Fiat just earned 5 percent more ownership in Chrysler for creating a product no one has bought yet.
Payment for non-performance. If you suspect this is government’s benchmark for success, you’d be right. More precisely, this is how the Obama administration measures success.
Let’s rewind the tape. Under King Obama’s gift of 20 percent of Chrysler to Fiat in 2009, His Highness decreed that Fiat would assume another 5 percent of the company upon production of a 4-cylinder engine in the United States. Not selling it. Simply producing it.
Why? Because Obama has decreed, against all evidence, that America wants small, fuel-efficient engines. Build them and they will come.
“Fiat’s initial 20 percent share of Chrysler rose to 25 percent in January, when it met the first government benchmark: production of a fuel-efficient, four-cylinder engine at its Dundee (Michigan) plant,” reports the Detroit News. Fiat could have built anything under this condition — a windmill-powered engine — since it only had to pleasure the king.
The engine is made for use in the Mexico-assembled Fiat 500, a Smart-car-sized tin can that has yet to go on sale in North America but that — even with gas prices soaring over $4 a gallon — is likely to find a market as cramped as its interior.
Reviews of the little pepperbox have been, well, brutal.
“So, what’s the new 500 like to drive? Um, can we go back to how cute it is?” writes even Supergreen Dan Neil of the Wall Street Journal. “To rag on its performance feels like berating a preschooler for poor spelling. If your driving cycle involves a lot of internodal transit, the 500 is not for you. At highway speeds, the powertrain becomes increasingly shouty, and around 80 miles per hour the machine starts hitting its head on the performance ceiling.”
“The lack of the automatic transmission . . . mystifies me,” continues Neil. “Fewer than 20 percent of Americans can actually stir their own gears.”
Obama’s ownership formula gets more absurd still.
Fiat gained yet another 5 percent of the company this week by increasing its sales of Chrysler vehicles outside North America. How did it achieve this? By selling Jeep SUVs, Chrysler’s mist desirable brand overseas. That is, while Obama forces low profit-margin Fiats on the U.S. where there is no market, Fiat CEO Sergio Marchionne is bringing big-profit-margin Jeeps to Europe where Euros crave its size. “Jeep defined the SUV” says Sergio, who aims to multiply Euro sales to 125,000 a year by 2014 from a meager 15k now.
But wait, there’s more. The Italian automaker will gain yet another 5 percent ownership (35 percent total) of Chrysler later this year when it introduces a 40-mpg car. But, you might ask, surely the Fiat 500’s 1.4 liter, 100 HP, 4-cylinder mouse engine gets 40 mpg? Nope, it gets a mere 34 mpg.
Obama is transforming the U.S. auto industry as promised. Into what is anybody’s guess.
What did you expect from a man and an administration that knows nothing about business? or economics? or foreign ploicy? or the American people.
Mr. Obama has been scaming America for 30 months now with his "No Clue" policies.
Reply to this commentLinkReport AbuseThe emporor has no clothes and no reason. Well, maybe this is the same strategy being used in Obamacare: Wreck the thing entirely, forcing adoption of what you really want. Governement health care = "a 21st century clean energy economy." (= American socialism as taught by the blind and self-consumed doctoral candidates in poli sci in the late 60s)
He's right on plan. But he's going to have to stop the lame posing. It doesn't just make him look like a liar.
A large part of corporate America may be busy devising a method to be a political client of Obama's government to increase their chance of survival.
There are better cars with fuel efficency than this Fiat and the Smartfor2. Obama may not be able to destroy the internal combustion engine with his current methods. Look for more blatant intrusion.
Reply to this commentLinkReport AbuseSilly me, but Honda had 40 MPG cars in the 70's.
So 40 years of progress has us searching for the same economy levels we've already seen.
Way to win the future.
Reply to this commentLinkReport AbuseEvery member of Congress who votes yes on these absurd CAFE standards should be required to drive and own only cars which meet or exceed their latest ten-years-out standard. Right now, that number is 35 mpg and the deadline year is 2020: 9 short years from now, and really just 5 or 6 years before the new designs must be getting underway to have them ready for a 2020 roll-out. As our masters in Washington have taken it on themselves to tell us the kind of product we can buy, they should at least have a personal seat of the pants feel for what it is that they're requiring. That 35 mpg number is a *fleet* number -- the corporate *average* fuel economy -- a sales-weighted composite of all cars sold. A deathtrap like the 500 falls one mpg short. This means that for every 34 mpg 500 sold, Chrysler must sell a car with a 36 mpg rating, something even slower or smaller or lighter weight.
Reply to this commentLinkReport AbuseMy 4 door, 2002 Nissan gets 35mpg, seats 5, and will go over 120mph. Yet for producing a poorly done go-kart Fiat will get another 5% of Chrysler while my public employee retirement fund gets nada.
Somehow I think the President and Charlie Sheen have the same idea of "WINNING!!" when the Pres. says we're winning the future.
Reply to this commentLinkReport AbuseI routinely get 40 to 43 mpg with my 10 year old Saturn SL1. Auto transmission and power steering included. I haven't done anything special to the car, other than use teflon based oil in it once a year. I just drive carefully, no hard acceleration and try not to use the brake anymore than necessary.
Reply to this commentLinkReport AbuseI have a v-8 BMW that is big and safe, and averages 30 mpg highway on high test gas.
Suicide clown cars are not on my list, regardless gas price.
Reply to this commentLinkReport AbuseAlternate Headline:
Fat fiat for Fiat fattened?
Reply to this commentLinkReport AbuseFirst month sales of 500 from 30 dealers, and expected to be in over a hundred dealers soon. So "no one has bought yet" is untrue.
Reply to this commentLinkReport AbuseI love the slurs like "tin can" and "mouse engine".
So for all that I read about this stupid little car, this article is the first to note the lack of an automatic transmission. You would think that was important.
They have little to no chance of selling more then a few hundred of this model JUST BECAUSE IT DOESN'T HAVE AN AUTOMATIC.
Even the few people that like little cars likely won't buy it due to the lack of a automatic.
How could they be that stupid. They take a car of limited marketability to begin with, then they saddle it with a transmission that less then a quarter can even drive?
The only cars that sell without an automatic (and that's a limited market as well) are sports cars, which the Fiat 500 is definitely not.
Reply to this commentLinkReport AbuseSince Edmunds has reviews from people who drove the 6-speed automatic-transmission version at dealers, I think we can say that the "lack of the automatic transmission" problem has been definitively solved in the time between the reviewer's test drive and now.
Reply to this commentLinkReport AbuseAnd there's more. Ford is directly involved and profits off this. Ford is Fiat's partner in the 500 microcar; it's sold in Europe as the Ford Ka, which is the same car with a Ford nose and tail.
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