Daimler and Renault: Are they right for each other?
An alliance of two losers?
That is too harsh a pronouncement on the news that Daimler and Renault are talking about a possible cross-shareholding. Nevertheless it does seem striking that the two European carmakers that probably performed worst in the recent crisis are talking about propping each other up.
Peugeot and Mitsubishi call time on planned tie-up: Spare the tears
Another putative auto alliance falls onto the scrap heap. Following on the heels of GM’s U-turn on the planned sale of its European unit Opel and the scotched disposal of Hummer to the Chinese, Peugeot of France and Japan’s Mitsubishi Motors (MMC) have called time on their planned tie-up.
Spare the tears. Auto alliances have a mixed track record; there have even been rumblings in the initially highly successful Franco-Japanese pairing of Renault and Nissan. It was never clear where the strategic advantages lay for Peugeot and Mitsubishi – other than the fact that the Japanese carmaker could use the cash. Yet the more likely share swap would not have brought even that benefit.
Will VW be the biggest beneficiary of Toyota’s woes?
Toyota’s woes are seen as a chance for other Asian carmakers such as Honda and Hyundai and maybe even the US Big Three.
But the biggest beneficiary in the long run might be European: Volkswagen.
Is Toyota serious about rebuilding its franchise in the US?
Whoever is advising Akio Toyoda, Toyota chief executive, on PR has not exactly covered themselves in glory. Toyota has widely been seen to be slow in responding to the unfolding safety disaster. That view is only going to be compounded by news that Mr Toyoda does not plan to appear before US congressional committees investigating the defects that have led the troubled Japanese automakers to recall of millions of vehicles. Mr Toyoda said Yoshimi Inaba, head of Toyota’s US business, would represent the company at the hearings.
This can only end badly for Toyota. It gives a bad impression that Toyota’s top management are ducking the issue or not taking it seriously enough or trying to hide something. Worse, it is an untenable position. If Mr Toyoda seeks to dodge the hearings, such will be the public backlash that he will inevitably be forced to backtrack and go to the hearings. If Toyota is serious about rebuilding its franchise in the US, Mr Toyoda has no alternative. He must go to Washington.
GM, Ford: Reasons to be grateful to Toyota
Toyota Motor, presumably reading my colleague Dan Bogler’s posting, has apologised for those pesky accelerator brakes. And almost immediately recalled a slew more cars in its home market of Japan, begging the question: how much does an apology help? If you’ve spent the weekend going slo-mo back to your dealer and missed Jack’s first soccer match/Susie’s riding lesson or watched your shares lose nearly a quarter of their value, it may only go so far.
Toyota: sorry is the hardest word to say
A problem that is handled well can increase a customer’s loyalty. This is something Toyota should bear in mind as it deals with the potentially devastating recall of more than 8m cars for safety defects. Just look at last week’s healthy results from Mattel, which has recovered admirably from the “toxic toy” scandal of 2007 that forced it to pulp more than 20m products that were covered in lead paint or had bits falling off them.
What Mattel understood, from the get-go, was the need to take full responsibility and to apologise and explain, and then to keep on apologising and explaining…until consumers were sick of hearing it. Unfortunately, this goes against a deeply-held corporate instinct – applicable globally but possibly even more pronounced in Japan – to downplay problems, shift responsibility and reveal only what is absolutely necessary. Just remember how Ford and Firestone blamed each other for the exploding tires on the Ford Explorer a decade ago, a scandal that ultimately cost Ford’s then-CEO Jac Nasser his job.
That senior Toyota executives have, over the last 48 hours, started to say sorry publicly, at press conferences and via YouTube, is a good sign. And they have a very strong brand to fall back on. But a 16 per cent fall in January’s US sales when those at GM and Ford increased shows how quickly the damage can be done. Keep on apologising.
Whitacre’s self-appointment as GM boss is worrying
Ed Whitacre has solved the problem I noted last month of finding a chief executive who could work under him at General Motors – he has adopted the Dick Cheney tactic of appointing himself.
This solves one problem but it leaves me with an uneasy feeling about the way that Mr Whitacre, the former chairman and chief executive of AT&T who was appointed by the Obama administration to oversee its own investment in the restructured GM, has interpreted his mandate.
This is not a criticism of what Mr Whitacre has done so far at GM. Fritz Henderson, the former chief executive, did not handle the potential sale of Opel in Europe adroitly and 68-year-old Mr Henderson is correct to have reshuffled GM’s senior ranks.
But the idea that Mr Whitacre would be content as an “interim chief executive” never seemed that convincing. He always looked unlikely to share power well with anyone else.
Frankly, if I were in the Obama administration, I would be a bit concerned. Although Mr Whitacre talked of the GM board urging him to take the job permanently for stability’s sake, it feels like his decision.
It is a telling contrast to Ford, where Bill Ford has found a way to work amicably alongside Alan Mulally and shift the company’s trajectory.
The last thing GM needs is for one compliant board, which backed Rick Wagoner’s strategy and resisted any criticism of it, to be replaced by another dominated by Mr Whitacre.
Sergio Marchionne wants to behave like Steve Jobs
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.
| About this blog | Blog guide |
John Gapper is an associate editor and the chief business commentator of the FT.
He has worked for the FT since 1987, covering labour relations, banking and the media. He is co-author, with Nicholas Denton, of All That Glitters, an account of the collapse of Barings in 1995.
Andrew Hill is an associate editor and the management editor of the FT. He is a former City editor, financial editor, comment and analysis editor, New York bureau chief, foreign news editor and correspondent in Brussels and Milan.
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