Never Stop Driving #116: Jerry Springer Comes to Motown
What the fudge is happening at the automaker formerly known as Chrysler? It’s chaos over at Stellantis, which owns Ram, Jeep, Dodge, Chrysler, Alfa, Peugeot, and a bunch of other brands sold around the world. U.S. dealers penned an open letter claiming that reckless short-term decisions made by CEO Carlos Tavares left them “anemic and diminished.” Last month, a group of shareholders sued the company for not revealing rising inventories of unsold vehicles. The UAW is delivering a third punch by threatening to strike over rumors that promised U.S. car production will happen elsewhere, with UAW president Shawn Fain declaring that “Carlos Tavares is the problem.” I tell ya, it’s high drama in Detroit—it’s like Jerry Springer live!
I first met Tavares when he was a rising executive at Nissan. He seemed intelligent and highly competent and blessedly lacked the hubris often seen in other auto executives, so his ascension to a top job wasn’t a surprise. Today I wonder if he’s doing what a leader must do, which is to make unpopular but necessary hard decisions, or if he and his management team are, as Fain suggested, “out of control.”
Rank-and-file employees I know suggest the latter is closer to the truth. They’re speaking for the part of Stellantis better known as Chrysler, the smallest of the longtime Detroit Big Three. During my lifetime, Chrysler has always been the car company that gets kicked around every decade or so but then emerges, triumphant, from near disaster. Think back to the late 1970s and early 1980s when Lee Iacocca steered the company out of insolvency, with a generous assist from Uncle Sam. In those dark days, Chrysler engineers, backs to the proverbial wall, morphed the modest K car into the sporty Daytona coupe, a variety of sedans and wagons, and, most important, the first minivan. That sharing strategy was a bean counter’s dream and made the company so flush that it was able to repay the Feds early. By 1985, Iacocca was able to snap up Gulfstream, followed by Lamborghini in 1987.
I got to know Chrysler even better in the early Nineties when I joined Car and Driver and about the time product chief Bob Lutz’s influence started bearing fruit. The cars were interesting and among the domestics always had a consistent sprightly feel from behind the wheel. We tested cars at Chrysler’s proving grounds in Chelsea, Michigan, outside of Detroit and I’d often encounter engineers I’d met at local racetracks out there testing. I could see their dedication to the cars and their joy in the work. You could feel their collective spirit in even the least expensive models, like the Dodge Neon. Executives such as Lutz and design chief Tom Gale understood that outrageous sports cars like the Viper and the Plymouth Prowler provided not just news clips but also internal pride that filtered into all the products.
From 1978, when Iacocca arrived at Chrysler after being booted from the Ford Motor Company by none other than Henry Ford II himself, to 1998, Chrysler had a helluva run. Then the company merged with Daimler-Benz and Lutz exited. The so-called “merger of equals” was really a takeover as Daimler owned 57 percent of the company, now called DaimlerChrysler. In August 2023 I went to a car show assembled to honor Lutz. Many of the Chrysler engineers and executives I knew from the Nineties were there and their bitterness over the merger surprised me. When the Germans took over, they recalled, passion left the halls of Chrysler and nothing but the bottom line mattered.
I’ve seen time and time again how executives without passion for the car business fail. That’s not universal, as evidenced by Alan Mulally, who took over the helm at Ford after a highly successful career at Boeing, back when Boeing was synonymous with engineering excellence. And to be clear, it takes more than a love of cars to successfully run an automaker and please Wall Street, dealers, and consumers. Yet the best auto company leaders always seem truly to love the business. Perhaps the bottom line follows passion?
In May 2007, a hobbled Chrysler was ignominiously sold off to a private equity firm called Cerberus for $7.4 billion. The 2008 financial meltdown brought bankruptcy and another savior, Sergio Marchionne, who arrived from a forced marriage to Fiat. Marchionne was no car guy but was smart enough to listen to U.S. executives who knew the products. Under his tenure, the company thrived again, leaning into muscle cars with Dodge Hellcats, fielding an expanded lineup of highly profitable Jeeps, and creating a Ram pickup that was so compelling that I personally bought two of them.
Now we’re back to another low. People I know who stayed with the company over the decades report that this new struggle is different because the rank and file are not on board with Carlos Tavares’ plans for a future lineup dominated by EVs. Most agreed with Akio Toyoda of Toyota, who displayed genuine leadership years ago when he opined that the rush to EVs was misguided and hybrids are a better short-term solution. Nearly every car company is rolling back aggressive EV plans. The worst I heard from my sources within Stellantis is that many employees are simply waiting for the inevitable Tavares replacement. This week there were reports that the search is already underway. In the meantime, the troops are just short of mutiny. As I’ve said many times, the auto industry is rarely boring.
Before I sign off, let me suggest some of my favorite new updates from Hagerty Media and beyond. As always, if you’d like to support our efforts to spread car passion, please join the Hagerty Drivers Club.
- The Ferrari restoration that keeps kicking me in the face.
- Will the Corvette always be a Chevy?
- New Mustangs include a free driving school.
- Did you see the zipline video from the Watkins Glen race? It’s incredible.
- This latest TikTok case could upend social media. We can hope.
This driver profile from Steven Cole Smith, published this week, needs to be a movie: Dirt Track Legend Scott Bloomquist Died as He Lived: Full Throttle
Thanks for reading. Have a great weekend!
Larry
P.S.: Your feedback and comments are welcome.
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Is the tooling for the 300 Charger and Challenger still available? They could all be ‘classic’ editions and allow Stellantis to save a bit of face. Send the production equipment to Belvidere-now!
Sergio Marchionne is one of the best leaders Chrysler has seen.
Charo Tavares, on the other hand, has no clue as to what he is doing and does not understand the North American market at all. He acts like a sterotypical European, looking down on Americans, thinking we are all fools who have no taste. We don’t appreciate that.
Shawn Fain and the UAW are also to blame for the issues at Chrysler. Demanding more from a company that does not have a solid future plan or steady income stream has left Chrysler employee’s jobs hanging in the balance.
Chrysler customers and it’s ‘Fan Base’ have also been left out in the cold by the actions of Tavares and the UAW. Both failed to realize where their profits will come from, luckily for the customers, there are plenty of other manufacturers to buy from.
Great article, Larry! I remember when Chrysler’s engineering acumen was legendary. The saving of the company by Lee Iacocca, the shift if attention by Bob Lutz, the ultimate enthusias. But I think the real death knell has been the machinations of Elkann and Exor, slowly destroying some of the best brands.
A shame…
This Stellantis (use only as directed) take over has hurt Chrysler. Quality is down, desirable product is going away and the threat of it’s all going to die seems to have come over the company. That’s not great leadership. I have been saying for awhile Stellantis will lead to the downfall of many brands. They have too many brands making the same/similar cars and their pivot to identical EV’s will not achieve profitability for so many brands. Disaster is a good word to describe it all.
Management hubris and poor quality products are not a good long-term combination. Stellantis needs radical surgery to stay in business.
Look Chrysler and associated companies are not the companies they once were. The Equity companies and other automakers used her like a pimp uses women. They used this company for money where they took it and ran not reinvested in the company.
#1 Daimler killed the Chrysler cars and never worked to make a good line of small CUV models. They did focus on the trucks, Jeep and the RWD cars that kept money coming in,
#2 Cerberus did nothing but rob the money.
#3 Fiat really was a weak partner as they too were failing, Sergio robbed the Jeep and truck profits for Alfa and Fiat with poor results. They did try to address the small CUV issue but using bad Fiat platforms. Rgw RWD cars were cool but they were not bringing in the profits that they need. Yes Small CUV models are boring but that is what is selling and thagt is where the money is.
#4 Stellantis comes in and they really don’t care about Chrysler as a whole. The cars are outdated and over weight and make small profits. The trucks they kill the V8 and Jeep they go to high end SUV models when they needed small quality lower priced models. Stellantis is all about money. As I have said before it is not enough just to make money today in the auto industry but it is to make the maximum profit from the investment. Carlos get this and is rewarded for the profits not the models lines.
Look Stellantis has no care for the UAW. If they have to they will move the Jeep lines overseas and make larger profits and they will close down Toledo. Fain is more about killing the auto production too. He is not the kind of person the union needs and his socialist ways will kill the entire industry before it is over.
Most all automakers are struggling today. Most all will need and some will want to partner for more scale and more flexibility to get around the unions and poor economy.
The EV thing is not going to go away. Trump could kill the mandate but there is another election in 4 years. Also the CARB states still can kill ICE on their own with no EPA help. These EV models are still not ready or affordable yet.
The real key to much of this is cheap energy and we need to still utilize fossil fuels as we need more power and cheaper energy in the market.
I am fine if they want to continue work on EV models but no dead lines. It took 120 years to get ICE to where it is today but we have only really had 20-25 years of EV development and investment. These things take time. Use EV where it works but do not force it on everyone.
Once Chrysler Corp was sold to non American companies the clock started ticking. They were raped for the profits and not invested in like they should be.
Ford is also in trouble as is Nissan, Mitsubishi and other smaller companies.
VW is struggling as is Toyota. Even GM while in a good place they are willing to sell tech to Honda and build their cars to leverage out their costs of EV models. Now Hyundai and GM are in an agreement that could lead to platform sharing and possible GM models going to non union Hyundai plants. GM has the tech and staff while Hyundai that is more than an Automaker has great scale for materials and MFG and even shipping.
While many celebrated the Hell Car I was one asking where is the profit cars. My in-laws bought a 300 new, Nice car but they paid the price of a Malibu for it. There was little money made on that.
We too often get distracted by the frosting and find the cake under the frosting to be very stale. I see it on the web often. You still have to run companies with your head and some heart not all heart. Something still has to pay the bills.
To be honest the Chrysler thing is done. Bringing back the big cars is not going to fix anything and a new owner will still not have the needed money to fix decades of lack of investment into the models they need.
We need to focus on Ford and GM and make sure they remain American. Even if just for war time MFG they are important to us here. Contrary to Fains claims these companies are not dripping in jewels. The UAW had better bounce him before they lose it all. Don’t think it can happen. Look for the United Rubber Workers and where their union is< They had to merge with he steel unions as too few members.
Also look a the Rubber companies. We only have one American owned tire company. We had two but Cooper had to merge with Goodyear to survive. Cheaper over seas labor and cost cutting has given these no name import tires from Asia a greater hand.
Americans need to learn you can't get rich on pay alone. It take skills and knowledge. You need to improve your self to get ahead not just get more money. Handing out more money just ramps up costs and no one wins.
Look at the Mc D folks. Min Wage goes up but these sets off more issues like higher grocery prices and energy cost . Also higher product prices to help pay for the added cost of everything.
While many like to say the cost of tariffs adds to the cost to consumers they forget that at least it will help return jobs to our country vs just handing out short term pay increases that are like a fast sugar high.
Some want to play checkers but this is a game of chess and it take time and thought to make it all work. The gane us short only if you screw up.
Nicely thought through and written. Buying Ford for me.
I know it seems like a trivial detail, but Lee Iacocca did not receive a generous government bail out. He received loans from various sources that were backed up with a default guarantee from the U. S. Government. I might add Chrysler paid back all loans with interest seven years early.
This scenario should not be compared to direct government bail out that rarely are repaid to us taxpayers.
Well to be fair times were different. The Economy was different later on and banks just would not loan the money.
Ford did get loans 2 years earlier but they also got a loan from the Energy department for $7 billion. GM and Chrysler paid the bail out money. Ford I think still owes the government some money and still has outstanding loans leverage in their plants.
It is all trivial at his point. Chrysler just never fully recovered.
GM going into the bail out had Lutz pouring in money into new products that would provide income to pay things off and this is why they did not have to sell out to someone else.
These two companies took two different paths and Chrysler really was too far gone to go it alone due to choices made my the previous owners who also were not American. I feel if they were still American owned things would have been a bit different.
Thanks for the interesting and informative article Larry. You validated a handful of my personal thoughts and really convinced me that I’ve been correct with my opinion that Chrysler has been their own worst enemy for years. (I say that as a consumer, not as any sort of business oficionado). That being said, it should also be stated that I still prefer my fleet of “Pentastar” products and probably always will.
For me the breed has always been of the ilk that I find myself being at home with the logic of how things were built and how that translates to working on those machines and driving those machines. I can’t really say that I have that sort of at-home sense with the more contemporary products.
I agree with hyperv6 with the notion that the corporate push of today is “today’s dollar” oriented and not so much as efforts to build loyalty and longevity product and company wise. But then look around…we want instant satisfaction, and ‘we will worry about tomorrow when it gets here!” I know we can’t live in the past, but it should be important and constructive as we plod along.
I am at the point where I feel that if someone came along with a 1/2 or 3/4 ton pickup with an adequate V-8 (because I love the sound of V-8’s) with a 5 or 6 speed manual tranny, roll-up windows and keyed entry I would buy it. Bells and whistles don’t interest me, but those things are where so very much emphasis is placed. I guess I’ll just continue rolling in my ’73 Dodge D100 and smirk at the $80,000 or 90,000 rigs that are hurrying up to that next red traffic light. It’s a strange new world for this old guy but it’s the best one we’ve got.
Auto makers generally their worst own enemy. But often government interference and public expectations.
We have a long history of companies making mistakes. All of them have. But government regulations while some are needed many are not implemented in ways that is fiscally responsible or -tactical to the health of the company. Then the public gets upset when those regulations result in cars they really don’t like.
In the past mistakes were cheaper but today one mistake on a main line of product could damage a company. So making money or greatest return matters.
Then regulations force smaller cars, aerodynamic and styling let alone how it is powered the public gets mad at the mfgs not the government.
They all need to work together including unions for the industry in this country. Once the companies struggle these equity companies are like buzzards on a dying animal.
Also people need to understand the market too. Companies can’t build every body style anymore. They need yo offer options as that is what sells and is priced to make money. Gutted cars are not profitable.
This is a perfect storm and all will suffer if things do not change. Note China is just sitting and waiting to unload cheap cars on the world market if not Therecwas too much on their plates already.
Maybe Stellantis should retreat from the US market entirely? If the business isn’t viable as-was or as-is…
Selling off Jeep makes money I would think.
Ram trucks you sell to Hyundai, Honda, VW, etc. –someone with NA presence but not in that space of the market.
Chrysler you sell the name to one of the overseas companies that will only sell them to a market like China, if anyone is even interested.
The historical parts business could probably be parceled off too (AMC and the other defunct stuff could go into that as well) as some automakers are starting to tap that income source.
Well said, Mr. Burdette.
This was an enlightening article and I agree with the comments that the UAW is just as culpable for Chrysler’s current situation as poor management. I do wish the Democrats had never tried to incentivize people to buy EVs because they’ve given a lot of people a reason to hate a new technology. I do believe that just as ICEs replaced early electric and steam cars, the newer EVs will over time replace many new ICE purchases. The nascent EV industry will over time get better, but for now, I’m quite happy to drive a Tesla. The legacy car manufacturers are having difficulty making a profit on EVs because they don’t know know how to build them and when a manufacturer, like Chrysler, is having so much internal turmoil, there is no room left to allow engineers to build the best car they can and to come up with new ways to develop and build them.
Speaking of failed car companies, I just sent my last Pontiac to the scrappers. I would spend my retiree’s last dollar for a Pontiac to keep my 10 car Pontiac string alive. Because I still have some allegiance to GM (or is that gm now), I purchased a Chevrolet Malibu from my local dealer. Because Chevy has only one rear drive ICE CAR for sale except for the $160,000.00 Corvette in the showroom, my choices were quite limited. GM and Ford refuses to sell a CAR to me for less than $50,000.00 I was tempted to go the Japanese or Korean route, who sell all the CARs they can pump out, but sending my money to the Far East, turns my stomach.
That disease which Stelantis has contracted is apparently very infectious.
My family was always Chrysler product owners but when Daimler got involved the lack of support from them started the decline. Since then it has only gotten worse. My last purchase from them was a Jeep Patriot with the infamous CVT transmission. That alone has driven away future customers like me. Currently, Stellantis has nothing I want to buy. Being connected to Fiat, Puegeot and other poor quality brands does nothing to build confidence in their products.
Been with this “” company” for over 39 years begining with AMC! Since then, it’s been Renault, Chrysler, DialmlerChrysler, Cerberus, FCA and now Stellantis each time raping the coffers of billions in cash! This time feels different … Jeep and Ram will be only survivors in end!been a great ride… but time to retire!