Chrysler: Employees Heartened by New Hires, Investments
September 10, 2007

FRANKFURT, Germany -- Chrysler employees attending the Frankfurt auto show this week are upbeat about  all of the radical changes that have taken place in the last 30 some days of the automaker being owned by private equity firm Cerberus Capital Management.

Employees, speaking at Chrysler’s private party unveiling of the Dodge Journey making its debut Tuesday at the Frankfurt show, are particularly heartened at last week’s news that Chrysler has hired former top Toyota exec Jim Press to run sales and marketing for Chrysler in the U.S. and former General Motors/Shanghai Automotive Industry Corp. exec Phil Murtaugh to run its Asian operations.

Some hint that Chrysler’s hiring spree may not be over.

Those hires, the employees say, suggest Cerberus isn’t doing the typical private equity drill of breaking up and selling the pieces. Instead, they say the company appears serious about investing what it takes, as it did in attracting outside talent, to turn Chrysler around, even if Cerberus ends up taking Chrysler public or selling it down the line.

A Peek Behind the Scenes

Chrysler Design Chief Trevor Creed provided an interesting  peek inside Chrysler’s design operations with Bob Nardelli, former Home Depot CEO, in charge.

Creed invited Nardelli to visit the design studios on a Saturday when they wouldn’t be rushed. After chatting for an hour or so, Creed took Nardelli on a tour of each and every design studio, pointing out what products are in the works.

Creed said Nardelli is exactly as he has been described –- extremely intensive and inquisitive “on a vertical learning curve.”

Creed said Nardelli asked incisive questions about why designers did this or that, right down to why is there chrome here or not there. Nardelli asked about what consumers want, what consumer research shows and how Chrysler used it. He quizzed Creed on what competitors do on certain things versus what Chrysler does.

Creed thinks Nardelli’s questions and outsider view are healthy and will make Chrysler stronger in the end. He said it will force Chrysler designers to think about why, indeed, they do things the way they do and answer questions and provide explanations on things taken for granted under “car guys” of the past.

Creed said Nardelli isn’t looking to just slash costs; quite the opposite. He’s trying to make certain money is spent on the items that matter.

As an example, Chrysler – finally -- is now investing time, effort and resources heavily in its interiors, many considered subpar in the industry. Ralph Gilles, Chrysler design vice president, says Chrysler had skimped on interiors in the past due to costs, but now is trying to not only match but leapfrog the competition. Chrysler is shopping worldwide for interior designers, he said.

So far, in fact, it is hard to see where Chrysler is cutting. In his speech to the Automotive Press Association in Detroit last Friday, Nardelli said Chrysler can no longer be emotionally attached to brands and vehicles. But thus far, it appears to be investing in new products instead of eliminating existing ones.

For instance, it had long been rumored that the iconic Chrysler PT Cruiser was soon to go away. Instead, it will soldier on with the new Dodge Journey, the multipurpose vehicle being unveiled in Frankfurt and to be sold in the U.S. and Europe beginning early next year. The two vehicles will be built side-by-side at Chrysler's plant in Toluca, Mexico.

More International Investment

The new Chrysler also is making substantial investments in adding people to overseas markets to push the automaker's global expansion, said Thomas Hausch, who has been working on Chrysler's global expansion for the past few years.

Global expansion won't just mean selling vehicles in overseas markets. Chrysler is on the hunt for partners internationally. Chrysler wants to use the platforms of other automakers, especially for very small cars, and, as Nardelli described it, put "Chrysler's top hat" on the platform.

Vehicles in need of platforms include the Dodge Demon sports car concept and the Dodge Hornet, a small B-segment people mover concept for international markets. It had been expected that Chrysler would tap its Chinese partner, Chery Automobile Co., for a B-segment platform, but Creed said Chery's platform is not appropriate for the Hornet, so the hunt continues. Creed would not say if Hyundai and Mitsubishi, Chrysler's partner on its global four-cylinder engine, are among the hunted.

Similarly, Chrysler will provide its minivan platform upon which Volkswagen will attach its top hat, and the Dodge Journey will use a VW diesel in Europe.

Such is the new order of the world -- sharing platforms and engines.

Photos by Edmunds.com's Erin Riches

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