Episode 296 – Chevy’s New Ad Agency, Ford Needs More Buyouts, New Fiat Hatchback

December 22nd, 2009 at 12:53pm

Runtime 7:09

Chevy turns to another ad agency for the first time since 1919. Ford is now stuck with the highest labor costs in the industry. All that and more, plus Fiat comes out with the Sedici. Could it also be headed for the U.S. market?

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Chevy takes a bold move in the advertising industry. Ford is stuck with the highest labor costs in the industry. And we’ll give you a look at the latest little hatchback from Fiat.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Tuesday, December 22, 2009. And now, the news.

There was a minor earthquake in the world of automotive advertising last weekend when Chevrolet awarded some of its 2010 ad business to a company other than longtime agency Campbell-Ewald. General Motors announced that it was giving Publicis the work for Malibu, Equinox & Traverse while Campbell-Ewald will continue working on Silverado as well as the Winter Olympics. My co-host for “Autoline After Hours” Peter De Lorenzo, who spent much of his career in advertising — and working on Chevrolet no less — says this move is huge and signals that it’s going to be a jump ball from here on out for all Chevy advertising except for Truck which Peter believes will stay with the agency. Of course the reason it’s such a big deal in the ad world is because Campbell-Ewald has been working with Chevrolet since 1919.

Reuters reports that Ford is going to offer buyouts to 41,000 hourly employees. Amazingly, even though Ford builds fewer vehicles in the American market than GM, Ford now has more hourly workers. Last month UAW workers at Ford rejected any concessions, so not only does Ford have to highest labor costs in the industry, it also has more workers than it needs.

And speaking of Ford, yesterday we reported that one of Ford’s top designers Pat Schiavone, resigned from the company. And I asked did he really get an offer he couldn’t refuse, or is this a sign of turmoil at Ford design staff? Well, now we know Schiavone left Ford to go to Whirlpool, so I say it is a sign of turmoil. Ask yourself: what successful car designer, with gasoline in his veins, have you ever heard of who would leave the auto industry to go design washing machines?

Speaking of designers, the Peugeot brand just got a new Design Director. He’s Gilles Vidal, 37 years old, who is a graduate of the Art Center College of Design of Vevey in Switzerland. Since early 2009, he has been in charge of concept cars, including the BB1, an electric urban mobility car.

And more people in the news. General Motors has hired Chris Liddell as vice chairman and chief financial officer (subscription required). Liddell had been CFO at Microsoft. GM chairman Ed Whitacre says they also want his insights in corporate strategy, so he’s not just there to count the money. Liddell, 51, is a New Zealander with extensive CEO experience at other companies, which prompts the Wall Street Journal to ponder whether he could also become CEO of GM. GM will pay him a $700,000 cash salary plus $3 million in restricted stock, and it was all approved by the Obama Administration’s pay czar.

GM is in talks to increase its stake in its Chinese venture with SAIC and Wuling. According to Bloomberg, the company wants an additional 10% stake in the alliance to bump its holdings up to 44%. GM would purchase the shares only from Wuling and SAIC would keep its current amount. 3 out of every 5 cars GM sells in China is made by Wuling.

In other GM news, Isuzu may pull out of a joint venture with the company that builds diesel engines. According to Bloomberg, Isuzu wants to review its partnership because the Ohio plant is only running at 30% capacity, the plant builds the 6.6l V-8 Duramax diesel. Isuzu may also pull out of another joint venture with GM in Poland that builds diesels too. This news comes on the heels of Suzuki pulling out of its venture with GM in Canada.

Coming up next, a look at Fiat’s new small hatchback, the Sedici. We’ll be back right after this.

Even though it’s going to be a few years before we see Fiats in the U.S., it’s important to know what the company is coming out with in Europe. And Fiat’s newest small hatchback is the Sedici.

The vehicle is a little bit smaller than a Pontiac Vibe and a Mazda3, and also weighs less than both.

It comes with two engines. A 1.6L four-cylinder gas engine and a 2.0L turbo diesel which can be mated to a four speed automatic or 5 and 6 speed manual transmissions. The vehicle is available with four-wheel drive which includes three driving modes the driver can choose from with the push of a button. The first mode is normal 4×2 driving that only powers the front wheels. The next is AUTO mode which distributes torque to the rear wheels automatically when sensors detect low grip but power is transmitted to the front the majority of the time. And LOCK mode distributes torque evenly between the front and rear for speeds up to 60 km/h or 37 MPH.

Fuel economy for the 4×2 gas engine version gets a combined 6.2 l/100km or 38 MPG and the 4×4 version gets 6.5 l/100km or 36MPG. The 4×2 diesel gets a combined 5.1 l/100km or 46 MPG and the 4×4 version gets 4.6l/100km or 51 MPG.

The Sedici comes standard with the typical convenient and safety features you would expect and can be upgraded to include features like a 3D Nav system, a DVD player and electronic stability control.

Base price for the gas powered version of the Sedici is just over 18,000 euro or just under $28,000. And a four-wheel drive diesel starts just over 23,000 euro or $35,000.

And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

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42 Comments to “Episode 296 – Chevy’s New Ad Agency, Ford Needs More Buyouts, New Fiat Hatchback”

  1. Pedro Fernandez Says:

    If that Fiat doesn’t look an awful lot like the Suzuki sx4 hatch, then I don’t know a thing about cars, even the a/c vents are identical. If Ford cannot control labor costs here, they will be forced to produce more cars in Mexico. UAW wake up from your coma.

  2. Dave Says:

    If Fiat cant controll the cost of there cars when they come to the US they dont stand a chance..35 grand US for a little all wheel drive car, NOT GOING TO SELL HERE

  3. Darron65 Says:

    Re the Fiat Sedici: Are the diesel fuel consumption figures reversed? Hard to believe the 4×4 drivetrain uses less fuel than the 4×2.

  4. Nick Stevens Says:

    “The 4×2 diesel gets a combined 5.1 l/100km or 46 MPG and the 4×4 version gets 4.6l/100km or 51 MPG.”

    John Mc Elroy,

    This quote of yours above makes zero sense and is probably a typo, it should be the 4X2 that gets the higher MPG!!!

    PS $35,000 fro this little 80s POS is off by one zero. if they can sell it for a TENTH of the price in the US, given FIat’s HORRIBLE Reliability and cheap guality, people may consider buying it.

  5. Nick Stevens Says:

    “Fiat’s newest small hatchback is the Sedici”

    Its styling does not look new or bold at all, it looks like an 80s Suzuki cheapo econobox.

    Seidici means 1,600 in italian, an obvious ref to the base engine.

  6. Darron65 Says:

    Pedro,
    The Suzuki SX4 and Fiat Sedici is the result of a collaboration between Fiat and Suzuki.
    see http://www.sx4sedici.com

  7. Nick Stevens Says:

    Why am I not surprised…

  8. Don Harbidge Says:

    John,

    The Sedici is already on sale here, as the Suzuki SX4. There is very little different but mine can’t get anywhere near those fuel economy numbers you quoted (the Suzuki’s gas engine is 400 cc’s bigger, but the highway EPA number is 28 MPG).

  9. DanM Says:

    The Fiat Sedici has been out since 2006 when it was launched. It’s a joint venture with Suzuki (SX4 to americans). Assembled in Hungary & Japan, it was originally meant for only european consumption, but then Suzuki decided to bring it to the states. The ‘new’ version is just a mild facelift & trim variations, with some new powertrains. Not a ‘new’ vehicle by any means.

  10. Pedro Fernandez Says:

    Thanks, Darron65, I just looked up pricing for the Suzuki and it’s about half of what that Fiat is supposed to sell for. Is Macarroni crazy? who in their right mind is going to buy that crap, the SX4 doesn’t sell that well at half the cost of the Fiat.

  11. Salvador G. Says:

    I can’t believe a car with all that cheap interior ugly black plastic would cost as much as a Ford Taurus SHO. I think we can all agree that the FIAT Sedici would never sell here, regardless of mileage, it’s just a cheap looking car.

    -That’s what I call ‘Dead on first sight’.

    Do we have Consensus??

    — Now, in retrospect… I take back what I said about that Audi match-up on Dec.11, which is still better any day (and twice on Sunday) than the FIAT Sedici.

  12. unionmade Says:

    John, i see you forgot to mention that ford gave its salary workers a 3.5% raise matching 401k and a bonus, but I am sure you have not heard about that. Now you have. Union workers wont give up their right to strike in your so-called concessions and that was what that was all about. Have a merry Christmas I am sure Fords salary people will.

  13. G.A.Branigan Says:

    Sergio Macaroni said they would be cutting some of the less popular jeep whatevers out of the lineup.Having said that,I wonder if they will try to stick a jeep badge on it? Even if they did that,and even if they went as far as putting a trail rated badge on it,I can’t see it selling here for anything close to the price quoted.Are they on drugs,or drunk?

  14. Nick Stevens Says:

    This ugly little POS “Fiat” is obviously only for sale in Europe, where the opressed masses there have to cough up $30,000 for a base 1.4 lt front wheel drive Toyota (even 4-5 years ago!).

    In addition to its hideous looks, WHAT, if anything, is “FIAT” about this little POS apart from the Fiat badge in front? The styling is IDENTICAL to that cheapo Suzuki. Are the engines develped by Fiat? I doubt it.

    Badge Engineering is a HUGE Fraud and makes me sick to my stomach. Especially in this case of “ccoperation” where there was ZERO working together, but only Suzuki USING the FIat label to get $35k for a POS.

    But I doubt many Europeans would pay $35k even for a real fiat!

  15. Laurance Miller Says:

    John,
    I appreciate your indepth coverage of the US car makers. But, with all the turmoil they face, i.e. Ford’s worker wages, GM’s advertizing changes, Japanese company backouts, does the many foriegn manufacturers face similar issues? I hope this is just business as usual or is this symptimatic of something uniquely American? I hope not. Foriegn manufacturers must be facing similar challenges.

  16. Phil Hopewell Says:

    I also immediately thought the Sedici looked exactly like the Suzuki sx4 – I see that’s been confirmed. What I wonder about is the packaging and 2wd/4wd options make it awfully similar in purpose and function to the Jeep Patriot (4 passenger, 4 cyl, awd wagon). Seems like a lot of overlap to me in the Fiat lineup.

  17. Pedro Fernandez Says:

    Hey guys, are we forgetting the Jaguar X car, based on the much cheaper Mondeo that they sold here as a entry-level “luxury” car, talk about a piece of crap. It was just a Ford with a Jaguar emblem. Jaguar has yet to recover from that disaster.

  18. T.K. Says:

    You can get a Fiat Seidici in the USA right now from Suzuki, the SX4 crossover, for $14,599, with a 2.0L engine after a $1,250 discount.

    An Opel Astra in Europe starts at 16,850 EURO (24,060 USD), but the similar car in the USA sells as the Saturn Astra for 11,551 EURO (16,495 USD); so in the US the Astra is CHEAPER by 5,299 EURO (7,525 USD). So price comparison here is irrelevant.

  19. Gary Paul Says:

    Enjoy your comments as always , John.

    Regarding Schiavone’s move to Whirlpool from Ford, this reminds me of my experience as an intern at VW-Audi of America when I learned that the guy in product planning who had the most knowledge regarding the features & benefits of VWs as well as competing models, was leaving his position for a job in a BANK! At the time I had the naive idea that people in auto companies were intently interested in automobiles & the auto industry; had gasoline in their veins; and that they ate, drank and thought about cars every day—like I did. It was a revelation to me for example, that people did not take the latest dealer brochure home with them to review stats on the latest VW or Audi! I did review them, and discovered errors, which are not uncommon when reviewing auto brochures because I learned that the people who write them and edit them–surprise!–typically have little knowledge or interest in automobiles! In fact when I worked at EDS I discovered interns editing/writing automobile owner’s manuals for GM & I discerned that they knew next to nothing about what they were writing & did not appear to be concerned about this because they had gone to college to obtain a degree as a writer. I could see that one fellow was writing about the procedure to jack up a vehicle, so I asked if he had ever jacked up a vehicle before, and the reply was, “no, I just call AAA.” My eyes were opened with further experience in the auto industry as I realized that this scenario was par for the course at big auto companies… It usually did not matter to the employee, whether higher up in the company or at the bottom, as to whether he worked for a car company, a boat company, or a ladies shoe company…

    Now I don’t expect the secretary and the accountants and the custodian, or even the CEO to necessarily have any particular knowledge about autos, but the dearth of people who knew or even liked autos and the auto industry was astonishing to me…

  20. Drew Says:

    Salvador G.:

    The Taurus SHO is more like $45,0000, not $35,000.

  21. Drew Says:

    Sorry, I meant the Taurus SHO is more like $45,000.

  22. Kit Gerhart Says:

    Dave Says:
    December 22nd, 2009 at 1:13 pm

    “If Fiat cant controll the cost of there cars when they come to the US they dont stand a chance..35 grand US for a little all wheel drive car, NOT GOING TO SELL HERE”

    The quoted price obviously includes the very high “VAT” included in the price of cars in Europe.

  23. Len simpson Says:

    Thanks, Gary Paul,that was an eyeopener!

  24. Craig Says:

    With all of this talk about hybrids vs. diesel engine fuel economy. The experts say the diesel is just as good or better then hybrids. And one of the sticking points of hybrids is the extra cost of the electric motor. But what about the extra cost of the diesel motor? Nobody every talks about this. I know for years if you wanted a diesel engine in a pick up truck it costed an extra 5 grand. What about the extra cost to buy a small fuel efficient vehicle with a diesel engine as compared to a gasoline engine? Should this not be considered in the formula? Also, is it cheaper in the long run to maintain a gasoline engine or a diesel engine?
    DC Auto

  25. Salvador G. Says:

    Drew Says:
    December 22nd, 2009 at 2:31 pm
    Sorry, I meant the Taurus SHO is more like $45,000.
    -

    The base Taurus SHO starts around $35,000 -Look it up before correcting me.

  26. Salvador G. Says:

    as a matter of fact the Taurus SHO starts at $37,770 and still too close to the 35,000 Sedici.

  27. Andrew Charles Says:

    The Sedici is not new, It’s just had a minor facelift and new generation engines, but is as old as its Suzuki SX4 sibling (in fact I think the Sedici was unveiled first). The Sedici as developed in partnership with Suzuki and along with the European-market SX4 is built in the Magyar Suzuki plant in Hungary. Both models have the same Suzuki gasoline and Fiat diesel engines. Fiat’s newest model is still the 500, although the Grande Punto has had a 500-inspired facelift to become the Punto Evolution. The next major introduction is the recently previewed Alfa Romeo Giulietta (Juliet) which will formally debut in Geneva.

  28. ashwats Says:

    Please don’t bring the Sedici to US. It just looks as bad as Suzuki SX4. Oh it is a Suzuki SX4!!!

  29. DiRF Says:

    That whole extended rundown of the Sedici, and not a SINGLE mention that that vehicle is ALREADY on sale in America (and has been for over 2 years already) as the Suzuki SX4?!

    My family LOVES our SX4… it’s such a great little car. Small footprint, very maneuverable in tight spots, yet very stable on the highway and very roomy inside… plus, it was unbelievably cheap, for what it offers.

  30. wolfman Says:

    I feel Ford UAW members will hold out for as long as their contract lasts, but I am positive they will become more in line with other makers at the next barganing table. A UAW brother, myself, my devotion is mixed. Most new production workers, making $14-19/HR,are earning their keep, yet,it bewilders me that management turns a blind eye to all those unworthy. Trades,such as me,making $35/hr.,is well earned by those of us who love working. But any remaining ol’timers,including older new hires, for the most part, are “Do-Nothings”. Once they are gone, I think you anti-union guys will have to find a wipping boy other than the UAW. I wish management would weed out the “dead wood” and to have the UAW take part, but both do absolutly nothing! Yes, I care, work very hard, learn something new everyday and am worth every dollar paid.

  31. dcars Says:

    I’m not impressed with the styling of allot of the American made ford cars. The European fords (cars) have a nicer look. The ford Trucks are excellent. I don’t think the Flex and Taurus/500 are selling well. The Lincoln Sperm whale grills aren’t appealing. The Focus a hit originally, the newer models needed redesigns. The Fusion and Mustangs seams to do well. Ford’s North American designs have some hits, but allot of misses. I can see why they are in flux.

  32. HyundaiSmoke Says:

    Nick Europeans pay crazy prices for all and any cars, so I bet they would pay a kings ransom for a FIAT. The SX4 wasnt the pretiest kid on the Block, but FIA just made it look downright Fugly.

    Speaking about awards John, I guessed you missed the fact that Hyundai North America CMO Joel Ewanick (I think he will be next in line for Krafick’s Job if anything happened) won Forbes Magaizine’s Marketer of the Year Award.

    http://www.forbes.com/2009/12/21/marketer-of-year-cmo-network-joel-ewanick.html

    If the company decides they want to go further upmarket to contend as a Lexus type company, as opposed to being the Asian Chrysler I can guarandammtee they will make this guy Hyundai North America CEO.

  33. HyundaiSmoke Says:

    A good Portion of the cost is Tax, a Good Portion is higher relative labor costs on the Sedici. But if FIAT made this at a Mexican Chrysler Plant and just shipped them over the Border id say, this would go for about $13-$21K depending on options.

    Though it looks very Dodge like or 5 years ago KIA like, in a bad way in that Interior.

  34. HyundaiSmoke Says:

    Its like a Spectra 5 almost, which was a good car, but of course its outdated now.

    John, so when are you going to admit FIAT deal was a mistake here? With the prices they plan on selling these things, and the outdated looks on the interior front; it doesnt look good. You cant sell can $10-$16K car for $13-$21K. Sergio Marchionne seems like the type of guy that expects premium pricing for his products.

    The more and more I read about these guys the more and more I dont trust Chrysler.

  35. Cars cars cars Says:

    Doesn’t anyone recognize the Sedici as the Suzuki SX4?

  36. Rick R Says:

    Shiavone’s move does not surprise me, most of the cars produced for the masses look like washing machines already. Remember when you could tell a Chevy from a Ford from a Plymouth? Now about the only difference in looks is the emblem in the grille and that does not mean much to some manufacturers.

  37. Pedro Fernandez Says:

    here’s an idea for Sergio Macarroni, take the Pt Cruiser, change the name to “Fiat Kalifornia” and sell it in Europe for $40,000.

  38. G.A.Branigan Says:

    @ Craig:The cost of a diesel on american pickups average 4k.That is a lot of money,however most are used for towing/work etc and have a very long life.For smaller vehicles,my 06 Jeep Liberty the diesel option was $1800.00.Consider a almost 2 ton 4×4 that got 30+mpg hwy,along with excellent towing capacity.I figure the diesel option for the upcoming Jeep JK,will be somewhere between 1.8k and 2.2k.Considering the mileage increase and 340 ft.lbs. of torque with the automatic,the price is cheap,IMHO.

  39. Pedro Fernandez Says:

    The main drawback I see with diesels is the questionable price of the fuel in the future, when you combine better mileage, lower maintenance and superior longevity, it’s beneficial. I know of this guy that has a Mercedes diesel, 1986, with over 500k miles and no engine repairs. Only had to replace transmission.

  40. FrankCanada Says:

    Sedici means 16, as in 4X4! Get it. And this is a left over from the GM alliance (ie Suzuki), it was ment to replace the venerable Fiat Panda (1980 to 2003)But, like most Japanese rebadged crap, was ignored by Fiat engineers. Then the new Panda came out (#1 mini in Europe), & this product was neglected. It was not created under Marchionne’s watch, but is a legacy vehicle left over from old Fiat. If Hyundai is a great car company in America, then I feel bad for America. Please Europe save us.

  41. HyundaiSmoke Says:

    Fiat Punto (Grande Punto)=Most Unreliable Subcompact in Europe.

    Hyundai Accent=Most Reliable Subcompact in America and Europe.

    Source-J.D. Power.

    That’s why Hyundai is great FrankCanada.

  42. FrankCanada Says:

    Hey Smoking Hyundai, stop reading magazines & get under the hood. Early eighties Fiat technology is about on par with low rent wal-mart 2009 hyundai. JD Power says Italian Pizza is unreliable at giving you diarrea, Pizza Hut is Most reliable in America.

    That’s why Pizza Hut is great Smoking Hyundai