Go to the Globe and Mail homepage

Jump to main navigationJump to main content

North American International Auto Show

Big Three reclaim Detroit Add to ...

There is plenty of life in car companies that call Detroit home, though General Motors’ North American president Mark Reuss does point out – somewhat tongue in cheek – that Chrysler is actually an Italian company, thus any reference to the “Detroit Three” is misplaced.

For the moment, though, let’s just say Chrysler, which is indeed controlled by Italy’s Fiat, is in the club with Ford and GM. If we do, then here are the three cars that define what’s happened to the Detroit Three since the great financial crisis of 2008-2009 and the painful restructurings that have ensued: 2013 Ford Fusion, 2013 Dodge Dart and 2013 Cadillac ATS.

More related to this story

Three cars, each competing in a different segment and each one, in the words of auto analyst Rebecca Lindland of IIHS Global Insight, a budding star.

“These three speak to what has happened in Detroit,” says Lindland.

What’s happened, says Reuss, is that GM, for one, has become a full-blown car company, focused on building vehicles not crafting two or three business plans and takeover deals each and every year, as the company did for much of the time before the 2009 GM bankruptcy. Case in point: the ATS sedan, a BMW 3-Series fighter expected to be priced in the low $30,000s. It is to be launched in the second half of 2012. This car is the small Cadillac the premium brand has been in desperate need of for at least the last 14 years of its ongoing comeback.

Then there’s the Dodge Dart. The 2013 Dart is a bit of a show-stopper here at what is officially called the North American International Auto Show. Built on a Fiat/Alfa Romeo platform, the Dart will arrive with a variety of powertrain options and Dodge Charger styling cues. The interior of this compact, which will surely sticker with a base price of less than $16,000, boasts an electronic instrument cluster surrounded by lighted colour accents. It’s a gorgeous package and light years removed from the lamentable Dodge Neon compact introduced at this very show almost 20 years ago.

And what of the Fusion? Ford’s latest One Ford offering is a mid-size sedan that will be sold around the world, and one that literally “took my breath away,” said Lindland. The Fusion – to be sold in Europe as the Mondeo – follows in the “Kinetic Design” footsteps of the 2013 Ford Escape compact crossover, with all its curves and finely drawn lines. The engines, meanwhile, will have direct fuel injection and turbochargers and there is even a hybrid planned.

These three – the Fusion, the ATS and the Dart – show that here at the dawn of 2012, Detroit’s car companies are viable, profitable, and in the early stages of launching a raft of new models. We haven’t seen Ford, GM and Chrysler in this sort of fighting trim for decades, if ever – at least collectively.

All three are making money and building some of the best cars and trucks ever. Detroit, at least for the present, is not only back in the game, but putting up points with a commitment to car-making that’s stunning to anyone who can remember what these companies were like earlier in this century and going back to the 1990s and 1980s.

“It’s hard to say at this point that the [government]bailouts worked for GM and Chrysler, but what we’re seeing is impressive,” said Lindland. Ford, of course, did not seek bankruptcy protection, but has still enjoyed the benefit of generous government loans.

In any case, Chrysler expects to earn a net income of $600-million (U.S.) for all of 2011, up from previous estimates of $200-million to $500-million. Chrysler has paid off all its government loans and is in the early stages of becoming completely integrated with Fiat SpA of Italy into a global auto maker. The story continues to unfold, but the point is, taxpayers are no longer on the hook for any part of a Chrysler bailout.

General Motors, which like Chrysler went through bankruptcy protection in 2009, remains 26 per cent owned by the U.S. federal government, with another 12 per cent owned by Ontario and our own federal government. That said, GM has earned $7.1-billion through the first nine months of 2011.

Ford earned $1.65-billion in the most recent quarter and will reinstate its dividend for the first time since 2006. Ford keeps growing and earning piles of cash, paying off debt at an astonishing rate even as it funds an aggressive product plan and expands into emerging markets such as China and India. What a success story.

But nothing works in the car business without compelling new products. The Dart, which will compete with the Ford Focus, Honda’s Civic and the Chevrolet Cruze in the heart of the small-car market, is compelling. And by launching the Dart, Fiat will get an additional 5 per cent stake in Chrysler, boosting its holdings to 58.5 per cent. The company's only other holder is a union retiree health-care trust that received shares during the bankruptcy restructuring.

For GM, the ATS is the start of a product renaissance at Cadillac, and while cynics will say this is just another in a long line of announced product renaissances at Caddy, I am inclined to think this one might stick. But it’s hard not to be cynical about Cadillac. To his credit, Reuss said he wants a flagship Cadillac model to compete against the likes of BMW’s 7-Series and more. He has plenty of clout at GM and at heart is a no-nonsense product guy, an engineer by training and temperament. This reinvention of Cadillac just might work.

And Ford? Beyond the Fusion, the next step in the Ford story is the desperate need to fix the Lincoln premium brand. To call Lincoln moribund is to so say Greece has a small economic problem. Lincoln is a real mess. But here in Detroit, Lincoln has a new and gorgeous stand and showed a stunning concept that points to the brand’s styling future. This truly is Lincoln’s one last chance to resurrect itself. The reality for Lincoln is that the big Navigator is due to be restyled this year, and there is talk of a new Lincoln small crossover. Also, the MKZ and MKS are due to be reinvented in 2012.

GM, Chrysler and Ford: Detroit’s Three let key new models do most of the talking at this year’s 2012 Detroit auto show. They spoke volumes about the future.

Follow on Twitter: @catocarguy

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories