Back to future for Chrysler product teams
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Before it became the junior partner in DaimlerChrysler, Chrysler was an industry leader in combining all aspects of product creation in a single team. Chrysler Chairman Bob Nardelli said last week Chrysler will create its next-generation mid-sized car under just such a system.
"We wanted to experiment with a new structure that pulled together every facet from design and marketing to engineering," he said, speaking to reporters at the Automotive News World Congress. "We're trying that on a platform that brings all of the functions together as a closely linked team in a dedicated facility."
1. Mid-sized vehicles for global markets: Michael Donoughe
2. Jeep: Daniel Knott
3. Trucks: Scott Kunselman
4. Cars and minivans: Larry Lyons
5. Street and Racing Technology, focused on performance: Kipp Owen
High-stakes game
The stakes are high. Its current mid-sized sedans, the Chrysler Sebring and Dodge Avenger, have been criticized for their cheap plastic interiors and unrefined powertrains.
In 2007, Chrysler sold 93,130 Sebrings in the United States, up from 69,357 the previous year but below totals earlier this decade, when sales hit 118,459 in 2001. Dodge introduced the Avenger last year and sold 83,804 units. Its predecessor, the Stratus, also sold in the six figures from 2000 through 2002.
"They cannot afford to botch it next time around," said an industry source familiar with Chrysler's planning process. "This will not be just a North American car. They have to sell these cars to Asia and Europe."
Cutting cost was the primary goal of the Sebring team, the source said: "Each little silo did its own thing, but nobody is happy with the result."
Back in the 1990s, Chrysler was an industry leader in cross-functional product teams. In that era, executives such as Bob Lutz, Tom Stallkamp and Francois Castaing made Chrysler the most nimble of Detroit's three carmakers.
It's a process detailed in Lutz's 1998 book, Guts: The Seven Laws of Business that Made Chrysler the World's Hottest Car Company.
"The genuinely collegial atmosphere permeated down through the ranks, sending a strong message that internecine warfare was out," wrote Lutz.
Stallkamp, the former Chrysler purchasing chief, tried to champion the Chrysler approach after the 1998 acquisition by Daimler-Benz, but he was forced to leave.
After his departure, Chrysler evolved into a North American division of the merged company, and the compartmentalization crept back. Key product decisions had to go to Daimler headquarters in Stuttgart for approval. Communication between Americans and Germans was often poor.
Nardelli said the mid-sized sedan team is part of the effort to re-establish Chrysler as a stand-alone entity.
The leader of the new mid-sized product team will be Michael Donoughe (pronounced DON-uh-hue), who has extensive international experience.
Since 2004, Donoughe has been vice president of the body-on-frame product team. Among the projects he directed was the Jeep Wrangler, which has been the hottest product in the Chrysler lineup. Donoughe also spent three years in Stuttgart as director of passenger-vehicle development for Mercedes-Benz.
The mid-sized sedan team is part of a realignment of Chrysler product development operations announced last week in Detroit. The team likely will be housed at Chrysler headquarters in Auburn Hills, north of Detroit.
You can reach Bradford Wernle at bwernle@crain.com.
