Perhaps the auto industry can learn something from Steve Jobs, in addition to building pieces of technology that attract admiration and premium prices.

David Carr discusses in the New York Times this morning Apple’s ability to build suspense before one of its launches, typified by the commotion over the unveiling of its tablet on Wednesday.

One of the reasons this works is that Apple used to have a strict rule that it only revealed new products on the day they were ready to be sold. More recently, it has let that rule slip a little, with the tablet reportedly only going on sale in March.

Still, it is a lot better than car companies, which routinely unveil “concept cars” at auto shows that are very far from being built, and sometimes never are.

At the Detroit auto show earlier this month, Toyota unveiled its FT CH concept car, intended to be part of a Prius family, but warned photographers not to get too close or try to open the doors.

Carr quotes John Gruber of Daring Fireball on this subject:

“When I was younger, I used to love to go to the Philly car show, but I learned after a while that the coolest cars at the show — the prototypes — never get built,” he said. “Apple builds and unveils actual products. They don’t do prototypes.”

In fact, some people in the auto industry are coming round to that view, including Sergio Marchionne, chief executive of Fiat and Chrysler.

Interviewed by the FT in Detroit, he too complained about the shift towards concept cars, the car equivalent of “vapourware” in the technology industry:

“This is a biz that wants novelty all the time, what’s new. We showed the [Jeep] Grand Cherokee in New York last year two years before its launch and that is bound to hurt you because by the time it launches, people say now ‘So what?’ We have taken the novelty out of the business.’”

Steve Jobs’ example is clearly having an effect.

My FT column this week is on Fiat-Chrysler’s chief Sergio Marchionne.

Watching Alan Mulally, chief executive of Ford, talking to Wall Street analysts at the Detroit auto show, I was trying to figure out who he reminded me of.

That folksy manner, the shining face, the gosh-darn-it all-American manner, the intelligence, the ready grasp of facts and figures combined with a sweet anecdote for every occasion.

Yes, that was it: Bill Clinton.

Mr Mulally is looking cheerful at the moment and he has good reason to. His decision to mortgage Ford’s assets three years ago to push the company through a huge restructuring before the credit crisis struck, giving it the capacity to avoid bankruptcy, has paid off.

Continue reading "Alan Mulally is the Bill Clinton of business"

Goodness knows most US car companies have too many brands rather than too few - even after getting rid of Saab, Hummer, Pontiac and others, General Motors is still left with four. But car companies appear to be moving quietly towards a brand strategy built around successful models.

Chrysler has already split the Ram truck line out of Dodge, raising the question of what happens to what will happen to the rest of Dodge, which is left with a number of undistinguished cars, a muddy brand image and scant consumer appeal.

Now Toyota is heading in the same direction by turning its Prius hybrid into a sub-brand, intended to stand for environmentally friendly, urban cars. At the Detroit auto show on Monday, it unveiled a concept vehicle called the FT-CH (pictured above) which it said would be the second in a Prius “family”.

Continue reading "The global car companies start new families"

One of the pleasures of Detroit, where I am for the annual auto show, is that, despite the intense upheaval and distress in the industry over the past year, some things remain resolutely the same.

It is snowing outside the Cobo Centre, where the North American International Auto Show (its unwieldy title) is held, the people are still friendly, the best place to get a coffee remains the Mercedes-Benz stand (where I am writing this) and Bob Lutz of GM is as outspoken as ever.

As 78-year-old Mr Lutz, the Detroit veteran whose role at GM appears to have been somewhat curtailed in the new dispensation of Ed Whitacre, told the Society of Automotive Analysts on Sunday night, when asked about his future:

“I have never actually been dismissed so that would be a new experience . . . If the GM board will tolerate my occasional outrageousness I plan to be around for some time.”

Continue reading "Some American traditions die hard in Detroit"

Good luck to the search committee of General Motors in finding a new chief executive.

The abrupt departure of Fritz Henderson from the job this afternoon under pressure from Ed Whitacre, GM’s chairman (and temporary replacement as chief executive) leaves the company looking for someone to take his place.

The first question any candidate is going to ask himself or herself, however, is: what will it be like working under an impatient, strong-willed and sometimes abrasive chairman who made little secret of his lack of belief in Mr Henderson?

The job of non-executive chairman has never really caught on in the US, although it is commonplace in the UK, and Mr Whitacre, the former chairman and chief executive of AT&T, has not given the impression since arriving at GM that he believes in the notion.

Mr Henderson’s position was undermined by the GM board’s decision to over-rule him on the sale of Opel, its European subsidiary, last month and Mr Whitacre’s open disagreement on issues such as the timing of GM’s initial public offering and the speed of internal change.

There was no doubt plenty in GM’s slow-moving and inwardly-focused culture to concern Mr Whitacre, but it will not make it easy to find a replacement.

The model is probably Ford, which managed to attract Alan Mulally from Boeing in 2006, although Bill Ford remained as executive chairman. Mr Mulally judged, apparently correctly, that Mr Ford would given him freedom of manoevre at the company.

That parallel occurred to Steve Rattner, the former head of the US government’s auto task force, when he was considering whether Mr Henderson should take over from Rick Wagoner as GM’s chief executive in March.

As Mr Rattner wrote in Fortune magazine in October:

“The question for us was whether GM would be better off with Fritz or with an outsider, as Ford had done in bringing in [Mr Mulally]. While nervous about whether Fritz could bring the change GM desperately needed, I was considerably more nervous about the likelihood of recruiting a thoroughbred CEO in the midst of the turmoil.”

GM now has its work cut out to persuade candidates that there is a job for a thoroughbred CEO under a chairman who likes to run things.

Update: Last March, I gave Mr Henderson a 50-50 chance of surviving at the helm of GM on the grounds that he was “a tough and talented executive but indubitably an insider” who might have “damaged his long-term chances by pinning his colours so firmly to Mr Wagoner’s mast.”

While at BMW in Munich, I received an insight into why we should not hold our breath for pure electric cars to replace those with internal combustion engines.

It came from Hans Rathgeber, a BMW executive in charge of developing fuel-efficient technology for the BMW and Mini brands. Mr Rathgeber’s latest project is a BMW concept sports car, unveiled at the Frankfurt motor show, which accelerates to 100 km per hour in 4.8 seconds but is extremely fuel efficient.

BMW has produced the Mini E, an experimental electric car which is being tested by selected drivers (about 450 in the US, for example). It is powered by a lithium ion battery and has a maximum range of about 170 km in normal driving conditions.

However, Mr Rathgeber had doubts about whether battery technology will advance rapidly enough in the next two decades to enable pure electric cars to have sufficient range to challenge hybrids that have both internal combustion engines and electric ones.

The problem of the battery is that it is not an electronic part, it is chemical. In chemistry what you don’t know today you won’t know in 20 years,” he told me.

BMW has been working on improving the fuel efficiency of its entire fleet of cars under a programme known as Efficient Dynamics. Its new cars registered in 2008 had lower carbon dioxide emissions that competitors such as Audi and Volvo.

It sounds absurd to be surprised at how automated the process of car production is these days, but that was my reaction when I toured BMW’s plant making Series 3 cars in Munich today.

It has been more than 10 years since I went round a vehicle plant, so I took the opportunity on a visit to Munich to visit the one that which stands on the site where BMW first made aircraft engines in 1917.

About 9,000 people work at the plant, which only turns out about 900 or so cars a day - these are, after all, premium cars and not volume models - but most of the work is done by robots.

In the body shop, where the stamped metal sheets are welded together into car bodies, for example, about 97 per cent of the task is done by 650 robots. The remaining three percent consists of changing copper welding tips and placing stamped sheets where the robots can pick them up.

BMW does not allow visitors to take photographs inside the plant, which is a pity because I would otherwise have posted a shot of the intricate dance of the robots, which is quite a sight.

The robots, which are made by Kuka and ABB, are painted orange and tilt and twist on several axes as the metal parts are threaded in and out, glued and welded. BMW is proud of a station at which the completed bodies get welded by 12 robots at once, said to be more than its rivals manage.

Even on the assembly line, the powertrains and bodies are brought together (in a process called “marriage”) by robots and human intervention is limited to jobs such as tightening some bolts and threading in the electrics. Humans still make the car seats, although that too is done by robots at other BMW plants.

That accounts for the fact that far fewer people work in vehicle plants than in the past, despite their image of being filled with people. General Motors, for example, now employs only 48,000 US manual workers, down from 114,000 three years ago.

Robots have been in use for about three decades and I recall the 1979 British television advertisement for the Fiat Strada which boasted of them being “hand-built by robots”.

There is a, possibly apocryphal, story that when Hugh Hudson, the director of the Fiat Strada spot, arrived in Turin for the filming, his crew came across a protest by workers at their jobs being taken over by machines. That fight has long been lost.