Biggest auto industry blunders of 2015

DETROIT (Dec. 30, 2015) — From Volkswagen A.G.'s diesel emissions scandal to Ford Motor Co.'s F-150 crash-test do-over, we look back at the 10 biggest blunders of 2015.

Volkswagen's emissions mess

Is it possible to convey the enormousness of this thing adequately? The company set aside more than $7 billion to cover scandal-related costs, but that's merely the beginning of the damage. There's brain drain: A CEO stepped down; senior, key engineers, including Ulrich Hackenberg, father of Volkswagen's MQB modular architecture, have left. VW's rep in the U.S., Europe and elsewhere is tarnished.

In the U.S., its dealers are in crisis, its business strategy in tatters. That pipe dream of selling a million cars a year? Fuggedaboutit. Instead of focusing on new models, it's scrambling to figure out how to fix the NOx-spewing diesels and compensate owners. As rivals are increasing investment in autonomous driving and other technologies, VW is cutting capital spending by 1 billion euros a year. And the aftershocks, such as its admission that it fudged fuel economy numbers, are still coming. Get the idea?

Sergio Marchionne's love letter to GM

It has to be the oddest corporate marriage proposal ever. It was made not in the usual manner — in secret meetings at airport hotels and late-night phone calls between investment bankers. It came in an email to GM CEO Mary Barra, which was not answered, and then laid out in an analysts' call in which FCA CEO Sergio Marchionne said the auto industry is ill and the cure is big mergers, starting with an FCA-GM tie-up. The offer sparked a media furor, but in M&A circles, crickets. More than anything else, the move highlighted FCA's own serious bottom-line challenges. GM, meanwhile, declined the overture and has gone on racking up hefty profits.

Donald Trump rails against Ford's Mexico investment

In June, presidential candidate Donald Trump attacked Ford's plans for a $2.5 billion plant investment in Mexico. Mr. Trump claimed that he would call “the head of Ford” and tell him: “Let me give you the bad news: Every car, every truck and every part manufactured in this plant that comes across the border, we're going to charge you a 35 percent tax” — apparently unaware how the North American Free Trade Agreement works.

Scott Painter's flameout

TrueCar once seemed poised to reinvent auto retail, and this year the ambitious founder and CEO decided to play hardball with dealers, whom he viewed as competitors. He wanted them to hand over extensive data about customers, much more than many were willing to share. AutoNation and its CEO Mike Jackson publicly refused, and a feud ensued. Inconveniently, about that time TrueCar issued a profit warning and missed its forecasts. With Mr. Painter's credibility shaken, TrueCar's board, especially affinity partner and major shareholder USAA, turned on the CEO, and he agreed to resign.

Julie Hamp's not-so-excellent adventure

The American communications executive was one of three non-Japanese named to top posts at Toyota Motor Corp. early this year as part of an effort by CEO Akio Toyoda to diversify an insular leadership team. Then Julie Hamp was mailed a package from the U.S. containing oxycodone, the import of which is strictly controlled in Japan. For 57 pills, she was arrested and thrown in jail. For three weeks. Toyota offered tepid support. Toyoda called her “invaluable” and a “trustworthy friend” but didn't demand her release.

While sitting in the clink, she resigned. In this comedy of errors, Ms. Hamp's was actually quite innocuous, worthy of maybe a fine and a slap on the wrist in any other industrialized nation. The actions of Japan's authorities were egregious. So much for diversity.

Piech's last stand

The grandson of Ferdinand Porsche, the inventor of the “people's car,” Ferdinand Piech had dominated Volkswagen for 22 years, first as CEO and then chairman of its supervisory board, pulling strings and orchestrating the ouster of those who fell short of his exacting standards. In April, he tried one more intrigue, against then-CEO Martin Winterkorn. Unhappy with VW fortunes in the U.S., Mr. Piech slyly told a German magazine that he was keeping a “distance” from his former protégé.

News that the chairman suddenly had doubts about the CEO set off a board-level crisis, but this time Mr. Piech went too far. With VW nosing ahead of Toyota as the world's largest auto maker and profits billowing, the board sided with Mr. Winterkorn. Vanquished, Mr. Piech resigned, as did his wife, Ursula, also a board member. When the diesel scandal erupted, Mr. Piech gained a measure of revenge as Mr. Winterkorn resigned and was replaced by a Piech favorite, Matthias Mueller. Oh, but what a price: In the wake of the diesel mess, VW's shares have plummeted, cutting the value of the Piech-Porsche family's holdings at one point by as much as $11 billion.

The Takata train wreck

The maker of airbag inflators continued its blundering ways in 2015. It's in hot water for making inflators that can explode too forcefully and spray vehicle occupants with shards of metal and plastic. That's bad enough, but then it was revealed that Takata Corp. had provided its largest customer, Honda, with incorrect data related to its inflators. Takata agreed to pay $70 million cash as part of a consent order with the National Highway Traffic Safety Administration (NHTSA) for Takata's violations of the Motor Vehicle Safety Act but could end up paying a whole lot more if it violates the terms of the order or U.S. auto safety laws.

The hug

The opening of UAW and FCA contract talks in July was highlighted by an emphatic man-hug between union boss Dennis Williams and FCA CEO Sergio Marchionne and rankled the rank and file, used to seeing their leaders confronting, pushing, challenging management, not some buddy-buddy bromance. Then the union leaders and the company announced a deal in September, after no strike, no walkout.

It included the first raise in 10 years for veteran, Tier 1 workers and a path for lower-tier worker pay to climb to as much as $25 an hour over the four-year term of the contract. But the membership spiked it — decidedly. Messrs. Williams and Marchionne were forced back to the bargaining table to hammer out a more generous deal for workers.

 The Alfa Romeo 4C

The curvaceous two-seater was supposed to put an exclamation point on the Italian racing brand's return to the U.S. market. Made from a combination of aluminum and carbon fiber, the midengine car was touted to offer a better 0-to-60 mph time than the Audi TT and Porsche Cayman. It is powered by an aluminum-block inline four-cylinder powerplant rated at a thrilling 258 pounds-feet of torque and sports a dual-clutch gearbox. All that for a sticker price of $55,195, including shipping.

But it also has a high and wide door sill that requires the driver to perform an acrobatic move worthy of a high jumper to exit the car. It also has no trunk, so if you're heading to the airport, you choose: Companion or luggage? Through November, FCA sold 606 of the cars and had another 213 in inventory.

The Ford F-150 crash-test do-over

The 2015 SuperCrew version of the pickup passed the Insurance Institute for Highway Safety's (IIHS) small-overlap crash test with flying colors, thanks in large part to tubular bars welded to the truck's frame in the front wheel wells. That was great for Ford because IIHS normally tests just a single version of the pickup — the SuperCrew! — to derive its highly coveted top safety ratings. But what's not so awesome? The regular cab and SuperCab versions of the truck didn't have those bars. When IIHS decided to test a SuperCab, it was rated “marginal” in the same offset test. It was an embarrassment for the otherwise highly touted aluminum truck. After the details spilled out, Ford said it will add “countermeasures” to the regular cab and SuperCab versions for the 2016 model year.

_______________________________________

This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.