BY TOM WALSH |
Deborah Meyer, Chrysler LLC's chief marketing officer recruited from Toyota Motor Corp., positively radiated enthusiasm and confidence.
"We're listening. We're changing. We're responding. We're moving very quickly," she told me on Monday, relating a story of how Chrysler killed one of three engine options for the new Dodge Journey crossover vehicle last month, within a week of dealers urging asimpler approach.Bob Nardelli, Tom LaSorda and Jim Press, the CEO and two vice chairmen who signed off on the Journey changes, are also gamely talking up Chrysler's future this week at the North American International Auto Show.
After they answer all the questions about whether they like each other, that is.
Despite this earnest talk from the top, it's hard not to feel like Chrysler is one of the classic underdog stories of our time -- a parochial outfit playing against global giants like Toyota Motor Corp. and General Motors Corp., with a gas-guzzling vehicle lineup in an era of soaring gas prices, and a strategy that relies on help from a gaggle of disparate partners.
"We cannot do all things in-house," said Nardelli, the former General Electric executive and Home Depot boss installed last summer by Chrysler's new private equity owner, Cerberus Capital Management. "And I'm not sure the not-invented-here paradigm would serve us well."
In an interview Monday, he followed that blatant admission of Chrysler's product and technology shortcomings by noting that there is no consensus on what the winning fuel-saving technology of the future will be, adding that Chrysler officials are "keeping our optionality open."
Optionality?
At first I thought Nardelli misspoke, but then I discovered that optionality is a term for evaluating a company that can't be judged by normal methods -- such as a small private company with a unique focus operating in an industry of giant public companies. Sound like Chrysler in a world of Toyotas and GMs?
Chrysler sells more than 90% of its vehicles in North America, while Toyota and GM -- and Ford Motor Co., Volkswagen AG and many other auto giants -- sell most of their cars and trucks outside their home markets.
Chrysler is busily trying to fill gaps in its product lineup and geographic reach with partnerships and alliances. It cut a deal with Nissan last week to sell Nissan-built small cars in South America. Separately, it has a small-car development deal with Chinese automaker Chery. Chrysler builds minivans that are badged as Volkswagens in another deal. And the company has partnered with Hyundai and Mitsubishi to build engines in Dundee , and to develop hybrid technology with BMW and GM.
LaSorda, who has been the point man in negotiating Chrysler's partnership deals, doesn't put a limit on how heavily Chrysler should stake its future on such partnerships rather than its own proprietary technology and investments.
"Wherever it's a strategic win on both sides," he said, Chrysler would entertain partnerships.
That's a markedly different approach from Toyota, the world's most profitable automaker. Katsuaki Watanabe, Toyota's president and CEO, spelled out an ambitious program for exploring alternative propulsion systems, noting that Toyota "is committed to developing everything in-house."
In other words, Watanabe wants to control the technologies critical to his company's future.
GM is participating in selected partnerships and joint ventures, but is wary of sharing too much.
"We want to control our own destiny, not rely on others to provide us with technology solutions in the alternative-energy space," said Jon Lauckner, GM's vice president for global program management.
"Intellectual property is where this game is going to be won or lost," added Jim Queen, GM's global engineering vice president.
Chrysler, meanwhile, with its thinner, limited product line, smaller global presence and the cash constraints of a company struggling to return to profitability, has little choice but to bet its future on making smart partnership deals.
"There are a lot of different business models," said Chrysler's Meyer, "and the pendulum swings back and forth. We want to be very strategic and choose our alliances carefully."
That's certainly the hope.
But then comes news that Chrysler is embroiled in a dispute with Getrag Corp., a German firm that is delaying construction of a $530-million joint venture transmission plant for V6 engines in Kokomo, Ind.
And that's the danger.
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