Mood in Detroit: Anticipating ’12 but remembering ’09
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The Detroit auto show started on a high note and as the week progressed from media days to industry days the mood has been rising.
Peter Fuss, German-area auto leader for Ernst & Young, noticed it as soon as he got off the flight from Stuttgart. “Everybody arrived happy and they get happier after talking to others.”
It isn’t a surprise. In a phrase, the 2009 Detroit show was “oh, no!,” 2010 was “we ain’t dead yet” and last year was “we may be OK.”
So yeah, we’re in a better mood this year. Folks gathered here aren’t on defense. They’re playing offense. Listen to conversations this week. Everybody has a plan for growth.
Ruth McBride is in from Toronto, honing manufacturer relationships and looking to build Canadian auto loan and dealer floorplanning volume for Scotiabank.
Another banker, John Landefeld of Citizens Bank in Michigan, lends to suppliers. His biggest worry this show? Maybe auto sales grow so fast that medium-sized parts makers get pinched tooling up.
But Neil De Koker, president of the Original Equipment Suppliers Association, said even that concern has eased since last year. His pleasant surprise this year? Far fewer structural problems for suppliers.
Since the depths of 2009, the industry has obsessed about the stinky U.S. economy and how stubbornly slow the fundamentals have recovered. But what’s the biggest worry among automakers and analysts about U.S. auto sales this year?
A European meltdown over sovereign debt.
But the betting book of that happening has been falling since last fall. Last month, Polk’s Anthony Pratt, after probing his staff in Germany, said he expects lots of ugly but thinks Europeans “will get it done.”
This week, Morgan Stanley’s Adam Jonas put the chances at “not zero, but it’s less than 10 percent.”
So Wednesday night at the Automotive News World Congress, it was left to Chrysler-Fiat CEO Sergio Marchionne to deliver a reality check.
Europe’s crux will come in the next few weeks. He thinks the odds of a workout “are better than 50 percent.” But citing centuries of warfare and ingrained nationalism, he cautioned “never underestimate” Europeans’ willingness to choose poorly.
As always, Marchionne was honest, thoughtful and often eloquent, especially his take on how Fiat and Chrysler employees connect because both companies fought to live and survived when most expected them to die.
His core message on 2012?
Expect growth. Take risks. But don’t bet the rent money.
You can reach Jesse Snyder at email@example.com.