Mike Manley, Fiat Chrysler Automobiles' new CEO, has enough on his plate as he begins leading the company this week. But I hope Manley's long-term plan includes making electrical engineering a top priority.
Last week, the country commemorated the 49th anniversary of the July 20, 1969, moon landing. The United States likely would not have made it to the moon less than seven years after President John F. Kennedy's famous 1962 speech were it not for Chrysler engineers.
Chrysler's now-defunct missile and rocket division had been part of the U.S. space program since the early 1950s. The company built the first stage of the Saturn 1 and 1B rocket boosters used in the Apollo program, the rockets that reached the moon. It also designed and manufactured much of the computerized electronic equipment that made the Apollo program a success. After Apollo ended, Chrysler used its aerospace expertise for automotive systems, pioneering electronic ignitions, trip computers, exhaust gas analyzers and other advanced features that became industry standards and improved all vehicles.
Today, electronics are driving the evolution of light vehicles, changing everything from the way fluids move through the engine to the compression ratio (computers and electronics manage the advanced variable compression ratio system on Nissan's new VC-Turbo engine). And, of course, there will be no self-driving vehicles without the kind of powerful computers that are used in aerospace.
While the old Chrysler Corp. exited the electronics business more than 20 years ago, the company's engineering legacy will always be closely tied to its pioneering aerospace work. Now the time is right for FCA to revive a strong in-house electronics division charged with quickly making up ground it lost as former CEO Sergio Marchionne worked to strengthen the company's balance sheet.
And in what would be a perfect homage to Marchionne, Manley could ensure the electrical engineering division doesn't become a "capital junkie." He could do that by establishing partnerships and joint ventures -- not unlike Delphi Technologies' arrangement with companies such as Tula Technology -- to develop proprietary components and systems. Delphi, working with Tula, has created a digital cylinder deactivation system that continually adjusts the number of engine cylinders that fire.
We're in an era in which automotive technology is going to be all about electrified and self-driving vehicles. With electrified vehicles, at least, FCA retains immense capacity for advanced engineering. The Chrysler Pacifica Hybrid is proof of that. But FCA has largely avoided investing in self-driving vehicle technologies. And I don't fault Marchionne for that.
As far as I know, no one has developed a business plan that shows car buyers will pay immense premiums for the technology. And, even if they would, it will be many years before a vehicle can safely drive itself on a public street beyond a geofenced area.
The trick for Manley will be to transform FCA into a competitor in autonomous vehicles without duplicating much of the engineering work happening at other companies -- work that falls under Marchionne's definition of a capital junkie.