AD #1276 – GM-PSA Deal Going Pfffft, Cool Bus, Weird Name, BMW’s M&M’s

December 12th, 2013 at 11:51am

Runtime: 8:06

- GM-PSA Deal Going Pfffft
- Hub Motor Jetta
- Cool Bus, Weird Name
- Volvo’s New Architecture
- BMW’s M&M’s
- Autoline Executive of the Year

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Hello and welcome to Autoline Daily, where we bring you the latest news in the global automotive industry, and explain the reasons behind why it’s happening.

GM-PSA DEAL GOING PFFFFT
And we start today with a report out of Europe from PSA, the parent company of Peugeot and Citroen. It’s now admitting that its alliance with General Motors is going to yield 40% less savings than originally expected. It still expects to save $1.2 billion in joint engineering and purchasing, but that’s down from the $2 billion they originally announced. Here’s my Autoline Insight. This comes as no surprise. General Motors has a rich history of failed alliances with other automakers, and when the PSA deal was announced we wondered why GM would even make such a move. It already had to write off the $400 million it poured into PSA, in other words, it was a complete waste of money. I think this is a key reason why GM vice chairman Steve Girsky, who was president of GM Europe when the deal was signed, is being removed from all operations at GM. He will remain on the GM board, though we’ll see how long that lasts. Here’s the problem with these kinds of alliances: trying to get two different car companies to agree on what kind of products to share, how to engineer them, where to make them, and who gets charged what, inevitably slows any project down. And that adds costs that are not well captured by most corporate accounting methods. I’m afraid we’re going to hear more bad news about the GM-PSA alliance before this is all over.

HUB MOTOR JETTA
Protean Electric, the maker of in-wheel electric motors, is partnering with FAW-Volkswagen to develop an all-new electric propulsion system that uses Protean’s hub motors. The fully-electric, rear-wheel-drive vehicle will be based on FAW-VW’s Bora sedan, better known ‘round these parts as the Jetta. The companies started work on the project several months ago and expect all testing and engineering to be completed within a year. If you want to learn more about Protean and its electric hub motors, check out my interview with CEO Bob Purcell on Autoline After Hours earlier this year. Just click the link in today’s show notes on our website.

COOL BUS, WEIRD NAME
Talk about distracted driving! Check out this concept called the Willie Bus. The side panels are actually transparent LCD screens that convert the bus into a mobile billboard with advertisements, film clips, route plans, weather reports, TV coverage as well as tourist information.The designer, Tad Orlowski, says two European cities have expressed interest in the bus. You can get more information at his website, just click on the link in today’s show notes.

VOLVO’S NEW ARCHITECTURE
Volvo has set quite a lofty goal for itself by 2020: no one should be killed or seriously injured in any of its new vehicles. To do so, it’s developing what it calls Scalable Product Architecture, which is a combination of a new safety frame and crash avoidance systems. The safety frame is a mix of different steel grades that won’t add mass or weight but will increase strength. It also features a unique electrical system that makes it not only easy to add new features but to do it quickly. The system will also feature things like radar technologies, adaptive cruise control with steer assist and car-to-car communication. Some of Volvo’s Scalable Product Architecture will be seen on the upcoming all-new XC90.

BMW’S M&M’S
BMW is giving us a look at the new M3 sedan and M4 coupe. The cars will be dropping their V8 in favor of a turbocharged inline-6 that puts out 425 horsepower. The engine can be mated to either a 6-speed manual transmission or a 7-speed DCT unit. And when mated to the DCT the cars are capable of hitting 60 miles-per-hour in just 3.9 seconds, it takes 4.1 with the manual. A few different styling cues can be spotted from their non-performance counterparts, mainly the massaged front and rear bumper fascia. The BMW M3 and M4 will makes their debut at the Detroit auto show next month.

Don’t forget to tune in to Autoline After Hours tonight. I think Peter DeLorenzo will share some of his Autoextremist thoughts on GM CEO Dan Akerson that he wrote about on his website. Should be a good one. So join us tonight starting at 6 pm eastern time on Autoline.tv.

Coming up next I’ll be talking about the next executive who made it to our short list for the Autoline Executive of the Year.

AUTOLINE EXECUTIVE OF THE YEAR
As you know, I’ve been talking all week about those executives who made the short list for the Autoline Executive Of The Year. I’ve put together a blue ribbon panel of automotive experts to help me choose the one automotive executive who stood out above the others this year. So far we’ve covered Akio Toyoda, Tom Doll from Subaru and Martin Winterkorn from Volkswagen. Today I want to talk about Alan Mulally.

When I first met Alan, I thought this guy would be toast. I was sure the auto industry would chew him up and spit him out. Boy, was I wrong!

Alan is the most unique CEO I’ve ever met in my life. whenever he sees me, he gives me a bear hug and a kiss on the cheek. No CEO has ever done that to me before!

Alan has an ability to get people to do their best for him. But he didn’t rely on his nice-guy personality to get it done. He also put a process in place that almost forces the top executives at Ford to work together. And that has transformed the culture at Ford. It will be his lasting legacy.

But, Ford was recently clobbered by Consumer Reports and J.D. Power over problems with its Sync and MyFordTouch systems. And today the board of directors is reportedly going to press Mulally over his plans. Is he going to Microsoft, or not?

The way I read the tea leaves, Alan will go to Microsoft. At first I thought no way he’ll go. He’s 68 years old, he has more money than he can possibly spend, and he’s proven himself. But recently Alan has been ducking questions as to whether he’s going or not. Look, if he was not going he’d just come out and say so. But he’s been ducking the question, and that makes me believe he’s going.

And why not? He’s done everything he can do at Ford. Microsoft definitely needs someone with his leadership skills. And it’s a way Mulally can spread his Business Process Review, which could revolutionize American business.

So will Alan be the first Autoline Executive of the Year? Hold your horses, tomorrow I have one more executive to talk about.

And that wraps up today’s report, thanks for watching, we’ll see you tomorrow.

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52 Comments to “AD #1276 – GM-PSA Deal Going Pfffft, Cool Bus, Weird Name, BMW’s M&M’s”

  1. HtG Says:

    MulallySoft

    If you read AllThingsD’s Kara Swisher, Mulally is not favored to take the top job at Microsoft. Computers are hard, you see. And MS is facing an industry transition that requires deep understanding. Ms. Swisher is following the shadows like a cat.

    http://allthingsd.com/20131211/with-microsoft-ceo-race-in-home-stretch-and-mulally-fading-heres-my-dark-horse-pick-vmwares-gelsinger/

    Here’s my LunchLine insight; a technically immersed candidate gets the CEO job, but Alan comes on as Chairman in order to align the organization. After all, it’s his One Ford work that influenced Ballmer’s reorg, and Old Man Ballmer is staying on the board.

  2. HtG Says:

    John, a little booze in Peter’s coffee tonight wouldn’t hurt. ;)

  3. Rick Says:

    Can you tell us all of the considerations for this recognition. The reason I am asking is I want to know if the most deserving is on the list. So far I think your candidates are strong but there is a stronger one. Mark Reuss has done more for the American auto industry in recent times than anyone I can think off. He is a car guy! Plain and simple that is something that GM has needed. It shows in the great cars GM is producing. Two of the three NACTOY candidates are GM cars, the Stingray and the Silverado. In addition there is the Cruze Deisel,the ATS, the magnificent Z28 and the soon to be released ELR. To produce just one of those cars would have been an accomplishment but a stable like that takes inspired leadership and guidance. And the inspiration side is a huge factor. Reuss has inspired those engineers and designers to recapture the pride of working for a company that has been maligned and continues to be the undeserved butt of too many jokes which pertain to the past. Simply put car guys like working for a car guy and it shows in Reuss’s case. Let’s make sure he is on the list for consideration.

  4. Kit Gerhart Says:

    HtG,
    Do you know how well Microsoft is doing with their belated serious entry into the mobile and tablet business?

    They are sure advertising a lot, but from what I see, they don’t seem to be making much inroad against Apple and Android. Also, it doesn’t seem that long-time Windows users are warming to W8 either. What are you seeing?

  5. gary susie Says:

    When i was a kid i stuck my finger in a fire, never did that again. When is GM going to learn?

  6. Kit Gerhart Says:

    While PSA makes some good stuff, like small diesel engines, they aren’t very good at making money. For that reason, if nothing else, the alliance with GM didn’t make sense.

  7. Bradley Says:

    I have significant issue with the executive mindset of leaving a company once the job of getting it back on track is done. It’s easy to land a basketball on the court, but to get it into the hoop takes a lot of time.

    Microsoft’s problems are not too different from the problems GM had prior 2008. A cognizant power house of an industry becoming almost irrelevant.

    Microsoft like GM had market dominance and neither of them correctly understood exactly why. Both believed their products were superior, in reality their products were simply available. Instead of listening to their customers and taking advantage of their market share to make even better products…the product became stagnant.

    I would argue that Microsoft’s problem is worse than GM’s. The way people use cars hasn’t changed much (yet), and the way people use computer technology has changed significantly.

  8. ColoradoKid Says:

    HtG – 1 ….. or alternatively …. Mulally and Ross Brawn wise up … take the money and run … with Mulally doing what ever it is he enjoys in his spare time to do … and Brawn taking a few years off for a spot o’ Fly Fishing … hint hint ( .. yeah … by Spring I should be allowed to get back to that by Mr PT Punisher … PT in my definition being when you pay someone good money – to beat you up – so’s you can feel better )

    As to PDL ? Nahhh … feed him a couple of Double Espressos on top of his daily dose of Joe I say .

    IMO the man can’t display too much ‘ attitude ‘ in this present era of Arschkussen automotive journalism

    ——

    Speaking of Physical Therapy ( hold on .. this is very automotive relevant )

    Second thing my PT master did after doing a full assessment was to ask what kind of car [ style .. not brand ) I drove . After telling him it was an SUV/CUV he expressed relief saying if it was anything but he'd of recommended and prescribed [ for tax purposes ] renting an SUV for the duration of my ‘ treatment ‘

    Then …. ahhh yes .. this’n a thorough one … he and I went out to Franz to access and have him slightly modify my seating position

    When it comes to human physiology … everything matters !

    —————-

    PSA/GM down the tubes … All those surprised by this …. cough … revelation …. please stand up ….. All those standing please go down the hall to Automotive Business 101 for Dummies .. the refresher course for a full session on GM and PSA’s ‘ business ‘

  9. Tony Gray Says:

    I’m not an engineer, but I know that some of you folks are. We always hear that we want LESS unsprung weight to improve ride and handling. So what is the effect of these in wheel electric motors on that component of auto performance?

  10. HtG Says:

    3 It’s hard to figure out what’s really happening. But MS is doing everything they can to make it, and they’re known for their doggedness and willingness to spend money. Their cash cows like Windows and Office will pay the way. Tablets are becoming so capable that the need to replace PCs is declining. But Windows XP will no longer be supported by next spring, so there will be an upgrade cycle. The Windows phone is getting some share in sales, but Apple just got clearance into China with its iPhone.

    The point for Mulally is that Microsoft is so complicated, and the underlying technologies and standards that made Wintel the profit machines they’ve been for 30 years are being threatened from the cheapest sensors all the way to the datacenter, that running MS is one tough assignment. Some even argue for breaking it up.

    I’m certainly not smart enough or knowledgeable enough to comprehend the issues for MS. At least for Ford it was organization and a cash problem.

  11. Jon M Says:

    Indeed a lofty goal for Volvo. And surely the corporate attorneys made certain the company used the word “should” in their statement. It’s a nice loophole for the legal complaints threatened by quick readers who don’t carefully think about the statement. So when the family of the Volvo owner struck by a tractor trailer who didn’t notice traffic coming to screeching halt on I-95 tries to sue Volvo for not living up its claim, Volvo’s lawyers will defer the family back to the truck driver, his company, and the truck manufacturer. Volvo will just have to hope the truck driver wasn’t driving a Volvo VN780!

  12. Kit Gerhart Says:

    8. Yeah, you want less unsprung weight, and also, less rotational inertia. Motors in wheels increase both, but I don’t know how much, in the case of these Protean motors.

  13. ColoradoKid Says:

    6 – Its called jumping [air] ship with a Golden Parachute above you

    Common as the rain in England in this ‘ business ‘ era we’re in . Very few like Steve Jobs stick it out till the very end

    BTW … Microsofts main problem has been their over dependence on Software to get them thru the day … with their entry into Hardware now proving too little …. too late

    HEY !!!!! Just like GM with ‘ small ‘ fuel efficient cars and Hybrids … Damn ! You’re right … Microsoft has become a bit too much like GM

    Good call !

    ;-)

  14. HtG Says:

    7 haven’t I been saying that crossovers would be the ticket for our population, some of whom have injuries?
    —–
    fly fishing- yes, I’ve been meaning to ask you for your opinion, CK, but that’s your world.

  15. ColoradoKid Says:

    8 & 11 … a lot !!! More in fact than either the creators or the potential end users are willing to admit …. hoping the Auto Consumers overall ignorance will sell them regardless

    ———–

    Volvo’s ‘ Goal ‘

    Lofty ? More like pretentious – delusional – irrational and complete and utter wishful/pie in the sky thinking

    Driving a car … or any other activity on this planet Earth … will NEVER be made completely safe .

  16. ColoradoKid Says:

    13 -

    a) Yes you have … along with moi !

    b) Fly fishing ? Vas ist das you vants to knows ? Or is it that I think ( and may of suggested ) that Ross take a bit o’ timeoff to pursue his almost obsessive passion ? If the later … no need to respond

  17. Dan Clemons Says:

    Alan has turned Ford around come on!!! He is simply the best! He helped Ford avoid bankruptcy. How good is that?

  18. Kit Gerhart Says:

    14, Yeah, 75 pounds/motor. That’s a lot of weight in one wheel of a Jetta-size car.

    http://www.proteanelectric.com/en/protean-electric-announces-partnership-to-develop-in-wheel-motor-propulsion-system-with-faw-volkswagen/

  19. dcars Says:

    If Alan M. leaves, do they look outside FMC? Mark Reuss could make GM pay for all the injustice that he received.

  20. Buzzerd Says:

    “Gas ist das you want to know” or in other words “what is the you want to know”? you may want to stick B.S.ing in one english.

  21. Buzzerd Says:

    should have been “vas its das you want to know”

  22. Buzzerd Says:

    dam auto correct

  23. Bradley Says:

    In terms of vehicle dynamics 75lbs per wheel breaks the standard rules of wisdom. However, the benefits may offset this breaking of convention.

    I assume there is no other motor and transmission, so the weight of both of those are removed. Then 75lbs of each motor at the wheel significantly lowers center of gravity.

    Then there is great efficiency with having all the electronics right there at the source of mechanical rotation.

  24. Chuck Grenci Says:

    I’m thinking maybe the ‘bill board’ bus will bring more distraction to the walking public (even more so than already present with the static advertisement and as smartphones do now). Between drivers fiddling with their in car distractions and walkers paying less attention to where they are going can anyone else see a potential rise in the pedestrian accident rate. Sometimes technology isn’t so wonderful (if not properly applied.

  25. Kit Gerhart Says:

    22, It should lower total weight, but would increase unsprung weight.

    From the picture shown by the “our technology” button on the Protean web site, it looks like the rotational inertia would be high, adversely affecting acceleration and braking performance. There are tradeoffs, though, and such a system could reduce total power train weight substantially.

  26. ColoradoKid Says:

    Positive End of Year Rumor

    Its looking more and more like Toyota’s finally coming to its senses and planning a re-entry into the one motorsport competition it has succeeded at in spades

    The WRC … with a Yaris based WRC car

    —————–

    Protean – Well … when they tried their little scam in conjunction with Lotus earlier to promote their Hub Centric EV motor … the UK Engineering press had itself a Heyday … debunking each and every claim made by both Protean and Lotus in the process .. with even the likes of Gordon Murray chiming in … and brother did it ever get ugly !

    Suffice it to say …. Every single one of Protean’s claims are a pant load of abject and utter engineering BS

    —————–

    CK’s GM Prognostication Report Card 2013

    Said the ATS would hit the wall sales wise

    Check !

    Said the GM/ PSA thing would end up in tears

    Check !

    Said the ( cough ) new Silverado’d be zero competition for the F150 and languish on the lots as well

    Check !

    Said the Impala was an impending sales dog waiting to happen

    Check !

    Said the VOLT would crawl with its tail between its legs into the sales Abyss

    Check !

    Said the Korean connection had some fatal flaws that would begin to manifest themselves sooner than later

    Check !

    Said Holden would no longer be holding on ( I really don’t mind y’all borrowing that’n ALD )

    Check !

    Hell … the only one I didn’t see coming and was just recently made privy to was just how much of the ‘ new ‘ C7 is in reality the old C6 in drag . Not evolved mind you .. just ‘ covered ‘ up by a C7 party dress

    Hmmmn … seems to me GM could do a whole lot worse than hiring me as a consultant … not that I’d accept … but ..

    ——–

    Buzzerd – 20 – I was being a bit ‘ silly ‘ with the ‘pig ‘ German … would of thought that a bit obvious …. but then again it is you commenting on it so .. ;-) … btw … Anytime you’d like to prove your claims of BS’ing .. Buzzerd ( btw that should be Buzzard ) feel free sonny ;-)

  27. ColoradoKid Says:

    Damn buzzerds ;-)

    ( gotta wonder when one can’t even spell one’s own moniker correctly )

  28. ArtG Says:

    John, it wasn’t that long ago you were saying that Mulally would never go to Microsoft.

  29. Kit Gerhart Says:

    25, Impala is the best selling car in its segment, by a wide margin.

  30. Brett Says:

    #28 – I believe John confesses to that very thing in today’s video.

    ————

    Saw my first ATS yesterday. I sorta liked the look of it. The styling has achieved a nice balance of proportions while keeping to the make’s styling language. Not too impractical or “gee-whiz” like GM stylists can get.

    Most GM vehicles seem like the stylists should’ve put down their pencils a couple hours before they actually did. The current Camaro and Corvette come immediately to mind.

  31. HtG Says:

    Kit, if I can go off topic again on microsoft’s challenges, take a look at what Google is doing with its Docs software. For lots of people it’s word processor and spreadsheet programs will be fine. And they’re free. I’ve been saying it since Google went public a decade ago; they’re going to try to take down Microsoft. (Now Microsoft is even trying to sic the govt onthem for antitrust, in Europe too)

    As a person who’s got big bets on the coming world of computing and communication, I wonder what Microsoft will do. (I also wonder about intel, but much more viciously)

  32. Kit Gerhart Says:

    I got another “scroogled” spam email from Microsoft today, with a video of people saying a Chromebook won’t do what they need to do, like running MS Office applications. If you need to run Office, you need a Windows computer, or a Mac, but most people are fine without that capability. I assume a Chromebook has, or can download readers for the Office formats.

  33. HtG Says:

    One thing that may give Mulally pause about joining Microsoft is that the board will include Messrs Bill Gates and Steve Ballmer. Does Alan want Bill’s ‘superbrain’ to have power over him? Maybe Mulally refused the gig already, because of just such an issue.

  34. T. Bejma Says:

    The REAL facts! CHECK!

    November 2013 to November 2012

    Cadillac ATS 3,443 to 2,152 +60%
    Chevy Impala 13,418 to 11,163 +20%
    Chevy Volt 1,920 to 1,519 +26%
    Chevy Silverado 34,386 to 30,674 +12%

  35. HtG Says:

    Who let you in, TB?

  36. T. Bejma Says:

    HtG-

    Thanks for the advice on Chromebook vs. Surface.

    Ended up getting the Samsung 11″ Chromebook with Exynos 5250 Dual Core Processor.

    Will let you know how my daughter likes it after she has a chance to play with it.

    Thanks again! ;-)

  37. T. Bejma Says:

    Back in town after being totally immersed in all things Colorado/Canyon the last few days.

    This is going to be an awesome truck.

  38. HtG Says:

    36 yeah, it’s a great machine. I hope your daughter enjoys it.

  39. HtG Says:

    More on Mulally

    If you’d like to read a blog post about Microsoft’s leadership future, check this out. It’s a blog by a retired director of Microsoft. I only now checked it, so can’t say anything. He goes through the issues…

    http://hal2020.com/

  40. Bradley Says:

    #26 CK

    A WRC Yaris! I will be torn as I love WRC Subaru!

    Rally Sport (RS) Yaris! :P

  41. Kit Gerhart Says:

    36, 38
    It seems that MS is scared of Chromebooks, and with good reason. While they won’t do everything, they will do what most people want.

  42. HtG Says:

    41 plus, Intel is practically giving away processors just to get into chrome books and android tablets. MS faces a rear guard action from Intel, who weren’t pleased about MS opening windows to ARM via RT. Sorry, but this is a tough landscape even for Mulally. And it’s just part of a titanic battle happening across the globe; I love this stuff.

  43. dcars Says:

    As I see it, Mark Reuss is going to run a car company, if not GM then Ford.

  44. dcars Says:

    Could chevy be making a strategic withdrawal from Europe? They are still going to sell the Corvette and the Camaro. It would be a lot easier to add upscale Chevy’s with these two cars in the show room.

  45. G.A.Branigan Says:

    @ TB: Why is it going to be another year for the diesel option?

  46. Kit Gerhart Says:

    44,
    GM in Europe is Opel on the continent, and Vauxhall in the UK. They inexplicably introduced Chevy as the nameplate for low end Korean imports, which never made much sense to me. I guess the powers that be decided the same thing.

    Selling the handful of Corvettes and Camaros they sell in Europe as Chevys makes sense.

  47. cwolf Says:

    G.A.Branigan,
    I heard last week that the diesel will be offered as an option at the initial offering. Hope noone changed their minds or we have only TB to blame!

  48. T. Bejma Says:

    #45

    Haven’t yet found the right person to ask that question G.A., but believe me, I will find out.

  49. G.A.Branigan Says:

    Thanx TB.Everything I have read so far says that the diesel won’t be offered until the second model year.Yet no reason was given.I also don’t understand GM’s reasoning behind NOT using the new 4.3 instead of the 3.6 car engine.It does seem to me that for every step forward,they purposely take 3 steps backward.Very confusing….

  50. T. Bejma Says:

    My guess would be that there is probably a couple reasons why no 4.3L

    - Keep Colorado/Canyon differentiated from Silverado/Sierra
    - Keep cost lower
    - Keep mileage better
    - Packaging space

    Decisions like this are usually made by the Marketing guys and you know how confusing they can be ;-)

  51. G.A.Branigan Says:

    @ TB:
    Remember,the S10 had the same 4.3 that was available in the full size,back then.

    Lower cost:okay.

    Keep mileage better: The 4.3 has afm,the 3.6 doesn’t,and will have to work harder.

    Packaging space: Maybe….

  52. Kit Gerhart Says:

    Another reason to use the 3.6, would be to make the vehicle “sportier,” with the higher revving, slightly more powerful engine. The 3.6 is less “trucky” than the 4.3, but is much more like the V6s used in the Colorado’s competition, Tacoma and Frontier.