Indianapolis 500
I was pulling for Tony Kanaan, who throughout the race quickly moved his way up the field, only to fall back on ill-timed pit stops. As you know, Dan Wheldon took a dramatic victory after the last turn, when leader and rookie J.R. Hildebrand augured into the wall. Wheldon’s contract with Bryan Herta Motorsport expired the night of his second 500 victory. Herta had no money left.
This is the great and the awful thing about the Greatest Spectacle in Motor Racing. It is, as Leon Mandel once wrote, “American Formula One.” Even after 100 years though, it’s a race a rookie nearly won, a race that a team with no money did win. One that Kanaan, who started 22nd in a field of 33, could have won. It has the excitement of the best of F1 racing, without the shlock of NASCAR.
I watched the race from Source Interlink’s Turn Two suite with my niece, Betsy, who’s 14, and my nephew, Jeffery, 11. They want to go again next year. I want them to see the kind of IndyCar racing that I listened to on the radio in the late ‘60s and early ‘70s. I’d like to see other new engine-builders join Chevrolet, which supplies engines beginning next year. (Three cheers for Chevrolet!) I’d like to see the Indy 500 again become a bigger deal than the World Series and a year’s worth of NASCAR races, while maintaining its odd combination of world-class sophistication and speed and aw-shucks Midwestern pragmatism.
May Sales
A slowing economy heading for a double-dip, the Japanese earthquake and tsunami tanking Toyota and Honda sales and GM cutting fleet sales all have been blamed for the industry’s 3.7-percent drop in U.S. sales last month. I’d bet that while the earthquake hurt Japanese-brand sales, it didn’t much affect American or European brands.
GM’s total sales dropped 1 percent while it reported a 9-percent hike in retail sales, and its market share was better than 20 percent. GM’s car and crossover sales are getting stronger, while it has a 100-day supply of big pickup trucks. Ford sales were virtually unchanged. Chrysler passed Toyota for third, with help from strong Jeep sales and the Chrysler 200, and Hyundai combined with Kia, which both companies hate to do, outsold Honda last month. Chrysler won’t stay ahead of Toyota, though Hyundai/Kia were inching up on Nissan and Honda, anyway. The Japanese parts shortages only accelerated that trend.
The Chevrolet Malibu was America’s most popular midsize car, though that model continues to rely on daily rental fleet sales. Less so the Chevy Cruze, which was strong at 22,711 units for the month. That’s just 408 units ahead of the Ford Focus, which mostly consisted of the new ’12 model. I give the Focus no more than two or three months to catch, and permanently pass, the Cruze. The Chevy Camaro continues to pound the Ford Mustang, though, 9,451 to 6,607.
Meanwhile, Ford announced another price increase. Higher prices, lean production plans and lowered U.S. brand incentives are what’s really affecting auto sales, at a time when the consumers who still have jobs aren’t growing their incomes. This is bad for middle-class consumers, while higher profit margins in the face of lower sales and production ultimately is good for the automakers.
Fiat Buys Treasury’s Remaining Chrysler Shares
It will take the U.S. Treasury Department up to 90 days to approve and complete the deal, but consider it done. Fiat Auto is paying Treasury $500 million for its remaining 6.6 percent of Chrysler, which will make the Italian company majority owner at 52 percent. Fiat gains another 5 percent when the Dodge PF 40-mpg compact goes on sale just before the end of the year. Fiat is running out of reasons to issue an Initial Public Offering for Chrysler and instead swallow it whole (or let the UAW retiree benefit fund hold on to the other 43 percent).
Is this another DaimlerChrysler deal? Is it like Chrysler buying out AMC to get Jeep? Sergio Marchionne seems to have as much passion for Chrysler as he does for Fiat, and the Chrysler execs who have stayed on, such as Ralph Gilles, are unabashedly optimistic about their employer’s future. Daimler bought Chrysler in 1998 in order to provide a cheap-car counterpoint to Mercedes-Benz. It misunderstood the Chrysler brand, and stripped the Chrysler Group of its resources on the way to dumping it off on Cerberus in 2007. Bob Nardelli’s arrival at the Auburn Hills HQ, for a Plymouth Prowler gathering, no less, was Chrysler’s darkest day in a long string of them. If Marchionne does keep the Dodge and Chrysler brands for the long-term, even mostly on Fiat/Alfa platforms, the company faces its brightest future since 1926.
Three-banger Ford
Ford announced it will build a 1.0-liter, three-cylinder EcoBoost turbo engine, and the Fiesta, which currently runs a 1.6-liter four is probably the recipient. No surprise – with the four, the Fiesta’s fuel mileage is marginally better than the Focus’. In SFE trim levels, the Fiesta beats the Focus’ city mileage by 1 mpg, and only matches highway mileage, at 40 mpg. Ford proudly notes that it sold 29,423 small cars last month, but just 7,120 of those were Fiestas, while 22,303 were Foci. Probably more important for Ford was its concurrent announcement it will build a new, 8-speed automatic transmission, to keep up in the cog count with GM and Chrysler.
Mulally’s Successor
The 65-year-old Ford Motor Company executive officer, Alan Mulally, says he has no plans to retire. Apparently, chairman and scion William Clay Ford is preparing for a contingency. He was quoted at the Mackinac Policy Conference, a mostly state government-oriented annual meeting on an island filled with horses and bikes, but no cars, as saying Mulally’s successor will probably be selected from within FoMoCo. I’d put my money on Mark Fields over Jim Farley. Derrick Kuzak is the wild card.
Mark Reuss on Autonomous Cars
At the same Mackinac Policy Conference, GM North America President Mark Reuss floated an idea for a pilot program featuring the corporation’s EN-V technology. This is the “pod car” concept unveiled recently; an electric-powered personal mass transit vehicle that drives itself. Reuss said he’d like a pilot program to introduce the system to the city of Detroit, as well as Shanghai. Commuters would pay to use the pods to go from door-to-door, much as they pay for public transportation now to get within walking distance. It reminds me of the Michelin Challenge Bibendum green transportation conference in 2004, when GM announced a pilot program to test shiny new fuel-cell buses in host-city Shanghai. Meanwhile, ugly, broken-down buses were transporting people who couldn’t afford reliable cars around GM’s hometown. Why didn’t the Motor City get fuel-cell buses?
Before I say “I told you so” about autonomous cars, I must add that Reuss was emphatic this is a “what if” kind of dream. Still, he says GM already has autonomous personal transportation pod technology. He deserves lots of credit in pushing an idea that could be a boon to our economically devastated city. I’d still like to see GM get into light- and high-speed rail and take advantage of the controversial efforts to improve those systems in the U.S. Maybe Ford and Chrysler could get involved, too. After all, this isn’t like when GM got into kitchen appliances or Ford sold TVs. This is the transportation business.
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