In the auto industry, everything you know is wrong. Conventional wisdom churns faster than you can say, "The Internet changes everything."
That thought comes to me as I contemplate a lightning-fast 15 years at Automotive News. When I joined the paper as editor in February 1989, the big question was either: Why would somebody want to buy a Japanese luxury car? Or: How soon will Lexus and Infiniti kill BMW and Mercedes-Benz?
When I celebrated 10 years here, I introduced the Petey Awards for the decade's achievements and follies. Herewith the new, updated Peteys marking 15 years of change, mistakes, brilliant moves, and fortunes won and lost: MOST MEMORABLE CHARACTER: At the 10-year mark, it was Bob Lutz, who had retired from Chrysler Corp. and was in the battery business at Exide Corp. Since then, Lutz flew into General Motors as product czar. He introduced passion, accountability and simplicity to GM's product-development organization. And even at GM, Bob Lutz speaks his mind. BEST NEW BRAND LAUNCH: Several brands have leapt successfully into this mature market: Hummer, Mini, Kia. But in a heartbeat, the folks from Toyota made Lexus synonymous with refined quality. Then they led the evolution into luxury trucks.
BEST BRAND LAUNCH ON A SHOESTRING: When the late Greg Warner launched Kia in America, he required about $1.95 worth of investment from each dealership. It worked. And now Peter Butterfield is getting Kia dealers to build nice single-brand stores. MOST UNSCRUPULOUS VILLAIN: Inaki Lopez holds onto the award from five years ago for what he did during his time at GM. As I wrote then, "He destroyed suppliers' trust in GM, he betrayed Jack Smith, and he stole boxes and boxes of GM documents." But he also was the MOST INFLUENTIAL PURCHASING GUY. He revolutionized
Lutz: Thanks for the memories
parts purchasing. The outsourcing of parts to Mexico - and now to China because Mexico isn't cheap enough - was greatly accelerated by Lopez-ism. TOP TRADE ASSOCIATION: Five years ago, it was the American International Automobile Dealers Association. Its mission, as I wrote then, was "as clear as gin. It's for free trade. Period." Today, Chrysler is German, Ford owns a stable of foreign brands, and GM has full or partial stakes in a bundle of "imports." The trade war is over. The imports won. (In those five years, they picked up 10 points of share to about 40 percent of the U.S. market.) While AIADA continues to advocate free trade, its biggest practical issue in the past couple of years has been opposition to inheritance taxes. We'll leave this category vacant for now. STEEPEST FALL (CORPORATE): DaimlerChrysler AG. In the high-flying combine, DCX management ignored the hugely profitable Chrysler group as Chrysler spiraled downward to become a money-losing orphan. Then, the merger diverted management attention and capital away from the profitable Mercedes-Benz. The "merger" burned up $60 billion or $70 billion in shareholders' wealth. Only now are synergies emerging.
Lopez: Unscrupulous villain
STEEPEST FALL (INDIVIDUAL): Ford Motor Co. CEO Jacques Nasser was a 21st century visionary. Ford wouldn't be a car company. It would be a consumer company, retailing its own vehicles, selling telematics services, controlling financing, service, even junking. Internet ventures would create unimaginable shareholder wealth. Only, they didn't. Nasser left behind unhappy dealers, suppliers, employees, Ford family members and other shareholders. MOST INFLUENTIAL FEMALE EXECUTIVE: This is a trick question. In 2004, there is still no woman approaching the summit of this male-dominated industry. There are a lot of important female executives, such as Jan Valentic, Kathleen Ligocki, Christine Cortez, Sue Cischke, Anne Stevens and Debra Kelly-Ennis. But progress is glacial. MOST IMPORTANT NEW-VEHICLE TECHNOLOGY: Antilock brakes? GPS navigation? Variable valve timing? Elegant hybrid drive systems? Until we see how hybrids play out, the 15-year Petey goes to stability control; it makes better and safer drivers. MOST DISAPPOINTING TECHNOLOGY: The battery in electric cars. WORST BIG IDEA: A hundred years from now, people will still talk about the Internet bubble of the late 1990s. We were there. So were the Big 3 with the big idea of a massive online parts marketplace, Covisint. Was this going to be a great IPO, or what? The few remnants of the Covisint catastrophe, which cost the Big 3 and others about $500 million, are being sold off. Born in greed, Covisint died destitute. MOST SIGNIFICANT VEHICLE: At 10 years, it was the Ford Explorer, which opened the floodgates of truck-as-car. Since then, the Lexus RX 300 and RX 330 have typified the civilized luxury station wagon masquerading as an SUV. The Explorer and the Lexus share the Petey.
Nasser: How the mighty have ...
Well, it's not completely true that everything you know is wrong. This much is certain: Good, attractive vehicles are necessary to success, and that never changes. But the definition of a good vehicle does change.
The Peteys will see you again in five years.
E-mail Peter Brown at [email protected]