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Auto Efficiency: An Executive's View

ROBERT SIEGEL, host:

One other automaker that would have been mentioned in the same breath as Ford and GM, until its merger with Daimler-Benz, is Chrysler. This week, I asked the CEO of Chrysler Group, Tom Lasorda, about his company's strategy, given the soaring cost of gasoline.

Mr. TOM LASORDA (CEO, Chrysler Group): Well, I think what you'll see is a shift with the Chrysler Group into smaller vehicles. In particular, if you look at a Dodge Caliber that just came out, we call that an entry-level compact car. We may look at products slightly smaller than that, but in order to do so, we would look at some partners around the world to do that with. And within 10 years, you'll see more hybrids and more movement towards fuel cells as well.

SIEGEL: It appears that the choices the different automakers are making about how to cope with the desire for greater fuel efficiency, in that choice, that Chrysler's going mostly with ethanol. That seems to be your big gamble. Do I have that right?

Mr. LASORDA: Well, ethanol is one, because we see ethanol as an option from oil independence and national security play. We also are looking at diesels, which have an improvement of 30 percent in fuel economy, and biodiesel mix, which again is a homegrown solution for this nation. To bring soybeans and other crops, including corn and such, for ethanol are great options for national security, but we also need fuel economy. That's where diesels will play in. We're moving into hybrids in early 2008 as well.

SIEGEL: The best that I can make of sales figures indicate to me that right now Chrysler dealers have a 125-day supply of Dodge Rams out there and ideally you'd want that to be about half that supply. Do you think we're seeing the twilight of the personal truck?

Mr. LASORDA: Well, the personal truck will be here forever. And it's the reason because of what people use it for, for practical purposes, commercial usage, as well as individual, whether it be boating or, like I say, business or whatever. So it'll always be here. The question is providing more fuel-efficient options for them.

Of course, we don't like the fact that we have that kind of day supply. But overall, I mean, we've had the spikes and ups and downs and fuel economy hit it. But we'll be back within the normal levels here in the next three or four months.

SIEGEL: I want you to explain something to me. The Dodge Durango hybrid, this is a car - well one auto writer has said by going hybrid with the Dodge Durango, you can take a car that gets 12 miles to the gallon and get 16 miles to the gallon instead. What's the point?

Mr. LASORDA: Well the point is, is that we're targeting the largest cars. And people love the Dodge Durango and say, why would you put a hybrid in there? Well, it is to get the fuel economy. That's one step in the right direction. And the next will be as we get new ones, we take the weight down and continue to improve fuel economy over time.

SIEGEL: But why should any benefit attached to buying a hybrid that gets mileage in the teens, when you can buy a conventional car that gets mileage up in the 20s?

Mr. LASORDA: Well, first of all, it depends on what you're using the vehicle for. And I mean if you have a family of four or five children, you need a car the size of a Durango to fit them in or a minivan or whatever.

SIEGEL: But there are families, you know, all over Europe and Asia that have many children and they don't have Durango-sized vehicles.

Mr. LASORDA: Well, I know, and we're glad that they have smaller vehicles over there and we're glad our Durango fits the needs of people here not only drive their kids, but they also have sporting lives and they have other things beyond work. And we think that's the size of vehicle they need.

SIEGEL: So the culture of the American car, from what I'm hearing you say, that's here to stay. I mean, the desires for efficiency may have to work into that, but the idea of the rather large personal vehicle is something that's just inherent in our way of life.

Mr. LASORDA: Well, and if you look at it back - and I remember the days I started in the auto industry almost 29 years ago - when I looked at the cars and the vehicles that were there. You remember the size of the big old, you know, Chrysler products and GM and all of them were big. And they're still big today.

But they're big for various reasons, mainly because of how people need them for personal use. If everybody just needed a little compact car that sat two people, I mean, they would be buying them. But the fact is they don't.

There's a mix now. There's a shift, like I said, to cars from big trucks or SUVs. Big, large SUVs, we see that level saturated as far as upside in volume. And that's what competition's all about. When people swing, we'll be there with new product.

SIEGEL: Mr. Lasorda, thank you very much for talking with us.

Mr. LASORDA: Thank you very much.

SIEGEL: That's Tom Lasorda, who is CEO of Chrysler Group. He spoke to us from Auburn Hills, Michigan.

BLOCK: On average, American cars and trucks actually get fewer miles per gallon today than they did a decade ago. Find out why at NPR.org. Transcript provided by NPR, Copyright NPR.