Episode 686 – Fiat Now Majority Owner in Chrysler, Saab Delays Production, Classic Cars in Cuba

July 22nd, 2011 at 12:00pm

Runtime: 9:29

Fiat reached a deal with the Canadian government to buy its stake in Chrysler, which makes the Italian automaker the majority owner in Chrysler. Saab announced that it’s postponing production once more. Some Ford Raptor owners are complaining that they have managed to bend the frames of their trucks, which obviously should not be happening. All that and more, plus a preview of this week’s Autoline about classic cars in Cuba.

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This is Autoline Daily for July 22, 2011. And now, the news.

FIAT TAKES MAJORITY STAKE IN CHRYSLER (subscription required)
It’s official. Fiat now controls a majority stake in Chrysler. The Italian automaker reached a deal with the Canadian government to buy its stake in Chrysler, and it already did that with the U.S. government. Fiat now holds a 53.5 percent stake in Chrysler. The rest is owned by the UAW’s retiree trust fund. Now CEO Sergio Marchionne will announce the new management structure at Fiat-Chrysler. We’ll get that announcement on Tuesday.

SAAB POSTPONES PRODUCTION…AGAIN (subscription required)
It’s déjà vu all over again.  Saab announced that it’s postponing production once more. The company blames suppliers taking their summer break as the reason, but according to Ward’s, Saab hasn’t built any vehicles at its plant in Trollhattan, Sweden since April. Worse still, the company had an eye-popping 295-day supply of vehicles in inventory. The company got a bridge loan last month and it’s still waiting for regulatory approval to get cash infusions from two Chinese companies. But at this point, it’s hard to imagine that Saab can turn this around.

RENAULT EXPANDS IN RUSSIA
Renault is on the warpath in Russia, expanding its operations in the country. The linchpin of its strategy is a partnership with AvtoVAZ, maker of the affordable and immensely popular Lada brand. Renault paid $1 billion for a 25 percent stake in the outfit, which accounted for 45 percent of Russia’s vehicle production last year! Nissan-Renault is also gunning for another 25 percent of the company. Competitors like Ford and Volkswagen are expanding in the country as well, but Renault’s partnership basically makes it untouchable. One Deutsche Bank analyst said Russia could be a China-like market for the company. Neither Napoleon nor Hitler could conquer Russia, but it looks like Renault just might.

MERCEDES EXAGGERATES INVESTMENT
This next story should involve truth in advertising. Car companies constantly exaggerate how much money they’re investing in an assembly plant or a community. The latest example is Mercedes-Benz, which claims it’s investing $2 billion in its plant in Tuscaloosa, Alabama. Let me be the one to assure you it’s not putting nearly that much money into that plant. A totally new plant these days typically costs less than $1 billion. So there’s no way Mercedes would dump $2 billion into an existing facility. The company builds the M-Class, the GL and C-Class in the plant. So that $2 billion likely includes all the product development costs and all the tooling, and the vast majority of that money was spent in Germany, not Alabama. Look, all the car companies do this, not just Mercedes. They want to make the politicians believe that all those tax credits and subsidies they gave away are really paying off.

RAPTOR BENT FRAME COMPLAINTS
Ford could be in some trouble. In an exclusive report, Autoblog interviewed the Special Vehicle Team’s Chief Nameplate Engineer about problems with the SVT Raptor pickup. It seems some owners have managed to bend the frames of their trucks, and that’s not supposed to happen on an off-road performance machine. The number of Raptors involved is small – maybe 10 trucks– but still, this is not supposed to happen. The pickups affected seem to have been modified, with owners swapping out suspension parts and changing the programs on their engines’ computers to remove the speed limiter. These alterations change how the suspension gets loaded and allows them to drive MUCH faster over bumps. Even so, the frames shouldn’t be bending.

EXECUTIVES TRASH TALK COMPETITION
The industry is all abuzz about a new book out that quotes executives at different car companies trash talking each other, in an especially vulgar way. It quotes Jim Farley from Ford as saying “F___ GM. I hate them and their company and what they stand for.” The book is called “Once Upon a Car — The Fall and Resurrection of America’s Big Three Auto makers — GM, Ford and Chrysler” and was written by Bill Vlasic from the New York Times. It also goes on to cite nasty words from Dieter Zetsche, Sergio Marchionne and others. But I say, where’s the news? My goodness, do you mean to tell me that car executives swear? That they trash talk the competition? Let me tell you, this is an industry, from the shop floor to the executive suites, that has always talked like this going back to the earliest days of the horseless carriage.

Coming up next . . . why don’t we go down to Cuba and see what’s going on down there?

THIS WEEK ON AUTOLINE
On Autoline this week I’ve got a documentary running about all the classic cars in Cuba. Going there is like stepping into a time machine and going back about half a century. Here’s a little taste of what the show is all about.

You can watch that entire documentary about all the classic cars in Cuba on our website right now at AutolineDetroit.tv

Be sure to catch a LIVE episode of RoundAbout tonight with special guest Jeff Gilbert of WWJ Newsradio 950. Tune in to find out about an amphibious Mini that’s ready for your pool party, and you’ll learn what eccentric Bugatti owner’s name is visible from space. Plus they’ll play “Versus” – the only game show that makes you defend the cars you hate and attack the cars you love. That’s tonight at 6:30 Eastern at AutolineDetroit.tv.

And that wraps up a week’s worth of helping you keep on top of what’s happening in the auto industry. Join us again on Monday, won’t you? We’ll have more news then.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog and WardsAuto.com

38 Comments to “Episode 686 – Fiat Now Majority Owner in Chrysler, Saab Delays Production, Classic Cars in Cuba”

  1. Chuck Grenci Says:

    Really enjoyed “Stuck in Time” at Autoline Detroit. As with your guests, would love to visit Cuba for its heritage, people and CARS.

  2. HtG Says:

    What’s the vote? How interested will you guys be in cars as they come to be increasingly controlled by processors? For me, driver involvement is key to having anything but rational interest in a car as an appliance. Will a car that has ABS, traction and stability, lane departure, back up beepers and cams, crash avoidance, and wakey uppey sensors, get your interest? Aren’t these things for geriatrics and kiddie haulers? I’ve loved cars and the industry since forever, but what in the world is a Ferrari with automatic transmission and fake exhaust tips. Yeah, yeah, I know, mileage requirements and what the majority of customers demand are driving changes, but why should anyone get passionate about this jazz?

  3. pedro fernandez Says:

    How quaint, all these folks hanging on to their dilapidated 40′s and 50′s American iron, why are there no Fiat,Hyundai, Toyota, or even Chinese cars available? is it the fault of the evil imperialistic US government also? The truth is that the avg Cuban makes about $20 dollars a month, only govt big wigs can buy (acquire)cars. To answer your question John, what is going on in Cuba? Oppression, hunger, decaying infrastructure, despair and the result of 50+years of a Communist dictatorship. BTW those cars ain’t worth crap. they all have parts adapted from other brands. Completely worthless in the classic car market.

  4. pedro fernandez Says:

    Today I saw 3 separate bumper to bumper accidents involving at least 4 cars each, great time to own a body shop, keep those distractions coming folks!

  5. pedro fernandez Says:

    So let’s figure this out, SAAB has not been building cars,yet they have almost 300 day supply, why are there people who still believe this company can or should be saved? It’s obvious that no one wants to take a chance buying a car from a company in a state of coma.

  6. John Says:

    FYI :

    “Classic American Cars Of Cuba”

    47:31

    http://www.wliw.org/productions/travel/classic-american-cars-of-cuba/342/

  7. Chuck Grenci Says:

    On Saab: Pre 2008 crash, sell a few cars, able to hang on, be low volume, okay; just another specialty car company. Now, post (supposedly) recovery, lean and mean production; there’s just not room for this struggling anachronism, especially when badges of more merit (Oldsmobile, Pontiac and Saturn) have fallen to the wayside. JMHO

    And an adjunct to pedro’s diatribe on too many gimmicks in new cars: Toyota announce a super specific radar that, if a vehicle is heading for an object (presumably a human), and detects that the car will not be able to stop in time, will actually take control of the steering and turn away from the object. Sounds good at first, but I have a couple of objections; first it takes away actual control of the steering from the driver and second this ‘secondary’ steering could ‘just’ change what the vehicle is going to hit (lawsuit anyone?). This was in my morning newspaper’s automobile section and isn’t planned for production (yet) but not sure this one has much merit.

  8. Jon M Says:

    Well, John, apparently Mr. Vlasic thought the market for books about trash talking, foul-mouthed politicians was too flooded. But since the big three got into the political scene a few years ago when they begged the government to fix the mess each automaker had made, Billy must have thought trash talking, foul-mouthed auto execs would a better whole lot of nothing to write about. After all, it worked for Jerry Seinfeld for nine seasons.

  9. pedro fernandez Says:

    First, put a bunch of distractions in new cars to complement the ones people already own, then put in safeguards to prevent the same mishaps caused by these distractions. This is something incredibly stupid and people fall for this.

  10. HtG Says:

    It’s also clever how these aids, which clearly benefit the age enfeebled, get marketed as safety features. Does Phil the Financial Fraudster see himself piloting a BMW optimized for the Catheter Crowd? No, but theys got the moneys.

  11. Tom L Says:

    Pedro Re #3
    I like the idea that the Cuban’s have for using a Truck tractor to haul transit riders.
    The USA should do the same thing. It would be cheaper to just replace the power unit every 5-6 years. As for new cars with to much stuff. Build yourself a Hot Rod.

  12. pedro fernandez Says:

    Oh yes, I am sure most Americans would love to get shoved into hot, stinky, standing room only livestock carriers to get around. This was done because no country in their right mind will sell Castro buses cause he does not pay his bills, I don’t want to hear about no embargo, there are many countries that make buses and have no embargo going.

  13. pedro fernandez Says:

    From TTAC: up to 30% of all crashes involve distracted drivers. (I’ll bet it’s higher) and the Michigan congressional delegation stated that the proposed 56.2 mpg req is NOT feasible, Duh!

  14. John Says:

    Pedro,

    Here is where you should start with your Hot Rod.

    http://www.dynacornclassicbodies.com/classic2.html

  15. pedro fernandez Says:

    I like the Phantom but that has to be the mother of all blind spots, I’d be happy with the 69 Camaro look-alike.

  16. John Says:

    Pedro,

    You are right, “the mother of all blind spots” .

    http://www.autointhenews.com/wp-content/uploads/2010/04/1938-Phantom-Corsair-image.jpg

  17. pedro fernandez Says:

    I would not want to be caught behind the wheel of that mafia car.

  18. HtG Says:

    How many people driving monstrously powerful modern cars understand that it’s the computer that determines how much oomph they’re going to get, not the throttle pedal position? Did you know that the Corvette ZR1 street car has more hp than the race car? It’s ok though, no skills required.

  19. Lex Says:

    Those Camel Trucks in Cuba are Great. We can do the same in the US and forget about investing Billions of Dollars into High Speed Light Rail. The Billions we would save can be used to rebuilt our crumbing highways and interstates. Just authorize those Camel Trucks to drive in the HOV lanes on most highway.

    The Cuban People demonstrate resourcefulness in the face of adversity. I wish other nations could do the same.

  20. John Says:

    Pedro,

    A different Phantom ? :)

  21. John Says:

    Pedro,

    This Phantom ?

    http://www.pistonheads.com/news/images/5285-phantom2.jpg

  22. Kit Gerhart Says:

    As I’m sure Pedro knows better than the rest of us, 50 years of the Castro regime have not been good for the Cuban economy, or people who “make waves” an offend those in power. Let’s get real, though. The US goverment has done everything possible to hurt Cuba, and the Cuban people for those 50 years. How well would any of those other Caribbean tourism destinations be doing if 2/3 of potential tourists were not allowed to travel to those places by our government. Then, we make it illegal to import anything like cigars from Cuba. Jamaica has its problems with poverty and violence now, but it’s safe to assume they would be much worse off if Americans were not allowed to travel there, and if we refused to import their rum, coffee, and beer.

  23. Chuck Grenci Says:

    As John Mc had mentioned a couple days ago, that a diesel Cruze was being considered; it has been confirmed yesterday as on it’s way:
    http://www.dailytech.com/article.aspx?newsid=22130

  24. John Says:

    Thanks Chuck, good link and good news too bad we have to wait until 2013.

    More “News”

    “Automakers Warn of Huge Job Losses Under Obama Fuel Efficiency Plan”

    By Jim Angle

    Published July 22, 2011

    “”When manufacturers bring an advanced vehicle technology to market, consumers must be willing to buy it. There is a high level of uncertainty about consumer willingness to pay significantly higher prices for more fuel-efficient vehicles.

    http://www.foxnews.com/politics/2011/07/22/automakers-warn-huge-job-losses-under-obama-fuel-efficiency-plan/?test=latestnews

    “consumers must be willing to buy it.” is an understatement.

  25. pedro fernandez Says:

    Kit, what is your opinion of CVT’s now that you’ve been driving one for awhile, do you think it belongs in a hybrid better than a regular car, when you drive a regular transmission car, do you wish it also had a cvt? Reading all the negative reports on the Fiesta double clutch auto, perhaps Ford should have gone with a cvt unless they have nothing they could put in there.

  26. cwolf Says:

    @ Chuck G.: The Cruze diesel is something long waited for. This anticipation was the reason why I drove the Eco model yesterday. I walked away rather impressed after the short expressway drive..enough to keep it on my list. I did a little rough figuring comparing the Eco and diesel. Using $19k and 42mpg for the Eco and adding $5K more and 52mpg for the diesel and $.35 fuel variance, an estimated 143,000 miles need to be driven in the diesel to break even. Even for me,thats 1 1/2 years of driving! A diesel could still work in my situation, but the way gas engines are obtaining better and better economy at a lower initial cost, justification gets pretty tough. A better application for diesels would be in bigger cars and suvs.

  27. Kit Gerhart Says:

    Pedro, I like the way CVT’s work. They are seamless and smooth in normal driving, and when you need extra acceleration, as for passing, the engine revs up and there is more noise, but their are no jerks, lurches, or anything else but smooth power delivery.

    Actually, a Prius doesn’t have a transmission at all, just a “power splitter” that connects the gas engine, one of the motor/generators, and the gearing to the wheels, and with electronics constantly adjusting things depending on what you do with the pedals.

    I’ve also driven a Nissan Cube with a regular CVT, and I liked the way it worked too. The Cube is almost as slow as a Prius, but the transmission works nicely, and it gets good mpg for a box on wheels its size. A CVT, done properly, should do exactly the right thing to maximize fuel econonomy, and maximize acceleration when you floor it. It takes the input from you right foot and, in normal driving, should select the gearing and throttle opening to maximize mpg for the acceleration you ask for. If you “floor it,” the CVT should just put the engine at its power peak, at least in low powered cars where acceleration is not traction limited. I don’t know how close today’s CVT’s are to this ideal, but they should be fairly close.

    As far as the Ford dual clutch auto, I was surprised, and disappointed to see all the negative reports. I drove a VW DSG once, (GTi)and liked it pretty well. In most ways, it was like riding in a car with a skillfully-driven manual transmission. Rev matching was good, both up and down shifting, and, in normal driving, it got going from a stop smoothly. It sounds like Ford has more work to do on theirs, though.

    All this said, I know some people hate CVT’s. I guess they like to feel shifts, and hear discreet gear changes on acceleration. I don’t see the appeal, especially since even today’s automatics have less-than-stellar rev matching on downshifts.

    I like manual tranmissions, and have them in my MINI and two older cars, but I also like CVT’s. It may be unusual for someone to like CVT’s AND manuals, but I do.

  28. Kit Gerhart Says:

    I got about what power trains sold in Fiesta in other markets, so I checked the Ford UK site. Not surprising, all of the available engines, diesel and gas, can be had with a manual transmission. Only the “mid level” 1.4 gas is available with an automatic. The big surprise, is that automatic is a 4-speed torgue converter unit. Do any of you Fordophiles out there know where the dual clutch is used, other than the US market Fiesta and Focus?

  29. Kit Gerhart Says:

    I meant to say: “I got curious about what power trains are sold in Fiesta in other markets.”

  30. pedro fernandez Says:

    Kit, I’m confused, the specs on the Prius claim that it comes with a cvt, is it another type of cvt? Nissan seems to be the one manufacturer who has invested heavily in cvt’s. The Sentra, Rogue, Juke. I did try the Rogue, but never made it up to highway speeds, I wonder if cars with cvt rev higher at high speeds that the ones with conventional multi-speed autos.

  31. pedro fernandez Says:

    On the Ford double clutch tranny which is also included in the new Focus, if this turns out to be as troublesome as I predict, it will make these cars undesirable as used cars. TTAC recently retested the Mazda 2 (cousin of the Fiesta) with the old-fashioned 4 speed auto and found it to be a better buy than the Ford mostly because of the transmission and a lower cost.

  32. Kit Gerhart Says:

    Pedro, there is a good explanation of how the Prius power train works at: http://prius.ecrostech.com/original/Understanding/PowerTrain.htm

    This description is for an earlier generation Prius than the current one, so some of the numbers of battery cells, motor power, etc. would not apply to the gen 3 car, but the way the power train works is the same for all three generations of Prius.

    From the driver’s standpoint, it behaves like a CVT, but it is not an actual CVT with variable width pulleys, etc.

    The highway speed rpm of the CVT Nissans is about the same is similar cars with regular transmissions. A published report I found shows a 4 cylinder CVT Altima running 1750 rpm at 60 mph, with 4 cyl. Accord and Camry at 1915 and 1860 rpm respectively. With a CVT, you have a certain amount of “gearing down” when you climb a mild grade or accelerate gently under conditions that might be less than what would cause a regular automatic to down shift.

  33. Kit Gerhart Says:

    It looks like the Mazda 2 uses the same 4-speed automatic as the UK market Fiesta. While the car is a little slower and thirstier than with the dual clutch, the old 4-speed drives better.

    I, personally, would consider these cars only with a manual, but since most Americans buy automatics, Ford really needs to sort out that dual clutch, and quickly.

  34. pedro fernandez Says:

    Agree, seems that Ford has really taken a chance with this type of transmission, I know they’ve been around for a long time on high-end cars but not on common, everyday type of cars, I think they have made a bad decision. Toyota, Honda and Hyundai don’t seem to want to mess with this, the new Accent has a six speed traditional auto.

  35. Kit Gerhart Says:

    VW has been the leader in using dual clutch transmissions in mid-range cars. They use them with the 2.0 gas turbo and TDI in the US market, and in a number of other applications in Europe.

    I’m curious who makes these VW transmissions, and the one Ford uses. I don’t know if either, or both are “in-house” designs, or if Getrag or someone like that makes them.

  36. HtG Says:

    @34 I believe Hyundai Veloster may have a double clutch transmission. Maybe testers will look carefully at it.

  37. pedro fernandez Says:

    Perhaps it’s no coincidence then that VW continues to show poorly in both CR and JD power reliability data. this is the main reason they most likely will never achieve #1 status in the world.

  38. Kit Gerhart Says:

    It turns out that boring, but reliable cars score well in CR and JD Power surveys in the US, but other things come into play in Europe. VW outsells everyone else in Europe by a wide margin, because their cars drive well, and have nice interiors.