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Inside the CTC (Chrysler Technology Center), 2009

When we visited in 2013, the CTC was a bustling center of activity. Much had changed.

In summer 2009, I took a walk through the CTC (Chrysler Technology Center) for the first time in over a year. I was shocked, saddened, and appalled to see what Cerberus had done to this company, after the pillage and rape by the high command for the previous nine years. These were the same guys that said they were in it for the long haul, and had every intent of being a competitive car company. They clearly weren’t.

CTC from a distance

A brief history of “cost savings”

A little history is in order here. Back in 1987, Lee Iacocca was sending the top four guys around the country talking to banks, showing them our product plans, models, and concepts to get product development money. Prior to that, the bankers were flown in to Highland Park, wined, dined and anything else they wanted, while a full dog and pony show was held in the East Styling Studios and in the Styling Dome. This was after the successful launch of the 1984 Dodge and Plymouth minivans, K-car derivatives, and the Federal loans that were paid back seven years early, with large interest and stock warrants.

After these meetings, the employees were told that the banker experts felt that Chrysler’s break-even point was too high. The break-even point is the number of cars that are sold before you start making money. Chrysler had only a 10% market share, in a 10 million sales year, just like in 2009. The company then invoked the SCORE cost reduction program (sharing cost savings with suppliers); the MCM cost reduction program (taking a large amount of the cost out of the vehicles); and since the ill-fated 1998 takeover, “right-sized” at least 62,000 salaried and hourly people out of the car business. Daimler even destroyed the Plymouth brand, and continued to do takeaways from the salaried non-UAW (and from the UAW at every contract renewal). Since Cerberus “right-sized” thousands of people, they have mandatory overtime of up to 20 hours per week.

Chrysler headquarters

After all of this, how can anyone possibly claim, in 2009, with a straight face, that Chrysler costs/fixed costs were too high? This is simply ludicrous!

In 1998, Chrysler had $13 billion in the bank for a rainy day, and the pension funds were fully funded. The merger debacle was shepherded by the SEC. After that, Chrysler was forced to use high-cost German-made parts which forced even more money to be taken out of vehicles, impacting market perception quality, actual quality, and warranty claims; destroyed the 70+ year old Plymouth brand, marketing, product design and development, losing 300,000 in vehicle sales; have been increasing the workload and decreasing pay of all salaried folks for the last 20 years; and kept chipping away at every UAW contract.

CTC 2007The only reasonable answer is that the geniuses running Chrysler for the last two years, had no business going near a car, or especially a car company. It seems that in their efforts to unload what they perceived as a bad investment, they must have thought that adding $6B in US-funded debt would make the company even more attractive to a buyer. The fatal flaw was the economic depression.

Ever since Bush acted like he saved the car companies, the government bureaucrats have been railing that Chrysler should go out of business. You never heard any explanation or justification. After the announcement of the GM bankruptcy, the president got up said that “the car companies weren’t building the cars that Americans wanted!” Bullfeathers! The Detroit 3 had been beaten down to 55% of the market due to government policies that favored foreign companies. Any kind of vehicle was available from econoboxes, to SUVs, to hybrids, at any price point. The fact that the problems the car companies were having was due to the banking scandal/failure/bailout that destroyed the economy, the credit markets, the housing market, everyone’s retirement savings, and caused millions of people to lose their jobs. It was not bad corporate planning or manufacturing.

A walk through the Chrysler Technology Center

In July 2009, when I walked through the hallways between the central nodes, you could look down into the offices. It appears that there are about one third of the people still there, based on all of the empty cubicles, desks, and offices. On the first floor, where all of the shops and labs are, it was really quiet, with almost no people or vehicle traffic, at 1PM, after everyone was back from their lay-off/furlough and lunch.

CHrysler Technical Center (CTC)

Towards the east end of the complex, the building maintenance and skilled trade tricycles and electric scooters were parked by the dozens. There wasn’t anyone to ride or drive these. I can only assume that these people were forcibly early-retired, given incentives to quit or retire, or just layed off or fired. There is no other explanation for this.

Both satellite cafeterias have been long closed, which makes sense, if you have half as many people using them. As I understand it, the Competitive Intelligence group is now down to one person, from a high of seven. If you don’t have any future product, aren’t designing anything competitive, who needs to know what the rest of the world is doing or going to do?

viper in test area

Worst of all, I was shocked to see that the CIRC (Chrysler Information Resource Library), the only engineering library in the company, was entirely gone. They had materials and expertise that simply was not available anywhere else, even online. A frequent user told me that it was said it was too expensive or under-utilized, so they trashed it.

Brandt Rosenbusch, Walter P. Chrysler Museum and Historical Collection Coordinator curator, wrote:

As the Archivist for Chrysler for more than 20 years, I had initial and priority access to the material in the Engineering Library for my review, and I transferred all critical books and materials to our Corporate Archives. All historical documents were shipped to the Chrysler Archives, and most of the library books were sent to the appropriate departments to utilize. I can assure you that the materials absorbed by Corporate Archives deal directly with the history of Chrysler, including but not limited to reference books, internal engineering reports and publications.

Following the initial review, our Corporate Records Retention staff then reviewed the remaining materials. Any and all material that was deemed relevant to preserving the historical relevance of Chrysler was sent to storage.

It was then, only after these two extremely in-depth and professional reviews, that Chrysler Group LLC employees ... were allowed to take the remaining materials. This material consisted of duplicate reference books, periodicals, and trade journals — material that is not core to our goal of retaining Chrysler’s rich and storied history.

... I can verify that, after several visits from Fiat management, they recognize the value in the materials and wholeheartedly support our ongoing efforts at preservation.

This wasn’t the first time that this happened. In 2003, a personnel dink in Product Design did the same thing, throwing out 6,000 items such as rare, unavailable European magazines, and thousands of press kits from all of the International auto shows. This was despite repeated requests, for six months, requesting the items be donated to the National Automotive History Collection in Detroit.

Rear of the CTC

Finally, the High Command allowed the Walter P. Chrysler Museum to become a non-profit, 501-3C entity, after many years, this past January. They left no endowment. There doesn’t appear to be any good source of income, other than admissions, which, historically, are never enough to support a museum. I am worried for them.

I am not trying to be Mr. Negativity here, but they have gutted the heart of the company out, forcing out almost everyone over 50, hurting the collective knowledge base of the company, and have left a shell of a car company, for Fiat to pick up the pieces. There may be some upside for Fiat, such as gaining instant access to the remaining dealer network, but in talking with those still working, it is a mad scramble to find any kind of fit.

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