Francois Castaing is among the creators of the sport-utility craze that has propelled the North American automotive industry for the past decade.
After he joined AMC in 1980, he championed production of the Jeep Cherokee Limited, which helped transform sport-utilities into mainstream, personal-use vehicles.
Castaing, the former AMC group vice president for product and quality, carried his belief in Jeep sport-utilities to Chrysler Corp. In 1987, Chrysler, now DaimlerChrysler, bought AMC from French automaker Renault SA.
In 1988, Castaing took over as Chrysler's vice president of vehicle engineering. He is credited with pioneering Chrysler's famed vehicle-development platform teams, product groups that included design, engineering, manufacturing, finance, marketing and purchasing. Chrysler's teams were modeled after AMC's nimble product-development groups. But Castaing never relinquished his role as a strong voice for Jeep within Chrysler. Indeed, two vehicles he helped to conceive at AMC - the Cherokee and the Jeep Grand Cherokee - helped Chrysler stave off bankruptcy in the early 1990s.
Castaing retired from Chrysler in December 1997. He discussed the birth of the sport-utility era with Staff Reporter Mary Connelly.
Whose idea was the Chrysler purchase of AMC?
It came from Chrysler Chairman Lee Iacocca. Renault was in trouble. Some of the Renault people were blaming the (AMC) venture in America as a reason for the trouble.
Why was Iacocca interested?
Iacocca was interested for a good reason: Jeep.
AMC had invented the first yuppie sport-utility called the Jeep Cherokee Limited. The money it was bringing to the company was tremendous.
I still believe the sale was the biggest tragic mistake of Renault.
Over time, Jeep has proven to be the golden goose of the new Chrysler.
When did you see the potential for sport-utilities?
We saw the potential for sport-utilities at AMC. With the success in 1985 of the four-door, black-painted, gold-striped Cherokee Limited, we realized that we had found the beginning of a craze that became sport-utilities. In 1986, we decided to invest in doing the Grand Cherokee.
What did Chrysler bring to the deal after the AMC purchase in 1987?
Chrysler brought the weight of the company, more money to invest and the new production facility at Jefferson Avenue in Detroit. So Jeep got horsepower behind it.
Jeep is now one of the most recognized brand names in the world. Who gets credit for that?
Brand recognition starts with the product itself. The name of Jeep (today) was created by the success of the Cherokee and the Grand Cherokee.
When you conceived the Grand Cherokee, did you already sense that these were going to be personal-use vehicles?
As soon as the Cherokee was in production in 1983 as a 1984 model, we saw it was perceived as a car. People started enjoying it as a fashionable station wagon on a high-performance four-wheel-drive system. I remember saying, 'How about if we were to just dress up the car like an import luxury vehicle? The suspension is fine. We have a wonderful powertrain.' So we painted it black with gold wheels and gold stripes. We created a craze with the Cherokee Limited. Overnight it became a hot seller.
AMC discovered and mined what became the sport-utility craze?
We had Jeep. We decided to do something with Jeep. By doing something with Jeep, we ended up discovering that, instead of staying with the traditional market which some people at AMC were advocating.
You mined a category that went on to dominate the industry for the next decade. Did you have to sell the idea to Chrysler?
In 1986, we were already designing the second one, the ZJ (Grand Cherokee). Going into Chrysler, the ZJ (program) was postponed almost two years from 1989 to 1991 even though people at Chrysler were convinced a sport-utility market was going to work. It took some time for (former AMC President) Joe Cappy and I to convince everyone that we had to stick to the plan.
But Chrysler went on to market both the Cherokee and the Grand Cherokee.
Six months before the start of the Grand Cherokee, Chrysler sales and marketing were still convinced the Cherokee should not be around. They convinced Iacocca.
We went through a crisis in the spring of 1992 because we had run out of parts for Cherokee when the market was still clamoring for it. Here we are in 1999 today, and Cherokee is still humming along.
You are suggesting AMC brought not just the Jeep brand name to Chrysler but a product philosophy and strong voice for Jeep within the company?
Yes, that is true. Not making Cherokee could have been a very costly mistake because in 1991 and 1992, Chrysler was not out of the woods. Making Cherokees or not making Cherokees was a huge swing financially in terms of saving the company the second time around.
How instrumental was the AMC acquisition to Chrysler's survival the second time it came near bankruptcy?
Two lines of products permitted Chrysler to squeak by in 1990, 1991 and 1992. One was the minivan. The other was Jeep, the Cherokee and the Grand Cherokee. On a fully accounted basis, Jeep has brought more money to Chrysler from day one than any other product they have. The Grand Cherokee and the Cherokee combined brought more wealth, more cash to be reinvested, than any other product at Chrysler.
Even more than the minivan?
Yes. In 1990-92, the decision to keep Cherokee made a huge difference. Some of us never gave up the idea. At the time, I was in charge of the Jeep platform business group. The sales people said it was not going to work. Iacocca agreed with them, that one Jeep is already a lot of Jeeps.
What reversed the decision?
The customers and the dealers who ordered more.