(The following email was sent to Chrysler employees today. It was released to the media with a note which read "'This information should help you cover Chrysler. We also sent it to our employees to help them as ambassadors of the company – Nancy." We leave it to you, our Best and Brightest, to make what you will of it.)
Keeping Track of the Facts on Chrysler LLC
By Nancy Rae
Senior Vice President, Human Resources and Corporate Communications
As the industry goes through a period of great change and a slowing economy, we all face difficult questions about the status of the industry and our company. Following are a number of the leading subjects that come up in the media and in our daily conversations, as well as information you need to know and share:
The State of the U.S. Auto Industry in 2008 .
Our full year plan for the market in 2008 has been aggressively conservative, allowing us to be better positioned for the current slowdown. We are clearly in a challenging environment, but continue to be focused on building a profitable enterprise for the long term. We are committed to good business practices despite the market slowdown such as reducing fleet sales (volume down more than 20% YTD) and dealer inventory (volume is down 67,000 units from a year ago).
The State of Chrysler
. As a private company, we are like a $60 billion startup with a real owner-operator mentality.
. Despite the challenges, we are meeting or exceeding our financial targets.
. According to Bob Nardelli (in The Wall Street Journal), "Cerberus nor its backers are second-guessing the deal. They are not looking back."
. According to Tim Price, Cerberus spokesman, "We are comfortable. We are long-term investors. Chrysler is ahead of its cash flow forecast by $1 billion."
. We currently have our top 300 leaders going through a comprehensive leadership development program consisting of five segments focusing on strategic thinking, operating excellence and leadership.
. We are developing project-specific alliances to help bring the world's best technology to our customers, as soon as possible. Examples range from working with Nissan on a new small car for global markets to partnering with GM, Daimler and BMW on hybrid technology.
. We enacted a 5 percent cost reduction on certain non-production materials and services as a part of ongoing efforts to reduce our cost footprint in a highly competitive marketplace.
Chrysler's Sales in 2008
. Worldwide sales are down 14% YTD, which includes YTD increases in Canada, Mexico and International Markets. Fleet sales in the U.S. were down 40% in May and 23% for the year.
. Sales are rising for new products, such as Dodge Journey (2nd best selling mid-size crossover in May), Dodge Avenger (+15% YTD), Dodge Caliber (+9% YTD), Chrysler Sebring Sedan/Convertible (+11% YTD), and Jeep Patriot/Compass (+65% YTD).
. Our long-wheelbase minivans' U.S. retail sales are up 30% YTD, and retail share is up.
. In Canada, Chrysler is the #2 best selling manufacturer in the country, and up 5.5% YTD.
. In Mexico, Chrysler's sales are up 5.1% YTD.
. Outside North America, Chrysler's international sales are up 8% YTD, with markets like China and Russia becoming a larger part of our business.
. Dealers have embraced Project Genesis, and we are making progress in transforming the U.S. dealer network. Through May, 58% of our dealers are tri-branded, compared to 50% a year ago. In the U.S., we now have 3,488 dealers, down from a year ago 3,684.
Chrysler's Alignment with Marketplace
. Chrysler is better aligned than previously for the shift towards smaller, more fuel efficient vehicles. We also believe there is a strong and viable pickup truck market going forward.
. Through May, our U.S. sales were 41% pickup trucks and traditional SUVs, and 59% cars, car-based crossovers, compact vehicles and minivans. (Industry is at 33%/67% ratio)
. Chrysler has six vehicles that achieve 28 MPG on the highway: Dodge Caliber, Dodge Avenger, Chrysler Sebring, Chrysler Sebring Convertible, Jeep Patriot and Jeep Compass.
Chrysler's Launch Lineup for 2008
These new vehicles have competitive advantages and are well-suited for today's marketplace:
. Dodge Journey – A crossover with class-leading (25 mpg) with a 4-cylinder engine.
. Chrysler Aspen/Dodge Durango Hybrids – Full-size SUVs offering up to 40% improved fuel economy in the city at a price thousands of dollars less than the competition.
. 2009 Dodge Ram – There is no better way to fight truck buyer malaise than with our best truck lineup ever boasting breakthrough new features. The new Dodge Ram lineup will also soon add optional light duty diesel and hybrid powertrain options.
. Dodge Challenger – This modern muscle car will come with a fuel-efficient V6 option at an aggressive entry-level price of $21,995.
Harbour Report for Manufacturing Productivity
. This year, Chrysler tied Toyota for #1 in manufacturing productivity (avg assembly hours).
. Chrysler has the #1 assembly plant (innovative Toledo Supplier Park) and #1 engine plant (GEMA joint venture with Hyundai and Mitsubishi).
. The combination of lower hours-per-vehicle production and a more competitive wage rate helps us compete with the transplants.
Quality
. In the latest J.D. Power IQS, the company improved six points, and Chrysler and Dodge brands showed improvement. Unfortunately, the Jeep brand was last in the survey due to concerns about the Wrangler Unlimited. We can do better and we know it.
. Dodge Durango and Dodge Dakota were tops in segments for least problems per hundred. Chrysler PT Cruiser took second place in the "Compact Multi-Activity Vehicle Segment".
. We have a corporate wide focus on the customer. As part of this, we have put in place the industry's first Chief Customer Office, Doug Betts, and the Customer Advisory Board.
. Chrysler LLC has approved more than 400 improvements in areas such as better materials, fit and finish and quieter operation.
Commodity Prices
. In the wake of mounting pressure from ever-increasing steel and other commodity prices, Chrysler is managing its costs and revenues to partially offset spiraling commodity costs.
. Chrysler will continue its overall commitment to deliver the best values in the business through increasing standard equipment with our New Day packages to creative incentives, such as the $2.99 Gas Guarantee and our industry-leading lifetime powertrain warranty.
. At the beginning of the model year, Chrysler added, on average, $1,200 of new content to the vehicles in its lineup.
Investing in our Future with Advanced Technology
. Chrysler is in the midst of a $3 billion investment in advanced powertrains to develop new fuel efficient engines, axles and transmissions.
. ENVI is Chrysler's in-house organization charged with establishing Chrysler leadership in electric-drive vehicles and related advanced-propulsion technologies.
. Chrysler's UConnect® is a Bluetooth® enabled voice-activated, in-vehicle, hands-free communications system that recognizes more than 100,000 words and is capable of learning new words. Voice commands can input addresses to the navigation system, select satellite radio stations and access voice mail. New for 2009, the hands-free system automatically downloads up to 1,000 phone book entries per phone.
. Examples of new advanced technologies available on 2009 models include:
. In-vehicle wireless Internet connectivity: coming from Mopar® by year end 2008.
. Rear Cross Path: Chrysler-exclusive system warns drivers of approaching traffic in the parking lot aisle during back-up maneuvers.
. Blind Spot Monitoring: exclusive to Chrysler and Dodge in minivan segment.
We are committed to continuing to share information with you. As an ambassador for this company, we hope you will communicate this information in your conversations about Chrysler.
Nancy
PR spin. All of it.
I wouldn’t go that far. From this release, it sounds like they know they’re in a bad position, but they feel that they’re in a position to take themselves out of it. (after all, they do know more about their future product plans than we do)
New cliche of the year “aggressively conservative”.
This line actually impressed me in that they were bold enough to point it out:
Unfortunately, the Jeep brand was last in the survey due to concerns about the Wrangler Unlimited. We can do better and we know it.
The PR person’s job, of course, is to emphasize the good and de-emphasize the bad. This e-mail, like every automaker’s monthly sales results press release, does that.
It just reads like concatenated bullet points from Powerpoint slides. I’d like to have an actual narrative from someone who knows what’s going on.
miked:
It just reads like concatenated bullet points from Powerpoint slides. I’d like to have an actual narrative from someone who knows what’s going on.
As the Brits say, you’d be lucky mate.
Kudos for TTAC for presenting an opposing point of view. They are entitled to air their views as well. That being said, I still thing ChryCo is doing a Hindenberg.
A couple of things…
Robert: For the slower of us, a brief word of introduction as to what I’m reading would be helpful. I was confused at first. But maybe it’s just me.
As for the love letter, I try to have an open mind and was, indeed open to hearing about the positive stuff at Chrysler. But then it came to the part about quality and that’s something I know a little about. Suffice it to say that while they may have won a few awards, well, I have a bowling trophy. A broken clock is right twice a day (except in an Astra, of course, just once).
Until Chrysler can admit that they have been delivering substandard product to market, they will only sell to those who don’t know better.
Cry-sler makes cars and trucks that do not sell well. The reasons are as known as they are unknown but one thing is certain: They are going to need a lot more than manager training classes to fix this mess.
When a car is sold, the customer looks at it as a huge investment of money over a few years, the company looks at it as a small blip on a sales sheet. When there are problems or poor service issues, the company does not see it as a big deal whereas the customer’s life can be turned upside down as they have to deal with this headache. If a car cost 15 million dollars instead of 15 thousand dollars, I bet the company would jump.
In actuality, that car does cost 15 million dollars. Because if a ticked off customer tells everyone they know about their problems, and another groups gets it from an internet post, and the car ends up being wholesaled off to someone to start the complaint process again, a thousand people could be adversely affected by a bad design or faulty part that was ignored by the company. And those thousand people will NOT buy again from the company. Think head gaskets, transmissions, brakes, intake manifold gaskets, door seals, and a dozen other chronic problems with domestic cars.
Maybe they should treat each sale like a million dollar order instead of a simple booking. I bet the Japanese treated each sale that way when they were trying to get into the market here.
I bought a blank MD in Tokyo at Akihabra and was treated to the same level of thanks the guy in front of me got for spending 1200 dollars on a stereo. Something to think about.
No way this is 800 words. You should tell her to rewrite it.
We may have a horse race for next years Lutz award after all.
If only the puff piece were true. What is not said is that in just about every segment,Chrysler competes in they are the worst in fuel numbers. Further, they have ceased building what little they had (ie neons) in truly small cars. When they get the hornet on line the game may be over. Just drive by one of their modern tri-brand dealers, and ask yourself, how many of these dusty things sitting out front do I want in my garage? Is a new Dodge ram going to matter in a marketplace virtually cut in half this year? Will jeep ever be relevant again as the four wheel drive king in a severely shrunken market? Chrylser would need to start with a clean sheet of paper for virtually everything they build, and they need it now.(not 2010)
We currently have our top 300 leaders going through a comprehensive leadership development program
Uh-oh.
jaje: New cliche of the year “aggressively conservative”.
I believe it’s actually an oxymoron… but I second the nomination nonetheless.
Nice of her to write in, but it was no less painful nor more insightful than reading the typical self-assertive, non-confrontational dribble that comes from PR releases.
A for participation. F for effort.
I’m thoroughly confused. It says by Robert Farago, so I assumed it was shtick and Nancy Rae is fictitious. It reads like satire, so I guess if it’s real, it’s even funnier.
It’s real, and it’s spectacular. I tracked down the original (won’t post it without permission) which is a touch longer because of fancy corporate double and triple spacing.
As a private company, we are like a $60 billion startup with a real owner-operator mentality.
I think that 0 after the six is taking a great liberty, and startups don’t normally have too much legacy cost.
We currently have our top 300 leaders going through a comprehensive leadership development program consisting of five segments focusing on strategic thinking, operating excellence and leadership.
I’ll second mrdweeb’s uh-oh. I hope it’s one of those retreats where they dress in bear skins and become one with their inner beast or something.
This level of honesty, while refreshing, makes you wonder if this wasn’t an accidently-released early draft. Whatever the case, somebody gettin’ fired.
According to Bob Nardelli (in The Wall Street Journal), “Cerberus nor its backers are second-guessing the deal. They are not looking back.”
They can’t second-guess the deal; they’re neck deep in it. QOTD: Would they if they could?
Maybe they should treat each sale like a million dollar order instead of a simple booking
I read somewhere about this 250 rule, whether is a good or bad product each person usually spread the word to 250 people.
I go eat at a local greasy spoon restaurant. The deocr was way off, the food is quite nice, the owner treats cust real nice, often gave free can pop to cust too.
I rarely see many new customers there, but very much old faces. These folks treated it as their personal dining room.
So what it shows is if u treat them right old cust will always frequent, no need to run 1/2 page ad every week to attract new cust.
And f u cant hang onto old customers then u’re really in trouble. As new cust are not born every day.
Chryslerbus if not going to improve the reliability, quality there wont be much hope in hell to have a turn around.
. As a private company, we are like a $60 billion startup with a real owner-operator mentality.
LOL. Reminds me of my first lemonaid stand. Like most 8 year olds, I could only come up with about $60B in startup capital. Those were the days; I knew the names of each of my 357,000 employees, and there were only 7 layers of management.
I just had to put in my 2 cents worth, gang, even tho I’m on the road and using my little Asus laptop in a motel room…
I was momentarily chered by this with thoughts bouncing around the old brainbox, like – hmm maybe there is a small chance they’ll survive.
Then I got to the part about the awards for the Toledo Park plant (good) and then the admission that the Jeeps are um total krap. Reason” it’s the Jeep Wrangler which is built at Toledo Park!
So the fugue of reality set in again.
Well said, gs, btw.
I’m going to start referring to Chysler as The Hindenberg from here out. GM is of course, the Titanic…
I’m having a button made up:
Aggressively Conservative = Consistently Wrong
Another PR hack goes into the breach. Last we heard from the Global/Universal/Omnipotential Mr. Berger of GM, who thought he’d spread some post-Easter Christmas cheer among the ranks when he railed against a negative op-ed.
And now we have Nancy Rae Senior Vice President, Human Resources and Corporate Communications, who thought she’d put some nice spin on things.
Anyone remember Emperor Hirohito’s message to his people following the capitulation:
… the war situation has developed not necessarily to Japan’s advantage …
“Harbour Report…”
What nationality is Ms. Rae?
Perhaps TTAC should send Nancy a check for her editorial contribution … she may soon really need the cash :).
I’m in PR. These are facts, spun.
To balance out the discussion, Chrysler continues to possess some attractive assets:
*Jeep brand
*LY platform
*Minivan platform
*Ram lineup
*Various mfg plants
*Dealer network
Yes, the situation is dire in many ways, and the clock is ticking, but at the end of the day, the Cerberus gang certainly is going to have some measure of opportunity to do something on the M&A front. Whether or not they can get someone to pay for the equity is the big question.
I’d like to know what the cost of parts and materials is on the Viper. What’s the mark up on it?
How much could they reduce the cost if they’d just put a Hemi in it and can that odd ball V10?
If you ever had to change the head gaskets on it, do any porting or valve train work on that V10; you’d hate it too.
I got a kick out of the “fight truck buyer malaise” part. As if the problem with truck sales is that all the Mike Rowe truck guys are sitting around, sipping tea, saying “I would buy a Dodge Ram 3500 Cummins Mega Cab Laramie, but I can’t get over my feelings of malaise.”
The next time I’m late on an assignment at work, I’m going to tell my boss that I’m taking an aggressively conservative approach.
Also, how come Mopar is coming out with an electronic gizmo? Didn’t they shut Mopar down?
“In Canada, Chrysler is the #2 best selling manufacturer in the country,…
#2, perhaps. But in a shrinking market. Kind of like being the #1 Buggy Whip manufacturer.
Don’t you just love that good old-fashioned corporatespeak? My eyes started rolling back in my head when I got to “project-specific alliances”.
I want to know what the other two segments are in the “comprehensive leadership development program”. Any guesses? If those top 300 leaders are all in class, then who’s running the company? Oh, never mind. I just answered my own question.
I know that it’s real easy for some of us to sit here and make snide comments, but damn – it’s like they’re begging for it!
Steven Lang :
No way this is 800 words. You should tell her to rewrite it.
I thought the same thing, as I looked at the first paragraph. I didn’t make it to the second.
Anyway, it’s not spin. It’s clueless management bullshit.
Straight from the Iraqi information minister.
@bjcpdx
Yes, Baghdad Bob would have been proud of Nancy – the corporate speak quotient here was mind numbing.
Sad thing: there are thousands of people like Nancy, spouting absolute nonsense on behalf of their corporate masters, thinking they are doing the world a favor by spinning like tops.
Sad. What the car majors need is a serious infusion of reality, and they’re about to get it, aren’t they.
Stein X Leikanger
Word. A worldview consisting of self-deluding happytalk and communicating in obfuscating gobbledegook appears to be a prerequisite for management success in Detroit, much like the Brezhnev-era Supreme Soviet.
The parochial management mentality that drove Chrysler into a ditch is not going to pull it out of the ditch.
Does that work for politics too?
Q: Are you a Democrat or a Republican?
A: I am aggressively conservative.
(I pity the poor soul who claims to be passively liberal)
The spin has spun. Here’s my favorite part:
“We currently have our top 300 leaders going through a comprehensive leadership development program consisting of five segments focusing on strategic thinking, operating excellence and leadership.”
First off, the “comprehensive” aspect implies that Bob and crew are poor leaders. These guys don’t need topping off, their tank is empty.
But then it flat out tells the reader that Chryserberus’s management had no clue what they were getting themselves into. The car biz ain’t for six-sigma heavyweights, is it?
Some things aren’t worth mentioning in a PR letter.
Lies and damn lies.
Just more utter crap that shows how much these companies DESERVE to shrivel up and die.
They had a chance to make high-quality, reliable vehicles, but they didn’t.
I was going to say that they had an opportunity to “cover many different market segments with quality vehicles,” but I guess that’s just redundant.
It really does just boil down to COMPETING in the market — with quality vehicles, in a diversified number of segments. But Chrysler has been third-rate in most segments, for decades. It just boggles my mind to see that some people are actually stupid enough to buy the Chrysler vehicles that are truly the worst pieces of junk sold in this country.
“Fooling some of the people some of the time” just isn’t “competing,” in my book….
Several posters would have us dismiss Ms. Rae’s e-mail as “PR spin” at best and flat-out “lies” at worst, but I’m having a hard time finding a single disingenuous statement. Would anyone care to point one out for me? (With refuting evidence, of course.)
FYI, when likening Chrysler to a “$60 billion startup,” Ms. Rae refers not to the newly private company’s “startup capital,” but rather its annual revenue.
factotum:
American, British, or otherwise, Ms. Rae spelled “Harbour” correctly. Indeed, the productivity report she references is named for its founder, Ron Harbour.
@MLS
I have made the following judicious extract from Rae’s exhortation to Chrysler ambassadors. If you don’t see it, you won’t get it:
Investing in our Future with Advanced Technology
. Chrysler is in the midst of a $3 billion investment in advanced powertrains to develop new fuel efficient engines, axles and transmissions.
. ENVI is Chrysler’s in-house organization charged with establishing Chrysler leadership in electric-drive vehicles and related advanced-propulsion technologies.
. Chrysler’s UConnect® is a Bluetooth® enabled voice-activated, in-vehicle, hands-free communications system that recognizes more than 100,000 words and is capable of learning new words. Voice commands can input addresses to the navigation system, select satellite radio stations and access voice mail. New for 2009, the hands-free system automatically downloads up to 1,000 phone book entries per phone.
. Examples of new advanced technologies available on 2009 models include:
. In-vehicle wireless Internet connectivity: coming from Mopar® by year end 2008.
. Rear Cross Path: Chrysler-exclusive system warns drivers of approaching traffic in the parking lot aisle during back-up maneuvers.
. Blind Spot Monitoring: exclusive to Chrysler and Dodge in minivan segment.
I rest my case.
First, I doubt this was a PR initiative. As you may recall PR was essentially neutered when Jason Vines walked away. I suspect that this was forced upon them, if they were even “consulted” at all.
A better plan would have been to cut the pay of the top 300 managers thereby instilling a sense of urgency, instead they opted to squeeze their suppliers by 5% and tax their customers with a 2% price increase.
I understand that Bob Nardelli recently had back surgery, perhaps they tried to give him a spin….I am sure his body will reject it.
aggressively conservative
Now that’s some newspeak doublethink. The next letter will inform all employees that 2+2=5.
Now that it was just last year that Mercedes exited Chrysler stage left. Is Dieter Zetsche the most foreward looking exec in all of autodom or what? Since taking his lumps in the US las year,chrysler has not had one good month and mercedes is holding up just fine on their own again. There is no question with the present line of products the ones Mercedes owned chrylser would have been identical to what we see now. Therefore, the huge bath now being taken by Cerebus would have fallen on Mercedes. I don’t know if he was the recipient of perfect timing or he knew the junk in the Chryler stable was going to die. Or did he know that gas was going to go stratospheric? All we do know is that he got out as the upper floors in Higland Park were starting to cave in around the new owners.
Nancy Rae is head of HR at Chrysler, a lifer who is loyal to whomever is in power there at the moment. She was saddled with Communications after Jason Vines left in frustration. My bet is that she did not write a word of this, but was told to sign and send it. Nardelli relies on Robert Marston and Associates in NY for all of his PR needs, just like he did when he was at Home Depot. Hence the recent exodus of Vines and many other top PR folks from Auburn Hills.
Marston is your man…
We also believe there is a strong and viable pickup truck market going forward.
Do they also believe in the Easter Bunny?
Percentages are useless without units. If we sold 1 Ram last year and this year we sold 2, guess what I can quote 100% increase in sales in all my PR blather?
TRANSLATION: ” Please as a loyal Chryslerberus employee make sure you leak this to the press as we are pretty sure a small percentage of you will because we NEEEEEEEED all the positive spin we can get right about now…and of course, if you do so, you may suffer an involuntary separation from our employment. Thank you that is all for now.”
GS650G :
I know exactly what you are talking about! I was in Tokyo this past winter (Akihabara is WAY TOO COOL!!) and the dramatic difference between how customers are treated in North America and Japan is gigantic! Even at a Seven Eleven I was treated with the greatest amount of respect and show of gratitude than pretty much any other time in my life. It was almost surreal!! To many people it may not seem like they’ve missed much by not being treated higher than the person at the register–but once you’ve experienced such a high degree of respect just for patronizing a store to buy a measly bottle of tea, it makes you not want to go back to the humdrum “buy your crap and get out of here” anymore.
Hooray for being treated like royalty! Can Chrysler even be called “luxury??” Lexus prides itself on the way it treats its customers.
Stein X Leikanger:
The excerpt you’ve highlighted more or less consists of technologies that are segment-exclusive to Chrysler vehicles. Will these new features save the company? Of course not. But the mere offering of new options—even if they’re externally procured, off-the-shelf components—shows that Chrysler’s making an effort to improve its struggling lineup. Regardless of its significance in the overall state of affairs, is this development negative or otherwise unworthy of internal publicity?
The other bullet points in your excerpt pertain to forthcoming Chrysler technologies. Until some member of the motoring public gets his hands on a Phoenix engine- or advanced-propulsion-equipped Chrysler vehicle, we should refrain from passing judgement. After all, the company hasn’t made any unreasonable claims with regard to these future powertrain systems.
Ms. Rae’s original message was a small bit of good news among the sea of negativity inundating Chrysler. That posters should dismiss what’s largely a factual bulleted list as “spin” and “lies” is almost offensive. Sure, Chrysler’s made more than its share of mistakes over the years, but I’ll never understand how so many take such great pleasure in watching an icon of American industry fail. Why can’t we accept a positive development, no matter how minor, for what it is?
That sounds like it was written by a comrade on the sinking Soviet ship during the final years.
“We currently have our top 300 leaders going through a comprehensive leadership development program..”
That probably means 300 employees get to listen to Nardelli’s retelling of his football glories at some minor league college and how he reduced costs at HD by getting rid of employees that the customers mistakenly thought were part of the operation.
If i were running Chrysler, things would be dramatically different — that is, i’d stop lying through my teeth about how confident Chrysler executives are that the company will survive intact. We all know that it won’t. First of all, Chrysler products are well below average by almost all measures of quality and fuel economy. What’s more, Chysler has’t bothered to properly invest in new vehicle development in the last decade. Farming everything out to the lowest bidder is the best way to integrate a junk product. And let’s not forget how nicely this PR-spun piece ignored the cash burn problem. Sure, Chrysler is trimming down inventory on dealer lots as fast as it can. But it has to give away each car and truck to do it.
So long, Chrysler, it was nice knowing you. Please donate your last few factories to the city governments so that they can refurbish them into low-cost housing or something useful.