Chrysler Betting Heavily on LH Cars : Autos: Anticipation is rising as the start of production nears. Early signals bode well for the No. 3 maker.
When Chrysler Corp. gave the code name LH to its new line of mid-size cars, industry cynics suggested that the initials could stand for “Last Hope.”
Today, the LH prototypes that zip along Interstate 75 and the rural two-lane roads near Chrysler’s technology center north of Detroit appear anything but projects of desperation.
At the offices of the LH project team responsible for the Eagle Vision, Dodge Intrepid and Chrysler Concorde, anticipation is building for the start of production June 30 and their introduction next fall.
“Anyone at Chrysler’s Big Three competitors who says he’s not worried about the LH is either lying or is not living in the real world,” said auto analyst Joe Phillippi of Lehman Bros. Inc. in New York.
Those who helped develop the LH line are similarly upbeat.
“Chrysler is going to become a world-class car company,” said Glenn Gardner, a Chrysler engineering general manager. “We’ve made great components for a long time. With LH, we’re going to make a great car.”
If the cars stumble during their launch--such as through a recall or other serious problem--the cynics’ “Last Hope” barb could be prophetic for Chrysler, which has the poorest debt rating and highest borrowing costs of the Big Three.
The company lost $13 million in the first quarter, largely because of rollout costs for its new Jeep, the 400-horsepower Viper roadster and early LH marketing costs. General Motors Corp. and Ford Motor Co. together earned more than half a billion dollars in the period.
Still, a ride and drive of a Vision prototype revealed a sleek and stylish vehicle with ample rear seat leg room and trunk space, features accomplished through engineering innovations, not extra sheet metal that once signified Chrysler’s big cars.
The Vision has smooth power flow, tight handling and cockpit-like instrumentation.
About 1,500 car owners in California took part in a tire-kicking session last December in a makeshift showroom packed with competing cars such as the Ford Taurus, Honda Accord and Chevrolet Lumina.
Dodge car marketing plans manager Wally Anderson said the new Chryslers won every comparison. Even die-hard import buyers said they would at least consider an LH.
Unlike GM, which started its separate Saturn subsidiary to fight Japanese imports, Chrysler has reorganized from within.
Gone is a car-building organization in which each area looks after its own interest. In its place is a vehicle development team with sales, marketing, finance, purchasing and supply--even engineering and manufacturing--talking to each other from the start.
This was novel stuff for American car making but it is the way Japanese auto makers have operated for decades. Those methods came to America with the Japanese transplants--Japanese car makers with U.S. plants--and joint ventures such as the Mitsubishi-Chrysler Diamond-Star assembly plant in Bloomington, Ill.
Chrysler’s Gardner chaired Diamond-Star from its 1985 inception until he was tapped in 1988 to lead the LH project. Chrysler has since sold its half stake in the Diamond-Star plant.
“We’ve done everything here we’ve learned at Diamond-Star,” Gardner said. About 1,000 of the first LHs produced in Bramelea, Ontario, Canada, in late June will be shipped to rental fleets in Orlando, Fla., and Denver. Dealers will begin getting cars to sell in late July. But the public introduction won’t come until the beginning of November.
Like the new Jeep Grand Cherokee that is beginning to arrive in volume at dealers, the LH cars are being launched slowly with lots of attention to details and quality checks. By the end of the year, about 50,000 LHs will be built, with 185,000 anticipated in 1993 and up to 300,000 in 1994.
“We’re not running this plant by volume, we’re running it by the quality curve,” Gardner said. “So we won’t have as many units as we’d like to have. But that’s the price of entry in this business. The car has to be superb.”
New Chrysler Mid-Size Models
Here are brief descriptions of Chrysler Corp.’s three new mid-size cars, including key features, expected price range and competing cars:
* Eagle Vision: European styling; aimed at import owners. Price expected to start in the high teens. Principal competitor: Acura Legend.
* Chrysler Concorde: Priciest of the three, with a bigger 3.5-liter engine, standard anti-lock brakes and plush interior. Principal competitors: Buick LeSabre, Lexus LS 300.
* Dodge Intrepid: Family sedan aimed at baby boomers with children still at home. Lowest entry price, about $16,000. Principal competitors: Toyota Camry, Honda Accord, Ford Taurus, Pontiac Bonneville.
