What a beginning for Tom Stallkamp. Chrysler Corp.'s new president officially began his new duties Jan. 1. He immediately joined other company executives in secret merger talks with Daimler-Benz AG. Stallkamp will lead the effort to integrate the product, sales and marketing, and manufacturing arms of the two companies.
He was interviewed by Automotive News Publisher Keith Crain, Editor Peter Brown and Staff Reporter Ralph Kisiel at his Auburn Hills, Mich., office on May 12. (Stallkamp declined to talk about the pending merger due to government securities restrictions.) What follows is an edited transcript.
How do you enjoy being president?
The first four months have been better than I thought they would. Very rewarding. We came out very fast with a good first quarter. Record earnings. Sales are good. Everybody's working together very well, which wasn't a concern to me, but a lot of people made such a big deal about that. We're all still talking to each other.
The executive committee meets every Monday (all the executive vice presidents) without Eaton or Lutz and talk through how things are. That's the way the company's always been. That's the way it's still run.
Is the car business becoming commoditized?
We think if you have a design and a car that strikes some passion, you can break through that. The vast majority of cars are, to some degree, lumped together. Our job is to distinguish those out and continue to do cars like the Chrysler 300M and LHS, to show our customers that our cars have some spirit and passion to them and they are more than a commodity mobile, not just somthing to drive to work in.
What is happening with the Dodge Intrepid?
Intrepid got off to a slower start than we'd like. Our analysis is there's nothing fundamentally wrong. Lots of little things. One was, quite honestly, the Dodge dealers are doing very well selling trucks. As the company grows, this is one of the pleasant problems to have. We're doubling back now, and I think you'll see the Intrepid come back very well. Last month it was almost tied with Chrysler Concorde in sales at the retail level.
Do you see your percentage of light trucks continuing to rise?
No, I don't think so, because we've got new passenger cars. We have more entries now. Neon sales have held up extremely well in a very, very competitive market. We are where everyone else wants to be, frankly, with our mix. But that's what Chrysler is noted for. Everybody else is coming out with sport-utilities. We come out with two new cars, and clearly they are being well received. That's what we want to do - go where people aren't.
Your Bramalea, Ontario, assembly plant is building four car models. That is not going to overwhelm your truck volume?
No, but it's a good sign that we are concentrating evenly across where we are. It shows that we are a big enough company to cover a breadth of vehicles, and we're not panicking to move to one side or the other. And that's very comfortable for us.
How do you view the emerging sport-wagon segment?
I don't know. It hasn't been defined yet. Everybody is groping with that. I don't know if there will be one answer. You will see from us our answer to that down the road. But clearly you have to look for new segments. In general, it has some type of four-wheel-drive capability, not necessarily off road. It has some better package than a car, but clearly not a minivan.
Will the minivan market stay at its current level?
I think so. There obviously are more entries. It's getting more competitive. But I don't think the segment's going to decline any.
How are you protecting your share given these new entries?
We have the broadest breadth of minivans known to man. We sell everything from a base-level Plymouth Voyager that comes in around $17,500 all the way up to the new Chrysler Town & Country Limited that goes for $34,000. I defy you to find anybody that makes minivans, or in fact any other vehicle, that goes that span, doubles its value. And we've been able to find different segments within that minivan segment. There's the luxury segment, there's the long wheelbase, there's the short wheelbase segment. So I think it's variety of models and feature content that will keep us having roughly half the minivan market.
Has the anti-truck backlash affected how you are doing any business?
We don't see it in the marketplace. Why are we at more than 70 percent light trucks? People want the utility and versatility of a light truck. No, we're not seeing that affect us at all.
I'm glad that we have the Dodge Durango, instead of something even bigger, because I think Durango is a long-run kind of useful vehicle that people can buy, go through its cycle, and buy again. I'm not so sure that would happen with something larger than Durango.
Have you discussed anything bigger than the Durango?
We always look at our product line up against everybody else's. We talked about it, and we're glad we came out with Durango. Our forte is not following other people.
Where are you with the Dodge Ram-based sport-utility for Mexico?
We're getting to be a large enough company now, and even in the future, that we can do different models for different parts of the world.
How goes the battle to get the cost out of the whole extended enterprise down through more tiers?
As you know, the SCORE program is the way of counting that, and so we're doing extremely well. We raised the target internally from $1.5 billion to $2 billion. It's aimed at waste elimination, not at margin reduction. So as long as you approach it from that standpoint, we're OK. It requires us to change the way we work with people. Those guys that are helping us, we need to reward them with more business. Those guys that aren't quite playing, we'll have to give them another tune-up or a thought-starter.
I think it's tough to change this industry from the way it was created over the last four or five decades, but we're making some progress on that.
Is there a collective groan from suppliers when you raise the bar?
No. I hope that the SCORE program is not an onerous kind of adversarial thing. We think we've got them conditioned that the yardstick is going to be raised each year, maybe during the year.
But our competition does that, too, perhaps in a slightly different way of raising the yardstick and goal posts. We just kind of work with them a little closer.
We want them to make enough so it's good business for them to return investment into that business, and I think we've been very successful.
How much can you integrate your supplier body with somebody else's supplier body?
The only function that's envisioned in the (merger) announcement to be integrated from the start is the global purchasing function. So I think it shows a lot of potential for applying the Chrysler techniques to our new partner.
Techniques as opposed to integrating the suppliers themselves?
Techniques (such as) integrating the supplier into the company, the SCORE program, working closer with suppliers, leveraging r&d - all the stuff that's the hallmark of our program. I think you'll see that continue in the new company.
How is your joint-venture engine plant with BMW AG in Brazil coming along?
The engine is doing extremely well on prototype development here as well as with the joint venture's major customer (BMW's Rover Group). But the real thing that excites me about it is the small team of people we put together has done better than our partner thought that we would do, and they're a pretty high-class and high-technology company.
What do you do on the distribution side to take costs out?
How we can schedule our production to be more in line with what the people are ordering off the lot. Because we still believe that in the next century, by far, the predominant majority of our vehicles will be sold by the traditional dealer franchise. Jim Holden (executive vice president of sales and marketing) is spending a lot of time and money on making sure that we really know what the customer wanted to buy, not what he actually bought - two different things. And then making sure that the cycle of our manufacturing is more in line with that desire so we don't have purple minivans with red interiors sitting around.