A Word About Chrysler’s Recovery Plans
The laying out of the future process and product plans at Chrysler earlier this week was like a teenager who comes home from school with a report card studded with Ds. Somehow, in order to retain driving privileges, he must convince Mom and Dad that he’ll do better going forward, that all will be right with the world in a while.
And then he promptly goes to his room and logs onto Facebook and simultaneously engages in “World of Warcraft” or some other MMORPG. The books. . .well, eventually.
One gets the sense that executive after executive took to the pulpit and confessed “Mea culpa, mea culpa, maxima mea culpa.”
Ralph Gilles, who is the head of Design and of Dodge cars (isn’t this sort of like wearing a black T-shirt, jeans, sports coat, and a tie?), claimed that they’d get better by improving interiors. If I had a dime for every time someone in Auburn Hills talked about interior quality, I could have fronted them the money that the Feds kicked in. And speaking of quality, Doug Betts, who is in charge of quality, said that they’d get better. Really. Which leads me to think that they’re not going to roll out with the Iacocca, “If you can find a better car. . .” anytime soon.
Speaking of soon, Scott Kunselman, who is in product development, said that they’re going to be working hard at accelerating their time to market. Now we have an entire publication (and website and event) dedicated to the proposition that faster is better, Time Compression. But here’s the thing: Going fast isn’t any good if what you’re producing isn’t any good. Maybe they ought to rethink that part of the plan.
Meanwhile, Dan Knott, who handles purchasing, said that his goal is to cut $2.9-billion from the company’s parts and materials tab. Which may be a laudable goal. Dan Knott used to be the head of Chrysler’s SRT ops, and was responsible for producing some of the most kick-ass vehicles on the planet. But do you know what? To do that, he and his team employed really good parts and materials that people were willing to pay a premium for. Somehow, this notion that they’re going to be able to have Walmart parts and produce Nordstrom vehicles doesn’t seem quite right. In addition to which, according to the most recent study by Planning Perspectives on OEM-supplier relations shows that Chrysler’s score is at the bottom, 162, behind GM at 183. That’s pretty much a failing grade, because the #1 position is that of Honda, at 349. Somehow, just combining with Fiat purchasing and buying in Sam’s Club volumes might not pull the trick.
Yes, and manufacturing is supposed to get better, too. Well, as Frank Ewasyshyn, who heads manufacturing at Chrysler but who is currently on medical leave, would acknowledge, improvement is continuous, so there is that. Moreover, I’d suggest that Chrysler’s manufacturing is among the best in the world. It’s what they’ve had to manufacture is the problem.
Which brings me back to Hyundai. The product plans revealed by Chrysler are, in a word, weak. A new Chrysler 300—full-size sedan—and derivatives of that platform in 2010. A new Jeep Grand Cherokee—a full-size SUV—in 2010. And a seven-passenger—full-size—CUV next year, too. While these were underway before the bottom fell out of the industry, how well is that going to work out for them in the marketplace? Has anyone noticed that as we come out of the recession gas prices are climbing back up? How much interest will there be in big cars and trucks when gas is over $3/gallon?
Yes, there are some other vehicles coming. Compact car? 2012. Small car? 2013. Do they have enough time to make it on just improving interiors and NVH of existing models?
Hyundai has what is among—if not the—freshest showroom in the industry. It has upped its quality tremendously, has interiors that are literally on par with luxury brands, has small cars as well as large that are really superbly executed, is working on bringing hybrids and other advanced technologies to the market, is gaining market share, is building vehicles in the U.S.—and is not done, not by a long shot. Through October, it has increased its sales year over year (yes, increased) and is up 1.2 percent in overall market share, from 3.1 to 4.3.
These guys are moving, and they’re moving fast.
Chrysler’s sales are down 39% for the year. Chrysler does have 9% of the market, which is a considerable space between it and Hyundai’s 4.3%, but their respective numbers are moving in opposite directions.
You’d have thought that there might have been a bit more aggressiveness in Chrysler’s plans because the competitors certainly aren’t lagging.