With the 20th anniversary of the Daimler-Chrysler hook-up from hell being celebrated these days, I’ve had Chrysler on the brain, and stumbled into these the other night. They’re a bit long, but are pretty well done. If you want to refresh your memory banks, or learn a bit more about these two pivotal chapters in Chrysler’s roller-coaster history, take a gander.
This one cover the pivotal transition from the Iaccoca era to the Eaton era, right down to Lee doing the intro and Bob doing the outro. What lee neglects to say is that he resisted the transition from his box K-car derivatives to the “cab-forward” LH cars with all his might, including proposing (and having built) an alternative concept that was essentially a bigger Dodge Dynasty. Yup, that would have gone over well.
And of course what is missing in this is the fact that although this transition to platform teams and a lineup of three very modern FWD sedan lines was impressive, and madly profitable, just like it had been in 1957, the quality of all of these cars was lacking. Well, it wasn’t quite the same as 1957, as the issues took longer to materialize in some cases, but lets just say they were all brittle, and the cost-cutting and super-quick development time took its toll.
Which of course explains the “merger” with Daimler. Bob Eaton rightfully saw that this surge of huge profits from these cars was about to (or already had) melt away, as their poor rep compared to the Japanese competition was quickly developing. This was most acutely so with the Neon, but the “cloud cars” never really gained much traction against the Camry and Accord, and the big cars were competing in a shrinking segment and also were suffering from a declining quality rep. And the once bold styling was quickly getting old.
Could Chrysler have righted the ship without a partner? Probably so, but a marriage was seen as a way out of what would undoubtedly have been another difficult era for Chrysler. Which it was anyway.
I think if Iaccoca’s massive ego had not gotten in the way, and he had not blocked Lutz from being CEO, today Chrysler would America’s most interesting and admired automaker, and quite conceivably the leader in a Chrysler-Subaru alliance.
I’m not sure Lutz would have been ‘that’ much better than Eaton. In fact, in some ways he seems a bit like Iacocca 2.0, which is quite ironic considering how much they hated each other while at Chrysler. While Lutz did a stellar job with the Kenworth-look Ram pickup, LH and cloud cars, when he got passed over for Eaton and subsequently moved to GM, his pet-projects there were high-cost losers like the Chevrolet SSR, Holden GTO, and Solstice/Redline. Lutz was more savvy for today’s market and a better engineer than Iacocca (and less of a salesman), but his ego was just as massive and, just like Iacocca, it tended to get in the way of his brilliance.
It’s worth noting that Iacocca not long ago admitted that, on his way out the door, he made a mistake by backing Eaton as his replacement and not Lutz. I have to agree that, while no one will ever know, Lutz, despite his flaws, would still have been a better Chrysler CEO than Eaton.
Lutz certainly left us some head scratchers from his GM years, but I think it is hard to argue with the proposition that GM cars were massively more appealing after he left than before he arrived.
As you note, Lutz did bring about some big improvements in GM cars when he was there.
Lutz, properly guided (meaning, keep him focused on improving the high-volume vehicles, not on developing unprofitable “halo/vanity” vehicles), had some good ideas.
Iacocca, however, was not the person to guide him.
The problem with Lutz is that he never had a solid commitment to quality. This really comes through in the cab-forward era at Chrysler, which are all classic Lutz-mobiles: flashy, dynamic, bold, but not well built.
Everything costs. As they say, “Quality, performance, or cost–pick two”.
Anecdotally, I dated a Canadian who put over 250k km on her Intrepid before, to her dismay, it was not worth keeping. So LH cars may not have been built like 92 Camrys, but they were not all lemons.
Given the opportunity, Lutz was a bigger fish at Chrysler, and with Chrysler’s modest resources, he drove the “new” Ram truck, the LH cars, the Neon, and allowed the XJ (Grand Cherokee) not to get messed up.
I’d like to think his ego would motivate him to keep Chrysler independent, so he would not work for some one else.
At GM, the die as largely cast. His biggest contribution, the Solstice, was clever and catchy, but it cost almost as much to make as a Corvette and was a money loser. In any case, it was too little, too late.
Also, at GM, he was not as big a fish, I think he liked being in the game without ‘owning it’ (and he liked the salary), so he was more politically correct. When asked about the 2004 Grand Prix GTP (a piggish looking car, compared to the handsome–and relatively high-selling 97-03 GP) lacking a proper manual trans, he gave a standard GM answer.
Still, at GM, he may have saved the 2008 Malibu (by ensuring it looked classy). The lowly G6 was a decent-looking car…it’s just the General didn’t have the resources to make it decent at launch. That had to wait for the Saturn Aura (good car) and 2008 Malibu.
Eaton was a competent GM manager, but nothing special. Iacocca selecting him, and Eaton’s subsequent sellout to Daimler-Benz was like winning the lottery for Eaton.
These are all just my opinions, but I think I am onto something:)
As questionable as Lutz pet projects go, of which they were all pretty goofy or flawed, I cannot help but feel GM’s corporate bubble is what enabled them. GM was inevitably going to collapse with or without him, perhaps the too big to fail presumption made any idea seem as though there was a parachute for any flop, and all concepts are worth trying. Whereas a smaller and more fragile company like Chrysler naturally would keep him in check, somewhat. Some people just aren’t good fits at the wrong company in the wrong position.
I think that choosing Eaton may have been Iacocca’s biggest blunder at Chrysler. Hindsight tells us that really effective executives coming out of GM in the 70s and 80s were the exception rather than the rule, as that company’s system really did not promote the kinds of skills needed in a smaller organization. He may have been one of GM’s better execs and had an engineering background, but if he had a really impressive string of results to his credit I have never heard it.
There may have been problems looming on the horizon but Chrysler was the most profitable auto company in the country (if not the world) at that point and with the combination of cash and some effective leadership many of those problems could have been fixed. Chrysler had plenty of cash then but the effective leadership part was nowhere to be found. Cost cuts and the Daimler “merger” are the only things he is remembered for.
In an article I read yesterday, a look back by to the merger by then President Tom Stallkamp, he said that he and Lutz and Eaton had been discussing mergers for some time, as if it was an inevitability. Lutz had favored BMW, which he felt would be a better cultural fit.
Don’t forget, it was a time when everyone was talking mergers. And most of all, let’s not forget that Marchionne has been talking about an inevitable merger/sale for FCA. It will almost certainly happen at some point.
How many mergers have actually worked? Since the 1950s, certainly no US one has. Perhaps the VAG juggernaut is working, but that has been more absorption into VW than merging the separate companies. While we can see that techniques and production facilities can merge, management never can. Oddly, what is best overall for a company can often be ruined by the top management, as merged companies do not have co-CEOs, and someone is considered the loser in the deal.
In the DaimlerChrysler deal, Eaton wanted out, and Schrempp wanted an empire. Had there been no other former overlords, perhaps it may have worked, but the amalgam of AMC/Renault/Chrysler as base platforms doomed it all. We saw the old Daimler platforms take the place of the old Chrysler nee Renault models, and it was a miracle that we did not see either a Jeep redone as a Mercedes off roader, or a G-wagon based new Grand Cherokee. At least they left the cash cow intact. The ongoing miracle of all of this is that Jeep is the saving grace in every new owner’s attempt. Perhaps FCA will get it right. I have my doubts, but for better or for worse, they do seem to be the most pragmatic towards the entire line. Cutting the small cars before everyone is now looking to be the best choice. I can see Dodge going away, Chrysler making Pacificas and maybe 300s (with Challenger becoming a Chrysler), and RAM trucks selling American pickups and imported Fiat vans. Or, the guy who takes over from Sergio will also cause problems and Chrysler will be sold to the next group silly enough to buy it. Maybe a Chinese owner for the once proud Chrysler? More likely than not.
Renault-Nissan has been running for a while and seems to be going ok, although perhaps not strictly a merger.
The Grand Cherokee was based on the Mercedes ML for a while – is it still?
The first gen M-class was BOF with much engineering work done by Freightliner. 2nd gen ML was unibody along with lwb version GL. What I’ve heard is that ML/GL originated with Jeep WK/XK (gr chrk & commander). With Jeep engineering @ DCX being in charge. Once hard body points were done each division took the basic design and took development from there. MB will not publicly state this fwiw, but that’s the scuttle butt.
Good point, and I considered that, but it is not technically a merger, rather a partnership. Perhaps that is why it is still working. I don’t see that a full merger of Nissan with Renault could work as the government owns such a large piece of Renault and has a valid stake in keeping the company French. The reason that is DOES seem to work is that Ghosn is really leader of both, so there is no one coming out as a loser in the CEO race that a merger usually produces.
Edit – I checked, the ML was based on the GC, not vice versa. It seems Daimler did get a Jeep platform after all.
A couple of probably most successful Chrysler transplants were Crossfire (Mercedes R170 chassis with different attire) and the LX (sourced from W211).
You’d be fortunate that you don’t live in Europe where we have Mercedes-Benz Citan which is just a Renault Kangoo II (2007-present) with mild rebranding and different taillamp design. When people found out about Citan, they rushed out to buy cheaper Kangoo, thinking it was a Mercedes under the skin.
“How many mergers have actually worked? ”
Any of them that have involved Willys/Jeep. 🙂
The Jeep Curse!
Did they work, or was that the defining asset that was the only reason for taking on the rest of the baggage associated with the current owner of Jeep? I can only assume that you and I view the definition of a successful merger differently, as I see that none of them have gone to plan and all, save the current FCA tie-up are dead and gone, and all at a loss to the merging partner. I say that no merger has “worked”, and the only reason for not completely closing down a company may be due to Jeep retaining enough value to make the business attractive to the next buyer. If Jeep had been spun off to it’s own company, would anyone have bought AMC? Kept Chrysler alive after Daimler bailed? Would Fiat have really wanted Chrysler/Dodge/Ram?
Toyota has stakes in Subaru and now Mazda, so they are working out. As stated “not technically a merger, rather a partnership”.
The ‘Cloud’ cars were good looking, but didn’t last long. By 2008, most were beat up BHPH fodder, and near extinct by 2012.
Also, it seemed like the 2nd gen LH cars, of 1998-2004 hit the Pick n Pull yards quick. Lots of Intrepids with hazy headlights after they were 2-4 years old.
Some fans go on and on about how ‘beautiful’ Chryslers 90’s car designs were, but as the saying “it’s only skin deep”.
Our 1996 New Yorker is still going strong with 102000 miles. On the original transmission. The secret ? Regular maintenance.
Not sure that I agree, Tomcatt. I still see first generation cloud cars still being driven daily. There’s one only a couples houses down the street from me. But, admittedly, I’m biased because I had a cloud for 14 years and over 200K miles, and it was a great, practical and economical car. Even got a second first gen cloud a couple of years ago. One that looks almost as good as new, and had only 111K miles. Just no longer using it as a daily driver.
I do know someone who actually bought a 2007 Dodge Avenger, due to it being a “Daimler product”. Said “I checked the sticker and it said so!” Thinking it had “Mercedes” pedigree.
But then shortly after Chrysler was dumped into Cerberus, then BK, then Fiat.
We had a cloud car (Dodge Stratus) that was, in many ways, one of the best cars we’ve ever owned (a 1999).
Likewise, Dan, mine was a 1999 Stratus. If not the best car I ever owned, certainly one of the best. Dependable, reliable, and outstanding visibility compared to sedans these days.
The video references ‘market research books’ that were taken by Iaccoca from FoMoCo. I had recollected that some design info or drawings were also given. In any event, I had not been aware that the key component in the design was the front wheel drive chassis. I knew that the main benefit that Chrysler pushed was the ‘garageability’ of the compact size minivan. Basing it on the K car platform was another key design principle I’d heard of. Same thing I guess.
Thanks for posting these, they are excellent insights.