Chrysler Looks Better in the Rearview Mirror

My first car was a 1970 Buick Gran Sport with four on the floor and 400 ponies—a Pontiac GTO incognito essentially.  From then on, I continued to buy “American-made” cars.  My Jeep CJ-5 was an off-road blast.  I’d take my Lincoln Versailles over a Mercedes any day. 

When I moved to the country, I switched to Fords—a Bronco II, two pickups, and an Explorer.  And when I moved back to town, I bought vans—a Ford Econoline and two Dodge Caravans.

My car-buying habits changed on September 30th.  I traded my Caravan for a Honda Odyssey.  I told the salesman that he should feel ashamed for taking a commission on the sale.  He asked why I would say that, so I replied, “The Honda sold itself.”

I actually considered trading for a new Caravan in 2008.  But when the economy turned, I thought it prudent to wait and see.  At the time, I figured that I would get a better deal the longer I waited.  As we now know, Chrysler was bust and on the verge of shutting down completely.

Chrysler’s recent failure brought back old memories.  I really wanted to buy a Plymouth Barracuda in 1970.  But the first one I saw in a showroom had a big hole in the carpet.  The carpet had been pre-cut (in the wrong place) for the gear shift.  Even though you could see the bare metal of the floorboard, that flaw did not stop Chrysler and its Plymouth dealer from showing the car.

It never surprised me when Chrysler asked for a bailout in 1979.  I was surprised, however, that Lee Iacocca was able to save the company given its culture at the time.

Here we are thirty years later, and history has repeated itself.  The doubling of the price of a gallon of gasoline from fifty cents to one dollar in 1979 put a terrible strain on Detroit’s automakers.  When gasoline hit $4.00 per gallon in June 2008, it had doubled in price in eighteen months.  As in 1979, Detroit was caught flat-footed trying to sell gas guzzlers.

I think I made up my mind to buy a “foreign” car when President Obama married Miss Chrysler to Mr. Fiat last spring.  The dowry needed to carry out such an arranged marriage is always proportionate to the bride’s homeliness.  In this case, the dowry amounted to the full faith and credit of the United States Treasury.

Daimler Benz thought it could make Miss Chrysler into a desirable bride.  In the end, Benz had spent $30 billion on lipstick and makeovers and was absolutely giddy to palm her off on another suitor.  If Daimler Benz couldn’t transform Chrysler, then there’s no way anyone else can either. 

Chrysler’s downfall has a West Virginia connection.  If you’ll recall, a Putnam county couple sued the company a few years ago over problems with their Dodge Intrepid.  The case went to trial, and the jury awarded them $6,950.  Since Chrysler lost, it had to pay the plaintiff’s attorney fees which totaled $143,026.  Chrysler’s own attorney fees were more than that.  The company was out-of-pocket about $300,000 when all was said and done.

Whether this expense was due to a management blunder or to a legal system gone haywire matters little at this point.  Courtroom battles take their toll on a company.  While it may take a ton of straws to break the camel’s back, each one, however slight, takes a measurable toll.

What sold me on the Honda were its buttons—the big buttons on the dashboard.  When I saw that Honda’s engineers had gotten over their “How many buttons can we place on the head of a pin?” design mentality, I said to myself: “This is an American car!”

On September 30th, Detroit lost a long-time, repeat customer.  Most likely forever.

Iacocca's Dream: Organizing the Automobile Community

Team Obama has concluded that Chrysler and Fiat are worthy of marriage, albeit one of those double-barreled shotgun marriages.

Lee Iacocca came out of retirement recently to champion the Detroit-Turin merger. You'll recall that Mr. Iacocca had great success in managing Chrysler's previous federal bailout. And he was the head cheerleader during Chrysler's merger talks with Daimler Benz.

I contacted Mr. Iacocca ("Call me Lee, please") at his Gross Pointe residence, and I asked him if Fiat and Chrysler could achieve synergy given their different automobile markets. Well, of course they could -- Lee Iacocca sees synergy everywhere.

Lee told me, "We've already made plans to import the boxy, three-door Fiat 500. Papa John's and Little Caesars have said they will make the 500 their standard pizza delivery car. Domino's will fall in line as soon as we do some minor retooling. And it won't be long after that before Pizza Hut offers free delivery."

"Heck," he continued "we're even going to rename the 500 'Topo Gigio' to bring back that 1960s nostalgia when the Big Three ruled the car business. Isn't this clever? Topo Gigio means 'Louie Mouse' in English! Can you imagine how much fun the boys in advertising will have with Louie Mouse delivering cheesy pies?"

Lee paused a long pause. And then he dropped a bombshell.

"Warren Buffett is buying our stock. He's pushing his gecko for our new mascot. I don't see it -- geckos send the wrong image when you're selling Italian cars!"

Lee's exuberance reminded me so much of the time when I interviewed him in Munich after the Benz merger was announced. Fresh from his tour of Hitler's bunker at Berchtesgaden, Lee told me that Chrysler would help Mercedes reclaim the "Joe Hofbrauhaus" market with the introduction of Europe's first dualie, the HummDee. The HummDee would be the first armor-plated, all-wheel-drive pickup truck sold to German civilians since World War I.

Lee proclaimed, "Germans will love the way our HummDee can maneuver through the Maginot Line."

But he missed the market. Germans were looking for softer, refined cars, and the HummDee didn't sell well. I was surprised that Lee didn't see that coming. After all, the cover story on that month's issue of European Road & Track was about the newly redesigned Volkswagen Beetle titled "Herbie Goes Gay!" in screaming pink letters.

But Lee was positively effervescent about Fiat's product line.

He continued, "You know, David, Fiat has pioneered 'hands-free' communication for motorists. We're bringing Fiat's patented KneeSteer(TM) technology to Auburn Hills. The whole Chrysler family will soon offer integral cell phones that will be compliant with all these new 'hands-free' laws."

With KneeSteer(TM) in every car from the Charger to the Caravan, Lee foresaw a sales edge that would carry Chrysler for the next decade.

"KneeSteer(TM) also lets us add two more cupholders to the dashboard," he said with his characteristic panache.

Lee had already met with President Obama to talk about the Asti Carbone, a hybrid version of Chrysler's PT Cruiser.

He told me, "We feel certain we can run this baby on Asti Spumanti sparkling wine if we can develop the right catalytic converter to pull more carbon dioxide out of the air. We just need a few more bubbles to make the Carbone purr! I told the president that the Carbone could make a real dent in global warming."

Lee and I talked for some time after that as he was wont to reminisce about his career. I thought that he might consider the Mustang, his signature car while at Ford, as his biggest achievement. However, he believed the K-car was his swan song.

"Yeah, sure, the Ford Mustang was 'can't miss' and a lot of fun to design and sell. But the K-car had to sell or Chrysler was dead in the water. The K-car is what paid that government loan off."

I asked Lee, "If you had it to live over, what would you change about your life?"

He didn't hesitate at all and said, "I would never have gone to engineering school. I would have become a community organizer."

"You're kidding me," I pressed.

"No! I've seen this Obama fellow in action and his breadth of knowledge is so great. He can run the Fed. He knows where we need troops. He can get tax cheats to pay up and perform government service. He knows which CEOs to fire and which CEOs deserve bonuses.

"David, if I had been a community organizer instead of a methodical engineer, I could have brought the Edsel back to life and made Ford the biggest company in the world." Such were the words of Lee Iacocca.