Chrysler (again) works to design itself a miracle
The third floor of Chrysler’s global headquarters, the Product Design Office, is the most secure part of the building. The rare visitor who walks down these brightly lit halls has already stood for two bag searches and had his cellphone checked to make sure it’s not a camera.
The studios themselves -- echoing open spaces under rows of fluorescent lights -- are scrubbed of sensitive materials before outsiders are allowed in. White boards are erased and car covers thrown over new projects that can’t be moved.
It’s here that Doug Quigley and his small band of inventors are working frantically trying to engineer a miracle.
Or pull another rabbit out of Chrysler’s hat. Or wrench victory, with actual wrenches, from the jaws of defeat. Choose your favorite metaphor that conveys the longest of odds and the slimmest of hopes.
Quigley, engineering executive for Chrysler’s ENVI team, and his boss, director Lou Rhodes, are responsible for developing a line of radically different vehicles for Chrysler: plug-in hybrid minivans, Jeeps and crossovers that go 40 miles on all-electric power, as well as all-electric sports cars that bolt from 0 to 60 mph in 4.8 seconds and go 100 to 150 miles on a charge.
(ENVI is derived from the first four letters of “environment,” with “NV” standing for “new vehicles.”)
These vehicles, says Quigley, could “not only save the company but even the industry, and even at some point affect things like national security.”
To those unfamiliar with Chrysler’s long, erratic history, Quigley’s pronouncements may seem unrealistic, or downright crazy. After all, Chrysler is hanging on by its fingernails. All 30 of its factories are shuttered until at least Jan. 19. In December, the company’s monthly sales plunged 53% compared with a year earlier.
Even with the recent $4-billion government bridge loan, most experts think Chrysler can’t survive the year as an independent company.
Quigley, though, is tuning out the predictions of doom. “We’re not going to listen to it,” he says. “It’s destructive and it doesn’t change a damn thing.”
It’s dark all over Chrysler-land, but on the third floor of HQ here in Auburn Hills, the lights burn all night.
Out of the ditch
The fourth-and-long, Hail-Mary mentality has been part of Chrysler’s corporate culture from the beginning. Caroming between disaster and prosperity for 80 years, the company has saved itself time and again with great engineering or expressive, emotional design (though, it should be noted, rarely both at the same time).
Founder Walter P. Chrysler was called the “greatest doctor of sick automobile companies” the world had ever known. He saved Buick for General Motors, then rode to the rescue of Willy-Overland, Maxwell, Chalmers and Dodge before starting his eponymous company in 1925.
In the 1950s, when sales plunged because of stodgy styling, Chrysler put the portfolio in the hands of a young designer named Virgil Exner, whose “Forward Look” rejuvenated the company and sent sales soaring.
In the late 1970s and early 1980s -- around the time Chairman Lee Iacocca asked for and received a $1.5-billion government bailout to stave off bankruptcy -- Chrysler’s product boffins created the front-wheel-drive K-cars and minivans, which became huge hits.
Facing yet another sales collapse in the late 1980s and early 1990s, Chrysler developed the LH sedans, the so-called “cab-forward” cars, as well as the Ram truck, Jeep Grand Cherokee and ferocious Dodge Viper sports car. Again, sales soared. Even as recently as 2003, Chrysler -- while it was saddled by a disadvantageous merger with German carmaker Daimler -- launched the 300C sedan, another box-office smash.
This oscillation between adversity and prosperity has happened so regularly that it seems to be part of the corporate metabolism, a reflex. How such a neurotic tendency to let things get out of hand becomes ingrained into a huge organization over decades is something of a mystery, the stuff of management textbooks.
But it does seem to be that “when things get tough, we do engage harder,” says Quigley. “We get even more creative and more inventive, and management does empower us.”
But of course, he says, smiling, “that’s the same management that gets us into these messes.”
The public will get a good look at Chrysler’s electric-car plans today when it reveals two new “production-intent” vehicles at Detroit’s North American International Auto Show: a plug-in hybrid version of the Jeep Patriot compact utility, and a pure electric vehicle, called the Circuit, based on the British sports car Lotus Europa.
These join three ENVI prototypes unveiled last year: a plug-in hybrid Chrysler minivan and Jeep Wrangler, and another electrified Lotus, similar to the Tesla Roadster. Chrysler has committed to bringing at least one advanced electric vehicle to the market next year.
“These are not concept vehicles,” says Quigley. “We can’t afford that anymore. These are intended for production.”
It seems like bold talk, considering no mainstream manufacturer has yet put an all-electric car into production (notwithstanding small-volume programs in the 1990s such as Toyota’s RAV4 and GM’s EV1).
GM’s ballyhooed Chevrolet Volt plug-in hybrid is slated for production beginning in the fourth quarter of 2010, but that timing is suspect since the financially troubled company has suspended construction on the plant that is to build the Volt’s tiny gas engine.
Electric vehicle programs -- all carmakers have such efforts underway -- are expensive because they rely on technology that is only now emerging.
Chrysler’s shoestring strategy relies heavily on suppliers’ cost-sharing on these projects, with the expectation that both parties can profit if the vehicles succeed. This is particularly true of the battery suppliers, says Quigley. “The deal-breaker is and always has been the [battery] pack.”
The good news is, he says, suppliers have brought batteries to Chrysler’s door that seem to meet the company’s needs.
He holds up a silvery, Pop Tart-sized object, a prismatic lithium-ion battery, that puts out roughly 20 amp-hours at 3.3 volts -- powerful enough to create a ferocious shower of sparks when he strikes the leads on a piece of metal. “Two years ago, everybody was building cylindrical batteries, because that’s what they knew,” he says. “A lot has changed in two years, and a lot more will change in another two.”
Chrysler execs insist they want to work with a domestic battery supplier (a politic requirement when the company is looking to the government for loans and tax credits). Last week, Massachusetts-based battery maker A123 Systems announced it would build a manufacturing facility in southeastern Michigan.
Whichever battery supplier Chrysler works with, the relationship will depend on trust. That’s problematic because of the wobbling state of Chrysler’s finances. “We both have to ante up some capital,” Quigley says. “It’s a very tenuous thing. The wrong vibe can sink it.”
Will it work?
ENVI’s approach has other vulnerabilities. To save on development costs and speed electric vehicles to market, Chrysler will initially be adapting existing products such the Chrysler minivan and Jeep Patriot. Unfortunately, these vehicles haven’t won over the public, so it’s an open question how electric versions will do better.
“Their latest products have missed the mark by a wide margin,” says David Champion, director of automobile testing for Consumer Reports. “They don’t really have anything going for them.”
And though electric-car making was an open field only two years ago, today there is fierce competition. “How is Chrysler going to maintain any advantage when the battery manufacturers are going to be selling to all the automakers?” asks Peter Morici, an economist at the University of Maryland. “Are they going to be able to leapfrog Toyota and GM? I don’t think so.”
Then there’s the matter of cost. As the electric sports-car maker Tesla has demonstrated, it’s relatively easy to build an all-electric vehicle and charge $100,000 for it; to even approach cost compatibility with conventional gas-powered vehicles, the batteries will have to be a lot cheaper. Chrysler and all electric carmakers will also have to essentially redefine buyers’ notions of the cost of ownership. That means marketing. That means money.
Maybe the hole is too deep. Maybe the ENVI program is about making Chrysler attractive to the next corporate buyer rather than the current owner, investment group Cerberus. Maybe the Lazarus of car companies is out of miracles.
“All I know is that we’ve been here before and we can do it again,” says Quigley. Everything that he’s asked the board for, money or company resources, has been “turned on.”
“If I were living in my own little cave, I wouldn’t know that anything has changed.”