Editorial: Chrysler Suicide Watch 44: Will the Last One Out of the Building…

A TTAC reader writes: “Did you read the Wards AutoWorld article about how full Chrysler’s product pipeline is? So inaccurate. I had to throw away the magazine because of it. As a former product planner for Chrysler up until April of last year (on the Jeep WK (Grand Cherokee)), I can tell you the state of the business that I knew.

There was plenty of pinching on the interiors of the cars. We called it the “thousand dollar challenge;” which included reducing the amount of leather in the car seats (think lower back and where your butt is, but not the back of your thighs; all else vinyl). At the same time, unrealistic volumes were driving business decisions, with calculations for how JNAP [Jefferson North Assembly Plant] will be filled on three shifts for WK, endless management reviews and preparation for management reviews—leading up to a canceled product (CT, WC).

Chrysler tried to make product lines profitable by figuring out how to maximize profit by take rates and bundling. Eliminating an engine on the vehicle ultimately makes sense for reduction of complexity, but from a business case perspective, it is almost always negative (upcharge on the optional motor).

Now working in a different industry altogether, I get a sense of just how management-focused Chrysler had become. That is something the Germans can take credit for. There’s much more structure in the product development process, with the resultant inability to make a decision and endless preparation for meetings.

The “dream team” that Cerberus built was not. Specifically, the two Toyota execs were remedial. Jim Press was well liked internally, but Debra Meyer was not overly bright. She spoke and presented well, but she didn’t know cars.

I hear now that if you discuss the understaffing of ENVI relative to their proposed task you face retribution. I’ve also heard that the Jeep Patriot concept car/electric vehicle was nothing more than an interior (with cool cluster), Viper style wheels, and some other minor stuff. Nothing electric about it. Good PR tho.

They actually lost almost 35-40% of their staff in the Nov 26 buyout of white collars, not including the additional 10% they retired early (totaling then almost 50%). Of my product planning department, exactly none were left.

Brand Management and Product Planning have since been merged, an event that took until January to announce. They lost a month because they didn’t know who was going to be left, they didn’t tell people before they made a decision what was to be their future etc.

Look what happened to Mopar guys. They were mostly contract guys working for a 93 grade band supervisor. They outsourced all of the jobs to suppliers and transferred some of the contract guys over there.

XXXXXX XXXXXXX was one of the suppliers (plastic injection stuff among others). They told their guys that they were not able to work them the full 40 hours a week due to financial limitations (payments from Chrysler?) and that they’d get one day off a week (in addition to the 10% pay cut). THEN they said you need to work five days a week and simply book those comp days for the future (where you’ll never get to use them).

They really don’t have any idea of how to approach their business. They are building a WK (2- row only), a WD (3-row Dodge), an LX that the dealers council said needs to look more different than the existing model (the one that they showed in the filing to the government to get more dollars was the revamped one, the one before was even more vanilla but not much different), and no other product that I am aware of.

I heard (was not directly involved) that the D-segment quotes from Nissan were within single digit dollars of their projected internal costs to do it inside. With only 100 people on that platform working previously, they were definitely going outside. Now virtually all of those people are gone (retired or bought out). Normally 600–700 are required on a platform.

Internally, a platform’s profitability depends on how much overhead is assigned to it. The WK was over-assigned overhead, to the point where it was always negative. Usually it was based on sales + an arbitrary amount decided by management. The WK was always under water with the fully accounted system we used (DCAV). But I think it was an attempt to make the platform stretch for profitability (hence the unrealistic volumes).”