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Chrysler gears up to use criticism to address shortcomings
CEO tells workers to analyze complaints
BY TOM WALSH • FREE PRESS COLUMNIST • June 8, 2008
At around 7 a.m. last Wednesday, Chrysler LLC Chairman and Chief Executive Officer Robert Nardelli fired off an e-mail to all company employees.
Chrysler's biggest business challenge, he wrote, is to understand why many potential customers don't consider buying Chrysler, Dodge or Jeep brand vehicles.
And then do something about it.
Nardelli wants no whining about Chrysler products not getting a fair shake from Consumer Reports magazine or the latest J.D. Power and Associates report on vehicle quality.
Rather, he wrote, instead of putting defenses up, Chrysler workers should seek to understand the harshest critics of the company. And then get to work on solving the shortcomings cited by those critics.
Interestingly, Nardelli's e-mail was sent about five hours before the 2008 J.D. Power Initial Quality Study results were released at a lunchtime briefing in Detroit.
Nardelli and his top lieutenants already knew what the Power study showed -- that Chrysler cars and trucks had far more quality defects than the industry average -- but most Chrysler employees and the general public didn't know the bad news, yet.
His message was preemptive in a way, preparing the troops to hear some bad news.
Nardelli wasn't scolding or berating people for the bleak results -- Jeep ranked dead last among 36 brands -- nor did he try to soften the blow with lame excuses. He could have exempted himself from blame, for example, by saying the vehicles in this quality study were built and purchased before Cerberus Capital Management, which bought 80% of Chrysler from DaimlerChrysler AG last August, was able to make improvements.
Instead, he hammered home points that he has been repeating since taking the helm at Chrysler 10 months ago:
• Don't hesitate to confront problems.
• Everything is about pleasing the customer.
• Raise the standard defining excellent quality.
If this sounds like stuff straight out of the General Electric Co. playbook from the era of legendary former GE chief executive Jack Welch, that's probably no coincidence. Nardelli spent 29 years at GE before becoming CEO of Home Depot in 2000. Welch, a major influence and mentor to Nardelli, preached that a great leader must focus on articulating the organization's strategy and values, and on developing more leaders at all levels.
Chrysler, it so happens, is planning to embark soon on intensive new leadership training for its top 300 executives.
Will any of this make Chrysler a better automobile company? And even if Nardelli is saying the right things as the professor of culture change, does he have enough time? Or will Chrysler be engulfed by the sea change tossing Detroit's automakers around as if they were toy boats?
Those are fair questions. Soaring gasoline prices, at a time when Chrysler's bread-and-butter products are big trucks, powerful cars and family-hauler vans, are hammering U.S. vehicle sales in general and Chrysler in particular. Chrysler sales fell 24.3% in May and were 19.3% lower for the first five months of 2008 than in 2007.
General Motors Corp. and Ford Motor Co. stocks have been drubbed in recent weeks by rocky economic news. And even though Chrysler is now owned by a private-equity firm instead of being a publicly traded stock, you can be sure its owners are just as nervous as GM and Ford stockholders.
I don't know if Nardelli and his management team will survive today's storms and lead Chrysler to a new era of prosperity. Ten months isn't time enough for even the most urgent and dynamic leadership team to overhaul an auto company's vehicle lineup.
I do know it's smart for Nardelli to tell his folks in Auburn Hills to take a candid look at what J.D. Power and Consumer Reports are saying about Chrysler products. As he said in his e-mail Wednesday, those outsiders might not tell the full story of what's going on at Chrysler, but they do shape public perception about its products.
If Chrysler is to survive and prosper, the journey must begin with unflinching candor about the way things are.
