Retired engineering chief Robert Sinclair

Retired Chrysler engineering chief Robert M. Sinclair died on January 13, 2012, at the age of 84. A graduate of the Chrysler Institute of Engineering, he was the father of three sons and grandfather of six children. No services were planned, and relatives requested that memorial contributions be sent to the American Cancer Society.

One of Robert M. Sinclair’s greatest achievements was leading engineering of the original, groundbreaking Chrysler Valiant, launched as a 1960 model.  The car was priced close to GM and Ford compacts, but easily outhandled and outran them, with apparently greater reliability. The Valiant was Chrysler’s main export for many years, and Chrysler’s car with the greatest market share by a good margin throughout its life. (In 1959, Sinclair himself reported on Valiant engineering and the reasons for their decisions.)

Sinclair was Technical Director of Chrysler France in the mid-1960s. Burton Bouwkamp wrote, “That’s worthy of note because his engineers developed the FWD Simca 1100, which became the platform for the European C2 (1978) and C6 (1976) models. It was an outstanding platform for ride and handling but it was not used on the USA L Body [Omni/Horizon] because it was judged to be too expensive for a USA sub-compact car.”

In 1983, Sinclair was Chrysler Director of Power Train Engineering; he led the creation of the “Peugeot” (SIMCA) 1.6 liter engine used in some Dodge Omni and Plymouth Horizon models (which launched in the US with a Volkswagen 1.7), as well as Europe’s C2 and C6.

By 1984 he was vice president of engineering for Chrysler Corporation. In 1985, he launched the Turbo III project which set in motion Chrysler’s first dual overhead cam and four-valve-per-cylinder engine, which produced 225 horsepower from a 2.2 liter engine. It also had distributorless ignition. (He also signed a contract with Lotus to develop a 2.5 liter, naturally aspirated 16-valve four, and a four wheel drive system for the Daytona; neither of these survived, due to budget constraints).

Robert Sinclair retired on February 1, 1987, after 37 years at the company. Lee Iacocca wrote, “During Bob’s nearly four decades at Chrysler, he has made significant contributions to the turnaround and success of the company, contributions that will take the company well into the 1990s and beyond. His role in front-wheel-drive technology, turbocharging and unibody construction are among his many accomplishments during a distinguished career.”

In 1988, he wrote an article for Popular Mechanics in which he said that by 2005, the piston engine would remain, but companies would “deliver superb reliability, pleasint driving, and at a price that makes sense… an engine that starts instantly every morning at any temperature and any altitude.”  He talked about reliability and “we have to get rid of leaks, with new gaskets. It is not romantic, but that is where the advances are.”

Sinclair noted that turbocharging would be refined, and adaptive suspensions would be coming, along with sport-vs-comfort switches, voice commands, and controls on or close to the steering wheel; he also thought round dial gauges would remain, in black and white, with red needles.  His predictions were remarkably accurate, including the arrival of drive-by-wire (though he firmly objected to it).

Allpar will be posting a more complete page on Robert Sinclair later this week.

(Thanks, Bob Lees, for the notice.)

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Marchionne talks with WJR about Super Bowl ad

Chrysler CEO Sergio Marchionne joined WJR-AM radio’s Paul W. Smith this morning to discuss the two-minute spot that aired during the halftime of Super Bowl XLVI last night. What follows is a transcript of that show:

Paul W. Smith: Well, “You Can Drive My Car” the Beatles always starting our 7 o’clock hour, but how appropriate and our guest would certainly suggest you can drive his car and his car will be a fine Chrysler product; could be a Fiat, could be – well, I’ll let him say. I’m not sure what he’s driving these days but it’s always a pleasure to speak with the CEO of Fiat, SPA; chairman of the board and CEO of Chrysler Group, LLC, of course, Sergio Marchionne coming off an unbelievable victory last night at the Super Bowl. Sergio, congratulations.

Sergio Marchionne: Thanks, Paul. It was a great day yesterday.

Paul W. Smith: Well, let me tell you something, you got the New York Post saying, “Clint Eastwood scored one of the few touchdowns in last night’s advertising Super Bowl; a stirring endorsement of Chrysler-Dodge-Jeep and Motown as a whole, standing out in what was a decidedly ho-hum night for Madison Avenue,” just as the start of the third quarter there was Clint Eastwood. CNN Money, “Chrysler is king of the Super Bowl spots.” They proclaim in one of these stories that Chrysler just won the Super Bowl. It goes on and on; of course our Detroit papers being very favorable about it, too; and everybody was wondering what in the world you could do following Eminem from last year, and you even said to us, you know, understand we’re not going to be able to duplicate what we did. Well, you didn’t duplicate it, you’ve certainly – you may have outdone it in terms of spreading that whole feeling now for the whole country.

Sergio Marchionne: No, I don’t know whether we outdid Eminem. It’s difficult. The message is completely different this time around. It’s very difficult when you work on these things to be objective because the message and the work that we did with Clint Eastwood and with the agency and with our people on this was so, so detailed and so gut-wrenching that it was very difficult to be objective. So I – the fact that…

Paul W. Smith: You’ve got a nice team of young guys that worked on this; young men and women that worked on this.

Sergio Marchionne: Yeah, and by the way, there are two people that should be singled out; one of them is Olivier Francois, who’s the head of marketing for both Fiat and Chrysler, and Saad Chehab who’s the head of Chrysler-Lancia and these two guys have just – they’ve done an outstanding job. They didn’t sleep for – and I can tell you because they were with me in Europe when we were finalizing these commercials — but they did not sleep for four days in a row, and we didn’t wrap this up until last Monday at Noon.

Paul W. Smith: Wow.

Sergio Marchionne: So when we made the final call on the musical score, which by the way is a story in and of itself because there was a young lady out of Oregon who wrote the score and was recorded with people from the Oregon Symphony Orchestra in a matter of three days; and she’s a 35-year-old kid out of nowhere who’s done this brilliant job of recording the music. So it was a magical thing that came together and I’m thankful to everybody who worked on this; and it’s a great tribute to the people at Chrysler. The commercial ultimately reflects the spirit that drives this organization and I’m delighted.

Paul W. Smith: In the spirit of the workers who, from top to bottom, helped Chrysler post a $225 million fourth quarter profit, the hourly workers getting profit sharing checks for the first time since 2005; and I know that as is the case always in a situation like this, this is really just the beginning; no time to relax; this is the time to really charge forward, Sergio.

Sergio Marchionne: Yeah, no I think I reminded our dealers yesterday in Vegas when I met them yesterday morning that we’ve got a daunting task ahead of us for 2012 and that it should not be underestimated, the competition is incredibly fierce. I think we need to stay humble, keep our head down and just keep on pushing as I’ve always said, but we’re walking into 2012 with good prospects. January was a good month and I think this commercial yesterday has reset the tone of a fighting spirit within Chrysler and that’s the way I’d like to look at the rest of the year, and we’ll see. I’m confident.

Paul W. Smith: Well, it was – by the way, he won’t tell you this so I’ll tell you that when Sergio Marchionne was talking to all of the dealers at the NADA – not just Chrysler dealers but all dealers there, a tough crowd in Vegas, you got five standing ovations with what you said. So what you said resonated as well with the dealers as this commercial resonated with the viewers last night at the Super Bowl.

Sergio Marchionne: Yeah, no, but it says something about this country, Paul; I mean it says something about the resilience of what America really – I think Americans unfortunately have got this bad habit of short-selling themselves internationally. I travel the world and I can tell you, Americans should be incredibly proud of what they have. I’ve had a chance to see firsthand how other places work and how they view life and I think that the fundamental values that drive this country are sacred and I think they should be protected at all costs because they’re what makes this place magic and we should not fool around with them. I think this is important stuff and we need to protect it.

Paul W. Smith: Well, and it seems, Sergio Marchionne, that we from time to time need a reminder from somebody who was not born in this country who spends a lot of time in other countries. We sometimes need a reminder. I’m not exactly sure why, but I’m glad you’ve reminded us, and certainly Clint Eastwood reminded us in many ways with what he said.

Sergio Marchionne: Yeah, no he’s a unique human being…

Paul W. Smith: How did you talk – Clint Eastwood doesn’t do commercials. How did you talk Clint Eastwood into doing your Chrysler commercial?

Sergio Marchionne: Simply because I think – I actually believed – he believes in what he says. He’s at a point in his life where he doesn’t have to prove anything to anybody. You know, the great thing about being 81 years old is that you’ve got standing and you’ve got stature. If anything at all, age gives it to you, but in his case it’s his career and what he’s been able to accomplish, and he felt really deeply everything he said. I’ve spoken to him. There was not a single doubt in my mind that when he spoke on the commercial he was expressing his views. You know, when he talks about the second half and you talk about somebody who’s – and God forbid that anything happens to him — but the second half is going to go longer than his runway as it’s hopefully going to go longer than mine, and for somebody to be able to speak about the future with a level of confidence that he spoke about yesterday, and with I guess a sense of serenity and peace about dealing with the second half, is something that we should all take to heart. It’s – these are unique moments, right. You can’t really – you can’t minimize them. I think they’re worth a lot; they’re going to stay with me for a long period of time because even the making of the commercial changed us, right. It changed us as human beings and so we’ll cherish it for a long, long time.

Paul W. Smith: Sergio Marchionne was watching this. I don’t know if you could be anonymous in a sports bar in Clarkston with Gualberto Ranieri, the man who’s always with you and doing a nice job for you, and I was on the phone with you right after and found that the commercial got a standing O in the sports bar.

Sergio Marchionne: It did, it did, and I think it brought a huge amount of pride back from Detroiters and I think for – it’s nice to see, and I think – and I hate to say this, but we probably deserve it after all the stuff that we’ve gone through, so.

Paul W. Smith: I think you’re right, and I think that the people across the country could relate to the fact that we can’t be knocked out with one punch. We do get right back up again and –

Sergio Marchionne: Yep.

Paul W. Smith: And the world is going to hear the roar of our engines. It may be halftime in America but our second half is about to begin and we’re very thrilled with the direction it is going right now. You meant in no way shape or form, and unfortunately with it being the silly season in politics, everything has some political bent to it but this did not.

Sergio Marchionne: It has zero political content. I think we need to be careful, and God knows, I mean I can’t stop anybody from associating themselves with a message, but it was not intended to be any type of political overture on our part. We are as apolitical as you can make us. You know, we’re just an ingredient of a big machine here in this country that makes us go on. I wasn’t expressing a view and certainly nobody inside Chrysler was attempting to influence decisions. The message is sufficiently universal and neutral that it should be appealing to everybody in this country and I sincerely hope that it doesn’t get utilized as political fodder in a debate. But you know.

Paul W. Smith: You know, it’s interesting, too, with we already know you had to spend a lot of money to get that time, two minutes at that prime time just before the start of the third quarter. It probably was relatively expensive. I’m not asking, but relatively expensive to get Clint Eastwood.

Sergio Marchionne: Yes but you’ll see this; we’ll probably issue a press release in connection with this. Clint was sufficiently – was so generous in his approach to this that any money that we’re paying him is going to go to charity. So this was not done for financial reasons.

Paul W. Smith: It really seemed like it was coming from his heart and I point this out only because it’s astounding to me because I didn’t think about it ‘til I read it from somewhere; here you have this two-minute incredible commercial with the incomparable 81-year-old director/actor/producer Clint Eastwood speaking right to us, speaking to the heart of the nation, and he not once uttered the word Chrysler.

Sergio Marchionne: Yeah, didn’t have to I don’t think.

Paul W. Smith: Nope, he sure didn’t have to but it’s astounding when I look back and think back. He didn’t have to and that says a lot for what you guys are doing and the way that commercial came through. Again congratulations. What a fabulous moment for Chrysler again and the hard-working men and women who have been through hell and back and continue to keep doing a great job. I don’t want to forget, too, very quickly and then I’ll let you go, Sergio Marchionne, but that was a funny and powerful Fiat commercial you had, too.

Sergio Marchionne: You enjoyed it, huh?

Paul W. Smith: I did! I thought it was funny. I didn’t know where it was going.

Sergio Marchionne: Yeah, but it tells you something about this house. We are multifaceted (laughs).

Paul W. Smith: (Laughs) Yes.

Sergio Marchionne: And multi-talented, too, I think.

Paul W. Smith: Multifaceted, multi-talented, but I can’t remember, that’s a hot little Fiat. What was the model number or model?

Sergio Marchionne: It was the Fiat 500 Abarth, which is going to go into production now. It’ll be available in dealers I think in the first quarter of this year so it’s –

Paul W. Smith: Talk about a pocket rocket. That thing looked hot.

Sergio Marchionne: Yeah, it’s a rock and roll car.

Paul W. Smith: Yeah. All right, Sergio, always a pleasure. Thanks for your support here. We’ll see you from the Geneva Motor Show. We’ll look forward to that, and congratulations on what’s happening, too, with MOPAR and the 75th anniversary of the aftermarket parts division. You’re turning out some incredible, souped-up, customized cars. I think that’s a smart move for people who want to buy cars and customize them right away; you’re doing it with MOPAR. And again congratulations on winning the Super Bowl ad game, if you will, in a big, big way.

Sergio Marchionne: Thanks very much, Paul. Talk to you soon.
Paul W. Smith: All right, we’ll look forward to it. The CEO of Fiat SPA, chairman of the board and CEO of Chrysler Group LLC, Sergio Marchionne. And boy, he has lots to be happy about and lots to be proud of as to all of the hard-working men and women of Chrysler. And the people involved in putting that thing together did a heck of a job.

Transcript provided by Chrysler Media.

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Marchionne speaks at NADA Convention

Chrysler CEO Sergio Marchionne spoke to dealers at the NADA convention on Saturday. The following is a transcript of his remarks”

Thank you, Stephen, for those welcoming remarks. And I also want to say “thank you” to Governor Brian Sandoval for honoring us with your presence today.

Ladies and gentlemen, good afternoon.

I have to start off my remarks today with a confession. I am almost embarrassed to admit that although I have spent most of my professional life travelling around the world, I have never, ever been to Las Vegas.

I am a Nevada novice, although this city has been immortalized in enough movies I have seen to make the place almost familiar to me. And so I am delighted to be here today, to experience the Vegas charm first hand, and it is indeed a privilege for me to have the chance to speak before the members of NADA, an association that traces its history back to 1917, when 30 auto dealers went to Washington to protest a luxury tax on automobiles.

The city of Las Vegas was only 12 years old back then, and it was hardly a convention center. Las Vegas was more of a watering stop for steam-driven trains traveling between Salt Lake City and Los Angeles. Early residents battled heat, desolation and dust. There were more tumbleweeds than automobiles.

In fact, one of those pioneer settlers, watching tumbleweeds blow first one way, and then the other, back and forth on unpaved Fremont Street, originally uttered the remark: “What happens in Vegas, stays in Vegas.”

This remained a small, out-of-the-way town until after the Second World War, when the city began what civic boosters refer to as its “colorful” period of history.
“Colorful” being a euphemism for “shady,” as it was largely mob money that built the city into a tourist attraction. One of those colorful characters, named Bugsy Siegel, opened the Flamingo Hotel and Casino in 1946 with $6 million in mob funding. Unfortunately for Bugsy, the Flamingo originally suffered heavy losses. He was soon gunned down, a slaying said to have been ordered by his mob investors in order to bring in someone else to run operations at the Flamingo.

Fortunately, today we live in an era when most boards of directors use more humane methods to bring about a change in management. At least that was true up to the time of the financial crisis of 2008, when board room behavior became somewhat heavy handed. Not Bugsy style, but close.

Eventually, legitimate corporate entities replaced mob ownership in Las Vegas.

I’m sure Governor Sandoval is proud that today’s Vegas is the country’s entertainment mecca, the convention capital of the world and the ultimate symbol of the belief that, “if you build it, they will come.”

From their origins, NADA and Las Vegas have both grown up into something much larger, and an integral part of the American experience.

Of course, this city is also famous for its gaming tables. And during the recent recession, some of you may have wondered if you would be better off investing at the roulette wheel than putting your money back into the struggling auto industry.

In all honesty, those thoughts may have occurred more often to the Chrysler dealers in the room than the rest of you.

Betting on the underdog was not an easy call. Yet last year, Chrysler led the industry with a 26 percent increase in U.S. sales, and gained more market share than any other major manufacturer. Just three days ago, we released our 2011 financial results, which showed we made $2 billion in modified operating profit and shipped two million cars worldwide, a 26 percent increase from 2010.

We have been receiving accolades in the press for this comeback, but the truth is that Chrysler itself didn’t sell a single car to consumers.

It was Chrysler dealers who moved the metal, one vehicle at a time.

In fact, their sales, our retail sales, increased 43 percent last year and I want to express my deep appreciation to each and everyone of our own dealers who hung tough through hard times and uncertainty and who played a huge part in helping us reconnect with our customers.

As a dealer, whether you represent Chrysler or one or more of our worthy competitors, you are in fact much more than just an intermediary that connects manufacturers with their ultimate customers.

You are chief executives of your own independent businesses. You and I share more than just the title. You make investments, risk capital, make decisions that affect the lives of employees, and often stay up late at night worrying about how it is all going to turn out.

Right now, judging from what we are hearing from many of you, things are looking up. There is a feeling of optimism around the entire industry that perhaps has not been present since the Nineties.

There is a certain swagger in town this weekend, the kind last seen in Las Vegas during the heyday of Sinatra and the rest of the “Rat Pack.” This high level of enthusiasm also was apparent a few weeks ago at the North American International Auto Show in Detroit. And the enthusiasm spread even beyond the Chrysler stand, where we brought out an important new car, the Dodge Dart.

All of the domestic automakers, and many others as well, launched significant new products. The introduction of so many new entries demonstrated again how incredibly competitive the U.S. market really is.

Tomorrow, if you tune in to the Super Bowl on NBC, you will see another example of an industry fighting to bring the American consumer into the fold as the market comes back.

Chrysler will be back in the game as an advertiser, although I confess it will be improbable if not impossible to replicate the success of the two-minute, “Born of Fire” commercial that we aired last year. That commercial, featuring Eminem, was a calculated, all-or-nothing risk that was enthusiastically received during the game and has surpassed 21 million views on YouTube, as well as being named the best automotive commercial in the world at the Cannes International Advertising Festival in France.

I don’t want to give away too much about the commercial we will air tomorrow, but I will tell you that it will once again be unconventional. It will reflect the very spirit of what Chrysler is today, how we view our role in society, our passion and our love for this country.

Perhaps our success last year has inspired some others to try their hand at Super Bowl advertising.

After all, as this British sign clearly shows, it is hard to keep a good thing secret for long.

According to published reports, there will be a large roster of car commercials in the game, which some people also refer to as the “Super Bowl of Advertising” because it provides a huge audience that actually looks forward to seeing the ads. In fact, MSNBC reported that at least nine other competitors will air advertising, despite the hefty cost of doing so.

With that many automakers willing to pay the hefty cost of Super Bowl commercials, this is clearly an industry feeling positive about 2012.

So whatever we’ve lived through in the past four years – some of you in purgatory, and some of us in hell – I think we’ve paid our penance.

And the prospects for this year are quite good.

After a series of false starts, the U.S. economy appears to be picking up steam, as evidenced by the 11 percent increase in auto industry sales in 2011 compared with 2010. This trend continued in January, with a very healthy SAAR of 14.1 million vehicles.

Consumer confidence is creeping up and the employment recovery is beginning to gain momentum. The jobs report that came out just yesterday showed the unemployment rate is at its lowest level in nearly three years, which shows more and more companies have confidence that demand will grow for their goods and services. There is even a glimmer of optimism in the long-dormant housing market.

A Polk report released just a few weeks ago showed that the average vehicle on American roads is now 10.8 years old. That is the oldest since tracking began in 1995, when the average was just 8.4 years, and it should indicate a reservoir of pent-up demand.

One area causing nervousness in markets around the world is the uncertainty of the situation in Europe, because of the sovereign debt crisis. The response to the current crisis will go a long way toward determining the future of the Union itself.

Europe ultimately needs to decide whether it wants a true European Union. A confederation of interests which is unified by one single currency doesn’t work. Europe needs to find a way, but more importantly the resolve, to collectively run a fiscal and economic policy.

The problem is of a magnitude and of a reach that could, if it’s not controlled, have ripple effects beyond the European borders.

I’m hopeful that all those involved will eventually converge on a solution, but at the same time it is an issue we are watching very carefully to understand the risks it poses to the market in general and the auto sector in particular.

Perhaps the most important question our industry will face in the next few years is whether or not we are capable of handling a newfound prosperity, in a way that does not jeopardize the future.

It has been reported, by those who pay attention to the way of birds, that a certain kind of lark sings the same five notes over and over. Day after day, year after year, the same tune. This propensity to repeat oneself endlessly reminds me of how the auto sector behaved before the last recession, dragging value-destroying business strategies behind us for years.

Like the five-note lark that can’t change its tune, our industry endured these structural flaws for decade after decade, through market upturns and downturns alike. These dubious practices included an irrational preservation of industrial inefficiencies coupled with brand-damaging marketing approaches. Our companies struggled to make a profit on the core business of building and selling cars, depending instead on related activities, such as financing.

Domestic automakers in particular made expensive ventures into non-automotive businesses, further distracting attention from the simple proposition of making automobiles that people wanted to buy. We forgot that product is the key, and everything else is nonsense in comparison. Customers live in their cars, and if you give them an experience that is less than satisfactory, they will go elsewhere.

The recession destroyed all of our excuses for inaction.

Under the leadership of President Obama, America had the courage to force a restructuring of the industry, ensuring that what emerged from the bankruptcy of two major U.S. manufacturers would provide the foundations on which a new process of growth and development could be built.

Overcapacity is no longer a NAFTA problem. We have taken every ounce of unnecessary capacity out of the system.

The Fiat-Chrysler partnership stemmed from this effort to address the industry’s structural obstacles. It is designed to create efficiencies in the use of production capacity and the development of products, while allowing us to focus more resources on innovation.

The partnership also is helping Chrysler broaden its product portfolio and add jobs right here in America. For example, earlier this week we announced that we will add more than 1,800 workers at our plant in Belvidere, Illinois, to assemble the new Dodge Dart, which is based on an Alfa Romeo European platform. We also have announced plans to start production of a Maserati SUV at our Jefferson Avenue North Assembly Plant in Detroit later this year. You will also see Alfa Romeo models built in the U.S. as part of our plan to reintroduce this iconic brand to this country beginning next year.

As a whole, the North American industry has been retooled so that it can sustain not only the normal down cycle, but even the sort of cataclysm that we recently underwent. It was a painful exercise, but restructuring set the base for the rebirth of the American car industry.

This rebuilding is not contingent on applying a few Band-Aids, but instead is being built on a solid foundation.I believe the traumatic times we went through have indelibly changed the DNA of all of us connected to the auto industry.

I don’t believe there is anyone in the room who doesn’t remember the pain and suffering we collectively endured. For our part at Chrysler, our leadership team is continuously mindful of the experience.

Some sense has been restored to the marketplace. We have not seen any of the destructive pricing policies that characterized the auto market for many years. Leaders are making decisions for the long run, and across the industry there seems to be an understanding that we cannot afford to destroy brand equities or pricing power.

The French philosopher Camus wrote, “In the depth of winter, I finally learned that within me there lay an invincible summer.”

This is my hope – that having gone through our season of despair, that we are fully committed now to a path of viability.

The important thing is to maintain the discipline the restructuring forced. We need to be careful and avoid arrogance, resist the temptation to return to the car baron mentality, which has been a character trait for this industry for many years. Success is never permanent, it must be earned every day.

We have embraced change, but only if we embrace humility at the same time will we be in a position to reap the benefits of that change.

When the new Chrysler was formed nearly 3 years ago, one of our top priorities was to transform the relationship with our dealers by making it more transparent and emphasizing the partnership aspect of it.

I have often heard it said that the fate of dealers depends on the choices made by the manufacturers that they represent. This attitude is based on an assumption that an automaker drives the strategic direction and the ultimate financial prospects of its dealers. THis has an element of truth to it. There is no question that the products we build and ship to your stores are foundational for any success.

Chrysler’s revival in the marketplace was possible because we fulfilled a commitment to deliver 16 all-new or substantially refreshed products, including new powertrains, fresh designs and significantly upgraded interiors. We brought these 16 vehicles to market in a period of just 19 months, at competitive quality levels and with considerable marketing support.

But we recognize there is another side of the equation. The fact is that unilateral relationships do not exist.

Chrysler’s comeback was fueled by the commitment and the skills of the people that work inside Chrysler, and of equal importance, by the commitment and the skills of all the people who work with Chrysler. It is the same story for every manufacturer. Competitive dealers, those with courage and the vision to anticipate the needs of the market, not only write their own book of success, but also strengthen the brands and companies they represent.

I understand how important it is for dealers to know that their OEM partner is solid, resourceful and absolutely committed to following through in its partnerships. This is why transparency is a key element. Because our dealers are critical to our success, it is important that we share our objectives with them along with our plans for achieving those targets.

At Chrysler, we are making a great effort to keep the lines of communication fully open with dealers. Not just by holding dealer council meetings that include all of our senior management, as well as monthly conference calls. It also includes ongoing ad hoc discussions, so that we all are clear on exactly where everyone stands.

In a crowded market, customer satisfaction is a crucial differentiator for both manufacturers and dealers.

One of the most significant changes at the retail level in recent years is the unprecedented level of transparency in pricing. Educated consumers are using Internet-based services to get a pretty good idea of what they’re going to pay for a car. Price negotiating is being taken out of your hands, and it is a trend that will only continue as the consumer is able to access even more sophisticated information.

This makes it even more important for you to cultivate customer loyalty by providing the highest levels of care and convenience, or else risk being vulnerable to your competitors who are much more in tune with this development.

Customer satisfaction is the most significant determining factor of future prospects, for you and for us.

At Chrysler, we’re constantly looking for ways to improve the customer experience with our products and in our dealerships.

Overall, our dealers are more profitable than they have been in a decade. We know the importance of this. It is a prerequisite for you to invest in facilities, in hiring and training the best people, and in providing the amenities that round out a pleasant customer experience.

We need our brands to be properly represented in the marketplace, and this requires commitment and investments. At the same time, we recognize the need for some flexibility. We have to go beyond a system where the manufacturer issues top-down edicts to the distribution system. Facility requirements need to be reasonable, based on the economic realities of your particular marketplace.

Flexibility is an important aspect of embracing change. An example is our approach to our Dealer Standards program, which we continually assess to ensure we are on the right path. We made a lot of progress with this comprehensive program in the first phase after introduction, but recently customer satisfaction scores have plateaued.
As we examined the results, we concluded that our previous approach wasn’t elastic enough to accommodate individual dealer concerns.

We have suspended the rewards program and after consultation with our dealers intend to be back with a revised program.

The future of this industry is not without significant challenges.

One of the biggest hurdles facing our industry in the years ahead is improving fuel efficiency.

Over the long-term, we will need to bring our vehicle fleets to an average of 54.5 gallons by 2025, the anticipated federal standard that will be formally set later this year.

Looking at the near and medium term, I believe our industry still has a great deal of room for progress in the use of combustion technologies to bring about significant improvements in mileage in a cost-effective manner.

We don’t expect to turn America into a country full of people who drive subcompacts in order to reach fuel-economy targets.

The new Dodge Dart will represent a big step in fulfilling the commitment made by Fiat to help Chrysler introduce its fuel-efficient cars and engines to the North American market.

If you consider the C and D segments – respectively, the Dart and the Chrysler 200 segments – and you add in the SUVs associated with those segments, they account for more than half of the American market today.

That is not going to drastically change.

We need to get smarter about making these cars lighter, reducing friction losses, and improving transmissions and engines. Expertise in extracting more power out of smaller displacement engines is one of the things that Fiat has brought to Chrysler.

Although we have only skimmed the surface of our ability to squeeze out higher efficiency levels, it will not be possible to meet the tough 2025 EPA targets on the basis of pure combustion.

All the work going on now on electrification is a crucial part of exploration, and in fact at Chrysler we are working on an electric version of the Fiat 500 that we’ll begin manufacturing later this year.

But I don’t believe any of the current solutions are going to provide the final, definitive answer.

In my opinion, until the economic model that supports electrification changes, so that we can provide a cost-effective alternative to combustion, an outcome, by the way, which is far from being certain, electric vehicles will continue to play only a marginal part of the industry.

There is also an unresolved issue as to the future of compressed natural gas, CNG. Increased access to the natural gas reserves in the United States and Canada could help create independence from imported oil in a relatively short period of time in North America. It is also eco-friendly, with up to 25 percent fewer CO2 emissions compared with gasoline. And for customers, it provides a significant price advantage.

I was encouraged to hear President Obama say, in his recent State of the Union address, that he would focus on shale gas development as a way to create jobs, reduce emissions and lessen dependence on foreign energy sources.

Over the next several years our industry needs to continue to accumulate knowledge and increase our understanding of various technical solutions.

My best read of the future is that the ultimate answer to meeting 2025 standards will involve the use of multiple technologies.

I am confident that, if we unleash our engineering talent, we can achieve sustainable mobility without sacrificing our customers’ desire for vehicles that meet their transportation needs and are a pleasure to drive.

The history of our industry is marked by tremendous innovators who made a difference, fulfilling human aspirations for mobility and redefining how people lived. A defeatist outlook in regard to the fuel-economy challenge is not worthy of our collective heritage. As an industry, it is up to us to reject the notion that we can’t do it.

We can choose instead to embrace the attitude expressed by the author Thomas Carlyle, who said, “Every noble work is at first impossible.”

The focus on sustainable mobility is part of a broader issue – namely, our responsibility to our communities, our society and our planet.

At Fiat and Chrysler alike, we believe that economic success and respect for the environment are not mutually exclusive concepts.

Sustainable environmental practices, incorporated in both the products we sell as well as our production processes, are an important part of the effort to give merit and dignity to what we do.

We have established a sustainability team that is coordinating a disciplined approach and is reaching out to dealers and other members of the extended Chrysler family.
Some of our dealers already are well along the path.

For example, Tim Parker in Hot Springs, Arkansas, installed a 2,000-square-foot active solar panel system, the largest privately owned solar array in the entire state. It is part of a comprehensive effort by the dealership to reduce its carbon footprint and conserve natural resources.

Another dealership, Hunter’s in Lancaster, California, has implemented a recycling and energy efficiency program that includes solar carports that produce 75 percent of the dealership’s energy needs while providing protective covered parking for customers’ vehicles in the service lot.

I know there are many more dealers, and not just in the Chrysler fold, who serve society in a socially responsible way.

I do not pretend to have the answer to how any of you should conduct your businesses in a way that marks you as a good citizen. But I do urge you to make it part of your decision-making process.

Great organizations conduct business in accordance with fundamental values, and one of those values is a commitment to leave behind a world in which future generations can meet their own energy, transportation and health needs.

Hemingway once wrote: “Courage comes such a short distance; from the heart to the head; but when it goes, no one knows how far away it goes; and it is a bad thing to be in the bullfighting business when it is gone, no matter where it went.”

The challenges we face as an industry, and as a society, have much in common with a bullfight. If there is one ingredient that we need, it is courage. The kind of courage that comes from often choosing the grander, the more difficult path.

That courage is what must define us today.

Being courageous includes holding fast to those values that are at the core of how we do business and represent our most precious asset: honesty and integrity in our choices; humility and respect in our dealings with others; and the sense of responsibility held by those who fully understand that their actions have consequences far beyond the walls of the office or the dealership.

Being courageous means assuming the moral responsibility of our actions. We need to do something so that our age becomes an age of hope and action.

At the World Economic Forum last week in Davos, there was a renewed sense of urgency on how to adapt the market economy in a way that will moderate continual cycles of boom-and-bust, create jobs, and produce sustainable prosperity around the world.

There can be no doubt that the responsibility of governments is more crucial today than ever and that the decisions they make now will affect the legacy we leave for future generations.

But I believe that the crafting of our future should not be just the responsibility of governments. In its essence, it is an individual and collective responsibility. It is the duty of every person at every level.

Martin Luther King, Jr. – one of the most passionate leaders this world has ever seen – said, “I was not afraid of the words of the violent, but of the silence of the honest.”

The silence of those who choose inaction, who watch things happen and do nothing as if it isn’t their concern. The silence of those who shout and preach in public debates and on television, who act in their own self-interest and to bolster their own image, but then do nothing to actually change things.

That responsibility requires a commitment to being involved and taking action.

Martin Luther King, Jr. was talking about us all. He was addressing the human tendency to cocoon ourselves in our relative wellbeing, selfishness and indifference.
Closing our eyes, or thinking that the sacrifices and solutions are someone else’s responsibility, makes us part of the problem.

We all have a responsibility to make the most of the opportunities available to us now. We have a duty to commit to what we are able to do, to dedicate our individual skills and talents, to unite the best of society and work together to achieve higher objectives.

This is a lesson I have learned traveling and working around the world. A lesson I have carried with me that has allowed me to embrace my responsibilities as a leader with serenity and an open mind.

The essence of leadership, when all is said and done, is assumption of the moral duty to take an active part in building the future of the organization and of society as a whole. Acknowledging one’s own responsibility to give the next generation hope for a better future. Being accountable for this task is what makes leadership a privilege and a sacred trust.

Thank you all.

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Sergio Marchionne speaks at AN World Congress

Chrysler CEO sergio Marchionne spoke to the Automotive News World Congress in Detroit today. The speech, though long, is well worth consideration and reflection:

The first thing I want to do is add my condolences, both personally and on behalf of the whole of Fiat-Chrysler, to Susie Wheldon.

And to you Keith (Crain, publisher of Automotive News),

Our plan forecasts U.S. sales in 2012 to rise to 13.7 million. If I get as close to the projected SAAR right two years in a row, I’m going to give up this job, not follow Automotive News’ advice for 2012 of staying away from forecasts, and open up a fortune-telling business, 1-800-CALL-SERGIO.

Thank you very much.

Transcript courtesy of Automotive News and Chrysler Media.

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Pete Hagenbuch, Chrysler engineer

Charles “Pete” Hagenbuch, who once headed Chrysler’s production engine performance tuning and has worked on many of the company’s most famous engines, died this morning.

Pete graduated from West Virginia University in 1956, and earned an MAE degree from the Chrysler Institute of Engineering in 1958. He worked on the  the 426 Hemi, the B/RB-series big blocks, the LA small blocks, the 2.2 turbos, and even the Australian Hemi Six.

In retirement, Pete was friendly and approachable, and volunteered a good deal of his time at the Walter P. Chrysler Museum in Auburn Hills. He participated in a two part interview with Allpar, and answered more questions by email later. He is survived by his wife, Ann, by his children, Cathy, Peter, and Daniel, and by nine grand-children and one great-grandchild.

Services will be held on Saturday at 3:30 pm at the University Presbyterian Church in Rochester Hills, Michigan. In lieu of flowers, Ann Hagenbuch requested that people donate to the Walter P. Chrysler Museum.

Dyno operator Ed Poplawski wrote, “Pete was a great guy to work for…Pete was very hands on involved in all phases of the testing. He always had a plan in place and you knew where you stood with him. He made a point to make sure all our equipment was running and backed me up if any problems came up.”

Burke Brown, who was in charge of the original LX cars’ development, wrote, “I would call him the consummate absolute role model of the dyno development performance engineer. He was all about running the dyno, getting really good data, sitting down and looking at that data, he understood all that stuff really well.”

While with Chrysler, he gained some fame as a slot car builder, and is to be featured soon in a book on the subject.

With the Detroit Auto Show over, it may be worth some time to look at one of the men who made yesterday’s and today’s Mopars possible.

• Pete Hagenbuch (brief biography)
• First interview
• Second interview
• Third “interview” (correspondence)
• Pete’s guided tour of the Walter P. Chrysler Museum

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Marchionne in hot water again?

Auburn Hills is probably looking more tempting than ever to Fiat/Chrysler CEO Sergio Marchionne, if only because the U.S. government isn’t harassing him.

Reported in today’s Il Sole 24 Oro, Elsa Fornero, the Italian Minister of Labor, announced she wishes to meet with Marchionne “as soon as possible” to discuss “in person his intentions.”

Fornero says she is primarily interested in Fiat’s employment plans for Italy.

Though it wasn’t mentioned, the announcement comes on the heels of another Marchionne comment about the future location of the combined companies headquarters. In a discussion with reporters at the North American International Auto Show, Marchionne said the future company could be based in Europe, North America or Latin America. Fiat has a very strong presence in Brazil.

The first time Marchionne mentioned the possibility that Fiat might leave Turin, former Italian Prime Minister Silvio Berlusconi demanded Marchionne attend a special Saturday meeting to discuss the matter.

For an answer to her questions about Fiat’s plans for Italian employment, Minister Fornero need look only as far from Rome as Pomigliano d’Arco, near Naples, one of the hardest-hit Italian regions in terms of jobs. At the Fiat plant there, unions agreed to a new contract that improves productivity and reduces absenteeism. In return, Fiat pulled production of one of its most popular lines, the Panda, from the Fiat plant in Tichy, Poland, and gave it to Pomigliano, increasing the factory’s work ten-fold.

Similar events are taking place at the former Bertone Grugliasco plant and the huge Mirafiori plant in Turin.

In the midst of financial chaos, it’s not surprising the Italian government is looking for guarantees but, time after time, Marchionne has said the future depends heavily on what actions the new government of Silvio Monti takes to restore the Italian economy.

Even John Elkann, Chairman of the Fiat Board, shows signs of impatience with the government’s demands. When the subject of a possible move first arose, Elkann was quick to say Fiat would never leave Italy. In more recent comments, Elkann said Fiat will build cars, no matter what, but it’s up to the government as to whether Fiat will build them in Italy.

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