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BACK SEAT DRIVING - JANUARY 2009

This article is from our archives and has not been updated and integrated with our "new" site yet... Even so, it's still awesome - so keep reading!

Published on Fri, Jan 9, 2009

By: The LACar Editorial Staff

HOT WIRES For hot and tender news wires on the car culture, see LA Car's Hot Wires The Chrysler-Fiat Alliance: A Great Big Patch of Blue in a Cloudy Sky Acura, Macworld, and the Melding of the Automotive, iPod and iPhone Worlds Unveiled: Toyota's Generation 3 Prius 7 Reasons Why Ford Has the Best Chance of Surviving the Crisis  

 

 

Is this the car that can save Chrysler? Editor's Note: Just as Chrysler's insolvency appeared to be a virtual certainty, it managed to (once again) snatch victory from the jaws of defeat. This time, it's an alliance with Fiat that seemed to have come from nowhere right into Chrysler's lap. It's a great big patch of blue in an otherwise cloudy sky. - Roy Nakano   BOB NARDELLI: BACK SEAT DRIVING CHRYSLER'S PATH TO LONG-TERM SUCCESS To all Chrysler employees, dealers, suppliers and other stakeholders: With this week's announcement of our nonbinding agreement for a strategic alliance with Fiat, I want to update you on where we stand in our continuing efforts to manage our business through the current economic downturn and put Chrysler on a path to long-term success. This potential alliance has the opportunity to greatly benefit America by preserving American jobs, stabilizing the economy including the important domestic auto industry and expanding the availability of small, fuel efficient automobiles. Throughout this process we will work with the U.S. government to ensure Chrysler meets all the terms of the U.S. Treasury loan agreement, including the submission of a restructuring plan that assures Chrysler's long-term viability, timely loan repayment and energy efficiency. It is important to note that no U.S. taxpayer funds would go to Fiat.

Fiat 500 Our Vision, Mission and Strategic Framework Continues One year ago, we began our first full year as an independent company with a three-part strategic framework to help focus our efforts and align our resources toward our goal of returning to profitability. The framework is comprised of three basic principles: Enhance our core: invest in product enhancements; strengthen our customer focus; improve our relationship with our dealers; and recommit the entire organization to a new level of quality. Extend our business: develop or establish partnerships to provide new products; build off of existing products to extend into new segments; explore new and adjacent market opportunities; and accelerate new technologies and innovation. Expand our market: pursue global alliances to fill gaps in our product portfolio and open new geographic opportunities; increase global sales by building from our existing dealer network; and invest closer to our global customers by enhancing regional business operations and global engineering centers. As the economy declined through 2008, Chrysler responded quickly and aggressively by making further reductions in manufacturing schedules to keep production and dealer inventory aligned with shrinking U.S. market demand. The extensive restructuring, cost reduction and productivity enhancements served to support our competitive position in the continuing economic downturn. By executing our business plan, reducing our fixed costs and working to continually improve our operational performance, we were ahead of our targets to return to profitability through the first half of 2008. But in the second half of the year, our nation's financial meltdown and a freeze in credit led to a devastating automotive industry depression. On a Seasonally Adjusted Annual Rate (SAAR) basis, vehicle sales fell to their lowest level in 26 years. Bridge Loan Required for Short-term Viability due to Economic Factors As a result, we went before the U.S. Congress last November to testify for the need for a $7 billion bridge loan to sustain our business. We presented data showing the likely devastating effect of a domestic automaker bankruptcy to the overall economy. We explained how the freezing of credit markets prevented average hard-working Americans from getting access to competitive vehicle financing and reduced our dealers' ability to get market competitive funding to place wholesale orders. Those factors combined to constrict cash inflows to auto manufacturers including Chrysler. In fact, 20 percent of our revenue disappeared overnight when our finance company was unable to offer leases to our customers. In December, we returned to Washington, D.C., and presented a plan for viability and accountability to the U.S. Senate, House of Representatives and the Treasury Department. We reiterated our request for a $7 billion bridge loan from the federal government. Our plan was supported by extensive financial data laying out a clear case on how Chrysler would manage through the current global credit crisis and generate adequate cash to begin repayment of the loan in 2012. We also shared our long-term product plan, which is central to our return to sustainable profitability. The U.S. Treasury granted us the first $4 billion of our request, signaling its confidence in our plan as well as recognizing the importance of the automotive industry to our national economy. The bridge loan supports our operations as we continue our process of restructuring and transformation, and we are working hard to meet all requirements for the receipt of the balance of $3 billion, for a total of $7 billion - the amount of our original request.

Fiat 500 Aggressive Restructuring Already Showing Positive Results So far in our restructuring efforts, we have reduced fixed costs by more than $3.4 billion, have taken out 1.2 million units or 30 percent of our production capacity and stopped building four models to simplify our product line. We've made significant enhancements in our products and, in the last 12 months, we achieved the lowest warranty claim rate in our company's history - a 30 percent improvement compared with the prior year. Reflecting the Company's focus on designing and building in quality from the beginning, Chrysler had the industry's lowest number of recalls in 2008 as reported by NHTSA - a total of 360,000 units, down from 2.2 million units in 2007. For the 2009 model year, over 88 percent of Chrysler's vehicles achieved five stars for frontal crash tests, 86 percent achieved the highest rating for side-impact protection and 73 percent of our product line up offers improved fuel economy compared with last year's models. Altogether, we are leaner, more nimble and focused on customer first and quality period. We continue to invest in new products, with 24 new-vehicle launches during the next 48 months. That means the Company will renew more than 60 percent of its total sales volume, including the next-generation Jeep® Grand Cherokee, Dodge Charger, Dodge Durango, Chrysler 300 and several exciting new small cars. We'll continue to improve overall fuel economy with these new small-car entries and our all-new Phoenix V-6 engine. Through our internal ENVI organization, we're focused on electric as our primary clean-vehicle technology. Our product plan includes the introduction of a full-function electric-drive model in 2010, and three additional models by 2013. We focused our resources and funding on electrifying our existing models to achieve speed to market. We also selected this technology because it is the least disruptive to the existing infrastructure and the most consumer-friendly. Our vision is to build cars and trucks people want to buy, will enjoy driving and will want to buy again. And we're doing just that. Just this week, we earned two top honors at the annual Polk Automotive Loyalty Awards. The 2009 Chrysler Town & Country earned the "Automotive Loyalty Award - Minivan" for the eighth year in a row, and Jeep Grand Cherokee took "Automotive Loyalty Award - Mid-size SUV." The all new 2009 Dodge Ram truck is another prime example of the customer focus and innovation that's part of the Chrysler DNA. In addition to overwhelmingly positive customer response, the all-new Ram already has earned nine industry awards including the 2009 International Truck of the Year, Truckin' magazine's Truck of the Year, Texas Auto Writer's Association (TAWA) 2009 Full-Size Pickup Truck of Texas and Edmunds.com Inside Line Editors Most Wanted for 2009.

Fiat Bravo Alliances Support Long-term Success in Local and Global Markets We are actively building on our strategy of alliances and partnerships in order to create value and enhance our ability to meet customer needs. Chrysler is currently engaged in more than two dozen alliances and partnerships around the world, including our joint-venture with GM, Daimler and BMW to develop two-mode hybrid powertrain technology, and our GEMA alliance with Hyundai and Mitsubishi, which produces the advanced technology, four-cylinder World Engine in Dundee, Mich. Our manufacturing agreements with Volkswagen and Nissan further illustrate our strategy of partnering to win. This week, Cerberus, Chrysler and Fiat announced a preliminary nonbinding agreement to establish a long-term global strategic alliance. Upon completion of a due diligence process and meeting all of the U.S. Treasury requirements and required approvals, the agreement could be completed as early as April. This alliance would further enhance the fuel-efficiency of our product portfolio, support our ability to build a long-term profitable enterprise and preserve American jobs. The alliance would give us access to substantially all Fiat group vehicle platforms, which would complement our current product lineup with fuel-efficient, environmentally friendly small cars and powertrain technology - including clean diesel. Using Fiat's distribution system, we'd be able to greatly increase the global reach for the Chrysler, Dodge and Jeep brands in markets outside of North America. Fiat would benefit from product and technology sharing, with access to our vehicle platforms and our manufacturing capabilities in North America. In addition, Chrysler would help Fiat bring its brands to the U.S. market. Fiat has successfully executed its own restructuring during the past several years, and Chrysler could benefit from Fiat's restructuring expertise. Fiat Alliance Consistent with all Government Loan Conditions The potential Fiat alliance is consistent both with our strategic plan and with the long-term viability plan required under the U.S. Treasury loan. The alliance would help us provide a return on investment for the American taxpayer by securing the long-term viability of Chrysler brands in the marketplace. It's important to note that no U.S. taxpayer funds would go to Fiat. The alliance is based on an exchange of equity for assets. Fiat would acquire an equity stake in Chrysler by giving us access to substantially all its vehicle platforms and technologies. This access is of high value to Chrysler, saving us significant costs and years of development time.

Fiat Bravo Many Components Work Together to Make Chrysler Viable For Chrysler, this alliance is a key milestone on our path to viability. But it is just one piece. Our viability still depends on receiving the remaining $3 billion in government funding and concessions from each of our constituent groups: lenders, employees, unions, dealers and suppliers, so that we're in position to benefit when the automotive market recovers. A healthy Chrysler Financial is another important component of our recovery. Chrysler Financial recently qualified for $1.5 billion in federal Troubled Assets Relief Program (TARP) funds. This money will immediately be put to work assisting our customers in securing the credit they desperately need. We all understand the critical interdependence between Chrysler LLC and Chrysler Financial. Our success is linked with theirs. Our viability depends on customers having access to affordable credit for loans and our dealers having access to competitive credit to finance their floor plan costs. Meanwhile, we continue to meet with constituents as we seek to achieve shared sacrifice and required concessions to be included in our U.S. government long-term viability plan. Let me be clear: we don't underestimate the challenges before us. We also recognize that the financial crisis, which has brought hardship to Chrysler, has created similar challenges for our suppliers, dealers and other constituents. But we continue to make important strides toward restructuring our company, leveraging strategic partnerships and developing innovative new products. We are committed to working together to find ways to reduce costs while maintaining the business operations that will support our mutual and sustained viability for the long term. We are committed to work with all our company stakeholders, including our employees, unions, dealers, suppliers, lenders and owners to identify the concessions required as a condition of our loan. We recognize we have a unique bond with the American public, and we are fully committed to meeting our obligations by developing high quality, fuel-efficient vehicles. I appreciate your continued support as we seek to return Chrysler to its rightful place as an industry leader. Bob Nardelli, Chairman & CEO Chrysler LLC    

 

 

 

 

TOMMY GRAFMAN: BACK SEAT DRIVING IT'S A SMALL WORLD AFTER ALL At long last, we have full integration! Acura, Macworld, and the melding of the automotive, iPod and iPhone worlds As the co-owner of a Macintosh service company, attending the Macworld convention in San Francisco is one of the yearly rituals I do. And from the time the product first came out at Macworld, the iPod has dominated the market of MP3 audio/video players. For years, I've been grumbling about the fact most cars I've reviewed don't have a proper iPod connecter and interface with the car audio system. Having a state-of-the-art car with a killer audio system but no iPod connection leaves me perplexed. Hey, maybe if the automotive industry had a proper iPod connection years ago, they wouldn't be in the condition its in today. Who knows? History will decide. Meanwhile, back at Macworld: I'm attending the Acura Lounge, and the car company is showing off its new TL. I'm pleased to see the vehicle equipped with full iPod integration and hands-free, voice-activated connections thru Bluetooth-enabled phones. The Acura Lounge has several cars on display and invites attendees to coffee, couches and connectivity. I am elated to see an automotive company with the foresight to cross-over into different industry, and show how the two industries work together. After all, I spend so much time in my car, I call mine my mobile office.

I get a first-hand demonstration of iPod-iPhone integration inside the new TL. Sitting behind the wheel is amazing, but I'm not here to do a car review (I keep telling myself). I plug my iPhone into the connector and the screen on the dash immediately comes to life with my iPhone music playlist. I use the dash controls, and select some songs to play. The display shows the artist, album, track and time. It also shows the other tracks from the selected album. This is one of the best interfaces I have seen in a long time - quick and easy to read. The interface is only matched by the quality of the sound system (and yes, I did crank it up to '11'). I must say, it's great to experience the melding of auto industry, iPods and iPhones - courtesy of Acura. - Tommy Grafman Check out: www.acura.com

  Editor's note: Tommy Grafman is a partner with MacMyDay.    

 

 

 

 

The 2010 Toyota Prius unveiled

NAKANO: BACK SEAT DRIVING Within days of Ford's unveiling its remarkable Fusion Hybrid, Toyota releases information on the next-generation Prius. The midsize third-generation 2010 Prius will offer even better mileage ratings, enhanced performance, and innovative design features. It will be quieter, roomier, and equipped with advanced standard and available features such as a moonroof with solar panels, four driving modes, Intelligent Parking Assist (IPA) and steering wheel touch controls that display on the instrument panel. The third-generation Prius extends its record of continuous improvement in fuel economy. The first-generation Prius, which was rated 41 EPA combined mpg, was replaced by the current model, which is EPA rated at 46 mpg, combined city/highway. Using a combination of technologies, fuel efficiency was increased to an estimated 50 miles per gallon for the new Prius. A larger and more powerful 1.8-liter Atkinson-cycle, four-cylinder engine will power the new Prius. Contrary to conventional wisdom, Toyota claims the larger engine actually helps improve highway mileage. By making more torque, the new engine can run at lower average rpm on the highway. When operating at lower rpm, the new engine uses less fuel. Mileage is especially improved in cold-start conditions and at higher speeds. Use of an electric water pump and a new exhaust gas recirculation (EGR) system also contribute to the engine's efficiency. The 1.8-liter Prius engine is the first Toyota power plant that requires no belts under the hood for better fuel economy and less potential maintenance. Unlike most other hybrid vehicles available, Prius has been a "full" hybrid since introduction. This allows it to run on engine alone, battery alone, or a combination of both. The system blends the best of parallel hybrid and series hybrid designs to achieve the ability to operate on the electric mode alone, and to charge the batteries while the car is running. The new Prius will offer three alternative driving modes. EV-Drive Mode allows driving on battery power alone at low speeds for about a mile, if conditions permit. There is also a Power Mode, which increases sensitivity to throttle input for a sportier feel, and an Eco Mode, which helps the driver achieve their best mileage. Pricing for the 2010 Prius will be announced shortly before it goes on sale late spring.

2010 PRIUS SPECIFICATIONS POWERTRAIN 1.8-liter four-cylinder engine with VVT-i Engine horsepower: 98 hp @ 5,200 rpm Engine torque: 105 lb-ft @ 4,000 rpm Electric motor: Permanent magnet synchronous motor Electric motor power output: 80 hp/153 lb-ft torque Hybrid system net horsepower: 134 hp Emission rating: SULEV (with AT-PZEV) Electronically controlled continuously variable transmission Drive System: Front-wheel-drive Hybrid battery pack: Nickel-metal hydride Estimated fuel economy: 50 mpg (combined)* * Preliminary figure based on Toyota's internal testing   DIMENSIONS (inches) Overall Length: 175.6 Overall Width: 68.7 Overall Height: 58.7 Wheelbase: 106.3 Ground clearance: 5.5 Coefficient of Drag: 0.25 EPA class rating: Midsize Toyota says the new Prius will be built using processes that reduce pollution in every stage of vehicle life, from production and driving, through to disposal.    

 

 

 

 

The Fusion Hybrid can drive in pure electric mode up to 47 mph.

NAKANO: BACK SEAT DRIVING 7 REASONS Why Ford Has The Best Chance of Surviving The Crisis     With all the talk about the credit crisis and bailouts for the auto makers, there has been this tendency to paint The Big Three with a single brush. In fact, the domestic car companies are not all in the same fiscal boat. Ford Motor Company has indicated that it sees no need for a loan from the Federal government at this time. It has, however, asked for a line of credit. The distinction may have gone largely unnoticed, but it's a reflection of the cautious optimism Ford has for several new products scheduled to come to market. These new products, along with changes already in place are why Ford Motor Company has the best chance among the domestic car companies of surviving this crisis: 1. Alan Mulally Ford recognized early on that it needed to make a fundamental change in the way it did business, or risk death. That's why in September of 2006, William Clay Ford, Jr. stepped aside and named Alan Mulally the new President and CEO of Ford. Mulally had been credited with the resurgence of Boeing Commercial Airlines in the mid-2000s. At Ford, Mulally's cost-cutting led to the company's first profitable quarter in two years. He is credited with playing major role in stabilizing Ford's financial position to the point where it is outside the threat of bankruptcy. 2. Ford F-150 It took a hit in mid-2008, when $4 per gallon gasoline sank sales from first place to fourth. By the end of the year, however, the F-150 was back on top as the number one selling vehicle in the USA. With an all-new F-150 at the showrooms and gas prices hovering below $2, Ford should do well with this bread-and-butter offering. These times of economic uncertainty have brought out some jingoistic sentiments. Whatever detriments it may carry, it should bode well for traditional American brands, and domestic truck manufacturers stand to benefit the most. 3. Ford Fusion/Mercury Milan The first-generation Fusion/Milan, introduced for the 2006 model year, earned universal accolades. Everyone from Consumer Reports to LA Car's Back Seat Driver liked the car. The Ford of yesteryear would have been content to drag the the same vehicle into the 2010s without any changes. The new Ford, however, chooses not to rest on its laurels. The second-generation Fusion/Milan not only offers a significant boost in power on its premium motor, it also boasts the best gas mileage of any non-hybrid midsize sedan in its base engine - 34 mpg on the highway. That's right up there with the subcompact Honda Fit!   4. Ford's  Third-Generation Hybrids The big news with the new-generation Fusion/Milan is the new hybrid model. Ford's first and second-generation Escape Hybrids have been exemplary in gas mileage, reliability and customer satisfaction. Ford's third-generation full hybrid system surpasses even Toyota's counterpart. This midsized hybrid sedan can travel in pure electric mode up to 47 mph! This translates to an EPA rating of 41 mpg in the city and 36 on the highway - far surpassing the mileage figures for the excellent Toyota Camry Hybrid. The LA Times' Dan Neil did even better, with a real-world city mileage of 61 mpg, taking advantage of the car's full electric mode ability.

The 2010 Ford Taurus 5. The New Taurus After ignoring the sedan market for so long, Ford is following up the new Fusion/Milan with another all-new sedan: The next-generation Taurus. The current Taurus is a very good car, but its sales have been disappointing. The new one is significantly more attractive, and Ford plans on unveiling a halo model: The return of the Taurus SHO, which will feature Ford's new Eco-Boost engine. 6. Eco-Boost Eco-Boost is the name given to Ford's new turbocharging and direct-fuel-injection technology, allowing smaller engines to perform like bigger ones, but with better fuel economy. One of the first applications will be to a twin-turbo 3.5-liter V6 that will make around 350 horses. Fuel economy is expected to improve by 15-20 percent over Ford's similarly powered V8. Expect to see the Eco-Boost offered in Ford's new F-150 and Taurus. 7. The British Are Coming! Ford has some very attractive small vehicles in Europe, including the handsome new Fiesta, C-MAX and S-MAX. The carmaker knows this and is working at break-neck speed to tool up the first of possibly several small European vehicles for manufacture in the USA. The subcompact Fiesta is expected to arrive in 2010, boasting great fuel economy and refinement heretofore unheard of in a small American car.     Of course, nothing is for certain. And these are not the only reasons to bet that Ford will survive the current crisis. They are, however, the ones that stand out. My money is on Ford to make it through the night. - Roy Nakano    

 

 

 

A JOURNAL OF LOS ANGELES & ITS CAR CULTURE

LA Car

That was LA Car's subtitle when it started back in 1997. It's original website address was about five times the size of lacar.com. Since then, La Car became LA Car. Its subtitle became Reporting From Car Culture Ground Zero, then From The Heart of Car Culture, to today's The Cars and Culture of Southern California. At all times, however, we aimed to chronicle the Southland's automotive spirit - much like one's own journal or diary. LA Car has always been a great source to come back to from week-to-week, to see what articles and reviews have been added to our rather staggering database. With Back Seat Driving, a.k.a. BSD (note the similarity to two well-worn abbreviations, BS and BFD) and Hot Wires - Hot & Tender News From the Car Culture (co-located with Back Seat Driving, and updated at least daily), we give you some reasons to come back more often (all opinions, by the way, are those of the respective author). So, go ahead and bookmark www.lacar.com. We'll be sure to always provide a link to Hot Wires and the latest Back Seat Driving blog entry. In the meantime, welcome to the journal and journey from the heart of the car culture. - Roy Nakano 

For past Blog entries, click the following: December 2008 November 2008 October 2008 September 2008 August 2008 July 2008 June 2008 May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 April 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006 August 2006 July 2006 June 2006 May 2006 April 2006 March 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 April 2005 March 2005 February 2005 January 2005 December 2004 November 2004 October 2004 September 2004 August 2004 July 2004 June 2004 May 2004 April 2004

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