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As usual, the 2017 NAIAS show in Detroit was a major source of news, with Sergio Marchionne’s annual press conference (last year, in addition to the conference, Jeep chief Mike Manley confirmed the Jeep Grand Cherokee Hellcat).
Sergio Marchionne’s talk filled up many column-inches in the newspapers:
Here is a transcript of both press conferencees on January 9 (some reporters’ name may not be spelled correctly, and their questions were edited. Photos are from prior years).
Donald Trump has ... called for a border tariff on products exported to the US from Mexico. What’s your reaction?
That we will adjust whenever the rules get changed, if they get changed. We have no choice in this.
We’re not policy setters. It does take time to adjust to this new set of rules that he’s proposing, which I guess we’re speculating he’s proposing. He’s just been tweeting about them. I’m not sure exactly what the rules are. But let’s wait. I don’t know how to be more helpful in this.
Hi, Dave Shepardson from Reuters. Can you say if Trump’s election or pressure was a factor in the decision to make [recently announced] investments? And have you spoken to President-elect Trump or any of his advisors?
I have not spoken to President-elect Trump. I have not spoken to his advisors. And I know you’re going to hate when I say this, but the decision has been in the works for a long period of time. It was part of the discussions that we’ve had going back to 2015 with Dennis, when he was in the UAW.
If you look at the way in which we have realigned our manufacturing footprint in the United States, this latest announcement that we’ve made is totally consistent with what was announced back more than 12 months ago.
There’s nothing unusual about this step; it’s just a continuation of the retooling of the US manufacturing base to try and nurture the growth both for the local markets and for international purposes of the Jeep and the Ram brand. There’s nothing unusual about this. It was owed, right?
With the development that we’ve made, with Sterling Heights taking on the new Ram 1500, which will hopefully be released next year in January, it’s given us the opportunity now to effectively cement in the choice of the architecture for the Wagoneer and the Grand Wagoneer. That opportunity obviously has got a whole pile of positive implications, which is to provide additional capacity in the event that we have to move the heavy-duty truck out of Mexico into the US.
This was something that technically was not possible until the earlier announcement was made to effectively free up Warren. We were at capacity constraint, and have been at capacity constraint, on the Ram now for a number of months and so we needed to find additional capacity, the retooling of Sterling Heights. Once we stopped making the Chrysler 200, the retooling of Sterling Heights has given us the space now to try and look at Warren in a completely different way.
So the announcement yesterday was coincidental with all these tweets coming out, but it was owed.
Mike Wall with the Detroit News. We knew about the Grand Wagoneer. You’d mentioned that before as well as the Wagoneer. But the heavy-duty pickup was not mentioned before. You’re saying that was still part of the UAW deal?
It was in the announcement yesterday.
But when was that actually decided on?
It’s always been... By the way, there’s no commitment to move the heavy-duty.
Let’s be clear. If tomorrow morning President-elect Trump decides to impose border tariffs on anything that comes up from Mexico then we’ll have to adjust. I have no way of adjusting until I have Warren free. I can now adjust.
Regarding the production footprint, can you say where we’re at with that initiative and if you guys have found a partner to produce the sedans?
Well, given all the tweets that are going around and the fact that people would’ve probably found a non-US-based production site to produce the sedans, let’s find out what happens as a result of President-elect Trump coming in and how he views imports coming into the country. Let’s put everything back on the back burner for the time being.
I need clarity. I think we all need clarity. ... We’re not the only ones that need clarity. The great thing about the announcement yesterday is that it was painless and it was owed to this country given what we lived through. So we didn’t twist ourselves into a pretzel. It wasn’t a sort of preemptive strike against the tweet; it was just a natural extension of what we started doing a couple of years ago.
Now the cards are all laid out on the table, so you know. We have now confirmed the pickup truck in Toledo; we’ve confirmed the Wagoneer and the Grand Wagoneer as being body-on-frames. All those decisions that we’ve been working on are out, so we’re just in execution mode.
We’ve got to be careful that we don’t load ourselves up for bear, because we’ve got two big products coming downstream at the end of this year and the beginning of next. We’ve got both the new Wrangler coming out and the Ram 1500. With those two products coming downstream, if I load it up with one more car to launch in 2018 we would’ve choked. That’s why we called it [the Wagoneer?] a model year 20, just to buy ourselves enough room to try and breathe here. There’s just too much stuff on the burner. I can’t digest it; it’s too much.
Todd. Speaking of which, what does this investment of a billion dollars in Jeep and Ram mean for the other brands? Specifically, ...the Alfa Romeo platform and all the other brands.
The Alfa Romeo platform has applications neither in a body-on-frame, as the Wrangler pickup would be, or on the Wagoneer or Ram Wagoneer.
What I mean is so you’ve been developing that platform, but ... with all this development money going to Ram and Jeep, what does it mean for the other brands?
Well, the Grand Cherokee will need a new architecture, and the most natural application of a further evolution of the Alfa platform is the Grand Cherokee. We’re finishing off the study now, and I’m going on the basis of the latest available information, but it is the basis on which the Grand Cherokee will be developed, unless something happens in the next 60 days that will suggest it’s not doable.
That would really complete the story of architectural development for us because I think it would certainly nail in a big piece of the Jeep story. And in that case we also need capacity because we’ve been choking production for international expansion out of Jefferson. We just don’t have enough.
So the real issue now going forward is how do we make sure that we get as many Grand Cherokees out of Michigan as we can? So we need to work our asses off on that issue. I don’t have an immediate answer, but I can confirm that it’ll stay here.
Brent Snavely with the Detroit Free Press. I was wondering if you could talk a little more about the Warren truck investment .... and the potential heavy-duty production. Would that be in addition to the production in Mexico or would you be moving Mexico production to here?
If the heavy-duty started being produced in Warren it would be in replacement of the Mexican production. If it moved here.
Then would the Grand Wagoneer be a body-on-frame?
It’s a body-on-frame, but these are large vehicles. Paint, envelope, moving the vehicle around the plant all require adjustments that can only be made if I have access to a clean Warren, which we’ll have starting with the production of the 1500 [at Sterling Heights] next year.
Craig Genan from The Golden Mail. I wonder if you can clarify whether the Canadian investment that was committed to Unifor . . .
It’s going ahead? The tweets have no impact on that?
If Prime Minister Trudeau wants to start tweeting we’ll deal with that too. I don’t know whether it’s a new political language, but if it is we’ll just adjust to that too. But I think we’re okay.
So are you in discussion with those two governments yet about financing?
Not yet but we will.
What kind of money are you looking for?
As much as I can get.
Tyrel. I wanted to talk about the roll-out of the Wrangler. We’re a ways out from that I understand.
We’re not a ways out. It’s less than 12 months.
It looks like you are going to be selling both the current model and the next generation simultaneously. Is that the case?
It’s for a very short period of time to allow phase-in and phase-out.
Not long enough. Not with the volume absorption that we’ve got for Wrangler today.
You’re talking about 2,000 jobs in Warren and Toledo. Can you give us any sort of indication of how many of those are in Warren? How many are in Toledo?
Any further breakdown on that?
What still has to be determined?
You’re just not going to tell me then?
There you are.
Oh, all right.
As I get older I learn that the more detail I give you, the more you’ll remind me of the fact that I got it wrong, and if I get it wrong by five people you’re going to be hammering me into the ground until I die, so I’m not going to let you do that.
How relieved are you that now you’re in the list of good people for Mr. Trump?
You’re telling me that I’m on the list of good people? Because he hasn’t told me I’m on the list of good people. Do you know something that I don’t know?
Look, I appreciate the comment that he made today, that he thanked us for the investment. I can go back to what I told the foreign press earlier this morning. Our history with Chrysler here is eight years old but we haven’t forgotten how we got here.
We owe a lot to this country, and I think the development of Jeep on an international basis is a sacrosanct moral obligation that we have. But we’ve got to protect Mother Goose here. This is where it started and we’ve got to make sure that we do all the right things and we do the right things in terms of both profitability for Chrysler but also in terms of employment level.
I think the fact that we can continue to make mid-size and larger vehicles in the United States for global expansion is a key part of our strategy and I think we will continue to develop this. I think it’s having incredibly positive effects on employment levels and utilization of our plants. So I’m glad that we could share that level of commitment.
Well, I’m not selling shares. I appreciate the fact that a negative tweet has got a negative repercussion on share price, but I don’t know how to answer questions like this. This is new territory for most of us. None of us have had a tweeting president before. It’s a new way of communication and I think we’re going to have to learn how to respond.
Now, I just saw a couple of comments from my colleagues on the floor here; all of you have been persistent in asking the question on what are you going to do about President-elect Trump? And the answer is we’re not going to do anything about President-elect Trump, because he was elected. He’s the President of the United States. So we will respond to whatever it is that he determines as being relevant policy to the United States and we will adapt, and life will go on. There’s no used trying to moralize this. There’s nothing to moralize. We’re car makers.
Well in that case I’m going to have to ask yet another minivan question.
[Laughs] You could always tweet me one. Go ahead.
What are your thoughts on Pacifica sales so far?
Expected, because we had the same story with the Grand Cherokee back in 2010. If you go back, it took us about 12 months to get geared up.
It’s received more awards than any minivan I know of. It’s a lot more expensive than the outgoing vehicle. We know from a quality standpoint and what it offers the marketplace there’s no better. Give us some time. I think we need to take out the imports and place the Pacifica at the top of the list. Kuniskis is working his ass off to make sure that it happens. And he did promise me that it’ll happen in the first six months of this year.
There is a view that the Pacifica does have an affordability issue. Will the trim levels be enough to make up the lower end of the market, and will that affect your decision as to when or if you will phase out the Dodge Grand Caravan? Have you made a decision on the future of the Caravan?
I mean that’s a point of heated debate on the inside of FCA. Kuniskis is the victim, him and Bigland. When we shut production of the Grand Caravan is not clear to us yet. But I agree with your instincts about the fact that we need to look at the range and to offer some level of affordable access to the Pacifica at the lower end to try and replace the outgoing models.
You understand this is going to happen with every architecture that we launch because the level of technology that’s in these cars is by definition more costly. And as we keep on rejuvenating the fleet here in terms of architecture and content you’re going to see prices escalate. I keep on reminding everybody that we had the most accessible minivan in the world with the Grand Caravan, and that’s a position we may end up losing but life goes on. The Grand Caravan has got limitations. It’s a very old architecture.
The phasing out of the Caravan might start this year. Is there any truth to that?
No, probably not.
Hi, Charlie Vogelhein, Motor Trend Audio. ... Can you just comment again on using a third party ... for autonomous in a worldwide viewpoint?
Again, the comments earlier this morning, I just want to make sure I’m consistent with what I said earlier. We are collectively spending an inordinate amount of time interfacing with emerging realities out of Silicon Valley. I think we’ve been trying to understand the lay of the land and re-try to make a call about how it is that we’re going to interface with our world.
There are multiple solutions available to all of us. I think if I looked at the amount of venture capital that is being attracted by these potential ventures, it reminds me of what happened here back in the late ’90s/early part of the 2000s with the Internet explosion going on and I think we need to be careful because a lot of these initiatives will die and will not end up being a viable technical solution to our objectives.
There is a very high level of activity that is going on out of the tier-2 suppliers now to try to bridge the current technology with future expectations, and we keep on looking at all these as being sort of potentially integratable into current architectures that we’ve developing.
A couple of things that I’m convinced about. The first one is at least some level of level-4 autonomy is going to become commonplace certainly within the next five years and I think that you’re going to be seeing more and more of the relevant portion of that escalation into level-4 appear in some version of our cars between now and 2020.
I also think that standalone unilateral interventions in that field in the absence of the ability to reinvent that process within FCA is limited. I think it’s true of most automakers. And I think ultimately we’ll end up having to rely on standard alternative solutions that are available from people who are more relevant in the space than we have been historically.
We announced the day before the electronics show in Las Vegas this collaboration that we have with Google using the Android operating system in our vehicles. I think that’s unavoidable and I think it’s also unavoidable that that reality will link with the autonomous driving world that Google is pushing. So we need to understand that a lot better because it may effectively provide one of the solutions to the objectives that we all have in terms of making this a viable reality by 2020. It may not be the exclusive solution but it’s certainly one of the solutions.
Our objective is to continue to work with Google to see how far we can take this. I think that their thinking on their involvement in autonomy is an evolving concept. I think they started off with the idea, but the fact that perhaps they could actually make their own car, I think a lot of people have become less enamored with the notion of actually getting involved in car manufacturing.
So we need to continue to have the dialogue with them, and I think we do provide as other automakers, but we in particular at FCA, because of the fact that we don’t have a preconceived notion about what we want as the outcome, we may be the only development partner for a lot of these people. So we continue to have multiple dialogues with people who want to play in the space. We’ll see how far it’ll take us.
The important thing is that we’re not betting the bank on the solutions. I’m still convinced that we cannot develop something on the inside that is going to be better or superior or at least on par with what is going to be otherwise available from others. But it’s a tough topic because it’s very, very uncertain and the outcome is uncertain.
Hi. Peter Campbell from the Financial Times. .... Do you see any scenario where you actually end up closing plants that you’ve got in Mexico?
It’s possible that if the economic tariffs that are imposed by the US administration on anything that comes into the United States, that if they’re sufficiently large that it will make the production of anything in Mexico uneconomical and therefore we would have to withdraw. It is quite possible.
You wouldn’t try to repurpose those factories to export to other places in the world?
That transition would be costly and it would be very, very uncertain. There’s no easy transition. Those plants were designed, built, and purposed at a time in which NAFTA was alive and well.
If you’re forced to close any Mexican plants will you be seeking any financial compensation for having to do that?
We are so far away from that option that I have no way of answering your question. I just don’t know. I mean certainly, if I can give you one example, at the time when we built an extension to our van facility down in Saltillo to deal with the potential export of vehicles into Brazil, and then Brazil and Mexico broke the free trade agreement, I don’t think we saw compensation from either Mexico or Brazil because of the change in the rules. I think it’s a risk that we run.
Having said this, I don’t want to speak on behalf of our lawyers when we find this incredibly intelligent case in which we can lodge a claim. Based on what I would know I think it’s one of the perils associated with the business that we run.
Hello, [unintelligible] from Mexico City Radio. If President Pena Nieto or any government gave you a lot of facilities or deductible taxes would you reconsider your investments in Mexico or to invest more?
To be perfectly honest, given the level of uncertainty today associated with the relationship with the United States and Mexico, I think it would be incredibly imprudent on our side to try and make commitments in that country. The production of the Compass in Toluca, which has at least in part as an objective the distribution in the United States, was redesigned to deal with global distribution and a lot of the product coming out of Toluca is going into Europe.
But in the absence of more details and certainty about what the rules of engagement are in international trade, I think it would be very foolish for me to try to make predictions. We will adjust, but I think it’s impossible for me to tell you that I would consider an additional round of investments in Mexico unless I have clarity. I need clarity and we need rules and right now they’re all on the table so we’ll wait. We’ll be all right but we’ll wait.
Drew Winthor with Wards Auto. You’re going to be testing 100 cars starting I think this month. Do you see this as a growing relationship?
Like a one-off deal?
Are you really going to grow this?
No, I want to grow it. I think there’s a willingness on the other side, and it’s not an exclusive desire to grow with us. I think they’ve opened channels with others. But I think they have every intention, based on what I know, to continue to develop the relationship with FCA and find out how far this development, the sharing of the development exercise can be carried out in a way which is beneficial to them and to us.
We are learning a lot as a result of all this. It’s not just a question of assembling the car in Windsor; it’s a question of understanding how the technology plays in our world. I think it’s crucial that we continue to push the boundaries on this.
Are they like a first-tier supplier to you? Are you more like partners?
That’s a very difficult question because I think that they’re not a Tier 1 supplier. They are a customer today, who have allowed us to come back in and take a look at what they do, which is a very interesting look into a development process which they started way back before we showed up. So we’ve acquired knowledge. We required an understanding of the technology where we’re unclear about. I think they are too, unless they’ve shed clarity on this topic yesterday during the press conference as to what the ultimate business model will be for them.
I understand that they say that they want to become a service provider to the auto industry. How you reconcile running a fleet of cars on your own account on that basis is unclear to me. That’s why I think we need to continue to dialogue.
I have nothing else to add until we have clarity from them, but we’re certainly a debate partner for them and a development partner.
Justin with the Wall Street Journal. Your recent investment decisions and your whole lineup is shifting towards larger vehicles... but doesn’t that expose you to a risk if the market swings back and compact cars or sedans come back into favor? How is FCA prepared to deal with that possibility?
Well, to be honest I think the likelihood of that happening is relatively small, and I think the pricing conditions for those vehicles in today’s marketplace are reflective of the economics of the deal. These are not the most financially-rewarding investments you can make even in the best of times. It is an incredibly overcrowded market.
There is not a single automaker that’s not playing in the sedan market today. Not one. So the likelihood of us wanting to continue to play in shark-infested waters without having an economically viable solution to the cost issue, and if I have to stay out I’ll stay out, it is better to stay out of the markets and not get killed than to go in and play and to come home every day with a bloody nose.
I can tell you right now that both the Chrysler 200 and the Dodge Dart, as great products as they were, were the least financially-rewarding enterprises that we’ve carried out inside FCA in the last eight years. I don’t know one investment decision that was as bad as these two were. With all the effort that went into the development of the vehicles, the technology that we put into these cars, it was a tough slug.
I come from Chile. I want to know, what do you think about the future of the diesel engine?
I think because of events, and without trying to attribute blame or to assign responsibility for any of this, diesel has now acquired an incredibly bad reputation. I can tell you there are some parts of the world, Europe for one, that would never, ever have been able to make any of the emission standard objectives in the absence of diesel. Whether they were properly applied and rolled out is a separate issue, but that’s the question of implementation of clarity and implementation on execution.
But in terms of the viability of the technology it is at least relatively clear to me that it’s an essential element of the mix of solutions that are required to try to meet the emission regulations. What is happening, unfortunately, is that as we move up the level of technological intervention in diesel, and now we’re going to see this with the ultimate expressions of Euro-6 in Europe, the cost of that technology is going to push diesel right at the edges of the economically possible.
These engines, fully loaded up with scrubbing equipment, whether you include SCR or some type of scrubbing mechanism associated with emissions, is going to push the price of diesel solutions beyond the combination of gas and electrical. I think the real risk to diesel is it will actually be replaced as an economically-viable solution as a result of other technology displacing it.
But I think to ignore its value over the last X number of years would be foolish. It’s played a key role in the development of transportation in Europe for quite a while. But I think its future, at least in that segment, is suspect. On the industrial side I think nobody’s going to touch diesel. I think you’re going to see this continue to be used in industrial applications, whether it be trucks or tractors or construction equipment. It will continue to be relevant.
On the passenger car side, if you had to ask me ten years out, I think it will have limited use. But a lot of it depends on how costly the technology to try to clean it up will be. It’s just right now it’s prohibitive. But, you know, we’ve had long discussions about this on the inside.
If I look at the compliance cost, I’m going to give you one number that should probably shock the living daylights out of you. If you look at the transition to move 80% of our diesel engine families in Europe to the next level of compliance it’s a half a billion euro investment, ... base technology injections and the development of all the compliant strategies to make it compliant with Euro-6 in its final form. Out of the European side it’s about half a billion euros. And that’s for about 80% of the families of engines.
That’s a big number. That’s something that we don’t carry on the gas side. We just don’t have any such massive technology interventions that diesel requires. Gasoline doesn’t require it. What’s going to kill diesel is this continuous drain on capital and this continuous skepticism about its value to society, right?
This latest round of events that have happened, without mentioning competitors, have made this an incredibly undesirable product. Although its usefulness is beyond doubt, but it now has a reputation that is far in excess of its true nature. It’s a bad thing. And it isn’t. It’s just misused.
Luca Inga for French News WIHP. What is your answer to the French government saying that the Fiat 500X emission is ten times what is allowed?
It’s the same answer that I would give you when I tested a Renault and I found emissions in excess. I think you need to be very, very careful ... The problem with European regulations, and I’ve said this publicly and I continue to repeat it, the rule has been set under European regulations. There was zero specificity associated with the requirements of that rule other than a very broad concept. Under the European rules the body that homologates these cars under the national jurisdiction authority, is the one that is responsible for all homologation.
Part of the European Union is to allow all member countries to effectively carry out this exercise on behalf of others. If Italy homologates Fiats then it’s binding on the rest of the country; if France homologates a vehicle then it’s binding on Italy and Germany and everywhere else.
The biggest concern that I’ve had to the development of the dieselgate story in Europe is by necessity we would have retaliatory actions on a national basis that would be going on out there, trying to identify culprits of a system which is undefined and which is not prescribed. What you’ve got today is that the tests that have been run in France and the ones that are being run in Germany and the ones that are being run in Italy are not prescribed tests.
But do you plan to sit down with them and give . . .
I sat down with the homologating body. I’ve sat down with the Italian homologating authority to which I’m responsible, and I’ve had those discussions, and we’ve had full disclosure with them of everything we’ve done. I cannot open up a dialogue with the French authorities and the German authorities and the Dutch authorities.
That was the purpose of the European Union, I hate to remind you of this. The Treaty of Rome of the 1950s was setup to allow for the proper administration of Europe on a supernational basis then to allow some decisions to be left to the homologating bodies, at least in the case of emissions, on a national basis.
Let’s not reinvent the rule. If you want to run a different type of Europe just redesign Europe and we’ll comply. But let’s not change the rules.
I never interfered in the homologation of VW vehicles in Germany. I never interfered in the homologation of Renault and Peugeot vehicles in France. Let those homologation authorities carry out their duties and life will go on. But Europe is supposed to be the center point on this. It is the one that has recognized the authority of each and every one of the countries in Europe to homologate on behalf of all of Europe. Let’s not change the rules now. I need certainty on those matters. I need certainty on the trade issues here in the United States.
Jamie Butters from Bloomberg News. Do you also need certainty or clarity on the fuel economy rules? What else is it that you might be looking for? Aside from trade policy what are you looking for?
That will be very helpful. If you could just tell me what the objective is I think we will comply.
Look, the alliance has been clear on this, right? The alliance said – and I remember because I was there when President Obama announced the new targets for 2025 — that there will be a midterm review in 2018. I think the only thing that the alliance has said was let that review happen properly. Don’t preempt the review from happening.
There’s been no review. There’s been an adjudication. There’s a difference between a review and an adjudication process. I think the only thing we want is for that review process to be carried out properly. I understand that we’re in the midst of changing administration people and so on, but that’s not helpful to us.
Is there anything else that you’re looking for from the new administration in terms of the infrastructure investment, whether new highways should be equipped with Level V...
If we want to make autonomous driving a reality and you want to start getting to level five, you’d better start equipping roads with the right level of equipment. It’s not going to happen by itself. Level four we can probably handle without anybody else. Level five, it’s a different world.
Alisa Priddle with Motor Trend. You talked about that you are learning a lot with your partnership with Google. Is it the kind of sharing where you will be able to then take the learnings and the technology and start to develop a lot of this in-house?
I think we’ve learned, to be perfectly honest, is the way in which these systems are integrated, and I think we need to be very careful that we don’t start walking all over intellectual property protection of anything that Google has done. But certainly the access to the development of the integration of the parts has been crucial to us.
There are alternative suppliers by the way, believe it or not, to most of the components that are currently sitting in the Google vehicle. There are other people that will make both the sensors and the so-called reasoning equipment that is associated with the integration process, so we’re talking to them too. But the important thing for us was to see it being integrated, to be in operation.
So you don’t really want a lot of in-house?
We’ve got to be very careful about doing stuff in-house that we’re incapable of doing in-house. I have no intention of recreating Silicon Valley in Michigan. One, it’s too cold. But more importantly there are things going on in Silicon Valley that I cannot replicate in Michigan. That’s part of a culture and an economic ecosystem cannot be duplicated.
Don Sherman, Car and Driver. Is Detroit Auto Show running out of gas as a place to launch new FCA concepts and products?
Or is this a one-time anomaly that you’re not doing anything here other than . . .
Well we’re not doing anything else. We’ve done – we’ve launched down in California. We launched the Portal at the Vegas show.
But Vegas is not here. What about here?
No, okay. So we made a choice to go to Vegas. We could’ve brought it here.
Could you expand on that choice? Why that versus here?
It appeared to be the more relevant within which to launch the car. And the Compass, by the way, because of the international position of Compass, it was earlier in Brazil. We need to be very careful here that we do not get offended by not doing things in Detroit. We will be back and do stuff in Detroit next year, so I promise you, I have not forgotten about this place and I think it will continue to play a hell of a role in the development of cars going forward.
Morning, Antony Currie. So your stock’s up the most by quite some fashion versus other automakers since the election. Investors are clearly getting the joke about how good Fiat-Chrysler is. I think you’ve even got a trading multiple that’s better than General Motors at the moment.
That is untrue but I will ignore your . . .
I think that on 2016 numbers you’re just slightly ahead. At least you were in Friday, or Thursday.
You haven’t seen my 2016 numbers. I feel . . .
Estimates. I’ll go with estimates for now.
Okay. So be sure when you make these comments.
I realize that you come from Breaking View so you don’t need accuracy but go on.
Oh no, come on. We do . . .
No, listen, I’m good friend of Cox. Don’t worry about it. I’ll tell him . . .
He’ll love that you said that. I’ll tell him.
But does this give you a bit better ammunition to restart the capital allocation merger process that you started a couple years ago?
Look, just on a serious note here, the real issue is that the comments that I made back in ’14 about – ’15, sorry. Time flies when you’re having a good time. That I made in ’15 about a capital allocation are true. They were true then; they’re true today.
That reality is not going to change. We spend two billion dollars a week in capital here in this industry, excluding China, and there’s some portion of that capital commitment which is superfluous. Sooner or later somebody’s going to come to their senses and realize that maybe there’s a better way to run this industry.
I think the market has told us now for a while that we get the treatment and the multiples that we deserve. Whatever that multiple is on estimates of 2016, it’s not a very flattering multiple, right? It assumes a relatively short longevity for the earnings. So we need to fix this.
I think hopefully, and it’ll happen beyond my watch, because I’ll be finished hopefully by the time we get to that issue, hopefully sooner or later somebody will come to the conclusion that something needs to be done. In fact, we will run this business in a better basis than we’ve been able to run it up to now. It is my sincere hope that that happens, for the benefit of all of us.
I’m a journalist from Mexico. Despite Trump, you’re still thinking Mexico is a good place, a good country to still make investments?
It is, and all the comments that I’ve made, none of which are designed to be critical of Mexico. The reality is that the Mexican automotive industry has been, now for a number of years, been tooled up to try to deal with the US market. And if that US market were not to be there then I think the reasons for its existence are on the line. Then we need to find another solution other than the US, and I’m not sure that we have one commonly available. It’s been going off for a long time.
Yes, but Mexico right now is not the most well country with the government.
I can’t express an opinion on how well or how not well the country is. I can only tell you that as a result of what’s happened here in terms of the positioning of the US government the implications of Mexico on the automotive side today until we get clarity are not great.
That’s why I think I go back to what I said earlier, I think we need clarity. We need to have a very clear understanding of how it is that the US administration intends to deal with NAFTA and what the implications are for both Mexico and Canada. And Canada has been left out of this until now. This was a three-way agreement between Mexico, Canada and the US. Definitely the Mexican plants can be terminated but I think it will leave Canada and the US in a very strange position. We’re just waiting for clarity.
Given the fact that Trump hasn’t posted a negative tweet yet about vehicles produced in Canada, is that a sign that Canada won’t be targeted? Does that make Canada perhaps a more attractive place for future investment?
The answer is by definition yes. You and I are old enough to remember the days before NAFTA. There was an auto pact that governed the relationship between Canada and the United States before NAFTA was put in place, and there was a system that allowed for the free-flow of cars, both parts and cars, between Canada and the United States. I don’t even remember how far back it goes  but it’s been in place for a long period of time.
It is completely different than the relationship with Mexico, but I don’t know how President-elect Trump and his administration will deal with the one-third of the trading relationship. We’ll have to sit back and wait.
We’ve made a lot of investments in Canada as you well know, most recently the minivan investment which has as its biggest market the US. So until we get clarity I can’t say more, but in the absence of a complete rejection of Canada as a trading partner, I think that the investments are relatively safe and I think you should encourage people to continue to invest in the country. It’s a good manufacturing location.
It’s amazing how much time we’re spending discussing things that I don’t know anything about. [Laughter] No, but it’s true. I mean this whole notion of discussing trade relations and what the implications are, I’m in the dark as much as you are. I just don’t know. We need clarity.
Sam Thielman, The Guardian. You’ve spoken a lot about what you think the implications might be for Mexico if there would be tariffs. What do you think the implications will be for the US?
That’s a really good question because if it’s a Mexico/US issue I think the implications for the US are relatively limited. If it’s a rejection of international trade in a wider sense then I think the implications are much more severe because I think it’ll go beyond cars. And then to be honest I’m probably the wrong guy to try to estimate the consequences but it would not be nice I think.
Joe Szczesny, the Oakland Press. ... What’s your plan for engineering and development investment here in Michigan?
I’m not going to be able to replicate what’s going on in Silicon Valley. There’s a big piece of what Silicon Valley does that we can’t do here and there’s a lot of stuff that needs to happen to make Silicon Valley a reality in an auto sense that needs to happen in Michigan. I think we need to split those two roles.
How are you going to do that?
We are investing now. We’re staffing up. We’re bringing engineering people on. I mean they already are. They’ve been working on this for quite a while. We just don’t make a lot of noise about this because we’re working on something that will not be visible for quite a while.
This year ... is the introduction of the Alfa Romeo into the US. Can you talk about what your expectations are? ... does the industry need to speak with a unified strong voice to get the messages out that you’re talking about today?
The answer is yes, it would be helpful if we found a single voice to express industrywide concerns. I can only tell you from my experience, at least on the European side, it’s not necessarily been the most successful venture that I’ve found in terms of interface with Brussels. Historically the alliance here has not been representative, I think, of our individual requirements. That’s changing now, and I sincerely hope that the alliance will be able to carry out a lot of the work that has been carried out singly by the automakers in Washington up to now. But this is pure speculation.
We need to see the color of the position of President-elect Trump. I just don’t know enough. Look, it’s not that far away. I think we’ll know in the next 60 to 90 days as to which way it’ll spin out.
We’re at the very early stages of distribution of the Giulia. I got confirmation overnight that the Stelvio for US production will start in the second half of March, so we’ll start having proper distribution in the US probably by early summer. And I think the marketing effort that’s going on now is being redimensioned. I’m looking at yesterday. Reid and I spent about three hours together to try to redimension this thing in.
It needs to be Alfa, very much Alfa. I think you’ve seen all the technical reviews on the car. I think they’ve all come out and identified the Giulia as being an outstanding vehicle, certainly unmatched in terms of performance and technical capability compared to its relevant competitors. I’m quite hopeful that we’ll have a great year here in the US for Alfa. It’s the first year out but we’re doing it. We need to be careful we do it right.
Diane Durbin with AP. How have you worked out issues of liability with Waymo?
It’s all theirs.
That’s why when we were asking the question whether it was a Tier 1 [supplier] or a customer, you know, we provided them with a vehicle, everything that they’ve put into that car that changed its performance and its functionality is on their nickel. That’s a big issue, by the way, going forward because when you’ve got Tier 1 suppliers that will start providing autonomous-driving equipment, both software and hardware into these vehicles, the question about who owns the liability associated with the running of those operations is a big issue. Yet untouched. A lot of work to be done by the lawyers and also commercially in terms of us assuming responsibility for something that may or may not be within our turf.
Mike Wann again. The company faces several high-action lawsuits regarding their diesel engines as well as the shifters. Any comment on the diesel . . .
No, we don’t comment on those issues.
You still stand behind the company’s engines do meet the emission standards?
Indeed we do. Absolutely. We wouldn’t have sold them otherwise.
And then for the shifters I mean it seems like it’s just confusion. Is that the point of it?
I can’t comment. Anything I say here, as you well know, will be used or abused. Anything else? Yes? One more question here and then we’ll go. You’ve got a microphone.
Are you planning to double down the number of minivan Pacifica that you’re going to give to Waymo from 100 to 200?
I think it’s forecast that there will be a significant increase in a number of vehicles that we will provide them beyond the initial 100. That’s all I’ll tell you for now. Thanks very much.
Hi. Rod Maloney, WDIV TV Detroit. I’d like to start with the announcement having to do with Warren Truck and Toledo — are we adding additional jobs, or are these jobs that will be coming back after the changeover?
The numbers that we announced this morning in terms of head counts were the minimum numbers of additional adds that we have on top of what we currently have on-staff. So it’s 2,000 new jobs that did not exist before.
The sequencing works as follows:
Does that help? It’s all sequenced. We couldn’t afford to take one Wrangler plant down, out of production, because of its impact on our profits, and we couldn’t afford to take one Ram [plant] down, so we had to find another location to launch the new truck — which we’ve done with Sterling Heights. We needed a new location to make the new Wrangler, which we’ve done by going to Toledo North.
Now, by the time we’ve finished with all this, we’ll have Warren and Sterling using the same architecture and we’ll have the two Toledo plants working on the new architecture of the Wrangler, making the Wrangler and the pickup truck. So it’s a perfect solution. In ’19/’20 my successor will enjoy making money out of this thing.
Lisa Jayden from 13 ABC in Toledo. What can you tell us about the designs of the new Wrangler and the new pickup that will be built in Toledo?
The timeframe for the unveiling, and the expected production numbers?
Production numbers well in excess of what we’re currently making in Toledo. We have been unable to satisfy international demand on the Wrangler because of US demand on the vehicle, so this is going to give us an opportunity to expand Wrangler internationally, which is what we wanted.
On paper the new plant will be able to make 300,000 vehicles. On paper. It’s a perfect car. (Is Ralph here? Good, he’s not here so he can’t tell you anything. I’m delighted. And he shouldn’t.) It’s a perfect car. It fixes all the problems of the old car and it keeps the identity of the Wrangler. That’s a fair way to describe it.
Phillipe LeBlanc from the Canadian Broadcasting Corporation. I was wondering with the arrival of the president-elect who’s threatening to impose tariffs and taxes, what’s it mean for your commitment to keep investing in Canada?
To the best of my knowledge, there have been no tweets on Canadian production of cars. To the best of my knowledge.
I think all the comments that president-elect Trump has made are in connection with Mexican origin and production of vehicles. I made the comment to a Canadian journalist earlier about the fact that the relationship between the United States and Canada on cars goes way – a long time back, even before NAFTA. It was a pact that maintained the relationship in terms of free flow of cars and parts between the two companies for years before NAFTA showed up.
I would expect that somehow the new administration would be aware of that history and they would not necessarily look at Canada as being a target of imposition of tariffs.
If tariffs were to be imposed on vehicles built in Canada and available for distribution it would have a significant impact on us because our Windsor plant would be impacted, which makes all of our minivans, and a large portion of that output flows into the US. A large portion of the Brampton production will flow into the US, and so we have to look at the economics of what those tariffs would mean in terms of the competitiveness of the product [Charger, Challenger, 300C].
It is my expectation that Canada will not be involved in this dispute, because I think the problem goes beyond cars. It has to do with the free flow of goods between Canada and the United States. You are Canadian. You would know enough of the history of lumber wars that we’ve had between Canada and the US, oil and gas exports out of Canada. I don’t think that’s the primary objective of the Trump administration, but I don’t know so we’ll just have to wait and see. I have a more benign view of that relationship than I do of the one going south. That one is more problematic I think.
Hello. I’m Jennifer Ann Wilson with Channel 7 WXYZ here in Detroit. I know with the expansion, all the investment in Jeep, and the lofty goals that you’ve declared, that in two years you want to get rid of the five billion dollars of debt.
It was five billion.
Okay, well it was five billion. You’re on track. You’re doing well.
I said I have no negative views so they must be coming down otherwise we’re . . .
Moving forward is it safe to assume that you are placing a lot of your bets on Jeep? Or is there more to the plan to continue – continuing to eradicate the debt?
I think it’s part of a global effort to bring that down. We keep on applying capital back into NAFTA so we actually are consuming capital to create this capacity.
Actually if I could clarify my question, you’re expanding the Jeep brand. Is there any other vehicle or any other brand that you’re kind of hoping will help do . . .
Both the Alfa and Maserati brands have been targeted as being vehicles for growth. I think we’ve launched the Giulia in the late part of 2015, early part of ’16. We’ve now launched the Stelvio so we’ve got two products coming onstream which are key. The full rollout of the Alfa Romeo brand, at least in terms of its three cars – four cars – is now under way. The Levante was launched four or five months ago, summer of 2016. I think it’s going incredibly well.
So there are a number of components that are coming into the delivery of the debt-free organization by the end of 2018. And to be perfectly honest I would expect that they will all contribute but that’s not to take away from the commitment that we’ve announced yesterday to the development and the internationalization of Jeep. These things are crucial. It’s a commitment that we made back in 2009 and we expect to fulfill it. Yes sir?
Hi. To what extent have you had any discussions at all with the Trump transition team?
And will you going forward following the inauguration of him – was there any influence given to his statements in the past? Does that influence your thinking at all?
No. To be fair, and that’s not to minimize the efforts that President-Elect Trump is expending in terms of reinforcing the US economy, I think these are things that have been in discussions internally and openly with the UAW now for a number of months. They were part of discussion points that were on the agenda as far back as the labor negotiations in the summer of 2015.
This question about the expansion of Jeep, the shift in production away from passenger cars into Jeep across the whole range and in particular the launch of the Wagoneer and the Grand Wagoneer, the emphasis on trucks in the United States, these are all things that both FCA and the UAW consider to be crucial to the development of the US manufacturing footprint.
All these things are consistent with our own internal views that have been developed now for a number of months, and that were developed in conjunction, for a reason, with the UAW, which to be honest pre-dated both the electoral process and the election of Trump as President of the United States. I wish I could give him credit for this but the thinking was in place beforehand.
He seems to be willing to take credit for it. Is that a problem?
Not at all. And I don’t have a doubt that his desire to build a strong manufacturing base in the United States is something that we share. And so I share his enthusiasm about the commitment that he’s making to this country.
Even at the expense of Mexico?
That’s a more difficult question for us because we are so used to living in a NAFTA environment that to think of a world without NAFTA is kind of difficult. We need to see what the implications of his stance are on tariffs and the introduction of tariffs.
I think it would be unwise, and I throw this out just as a suggestion, that tariffs would be imposed on Mexico production without two things:
Both of those things require a runway that’s long enough to allow for the reversal of the delocalization exercise to be carried out. You don’t impose them overnight. And to the extent that we will have an opportunity to have this conversation with the transition team, hopefully by then it will be his administration and we will make that point clear to them and we’ll see where it takes us.
Right now, everything I’m saying is just pure speculation because I just don’t know enough and I’m not sure anybody else knows enough to be accurate about what will happen in the future. We’ll make that point clear to them and we’ll see where it takes us.
We can speculate but we don’t know.
Hi, it’s Adele from Blackburn News. Hi, Sergio. Just a quick question, you mentioned a bit when you were answering the CBC’s question about what happens is NAFTA is opened up and you mentioned that production in Windsor could be affected. Could you expand a little bit more on that? What would be a good scenario? What would be a not-so-good scenario?
A good scenario is the continuation of NAFTA, which is the basis on which the investment in Windsor is made. A bad scenario is one that says the production of minivans in Canada becomes uneconomical for US distribution. There’s a combination of tariffs and costs and we just can’t recover the costs of the vehicle. That would be lethal, I think, to Windsor.
Tim Miller, WTOL in Toledo. I wanted to ask about the workforce in Toledo. I know you’ve been on record as praising them before.
With the 700 or so new jobs, obviously you . . .
Where’d you get 700?
That was announced last year wasn’t it? Or you can correct me then.
That’s on the previous investment. I thought you were making reference to the 2,000 that we announced yesterday. There’s more people coming on.
Right. But obviously you see the promise in those workers and they’ve proven themselves.
And also can you tell us a little bit more about that pickup? What features do you think will appeal the most to buyers?
Well, it’s the Wrangler base, and that’s all I need to say. People have been waiting for that vehicle for years, and I’m looking at some here, but every time I’ve done into a meeting with Jeep distributors, Jeep customers, the first thing they’ll ask me is when are we going to roll out the Wrangler truck?
So it’s long overdue. I don’t have to sell the Wrangler; the Wrangler is a Wrangler.
And about the workforce, what can you say about them?
Well, look, I mean they’ve done a tremendous job up until now. I’ve told you this before, every time I’ve asked them, they’ve been on the pace. They’ve delivered well beyond anybody’s reasonable expectations. They work weekends, holidays, just to meet demand.
I think they’re going to get a reprieve now with this new investment coming on. At least the base will slow down because the capacity will be there to try to deal with a much larger number of vehicles that we’re forecasting for production going forward.
This are good news. I think we should enjoy days like this. But the other good thing about this is that Wrangler finally will have a space on an international stage. We just didn’t produce enough to be able to get it done.
It’s Jeff Gilbert from WWJ in the back of the room here.
The guy with the headphones. Yeah.
Yeah, we radio guys, we do two or three jobs just like your executives. Getting back to the international trade question and possible changes at NAFTA and the fact that we really don’t know what’s going on, could you gauge your level of discomfort? [What else would you] like to talk to the new administration about?
Look, the issue of trade is a very difficult discussion to have. Normally, you know, we’ve all grown up with the very clear understanding that free trade is a good thing, and a lot of this has to do with the fact that people have thought that globalization had economic benefits that sort of exceeded the cost of execution of globalization initiatives.
I think what we have seen politically now, we’ve seen this in Europe and we’re beginning to see it here in the United States, is that there’s a level of discomfort with the notion that free trade and globalization by themselves are the solution to the world’s problems.
In this interim – in this process of adjustment between sort of absolute buy-in to free trade, a flat world, no barriers, and what we’re witnessing now, there’s a happy medium we have yet to find. And you’re going to see over the next – probably the next few months if not the next few years a pendulum swing to the other side of the globalization initiative and you’re going to see the implementation of a set of restrictive measures that are designed to protect home turf.
We’ve seen this now with the UK, the voting out of the European Union. We’re beginning to see noises of this out of Europe. We’re beginning to see it here.
I think there appears to be an evolving consciousness that says globalization is okay and so is free trade as long as national interests are protected. The way in which this combination of national interests and free trade is actually executed on a national basis is yet undefined.
I think we’re beginning to see with this tweeting exercise that President-Elect Trump has carried out a very clear direction. Unfortunately, because of the fact that he’s not sitting in office yet, we haven’t seen the articulation of the methodology that’s going to be used to try to get this done. But we are going to live through a period of uncertainty and we are going to see, in my view, we’re going to see a period of adjustment from an absolutely unrestricted, unfettered access to goods and services on a global scale to one that has got as a dominant feature the protection of national interests.
We need to tone both of those views down and find a happy medium to extent it can be done. Certainly, discussions that have come out from the Prime Minister’s office in Canada, for example, with Justin Trudeau, suggests that a national interest card is playing as relevant a role as the free trade argument. I think that those two issues and the way in which they get balanced on a national basis is going to become a big issue. How the US articulates that view going forward is something that we’re going to have to watch very, very carefully and I’m not sure what the outcome is.
That’s why I’m not shocked by some of the tweets that we’re seeing nor am I surprised by sort of the level of angst that we’re seeing across the world by this new expression of national interest over globalization.
I think we need to have a chance to sit down, to go back to your last part of your question, we need to have a chance to sit down with the administration and really point out the consequences of a given posture.
In the case of FCA, one of the biggest concerns that I have is we are going to attempt, because we will now have the capacity, to try to take Jeep internationally. As we focus the production of mid-size and upper vehicles in the United States and the United States only, restrictive distribution practices which unfortunately are going to run against the tariff world are unhelpful.
It may force a resizing of our commitment to the US simply because of the fact that I cannot take it outside.
That’s something that needs to be valued and evaluated by the administration, before we start imposing tariffs and imposing restrictions on trade. These are the kinds of discussions that need to be had not just for the car sector but for a variety of other industries that operate in this country. So the discussion is going to be a pretty detailed and lengthy conversation, and I expect that the administration will be wise enough to choose the best outcome for the country.
Hi, Rick Newman with Yahoo! Finance. I’m looking for your Twitter account and I don’t think you have one, so the joke question is do you need to start tweeting? And the serious question is when you . . .
If I ever start tweeting shoot me.
The serious question is when you talk about a happy medium with regard to NAFTA and Mexico in particular, you are obviously aware of what Donald Trump is trying to accomplish. What do you think is the right way to do it with regard to Mexico?
You know, if I was that smart I’d be doing something else. I’m just a metal basher. I make cars. It’s a very difficult question. ... It is a lot easier in a sense if you had to pick a fight to pick a fight with a guy like Canada, because Canada has got other tools available to try to respond. It’s got an energy card that it can play; it can play lumber. It has a number of other tradeoff mechanisms that it can offset against any potential negative discussions on cars.
I’m not sure that there is an equivalent set of – there’s an equivalent arsenal available to Mexico.
So I don’t know what the right answer is. It’s difficult times for Mexico now. A full execution of an exclusion strategy of Mexico from trade is going to have pretty negative consequences on the country itself, and so I think we need to somehow maintain a sense of equity and fairness and balance in the way in which we disengage from NAFTA which has been in place for a long period of time.
I think they need the heads-up. I think they need fair warning. I think they need a runway within which they can exit from the mechanism and find an alternative solution. I don’t think it would be fair to shut off all the connections overnight. I think you need to give them some head room to get it done. I don’t know what that head room is but I think it needs a runway. You can’t do it overnight.
Especially for us, it would be impossible. We can’t just pick up all our toys and go home. You can’t do that. We’re not that mobile.
Laura Emerson, NBC 24 from Toledo. Could you tell us a little bit about the Portal? Why it was unveiled before the auto show here? The appeal and audience you’re expecting for it? And how much of FCA’s business model right now is going the direction of ride sharing and automation and how much of it is old-fashioned “let’s sell Jeeps”?
I already got beaten up this morning by someone else at a meeting as to why we didn’t launch the portal here in Detroit and why we had nothing to show.
We went to every other show in the world except here. The reason why we went to Las Vegas is because we thought it was the most appropriate audience for the unveiling of a car of that caliber which is really a next-generation transportation. It wasn’t meant to be disrespectful of the Detroit Auto Show. We’ll have other cars here next year. Hopefully the pickup truck will be shown here.
The broad question that you’ve asked is to how much of our resources are being devoted to the development of that kind of transportation model? There’s a couple of parts of our views which are different than our friends here in Detroit than the other two. One, I don’t think it’s our role to try to replicate Silicon Valley here in Michigan. We won’t.
I just finished having a meeting with the CEO of Waymo, who presented the Pacifica self-driving vehicle yesterday at the auto show, and we just finished having a chat about the continued level of collaboration between FCA and Google going forward, which includes the development of Android as an operating system in our infotainment and communication strategy in our vehicles. These are things that are integral to the way in which we’re developing architectures and moving forward.
We intend to keep a completely open mind about this kind of technology walking into our cars, and we’re not going to make unilateral, unequivocal commitments to a single technology provider. This is an industry which is in a complete state of flux. If you listen to Uber, you listen to Apple, you listen to Google, and you listen to every other startup that’s down in California, and I keep on spending enough time down there now talking to these people, there’s a myriad of alternatives that are available to us as automakers in terms of what we roll out in our vehicles.
To make one single choice and say this is the winner is going to be a pretty dangerous call if we make it. To develop it internally and try and replace the creativity and the level of capital that’s being attracted by Silicon Valley within our shop would send even the most stable car company bankrupt because you’d have to be chasing a million pieces of potential development leaks.
So we remain open. We keep on maintaining relationships with a variety of people and we keep evaluating these technologies as being the most appropriate for our development. So you will see hopefully in the next three or four years the rollout of more than one solution beyond Google. I think we need to try this and without betting the bank we need to try and find out what is the most viable alternative or requirement. Because the end objective of all this is clear: within the next five years you will have Level 4 autonomy sitting in most cars, or at least available as an option. Whether you pay for it or not is another.
That Level 4 autonomy is not exclusive of the commitment that we’ve made to the development of Jeep and the development of Ram. These things can co-exist. Autonomous driving off-road is a nonsensical concept, right? Doing Moab and autonomous driving are not things that go hand-in-hand. But there are times when you are not off-road, and Jeeps in the majority of our cases get used as normal transportation, and those events and those times you do want access to autonomous qualities.
I think that technology will find its way through the whole range of products that FCA sells, all of them. None excepted.
And so it’s an important piece of the strategy, but it’s not exclusive to the development of the brands. So we’re not betting the bank but we’re active across all the technology pieces including electrification which keeps on being minimized now because everything is into autonomous driving, right? There’s more to this.
Michelle Maluske from CTV News in Windsor back here. Two-fold question, I want to talk about the Pacifica. First, your thoughts on that award in front of you. Secondly . . .
It’s a great award. We deserved it too.
I wasn’t rolling on that. If you could say that again for me.
I’m trying to do four things here.
Thank God, otherwise we’ll never get another one.
Again, I’ll have you say that again for me. And secondly, how are you feeling about sales of the Pacifica so far?
Let me deal with the easy question: I feel good about the sales of the Pacifica. If you go back and look at our own sort of track record on the launch of vehicles, when we launched the Cherokee back in 2010, it took us about twelve months to get the car fully in gear. The Pacifica is following a similar trend.
We have an agreement with Tim Kuniskis that he’s going to make this the top-selling minivan in NAFTA in the next six months or thereabouts. Once we get there, I think it’s going to get much easier.
We just need to position the car. The car is worth – is worth the position. We’ve invested a lot of know-how, and I think most people who have driven the car are amazed by its attributes. I think that’s positive and I’m totally comfortable with the projections of where we’re taking the vehicle.
In terms of winning the award, it couldn’t have happened to a nicer bunch of people. I think we deserved it and, you know, hopefully we’ll win another one next year.
Brian Trauring with 13 ABC Toledo. I want to go back to the comment you made about 700 – more than 700 jobs for the Toledo production.
Well, we’ve announced 2,000 more as a result of the addition of the pickup truck. So a portion of that 2,000 will be incremental to the 700.
Can you tell us how many?
No. I refused to give the answer this morning so I’m just confirming it for you.
When do you anticipate we’ll get our first look at the pickup truck and the new version of the Wrangler?
The new Wrangler will be shown – I’m looking at Manley here. Help me, Manley. Is it the end of this year? That’s it? You’ll see the new Wrangler at the end of this year and the Wrangler is a post-18 event. The pickup truck. Yeah, it could be ’19, early part of ’20.
Can we talk about the wisdom of announcing the manufacturing in advance of showing the vehicle?
Well, I announced the Ram 1500 investment before you even saw the pickup truck. I have to. The minute that I start moving, I can hold back the stuff [only] to a point. The supplier base will talk. And once they talk, I’m exposed. That’s why there’s a limit to how much I can keep things secret. I can’t. All right?
Jennifer here again, WXYZ. So it’s no secret that you all have been trying to look for a merger and I know . . .
I was, yes. And I was rebuffed.
I know, and I’m sorry.
That’s all right. I’ve gotten over it.
We’ve all been there.
I’ve gone back and I’ll survive it.
I know you’ve said in the past that you were really aiming for an automaker. Would you ever consider Google or a technology company to merge with?
I pass no judgment on Google because of the market cap of Google, I think they can buy FCA out of petty cash.
So would you consider letting them?
Would I be a sport? There’s reason in them buying us. There’s reason in other people getting involved with us. Anybody who needs cars to try to move an agenda forward, an automaker is an ideal target, right? I mean Uber needs cars. And Uber, to the best of my knowledge, at least on paper, is worth about 60 billion, isn’t it?
So you are pursuing technology companies for partners?
I’m pursuing nobody. I haven’t gone out to chase anybody. I mean as I told you I was rebuffed and I’ve gone back to my green tea.
The objective here, just so we eliminate all these discussions, I saw an article floating around after my last meeting with the press that’s still speculating about this big deal. Let’s be clear: we’re looking at nothing.
The only thing that I do know is that there’s 24 months between now and the closing of the 2018 plan, and that 2018 plan is absolutely sacred and there’s not a damn thing that I know of that will stop us from making it. Not a damn thing.
If other people want to come in and start acting as interlopers in that process, it’s their issue. We’re chasing no one. We’re done. The capital junkie story that we pitched in 2015 was valid then. It was valid in 2016 and it’s valid today. Nobody wanted to dance. The music stopped. We’ve got other things to do and we’ve got to make the bloody plan. The bloody plan is crucial.
Nine billion in operating profits, five billion in net income, and five billion in cash. Three easy numbers, even I can follow that. Let’s just stay focused on those things and nothing else.
Female: Okay, we’ll take one last question and then we’ll wrap.
Rob Hindi from AM 800 in Windsor. Just wondering what the future of the Caravan – another strong year for sales? Any idea if it’ll get an extended pass? The date you mentioned last year, the year you mentioned last year?
More than I mentioned last year.
I don’t think there was a set year.
There you are. We’re going to run it as long as we can run it.
Were you pleased with the sales?
We are. We’re too pleased with the sales. I mean if you ask Kuniskis, he loves the car. I keep on telling them that the emphasis will have to be on selling Pacificas, right? That’s the real issue.
The problem is that there’s a price differential with the two vehicles which is relatively large. You pay peanuts, you get monkeys. You’re getting two different vehicles when you buy the two of them. They’re both vans, but one is technologically advanced compared to the other. We’re going to have to adjust to a new reality that’s going to happen relatively soon. Right Tim? He’s nodding. He’s nodding – he’s speechless now. Anything else? Thank you very, very much.
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