Episode 312 – Alfa Romeo In Trouble, Another Toyota Recall, Volvo Sale Not Going Well

January 22nd, 2010 at 12:00pm

Runtime 7:45

Fiat CEO Sergio Marchionne says this will be the make-it-or-break year for Alfa Romeo. Toyota announced that it’s voluntarily recalling 2.3-million vehicles to correct sticking accelerator pedals. Ford’s effort to sell Volvo to Chinese automaker Geely is not going well. All that and more, plus Ford’s Jim Farley talks about how customers like the new Transit Connect as much as they like Mustangs.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Alfa Romeo is in big trouble. Toyota gets hit with another massive recall. And Ford’s effort to sell Volvo is not going well.

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

This is Autoline Daily for Friday, January 22, 2010. And now, the news.

Alfa Romeo is in trouble (subscription required). Big Trouble. The Wall Street Journal reports that Fiat CEO Sergio Marchionne says this will be the make-it-or-break year for the brand, and has hinted at freezing all product development because Alfa keeps losing money. He also just named a new CEO to run the brand, Harald Wester, 51 years old, who also runs the Maserati and Abarth brands, and is the chief technology officer of Fiat. In a sign of how Sergio Marchionne doesn’t waste time over executives who don’t deliver results, Mr. Wester is the fifth CEO of Alfa-Romeo since 2004.

And sticking with Fiat for the moment, Bloomberg says that Alfredo Altavilla will most likely succeed Marchionne as CEO of Fiat. He runs the powertrain division at Fiat and is also on the Board of Directors at Chrysler, the only other Fiat executive there besides Marchionne. Interestingly, in its grueling eight-hour press conference last fall, the one I call the Bataan Death March, Altavilla was never introduced to the media, the analysts or the supplier community. Bloomberg says Marchionne will probably stay on as CEO of Chrysler at least until it does an IPO next year.

Late last year Ford announced a preliminary agreement to sell Volvo to Geely, but apparently those talks aren’t going as well as we thought. According to Gasgoo, the main hurdle between the two sides is over control of Volvo’s intellectual property rights. Geely wants to get them all and Ford doesn’t to give everything away. The new report suggests both sides announced a preliminary agreement months ago because they wanted to make it look like they were making progress.

A new study says that the most growth for the auto industry lies in the so called BRIC nations, Brazil, Russia, India and China, no shock there though. But, according to the Detroit Free Press, of the 50 automakers and suppliers it studied only four were considered well-positioned in each of those countries. For automakers it’s GM and Volkswagen and for suppliers its Bosch and Delphi.

If you don’t like the smiley front-end on the new Mazda 3 you’re going to hate the new Mazda 5. The company has refreshed its MPV, giving it the same flame-surfaced look as other models in its lineup. Most pronounced are the swooping lines that run along the side of the body. They bring to mind Japanese calligraphy. But there’s more to this update than just new styling, CO2 emissions are down 15 percent thanks to i-Stop, its system that automatically shuts off the engine when the vehicle is stopped.

Do you hear that? It’s time for Recall Roundup! When automakers screw up or NHTSA just wants to cause problems, Recall Roundup spreads the word.

Alright, first up we have Toyota. Yesterday the company announced that it’s voluntarily recalling 2.3-million vehicles to correct sticking accelerator pedals. This action is SEPARATE from the ongoing 4.2-million Toyota and Lexus vehicles called back for pedal entrapment.

Next, Ford is looking into pickups built between 2004 and 2006 for a potential airbag issue. Up to 1.6 million trucks could be affected by a defect that causes the airbags to go off without warning. The company believes the trouble could be caused by an electrical short.

Finally, Chrysler is in hot water over brake-rod clips on certain 2009 and 2010 models. The brake rod could separate from the pedal assembly resulting in stopping problems.

This has been Recall Roundup!

Coming up next, Ford’s Jim Farley talks about how customers like the new Transit Connect as much as they like Mustangs.

Joining me on this week’s episode of Autoline is Jim Farley, Ford’s Group Vice President of Global Marketing and the President of Canada, Mexico and South America. In the following bite he talks about the Transit Connect and how it’s really resonating with buyers.

As always you can catch the rest of this interview on our website, AutolineDetroit.tv.

And don’t forget to mark your calendar for January 26 when we’ll be webcasting live from the Washington DC auto show. We’ll be talking to the people in DC to learn how Washington will be dealing with the auto industry. That’s January 26 from 12:30 to 2:30 eastern time.

And as I mentioned yesterday, we have free tickets to the Washington show that we’d love to hand out. We’ve already received quite a few requests and we’ll be mailing those tickets out today, but we still have more, if you’re interested.

Ok, it’s Friday and you know what that means. It’s time to answer this week’s trivia question. We asked you to identify who was the aerodynamicist from the 1930s that discovered if you cut off a long streamlined tail on a car, it would reduce drag? And the correct answer is it’s Wunibald Kamm. As always we randomly selected this week’s winner from the pool of correct responses. And the winner is . . . Conrad Zumhagen from Ann Arbor, Michigan. Congratulations Conrad, you’ve just won an Autoline Detroit coffee mug.

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

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog, The Auto Channel, Car Chat, WardsAuto.com and WWJ Newsradio 950

46 Comments to “Episode 312 – Alfa Romeo In Trouble, Another Toyota Recall, Volvo Sale Not Going Well”

  1. Tony Gray Says:

    Zumhagen!!! He must have had an “in” with the selection committee!

  2. Michael J. Brown Says:

    John, that Recall Roundup voice works for you. You’ve gotta do an entire episode in it – LOL.

    You’re not kidding about the side panel forms on that newly redesigned Mazda M5. I can’t stand the smiley face grille they’ve got on the M3s now. If they do actually let this design loose on U.S. soil it just may threaten to swipe top honors from the Pontiac Aztec for butt-ugliest vehicle. I don’t think even Hyundai would commit that type of design faux paw. Sheeesh!

  3. Nick Stevens Says:

    The gaping, sagging mouth of the pathetic Mazda may have been ‘freshened’, but the result is as poor as the original. It looks like those dumb fish in the ocean that eat tiny water critters all day long, hence the open mouth..

    And seriously, no self-respecting auto enthusiast would buy a car that advertises with some dumb, excitable 9-yr old saying “zoom zoom”….

    And about the Ford Transit Connect, who cares? This is not a vehicle of interest to private buyers, it is merely a rarher efficient delivery van, with awkward proportions that do not inspire confidence (narrow and tall) and an awful, cheap interior. Tjhe POS is made in Turkey, and “Ford Turkey” would indeed be an appropriate name for it. But again, why bother with it? Only a few thousand will be sold, and those to fleets of cheapo delivery vans, not to any auto enthusiasts.

    I wonder what possessed the judges to give it the truck of the year, when they had the EXCELLENT Equinox to choose instead!

    Still, Farley should be interesting on AD, and much better than the usual GM riffraff that show up.

  4. Nick Stevens Says:

    Tony: You did not tell me how many miles does your 2004 325iC has? And how much are you asking for it (if on sale)

  5. Dave Says:

    As Matrix owner and like the tall wagon / cross over I kinka LIKED the Mazda 5. But not this new one!!! Man it looks like a reg. mini van and those coves on the side*&%*^#&%# who the heck thought that was a good idea?

  6. Alex Kovnat Says:

    Re Ford Transit Connect: I’d like to see how many of those will end up on their right or left side, or upside-down, owing to what appears to be high center of gravity in proportion to width between right and left tires.

    While I’m addressing this topic, one of the concept vehicles on display at the Detroit auto show, a one-person commuter car, appears to be very high in proportion to its width. What makes things worse is, its a four wheeler. With a motorcycle, at least you can (in fact, you have to) lean into a turn. This isn’t possible with said one-person commuter car.

  7. Chuck Grenci Says:

    While certainly having a place in the market, and maybe even having some passionate owners, the Transist Connect neither deserves the spotlight (nor deserves the Truck of the year), as it just doesn’t (and won’t) move the needle one iota in the automotive market. While maybe a winner, in its segment, we need a winner that moves volume.

  8. Ralph Kercheval Says:

    John,

    Not to be an “I told you so” but about 6 weeks ago I mentioned throttle problems with the initial Toyota recall and you did a reply in “You Said It” making it sound like I was way off base.

    Seems there was more to the problem than you were lead to believe.

  9. Kit Gerhart Says:

    Nick writes:

    “I wonder what possessed the judges to give it the truck of the year, when they had the EXCELLENT Equinox to choose instead!”

    While I don’t much agree with the judges’ decision, I certainly understand it. A smallish, fairly efficient delivery van is something that has been sorely missing in the US market for about 40 years, and the Transit Connect fills that void. The Transit Connect is mediocre in every way, but it serves a purpose. With luck, it will spawn some better competition.

  10. Nick Stevens Says:

    The dimensions of the MAzda 5 and the whole concept of a small wagon / minivan are just right, but the design (esp. the god-awful sagging mouth with the thing in the middle or without it) are not. And hopefully mazda has ended that infernally stupid ‘zoom zoom’ campaign, so serious auto enthusiasts can buy and drive its cars without having to wear brown bags over their heads.

  11. Nick Stevens Says:

    Kit,

    I am not even sure the delivery van should qualify, if it did, why not include all kinds of professional trucks, even 18-wheelers? I do not remember any strictly professional van getting this or any other award the last 25 years. Do you?

  12. paulstewart Says:

    Kit Gerhart be careful, never question the authorty of the mighty Nicky Stevens of Michigan and Tony for heavens sake answer his ? before his mighty tongue smites you down.For he knows all, except how to talk to people politly on the internet.

  13. Kit Gerhart Says:

    “I do not remember any strictly professional van getting this or any other award the last 25 years. Do you?”

    Not really. I’ll have to do some checking.

    Back to my other post, though, there have been some small, but very light duty delivery vans in the last 20-25 years. There were delivery van versions of the first generation Dodge Caravan.

  14. John Says:

    “…the main hurdle between the two sides is over control of Volvo’s intellectual property rights. Geely wants to get them all and Ford doesn’t to give everything away. ”

    It looks like common sense prevailed.

    The advanced technology is the only thing U.S. Auto Manufacturers will have as a competitive advantage.

    Who in their right mind would even consider selling it?

  15. dcars Says:

    Does Volvo loss money? it must if Ford wants to sell it. Seams like a good fit for Ford, a luxury brand that sells in Europe and the US. Unlike Lincoln, they don’t have to re-establish the name plate.

  16. pedro fernandez Says:

    Every year is a make AND break one for Fiat/Alfa, they make them and I guarantee they WILL break. I had a sticking throttle in my Corolla rebuilt engine to the point where I had to dig up the old throttle body assembly from the old one and put it in the rebuilt one. Toyota, you better get your crap together. Too much competition out there to be playing around.

  17. Nick Stevens Says:

    “…the main hurdle between the two sides is over control of Volvo’s intellectual property rights. Geely wants to get them all and Ford doesn’t to give everything away. ”

    It looks like common sense prevailed.

    The advanced technology is the only thing U.S. Auto Manufacturers will have as a competitive advantage.

    Who in their right mind would even consider selling it?”

    I have wondered about the same thing myself, and yet much more successful makers, with far better tech (for their time), did sell it to their less developed competitors.

    For years, the Koreans were using various japanese Engines in their cars (mitsu etc).

    I guess everything has the right price, at which it makes sense?

  18. HtG Says:

    In Re the Mazda5, cars on the road today are getting so hard to look at I sometimes consider taking my glasses off. It’s like visual pollution out there.

  19. Kit Gerhart Says:

    It’s too bad the Mazda 5 looks so strange, because it is a rather nice vehicle. My sister has one, and really likes its practicality and decent gas mileage. I’ll have to ask her how she likes the looks of the new one, but my guess is that she won’t like it.

  20. Andrew Charles Says:

    Geely’s problem is that Volvo doesn’t have any intellectual property rights Ford is willing to share. Everything aside from the styling is also Ford technology—platforms, engines, drivetrain etc. is either a key part of other Ford vehicles, or is built in Ford plants. The last thing Ford wants is give Geely the blueprints to build a Ford Focus clone in China, and I doubt Geely is all that interested without them. At the very least they would be looking at another $4billion to develop new vehicles for Volvo, and perhaps another $3billion to develop new engines.

  21. dcars Says:

    The Volvo, Aston Martin, Range Rover and Jaquar purchase by Ford and GM’s purchase of Saab, Fiat and the introduction of Hummer and Saturn drained the US car makers of cash. Their outcomes are so similar, Ford barely survived and GM didn’t. I know that I’m being an arm chair quarter back at this point, but the senior management a both companies let them down. Hopefully the new guys can get them on the right track.

  22. HyundaiSmoke Says:

    Simple Math:

    Alfa Makes Rubbish + people wont want to buy them becuase they are RUBBISH= LESS SALES.

  23. HyundaiSmoke Says:

    I think he’s also trying to make his business case about pawning off as much Alfa RUBBISH as he can on Unsuspecting (So open Minded it can kill them-literally) Americans.

  24. HyundaiSmoke Says:

    Remember many FIAT/Alfa/Lancia Products use Chinese engines from Chery. Think About that!!!

    Chinese State Company Developed Engines, in American State Company products.

  25. Nick Stevens Says:

    I was checking out Farley’s video on AD and it sounded familiar, after a couple minutes I realized that this is NOT a new show but a cut and paste from videos we already saw Live when John went to the Auto show many days ago.

  26. Kit Gerhart Says:

    Nick Stevens Says:
    January 22nd, 2010 at 1:33 pm

    “I am not even sure the delivery van should qualify, if it did, why not include all kinds of professional trucks, even 18-wheelers? I do not remember any strictly professional van getting this or any other award the last 25 years.”

    Ford Econoline was the ’92 NATOTY, but I don’t think the current “system” for the award was in place yet. The awards have been given out annually only since 1994.

  27. Nick Stevens Says:

    Kit,

    Thanks for info. with all these awards shows on TV, I would think there would be separate awards for commercial and for private vehicles, and if not, there should be!

  28. HyundaiSmoke Says:

    RE: AAH# 39

    John, I dont know but Im seeing a lot more professional young women under 45 in VWs now, In Jettas and Golfs. I think their truck lineup could be more dynamic though, as that same demographic buys SUV in droves.

    I personally think VW should be about AFFORDABLE upmarket small cars and soft roaders.

    Polo, Beetle, Golf, Jetta then Tiguan, and a smaller crosover, and a larger one. I also think they should have Phaeton, but at a Genesis Price, which it would have been as successfual as Genesis if they priced it like one.

    Make it a Chic upscale Chick Brand.

    On the other side of the Coin I think Hyundai should do the same, but for Men.

  29. Nick Stevens Says:

    VW a chick brand, Smoke? You must be smoking a very interesting weed indeed.

    The Golf as well as the Passat are 100% DRIVER’s cars, and we know that most men really enjoy driving, while most women do not, and treat the cars as appliances or fashion statements. Only the YOUNG women bought jettas a while ago (the jetta is a capitulation to US tastes mostly wanting sedans and perceiving hatchbacks as cheapo)

    With the sole and only exceptions of the pathetic, lame, 100% chick car the “New beetle”, and secondarily the golf CONVERTIBLE, there is NO other VW that even remotely qualifies.

    Hyundai should go back to the italians to improve their designs, an dif it already went there, should perhaps change which italian studio designs their vehicles, or stop overriding the italian designs with lamer korean corrections!

    I was not at all impressed with the latest Tucson front end or its sides for that matter,too many unnecessary curves for a breadvan, does not project an image of power or performance, hence NOT a “Men’s” brand.

    There is something about most recent Japanese and Korean designs, they are NOT “CLEAN” and “FORCEFUL” and do not have the character of German-European designs, even small cars like the Mini. This may work for their domestic markets, but Western tastes are different!

  30. Nick Stevens Says:

    meanwhile in China: HUMONGUS increase in production capacity from 12 to 21 million cars a year in 2012!!!

    “On the back of a 45 percent growth that propelled Chinese car sales to 13.6m in 2009, and faced with a shortage of cars that doesn’t allow them to feed China’s ravenous appetite for even more cars, Chinese automakers are racing to build more plants. The combined capacity of the 10 largest players is expected to balloon from around 12 million units in 2009 to a breathtaking 21 million in 2012, today’s Nikkei [sub] reports”.

  31. Nick Stevens Says:

    And in case this was unclear, the new plants are NOT just by Chinese makers, but also US and Euro and Japanese producers with plants in China:

    Some examples:

    SAIC, which has joint ventures with GM and VW, plans to raise its capacity by 30 percent.

    FAW, China’s second-largest maker after SAIC, has plans to nearly double its output capacity. FAW has big expansion plans with its joint venture partners Volkswagen and Toyota.

    Chang’an plans to build a new plant to be jointly operated with Ford.

    Even with the auto boom, capacity utilization at major Chinese auto makers was 80 percent in 2009, J.D. Powers reckons. For 2012, J.D. Powers projects 70 percent of utilization. The Chinese government has already warned that the industry could eventually face excess capacity.

  32. pedro Fernandez Says:

    I wish I had the opportunity to ask Jim Farley what is Ford gonna do regarding platforms now that they’re selling Volvo and divorcing Mazda. When you consider both Ford and GM’s best stuff is coming from either German or Australian architectures, have the domestics forgotten how to build a good platform stateside

  33. pedro Fernandez Says:

    ps, in the case of Ford: Japanese and Swedish architectures.

  34. HyundaiSmoke Says:

    Nick, its about sensibility my friend. The Hyundai is a sensible product and there are a lot of professional males who would buy one. To use as their “Bread Box” I want one!!

    By the way, the lady who designed the Tucson said she designed it to be Feminine but something a man would drive. The Tucson is a girl, and men should drive a girl and women should drive a boy.

    Hyundai stopped using Italian designers, and since they did their designs are so much better!!! Italian design is so 80s, and so that’s my mommy’s car (Kids dont want to drive what their parents drove). The Americans and Germans, and now Koreans design much better products. Look at FIAT/Lancia=not a good indicator of Italian design.

    Hyundais products get designed in Korea/Germany/California ONLY now. Thank You Lord!!!

  35. HyundaiSmoke Says:

    The Tiguan, The Volvo, the Next Gen Sportage, the Equinox are boys=they are perfect for Women drivers. The kind of trucks you name Chuck or something.

    The Lexus, Tuscon, and Acura look feminine, they are girls, and I see nothing but men driving those. The kind of trucks you name Kiara or something.

  36. dcars Says:

    Pedro I’ve wondered the same thing, Why would GM go to Australia to engineer big RWD cars? wasn’t the US great at big RWD cars? Why wouldn’t GM turn to the Impala engineers and designers to do a car like the new Malibu? the current impala has a great reputation for reliablity ride, fuel economy etc… it needs engineering dollars to keep it current.

  37. HyundaiSmoke Says:

    Like those beautiful Gran Tursimos BMW have been making, those are Women’s cars.

  38. HyundaiSmoke Says:

    X6,X5= women’s cars.

  39. Nick Stevens Says:

    Oh right, Smoked silly, X5 is a chick car and a… Hyundai Accent is not a poor chick car, aka a SECRETARY’s car, like the Escort and Cavalier used to be…LOL… You are effing DELUSIONAL.

  40. Nick Stevens Says:

    Honda FINALLY Gets it? That it has to develop a (5-seater! It already had the original 2-seater little 70 MPG Insight) hybrid with better MPG than the Prius!

    ” Honda is planning on taking on the Toyota Prius. Again. Even though sales figures for 2009 proved that people liked Toyota’s hybrid more than Honda’s, the company is not going to just roll over. There’s a new ad campaign for the Insight planned, but Honda is looking a bit further down the line for revenge. CEO Takanobu Ito reportedly told his research and development team to come up with a hybrid that has a better miles per gallon rating than the world’s most popular hybrid. Whether this is a next-gen Insight or a totally different hybrid has not yet been decided, but it’s going to need a major boost to knock the leader off its perch.

    Here are the numbers:

    * Insight’s 2009 sales: 20,572
    * Prius’s 2009 sales: 139,682
    * U.S. mpg rating for the Insight : 40/43 city/highway
    * For the Prius: 51/48″

  41. dcars Says:

    I agree, the current lineup of VW’s look kind of girly. Suprisingly I see lots of women driving them.

  42. Nick Stevens Says:

    The Hyundai Genesis coupe: Now that’s a chick car if their ever was one… plus, as John agreed with me in public, it is NO GENESIS!

  43. dcars Says:

    Hi Nick,
    I haven’t seen the Genesis coup. I’m surprised by the VW’s. Most German (BMW and M&B) cars have a heavier look to them, ie masculine appearance. It would be nice if someone came out with a small car that was reasonably priced and didn’t look so much like a child’s toy. For example the current Ford Focus, Hyundai Accent, Toyota Corolla etc….. The Kia Forte I rented was a step in the right direction.

  44. Nick Stevens Says:

    Dcars,

    I like “Form follow function” without unnecessary, frivolous curves that offer nothing to the performance of the vehicle. You are correct about the clean, spartan design of a lot of german cars, and in fact not the current BMWs and M-BS but pre-Bangled BMWs and the Bruno Sacco Mercs of the 80s and 90s. Audis are still quite smooth and have great interiors, but are not as fun to drive as a BMW or even a merc.

    I agree the Forte was a step in the right direction, esp. the coupe. The brand new Focus looks good too, but the Fiesta looks a little silly with too many unncessary curves and twists.

  45. Nick Stevens Says:

    I find the prius OK too, esp. the new model, bnecause I know that any strange lines are there for a purpose, it is the best, by far, MPG hybrid than any Toyota or non-toyota other hybrid, by at least 10 MPG, and sometimes 30 MPG.

    Well, I’m ready for John’s show fro Monday.

  46. Tony Gray Says:

    Nick:

    The car is about to hit 100K, which isn’t much for a Bimmer, however that is when my CPO warranty runs out and I don’t feel like getting slammed by expensive maintenance and repairs costs.

    As to what it’s worth? No concrete idea. However since it has been maintained to BMW’s schedule, not the much more stringent older schedule when the OWNERS had to pay for it, I’d probably just let it go to the auction my friend. If I wanted to buy and KEEP a high mileage BMW, I’d want to see some extensive maintenance records…far beyond the minimum that comes with BMW factory programs.