Don’t believe a word of it!

The Wall Street Journal scooped everyone on the Five Year Plan, or so it seemed. The next day, an automotive news outlet of great repute came out with an equally incorrect but consistent story based on “informed sources.” Finally, someone who certainly knows Auto Task Force insiders came out with another consistent story which would relegate Chrysler to minivans and trucks. It might still be true, but only if you consider the basic platforms – an important part of the vehicle but not necessarily the MOST important part. After all, consider that the Reliant, Daytona, Imperial, and minivan were all based on the same basic platform (they did not have the same platform but they were all based on the same platform).

Here’s our story on the Journal’s story:

According to the Wall Street Journal, which claims access to people who have seen Fiat’s plan for Chrysler, many of the recent rumors regarding current models are incorrect, and Chrysler will incorporate more Fiat Group products than expected.

Vehicles planned for the US, according to the Journal article, include a replacement for the Chrysler Sebring, based on a Fiat design. The PT Cruiser, Sebring, Avenger, Compass, Caliber, and Patriot will all have their final year in 2012, with even the popular Dodge Caravan ducking out; the Chrysler Town & Country will be Chrysler’s sole minivan, according to the article, though historically the Caravan has sold better.  The Nitro will also be dropped.

Marketing for the Fiat 500 is unclear; the article claims it will not use the Fiat name but “will be marketed as the 500.”

Alfa Romeos to be sold in the US starting in 2012 include the MiTo subcompact hatch, a midsized sedan, and the Milano, all to be made in North America. Chrysler will start up a Sebring replacement and compact sedan in 2012 and a compact Fiat-based Jeep in 2013, they say.

To be kept are the Dodge Challenger and Dodge Charger.

Under this plan, Dodge would be strictly muscle cars and trucks, while Chrysler would take over the “Chevrolet – Plymouth – Ford – Toyota” position as the “everycar” brand. No mention was made of plans to move Chrysler upscale, which were announced by the former head of the Chrysler brand shortly before he resigned.

Now, a lot of this is true. What isn’t? The Dodge Grand Caravan will remain, and be redesigned in 2014. The Nitro’s fate is unknown. Liberty will move to a Fiat platform. Fiat 500 will be called the Fiat 500 and will use the Fiat name.  Dodge will get new cars, based on Fiat designs – with one actual Fiat imported without changes (beyond what is needed for sale in the US).  Chrysler will indeed be moving upscale, if not in price then in image.

Above all, the engineering staff is going to be increased. And, while the charts do show numerous Fiat platforms coming to the US, to the point where 50% of Chrysler’s vehicles will be Fiat-based, the charts also differentiate between vehicles made by Fiat and imported “as is,” and those re-engineered by Chrysler to meet their own needs. Whether this is a sheet-metal-and-shock-absorber deal or a true re-engineering, we don’t know. You can build very different cars on a single platform – Audi TT vs Volkswagen Jetta, anyone? Camaro vs G8 or Nova? Mustang vs Ford Fairmont? Belvedere Six vs Hemi Superbird?

The second media outlet claimed that Chrysler and Dodge would disappear outside of North America. It now appears that Chrysler will continue in Asia, and in other markets Chrysler and Lancia will alternate; while Dodge will still be used here and there, sparingly. There is a lot more sharing going on than one would expect.

Oh, and the amount of money going to Fiat… remember all those billions in consulting fees going to Mercedes, for “sharing” their lovely previous-generation-but-still-expensive technologies? Fiat has so far gotten $0.  What’s more, they haven’t shifted everything to Italian suppliers. Mainly, though –

For the first time since Daimler first took over, an increase in the engineering staff was announced.

Wow.<

Maybe it’ll work out after all.

Dark but necessary times for Mopar fans

One day out from release of the official plans, there have been enough leaks to understand that the remains of Chrysler Corporation will not be what Mopar fans want them to be.

[See the actual plan | See our response to the plan so far]

Over nine years, Daimler-Benz decimated the ranks of Chrysler engineers. Some left due to their refusal to say “yes” to anything that originated in Germany; others because of various early retirement schemes; others due to layoffs; and others were poached by other automakers, including Toyota, largely because morale at Chrysler sank after 1999 and stayed low until a very brief period between the Cerberus buy and the Nardelli appointment.

After Daimler, of course, Cerberus came in. There was joy and celebration everywhere. Then Bob Nardelli, whom Home Depot paid tens of millions to get rid of, was appointed, and a dark shadow fell over the hearts of most Mopar folk. Sure enough, there was another round of engineering cutbacks. The company had millions for NASCAR, but apparently not enough to continue development of actual production cars.

As a side note, I tried to think the best of Bob Nardelli, but both the Fiat people and the Obama auto task force found that what people thought of him was largely true. He continued the hollowing-out of Chrysler, with no apparent long term plan other than stripping costs and flipping. Nardelli can take his place next to Bob Eaton in Chrysler’s pantheon of corporate killers.

Fiat came in and was impressed by what they saw, but they also had some very hard choices to make. I’m sure they’d rather keep LX development in the United States, but from what I understand, that’s just not in the cards. The LX was ready to go — if one accepted Daimler’s terms. Daimler has apparently decided it doesn’t need to supply the parts it was contracted to supply — so much for Dieter Zetsche’s love of Chrysler. We read him wrong, too. You read it here first. I was wrong about Dieter.

So now Fiat engineers will apparently go over the LX and redesign it to be produced more cheaply, and without Daimler parts. Well, it’s hard to argue with the second part. The first part might get us into some trouble. But emotionally, this is the hardest blow to take. It reduces Chrysler to a truckmaker. The Chrysler lineup, in terms of domestically engineered vehicles, will now be Jeep Liberty, Jeep Grand Cherokee/Dodge Durango, Dodge Ram, and Chrysler Town & Country. Four vehicles groups. That’s a sad end for what was once the world’s engineering leader, the country’s go-to guys during World War II, and the most profitable, successful automaker in the mid-1990s.

So where do we go from here?

Jeep will be Jeep if it’s not too diluted.

The lovely Chrysler 200C that I’ve been slobbering over is probably dead. We don’t know, it hasn’t been mentioned. But I’m not counting on it surviving. Its place in the production scheme will be taken over by the Alfa and Lancia and possibly Maserati versions.

Chrysler itself will compete with Alfa Romeo and Lancia versions of the same cars, and in North America alone. I would suspect that all three will be tossed into the market and whichever comes out on top will survive. Maybe Lancia will be “old Chrysler” to Chrysler’s Plymouth — the same cars with more luxury trim. Maybe not. But either Alfa or Chrysler will probably eventually be junked in North America depending on sales. In a way it doesn’t matter because they will all be Fiat designs anyway, unless Fiat starts building up local engineering staff to translate Eurodesigns into American designs.

Dodge will survive for a time on Charger and Challenger. Maybe Dodge will get some cars instead of or in addition to Chrysler, but I suspect each car will have one American brand and one or two Italian brands. Dodge Ram will grow with or without Cummins.

That’s apparently the future. Chrysler may or may not survive. Fiat may or may not put more resources in; Fiat may or may not keep the old names. In the best future, Fiat would temporarily handle engineering while recruiting a new engineering staff in the US to build next generation cars tapping Fiat technologies and platforms. In the worst future, the remnants of Chrysler will be empty brands slapped onto Italian cars, along with a light-truck-and-SUV-and-minivan group — essentially, the old JTE (Jeep-Truck Engineering) plus minivans. And with minivans getting smaller and lighter, except at Chrysler, which dropped its short wheelbase model at JUST the wrong time (because Daimler apparently only looked at costs, not revenues), the minivans might not last too long, either. Especially if Fiat buys over 50% of Chrysler — then the “buy American” argument won’t even work.

Sergio Marchionne, for all his positive attributes, is no less arrogant than any of Chrysler’s other recent leaders, and that is bad because it will close his eyes to the past, to lessons learned, and to local market (and loyal Mopar buyers’) preferences. His workaholic ways won’t help either – while he might be able to work under those conditions, I don’t think his leadership team will necessarily be making the best decisions. A lot of good people may lose their jobs, willingly or not, because they don’t want to work for someone with that “leadership style” – or with those demands. I’m also not crazy about the levels of responsibility he demands – running two brands and a functional area, for example.

There is some hope but frankly, I don’t think these will be fun times for Mopar fans.

(Thanks to Jalopnik for some perspective.)

Addendum: it appears that things will not be so bad:
Expansion of Chrsler engineering workforce

Chrysler to handle large displacement and hybrid engines for Fiat worldwide

Journey, Caravan, Avenger: new engine, new interiors, exterior refreshing

2014: all new Grand Caravan

New C-sedan, B-hatch, D-car, 7-passenger crossover

Repackaging around lifestyles rather than … whatever they were using before

Possibly, new Viper for 2013/2014

Quality improvements will continue and extend to dealer service