The Best and Worst Ideas of 2009
December 28, 2009

Desperate times require desperate measures, as the saying goes, and 2009 was about as desperate as it gets in the auto industry.

Companies sometimes do the most interesting things when they're desperate -- and that maxim seems particularly relevant to auto companies. Because their products are so visible, with such potential emotional impact. Because their executives and designers and engineers are in charge of the process that creates those products.

Desperation in 2009 -- as defined by coming up some 6 million sales short of the industry's glory days of just three years ago -- generated products and strategies that ran the gamut from ridiculous to sublime. Some ideas were inspired; some were just tired.

Here are a few of the best and worst ideas from the auto industry in 2009:

2009's BEST IDEAS

Hyundai Assurance

Wow, who woulda thunk this gimmicky response (refreshingly light on gimmicks, actually) to the nation's epidemic employment anxiety would help cement Hyundai's rep for totally in-tune-with-the-times marketing?

There was about a 90-day window at the worst of the crisis when Hyundai Assurance completely resonated as a singularly effective marketing "reach out" to the few buyers shopping for a new car in the worst market in 40 years.

Cutting Capacity

Geez, there's a concept. Maybe we should only make about as many vehicles as we sell. Maybe there won't be as many left over that way. Maybe we won't have to cut the price so much, either.

Overcapacity was a decades-old problem nobody wanted to tackle. Shame the recession had to force everybody to deal with it, but now that it's happening, all those macroeconomic gurus don't look so silly and slowly, there's sense coming back to one of the industry's most basic viability-insuring equations.

Course workers who are victims of downsizing and capacity reductions certainly wouldn't put this on their "good idea" list.

Kissing Off Hummer

Bad idea when somebody in tassle loafers dreamed it up back in 1999. Only took GM a decade to figure out how "unsustainable" the Hummer thing really was.

So argue about Pontiac, Saturn, even Saab. But parting with Hummer (closing it down is at least as probable, given the wacky Chinese Connection deal GM threw together) is a decision that almost makes up for buying Hummer in the first place. Almost.

Hatchback Sedans

Ow, the Honda Accord Crosstour isn't exactly easy on the eyes, and there's not necessarily a lot of beauty in BMW's 550i GT, either -- but the new trend of hatchback sedans is encouraging.

First, because auto companies are taking chances. And because forging acceptance of hatches for the U.S. market is important. Hatches are practical, useful -- and often the better-looking body style if the proportions are right.

But hatches are the place we probably have to go if the vehicle fleet is to eventually be downsized to a point where serious fuel-efficiency can result. The Europeans are on board, dontcha know: hatchbacks like the Volkswagen Golf have been the Continent's "crossovers" for years -- with gas at $8 a gallon, Europeans simply don't expect the ability to bring the household sinks on every grocery-store run.

But for the job converting the masses, it'd be better if Americans were first presented hatchbacks of the Audi A5 Sportback ilk rather than the 550i GT.

Talking up the Volt

The Chevrolet Volt extended-range electric vehicle is pretty sweet science and its development one of GM's few industry-leading, big-picture technology efforts in a long while (maybe since the EV-1 electric vehicle).

The Volt is impressive, progressive and potentially game-changing. Yeah, GM's gone a little overboard with the promotion, but GM is right to hype the Volt.

Paperless Owners Manuals

Chrysler decided now is the time to stop printing owners manuals. Starting with '10 models, searchable DVDs will replace 900-plus tons of the ignored paper Chrysler plops in glove compartments every year.

Printed summaries will still be in the car and Lee Iacocca-vintage diehards can still request the full-blown printed manual.

Sticking With Opel

Somebody saw the light and realized that without Opel, GM was going to be relegated to being little more than a North American automaker that happens to be a solid player in China. European operations and development capability were essential to GM continuing as a competitive global automaker -- and some wags had suggested that from the beginning.

Hanging onto Opel at the11th hour didn't win many friends in Europe, but it was the right decision. A decision that said plenty about the intestinal fortitude (did we just use that phrase?) of GM's new board of directors.

Firing Rick Wagoner

Firing GM CEO Rick Wagoner last spring needed to be done.

Only in the corporate world do you preside over that kind of institutional decline and still have people question your dismissal.

Firing Fritz Henderson

Fritz Henderson may have had more on the ball than he was given credit for, but there was too much "old GM" in the crease of that fella's trousers. Like Wagoner, he'll probably thank somebody someday.

 

The Ford Fusion

Case study in how to take some pretty old bones and keep them going on the cheap. Ford has spent money wisely -- and accurately -- to make the Fusion a better car than it was when it was first launched for the 2006 model year.

On the strength of its bar-raising hybrid version, the Fusion won Motor Trend's Car of the Year award for 2010, a rare feat for a car not totally new, and it is a finalist for the North American Car of the Year award as well.

Buyers were snapping up the Fusion at a healthy pace -- 161,819 through November -- and it was likely to finish as one of the year's 10 best-selling models, leaving us to wonder whether the Fusion's reinvigorated appeal is attributable to engineers' effective fettling or to the fact buyers are identifying the Fusion as more "right sized" than the ballooning Japanese competitors.

2009's Mixed Bag

Cash for Clunkers

No matter where you stand on the politics of this controversial initiative, Cash for Clunkers did stimulate activity in dangerously deserted showrooms across the nation. The program also chopped down inventories and yep, even got people spending, spreading around some money on Main Street America.

Call it a $3-billion backdoor grant to automakers and dealers, but as a way to induce spending and temporarily prop up a vital industry, Cash for Clunkers may prove to be among the best stimulus money the government spent for consumers who took advantage of it and automakers who benefitted, even if timing and execution could have been better. 

Double B's for GM, Chrysler

It was bailout and bankruptcy for GM and Chrysler, and between these two irksome gambits,  lenders got skunked for sure and probably America's taxpayers, too.

But for the nation, it was like the fox that has to chew off its leg to escape the trap, particularly in the case of GM. The end justifies the means, distasteful though it might be. Glen Beck and Sean Hannity got enough socialist-finger-pointing ammunition to sustain them well into the next decade -- and maybe they've got an argument. Yet at the juncture the weak economy was, the bailout for GM and the U.S. was necessary. That's the way it had to go down.

Entering China Early

Eyebrows raised when years ago GM charged into China to sell old Buicks. Eventually others followed. And it was 2009 that the early pioneers got their payoff. Car sales in China surpassed those in the U.S. and everywhere else, generating desperately needed profits that kept many global automakers afloat during the recession.  

 

2009's WORST IDEAS

The Dealer Dump

Chrysler and GM, hell-bent on proving to the Obama administration they were serious about restructuring and downsizing, set a course to save a lot of money by jettisoning vast portions of their national dealer networks.

From the start, the rationale and details behind the strategy looked as hastily concocted as a seventh-grader's book report written on the bus the morning it's due. Analysts wondered how either company could keep sales and market share, dealers were outraged and even politicos calling for the companies' figurative heads got involved when they realized the potential impact on their constituencies.

Were GM and Chrysler overdealered? Yes. Was this heavyhanded gambit the fix? Nope.

I Am Ram

This is Chrysler's front-line ad campaign for its vital Ram pickup line. And to paraphrase from its signature statement, the Ram's tank may be full, but the minds behind these putrid ads are running on fumes.

Panning advertising is always easy, but the I Am Ram effort is monumentally off-key. Or at least equal to the year's other testimony to Detroit's continuing talent for commissioning awful ad work, Buick's "Look At Me Now."

Chrysler: We're Making Money. No, Really!

In early November, Chrysler CEO Sergio Marchionne figured he had no choice but to lay out a grand five-year strategy plan for Chrysler's turnaround. The company's post-bankruptcy silence was deafening and they had to make it look like they were doing something besides smoking cigars and noshing salamis. Good enough.

But not satisfied to rest just on the utter incredulity of the plan itself, Marchionne opened the confab by laying it on pretty thick about what wonderful shape the company found itself in. Marchionne said Chrysler was revenue-positive in the third quarter and had added 1 billion to its cash on hand.

All true, perhaps -- but Marchionne supplied no context, of course. His assertions probably were accurate, but he didn't understand if-only-we-could-let-you-see-the-ledgers bragging about Chrysler's wonderful state of financial health was the sport of, well, the last two Chrysler owners who came before him. You know, the two owners who swore Chrysler was in fantastic shape right up to the point when they foisted off the "operationally bankrupt" company on the next unsuspecting owner.  

Buick: Look At Me Now

The Mad Men writers could work a half-season's worth of episodes detailing how ad-agency sharpies fleeced the loping Midwestern Buick marketers with this obnoxious little campaign.

They spent money on this kind of cringe-inducing "creative," and we still wonder why GM went Chap 11?

Giving Up On Diesels

We thought automakers were getting religion on fuel economy. They've been telling us for the past couple of years they're going to invest in just that attribute "because customers want it" and are going to continue to want it.

Fine words when the industry's selling 16 million vehicles and people are paying 50 grand for fullsize 'utes. But the second sales dried up and what buyers were out there were no longer inclined to drop sloppy money on the conventional profit-machines, the "investment" automakers promised to make in fuel economy went up in smoke.

Lickety-split, a raft of ready-to-go plans for diesel-powered light vehicles were shelved. Diesels cost too much, companies from Ford to Honda to Nissan bleated. Don't ask us how anybody plans to get their fleets to the fed-mandated 35 miles per gallon by 2016 when CR-Vs struggle to get 25.

Newsflash here: 180-horsepower gasoline 4-bangers in near-lux cars or midsize crossovers isn't gonna be the solution.

Private Jets To Bailout Hearings

Those CEO party animals from Detroit came up a little short on self-awareness when they flew their private jets to bend over for Congress at the bailout hearings.

GM lost almost $70 billion in total between 2007 and 2009, so "austerity" clearly wasn't in the corporate lexicon. And by the time of this colossal public-relations fiasco, Chrysler was being run by Bob Nardelli, so 'nuff said there, too.

But why did supposedly uber-tuned-in Ford CEO Alan Mulally join in the Gulfstream tango? Was he betraying his roots at Boeing, where it'd be fine with them if Americans flew to the post office, or was it because half of Ford's executive ranks was winging outta Detroit on corp jets every weekend to get to where they really live?

Foot-Dragging On Floormats

Maybe it's not totally Toyota's fault, but the unintended-acceleration via wedged floormats issue spun out of control and didn't need to. Toyota displayed a magnificent amount of corporate irregularity in dealing with the situation, cleaving another vivid gash in the company's formerly impregnable reputation.

GMC Lives

Why is the division that epitomizes the rampant, marketing-driven rebadging the led GM to the brink still hanging around?

GM says "profitability." We say, "Uh, right..."

GMC is a square peg still being pounded into a round hole.

Chrysler Bankruptcy

Either you believe the herd needs thinned or you don't.

If you do, Chrysler's the runt of the litter and no combination of bailouts and bankruptcies is going to change that.

Come on now: Somebody - anybody - could have been doing Jeep better over the past decade, and the minivan thing is over, so explain to us again exactly what's left to save at Chrysler with those billions in bailout dollars?

Chrysler's bankruptcy was like handing a Marlboro to a jonesing junkie and calling it the answer to the problem. Those Obama Task Force brains can't think this is going to work, can they? 

The 230-MPG Volt

Overpromising on the Chevy Volt's fuel-efficiency capabilities seemed a strategy destined for ridicule and smacked of the bad old days of GM marketing-by-hocus-pocus mentality.

At the very worst, throwing the 230-mpg figure out there assures some degree of disappointment from a car that should have to work to earn a black mark in its file. GM found a way to give it one with this juvenile gambit.

Chevy Volt Dancers

No explanation necessary. See for yourself the Chevy Volt dancers at the Los Angeles auto show - it's like trying to look away from a car crash.

Whining About Executive Pay

GM Chairman Ed Whitacre is a genial enough guy, but he's emitting signals of lurking tone-deafness when whining about how government-mandated executive pay restrictions are hog- tying GM's ability to russle up a worthy CEO candidate.

Ed: GM took the taxpayers' money. Great heaping Escalade EXTs full of it. And GM needed every dime. So get over it.

Sorry if GM's the poster child for the nation's annoyance with this "issue," but here's a recap, Ed, in case the telegraph wires to Texas got cut: if a million bucks, give or take, isn't enough to recruit somebody with a brain, then maybe it's time for all of Corporate America hang up the spurs. Did decades' worth of ya-won-the-lottery exec pay packages get it done for GM up to now?

Internet and TV On Board

Oh, yes. This is vital. Nothing going wrong on the highways another couple of pay-to-play distractions can't fix.

Sounds like great news for airbag suppliers and insurance companies, though.

The Honda Insight

With the all-new Insight hybrid, Honda is building a case for those who say the company is losing its famed engineering edge.

The Insight is a horrid little car from top to bottom - so bad, even the hyper-miler crowd can't bring themselves to buy it. Prior to the Insight's March launch, Honda was doing its famous nudge-nudge, wink-wink, "we-know-we're-gonna-sell-more" act about the 90,000 Insights it planned to sell annually.

Instead, the Insight wheezed its way to a paltry 18,933 sales through November. Honda blames low gas prices (funny, cheap gas didn't impede an estimated 140,000 Prius transactions for the year), but there's only one real reason for such microscopic sales results: the Insight is epically crappy.

That doesn't bode well for the coming CR-Z hybrid coupe based on the Insight's mechanicals. If the youth-bait CR-Z ends up anywhere near as vile as the Insight, Honda's going to have some 'splainin' to do.

Porsche Is Assimilated

Look, we like Volkswagens. Usually lots of good and interesting stuff in there. But the company that uses its legion of econobox brands to knock out the majority of Europe's mainstream cars - good as they are - shouldn't have its fingers in Porsche's sauerkraut.

It's really all the result of some mediaeval Germanic revenge play because Porsche had the audacity to think it was going to take over VW. Mix in some serious familial powerbrokering and now you end up with Porsches inevitably sharing parts with Seats, never mind Audis. The apocalypse draws nigh... - Bill Visnic, Senior Contributing Editor

Michelle Krebs, Senior Analyst and Editor at Large, contributed to this post

Graphic by Lauren Migaki

Photos by Manufacturers except where noted
1 - Hyundai Assurance ad
2 - Chrysler closed its Delaware plant in 2009
3 - Car advertised under Cash for Clunkers plan
4 - Hummer H3T
5 - Audi A5 Sportback (photo by Edmunds.com)
6 - Chevrolet Volt
7 - Ousted GM CEOS Rick Wagoner (left) and Fritz Henderson
8 - 2010 Ford Fusion
9 - Closed dealership (iStock photo)
10 - Chrysler/Fiat's Sergio Marchionne
11 - Volkswagen Jetta TDI has gained in sales
12 - Toyota floormat (photo by Edmunds.com)
13 - Chevrolet Volt to achieve 230 mpg
14 - GM Chairman and now CEO Ed Whitacre
15 - 2010 Honda Insight unveiled

 

 

 

Posted by Michelle Krebs at 9:22 AM under Chrysler , Commentary , Companies , Featured , Ford , GM , Personalities , Technology | Comments (4) | digg this | Seed Newsvine

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