The Perpetual Chaos: A Collection of Rants on the Never-Ending Mess

[ad_1]

Editor’s Note: This week, Peter shares a bleak overview of the situations facing the Detroit automakers, particularly Stellantis, along with a mention of Volkswagen. To say it resembles a disaster would be an understatement—even before discussing Cadillac’s partnership with a sneaker brand from Los Angeles (and no, this isn’t an April Fool’s joke). In “On The Table,” Peter offers a follow-up on auction results from Monterey, highlighting a notable Corvette. He also includes pricing, range specifications, and his sharp insights on Volkswagen’s eight-year development of the ID. Buzz. Additionally, our AE Song of the Week is “Tempted” by Squeeze. In “Fumes,” Peter starts a new series called “The Racing Machines.” And in “The Line,” we cover the results from INDYCAR in Portland, the F1 Dutch GP in Zandvoort, IMSA GT from ViR, and Trans Am from Watkins Glen. We’re on it! – WG

By Peter M. DeLorenzo

Detroit. The automotive landscape is currently in turmoil, with everything running at peak chaotic capacity. Rumors abound, electric vehicle initiatives are either being postponed, revamped, or outright scrapped, and the chill of early fall is starting to loom ominously.

First on the agenda is Stellantis, headquartered in Auburn Hills. The situation is dire; the company’s operating income for the first half of the year plummeted by 40 percent. The issue primarily stems from a massive downturn in its North American operations, where nearly all profits are generated. How severe is it? Sales of Ram trucks and Jeep vehicles have fallen by 33 percent compared to the same period in 2019, according to Cox Automotive’s research. Collectively, this is certainly Not. Very. Good.

The severity of the crisis compelled Stellantis CEO Carlos Tavares to cut his traditional summer break short for a three-day fact-finding mission last week to uncover the root causes of these issues. (Three days? That seems overly optimistic. -WG)

During his visit, Tavares likely found that the marketing strategies for Jeep had led to continuous price increases over the past three years, which subsequently caused a sharp decline in sales. The rampant greed appeared to erase any logical reasoning from the decision-making process. In a commendable move, Tavares publicly attributed these missteps to “arrogance” on his part, taking responsibility, yet the internal narrative paints a starkly different picture. Behind closed doors, Tavares faced a dismal scenario, questioning how his team could inflict such harm on a once-revered brand. This chain of events represents a catastrophic level of incompetence, and now Jeep’s pricing is having to be rolled back dramatically, model by model. It’s going to get ugly from here on.

Compounding the issues, Tavares also discovered troubling news regarding the Dodge division. It appears there was a significant misjudgment in assuming they could easily pivot loyal Dodge Charger and Challenger customers—some of the industry’s most passionate enthusiasts—to entirely electric versions of those models. The resounding silence accompanying this ambitious endeavor indicates that the shift to EVs for these dedicated customers is not only proving challenging but is nearing a dead end.

Regardless of how intensely Tavares monitors this situation, even moving to Michigan full-time wouldn’t rectify the problems. Astonishingly, just a few years back, Stellantis’ U.S. operations were considered a surefire success. Now, Tavares faces the monumental task of preventing these operations from spiraling into an unprecedented decline. Sound exaggerated? Don’t fool yourselves, Stellantis is undoubtedly under immense pressure.

Then there’s Ford. Each week brings new revelations from Dearborn about how Ford executives are supposedly keeping up with the shifting landscape driven by tepid consumer acceptance of EVs. Just a few short years ago, CEO Jim Farley—known as “Electric Boy”—was proclaiming Ford’s ambition to become the global leader in electric vehicles. Fast forward to today, and the company has consistently walked back its ambitious claims as reality sets in about the sluggish uptake of EVs.

The latest about-face from Ford? The cancellation of its long-anticipated three-row electric crossovers and a delay of 18 months for its next-generation full-size electric pickup, which could lead to a financial hit of up to $1.9 billion, including a $400 million non-cash charge related to the canceled crossovers that had already been pushed back from 2025. Now, Ford anticipates developing a line of hybrid three-row crossovers in the future—though it’s anyone’s guess when that will happen.

As is characteristic of Ford’s recent actions, the company cloaked these backtrackings under the guise of strategic decision-making. Farley has consistently dodged accountability, suggesting that Ford is merely being proactive and claims they will soon reclaim their position at the forefront of the industry. What that front position entails is a matter of discussion. The opposite seems true; Ford has been reversing course for years now, with its once-aggressive commitments to EVs—courtesy of “Electric Boy”—costing the manufacturer billions.

However, this hasn’t deterred others in the company from echoing Farley’s rhetoric. CFO John Lawler recently remarked to the assembled press: “This is really about us being nimble and listening to responses from our customers. We assessed the segment’s evolution, the competitive landscape, customer demands, and the battery size required for a pure EV, and we were unable to produce a profitable vehicle within the initial year of launch.”

“Us being nimble?” What an absurd claim. A more honest assessment would be: “We’ve had no idea what we’re doing. We’ve been reactive for years, and we continue to lag behind in this market.” Yet, the self-congratulation persists at Dearborn, as no automaker is more deluded about its accomplishments than Farley & Co.

In another example, even though VW isn’t based in Detroit, they too are facing significant challenges in the U.S. market. Last week, the German automaker revealed pricing for its ID. Buzz models. The rear-wheel-drive Pro S starts at $59,995, the Pro S Plus at $63,495, and the limited 1st Edition at $65,495. The rear-wheel-drive versions are estimated to offer 234 miles of range according to the EPA, while the 4Motion all-wheel-drive models provide an estimated range of 231 miles (dive deeper in On The Table. -WG).

It’s crucial to remember that while the ID. Buzz is finally set to hit dealerships by the end of this year, this comes a full eight years after it was first unveiled to the public. I foresee three major concerns for the “Buzz.” First, the timing of this launch is horrendous. Despite optimistic projections from EV advocates suggesting that momentum is building, the truth is that EV sales remain sluggish. Second, the estimated range for the Buzz is far from impressive. 234 miles for the rear-wheel-drive version? Incredible… in a bad way. Finally, the pricing is a major hurdle. Yes, there has been consistent chatter regarding the anticipated high price of the “Buzz,” but VW is about to discover that the demand for this niche vehicle will be painfully low. The ID. Buzz is simply priced too high, regardless of how VW attempts to market it—good luck with that, team.

To cap it all off, in an absurd twist, Cadillac has opted to prioritize a quest for trendy relevance over addressing its product shortcomings. (For those who missed it, Cadillac has recalled every single one of its LYRIC EV SUVs. -WG.)

How are they doing this? Cadillac has collaborated with Los Angeles designer Dominic Ciambrone and his team at SURGEON to create an exclusive line of custom sneakers. Each sneaker style draws inspiration directly from a vehicle in Cadillac’s EV lineup, including the LYRIQ, CELESTIQ, OPTIQ, and ESCALADE IQ.

Take a moment to read that slowly and reflect.

“Cadillac’s design philosophy is about transforming the ordinary into the extraordinary, personalizing the commonplace into something uniquely yours,” stated Bryan Nesbitt, executive director, Global Cadillac Design. “Cadillac aspires to set the benchmark for American luxury, just as Dominic and his team have established the standard for American craftsmanship and bespoke sneaker design.” (Speaking of setting standards, Nike just filed a $60 million lawsuit against Dominic, alleging counterfeit and trademark infringement. Is it too late to reconsider this partnership? -WG)

While I hold tremendous respect for Bryan and his talented team, really? Is this where they find themselves? This endeavor stands in stark contrast to the Opulent Velocity concept Cadillac showcased in Pebble Beach last week. At least that was a car.

Apparently, the SURGEON team worked closely with Cadillac designers at General Motors’ Design Center in Warren, Michigan, to incorporate design elements from the specific vehicles, including interior leathers, upholstery patterns, textiles and stitching techniques, as well as exclusive paint colors and design features.

These sneakers—which are rumored to retail around $5,000—can be seen below if you’re curious.

I am at a loss for words. (Though our readers know that’s not true – WG.) The rationale behind this partnership escapes me. Are Cadillac employees so fixated on attracting a younger clientele that they genuinely convinced themselves this was a brilliant idea? The impression left is that when there’s nothing substantial to discuss, why not turn to shoes? Frankly, this is just absurd. It epitomizes a huge miscalculation.

The ongoing turmoil in the automotive industry seems relentless.

And that’s the High-Octane Truth for this week.