In Detroit, the Big Three Are Trying To Invent a New Future
Published in Les Echos
(France) on 15 January 2014
by Maxime Amiot (link to original)
(France) on 15 January 2014
by Maxime Amiot (link to original)
Translated from
by Laura Napoli.
Edited by Sean Feely.
It’s time for novelty, not executives. At the Detroit Auto Show, the Big Three automakers did not let their product strategy be polluted by discussions of current developments with their management. Mary Barra, who officially succeeds Dan Akerson today as the head of General Motors, told journalists: “The focus should be on the cars. This is the International Auto Show, and again, it’s the cars and trucks that are the stars.” Similar talk was heard at Ford and Fiat, which just completed its purchase of Chrysler. Much spin helped focus the attention on new models, whether it was the new Ford F-150 pickup, the Corvette Z06 and its 625-horsepower engine, or the new Chrysler 200. These new cars serve to confirm the return of these Detroit giants. In a U.S. market that grew 7.6 percent in 2013, General Motors maintained its position as the leader (17.9 percent market share), while Ford (+10.8 percent) and Chrysler (+9 percent) were also significant.
But behind the show, questions remain. “The Big Three have much healthier bases than before, and that’s important. But all is not yet settled, and 2014 will be an important year of transition,” judged Xavier Mosquet of the Boston Consulting Group, who led the restructuring of the Big Three under the Obama administration in 2008.* Now that Chrysler is coming under Fiat’s full ownership, Mary Barra must soon unveil her strategic priorities at GM. At Ford, 68-year-old Alan Mulally has not committed to stay beyond 2014 and has already put in place his succession plan — complete with his designated protégé, Chief Operating Officer Mark Fields.
New faces must negotiate tight corners. Firstly, there is the question of competition in the United States: The framework agreement signed with the United Auto Workers union, which allowed for the return to profitability, will be renegotiated in 2015. There is also the question of pensions, which remain high. At the end of 2011, pension obligations rose above $70 billion for General Motors, which has already partially funded those obligations. But above all, the international arena will be the big project for the years to come, because the Big Three still derive the majority of their profits from U.S. sales. “We still have one to two years of good growth in the American market; after that, it will be complicated,” estimates Xavier Mosquet.* Though Ford seems better equipped for this thanks to its “One Ford” global strategy and its progress in China, GM is still restructuring. In December, GM announced it would be dropping its Chevrolet brand in Europe in 2015 and sold its 7 percent stake in PSA Peugeot Citroen. There also remains the problem of finding a future for Opel, which has lost money in Europe.
Questions About Chrysler
Finally, it is Chrysler that raises the most questions. For its third fiscal quarter, the group owned by Fiat only sold 25 percent of its volume outside of the United States, absent from the Chinese market entirely. For example, the group confirmed the end of exports of Chrysler vehicles under the Lancia brand, given its modest volumes. This will lead to the virtual halt of the Italian brand, which distributes several models. The exit door also remains open for the Jeep brand, which should surpass one million units of sales in 2014 and is still seeking to develop in China.
*Editor’s note: The quotations, accurately translated, could not be verified.
But behind the show, questions remain. “The Big Three have much healthier bases than before, and that’s important. But all is not yet settled, and 2014 will be an important year of transition,” judged Xavier Mosquet of the Boston Consulting Group, who led the restructuring of the Big Three under the Obama administration in 2008.* Now that Chrysler is coming under Fiat’s full ownership, Mary Barra must soon unveil her strategic priorities at GM. At Ford, 68-year-old Alan Mulally has not committed to stay beyond 2014 and has already put in place his succession plan — complete with his designated protégé, Chief Operating Officer Mark Fields.
New faces must negotiate tight corners. Firstly, there is the question of competition in the United States: The framework agreement signed with the United Auto Workers union, which allowed for the return to profitability, will be renegotiated in 2015. There is also the question of pensions, which remain high. At the end of 2011, pension obligations rose above $70 billion for General Motors, which has already partially funded those obligations. But above all, the international arena will be the big project for the years to come, because the Big Three still derive the majority of their profits from U.S. sales. “We still have one to two years of good growth in the American market; after that, it will be complicated,” estimates Xavier Mosquet.* Though Ford seems better equipped for this thanks to its “One Ford” global strategy and its progress in China, GM is still restructuring. In December, GM announced it would be dropping its Chevrolet brand in Europe in 2015 and sold its 7 percent stake in PSA Peugeot Citroen. There also remains the problem of finding a future for Opel, which has lost money in Europe.
Questions About Chrysler
Finally, it is Chrysler that raises the most questions. For its third fiscal quarter, the group owned by Fiat only sold 25 percent of its volume outside of the United States, absent from the Chinese market entirely. For example, the group confirmed the end of exports of Chrysler vehicles under the Lancia brand, given its modest volumes. This will lead to the virtual halt of the Italian brand, which distributes several models. The exit door also remains open for the Jeep brand, which should surpass one million units of sales in 2014 and is still seeking to develop in China.
*Editor’s note: The quotations, accurately translated, could not be verified.
Previous article![]( "A Socialist Councilwomanfrom Washington")
