Let’s Get Real, Who Needs Whose Help at DCX?
The media is at it again, breathlessly reporting on the supposed collapse of the Chrysler unit of DaimlerChrysler AG. And automotive trade publications seem to be regurgitating the same crap. The story goes that Dr. Z, under pressure from the German dominated supervisory board, had to send in—irony of ironies—a German manager to help the hapless staff operating behind the big “penta-star” window at Chrysler HQ in Auburn Hills, Michigan to cut costs. Are they serious? Who taught whom how to cut costs at DCX? It sure as hell wasn’t Mercedes, or anyone from the bloated half of the merger of equals.
A face only a mother could love
The inefficiency at Mercedes was as legendary as its once vaunted quality. At the time of the merger, the Mercedes unit was in a perfect storm of high costs and terrible quality that thanks only to its century old reputation and aging, slightly senile owner group it was able to weather. Mercedes was saved years of painful reorganization by lifting ideas from the systems that Thomas Stalkamp, Dennis Pawley, Bob Lutz, and gang fostered at Chrysler before the merger was even a twinkle in Schrempp’s eye. Chrysler brought efficiency and low cost to the table, Mercedes brought high price points and arrogance.
And now what do we read in the papers and on the automotive websites? The Detroit News reports: “With the Chrysler Group once again sapping DaimlerChrysler AG, the company has assigned teams including top Mercedes-Benz managers to find ways to increase efficiency and cut costs by $1,000 per vehicle at the Auburn Hills automaker.”
The fact that Chrysler may report a $1.5 billion loss in the third quarter is not due to inefficiency or unit costs, but instead is a result of building the wrong vehicles at the wrong time for way too long. And it was Dr. Z and his minions at the time that prescribed loaded full sized Dodge Rams, butt ugly Jeep Commanders and Dodge Durangos for a buying public that was becoming increasingly sick of high gas prices. The result can be seen all over the metro Detroit area—once empty lots are now packed full of unsold Chrysler, Dodge and Jeep products. Dealers are choking under the force feed antics of Chrysler’s sales and marketing group, headed by yet another one of those “top Mercedes-Benz managers.”
Talk to any Chrysler engineer or manager below the top floor and you’ll hear the same thing over and over—the troops are over worked and under staffed and because of that completely demoralized. This latest round of search and destroy cost cutting, ceremonially headed up by papa Mercedes may look good to the German investors and the sloppy media, but it will do nothing for Chrysler in the long run.
The time and effort should be spent designing, building and marketing great new cars. Chrysler is losing its edge thanks to razor thin staffing leading to underdevolped vehicles, big time blunders by sales and marketing, and spotty (read: ugly) styling… not because the cars they are building cost too much.