it very peppy and very sporty, and yet the value of what we put in in the form of interior features, technology, class exclusive integrated dual exhaust, very aggressive aero, all at an entry level price point $15,995, the value is tremendous with respect to the Dart but the performance look and the actual performance feel of the car is certainly there as well. And that’s Dodge. I think that value and performance is what makes Dodge unique.
There are 3 kinds of transmissions; two of them are clearly Fiat, what is the “PowerTech” transmission? Is that Chrysler or Fiat?
We haven’t disclosed where we are getting that from right now. One is definitely Fiat. The automatic, dual-dry clutch transmission DDCT is certainly Fiat. And then we have a 6-speed manual and another 6-speed automatic transmission. The other 6-speed automatic transmission is not Fiat.
Ok, not Fiat. But it is coming from an undisclosed location?
I don’t know if we have mentioned the location of that transmission yet. So it’s from an undisclosed location. I am leaving it up to Allpar, I am sure you will find that out in no time. [We believe it is sourced from Hyundai. Some internal materials claim Aisin while Hyundai has a “Powertech” subsidiary making 6F26 transmissions in the US; these transmissions attach to Hyundai’s own version of the “World Gas Engine.”]
But there are 3 transmission choices, so the manual if you really want that manual feel of the car, the DDCT if you want that connected feel to the car and that is the only transmission that will be made into the 1.4 liter MultiAir turbo. So that’s really the alpha, the European feel, the European transmission with the European engine. And then the standard automatic transmission will be [used in] the 2.0 and 2.4 liter.
Will the stick-shift be available with the 1.4 liter engine?
Yes. The manual stick-shift will be available across the entire engine line.
It’s been a while since I heard anybody say that. Why name it Dart?
We did a lot of research on the name Dart. Interestingly enough anyone that we spoke to that was under the age of 35, we showed them pictures of the 2013 Dart with the aggressive aero, the look, the sportiness and asked them which names they thought fit best. Dart was the overwhelming bulls-eye. These people weren’t very familiar with the 1960-1976 Dart. They were just looking at Dart for matching the design and the aero of the current car. Then on a demographic of 45 and older, there was a lot affiliation with name Dart.
The affiliation with the name Dart, the original, was very positive. The vehicle had a great run. 1960-1976 sold almost 4 million Darts. If I can get halfway there with this car I would be pretty happy.
Dart to this day lives quite large on drag strips throughout North America. A lot of people have a very strong affinity for Dart today, so they too were quite keen on the reentry of the name Dart back into the Dodge portfolio.
I think the third reason is that we knew when we came out with Dart it would get incremental notoriety for the new compact car and that is one of the reasons why we released the name in December with the first bunch of teaser photos. We didn’t want this car to be all about the name, but we wanted to get that out there and try to create some incremental buzz. I [don’t] think if called the car the Dodge ABC, would it have picked up the same amount of cache as “We are bringing back Dart.” There were 4 million people that had a Dart back in the day and it’s still living on drag strips, it certainly helped to increase the awareness of our new compact car. I am very happy with how it’s played out.
Dave: It has done very well, but a lot of people, as you know, were looking for Hornet.
Some people were looking for Hornet, a lot of speculation on the Allpar site about Hornet. Hornet is a good name. It is one that’s kicking around but I tell you, it is easier to name a child than to name a car. There is no shortage of opinions with respect to the name that you choose. Every name has its plusses and every name has its minuses.
Do you have any plans to tie it into the vintage Darts?
One thing about the original Dart is that Mopar played a pretty big role. Mopar will play a pretty big role in this Dart too. There will be over 150 accessories to accessorize the Dart in addition to the already OEM original factory customization. I think the possibilities are certainly there to add some Mopar features and content as it gets down the road a bit. Because as you know that history there is rich, there is a lot to deal with.
Going to people movers, performance and value. What are you looking at in terms of replacing Grand Caravan or getting a new one?
I am not going to get into the Caravan and potentially the Caravan successor but stay tuned to what is potentially on the horizon.
Is there something that I might be seeing around the show floor? [700C]
We have that [700C concept] out there. It is a great audience here to throw out some ideas and some concepts to get some feedback.
Chrysler invented the minivan. We have been dominating the minivan for 28 years. We’ve been dominating the people mover segment and we’ve done it by continuing to innovate and come out with new ideas and new concepts. I think that is the only guarantee in the future, is that we will continue to innovate and continue to evolve, just as today’s van has no resemblance to the 1980s van that came out. I think that the future van won’t look very much like today’s van. That’s one idea there of a van that is very futuristic in aesthetics. Once the show is over we will assess the comments and thoughts, ideas and see if we are on the right track. But at this stage it is pure concept.
What do you think of it?
I have mixed views. I think some parts of it are just gorgeous and some parts of it maybe don’t work quite as well.
What parts do you think are gorgeous?
I like the side view and I like the side latches when you open it up. I like the lower grill part, not so fond of the middle-grill part.
You know that side view, particularly that pillar, is very polarizing. People are going to have some pretty strong views of that.
I’ve seen that, but every time a concept comes out people have very strong views on it. It’s always black or white, never grey.
Are you going to be striving for love it or hate it in the future as sometimes in the past?
I think we always strive for everybody universally loving it. But if you don’t get that sometimes you have to step in and make the tough calls and try to anticipate what the market will want in the future. That’s where it gets risky in this business because you are betting a billion dollars at a pop. But the rewards can be large.
I’ve been covering the industry a long time. There weren’t a lot of people back in the late ’70s saying that I want a minivan, they were traditionally panel vans. The same thing with the crossovers, that’s a relatively new phenomena and sometimes the first guy on the block can make a killing whereas the second, third and fourth guys can find themselves lagging quite a bit.
Many times consumers don’t know what they want in the future or struggle in articulating it so the designers and automotive manufacturers step in and try to fill in the blanks. The Dart is a perfect example of that. These cars have been relatively boring and bland, just basic transportation bordering on commodities. Those why buys we talked about at the opening are no longer differentiators.
We’ve jammed technology, comfort and style into the compact vehicle that really hasn’t existed ever before in the segment. Is this going to work or not? Or are we going to find ourselves way out on an island where no, people want cheap plastic, they want small radios, they want cold steering wheels and they don’t want dual exhaust. Maybe we weaved when everybody was bobbing. Maybe we got it wrong. I think we got it right, but only time will tell and the market will tell.
Now that you are at Dodge for the whole brand what are going to be your priorities in hoping to realize the potential that you see?
I think it is just blocking and tackling at the end of the day. It is not a lot different from Canada, not a lot different from US sales. Dodge is any other portfolio. Specifically at Dodge is making sure we realize the full potential of the products that we have there because I think we have some diamonds in the rough…Durango, Charger [with] 31 miles to the gallon, there is unfinished business there, the Journey, and of course the Dart.
The Dart will be a key area of focus because the segment is just so massive. I am obviously biased, I think that so far on the Dart early teaser photos good, interior photos good, and name good, I am happy with the reveal today. The team did a great job with the ground breaking and the feedback has been overwhelmingly positive. Get the social aspect working, TV, newspaper, traditional media, get people out there and tell people about the Dart. There is still a ton of work to do; we are not even at the halfway point. Staying focused on those basics, the blocking and tackling is key.