1970s Mercedes-Benz 450SE versus... mid-sized Imperial?

[bryankazmer]

yes, for a silly device.  Adds weight but very little function, if any.  But gave the OEM a way to change styling without changing the door skin, which requires a modified stamping die.

[Pfeil]

2 hours ago, bryankazmer said:

yes, for a silly device.  Adds weight but very little function, if any.  But gave the OEM a way to change styling without changing the door skin, which requires a modified stamping die.

You know I retired after 34 years from a automotive manufacturer  in automotive engineering and I guess anyone can call it what they like but we never called cladding in our body assembly manuals or in the parts manuals. 

[Mahoning63]

At GM I think they call it lower body molding.

 

Good article on Imperial history at Imperial Club website. Appeared in Automobile Quarterly in 1983. Says the '67 was supposed to be a '66 but was delayed a year because of tooling costs, and the '73 was supposed to be the last year for Imperial but at last minute the planners gave it one more chance on a very limited budget. As if the planners ever had a clue how to make Imperial profitable. They are the reason it failed.

 

http://www.imperialclub.com/~imperialclub/Articles/Apr83AutoQuar/index.htm

[WQ59B]

Sounds like the final Imperial was profitable, going by the projection they would make $5K per car.

Interesting to learn all the ‘old World’ craftsmanship & quality checks the Imperial was put thru; truly impressive! 

[bryankazmer]

I believe you that it was the body engineering language, Pfeil.  Believe me, based on a similar amount of time with materials engineering, that your material approval group called it cladding to differentiate it from body side molding, as they had different material approval test batteries.  True whether they were based in Warren, Dearborn, Auburn Hills, Ann Arbor, Marysville or elsewhere.  Peace.

[Pfeil]

58 minutes ago, bryankazmer said:

I believe you that it was the body engineering language, Pfeil.  Believe me, based on a similar amount of time with materials engineering, that your material approval group called it cladding to differentiate it from body side molding, as they had different material approval test batteries.  True whether they were based in Warren, Dearborn, Auburn Hills, Ann Arbor, Marysville or elsewhere.  Peace.

Body molding and body side molding are two different things.

[Mahoning63]

3 hours ago, WQ59B said:

Sounds like the final Imperial was profitable, going by the projection they would make $5K per car.

That article said they expected to make that profit selling 25,000 cars in 1981. They only sold 8131, and 2717 in 1982.  Per unit profit is dependent on sales. Probably only the folks who ran that program know what the final per unit profit/loss was but it is hard to imagine anything but bloody red. The sales were just so far off the plan, the kind of nightmare result that gets a VP fired. In this case it should have been at least the ones in charge of Strategy & Planning and Marketing.

[Mahoning63]

Am sure they blamed it on the recession, bad corporate press and umpteen other things. The first course they teach in Business School is personal survival.

Edited November 21, 2019 by Mahoning63 (see edit history)

[WQ59B]

22 minutes ago, Mahoning63 said:

That article said they expected to make that profit selling 25,000 cars in 1981. They only sold 8131, and 2717 in 1982.  Per unit profit is dependent on sales. Probably only the folks who ran that program know what the final per unit profit/loss was but it is hard to imagine anything but bloody red.

Per your post on page 3, Imperial sold 12,385 units total, and obviously there weren't any significant changes over that run.  It's reasonable to assume as a ballpark that they cleared half the profit with half the volume.  Even at one-quarter that, or $1250/car, that's still $15 million profit.  I doubt it was "bloody red". 

[8E45E]

19 minutes ago, WQ59B said:

 Even at one-quarter that, or $1250/car, that's still $15 million profit.  I doubt it was "bloody red". 

I believe expensive warranty claims on the fuel injection and the digital dash ate up a lot of that margin.

 

Craig

[Mahoning63]

There are several ways to run out a vehicle's business case but in its simplest form, over the life cycle of the vehicle it is:

 

(Total revenue) - (Cost to engineer, build and sell) / (Total revenue).

 

A ratio (direct margin) of around 27% is good, over 30% is doing really well and over 40% is a superstar. Below 20% is a problem.

 

Let's make a few simple assumptions for the '81-83 Imperial program. If MSRP was $18,000 and dealer mark-up was 10%, then net sale to the dealer was $16,200. If per unit vehicle profit was $5,000 as the article stated, then $11,200 represented the cost to engineer, build  and sell each car.

 

Next let's assume the cost to build and sell the car was 45% of net sale, which represents a very high margin luxury vehicle. This means the cost to build and sell the car was $7,290. This means the cost to engineer the car (including engineering heads, testing, tooling and plant upgrades) was $11,200 - $7,290 = $3,910.

 

That's per unit, so now we need to make an assumption about the life cycle volume. The article says 25,000 units in Year 1. Let's assume Year 2 called for 20,000 units, Year 3 for 15,000. And let's cap the life cycle at 3 years before a freshening was needed. Adding it up, the total life cycle volume would have been 60,000 units. This means the total cost to engineer the vehicle would have been 60,000 x $3,910 = $234,600,000. Would this have been reasonable cost to bring a platform share with partially new top hat to market in 1981? K-Car cost $1B to launch. Article at link says spin-offs were $50M each but it is unclear if they mean spin-off body styles (coupe and wagon derived from sedan) or new derivatives with more significant changes (Chrysler-branded offers). 

 

https://www.autotrader.com/car-news/chryslers-k-car-first-modular-platform-261267

 

Regardless, the $3,910 is what shakes out here so let's run out the rest. Because total sales were not 60K over 3 years but instead 12,385 units, the $234.6M investment needed to be spread over this lower number. $234.6M / 12,385 vehicles = $18,942 per vehicle. Compared to $3,910 for the guestimated original plan, the difference is $15,032 which is way more than foregoing the $5,000 per unit profit could have ever recovered. Direct margin would have been 16% vs. 47% had they hit their 60K sales target and maintained pricing. Speaking of which, given the low sales there may well have been money put on the hood to move the metal particularly in Year 2 and 3. This would have dragged the numbers down further, Warranty, same.

 

Go ahead and poke at it but just remember, it is the cost of bringing a vehicle to market that buries the financials when sales volumes don't materialize. That doesn't mean a vehicle has to sell in super high volumes, Porsche does just fine as a niche player. It just means the business case must balance.

Edited November 21, 2019 by Mahoning63 (see edit history)

[padgett]

The second thing you learn in creative accounting (after the joy of personal bankruptcy) is how not to make a profit (and avoid taxes).

[bryankazmer]

M63's nailed it.  Amortizing the fixed cost of engineering and tooling over a much smaller number kills the case.  That's not beancounter hijinks.

[WQ59B]

Under 20% is not "a problem". 

For 2018 - BMW is 11%, FCA is 10%, Mercedes is 7%, GM is 6%. Porsche is the grand daddy at 47%, but there's some high level of black magic involved to achieve that.
Running south of 15% is the industry standard. From what I've seen, 10-15% is considered 'good'. 27% is very 'thin air'.

With Chrysler's checkered fiscal past, I wonder if they've ever been above 10% prior to last year.
- - - - -
Found a Consumer Reports review for an '82 Imperial : retail : $20,988, dealer cost: $17,733, a difference of $3255.

[Mahoning63]

You are talking about EBIT. I didn't run it that way because more info is needed and I had to make enough assumptions as it was.

 

Used 1981 pricing though was a bit light on MSRP, was $18K and change. The point was to show the burden that initial  investment imposes deep into a program's life cycle. We don't know what the real numbers were, i just tried to get them in the right zip code.

[WQ59B]

Found some illustrative numbers on production costs. Not directly applicable to the '81 Imperial, but perhaps illustrative.

'66 Ford Galaxie 500 XL fastback (number rounded to nearest dollar) ~
$1518 : regular material
$20 : minor material
$17 : standard parts
$21 : inbound transportation

$62 : direct labor
$154 : manufacturing overhead
$1792 : unit standard cost
$9 : usage & deletion changes
$1801 : adjusted unit cost

$1928 : wholesale to dealer
$140 : destination
$2069 : wholesale delivered
$2504 : suggested list
$2684 : suggested retail

 

So Ford was making $127 per unit here, or a 7% margin. Via economies of scale, naturally the OEM sees sizable profits. But per unit @ suggested list, the dealer sees $576 per unit.
 

[Mahoning63]

Very interesting, and rare to see such numbers escape an OEM. Neither Investment nor Marketing are mentioned so they are either baked into the regular material cost or get taken out of the profit. If the latter let's do a sanity check to see what happens to profit. If total Investment plus Marketing was say, $500M, which would have been more like $1B in 1981 dollars, spread over the '65-68 life cycle volume of 3.8M units that would have been $132 per unit, which is more than the $127 you pointed out, so maybe we are too high. Or maybe the financials you list really do represent a loss or a wash or at best, a minuscule profit, because the $2684 MSRP appears to be for the base 6 cyl  Galaxie, see link. Base models often don't make much money.

 

https://www.oldride.com/library/1966_ford_galaxie.html

 

My earlier comments about investment dragging an under-performing program down were for lower volume vehicles. The full-sized Ford is a great example of the opposite. Let's say the '81-3 Imperial's investment was much lower than what I guestimated, maybe only $100M. Spread over the 12,000 units even that lower number would have been $8,333 which would have towered Ford's $132 even though Ford's investment was 10X higher (all in this hypothetical case, of course). High volume programs are usually willing to invest in anything that will reduce piece cost because they know it will pay off big. Lower volume programs must approach things differently. Notice how M-B life cycle has historically been around twice as long as U.S. mass market vehicles. That has reduced M-B's investment over an 8 year period and spread the costs over that many more units. My '71-8 Imperial proposal would have done the same and I don't think the front and rear styling would have become dated. Would have needed to change anyway given the evolving bumper regs but I would have tried to maintain '71's appearance to greatest extent possible. It's about lasting value, the type which Packard and M-B were always known for.

 

It's all an interesting discussion. Note the challenges that Cadillac CT6 has faced. First is was built in U.S. only, then U.S. and China, now China only? It was an all-new vehicle from the ground up, had no derivatives , no scale, with a body style that served a shrinking market and with a greenhouse that looked like it came from a 2001 Volvo S80. To borrow a quote from The Patriot: "This battle was over before it began."

Edited November 24, 2019 by Mahoning63 (see edit history)

[padgett]

The second thing you learn in creative accounting (after the joy of personal bankruptcy) is how not to make a profit (and avoid taxes).

 

I've seen a plant that had financial issues so overburden a profitable line that it appeared to be in the red. Management wanted to close the plant. 

[Mahoning63]

Dealer promo for 1971 Charger and Coronet. Floor-mounted cassette stereo tape player with microphone/tape recorder, whoopee!!!

 

Imperial could have shared Dodge/Plymouth's I/P structure but featured its own gauge cluster and other upgrades that gave it a jeweled look. Bench or optional buckets with multiple adjustments and seat heat, and an interior smell of cow not Dow. Classy 15" wheels and 4-wheel discs standard.

 

If an Imperial coupe were determined to have sales potential and not cannibalize Chrysler, could have been created with very little new tooling and used Satellite's roof, which was shaped like the 4 door. Chrysler coupe could have used Charger's.

 

Lots of product opportunity for Imperial and no more head-to-head competition with Cadillac and Lincoln, instead a new position in between them and M-B and with pricing approaching the latter.

 

 

Edited November 25, 2019 by Mahoning63 (see edit history)

[padgett]

In the early 70s they used to say they could run the entire year and never build two cars the same.

[WQ59B]

^ And Cadillac could build something like 3.5 years and never build the same car (late '60s).

[Mahoning63]

Here's an attempt at much greater reuse primarily from Cordoba and with doors from LeBaron sedan. Concealed headlights, unique taillights and benefiting greatly from Cordoba's lower roofline vs. LeBaron sedan. Wheelbase extended almost 4 inches for increased rear seat legroom and acceptable rear ingress/egress given Cordoba's wide C-pillar. The longer wheelbase would have driven a new floorpan so might as well take advantage of the opportunity by doing same thing as '71... fuel under rear seat, lower trunk floor enabled by IRS and spare in well for flat load surface. Second image adds skirts. Investment would still have been a burden but less than the Imperial coupe. Car would have overlapped somewhat with LeBaron Fifth Avenue but had much sportier proportions. Question is, would the darn thing have sold?

 

 

 

 

 

Edited November 26, 2019 by Mahoning63 (see edit history)

[bryankazmer]

Interesting and to me a good look for the period.  I like the greenhouse much better than the Fifth Ave's.   This is a traditional lux look , IRS not a big deal then- if the more performance image is needed, keep the IRS but ditch the wire wheels, vinyl roof, striping and maybe whitewalls.

[Mahoning63]

Here's a slight variation that kicks up the beltline just forward of C-pillar to mimic the kick-up just aft of A-pillar. Starting to look more like a Lincoln.

 

Okay, let's walk away from IRS and the fuel injection system that didn't work and see what's left. A T-square compact/mid-size sedan with upscale, tailored, me-too appearance, super soft ride, fine Corinthian leather and not so good fuel economy. Not an M-B fighter but not a big Cadillac flotilla either. More normal than an '80 Seville and '82 Continental but in a good way, at least compared to Seville. A far cry from the curvaceous '71 Imperial proposal and its unique and original styling. I never fully appreciated Engel until studying the del Oro school of design and all the product that followed. He really had created something original and compelling, if a bit odd and out there.

[WQ59B]

Just getting a strong Olds 98 with a C-Pillar swap vibe.

[Mahoning63]

It might be the skirts that remind of Olds. 

 

Maybe the C-pillar needs to be metal and perhaps the forward part of roof should get the padding, without or with beltline kick-up. Reminiscent of Imperials of 20 years earlier.

[Mahoning63]

But let's not drink from the wrong bottle...

 

[bryankazmer]

I like the throw back roof reference.  Would stainless on the front section be going too far?

[Mahoning63]

Not necessarily, it certainly wouldn't go unnoticed by the buying public.

 

Of all the ideas floated I like the non-vinyl top version mated to straight-through beltline best. But there is a major deficiency. The rear is saggy, needs uplifted. First thing that came to mind as a solution was the '74-75 Imperial theme, so here's a version that adds a good inch to height of decklid and rear fenders and helps reduce the bigness of the C-pillar. Finally a car that arguably looks right! And though boxy, doesn't look too much like a Lincoln or Cadillac but instead ties back to earlier Imperials.

[Mahoning63]

Now that a working model exists it is easy to alter it, so I'd like to explore a design progression that would not be unlike what some programs go through. Let's assume it is 1977 or thereabouts and the Imperial coupe study is well along, sedan alternative just coming together.

 

Working from theme immediately above, Imperial studio may well have lobbied to include the long-nosed frontal design of their proposed coupe with neo-classic bustelback. That car appears to use Cordoba's front fenders and hood, differentiated with an almost 4 inch longer front overhang with unique bumper/fascia/grill. So onto the sedan it goes.

[Mahoning63]

But then a faction in studio argues that the car now looks like Pinocchio and lobbies for a similar increase in rear overhang to re-balance to correct proportions.

[Mahoning63]

Not yet worried about cost, more concerned with ideal state, Studio argues that to really bring the car into balance the front and rear wheels need to move 2 inches forward and back, respectively. Renderings and full scale 2-D line drawings are created and everyone is in awe at the potential they never knew was possible with the J platform.

 

Problem is, it no longer is the J platform!

Edited November 27, 2019 by Mahoning63 (see edit history)

[58L-Y8]

Wonder if they could have used the R-platform to create this Imperial?  The proportions look almost the same as those '79-'81 New Yorkers.

[Mahoning63]

Alas, Finance screams at everyone that either J makes money in all its permutations or it's gone, and points out that there is no corporate appetite to pour more money into it.  And so... the Program Chief orders Studio to adapt the theme to the existing 112.7 wb platform and use as many Cordoba and sedan stampings as possible. The Chief is OK with the unique narrower C-pillar because it is part of the rear quarter stamping anyway, and that needs to be new else the car will look like a 4-door Cordoba in side view.

 

Predictably the new theme quickly becomes the favorite child by all but Studio and Marketing. The latter always more the realist, Marketing sees the entire Imperial program teetering on the edge and so makes a coherent case for the short car, the target market being wealthy older women who want a practical luxury car that is stylish, comfortable, easy to maneuver and has good visibility, and is not too concerned with rear legroom.

 

So... YOU are the Program Chief. Which theme, if any, do you choose? Or do you place your bet and (theoretically) your career on the coupe? Or something else? Or do you lobby the CEO to drop the whole idea of a modern Imperial?

Edited November 27, 2019 by Mahoning63 (see edit history)

[Mahoning63]

Compare last theme to Cordoba. Fairly good differentiation and being a sedan, a different market.

[Mahoning63]

24 minutes ago, 58L-Y8 said:

Wonder if they could have used the R-platform to create this Imperial?  The proportions look almost the same as those '79-'81 New Yorkers.

They sure do. The argument against would have probably been that R's future was in even more doubt than J.

[bryankazmer]

The long overhangs are disfunctional.  They add weight and bulk but add no function beyond a bit more trunk room.  Raising of the deck lid above the belt line brings to mind the infamous "Bangle butt" at BMW.

 

The original trim design is only bloated by all this - keep it svelte.

 

Can we seen some brushed stainless disc or body-colored wheelcovers instead of the wires?

 

[padgett]

We now have more Imperial pictures than were ever produced.

[58L-Y8]

The R-platform was on the edge by the time an '81 Imperial would have been introduced.   Perhaps if management could have been convinced to retain it for the law enforcement and livery/taxi base volume then present an Imperial which would have been completely unrecognizable in its sharing, the premium per unit could have justified it continuance.   These images demonstrate there was a potential for a very appealing Imperial to be created from the basics.

 

Imperial's worst problem by then was the lack of continual presence in the segment.  Consistent availability seems a subtle but key factor to being taken seriously by the luxury buyers. 

[bryankazmer]

consistent presence is indeed needed.  Consider how difficult it is to enter that segment even now.  Lexus did it but had a solid corporate history and multi-year commitment.  Hyundai is trying for a second time.  Mazda aborted at the last minute.  A second factor now is the impact of leasing - no reputation = low resale value = high lease.