Sheaves suggests that the problem at the time of the merger was that Daimler management saw some legitimate problems — like high warranty costs — but the platform-team philosophy on which Chrysler operated at that point (designed, I believe, by François Castaing) was so anathema to Daimler’s culture that they didn’t even try to fix it. Rather than seeing a basically strong system that had some glitches that needed fixing, the Germans saw the platform-team approach (which, among other things, gave lower-level managers and engineers an unusual level of authority over their product) as anarchy, a sign that the Americans just didn’t know what the @%&( they were doing. When engineers and designers tried to exert the authority that they had previously been given, the Daimler managers saw it as gross insubordination. Before long, anyone who said “No” to a German was being escorted out of the building.

The Neon strikes me as a tragic but typical case. Like the original Saturn SL, it was a rare attempt to actually compete with the Japanese imports on their own terms (which Chrysler hadn’t done since the original Horizon), and in some respects, it came really close, only to be undone by flaws largely attributable to short-sighted cost cutting. (The reliability problems are the obvious ones, but there are also oddities like the elderly 3-speed autobox, and the fact that you could have power front windows, but not rear ones.) If they hadn’t let it languish, they could have made it into a very competitive product.

We must say this for the Neon, though. Whatever its other virtues (which it has) and faults (which it also has), it is one of the only American cars in its class to actually be profitable. Despite its lowball pricing, despite the warranty costs they ended up incurring, Chrysler actually made money on the Neon. By comparison, GM and Ford’s longstanding resistance to decent small cars was (and is) attributable to their conviction that they can’t make money at it — even though the Erika-platform Ford Escort was the best-selling model in America for many years, Ford’s profits on it were minimal. The bitch of it is that Chrysler could have fixed the Neon’s major weaknesses and still made a profit on it; they just chose not to, for which we may thank Bob Eaton, as well as Daimler-Benz.

Can’t buy it. Chrysler was profitable, its new cars had been well received and it had a very low cost structure. Quality was improving – the second-generation LH cars were a huge improvement over the first generation. Same with the second-generation Neon.

Unfortunately, Daimler thoroughly mismanaged the merger, and its quality was heading for the toilet at this time. It had to raid Chrysler’s cash bin in order to survive.

tom: Legacy costs and high gas prices would have cought up with Chrysler no matter what, although a horrible product like the Sebring surely didn’t help either.

The new Sebring and Avenger were designed when Daimler had complete control. It deserves the credit…or blame.

[On the Caliber being replaced by the Neon] “Still, doesn’t explain why it was decided to dump one modestly successful car for that utter POS.”

If you read between the lines of the story you will see that after Dumbler got thru with Chrysler, there was no one left on the small car development team. They left out of disgust or they were replaced for bucking the the new system. They didn’t have the manpower or more importantly, the know-how to develop the next Neon. So Dumbler told them to use Mitsu’s platform which wasn’t bad in and of itself. But as someone said before all the Chrysler’s get good crash ratings. That was an edict of Dumbler. Everything had to be 5 star. Problem was they weren’t designing the Mitsu platform from scratch, they were inheriting it. That’s one reason why the Caliber is so damned heavy, to pass the crash tests. But that’s not good for an “economy” car.

NickR:

“Chrysler and Mitsubishi had worked in the past though, hadn’t it? Was it Dumbler’s involvement that screwed it up?”

Yes. Although I don’t have the details. Dumbler promised some things to Mitsu and then pulled out leaving them hi-n-dry.

tom:

That is revisionist history. If Chrysler had stood on it’s own in 1998, it would have kept developing *cars*. Between 1993 and 1995 it introduced three different car platforms in small, medium and large sizes – all the while creating a full and mid-size trucks, and a mid-size SUV. Unless mgt totally tanked they would have kept on doing what they were doing, all the while expanding international sales (after the Dumbler takeover, international sales actually dropped). So you would have had more cars better suited to market conditions (higher fuel prices), international sales, and 10+ billion in the bank to fund new product development when the economy turned sour and sales fell. And what if they had decided to improve reliability the way Ford has? What if they had purchased another automaker themselves instead of being aquired? We’ll never know.

There should only have been one person for each task, not two. Mercedes should have been fully responsible for passenger car design, while Chrysler should have been responsible for trucks and minivans. It would have been easy: Simply re-skin previous generation Mercedes and sell them as Chryslers. All the development costs would have been amortized by then anyway, so the cars could have been offered a lot cheaper.

In retrospect though, Daimler was lucky do make those mistakes as this made it easy for them to get a divorce. If we’re honest, then we have to admit that Chrysler was probably already beyond redemption by 1998, even though it didn’t look like that back then thanks to massive margins on trucks and SUVs. Legacy costs and high gas prices would have cought up with Chrysler no matter what, although a horrible product like the Sebring surely didn’t help either.

To the best of my knowledge every vehicle Chrysler has launched since the Daimler gating process was introduced has had solid safety scores.

Those of you pining for an old Neon should look at the video of one doing an impression of an accordian as it hit a wall on the IIHS website.

Yes, the interiors suck. But fewer people die in them. Treade-offs.

Looks like things have not changed much, my dad first job out of school was with GM, and he got tired of creating something that got cheapened to death by the bean counters.

In most cases, the woman like the money,cars even though they pretend not too. There are some exceptions, my brother was elected by by ladies in his class as most dateable for the whole school (there was 600 classmates total). He did not have a car, and our family car’s where old beat up wagons. As for me,I pulled all the dorkyness genes out of the family pool.

Don’t get me started on Harvard MBA grads, they the ones driving good companies into wall. My former CEO said we “had a fully funded business plan” right up to we went chap 11.

That is true… actually, just about every Chrysler design prior to the DCX merger was excellent. You had cars such as the Stratus which were marvels of efficient packaging. There really wasn’t a single ugly car they made, but time hasn’t been kind on the designs due to the mental association of beater Dodge Intrepids and Neons.

I remember sitting inside the 1996 Chrysler Minivans and they were worlds ahead of anything else. The rest of Chrysler’s lineup was the same story- just compare the last-gen Dakota to the S10 or Ranger.

Pch101 has nailed it!

“Management does this without establishing whether the idea made sense in the first place”

Maybe “does the idea make sense in the first place” should be the first thing they teach in Harvard business school.

Does anybody remember Deming?

Although, at the same time I’d say that the Cloud Cars (Stratus/Cirrus/Breeze/Sebring) have aged quite well. The 1st generation ones, anyway. Most people seem surprised when they ask how old my Breeze is and I say it’s a 98. Now, granted, in some trims they do look old, but others they are perfectly fine.

mikeolan

You’re right, the Neon wasn’t a great car, but it was a great design. It was very roomy on the inside for a compact, handled very well, and got good fuel economy. The Neon engine also was, at the time, a slap in the face to the industry’s I4 offerings.

But, we don’t remember any of that because the Neon also embodies everything that is wrong with cost cutting. Shoddy build quality, cheap parts, I could go on, but you all know this story.

And what mobile home parks are you able to lure these “chicks” from.

Works the same way down here in the States.

Heck, my colleagues and I were walking back from lunch today and we spotted a trophy wife in her H2 with her purse dog. We immediately began speculating on the per annum cost to keep her under one’s roof.

Renault/Nissan shares platforms and has produced class leading vehicles.

Ford/Mazda/Volvo all share platforms and again, produce class leading vehicles.

So my guess is, Chrysler was told to “play along” with two other companies, neither of whom really wanted to play with Chrysler. It should offer a good deal of insight as to how Mercedes likes to engineer cars, and why I’d never buy one.

Also, the Neon was never a good car.

I don’t think the Neon was a great car, but neither was the original Camry; each was a start. Stingray’s point that refinement of the Neon would have brought Chrysler a winner is on the money. This is the only reason that the modern-day Accord is considered a decent ride; it is refined with each succeeding model.

Are you kidding me? You are obviously not familiar with the in ‘concubine in all but name’ Canadian women. Wave enough bling under their noses in the form of cash, a big home, a suitable title, or an expensive car and they won’t even notice your age or appearance.

Anyway, the 300 does NOT share an old MB platform. It has a few suspension bits, that’s it.

If ever there was an organization that shouldn’t have been platform sharing, it was Dumbler and Chrysler. Very different objectives and markets and a huge cultural mismatch.

Chrysler and Mitsubishi had worked in the past though, hadn’t it? Was it Dumbler’s involvement that screwed it up?

One of my wife’s friends was dating a guy driving an Evo VIII. No, it’s not an age appropriate car for a 30 year old guy, but he liked it. She hated it. I think it was the wing.…

Interesting sub topic here. Judging a new date by what they drive sounds shallow, and it is, but when you are very early into dating somebody, you are on the lookout for information on who you are with. Since the “keepers” are not usually the ones inviting you back to their place on the first date, you look at things like clothes, car, job, etc. I always checked out my date’s car. Not for what it is, but for what condition it is in. Is it dirty? Smelly? If the car is filthy, it is likely the house is the same way. A quick scan through the radio presets is a good way to check musical taste. Full of dents? Bad sign. Is she always with 1/4 tank of gas or less? That typically indicates “hand to mouth” spending habits. How people take care of their things says a lot about them.

To comment on the tangent that’s been going on, a lot of girls definitely care about your car. Just ask the 3 Boston University girls I met in front of a bus stop while I was waiting for a red light to turn green. After I rolled the window down to ask one of them for their number, she commented that she wanted a ride in “my Porsche” (I don’t even drive a Porsche) and was willing to put her friend in the trunk to ride with me in the Vette. This is not the first time something like this has happened either

I loved the looks of the LH and other cab forward cars of the time, but my God, the style has NOT aged well. Especially the second generation LH cars. Time has not been kind to them.