Episode 135 – Obama Sends a Signal, Imports Unhappy With Obama, Chrysler Execs Step Down

May 1st, 2009 at 12:00pm

Runtime 7:14

By making the Chrysler bankruptcy announcement, President Obama signals the beginning of a new industrial policy for the US. Foreign automakers are not happy with the President over encouraging people to buy American. Chrysler CEO Bob Nardelli and company president Tom LaSorda are going to step down. All that and more, plus a preview of this week’s Autoline Detroit, where we take a deep dive into what’s going to happen next at Chrysler.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. President Obama signals the beginning of a new industrial policy. Foreign automakers are not happy with the President. And two top Chrysler execs are going to step down.

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

This is Autoline Daily for Friday, May 1, 2009. And now, the news.

Well, as you all heard yesterday, President Obama announced that Chrysler will file for Chapter 11 bankruptcy. What I find significant is that the announcement was not made by the Secretary of the Treasury, or the Commerce Department. It was not a member of the automotive task force. It was the president of the United States who came out to face the cameras to say that a car company was filing for bankruptcy. Why did the Administration decide the president had to make this announcement? Is this the signal of a new industrial policy, where the U.S. is going to fight to keep its auto industry?

We also learned yesterday that Chrysler’s CEO, Bob Nardelli, would be stepping down once that bankruptcy is completed. No surprise there. Cerberus brought Nardelli in as a hatchet man, and everyone knew he would only be there temporarily. But Chrysler president Tom LaSorda will also be leaving, and that is a surprise, though I’m told he won’t be missed. LaSorda lost a lot of respect inside Chrysler when he took a $20 million bonus two years ago, even though the company was bleeding red ink.

The National Highway Traffic Safety Administration announced new roof strength standards for vehicles yesterday. It doubles the current requirement. Driver and passenger sides of the roof must withstand a force 3 times the weight of the vehicle. NHTSA also announced roofs on heavy vehicles, weighing between 6,000 and 10,000 pounds, must be able to withstand a force 1.5 times the weight of the vehicle. Previously, heavy vehicles were unregulated. The new standards will be phased in starting in 2012 and will be completed by 2017.

Fiat received 46 million Euros, or $61 million, in aid from the Italian government (subscription required). According to Ward’s, the money will be used to retool a plant that currently builds the Lancia Ypsilon. The loan comes after CEO Sergio Marchionne complained his company was at a disadvantage over other European governments handing out loans to their automakers. $61 million? That doesn’t even sound worth asking for!

Yesterday in his speech about Chrysler, President Obama encouraged people to “buy American.” But this is drawing fire the American International Automobile Dealers Association (subscription required), which represents foreign automakers in America. Ward’s reports the association said protectionism has no place in a U.S. economic recovery.

There are many things automakers can do to boost fuel economy. Some of the biggest tricks up their sleeves include cutting weight and downsizing engines, but vehicle aerodynamics is another biggie. Autoblog reports that in five years Mercedes is shooting to build a car with a coefficient of drag of only .20! The brand-new E-Class coupe already slices through the air with a score of .24, which is better than the 2010 Toyota Prius! According to the car’s project manager there are still some big improvements to be made around the engine and under the hood.

Coming up next, a preview of this week’s Autoline Detroit, where we take a deep dive into what’s going to happen next at Chrysler. We’ll be back right after this.

On this week’s Autoline Detroit I have three experts giving their insight and analysis into what’s likely going to happen to Chrysler now that it’s filing for bankruptcy. Joining me are Craig Fitzgerald from Plante & Moran, Kate Linebaugh from the Wall Street Journal, and Jim Hall from 2953 Analytics. In this clip we pick up the discussion where we’re talking about what Fiat is going to get out of this deal.

You can catch the entire episode at AutolineDetroit.tv right now.

And now it’s time to announce the winner of this week’s trivia contest. We challenged you to identify the car pictured here. To make it a little harder, we only gave you a small photo as a clue. So what is it? Well, it’s actually the Toyota/Scion iQ concept car.

As always, my crack team randomly selected today’s winner from the pool of correct responses. And this week’s winner is… Dan Bruckbauer of Muskegon, Michigan! Congratulations Dan, you’ve just won a Chrysler key fob. You’d better hold on to it too, it might be a collector’s item some day, but hopefully not.

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

17 Comments to “Episode 135 – Obama Sends a Signal, Imports Unhappy With Obama, Chrysler Execs Step Down”

  1. pedro Fernandez Says:

    John: I miss Pookie, was he part of a restructuring plan there? So the foreign car makers don’t like what Obama is saying, F U foreign car makers, Why dont YOU open up your market to American cars?

  2. dtomaz Says:

    Foreign auto’s not happy with “buy American”…Give me a break ! There home countries subsidise the companies, manipulate the currencies and charge more for vehicles in there home markets so than can dump the cars over here at an artificially low price! Eg. I recently saw an AMG coupe in germany selling for 120K Euro’s and the same car in LA $110K. Time for our President to make our free trade policies also FAIR TRADE! We can no longer afford to be the dumping ground for other countries!

  3. Mark Says:

    The complaints from the IADA about Obama encouraging people to buy domestic are laughable. Did he pass a law that restricts imports? No.

    If our markets were as open as Japan’s, the Big 3 would have (no joke) 95% of the US auto market. Same goes for Korea and their closed market.

  4. mitchw Says:

    Anyone catch that Jim Hall was wearing a commie red shirt today? I don’t have to take this, ya know!

  5. Bob Kinnee Says:

    You hit the nail on the head Pedro, I for one feel that the domestic vehicles are as good or better than the foreign competition plus they look better to ! We as American’s must try to buy US owned & built vehicles……..Sadly the mis-perception of poor design & quality….has many people feeling they must buy foreign…….And yes they will open there market to fair trade…thank you President Obama for the right decision.

  6. G.A.Branigan Says:

    I have no sympathy for the foreign auto makers at all.When they open up their markets to us,then they will have the right to pitch a bitch.Until then,stop your damn whinning.

    LaSorda:see ya beavis.You had a part in running Chrysler into the ground and still felt good about hauling in a 20mil bonus.It shows what your made of,not that you give a rats a$$.With people like you in the business,there won’t be any business.

    Last nights Autoline After Hours:Whew!!! Glad thats over.That robby kid you had on,he has no experience in the automotive field except for having a drivers license.Why would you even bring in someone like that.Hell,I thought you had on bill o’rielly or rush limbag on.The single biggest turnoff is when somebody trie to shout down someone else,especially on a auto news show.BAD FORM Robby,yer a tool.

  7. dtomaz Says:

    The owners/investors of Chrysler will be UAW, FIAT, US Govt. and Canadian Govt. What about Mexico ? Why are they getting a free pass on loaning money ? Are the operations in Mexico closing and coming back to US and Canada ? The US and Canadian operations were threatened to close if no concessions or loan money were given.

  8. David B. Fishburn Says:

    John, after hearing about the foriegn auto companies crying, i gotta say something. Like the other posters who said it before me, the foriegn companies need to shut up. They need to go to their govt’s and get them to open their markets to our companies. They have no right to say anything about protectionism, especially when our auto industry is on the brink of collapse. We need to bring back jobs, so people can work, feed their families, and be able to afford the products. Who do these auto executives think are going to buy anything, when everybody is out of work? I have no sympathy for the executives, when they seen the writing on the wall 20,30 years ago and failed to do the right thing then.

  9. Salvador G. Says:

    John Mc.

    The new standards of the NHTSA, is for all vehicles?
    I asked because I check on their web-site and they said the reason being is “Rollovers are the deadliest crashes on our highways and today’s rule will help occupants survive these horrific events”
    Now, its obvious they’re talking about SUV’s and Trucks, wouldn’t be easier just to band these elephants off highways.
    I wish they had a list of the cars they study to come up with this new rules but I don’t find it anywhere on their site.

    Anywho, Thanks John Mc.

  10. Reese Says:

    I to will wholeheartedly agree with the other posters. I have said for years now that Japan is a very closed market and doesnt want competition in their own market so they ship as much product to us due to our laxed restrictions. Naysayers to mouth off all they want about the fact we didnt make cars they wanted in Japan. Its easy too do however when your only choices are a Neon and a Cavalier what do you expect. Oh yeah the guy from TTAC really does have issues and only seems to say things that are self serving so that he may get more attention. I was part of his site for about a year and got out due to his inability to take any type of criticisms on his so called journalism. He reminds me of Simon (AI)he can dish it out but not take one lick. His criticisms and reviews of cars if rather uneven and sometimes I wonder if he even if he likes to drive at all or just thinks its point A to B. One last rant he just reminds me of so many who live here but should probably leave. I dont know him personally but with the way he talks about our industry even when news is somewhat good is just preposterous. I hear that Iceland is nice this time of year.

  11. pedro Fernandez Says:

    I always enjoy listening to Peter, but last night you could tell that he’d rather be at a gay porno convention than partaking with this American car hater that you had on . Please John, choose your guests carefully.

  12. JIm Thykeson Says:

    Well I would hope Obama stands up for OUR home-grown team! This allowing our nation’s heart & Soul of the manufactuering base to take a nose-dive so the other outsiders can take over is insane! The big problem is the fact that these import companies don’t have baggage of healthcare coverage and providing for retirement like Ford, GM and Chrysler do. This makes for a very unfair playing field. I realize the complaints of the Asian & German companies about providing healthcare. They don’t understand why they should have to do that, when that aspect of life is provided for in their home countries. Well, it just don’t work that way here….yet.

  13. harley charlie Says:

    I gotta laugh at Detroit while I cry over its very own suicide. Being a durability development guy since 1971 I can state beyond a shadow of a doubt our death was by our own hand.

    Never mind the ugly corporate politics played by upper management.
    Never mind the stubborn insular nature of the unions.
    Never mind the utter focus on reliability being just through warranty.
    Never mind the Zone Reps who only cared about getting by without fixing built in engineering design defects.
    Never mind the customer at all.

    All the while Toyota and Honda plucked at these self-made wounds while all of you howled about buying foreign made cars. While GM sold 14 years of nylon toothed, big block car timing gears that lasted 60,000 miles – just long enough to escape warranty before they broke and wiped out the valve train. Just one example of the entire industries defect filled product line.

    But believe me when I tell you from the time the 1st Honda Civic ran at the GM Proving Grounds and displayed extraordinary durability – and no one at the management level was concerned one little bit – I KNEW we were doomed to slide into oblivion.

    Carp at me, curse me, wail all you want, gnash your teeth – BUT I’m speaking the truth.

    And if can not handle it, you are exactly like the GM management of the 1970′s: clueless!

  14. charlie tachdjian Says:

    i like what obama said about the inports.i had a olds. store for 20 years and when i went to a gm meeting all i heard was how we were beating pont. and buick.i told gm in 80s that one day the inports would eat our lunch and they have.im a true american.

  15. Kyle Says:

    GO Obama! I agree 100% with everyone that said that foreign auto makers should shut-up. Yes some are made here but where does the money go..BACK TO JAPAN/where ever there from. Maybe Autoline Detroit should fallow Obama it seems you guys show a fair bit of all those pieces of scrap on your show.Im a Fifth Generation Chrysler person, and always will be due to just pride. Vet’s should remember who they fought during world war two before they go out and buy a car. The Next war we will not win thanks to corporate Money hungry scammers that decide to outsource everything and the rest of the public that buy there junk ie foreign car. Maybe the job you save might be yours BUY NORTH AMERICAN!

  16. JFD Hamilton Says:

    Finally ! Americans DEFENDING the American auto makers ! Good on yer ! Maybe the Japanese won’t finally win WWII after all !

  17. pedro Fernandez Says:

    John: I was just reading the list of the top 10 cars sold here in April 09. I was surprised to see both Ford and Chevy trucks did very well. So did Fusion, Impala and Malibu. Not one single Chrysler vehicle in the group. Are you surprised by the results? Also no subcompacts were on the list. Perhaps Americans are not willing to embrace that class of car quite yet. Unless goes up to the $4 or $5 range.