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Letter From Europe: Boardroom Drama at Ford and DaimlerChrysler, Love at GM; Thumbs up for Cadillac CTS; Open Letter To VW’s Bernd Piesetchsrieder

PHOTO (select to view enlarged photo)
2004 VW Phaeton

Letter from Europe-more knives than cars!

May 4, 2004
Andrew Frankl
European Bureau Chief

While the title might be a slight exaggeration some leading lights in the automotive world have certainly been more preoccupied with their own careers than with the production of cars and trucks.

First we had the soap opera in Detroit at the headquarters of Ford Motor Company where two Brits were slogging it out much to the dismay of Bill Ford whose name is on the building.

Nick Scheele, who is an old chum, and David Thursfield whom I’ve never met, agreed to disagree on great many things. As Nick was COO and David just one level below, it was a matter of some concern to the Board. Finally Bill Ford had enough and demoted Nick while David went off to pursue “other interests”, euphemism for “Could you please leave, and how much would you like, to do so in peace”. At least that is my understanding of the situation.

In the meantime the company is doing somewhat better of late; the F-150 is selling number one, and having driven one lately I can see why. Mazda and Volvo are also on a high while Jaguar have bounced back claiming a very impressive third place in the latest JD Powers survey of new cars. With only Lexus (who else?) and Cadillac ahead of them Jaguar can claim No 1 spot among Europeans, way ahead of Mercedes Benz.

Talking of the Stuttgart based company they certainly have been making headlines but unfortunately the wrong sort. If Ford has boardroom dramas, then the battles within the DaimlerChrysler HQ must have been a bit like Shakespeare’s Macbeth with several people knifed and severely wounded, not least head honcho Jurgen Schrempp. Jurge, a very capable man unfortunately backed the wrong horse in Japan.

While Carlos Ghosn managed to turn Nissan round in an almost miraculous fashion Mitsubishi was a disaster waiting to happen. Outdated cars, lots of recalls and a completely hair brained marketing scheme in the USA allowing thousands of bad guys to drive off into the sunset without putting down a single, solitary cent! Astonishing. I wonder which University produced the genius who dreamt up the scheme.

You cannot blame Schrempp for cutting off the funds with just about all the major share holders threatening to cut off his head-metaphorically of course. Poor Jurgen had other problems on his mind as well. There was a huge culture clash between “old Europe” Jurgen Hubbert and “new Europe” Wolfgang Bernhard.

Wolfgang with former truck supreme Dieter Zetschke did a fantastic job turning or at least trying to turn round Chrysler. The new 300 series is certainly proof of that. At 32 thousand dollars fully equipped it will give imports a hard time for their money. A lot of its progress was due to young Wolfgang, just the sort of person DaimlerChrysler needed to refresh its slightly dowdy image.

For the moment Herr Hubbert, the 64 year old veteran managed to put the knife firmly into the young lion. This is a crying shame and hopefully only a temporary setback for Wolfgang. I’ve met Herr Hubbert and can see what the problem might have been-a totally different culture, one Teutonic and one international. Watch this space as unless things get better soon-and that includes build quality-Jurgen Schrempp could end up doing what he likes best-climbing mountains of the Julie Andrews kind.

Unfortunately the Grand Prix team is not bringing too much either. Under the hapless Norbert Haug, the company’s competition manager their engines have been blowing up at a rate of knots much to the amusement of the Grand Prix fraternity. While everybody respects Mercedes-Benz not too many people feel the same way about our friend Norbert. To say that he had a charisma by-pass is probably an understatement.

One company which seems to be having a good time these days is none other than GM. I think this is partly due to peace and harmony in the upper echelons or to be more specific to the excellent relationship between CEO Rick Wagoner and his car crazy No 2 Bob Lutz. With a bit of careful massaging by PR supreme Tom Kowaleski they come over as an excellent double act.

Take the Geneva Show for instance. Realizing that Bob is adored by the World’s Press, Rick very sensibly stood aside and let Lutz introduce the new models. A far cry from ex-Ford honcho Jacques Nasser, who just would not get off the stage in spite of his Soprano suits and his thick Australian accent.

Certainly the Cadillac CTS with its V6 engine which I’ve been driving lately was a gem. For the very first time an American built GM car felt and handled like something out of Munchen or Stuttgart. Rock solid with excellent suspension and brilliant disc brakes all-round. When I read about the cars having been tested round the 14.2 mile Nurburgring I had a feeling that GM were on to something good and sure enough the CTS is great. One could argue about the styling or the somewhat claustrophobic dash but all in all an excellent car. Apparently the quality control boys have also done a good job as Caddy came second only to Lexus in the recent JD Powers report. In a way it is a shame that press cars always arrive with all bells whistles because it would have been fun to drive the $30,000 dollar CTS and not the one at $42,000. After all, standard equipment includes the excellent 3.2 V6, the five speed Getrag gearbox, 4 wheel discs, ABS and lots of other goodies. So if you can live without the 3.6 liter engine, the auto transmission, sports suspension and W rated tires to name but some of the extras included in the $11,700 options, you will still have an excellent Cadillac for the price of a Japanese import.

Just like The Auto Channel’s very own head honcho Bob Gordon I too loved the VW Phaeton enough so that I felt it necessary to communicate my feelings and thoughts to Bernd Pischetsrieder, CEO of Volkswagen. Below you can read a copy of that letter.

That’s it for this months “Letter from Europe”

Cheers, Andrew Frankl
European Bureau Chief
The Auto Channel

An open letter to:
Bernd Piesetchsrieder CEO-Volkswagen AG Wolfsburg Germany

Dear Bernd,

Excuse the lack of formalities but as we’ve known each other for rather a long time I am sure you won’t miss the Herr Doktor and all those other, rather Teutonic bits.

First of all sincere congratulations on the Phaeton, I have been driving cars in and around California for the best part of 10 years (having done so in Europe for 30 years beforehand) but have never, ever come across the sort of interest people have shown in your new car. I was chased down the road by a limo driver, stopped by people young and old-amazing. Which really begs the question-why did you do it?

Why did you call it a VW? I don’t have to tell you that for millions of people around the world the VW means the Beetle, the Golf, the Jetta in other words economical transportation. Your Microbus has a very special status in the United States, generations have gown up in it. In other words you’ve established a very special niche, happily for you-a large one.

Now you come along with a $75,000 dollar car and people are confused. They assume that you are trying to move up-market but are puzzled, just like I am. Why, oh why didn’t you make it a brand in its own right? Maybe with a somewhat better name? You already own Bentley, Lamborghini and Bugatti so obviously you have some people on your staff who understand luxury cars.

I understand that you were not happy turning up at major functions in a Mercedes or a BMW but surely that is not the reason for putting a huge VW badge on the front?! Apparently the Phaeton is not exactly walking out of the showrooms even though it is a great car. Maybe it isn’t too late now to do something about it. Do what people in the industry call a delete option-take the VW badge off the front and simply call it Phaeton.

Infiniti stands on its feet, so does Lexus and I promise you, 99% of the customers have no idea of the Nissan/Toyota connection. Maybe it was BMW’s move in reverse that convinced you of the move to the top-maybe you assumed that if they can go down into your territory you can move up into theirs. There is no guarantee that people will pay a premium for the BMW badge, what is certain is that the snobs will never pay $75,000 for a VW badge and it would be foolish to pretend that at over $60,000 snobbery does not play a major part.

So there we are Bernd, had you asked me or virtually any of my colleagues we could have told you not to do it. Trust me, judging by the sales figures it isn’t too late.

By the way whatever you do don’t go into F1. Right now it is a minefield and likely to remain so for a considerable time.

Looking forward to hearing from you.

Andrew Frankl