Building cars is hard. Building cars that last is even harder. There is no automaker that is immune to quality issues, although a few are standouts. One of them is the company currently known as Stellantis and, in particular, its North American brands have suffered from repeated quality challenges. The reason? There are many, but Stellantis Chairman John Elkann has a pretty good idea of at least one big reason why they weren’t getting fixed.
I’d like to thank Brian for filling in for me at the helm of The Morning Dump while I took a long weekend with the family. I feel recharged and ready to go. Perhaps that’s also how the heads of Audi and Porsche are feeling, now that their fates seem inextricably tied together. Toyota seems to think its future is tied to America, so the company is making yet another investment here to strengthen its position.
One of the adventures I went on during my long weekend was a trip to Clover Park in Port St. Lucie to see the Astros and Mets play their last spring training games. It was an incredible experience and timed out well to Ford announcing it would be replacing Chevy as the brand that represents baseball.
‘We Are Finally Able To Speak Up Openly’ Says Stellantis Employee
The photo at the top of the post gets used around here a lot because it’s one of the few showing both new Stellantis CEO Antonio Filosa and overall big boss daddy John Elkann together. It’s also possible that this is the exact moment that the following story, told in a shareholder letter from Elkann to investors in main Ferrari/Stellantis owner Exor, happened:
[As Interim Chairman I] placed particular emphasis on strengthening rigor around quality and on fostering an environment in which issues could be raised directly and addressed constructively. At one plant visit in Detroit, we were holding a discussion focused on persistent quality challenges on the shop floor. As the conversation unfolded, one member of the quality team said something that stayed with me: “We are finally able to speak up openly about what isn’t working and how to fix it.”
What mattered most was not the specific issue being discussed, but what that moment represented: a shift toward engagement and problem-solving. Creating the conditions for that change was an essential first step in reinforcing operational discipline across the company.
Because it happened at a plant in Detroit, the assumption is that it’s either Sterling Heights or Jefferson North, which means a Dodge, Jeep, or Ram plant. The specifics of where are less important than the unnamed “who” that is responsible for the “year of reckoning” that Elkann sees at his own company. As always, it’s former CEO Carlos Tavares, not pictured above.
The new guy. Filosa, stepped into a company that was full of challenges and he, too, jumped on Tavares over quality issues. Where Elkann’s quote here is focused on a culture of executives apparently ignoring their own employees, Filosa seemed more concerned with the bad habit Tavares had of cutting engineers in North America and sending work to markets with cheaper engineers. That isn’t to say engineers in places like Brazil aren’t talented, but keeping certain employees far away from the actual factories and production seems to have caused problems.
There is no one further up in the organization than Elkann, the Fiat heir in charge of his grandfather’s business, so it’s nice to hear him acknowledge not just that there are issues to be fixed, but to ennumerate where they fell short. That being said, what doesn’t get acknowledged here is that Elkann and the Stellantis board hired Tavares and seemed content to let him continue on while profits were high, even though the problems were obvious to some of us.
[Ed Note: I just want to note that, when I worked at Fiat Chrysler under CEO Sergio Marchionne, the company took pride in a concept called World Class Manufacturing, or WCM. I’m going to quote The Detroit News‘ piece on WCM, published in 2015:
World Class Manufacturing …is meant to empower workers to provide and implement suggestions on how to improve their jobs and factories, and act in real time to resolve problems.
“This is standard,” said Gianfranco Cinquefiori, Melfi Plant press shop manager, during a tour of the plant on Monday. “We have to respect the organization. With WCM, we focus on standardization … they must respect the methodology.”
In 2014, plant employees submitted about 2 million suggestions worldwide, helping the company save roughly $4.4 million, enabled by a training cost of $1.7 million. Since the program was implemented in North America in 2009, more than 2.4 million suggestions have submitted and approved. The company’s target is to save about $400 million in North America in 2015.
WCM’s goals are simple: reduce waste and improve quality, efficiency and safety by focusing on 20 areas, known as pillars. Pillars range from plant safety and quality control to worker motivation.
When I was at Chrysler, I truly felt that this WCM process — first implemented in Japan and adopted by many manufacturing industries — was being upheld. Italian Chrysler felt like a place where people could just say what they thought; was French Chrysler really that different? Whisperings among my old friends say that yes, a lot changed after the PSA merger.
I’ll also note that I think a big problem with Chrysler’s quality is its engineering and its purchasing; the former has too much turnover and job-hopping within the company (among other issues like the strength of the simulation tools), and the latter pinches pennies in sometimes absurd ways. -DT]
Porsche And Audi Are Going To Figure It Out Together
Were you aware that, while there has only been one Herb in the duo Peaches & Herb, there have been seven different Peaches? TMYK. Porsche has a new CEO Michael Leiters and a slightly more tenured Audi CEO in Gernot Döllner.
Volkswagen tried to separate Porsche and Audi out into their own orbits, but both rotate around the same star and both brands need one another as Automotive News reports:
With growth unlikely to rebound quickly and spending still elevated, pressure is building to deepen collaboration. “They have no choice — costs must come down significantly,” a person familiar with the matter said.
Historically, cooperation between the brands has been fraught with internal rivalry, including disputes over development leadership, cost sharing and engineering locations. Development of the joint Premium Platform Electric (PPE) architecture used by the A6 E-tron, Audi Q6 E-tron and Porsche Macan Electric required repeated intervention from Blume to resolve conflicts.
Now, tighter finances and a shared sense of urgency are fostering a more pragmatic approach. Porsche is looking to restore margins to as much as 10 percent while accelerating its return to combustion models, relying more heavily on Audi for platforms and components.
A little internal rivalry can be a good thing, but everyone has to recognize they have the same goal. It sounds like the two brands are about to be reunited, and it feels so good.
It’s A Grand Time To Make Grand Highlanders
I once half-seriously joked that I couldn’t stop people from buying Toyota Grand Highlanders. I recently drove the Lexus version, and I get it. If you want something nice and seemingly reliable with a true third row that isn’t a minivan, it’s hard to top a Grand Highlander.
Toyota agrees, and is investing in making more of them, as well as more RAV4s and Camrys.
The new investments include $800 million at a plant in Georgetown, Kentucky, to increase production capacity of the automaker’s Camry sedan and RAV4 crossover. The remaining $200 million is to increase capacity for the Toyota Grand Highlander SUV at a plant in Princeton, Indiana.
“Toyota’s investment in the U.S. is for the long-term, tied to our philosophy of building where we sell and buying where we build,” Toyota Motor North America Chief Operating Officer Mark Templin said in a statement.
This is all part of a planned $10 billion in North America.
Ford Takes Over As Baseball’s Official Vehicle
I love baseball. It’s by far my favorite sport. While I’ve never been better than a sub-mediocre player, I am a better-than-mediocre enjoyer. The last spring training game of the year doesn’t usually have great importance as most roster decisions have been made, but that didn’t matter to me. A day spent at the ballpark watching the sport as it was meant to be played is hard to beat.
For the last few years, baseball’s most closely associated brand has been Chevy. The World Series MVP gets a Camaro or a Corvette or a Silverado. No more. Ford has stepped in and taken the job.
“For generations, baseball has brought families and communities together and so has Ford,” said Lisa Materazzo, Ford’s global chief marketing officer. “This partnership is about honoring tradition while putting real capability behind the moments that matter for fans, players, and for the communities that keep the game, and the country, moving forward.”
Also, I learned via another Ford story on its blog, that Trystan Magnuson, the current Vehicle Integration Supervisor on the Ford Explorer & Lincoln Aviator, was formerly a pitcher for the Athletics. That’s almost like playing for a real team!
What I’m Listening To While Writing TMD
I had to do it. It’s one of the Peaches (the incredible Linda Green) and Herb doing “Reunited.”
The Big Question
What is the best example of two companies sharing one platform?
Top photo: Stellantis
As for the headline story, I think the answer could be easily summed up: UAW.