While it remains the smallest of the Big Three domestic automakers, Chrysler Corp. has made a remarkable comeback since its latest brush with bankruptcy earlier this decade. Prior to its recent resurgence, the Auburn Hills, Mich., company had been often criticized as overly subject to the periodic ups and downs of the automotive market. Specifically, Chrysler had a track record of slamming the brakes on product development and capital investment following sales slumps, adding to its troubles for years afterward.

The Chrysler Technical Center on-site pilot-plant facilities are easily accessible to all vehicle platform-team personnel, enhancing communications.

Things have certainly changed since the dark days of the late 1980s. In the following years, Chrysler's management instituted a series of marked changes in corporate culture, practices, and infrastructure that led to steady gains in market share and customer satisfaction. Meanwhile, the ongoing enterprise re-engineering effort is thought to have better positioned Chrysler to face lingering concerns about product quality, the company's vulnerability to growing competition in the small-truck market, and the expected slowdown in the domestic car market.

A good deal of the car maker's improved standing can be attributed to the significant downsizing it was forced to undergo following the controversial federal bailout of the early 1980s. The resulting smaller, leaner company was driven to adopt an "extended enterprise" approach to product development in which suppliers are given a much expanded role. This fortuitous circumstance did much to allow Chrysler to compete successfully in the car market of the 1990s.

Nevertheless, several savvy decisions by company management have subsequently played a considerable role in Chrysler's comeback. The changes in how Chrysler builds cars can be boiled down to four key "enablers," according to Cliff Davis, general manager of Chrysler's scientific laboratories and proving grounds: establishing vehicle platform teams, constructing a new technical center, adopting a new corporate culture and organization, and installing a single companywide computer system based on Dassault Systèmes' CATIA CAD/CAM software. "Basically, I'm focusing on what Chrysler has changed since the economic downturn in the mid- to late 1980s," said the veteran mechanical engineer, who joined the automaker in 1965.

Davis was quick to point out that "these four items did not happen at the same time as part of one grand vision or strategy. No one could have foreseen the changes that occurred in the market and in technology in general." These unanticipated changes in the environment, he said, pushed Chrysler's management to adopt "the four enablers, which came together to enable us to get where we are today." He went on to stress that "strong leadership was needed to implement these changes. Without it, nothing was going to change."

By 1988, Chrysler's product-development cycle—then about 60 months from approval to launch—had become too long for the company to be competitive, Davis said. In addition, the automaker was not controlling variable costs well enough: "We kept getting surprised by higher-than-predicted costs after vehicle launches." The uncomfortable realization finally came that "the product was not inspiring for automotive journalists or customers." This was the era of the boxy K-car, a design then widely held to have set the standard for dull, car-as-commodity vehicles.

Chrysler's management realized that the company's conventional functional organization, which consisted of the usual design, engineering, manufacturing, marketing, and sales departments, was a prime culprit. Each functional group tended to operate as an independent fiefdom with its own goals, Davis said. "When there was a major decision to be made, it had to go up to the president, because each functional group had its own objectives, and it was difficult to get agreement among them." Chrysler's president often ended up having to arbitrate among groups that should have been cooperating instead of competing.

In late 1988, the company was reorganized into five platform teams—large car, small car, Jeep, truck, and minivan, Davis said. "Each platform team is like a small company aimed at producing a single category of vehicle," he said. Led by a general manager, each team has all the necessary technical and sales personnel—even key suppliers—on board to accomplish its mission. Thus, each platform team essentially "controls its own destiny."

Robert A. Lutz, now the company president, "directed the staff to begin forming a large car platform team [within] 30 days." This radical organizational change immediately put "99 percent of the people into shock." Soon some resistance developed as well. But "Lutz just said, ''Do it, or I'll get someone else to do it.'" This kind of culture shock in response to such fundamental change is unavoidable, Davis said, and without strong leadership, people will find a way to resist. But the change bringers prevailed: All five platform teams were in operation a year and a half later.

"Platform teams allowed us to replace the conventional sequential engineering with simultaneous engineering," he said. Instead of handing a project "over the wall" to the next department—meaning that when something went wrong, it had to go back upstream to be fixed—problems were identified and solved by the team itself at the early stages of the product cycle.

The platform-team approach seems to be having its intended effect, Davis said: The latest Neon compact-car model took 31 months to bring to market, while the current Dakota pickup truck made it in only 29 months. "We're aiming for a 24-month development time," he noted, and "eventually we hope to get it down to 18 or even 15 months."

Another key enabler for Chrysler's resurgence was establishing the company's new technical center in Auburn Hills. "In the mid-1980s, we had probably the poorest technical facility in the auto industry, and we needed a new one," Davis said.

Lee Iacocca, then the company chairman, had announced the new technical center in 1984. Construction began two years later. When an economic recession hit in 1989, Wall Street and a lot of others called for Chrysler to abandon the project to save money, but Iacocca refused, believing it was too important to Chrysler's long-term health. The decision to resist these demands took strong leadership, Davis emphasized.

The Chrysler Technical Center opened in 1991 and quickly became an important part of the enterprise. The technical center provides a home for three platform teams as well as modern scientific laboratories, which "helps us attract and retain top technical personnel, Davis said. "It also allowed us to bring pilot operations on site," where the facilities were readily available to team members.

"It's important to have all platform-team members collocated," Davis added. This enhances communications and makes concurrent product development possible. "Everyone who's involved in a project is now in one place, which makes it a lot easier to meet," he said. "Previously, we'd schedule meetings and everyone couldn't always make it, often because they had to travel to get there. We'd end up having half a meeting, which usually led to half a decision."

Why was it important for Chrysler to adopt a new culture? "When you recognize that people are your most important asset and resource, you come to the conclusion that you've got to focus on culture," Davis said. "When Robert Eaton became chairman in 1993, one of the first things he said to us was, 'You really have no vision or mission for this company,' and he was right."

Collocation of platform-team members and an open working environment are key to improved communications and a concurrent engineering approach

Eaton brought top-level company officers off-site for a week to develop a mission. There, "they started to lay out a new culture that they hoped would lead our company to be the premier automaker in North America." The next step was to bring different levels of the organization through the same reorientation process—1,500 people in total, including the leadership of the United Auto Workers at Chrysler. After that, the message was extended to the entire corporation of more than 100,000 people.

The outcome of this effort was "five enablers that formed the basis of our new culture"—better communications, continuous training, a more effective human-resource support system, a more accurate measurement of company practices, and process improvement. "The next step was to form teams at the general managers' level to manage the development these cultural enablers," he said. For example, in 1994, Chrysler launched a new personnel appraisal process that has been subsequently refined until it has become "a full 360-degree-type process in which not only your supervisor but also your peers and even your subordinates rate you."

The effect of the cultural-change initiative was "to get the staff to buy into a new way of doing business, and to give them a sense of ownership about it," he said. "Since we're working in a dynamic environment, the idea is to train people to be able to embrace change and implement the changes needed to succeed."

Another problem with Chrysler in the 1980s was the proliferation of different computer systems within the company, Davis said. "There were too many different [makes of] computers, and there were no reliable linkages between them. This meant there was no harmony in how things were designed." The lack of commonalty also meant that data had to be translated between systems, which often led to translation errors. "In the 1980s, errors and redos were occurring everywhere, and everybody ended up pointing fingers at each other." As a result, the product-development process was inefficient, and product cycle times suffered.

In 1989, Francois J. Castaing, Chrysler's vice president of vehicle engineering, directed that the company change over to a single computer system with a single database. "It's what we refer to as our CATIA pipeline," Davis said. "Though we're not there yet, the intent is to use CATIA as a common thread that runs throughout the entire enterprise." He noted that the conversion of the styling and engineering departments to a uniform CATIA system is now complete, and an effort to do the same for manufacturing the department is under way. "In next few years," Davis added, "we will finally incorporate the service activities so if you are a customer at one of our dealerships, the service technician you deal with will be using the same data base that was used to design the car."

With the company now broken up into the five platform teams focused on the four enablers, how does Chrysler hold these five small "companies" together so they don't compete? "Our answer is technology clubs," Davis said. "In the early 1990s, technology clubs were organized around the major subsystems of a car—body, chassis, power train, brakes, electrical, and so forth. The idea is to cut across the five platform teams to allow them to share technical advances, lessons learned, resources, and expertise."

This kind of cross-fertilization occurs when the various layers of management—brake specialists, say—get to meet regularly with their counterparts on other platform teams. "At first the tech-club arrangement was informal," Davis said, "but that system lacked oversight, so in 1994, the arrangement was made more formal, with general managers becoming sponsors of the club with which they were associated."

"When you look at the entire re-engineering program, the results have been outstanding," Davis concluded. "And with the continued focus on improving the product development process and the never-ending emphasis on speeding time-to-market, we feel we're well positioned to keep moving forward."

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© 1997 by The American Society of Mechanical Engineers