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Winding Road columns by Karl Ludvigsen
Return to Karl Ludvigsen main page Capturing a Leaping Cat in Metal The new Jaguar XF, a gift from Ford to the luxury-car maker's next owner, finally cracks the code of a suitable style for future cars from the leaping cat. We take an inside look at Jaguar and its past and present design techniques. After Ford bought Jaguar I visited its executives to drum up business for my management-consulting company. One of my ideas was the creation of a "Jaguar Bible". This would be a guide to the way that Jaguar did things, to the distinctive methods that contributed to the special character of this most British of executive-car companies, techniques that would be alien to the minds of the Ford executives taking over. Needless to say they turned me down. "We know all about that" was the thrust of their reply. We are approaching twenty years later with Ford never having cracked the Jaguar code. I'm reminded of the comment by William Clay Ford when he was asked how soon Jaguar would be in the black. "Well," he replied, "it took forty years for Lincoln to make a profit. I hope it doesn't take as long with Jaguar!" Now it will be up to someone else to solve the puzzle of Jaguar, with Ford having decided to see the back of one of the world's most prestigious car brands. Styling has been at the heart of Jaguar's special appeal to the pocketbooks of car buyers the world over. There have been bad Jaguars, but it's not easy to think of ugly Jaguars - certainly not during the years to 1972 when the company's founder, Sir William Lyons, had the final word about the way Jaguars looked. The was a reason why Jaguars had a special panache. Although William Lyons was effectively chief stylist as well as chief executive, he was no artist. He didn't sketch or draw design suggestions. Rather, Lyons worked in the form of full-scale steel models. His craftsmen shaped panels in the usual way and mounted them on a wooden frame so they served as a visible mockup of the future design. After Lyons reviewed and critiqued the mockup the responsible workmen revised the shapes and presented their proposals again to Lyons. Lyons worked with one or two selected panel beaters, men who had a particular sympathy with his ideas. When the metal mockup was ready for review it would usually be assembled in Sir William's front drive at home. This allowed him to see the shapes in the daylight, in the open air and in the kind of surrounding in which the car would eventually be judged. Only after he had approved such a metal mockup would the final drawings and engineering for production be carried out. This design method meant that Jaguar shapes were fully compatible with the use of sheet metal. This typically gave Jaguars a crisp, light, metallic skin that lacked the excessive curvature or over-wrought look that sometimes results when shapes are modeled in clay for their own sake by designers who aren't respectful of the demands of sheet metal as a body material. By necessity this method of working was progressive rather than spectacular. Thus the designs of Jaguar models tended to evolve gradually rather than making sudden leaps from one form to another. The Lyons method tended to give continuity to the Jaguar design patrimony, which it did with great success. Nevertheless the Lyons Jaguar was capable of making big leaps in design when its leader sensed that the market demanded it. After his transitional Mark V Lyons segued smoothly into the full-fendered era with 1951's Mark VII. While this evolved into the "big" Jaguar. Lyons sensed a need for a smaller and less expensive sedan. He filled this gap with the 2.4 Litre launched in 1955. Powered by a short-stroke version of the famous twin-cam six, this was Jaguar's first integral body/frame car. Its styling was sleek and compact, strikingly different from the bigger and more costly Mark VII. Here, if heeded, was a clear lesson from the "Jaguar Bible" for the Ford managers tasked with taking Jaguar forward. However, when they introduced the S-Type and X-Type they aped, on a smaller platform, the styling characteristics of their predecessors. They should have searched for a new idiom, as William Lyons did, that would appeal to a more youthful owner body. Instead they flew in the face of the well-known car-industry axiom that you can sell a young man's car to an old man, but you can't sell an old man's car to a young man. Through these crucial years, from 1984 to 1999, Jaguar styling was in the hands of Geoff Lawson. Although a purebred Briton, the mustachioed Lawson was a passionate fan of American cars in general and Corvettes in particular. Among his many other interests were guns and shooting, designing and playing guitars, mountain biking, abstract art and sculpture. A strong personality, Lawson saw his role as a custodian of the Jaguar tradition in design. He showed this with the evolutionary XJ8 sedans and the XK8 sports coupe of 1996. Although clearly indebted to the E-Type, the latter was demonstrably the finest Lawson Jaguar. New to the Jaguar styling team in 1999 was Scotsman Ian Callum. Like Lawson a graduate of the Royal College of Art, he spent 11 years at Ford, contributing to the RS200, Escort Cosworth, Fiesta and Mondeo. In 1990 Callum left to set up a new design studio for Tom Walkinshaw's vehicle engineering group TWR. "Some of my colleagues came to see me from Ford. I'd walked away from this giant studio at Dunton, the corporation, all that stuff, into this little tin shed in Kidlington. They thought I was utterly mad. But I was as happy as could be. I was doing something I wanted to do." Car fanatic Callum shaped body kits for TWR-converted Mazdas and Holdens. He then hit the big time when TWR was commissioned by Ford to design and build the Aston Martin DB7, which was launched with great acclaim for its styling. Further Astons and a variety of other projects for TWR followed. In 1999 Callum came back into the Ford fold to set up an advanced-design studio for Jaguar, only to be named the company's styling director when Geoff Lawson unexpectedly died aged 54. For a while Callum directed design for both Jaguar and Aston Martin. He has clear ideas about the differences between the two makes. "Jaguars are more voluptuous than Astons, more curvaceous, more extreme. They shout a bit louder than Astons." The E-Type, he says, is the perfect example. "Though it was a beautiful car it was quite a statement. Visually it's shouting at you. You couldn't get more ostentatious than the E-Type." Another earlier Jaguar, the original XJ6 sedan of 1968, was a big influence on Ian Callum. "I just stared at it and stared at it, literally for hours on end," he says. "Basically it's where I learned about the proportions of a car. The wheels were enormous and there's this lovely lean piece of metal above them. Gorgeous. That was Lyons. He just knew how to do this." But Callum knew that aping the past wasn't the path to the future for Jaguar. He wanted to create a Jaguar for the 21st Century. But to do this he had to win over Ford managers who were nervous abut tinkering with the iconic Jaguar look, even though markets were telling them it wasn't working. The company had been heavily criticized for introducing a new XJ in 2002 which used radical new aluminum technology for its unit body but looked little changed from its predecessor. "I had to convince them that there was more than one way to skin a cat, so to speak," said Callum of his managers. To achieve this he had to raise his own game, he admitted: "I never considered being number one, but I was offered the best job in the world and I was terrified. I had never wanted to be promoted into a position where I'd be expected to make public speeches. I also had to learn how to manage people and a whole department. My initial problem was naiveté. I didn't know how to run a department of 100 people. I wasn't an executive and I had to learn the processes." As well he had to learn how to communicate to a board that had proven that it was nervous about styling: "I had to learn how to verbalize what Jaguar was all about: good taste, good design and drama." Concept cars were the way, Ian Callum decided, to gain fresh perspectives both inside and outside Jaguar. "I wanted to make a statement about what a Jag could look like that wasn't what you'd expect. It was a ploy to convince people that a Jaguar didn't have to be a stereotyped vehicle, as it's been in the past." He showed this with the R Coupe in 2001 and then with the R-D6 unveiled at Frankfurt in 2003. With the latter, said Callum, "I wanted to produce something that was very difficult to define. People didn't know whether it was a coupe or a hatchback or a saloon car or a sports car. They couldn't work it out. That's great! "Jaguar adhered to the rulebook of what a Jaguar is for too long," Callum said in 2005. "The next stage is to throw the rulebook away completely - because that's what Lyons would have done." Indeed, as we've seen that's just what Lyons did when necessary. And it's what Callum had his team did with the new Jaguar XF sedan, which won justly-deserved plaudits for its sharp new style both inside and out. It's the replacement for the S-Type and sits on a development of its chassis, so they could have called it the XS - but I suppose they didn't like the way that sounded! The new rulebook - the "Jaguar Bible" for the 21st Century - seems to be taking shape. If India's Tata takes over Jaguar together with Land Rover, as seems likely at this writing, it will further liberate Callum and his colleagues to fashion new Jaguars that will deserve serious consideration by those for whom Germany's domination of the executive-car sector is increasingly unedifying. Why didn't it happen on Ford's watch? I think I've given you some clues. - Karl Ludvigsen Porsche Was Right - Twice Front-wheel drive has enjoyed a long run as the layout of choice for small cars. But it's not without disadvantages as engineers in Japan, Germany and India - yes, India! - have decided. The auto industry's next step is to the rear. The overwhelming new trend in small-car design, already visible through the haze, came into high-definition focus at the end of last year. Engines are marching to the rear. This brings an eerie echo of the 1950s, when the most popular small cars were rear-engined. Fiat's 500, 600 and 850, Renault's Dauphine and Volkswagen's Beetle all had engines between their rear wheels. The merits of the layout even led Chevrolet to build its Corvair in America and Hillman its Imp in Britain. Then in the 1960s front-wheel drive became the rage. Led by the Mini of Alec Issigonis and the Fiat and Autobianchi designs of Dante Giacosa, engines were mounted transversely up front to power the front wheels. Power packages were still integral, with engines attached to transmissions and axles, but now in the front instead of the rear, a change made possible by better tires and universal joints. Generations of drivers soon got used to the new paradigm. Handling and stability were good, thanks to the weight forward, though a well-equipped car needed power steering. Also the steering wheel sometimes seemed to have a mind of its own thanks to the phenomenon known as "torque steer". Front-tire wear could be heavy while braking needed careful tailoring owing to rear-wheel lightness when the car wasn't heavily laden. A much-touted advantage of front-wheel drive, the elimination of a central floor tunnel, wasn't actually achieved in practice. The exhaust and controls had to go somewhere. Now engineers who've taken a fresh look at the small car have decided that rear engines weren't such a bad idea after all. In 1992 we had a glimpse of the future in GM's Ultralite, which had its two-stroke engine in the rear. In 1994 Mercedes-Benz unveiled its involvement in the Smart project and showed two small-car studies of its own, both rear-engined. When the Smart ForTwo came to market in 1998 its rear-mounted engine was the most unusual feature of a very unusual car. Meanwhile at a car-development center at Okazaki in Japan's Aichi prefecture auto engineers were mulling over the design of a new entry in that country's intensely competitive Kei class of small cars. So important is it that of the 3.7 million cars sold in Japan in 2006, 2.0 million or 55 percent were Kei cars, limited to 660 cc engines and a maximum length of 3.4 meters or a little more than 11 feet. Here was a real challenge for designers. How could they pack the most space and value into this specification? That's what Mitsubishi needed to find out. The first sign of their conclusions was the "i" concept car that appeared at Tokyo in 2003. It was a four-door car with MacPherson strut front suspension and a de Dion rear axle. Its newly developed three-cylinder engine was positioned just above and forward of that axle, nestling low behind the rear seats. That this was more than a pipe dream was shown by the introduction of the i as a production model in 2006. The following year it went on sale in selected markets abroad. Mitsubishi's Shinsuke Kawamura, who played a key role in the i's creation, pointed out that the rear engine brought a number of advantages, including:
Kawamura-san could have added that with front/rear weight distribution of 45%/55% braking effort was shared more evenly among all four wheels, increasing their stopping power. Drive traction was excellent as well. Many of these considerations were in the mind of Ferdinand Porsche when he conceived the famous Volkswagen Beetle. While others had tinkered with rear engines, Porsche was the first to make a practical rear-engined small car in volume. His pre-war KdF-Wagen - as it was known then - was the inspiration for the Fiats and Renaults. Thus it's significant that at the end of 2007 the company he co-founded announced its plans to introduce a new range of rear-engined small cars "before the end of the decade". In concept form Volkswagen unveiled its "up!" as a two-door at Frankfurt and then in four-door form, with a longer wheelbase, at Tokyo. It was the joint effort of Ralf-Gerhard Willner, in charge of concept development, and chief designer Walter de Silva. Their work, they said, involved "a hard clash of ideas between engineers and designers. That is the only way to produce icons." They deliberately aimed for a look of raw functionalism which they described as "A clever innovative whole…a friendly and masterful car." So far VW is coy about the up!'s technical details, saying only that its engine is in the rear. It could do worse than to recall the concept that the Porsche company designed for it in 1969-70. VW chief Heinz Nordhoff launched Ferry Porsche and Ferdinand Piëch on the assignment to deign a Beetle successor before his death in 1968. His successor Kurt Lotz asked the Porsche men to push ahead with the project that was Type 1966 to Porsche, EX266 to VW's engineers and Type 191 as the production model it was intended to be. The Porsche layout was radical. The in-line water-cooled four was placed longitudinally in front of the rear axle, lying horizontally to the right. In the space to its left were its radiator and fan. In this "under-floor" layout the engine was placed well forward, actually under the rear seat, with a four-speed transmission between it and the final-drive gears. This meant that top gear could be a quiet and efficient direct drive. The under-seat engine meant that passengers in the rear sat higher than usual, which as Porsche pointed out gave them a better view, especially with America's mandated front headrests. Anything as radical as an under-floor engine was bound to attract its critics. One was a VW engineer who had formerly designed submarines. "What about water on the engine?" he asked. This so irritated Ferdinand Piëch that he ordered a huge tub to be built in which the entire prototype was immersed. "It started under water," said an observer. As a final pre-series for testing Porsche built 100 engines and 50 gearboxes of the Type 1966. In four development stages some 50 complete vehicles were made in 1970 and into 1971, 15 of these made by VW itself. Preparation of production tooling was under way when, in the autumn of 1971, Kurt Lotz suddenly and unexpectedly left the company. He was succeeded by Rudolf Leiding, who decided to cancel Porsche's project and instead to plunk for the layout of 1969's Car of the Year, Fiat's 128. Creation of the Golf was an important step in the rise and rise of front-wheel drive. Thus Porsche and Ferdinand Piëch - both deeply involved with VW these days - have unfinished business in the rear-engined small-car arena. The latest indication that engines in the rear are making a comeback came on January 10th in New Delhi, India. There to intense enthusiasm Ratan Tata unveiled his Tata Nano, designed and tooled to sell in its most basic form for about $2,500. Conceived as a gap-filler between motorcycles and India's smallest cars, the Nano is set for production at better than 250,000 a year at Tata's factory in Bangladesh. It's a cheeky four-door sedan designed by 500 of the company's own engineers with the help of Turin's IDEA Studio, long-time consultant to Tata. With its standard CVT transmission, the Nano's 624 cc twin-cylinder engine is smack between the little car's rear wheels. It's a layout that provides remarkable spaciousness in a car only two inches more than ten feet long. Tata took a leaf from the book of Alec Issigonis by giving its Nano four tiny wheels at its corners, providing maximum stability with minimum intrusion on its interior. Though designed to meet India's needs, the Nano is scheduled to be exported in a less austere version once initial domestic demand has been satisfied. Those are the first indicators of this new trend. One other point is strongly in favor of rear engines for small cars: the layout is ideal for alternative forms of power. Up front, between the wheels, space is limited for all the gubbins needed by an electric or hybrid drive train. At the rear there's plenty of room to accommodate these new low-emissions power trains. In fact Mitsubishi has already launched a trial fleet of the MiEV electric version of its i, with batteries under the front seats. Sounds like an idea whose time has come! - Karl Ludvigsen Setting Sun in Formula 1 When Honda engines were powering McLaren and Williams Grand Prix cars to wins in the 1990s it seemed that the Japanese were taking over the sport. Now that they're building and racing their own cars, however, the outlook isn't so bright. Honda's Formula 1 team had cause to celebrate at the end of the 2007 season. They won a Grand Prix, their first of the year. It wasn't on the track, however. Honda received the "Green Awards Grand Prix" presented by a judging panel set up by the United Nations Environment Program as a means to "recognize outstanding creative work…for brands promoting anything from fair trade and renewable energy to resource efficiency and waste awareness." In its sphere this was a pretty big deal. The Honda team's environmental initiative, its www.myearthdream.com website and the swathing of its cars in huge decals showing the surface of the earth combined to win its nominated category of Best PR Campaign with a budget of over £100k against strong competition from Marks & Spencer and Procter & Gamble. Then with the other category winners Honda Formula 1 went into the final judging for the Grand Prix - and won. Honda's was judged "the campaign which best exemplified an outstanding environmental message and had the greatest capacity to raise awareness amongst the general public." In less elevated terms Honda reaped what one publication called an "image disaster" from its unconventional Formula 1 livery. When it was launched at the beginning of the year its earth-like look was widely lambasted as bizarre, inappropriate, illegible and even ugly. Nor did it yield recognition on the track, imparting a strange look to the RA107. As well its lack of clear identity logos won Honda the last place in an image-recognition survey of Formula 1 at mid-season. Also scuppering Honda's attempts to gain visual recognition for its "green" imagery was its cars' appalling performance on the track. For Jenson Button it wasn't enough to be eclipsed by meteoric newcomer Lewis Hamilton. He became the forgotten British star, mooching about at the back of the field with team-mate Rubens Barrichello, once a race winner for Ferrari. In 2007 Honda ranked eight in the championship of makes table with a measly six points. As a nadir this was comparable only to the seven points it scored in 2002, its third year as an engine supplier to British team BAR. BAR-Honda did wonderfully in 2004 with 11 podiums on the way to second in the championship with 119 points. This was a tribute to the design skill of Briton Geoff Willis, whom BAR had poached from Williams. In 2006 Honda took over the BAR team and began sailing under its own banner. It did well, scoring one lucky win for Button and compiling 86 points for fourth place in the makes rankings. Mysteriously, however, it dispensed with the services of Geoff Willis in mid-2006 after a former Honda motorcycle-racing engineer was promoted above him. The 2007 results suggest that this was not Honda's smartest move. The Japanese, it seems, had taken against Willis's style of firm direction from the top. "He wasn't very well liked by the resident Japanese engineers," said an insider, and as a result was subjected to a witch hunt. In the BAR days, said my source, "there was a room with 60-odd Honda engineers linked to the CAD system. They had full access to view the drawings but the IT system wouldn't accept any uploading of drawings from the Japanese section, it having been made quite clear to them that they were there to look but not touch." Only weeks earlier in 2006 the other Japanese car-maker team in Formula 1, Toyota, had released its high-profile technical director, Mike Gascoyne. Toyota started its Grand Prix team from scratch, converting and expanding its former rally headquarters at Cologne, Germany and staffing it with experts from many countries and companies. Starting in 2002, its results in the first two season were mediocre with 16 points or eighth place in the championship in 2003. At the end of 2003 Toyota hired Englishman Gascoyne, who had a well-deserved reputation for turning struggling teams around with a tough regime. He'd done that for Jordan from 1998 to 2000 and for Renault through 2003, giving them winning form. At a reputed salary of $6.5 million he led the design of Toyota's TF105 for the 2005 season, taking the team to fourth in the championship with 88 points, two pole positions and five podium places. The TF106 started the 2006 season slowly, however. Chafing under Gascoyne's dictatorial rule, Toyota's Japanese masters agreed his departure in April of 2006, saying that he left "amicably" after a "fundamental difference of opinion with regard to the technical operations" of the team. Having established its Formula 1 team based on "the wrong brief, premises and personnel," said my insider friend, "the hiring of Gascoyne was just an example of the credo that if you throw money at it, it will eventually work." So how has Toyota fared subsequently with its more collegiate approach, without an experienced big-name technical director? In both 2006 and '07 it was sixth in the makes championship, this year with a paltry 13 points. Like Honda, Toyota ranked a place higher than it deserved this year by virtue of the docking of all the makes points of McLaren-Mercedes after the discovery of its use of confidential Ferrari information. Although fielding having competent drivers in Jarno Trulli and Ralf Schumacher, Toyota had not a sniff of a podium in its sixth season of 2007, let alone a win. Saying "sometimes thinks in life don't work out the way you expected them to," Ralf left at the end of the season. In spite of results so far that give new meaning to the word "mediocre", Toyota declares its intention to press on. In fact Kazuo Okamoto, its executive vice president for research and development, forecasts a win in 2008. "Motorsport is all about dreams and passion," he said. "We will not pull out just because we haven't won a race. F1 is an important development ground for Toyota." In the Formula 1 of the future, he added, "there are development opportunities for using hybrid technologies and bio-fuels." Nor does Honda envision a withdrawal. Like Toyota, it relishes rubbing shoulders in the paddock and on TV screens with upscale brands like BMW, Ferrari and Mercedes-Benz. Its purpose, said Honda's Yasuhiro Wada, is "a mixture of engineering challenge and also carrying on the racing heritage which is connected to the Honda brand. Obviously, nowadays we have to think about some marketing aspects of the Formula 1 society as well." Hence the myearthdream™ concept. Somewhere in this corporatespeak something's missing - a clear commitment to win races and championships. In the Japanese teams, says an engineer who works with them, "all the major decisions will be taken by a committee after a lot of horse trading on spheres of influence, attributes and roles. The actual business at hand will not be high on the list of priorities. This bodes ill for decisive moves on racing decisions or even for a clear direction continuously pursued. They will chop and change with the wind. "At Honda and Toyota there are many 'project leaders'," adds the engineer, "senior this or that, but fundamentally they're all kept in check by a informal peer group. Within this they have to maintain good relations and accommodate the thoughts of others. Anyone standing out from the group will be hammered down. They are not very good at accepting forthright comments or dissension, which explains why Gascoyne had to go. "A technical director or chief designer goes against the Japanese tradition of anonymous group work," says my insider. "They're very good at smothering everything under meetings and reports ad-infinitum, plus the ever-popular 'counter-measure' to solve the problems caused by indecision and fumbling along. Add to this a no-blame (at least for the Japanese) culture that sweeps everything under the carpet and ignores it. "Despite the generous finance available," concludes my source, "a fully Japanese-managed team will never win a world championship and never has, be it in motor racing, ping pong or rose growing, because they will never take any action and assume the blame if it doesn't work. The modus operandi is to wear belt and braces and keep sitting down to make sure one's pants don't fall down, plus procrastinate and delay decisions until there is only one way to go. Therefore no-one is to blame because that was the only possibility left." Moreover, adds my insider, bringing in foreigners is seen as a last resort. "The Japanese view all gaijin as barbarians and assume that they can do it better, despite ample evidence to the contrary, and only deal with foreigners under duress or extreme need." That Honda has come to realize that its dire situation constitutes duress and extreme need is shown by its appointment of Britain's Ross Brawn as its new team principal, effective November 26th. He first visited the factory in Brackley two weeks earlier. Honda has trusted its fate in racing to gaijin before. It entered Formula 2 in Europe with Jack Brabham's team and called on John Surtees to help it in 1967, when it scored a lone win with its engine in a Lola-derived chassis. Since then Honda engines have performed well, for McLaren and Williams among others, but building a complete car and running the racing team are tasks of an altogether higher order of magnitude - as the Japanese are discovering. Now with the hiring of Ross Brawn Honda has set aside its pride - indeed arrogance - to hire the bespectacled 52-year-old whose Ferraris won six constructors' championships in a row from 1999 to 2004. From the end of 2006 Brawn has been on sabbatical from Ferrari. "I miss the racing a lot," he found. "I miss the sport. I miss the teamwork. I miss being part of a group of people who achieve something that is very difficult but when achieved is very rewarding." Brawn's arrival will buck up Rubens Barrichello, who raced for him at Ferrari and has just suffered an excruciating season in which he scored no points. "It's the best thing that's happened in a long time," said Britain's forgotten speed merchant, Jenson Button. It looks like one Japanese team, at least, is starting to take Formula 1 seriously. - Karl Ludvigsen Abarth Back in Action When I first wrote about Abarths I called them "Tiny Tornadoes from Turin". The name still suits a promising revival of one of the most dynamic brands in automotive history. What qualifies a moribund marque for a second coming? The answer boils down to category, content and charisma. Its image has to suit the category into which a car maker or entrepreneur wants to introduce a new product. It must suggest a technical and stylistic content that suits that category. And it must have charisma, that ineffable attribute that excites love and longing in the potential customer. On all three criteria Abarth scores big time. So why has Fiat's Abarth brand been "resting" - as they say in the acting trade - for several decades? Why was such a valuable asset for a maker of small cars allowed to languish unloved? Blame it on a revolving door of top and medium managers who lost track of what made Fiat's cars appealing. They kept the distinctive scorpion badge alive in a desultory way, slapping it on variants willy-nilly much as Ford still deploys its deeply devalued Ghia badge in Europe. Now Abarth is reviving big time. The company is being set up again in its traditional and historic quarters on Turin's Corso Marche. Its staffing of 113 includes 26 engineers, 43 production experts and a team of nine dedicated to motor sports participation. I know these buildings well, having visited Abarth in the late 1950s and early 1960s and several times at the end of the 1970s when they were preparing two special 131 Abarths for us at Fiat to enter in the SCCA's rally championship. It was always a treat to visit Abarth because something exciting and interesting was bound to be happening, be it a new twin-cam engine on the dyno, a record-breaker under construction or a new sports-racer being completed. The small quarters were always in perfect order. "If there's anything he hates," driver Hans Herrmann said of Carlo Abarth, "it's dawdling, disorder and dirt. The factory halls are almost as clean as a pharmacy. Materials, tools and cars have their designated places. He takes care that his cars go to the start sparkling." Abarth's 21st-Century successors have a lot to live up to. They're off to a pretty good start. Abarth has been resuscitated by Lapo Elkann, the Agnelli descendant who looks after branding at Fiat, and Luca de Meo, in charge of the Fiat business, now a separate unit in the Fiat Group. They're kicking off with cars based on the well-received Fiat Grande Punto. Just launched in Europe is the car's Abarth sister, which uses a turbo to pump out 180 bhp, in the SS version, from only 1.4 liters. It's a spunky machine that is decisively badged as an Abarth - no Fiat identity anywhere. Then there's a rally version, prototypes of which were campaigned in 2006 to win the Italian and European rally championships. This has four-wheel drive and a stonking 270 horsepower from 2.0 liters. Power production should be no problem with Paolo Martinelli, the genius behind Ferrari's great Grand Prix V-10s, now on Fiat's engineering strength. As the Grande Punto Abarth S2000 the Corso Marche outfit will build similar cars for customers. Says Fiat, "The new Abarth division will prepare racing and rally cars for customers in a wide range of series and one-make championships." If this weren't enough, Abarth will work its wonders on Fiat's new 500, just elected Car of the Year in Europe. At the Geneva Salon its Abarth version will appear with a stronking 150 horses under its stubby hood. This will make the latest Topolino more Mighty Mouse than Mickey Mouse. All this activity smacks of the vitality of the brand's heyday under Carlo Abarth. Abarth has been a Fiat property since August of 1971. When he sold it Carlo Abarth was 62; he died just short of his 71st birthday. Although Abarth had flirted with alliances with Alfa Romeo and Simca, his links with Fiat were by far the strongest since the later 1950s. After the war Turin's Siata and Nardi were prominent among the many companies that exploited Fiat's first-class raw material. Abarth soon raced by them with his knack for publicity and good-looking equipment that performed. With its clusters of consonants "Abarth" wasn't mellifluous to the Italian ear. It was a gift from Abarth's Austrian father, who with his wife, from Merano, welcomed their son Karl into the world in Vienna on November 15, 1908. Apprenticing with Castagna in Italy, the swarthy youngster was soon besotted with motorcycling. Working with cycle shops in Vienna, he also began racing. Into the 1930s he was a successful competitor who made a name for himself in Austrian circles. Showing his mechanical flair, Karl Abarth designed a special racing side car that had its own steering-wheel control to adjust its angle to the motorcycle. With this he cleaned up in his category. He also used his special rig in 1934 to beat the time of the famed Orient Express over 853 miles from Vienna to the Belgian coast at Ostend. Around the same time Abarth married Maria, a legal secretary. In Vienna she worked for Anton Piëch, lawyer son-in-law of car engineering legend Ferdinand Porsche. Anton was deeply involved in all aspects of Porsche's business, including his creation of the future Volkswagen car and factory. "He was always in contact with us," Piëch's son Ernst said of Abarth, "but because he was Jewish he had to leave Austria. He went to Yugoslavia with Maria. There he was said to be a mechanic for Tito's partisans." At war's end Abarth went to his mother's home town of Merano, now part of Italy. He divorced Maria, who returned to Vienna, and married a strong-willed Italian lady who became an important asset to his business activities. "I'll live the second phase of my adventurous existence as an Italian," he said, signing his name as "Carlo". Abarth's Italian became serviceable if guttural. Free as he was to move about in cordoned-off post-war Europe, Carlo Abarth became a vital link between the Porsche engineers, desperately in need of work, and the project in Turin of Piero Dusio to build Cisitalia cars. Porsche was soon designing for Dusio and Abarth was soon Cisitalia's successful racing manager. When Cisitalia overreached and faltered, Carlo Abarth picked up many of the pieces, including sports-racers nearing completion. He also found a novel muffler that engineer Giovanni Savonuzzi had created. Impressed by the effectiveness of the silencer on an American pistol, Savonuzzi dismantled it and found a fine netting of wire mesh surrounding the barrel. Designing a straight-through muffler on similar lines, the engineer discovered much improved performance. A serendipitous discovery, the mufflers became Carlo Abarth's cash cows. Crackle-finished with chrome tips, they sold all over the world and especially well in America, where they introduced the Abarth name. Striking too was their bold logo, a sting-tailed scorpion. This was Carlo's canny choice from his astrological sign of Scorpio. Even Ferrari fitted Abarth mufflers as standard equipment. Abarth carried on Cisitalia's car making, on a smaller scale initially. His breakthrough came with Fiat's introduction of the rear-engined 600 in 1955. Not only was Abarth's 750 cc version extremely popular, it also served as a superb basis for special-bodied cars that sold as Abarths in their own right. With Zagato's distinctive double-bubble roof the cheeky Abarth coupes were soon wreaking havoc on race tracks around the world. Low-drag versions were breaking records at Monza in class after class. Soon Abarths were part of the American racing scene. Franklin Delano Roosevelt, Jr., a striking dead ringer for his father, imported them in addition to Fiats. Sports Illustrated ad salesman John Norwood ran Roosevelt's racing team and drove the cars as well. Rampaging American circuits, the red coupes soon made Abarth a household name in SCCA circles. Moving up to a twin-cam one-liter engine, the coupes began outrunning their Fiat 600 underpinnings. Assigned one by Briggs Cunningham for the three-hour race at Sebring in 1962, Bruce McLaren found that they "would have benefited from some attention to the handling, braking and steering. It seemed that at every corner you were in danger of landing on your head! There were several of them racing and on nearly every corner you would come upon one spinning crazily, either on its wheels or roof." Nevertheless McLaren outfumbled Walt Hansgen in a sister Abarth to win the three-hour race. Carlo Abarth and his trusted lieutenant Renzo Avidano improved their cars and built more adventurous machinery, competing well in classes up to two liters. Attempts at Formulas 1 and 2 and a big V-12 to fight the Porsches and Ferraris were a reach too far, however, for Abarth and his team. Their high costs contributed to the company's 1971 acquisition by Fiat. I have a table that tots up more than 3,600 Abarth class and overall victories through 1966. A claim by Fiat that Abarth successes total more than 7,000 doesn't seem improbable. It looks like that tally will be growing with Abarth again in gear. It's an exciting prospect. At long last a marque has been revived that fully deserves a second chance. - Karl Ludvigsen Fearless Forecasting With big takeovers and mergers out of style, how are the world's automakers going to make the savings that they need to survive? What of the menacing upstarts in the developing world? The Europeans seem to have found the answer. Back in 1993 I took a shot at forecasting the mergers that would reshape Europe's auto industry. At the end of the previous decade we'd just been through a wave of mergers and takeovers. Volkswagen subsumed Spain's Seat. Fiat trumped Ford to acquire Alfa Romeo. Ford bought Jaguar while GM - outbidding Fiat - gained control of Saab's auto business. In 1991 Volvo and Renault created an interlocking shareholding. So what was most likely to happen next? Looking ahead to the year 2005, I foresaw a major combination in 2001 between Ford and Fiat. This would have included Rover, which I thought Fiat would acquire in 1994. Instead, of course, it was GM Europe that linked with Fiat in an arrangement of joint sourcing and powertrain production that unraveled early in the 21st Century. Rover went to BMW, which later unloaded all of it save for the phenomenally successful New Mini. I forecast an early merger of France's two automakers, Renault and PSA Peugeot-Citroën. I saw them under tremendous pressure after France's domestic market, long rigorously protected, was opened up to the Japanese. By 1996, I thought, they'd join forces after having cooperated for many years in engine design and production. This was an obvious clinker, for these proud French pioneers have staunchly maintained their independence. In 1998, I thought, Chrysler would be snapped up by a German company. Aha, you think, Ludvigsen got one right. Not quite; I thought it would be Volkswagen, not Daimler-Benz. A combination between VW and Chrysler would have brought them both tremendous savings in shared components and engineering. Exactly the opposite was the case in the merger of Chrysler with Daimler-Benz, which achieved little in the way of significant cost reduction through component sharing. That's why the latter alliance was both easy to make and easy to unwind. To that grouping, I forecast, would be added a company that I thought VW would acquire in 1996: Porsche. In 1991 the top people at then-struggling Porsche tried hard to convince me that they could go it alone, that they wouldn't have to be absorbed by a bigger car maker. But I didn't believe them. I didn't reckon on the ability and vision of Wendelin Wiedeking to convince his Porsche and Piëch shareholders to back his turnaround plans. And what a turnaround! Porsche is gobbling up VW instead of the other way around. I was moved to revisit these ruminations by remarks that Carlos Ghosn made at the end of a recent interview with Germany's Die Welt. You'll remember Mr. Ghosn, boss of both Renault and Nissan, from Winding Road number ??. Asked about his vision of the future of his business, Ghosn said that "there'll certainly be new players in the industry. China is becoming one of the world's largest markets and it's very likely that at least one Chinese producer will surface on the global market. India too is developing into an important region and here as well there's no reason why an Indian manufacturer couldn't play a world-wide role." So far as India is concerned the most obvious candidate is Tata, part of a large industrial group and fully able, in time, to move abroad. It will recover from its first such effort, the fiasco of supplying CityRovers to that expiring British company. In fact Tata was mentioned among the possible bidders for Ford's Jaguar and Land Rover. It's also preparing the launch of an extremely cheap car. But it will be a while before Tata is ready for a global role. You know how I feel about the Chinese. There too it will take some time before they're fit and able to expand globally. But most noteworthy about Carlos Ghosn's remarks was that he saw these developing-market car makers intervening in the established Western industries. "I think that Chinese, Indian or Russian manufacturers will buy established automobile groups or merge with them or enter into alliances," he said. "That would be quite natural," the Renault/Nissan chief added. "How many such companies will appear on the world market is in any case entirely open." This trend, Ghosh opined, would force further mergers and combinations in the developed world. "It's certain," he forecast, "that there'll be greater consolidation in the mature markets of West Europe, the USA and Japan." This isn't new. Auto-industry executives are forever predicting shrinkage of the number of industry participants - of course not including them! "We could end up with a dramatic decrease of one-half or more of the auto companies in the world," said Chrysler's Bob Eaton in 1998. He foresaw "six or seven big companies each selling five, six million vehicles a year." Eaton's solution to what he feared as the coming crisis was, of course, his fateful merger with Daimler-Benz. In the same year Bob Lutz, then a Chrysler retiree, had a different take. "Companies disappear," he said, "but at the same time new companies are created. There are companies that are going to consolidate and merge and others that are going to be created at the bottom." The trend toward outsourcing could create so much independent capability in engineering, manufacturing and assembly, Lutz thought, that "it might be just like the brewing business where there might be hundreds in another ten years." In fact Lutz put money behind a micro-brewing effort of his own. With Briggs Cunningham's grandson he had a go at reviving the Cunningham marque, which in the 1950s built something like three dozen cars. It was planned as a virtual automobile company with all services outsourced. Though Lutz's effort didn't take flight, the concept may still have merit. Notably Carlos Ghosn didn't mention the Japanese as possible predators in the auto-making jungle. They've never been inclined to be acquisitive away from home, preferring organic growth with their own people and products. They've toyed with foreign participation, as Toyota did with 15 percent of Lotus and Honda with 20 percent of Rover, but have never bought foreign brands outright. They create their own new brands instead. The same holds true of the Koreans with the notable exception of Daewoo, which under its buccaneering Chairman Kim bought up failing East European auto companies in a kind of pyramid scheme to build up both capacity and debt. He didn't exploit their brands, placarding everything as Daewoo instead. How have the Europeans managed so far to avoid the consolidations that I and others have forecast? What has allowed them to maintain their proud independence? The secret has been cooperation. PSA Peugeot-Citroën is a prime example. It has major joint ventures with Fiat in light commercials and minivans. In the Czech Republic it builds small cars with Toyota while with Ford it jointly develops and produces diesel engines. It shares gasoline-engine production with arch-rival Renault. In this manner PSA Peugeot-Citroën achieves the scale economies of larger production volumes that it can't justify from its own output alone. Obviously its partners gain a mirror-image advantage. We're enjoying an outbreak of cooperative fever. GM, Daimler and BMW are sharing heavy hybrid technology. Porsche's higher volumes were the result of cooperative deals with Volkswagen long before it started buying shares in the bigger company. Haughty BMW, justly proud of its independence, is prepared to discuss major component-sharing deals with other companies, including arch-rival Daimler. City cars and small engines are said to be on its agenda. BMW and PSA Peugeot-Citroën already cooperate in the manufacture of small power units. This looks like the way forward for the Europeans. It's less glamorous than big blockbuster takeovers. It offers no bragging rights at the club, the ski slopes or the opera. It requires dogged hard work to align product programs and make the compromises needed to permit aggregates to be shared. But it works. And it might even work in America. - Karl Ludvigsen Car Guys and Carpet-Baggers John Bentley was a shrewd, active and amiable Brit who made America his home, writing books and articles and racing actively at Sebring and Le Mans in Cooper, Lotus, OSCA and Abarth cars. John was a motorhead with a lot on the ball. In the 1950s he offered his considerable car-guy abilities to one of the Big Three in Detroit. "You're much too interested in cars," he was told. "You wouldn't fit in here at all." In 1967 I faced a similar situation. Working in public relations at General Motors in both Detroit and New York I'd been exposed to most operations of that then-great company. I'd worked closely with such icons of the automobile as Bill Mitchell and Zora Arkus-Duntov. Nevertheless I couldn't convince myself that GM offered a long-term future to someone like me who was deeply into automobiles. That's why I left the General to pursue a free-lance career. When I left the P.R. Staff in Detroit they didn't recruit another car-knowledgeable person. I regretted that I'd failed to convince them that it was essential. A colleague of mine at GM in New York had similar problems. He was very knowledgeable about cars and interested in their design. From product planning he went overseas to Opel and then GM France, from which he was headhunted for a top sales job at BMW. Then he moved to Ford of Europe and finally to Dearborn, where he was marooned in the backwater of truck operations. When he moved to Chrysler his automotive know-how energized colleagues below him but alarmed those above him who hated being shown up as the frauds they were. Bob Lutz was destined never to have the top auto-company job for which he was manifestly qualified. The same could of course be said of the charismatic and controversial John DeLorean. John's car-guy credentials were impeccable and his upward trajectory vertiginous. But he had to start his own car company in order to run it, and then he made a hash of it. DeLorean was seen as a potential successor to Ed Cole as GM's president. Outmaneuvering Bunky Knudsen along the way, Cole was a rare example of a dyed-in-the-wool car fanatic making it to the top of General Motors. But he was never elevated to chairman, and when he retired he suffered the virtually unprecedented slight of being denied a seat on the board of directors. While Alfred P. Sloan, Jr. was not a finance man - his degree was in electrical engineering - his emphasis on financial controls gave GM a tradition of accountants at the top. Fred Donner, Tom Murphy and Dick Gerstenberg provided the General with firm guidance. But Roger Smith was a bean counter of another color. His legendary reorganizations and purchases of Hughes and EDS left GM reeling. The coup de grace was the arrival of Bausch & Lomb marketing man Ron Zarrella and his battalions of brand managers, recruited from the likes of Procter & Gamble and General Electric. GM is still struggling to recover from this disaster. The Zarrella catastrophe is a negative example of what can befall a car company when top managers are recruited from other industries. These are carpet-baggers, a term traditionally used to describe out-of-state politicians who barge into local elections but equally applicable here. It's timely in view of the arrival of ex-Home Depot chief Robert Nardelli to run Chrysler in the wake of ex-Boeing boss Alan Mullaly's appointment at Ford a year ago. Carpet-baggers are suddenly in style in America's auto industry. The last time Chrysler had a similar experience was in 1961 when accountant and MBA Lynn Townsend was named its president. Townsend, who had leapt up the ladder since joining Chrysler in 1957, was appointed at the suggestion of board member and soon-to-be chairman George Love. The latter's sole - and successful - business experience was reviving and consolidating money-losing coal companies. Under carpet-baggers Love and Townsend Chrysler's fortunes improved. Lynn Townsend moved up to the chairmanship in 1966 and retired in 1975. He was followed in both posts by another non-car-guy, John Riccardo, to whom the task fell to dismantle Townsend's ill-fated overseas alliances with Rootes and Simca. The Pentastar logo and spectacular turbine cars were cosmetics for a Chrysler that fatally neglected its quality in these years, leading to its near-bankruptcy in 1979. The Love/Townsend involvement in Chrysler paled in comparison to the most striking carpet-bagger invasion in the history of America's car industry. As World War II ended Ford was limping badly. Its finances were in "wretched confusion" and its post-war product plans non-existent. The Ford Motor Company was created by the ultimate car guy, whose son Edsel had a distinct flair for automobiles. In contrast, Henry Ford II was never a car guy. But he was smart, brave, decisive and willing to learn, attributes in extreme demand when he was named Ford's president on September 21, 1945 at the age of 27. In November of 1945 Henry received a telegram from a group of ten Army Air Force officers who, in terms that "bordered on impudence", offered their services to Ford en masse. Led by a full Colonel, Charles "Tex" Thornton, some of these men had revolutionized the Air Force's efficiency in wartime. Adding more Harvard-trained officers, they created a cadre of ten who decided to offer themselves as an executive team to a deserving company in peacetime. Ford's national stature appealed to them, so they sent their wire direct to its president. To their surprise - not knowing the depths of the company's problems - eight of them were lunching with Henry Ford II only days later. Aged between 26 and 34, none of the officers had any auto company experience or enthusiasm. Among them were Ed Lundy, Robert McNamara, Arjay Miller, Ben Mills, Francis Reith and James Wright. While Lundy would go on to found a finance staff that ruled Ford with iron rigor, both McNamara and Miller were future presidents of the company. Indoctrinated with a four-month deep dive into Ford's departments, the newcomers were dubbed the "Quiz Kids" for their incessant questions. This was later refined to "Whiz Kids". At first the team was kept together under Tex Thornton to plan Ford's restructuring. They worked under finance man Lewis Crusoe, who had been lured to Dearborn by Henry Ford II together with other experienced auto-industry executives Ernest Breech and Harold Youngren. Crusoe decided to tutor the Whiz Kids after concluding that, although bright, "they knew nothing about business and the automotive industry. Their knowledge was from books." Learning well under the demanding Crusoe, the carpet-baggers spread out into Ford's operations after creating the company's new structure and the manual needed to run it. The rebuilding of Ford might have occurred without the fortuitous arrival of the Air Force Ten, but certainly less quickly and probably less effectively. Their incisive intellects more than made up for their lack of auto-company experience. Brilliance is not always valued highly in car makers, overpopulated as they are by field sales managers promoted well beyond their capacities. They're understandably suspicious of bright sparks with fancy degrees. Seeing the military as a source for top talent is a viewpoint not unique to Henry Ford II. This is also the perspective of new Chrysler chief Robert Nardelli. Officers from the services were prominent among Home Depot executive trainees. Soldiers, Nardelli told Business Week, "understand the mission. It's one thing to have faced a tough customer. It's another to face the enemy shooting at you. So they probably will be pretty calm under fire." This philosophy flies in the face of everything we know about how to run a modern company. The best are demand-driven by close contact with their customers and by management empowered, at the lowest possible levels, to make and keep them satisfied. This is the diametric opposite of the way the Army is run. Nardelli's demand for people who "understand the mission" and implement it assumes that there's somebody high up in the organization who defines and communicates that mission. Operating that way fails to make use of most of a company's best brains. When Don Petersen was running Ford he tried as hard as any man could to transform it into a bottom-up organization that was sensitive to customer needs and wants. Pete was the perfect prototype of a good auto-company boss. An engineer by education, he worked in product planning, marketing, trucks and international operations on his way up the ladder. He wasn't a car guy, but he burnished his credentials with sessions at Bob Bondurant's driving school. In short, Pete Petersen was savvy enough about the auto company he managed as president from 1980 and as CEO from 1985 to 1990 to know when people were bullshitting him. Having a working BS meter is vital in an arcane organization like a car company where so many people so ably conceal their foulups. Are carpet-baggers Alan Mullaly and Robert Nardelli likely to see through such obfuscations? Can they cut costs without cutting the hearts out of their companies? Not a chance. - Karl Ludvigsen Not Thinking about China I spend as much time as possible not thinking about China. In my fifteen-odd years running a motor-industry management consultancy I thought a lot about Pacific-Rim auto makers. We helped the Japanese find a foothold in Europe and, after that, the Koreans. We even worked with car producers in Malaysia, Taiwan and Indonesia. So I figure I've paid my dues in the Pacific Rim. That's why I spend as much time as possible not thinking about China. But it isn't easy. For one thing, there's this business of the Olympic games next year. You've probably heard that they're going to be in China. Early in August the International Olympic Committee visited Beijing for the one-year-away ceremonies. Welcoming them was "a stinging mass of what could be vaguely described as air." The smog was so intense that the IOC's president, a physician, said that similar conditions in 2008 would require the rescheduling of some endurance events. Beijing's smog is the byproduct not only of industry but also of vehicles. In addition to the ubiquitous delivery trucks and scooters the city is home to more than two million private cars. In search of a palliative, its government plans two days each week when cars will be barred from entry, odd-numbered license plates one week and even numbers the next. Severe controls on exhaust emissions are only in the talking stage. This is the consequence of an explosive expansion of vehicle sales that has rocketed China past Japan to make it the second-largest market in the world after the United States. This happened in 2005 when sales of China-made vehicles hit 5.8 million. In 2006 both production and sales surpassed seven million. The outlook for this year, says the China Association of Automobile Manufacturers, is 8.5 million, after sales for the first seven months were up a stunning 23.3 percent. Who's leading the charge? None other than General Motors with its Cadillac, Buick and Chevrolet cars and Wuling-badged mini-cars and mini-commercials. They accounted for 872,271 sales in 2006. Wuling products made in Guangxi province kept GM ahead of Volkswagen, whose total was 694,406 units. The latter, however, were all full-sized VWs and Audis, allowing the German company to claim the crown of China's leading auto producer. So far in 2007 VW's Santana and Jetta are the best-selling cars with the Buick Excelle third and Toyota Camry fourth. Like their American and European colleagues, GM and VW are operating with Chinese companies as joint-venture partners. They have to, because no foreign firm is allowed to own more than half of a Chinese enterprise. Another constraint is that a foreigner can cooperate with no more than two Chinese firms. The Chinese, on the other hand, can work with as many foreigners as they want. Dongfeng of Hubei province, for example, is partnering with Honda, Kia, Nissan and PSA Peugeot-Citroën. Sales of one domestic interloper are breaking into the ranks of the foreign-branded models that dominate the Chinese sales charts. Based in Anhui province, Chery Automobile Company is third in China's passenger-car market ahead of Toyota. In fact last March was historic for Chery, which led the field that month in passenger-car sales. This was viewed as a breakthrough for one of the so-called "independents", the smaller companies that aren't linked with the government-controlled "Big Three" of Dongfeng, Shanghai and China FAW. In recent months the independents have received an important boost from the highest level. Drafts of the government's eleventh five-year plan for the development of the auto industry have called for fully half of vehicle output to come from the independents by 2010 against the current share of less than 30 percent. Though watered down from an earlier goal of 60 percent this is still a strong vote of confidence for the independents, which have shown greater agility, opportunism and export-eagerness. Here's an example of their methods. One of the independents was negotiating for a super-high-tech German paint shop, the kind of long-lead-time equipment that usually determines when a plant will be able to start operating. The supplier's products were in intense demand, so it was no surprise that it quoted a two-year delivery time along with the price. The Chinese company chief's response was unusual: "What would it cost me to have it in two months?" He paid the higher price - and had it in two months. Sales leader among the independents, Chery Automobile Company, was much in the news in 2005 as the company that would make cars to be sold in America by a company set up by Malcolm Bricklin. Bricklin was to make important contributions by sourcing competitive designs and technologies. The partnership collapsed with Bricklin's people accusing Chery of having appropriated these design ideas - thank you very much - without due compensation. This is consistent with the actions of many Chinese auto makers, who have little respect for styling rights and are all too ready to copy foreign designs if its suits them. Chery is back in the spotlight with its deals with Fiat and Chrysler. An initial agreement with Fiat to supply 100,000 engines was expanded in August to a joint venture capable of making 175,000 Fiat, Alfa Romeo and Chery models yearly. Meanwhile in July the long-planned pact with Chrysler was signed and blessed by the government in Beijing's Diaoyutai State Guesthouse. Chrysler will get existing Chery models for sale outside the USA while Chery will make designs from Auburn Hills such as the Dodge Hornet. Chery chairman and president Yin Tongyue has every reason to be delighted with these deals. The Chery-Fiat alliance is a slap in the face for the Italian company's current Chinese partner, Nanjing Automobile Group in Jiangsu province. Bottom-feeding among the world's failed car companies, Nanjing has bemused Britons with its stuttering revival of MGF production at Longbridge. Speculation is that Shanghai, which has its own version of the former Rover 75 newly branded "Roewe" for export, may take over Nanjing to resolve the differences between them over the rights to former MG Rover intellectual properties. The auto makers are crafting many of these initiatives abroad to win brownie points among the all-powerful authorities in Beijing, who are eager to promote exports. In 2006 China exported 340,000 vehicles, only one-quarter of which were passenger cars. Most exports are going to minor markets with many being sold in Russia, seen as offering a "back door" to Europe's markets. China's share of global auto exports is now less than one percent; Beijing's goal is to hike that to 10 percent over the next decade. Substantial exports can only be achieved with unique Chinese brands, for example those offered by companies like Chery and Geely. The latter caused a stir by displaying its 7151 CK sedan at the 2006 auto show in Detroit. Then thought likely to be exporting to the USA in 2008, Geely has put back its debut at least a year after its samples stumbled at emissions and crash-test hurdles. An attraction will be a high-efficiency six-speed automatic transmission designed in cooperation with Franco-British firm Antonov. Meanwhile an American importing enterprise, better-funded than Bricklin, is picking and choosing among the best products on offer in China to put together a comprehensive range that it expects to launch in 2010. After more than half a dozen visits to numerous vehicle producers it expects to sign its first importation contract by the end of the year. More are likely to follow. Some of the Chinese brands already appearing on European roads are the Hover, Brilliance and Jiangling's Landwind. The last-named's New Vision, a big SUV based on an Isuzu design of the 1980s, sells for 25 percent less than a comparable Hyundai or Kia. In an independent crash test, however, it showed "grave design faults that caused an unacceptable reduction of survival space." Nor did a Brilliance BS6 sedan tested this summer fare well. Its passenger compartment contorted grotesquely in the crash. The attraction of low pricing sweeps away the doubts of some Europeans about crash protection. In Italy Eurasia Motor is importing Great Wall's Hover SUV while Germany-based HSO Motors is the European importer of the Brilliance BS6, aiming to sell 7,000 cars this year. It will be hoping that not too many people have seen the video of the BS6's crash test. Quality, in fact, is a big worry. With Mattel recalling 18 million China-made toys, Nokia warning about faults in 46 million batteries and stories spreading about anti-freeze in toothpaste, killer tires and tainted dog food, the reputation of Chinese products is taking a heavy hit. Some retailers are fashioning reassuring labels saying "Not Made in China". This is bad news for the ambitions of China's auto exporters. One observer of the auto scene said that "the game the Japanese mastered in 15 years and the Koreans in 10, the Chinese will do in 18 months to 5 years." That's way too optimistic. Two years after their first car-export efforts the impact has been negligible. As well the still-rapid expansion of the domestic market is easily absorbing increases in production capacity. Competing for share in China is still the overriding goal no matter what Beijing may say. Not until the next decade will exports, with all their problems of safety, emissions and service, rise to the top of Chinese agendas. Until then I'll spend as much time as possible not thinking about China. - Karl Ludvigsen Washington's Dysfunctional Fuel-Economy Surge Quick - of the auto makers in America, which has the better passenger-car fuel economy: GM or Nissan? Yes, it's a trick question, because the answer is General Motors. In 2004, the last year for which final unadjusted fleet-average figures were published, GM's cars gave 29.3 miles per gallon against Nissan's 27.9. Subsequent provisional figures show Nissan edging ahead and both doing well with their domestic fleets averaging around 30 miles per gallon. So, you might ask, why all the excitement about the Senate's energy bill passed on June 21st? The one that requires vehicle fleets to average 35 miles per gallon by 2020? The one that has the industry up in arms, saying that the standard would be impossible to meet? They don't seem all that far away. In 2006 the domestic passenger-car industry as a whole averaged 30.0 mpg, against a mandated Corporate Average Fuel Economy (CAFE) standard of 27.5 mpg. They've made a big improvement from 28.0 mpg back in 1999. How hard could it be to get to 35 mpg in 13 years? Well, pretty hard, actually - unless you look for the easy ways. For one thing the Senate, in its wisdom, set its proposed standard to cover the combined average of all light- and medium-duty vehicles weighing up to 10,000 pounds, not just cars. That's the new upper weight limit of the CAFE rules for light trucks that were promulgated in 2006 to take effect in 2011. Set at 22.2 miles per gallon for 2007 with the fleet averaging exactly that in 2006, the truck standard will intensify to 24.0 mpg. With trucks included, observers say that the Senate bill demands a 40-percent increase in miles per gallon. Sounds like a lot. And further improvements of four percent a year are mandated to follow. Though they might be swept aside by the Senate measure, the new truck CAFE standards are worth a mention. They assign each class of vehicle an economy target in relation to its "footprint", the ground area it occupies. Requiring all vehicles to show improvements, this means that a maker can't meet the standard just by packing its fleet with light and flimsy pickups. The new rules will also sweep up some of the crossover cheaters that the industry loves. Did you know the PT Cruiser was classed as a truck? The Chrysler Pacifica, Dodge Magnum, Volvo XC70, Saturn Vue and Subaru Outback? Letting these in as trucks means that makers can sell more ginormous gas-guzzling sport-utilities while staying within their truck-CAFE limits. The people who make these rules have been asking since 2002 to be allowed by Congress to revise the 30-year-old CAFE guidelines for cars so they'll spread fuel-saving technologies across a maker's ranges from the big to the small. Recommended in a major study by the National Academy of Sciences (NAS) released in 2002, this policy has been implemented in the new truck rules by the Department of Transportation's National Highway Traffic Safety Agency (NHTSA), which has the thankless task of administering CAFE. I say "thankless" because fuel economy has nothing to do with the Agency's important and central mission of improving the safety of our vehicles. One might think that responsibility could rest with the Environmental Protection Agency (EPA), which in fact generates all the fuel-economy data that NHTSA then analyzes and administers. Or it could be lodged with the Department of Energy (DOE), which surely runs point in America's fitful efforts to reduce its fatal dependency on imported oil. Stuck as it is with the job, NHTSA has been manfully struggling to cope with the new environment in spite of Congress's reluctance to allow it to modernize the CAFE rules. In fact NHTSA's hands were tied from 1996 to 2001 by a mandated freeze on any changes at all in auto CAFE. Now of course the buzz words are "global warming" and "greenhouse-gas reduction". Fortunately lower fuel consumption in vehicles translates directly into less greenhouse-gas emission. Activity at NHTSA was energized both by George W. Bush's State of the Union speech, which called for 34 miles per gallon by 2017, and by 2005's Energy Policy Act. Its Section 773 called on the Agency to get busy on ways to reduce automobile fuel consumption by 2014, be they rule-driven or market-driven or both. In cooperation with four other alphabet-soup arms of the US government the DOT's NHTSA has launched a study of these options and opportunities that's to be completed early next year. The study is ambitious, to put it mildly. It has the aim of forecasting the "economic, environmental, safety and energy-saving effects" of a wide range of fuel-consumption-reducing strategies to 2025. Drones at auto companies have spent thousands of man-hours completing the spreadsheets of a questionnaire NHTSA launched last February that asks for excruciatingly specific detail on all product plans to 2017, including costs, prices and forecast volumes. This is easily five years longer than any sensible motor company has made firm future plans, so they'll have made up lots of it. With NHTSA and its Beltway colleagues beavering away on this study, will they have any opportunity to put their conclusions to work? Won't the heavy-handed Senate bill preempt their worthy efforts? That's the 64-billion-dollar question. First the House of Representatives has to have its say. There Michigan Democrat John Dingell is chairman of its Energy and Commerce Committee, which will contribute a lot to the shape of the final measure. John Dingell has been Detroit's man in Washington for a fantastic fifty years. He's been on his home industry's side through all the safety, emissions and energy wars. But until the Democrats took over both Houses in 2006 he'd been out of power for twelve years. Dingell showed that he was out of step with the Senate when he said, last March, that "We have carried fuel efficiency about as far as we can." The Senior House put the lie to that assertion with its draconian fuel-economy amendment to the energy bill, which it passed by 65 votes to 27. In the House of Representatives a bipartisan bill has been introduced that would demand 32 to 35 miles per gallon by 2022, discriminating among vehicle types and sizes in the manner recommended by the NAS and NHTSA. John Dingell is moving cautiously in response, bowing to the aggressive pace of House leader Nancy Pelosi. The Representatives are thought likely to wait until autumn to take further action on their version of the energy bill. In the meantime the auto industry gains some solace from the "off ramps" that the Senate bill provides. They allow the administrator to relax the rules in the event that either the costs or the technologies or both are seen as too extreme. Quite rightly some legislators are not too keen on the "off ramps", however, so they may not survive in the final measure. Earlier I mentioned the easy ways to transform the fleet toward lower fuel consumption. The one that no one has dared mention in all this debate, that would have the most compelling impact on customer choice and lower fuel consumption, is a massive increase in gasoline tax to bring pump prices more in line with those in the rest of the developed world. One dollar is too little and two dollars are probably too much; a buck fifty would be about right. That would raise the cost of a gallon close to the five-dollar level, enough to make people think seriously about fuel economy in their next vehicle purchase. The other "easy" measure, one that would bring vast reductions in fuel use and CO2 emissions, is wholesale adoption of diesel engines. According to the NAS study the potential range of improvement by dieselization is 15 to 40 percent. In fact it's the only available technology that offers double-digit cuts in fuel consumption. The emissions problems of diesels have to be solved - as they can be. As the Partnership for a New Generation Vehicle concluded, diesel engines are the way to go. A final important step would be the adoption of a fuel-consumption measure on the European model. They use liters per 100 kilometers to give a direct measure of the volume of fuel consumed for the distance traveled. For America the best parameter would be gallons per 1,000 miles or gptm. For example 25 mpg would be 40 gptm and 40 mpg would be 25 gptm. Why is this important? Because the so-called "improvements" in miles per gallon terms are illusory. Let's take the Senate bill. In mandating a move from 25 to 35 mpg it's headlining a 40 percent improvement. In terms of gallons per 1,000 miles, however, the move is from 40.0 to 28.6 - a reduction in consumption of 28.5 percent. It we don't work with a measure that gives a direct index of the amount of fuel used we'll be kidding ourselves. But then we do that a lot. - Karl Ludvigsen A Tale of Two Car Companies Germany's Audi and Sweden's Saab have an amazing amount in common. We consider how that relates to their dramatically different fortunes in the 21st Century. Apart from being four-letter words, what do Saab and Audi have in common? Not much, you might think. One's German and owned by another German auto company, while the other is Swedish with an American proprietor. One has a limited product range for the truly dedicated while the other thrusts a multi-pronged offensive across global segments and markets. While one does well to make 120,000 cars a year the other is on track to build an order of magnitude more. Yet their early years were astonishingly alike. Both started from scratch after World War II. When the Iron Curtain came down across Europe the factories of the Auto Union combine were on the communist side. This sequestered Horch, Wanderer, Audi and DKW in East Germany. Before the war DKW was one of Europe's most popular small-car marques, with its reliable two-stroke engines and front-wheel drive. Though the East Germans would have a version of the DKW, no factory in the west was equipped to make such cars. For Auto Union stalwart Carl Hahn this was unthinkable. He set up a new headquarters at Ingolstadt, using a facility that was a pre-war parts and service base, and found a former armaments factory in Düsseldorf. In 1950 he and his colleagues were able to start producing DKWs again. They made 1,538 that year. DKWs had been popular in Sweden where Saab, a maker of airplanes, was looking for an additional product for its factories after the war. It decided to get into the automobile business. For power it chose a two-stroke after the pattern of the DKW, whose patents on scavenging systems expired during the war. With a sleek design styled by Sixten Sason, Saab began building cars in 1950. It made 1,200 that year. Both companies started with transverse two-stroke twins. DKW's measured 76 x 76 mm for 684 cc and produced 23 bhp at 4,200 rpm. Saab's had the same stroke with the bigger bore of 80 mm for 764 cc and delivered 25 bhp at 3,800 rpm. Both added three-cylinder engines to their two-stroke ranges, DKW in 1953 and Saab in 1956. These were mounted forward of the front wheels on a longitudinal axis. In 1958 DKW maker Auto Union, struggling financially, was taken over by Daimler-Benz. Its production of larger cars in Düsseldorf in 1960 was 58,139 units. Saab, in its much smaller home market, was not that far behind with 26,100 cars produced. DKW, however, was surging ahead thanks to a new factory in Ingolstadt and a smaller model, its Junior, which brought its total 1960 output to 126,237 cars. Problems with noise, emissions and smell - Saabs were nicknamed "Stinky Toys" in Sweden - meant that neither company could long delay a change to four-stroke engines. Auto Union, helped by a team of Daimler-Benz engineers under Ludwig Kraus, was first out of the starting gate. Launched at 1965's Frankfurt Show, its new four-stroke model carried the revived "Audi" name. The pride of launching it fell to Volkswagen, which acquired a controlling share of Auto Union at the beginning of 1965. Sales of the two-stroke DKWs plummeted, the last being produced in 1966. Saab was only slightly slower to introduce its own four-stroke. Lacking the support of a Daimler-Benz, which poured 86 million dollars into Auto Union over seven years, the Swedes had to be ingenious. They found that Ford was making a V-4 in Germany that slotted neatly into their chassis. Developed by stealth, lest sales of the two-strokes suffer, the V-4 version was introduced in the summer of 1966. After several years the ring-a-ding two-strokes were quietly dropped. Saab followed up in 1969 with the launch of a completely new car, their 99. Developed under engineer Rolf Mellde and again using the styling ideas of Sixten Sason, the 99 was both handsome and satisfyingly Saab-esque. Its engine was an overhead-cam slant-four initially made by Standard-Triumph and later produced for Saab in improved form by Scania in Sweden. Although the ambitious Mellde rightly saw in his 99 a car with great pan-European market appeal, to his regret Saab failed to back it up with the investment needed to expand production. Failure to exploit the volume potential of its all-new 99 must be seen in retrospect as a moment at which Saab elected to be a regional rather than global player. This decision was taken when Sweden's Wallenberg interests were acting as marriage broker at the wedding of Saab with truck-maker Scania, creating Saab-Scania in 1970. A new and more boring badge replaced the classic Saab emblem with its distinctive front view of an airplane, a badge that vividly reminded us of Saab's aeronautical origins. In 1970 the two companies weren't wildly apart in production. Saab's volume was 74,000 units against Audi's 165,900. But Audi had taken a decisive step to secure its future. In secrecy Ludwig Kraus had developed a larger car which hard-driving Audi chief Rudolf Leiding adopted with enthusiasm. They sold it successfully to VW boss Heinrich Nordhoff and the Audi 100 entered production in 1968. The team of Kraus with Leiding, who rose to run VW, gave vigor and drive to Audi, whose independence of operation endowed its cars and actions with great vitality. This impetus only accelerated with the arrival at Audi of Ferdinand Piëch as technical chief. He oversaw the launch of the four-wheel-drive quattro in 1980, creating a new and appealing image for Audi cars that has endured into the 21st Century. From 1987 to 1993 the demanding Piëch maintained Audi's momentum as its chief executive. Saab had a valid counter to quattro, a USP (unique selling proposition) of its own. I vividly recall the arrival of Len Lonnegren, Saab's public relations man in America, on my Pelham Manor, New York doorstep in 1977 with a black two-door 99 with something special under its hood: a turbocharger. European turbocharged road cars weren't new; from the early 1970s Porsche had one and BMW sold one briefly. But Saab's was something special, a well-balanced road car that gave excellent performance insouciantly without heavy fuel consumption. The Swedes were the first to find the formula that would make turbos serviceable and attractive for normal cars. Saab had another USP of compelling appeal: its origin as the offspring of an aviation company, a designer and maker of front-line supersonic jets. This was a heady reputation for a maker of upscale cars whose aerodynamics and interiors could only be seen by potential customers to benefit from the know-how of an airplane maker. When I consulted on the launch of Saab's 9000 in 1984 I urged its marketers to be sure to emphasize any and all aspects of the interior that reflected aviation practice. Unlike Audi, which mercilessly merchandised its quattro on the road, in rallying and in racing, Saab let its two USPs run into the sand. It wasted "Saab Turbo", a great marriage of words which - backed up by product - could have sustained its success. Especially after GM bought control of Saab and half the company in 1990, the other USP, aviation, was wasted - even though it had just been exploited in Britain with immense success by a creative ad agency. For the GM people managing Saab in the 1990s it was the separation from the company's aviation arm that was important, not the invaluable and irreplaceable halo of a skyriding heritage. This was made clear to me by a GM transplant during a visit to Sweden soon after the takeover. When I asked about Saab's maintenance of its charismatic aeronautical lineage he scoffed, "Oh, we won't be doing any of that. We're a separate company now." In current advertising they're trying to revive the association with aircraft. This would be more impactful if, instead of plunking another bland new badge on the cars as they have, they'd gone back to the winged original. Meanwhile Audi has Vorsprunged from strength to strength. Although slow to react when CBS's 60 Minutes demonized its 5000 model in 1986, famously accusing it of life-threatening "unintended acceleration", the four-ringed company gradually recovered from a serious slump in its American sales. By 1990 the contrast between Saab and Audi was embarrassing: 87,356 Saabs produced against 421,378 Audis. In 2000 with almost 600,000 made, Audi volume was still more than four times Saab's. Having topped 900,000 units in 2006, Audi is now setting out its "Route 15" plan to launch 15 new models to take its volume to 1.5 million units by 2015. Now that Martin Winterkorn has moved to Wolfsburg to head the VW Group, Rupert Stadler will pilot Audi on Route 15. What of Saab? For the first third of 2007 its European production was down by 12 percent from last year. With some models derived from Subarus and Buicks it does get products from other sources, but they haven't set the market on fire. Heralded as "dynamic new looks", the facelift of Saab's 9-3 features garish chrome wedges that fail to convince as an integrated whole. I'm not a big fan of Audi's gaping grilles, but at least they look like they were executed by professionals. The outlook for the Swedish company is not encouraging. Among opportunities that the company has turned down was research and analysis to understand Saab's "home market" - not in the usual geographic sense but in terms of the kind of people throughout the world who would be most receptive to Saab's message. It could have helped the company focus its research and development efforts more productively. On the other hand, you can only match the audience to the message if the latter is clear and powerful. While Audi was showing how that works, Saab has done without a consistent message for more than a quarter-century. We can see how that works. - Karl Ludvigsen Xceptional Incentive for Car Creators This has the potential to be interesting. Their first venture certainly was. I'm sure you recall it. Twice within five days, in September and October of 2004, a manned spacecraft took off from Mojave Airport and soared almost 70 miles up, well over the 62-mile limit that's the frontier of space. On its own this wasn't anything special. Men have walked on the moon, after all. But what made the flights no noteworthy was that they were achieved by private enterprise, not by NASA's technological might. And they were prompted by a prize. Yes, that's right. To win a prize of $10 million experimenters and entrepreneurs spent far more than that to put civilians into space - briefly, for the SpaceShipOne's pilots were only weightless for three and a half minutes. That 26 teams lodged plans to attempt the feat and five made significant steps toward hardware and testing shows the power of a prize to promote a great undertaking. Th successful flights have been followed up by a $21.5 million commitment from Sir Richard Branson's Virgin Galactic to put paying passengers aboard five-passenger ships now abuilding. A noteworthy previous example was the prize of $25,000 offered by New York's Raymond Orteig in 1919 for the first heavier-than-air flight between Paris and New York. It was the inspiration for Charles Lindbergh's successful crossing of 1927. Eight years thus elapsed between announcement of the prize and its awarding to Lindbergh. In 1995 Peter Diamandis announced the $10 million X Prize for a successful spacecraft; nine years later it was awarded to Paul Allen's Scaled Composites for the successful flights of an airborne rocket designed by Burt Rutan Now the St. Louis-based X Prize Foundation has turned its attention to the automobile. On April 2nd at New York's auto show it announced the Automotive X Prize, the goal of which is "to inspire a new generation of super-efficient vehicles that help break our addiction to oil and stem the effects of climate change." Prize money is yet to be determined but it's likely to be around $25 million. That should flush some potential developers out of the shrubbery! Some of you might wonder why this is necessary. With American gasoline prices heading for four bucks a gallon, aren't market forces enough to inspire auto makers to build more efficient vehicles? They can draw on know-how from past projects, like Bill Clinton's Partnership for a New Generation Vehicle. Using diesel-hybrid technology it showed that 80 miles per gallon was reachable in 1999. They can even look to Europe, where a half-dozen current car models exceed 60 mpg on the road and some approach 70. VW sold 29,500 of its Lupo 3L TDI, which gave almost 80 mpg. The X Prize people think this isn't good enough. "The Foundation decided to expand into genomics, energy and education with its prizes," explained executive director Mark Goodstein. "In the energy side, we toyed around with various ideas and settled on the automotive industry. We wanted to see what will actually change an industry that is so mature, so seemingly resistant to change that the gas mileage of the original Model T is better than the average gas mileage of vehicles on the road today." After their "toying around" the X Prize managers began talking with automotive developers, academics, journalists and the inevitable critics in 2006, staging a major "brainstorm session" in July. Among current automakers only Honda and Ford participated in what was an almost entirely North American exercise. From this the Automotive X Prize was formulated and published, in draft form, on April 2nd, on the website http://auto.xprize.org. Nominally 60 days were allowed for comments, but you might still be able to have your say. It takes 32 pages to describe all the proposed Automotive X Prize criteria. Highlights are these:
As you can see from just these few highlights the AXP people are taking on a massive task of assessment and adjudication. The potential for cheating in the qualifying and final races will be so great that they'll need to have NASCAR's tech inspectors on the job. Speaking of racing, one of the wealthy X Prize trustees is Kevin Kalkhoven. His biography on the X Prize website rightly lauds his entrepreneurship but omits altogether Kalkhoven's part ownership of the Champ Car series, formerly CART, of a Champ Car team and of Cosworth Racing, builder of engines for the series. In other words he is, as we say in England, a "petrolhead". Perhaps mentioning this would have lowered the tone of AXP's lofty website. Some aspects of the proposed rules are patently unworkable. The idea that a competitor could be producing his vehicle in the 2009-10 time frame from a starting point this year is ludicrous. Instead, success in the Automotive X Prize should be his springboard to success in funding his manufacturing effort. Lengthy continent-spanning "races" to demonstrate the durability of the contestants aren't needed. It would be sufficient for designs to show the potential for long-term durability. Nor does their mission statement makes sense. "Super-efficient vehicles" are welcome but how are they going to "stem the effects of climate change"? If you accept that increased greenhouse-gas emissions are changing the climate - a point on which there's still disagreement - all that these vehicles would do is slow that rate of change. They can make no contribution whatsoever to dealing with the effects or consequences of a changing climate. It's not for me to tell the X Prize trustees what to do with their mega-billions. But I would suggest that some of them throw tens of millions in the direction of Munich's Uli Sommer and Gerhard Heilmaier. At the March 2006 Geneva Salon they unveiled their Loremo, short for "low-resistance mobility". It's an ingenious ultra-light 2+2 turbo-diesel passenger car for which they claim mileage of better than 150 mpg - 156 to be specific. There's even a GT version that gets 87 mpg while offering zero to 60 acceleration in 9 seconds and a top speed of 137 mph. Well styled and cleverly engineered for production (see www.loremo.com), the Loremo meets the AXP's "desirable" criterion. With the motto "Simple, Clever, Fun" the company is now raising the funds to start production in 2009 in just the initial annual volume of 10,000 that the AXP requires. They have a clear road ahead, said Heilmaier: "None of the big manufacturers has plans for this segment." For all practical purposes, then, the goal of the AXP has already been met. Does this mean that they should raise their sights? Shoot instead for something really radical? An earthbound equivalent to an outer-space breakthrough? It's worth a thought. - Karl Ludvigsen The Book of John (Z) On the morning of May 16, 1973 I sat down with John DeLorean in the modest offices of Grand Prix of America in Troy, Michigan. Background music to our conversation was the buzz of Wankel-powered single-seaters on the one-third-mile track outside, each lap timed and shown to the driver by built-in equipment. This was the business that Jack built, John's entrepreneur brother who'd been developing the GP of America concept for several years. By the end of 1973 Jack was hoping to have as many as 15 tracks in operation in the United States. Our talk took place less than a month after John DeLorean stunned the industry by announcing that he was leaving his post as General Motors vice president and group executive in charge of the car and truck group. In fact his resignation wouldn't take effect until the end of May. But John wasn't letting grass grow under his Gucci loafers. DeLorean waxed with his habitual eloquence on the potential of his brother's scheme. Driver-training students would be donated a few laps, he said, to help them learn how to handle a car - and perhaps give them the GP of America racing bug. "Our plan is to try to make it a major sport like bowling," he said, "We'll have regional runoffs, then national with a top prize of one million dollars. We'll be developing a whole new breed of racing driver in America. All the top drivers in the world will suddenly be Americans!" We were wrapping up our conversation when John dropped his bombshell. "I'm going to write a book about General Motors," he said. "Who do you know who could work on it with me?" He was talking to someone who had left GM six years earlier and who had since built a fairly handy career as a free-lance journalist and author. Interested? I had to be although, as John joked, "If we do this neither of us will have anything to do with General Motors again!" Seven-thirty on the evening of June 4th found me sitting down to dinner in Bloomfield Hills with John and the ravishing Christina Ferrare DeLorean. With the Watergate hearings starting their third week, John jested that he was going to look up Spiro Agnew's press secretary in Washington: "I don't see how Nixon can survive!" After dinner we settled comfortably on the Pink Porch to talk about the issues that John wanted to deal with in his book. On Friday the 8th of December 1971, DeLorean told me, he'd spent an hour with GM's president, Ed Cole, and vice-chairman, Tom Murphy. "They all but promised me the GM presidency," he recalled, "if only I'd give up this championing of underprivileged people, minorities and the disadvantaged." He pointed to a 1941 book by General Motors icon Alfred P. Sloan, Jr., Adventures of a White-Collar Man, in which Sloan advocated a more activist role for GM in the building of low-cost prefabricated homes to help overcome a national shortage of affordable housing. "A company can be responsible," John said, "and still make money." DeLorean showed me a memo, dated December 17, 1971, that he'd written to Tom Murphy after their conversation. It set out a series of case histories, activities in which he felt that GM could be performing more responsibly without jeopardizing - indeed even helping - its profitability. In outline they were as follows:
Although something of a mish-mash, these were all serious issues that could contribute to the story that John wanted to tell about the way corporate decisions were made, for good and for ill. Looking back, I can see that such a memo would have conveyed to Tom Murphy that John DeLorean needed careful handling, that he had a lot of anti-GM arrows in his quiver that he could fire off if their relationship foundered. Having seen the memo, John's lawyer said that he thought such revelations could lead to GM's dissolution. I left the DeLorean home at 10:00 that night, my head swimming. Two days after that dinner I saw my father, an experienced motor-industry executive, in Cleveland. When I described some of John's criticisms of GM, without mentioning the source, he said, "It sound like some of the things Bunkie Knudsen has been saying." If GM took umbrage, my dad thought, it could sue John but not me as co-author. He cautioned me against relying on John for my further future and stressed that the book would have to be objective and bulletproof in its facts. On July 19th I wrote to John to say that I'd be willing to work with him on his book. I said that "I'd put every ounce of effort at my command into making it as successful as possible in its text, its truthfulness and its impact." This was a response to DeLorean's desire that it be "a non-put-downable life-story novel", that it be "widely read or a great amount of its value will have been lost". I'd been in Michigan that summer but in August I went back to my home in New York. All went quiet on the DeLorean front while I started work on the Porsche history I'd contracted to write. In February of 1974 John contacted J. Patrick Wright, Detroit bureau chief for Business Week, suggesting cooperation on The Book. Pat delivered the resulting manuscript to Playboy Press in early September of 1975. DeLorean, however, had second thoughts. He withdrew approval of its publication, feeling that it would roil the corporate waters excessively while he was planning to produce a car of his own. I learned about this when I met with John at his Bloomfield Hills offices on November 12, 1975. He said that Wright had been suggested by the publisher as co-author, probably a Little White Lie. The book had not met his aims at all, he continued, and he wanted to work with me to get it done right. He sent me a copy of the manuscript. To say it was "non-put-downable" was putting it mildly. Its contents were sensational and its presentation of them powerful. On January 30, 1976 I sent John three pages of recommendations for restructuring the book "to moderate its negative tone - not its critical content - and stress the way it illustrates…a guidebook to profit through responsibility." I said that John had to add credibility by owning up to some fiascoes on his own watch, such as the folding of Grand Prix of America and the tendency of his Pontiac Tempest to ground and snag its front crossmember on grade crossings. We could add some other costly skeletons in GM's closet, such as its air suspension, Wankel engine and Turboglide transmission. With Playboy stymied by John's rejection of the Wright book, the idea surfaced that DeLorean write a business-related book that would be a separate entity. John suggested that I outline such a work, which I did on February 18, 1976. I adumbrated ten pithy chapters with the title - ironic in retrospect - Ethical Management. While I carried on with other projects for John, this one had no issue. The idea of revising the text of the Wright book refused to go away. John wrote to me on May 3, 1976 to request "some specific revisions, additions and generally an outline for this book." He had some specific objectives, including a flattering request for "that Ludvigsen magic". I went back to the text and on June 21 produced a five-page analysis of exactly what had to be done "to give it the most positive effect possible, without taking away from the impact that it should have to be widely read." None of these changes was made. In September of 1976 John and I were still discussing ways to improve the book's final chapter to put a positive spin on his plans for his own sports car. Finally, despairing of getting DeLorean's approval and knowing that he had a hot property on his hands, Pat Wright self-published his original text of On a Clear Day You Can See General Motors in November of 1979. It was and is still a riveting read. In the spring of 1981 I had an echo of these events. Sitting in my sixth-floor office at Ford of Europe in Brentwood, Essex I took a call from John DeLorean. He was involved with some legalities concerning the Wright book, he explained, and needed to be able to show that the book as published wasn't what he wanted, that he'd made significant efforts to channel it in a different direction. Could I provide copies of the many recommendations that I'd made at his request? Thanks to the organizational skills of my former secretary in Connecticut, Judy Stropus, I could and did. Thus ended my involvement with the literary ambitions of John DeLorean. But I still remember vividly my slack-jawed astonishment at that first reading of Wright's raw manuscript in the winter of 1975-76, four years before it reached a wider public. It gave an unparalleled inside view of the damage a company and its people suffer when politics get in the way of decision-making. I recommend it unreservedly to today's industry bosses. - Karl Ludvigsen Mercury Rising? A brand with surprisingly rich history has hit a bad patch. Surely Mercury deserves to flourish as a valid part of the Blue Oval's portfolio between Ford and Lincoln. Or will we see Mercury following Oldsmobile and Plymouth into oblivion? What pops into your mind when you think of Mercury? Maybe it's the fabulous Cougar Trans-Am team of 1967 prepared by Bud Moore with iconic drivers Dan Gurney and Parnelli Jones. They came close to stealing the title from Shelby's Mustangs. Perhaps it's the stunning Turnpike Cruiser of 1957 and '58, one of the most spectacular manifestations of the boldly baroque era of American car design. It could be the 1964 Comet, a mini-fleet of which averaged more than 105 mph for 100,000 miles at Daytona to set a staggering array of international speed records. I can still hear the catchy theme tune of the commercials. You might have a soft spot for the jaunty Capri coupe, a popular import from Germany in the early 1970s. Or your mind's eye might picture the 1949-1951 Mercury, favorite of the lead-sled customizers and the wheels of James Dean in Rebel Without a Cause. Memorable could be the Breezeway models of 1963 through 1966 with their reverse-slope rear windows, opening electrically. They were Mercury's bid to create a feature as vivid and promotable as Pontiac's envied Wide Track. Then there's Troy Ruttman's fantastic finish behind two Ferraris and a Chrysler in the 1951 Mexican Road Race in the 1948 Mercury coupe he bought from a used-car lot for $1,000 and Clay Smith prepared for another $2,500. They won more than $11,000! Mention of the M-word could even bring to mind the special booklet, "A More Enlightened Approach", that I wrote for the launch of the 1984 Topaz, first car to be identified by the waterfall-M emblem that Mercurys still carry. It was the last job I did during my duty tour for the Blue Oval. Or…..you may have only a vague notion of what Mercury stands for. The Ford brand's latest strap line - "New Doors Opened" - doesn't exactly pinpoint the reason why you should besiege the showroom of your nearest Mercury dealer. Plenty of folks still have the same impression of Mercury that road-tester-supreme Tom McCahill expressed sixty years ago, calling it "the Ford that Ford would have built if there hadn't been such a thing as price competition." In fact this was the background story to the 1949 Mercury. It was designed to be the '49 Ford but kicked upstairs to Mercury when it proved too costly to carry the Blue Oval. Since 1939, when the brand was created by Edsel Ford to fill the yawning price gap between Ford and Lincoln's Zephyr, Mercury has struggled to differentiate itself clearly and effectively. With more power than the Ford and little more weight, it had an early reputation for performance. As the examples above illustrate, this remained an important strand of Mercury's DNA, but it hasn't been prominent in the latest generations. Style, too, has been a Mercury trait. When he was styling boss in Dearborn, Gene Bordinat didn't hesitate to endow Mercurys with some of the Rolls-Royce features he used to give his Lincolns a touch of class. Gene's theory - and not a bad one - was that with fewer cars on the road than his rivals he gained more impact with car buyers by sharing certain identity features among his brands. With its hidden headlamps and hot XR-7 version the original Mercury Cougar of 1967-68 oozed sassy style. Though it was too-soon denatured by the application of its name to lesser machinery, Cougar gave Mercury the prowling cat that became a symbol of the brand in ads and at dealerships. When Ford's brass tried to kill the Cougar, the division's general manager Ben Bidwell had an answer ready: "How can you run a cat house without a cat?" Today's Mercury could do with some of that chutzpa. Mercury is topical because it's one of the problems - challenges? - facing the New Ford Motor Company under Alan Mullaly. In 1977-79, 1984-86 and again in 1988 Mercury sold more than half a million units yearly. Mercury and Dodge were running neck-and-neck as strong brands in the market's midfield. Now, taking cars alone, Mercury has less than half Dodge's volume. Including trucks Dodge is more than five times as big. Total 2006 sale of 180,828 units is Mercury's lowest since 1959. There's no shortage of advice for Mercury. Some commentators say it should become Ford's importer of European cars. Lincoln-Mercury dealers have tried that - remember not only the Pantera and Capri but also the Merkur? - but the negative economics of Europe's high costs and currencies weigh against it. A while back my idea was that Mercury should become Ford's export brand to Europe. In fact that | |||||||||||||||||||||||||||||||||||||||||||||||
