In 1992, Chrysler Corporation’s world headquarters was in Highland Park, Michigan, getting set for a move to the CTC (Chrysler Technical Center) in Auburn Hills. The CTC was a brand new building the size of a small town, with aisles large enough to drive through and massive testing and research labs that insiders say stretch on as far as the eye can see; a full assembly line could be emulated, along with high winds, blizzards, and desert conditions. The company maintained three test facilities, in Auburn Hills, Chelsea (Michigan), and Wittman, Arizona. Lee Iaccoca was company chairman throughout 1992, retiring on December 31, 1992. On January 1, 1993, Bob Eaton was CEO and Bob Lutz was President and COO.
Chrysler had four major subsidiaries at the time: Acustar, for parts; Chrysler Financial, the fourth largest non-bank finance company in America; Chrysler Technologies, making aerospace electronics; and Pentastar Transportation, operating Budget and three other rental car companies. Joint ventures included New Venture Gear (with GM), Philips and Acustar Autoelectronics, Valeo/Acustar Thermal Systems, Eurostar (making minivans in Austria), and Beijing Jeep. Chrysler has also recently (1987) acquired AMC and Lamborghini, and held around 6% of Mitsubishi Motors and 16% of Maserati.
In 1992, Chrysler earned a $723 million profit on $37 billion of overall revenues, selling 2.2 million vehicles in 80 countries through 8,000 dealers, with 13 assembly plants, 10 powertrain plants, 3 stamping operations, 21 component plants, and 123,000 employees (as of December 1991, and including all subsidiaries). The financials were far ahead of 1991, when the company, without the buzz of the new big cars, only brought in $1.9 billion in sales, had a full point lower market share in North America, and lost $795 million. What makes that even more impressive is the fact that Chrysler was the only American automaker to make a profit in 1992.
Chrysler had been profitable for years before the 1991 loss. Profits in 1988 were $1 billion; in 1989, $359 million; and in 1990, $68 million. 1988 market share was high at 14.3%. However, market share was declining along with profits, incentives were high, and many thought Chrysler’s end was in sight when the Dodge Intrepid burst onto the scene.
Technologically, Chrysler was pushing the boundaries of turbocharger technology; the variable-geometry Turbo IV had debuted in 1989 to major technical problems, but patents from its development would bring in revenue for the future even if production didn’t make a profit. The partnership with Infinity resulted in what some called the finest car stereos in existence, and the Turbo III engine, appearing in 1991, gave Chrysler experience in dual overhead cams and distributorless ignition (well ahead of its time); amusingly both those technologies were successful, but the Turbo III engines would be plagued by snapping timing belts, steel core plugs in the aluminum block, and oil pump failures. In any case, while the 2.2 liter engine responded well to the Turbo I and Turbo II, despite not having been designed with turbochargers in mind, it provided amazingly good performance with the no-lag Turbo IV and the brute-force Turbo III. The new Magnum engines showed that Chrysler was again reaching the forefront as it squeezed dramatic power gains out of old blocks.
Chrysler vehicles were starting their “do-no-wrong” phase, coming out of their “can’t-get-respect” phase; the Viper took the world by storm, the Grand Cherokee was named Motor Trend Truck of the Year, the LH series were named AutomobileAutomobile of the Year, the Dodge Ram Van topped its segment of J.D. Power, the LH, Grand Cherokee, and Eagle Talon/Plymouth Laser were all in Car & Driver’s ten best list, and ordinary people were starting to notice something out of the ordinary.
The re-engineered 1994 Dodge Ram would suddenly burst onto the scene, previewed in 1992 but available for sale in 1993, shooting Dodge’s market share back up to serious levels and demanding new production capabilities — and making Chevy and Ford scramble to boost their horsepower, towing capacity, and interior liveability. Right hand drive Cherokees started to go out to the UK and Japan, with international shipments rising 22% as a whole. Perhaps most telling, owner loyalty shot up from 41% in 1991 to 52% in 1992, reflecting both product and perception.
Minivans had the strongest customer loyalty, and it was unquestionably a good year for them, with 522,000 minivans sold in North America alone. It’s hard to believe now, with Honda taking the lead for January-October 2007, but in 1992, Chrysler sold more minivans than all competitors combined; and they opened the Steyr-Daimler-Puch joint venture plant in Austria to build the 25,000 minivans per year sold in Europe (one fifth of the Eurominivan market).
But the LH was getting most of the attention, aside from what was going to the Viper; just its engine was a wonder of the time, a 3.5 liter 24-valve V6 producing a then-impressive 214 horsepower. Launching the vehicle slowly and listening to assembly line workers resulted in what Chrysler claimed was the highest-quality launch in the company’s history.
The Grand Cherokee cannot be forgotten, either; originally intended simply as a Cherokee replacement, it was instead positioned above the older Jeep, not unlike the Wagoneer, remaining the same size but boasting more luxury features and an optional V8 engine (the venerable 318, recently boosted to 220 horsepower and capable of towing 6,500 pounds). The Grand Cherokee was given "of the year" awards by Petersen’s, Four Wheeler, and Motor Trend; Car & Driver put it into their Ten Best Cars list. The Grand Cherokee was brought out in April 1992, selling over 86,000 units by the end of the year in the United States alone, and that was before the V8 was added. The Cherokee, meanwhile, continued to sell, actually going up 6% to nearly 129,000 units in the US alone; it also sold in 60 other countries. Fleets could look forward to the natural-gas powered van.
The Viper, Grand Cherokee, and LH series made the public stand up and take notice that Chrysler had stopped making all decisions on the basis of short-term cost, and as they did, volumes, margins, and market share went up, while incentives fell. This was all the result of plans started in 1989, when the company started pushing power downwards, getting ideas from lower-level employees and suppliers, leaning management ranks, making better use of computer-aided design, and cutting costs intelligently. The Plymouth Prowler, then still a concept, was helping the company as a test-bed for aluminum body production, while the Chrysler Cirrus showed the company's work in two-stroke engines and extreme cab-forward design.
Corporate change was in the wind, with engineering already completely revamped, and the supplier idea program saving over $200 million. The CustomerOne training initiative, including 360 degree feedback for zone reps, had started, and the new Chrysler Technology Center was in nearly full swing by the end of the year, with 6,200 workers in the state-of-the-art building. The CTC Pilot Plant opened to develop new manufacturing and assembly processes, and to get worker feedback before the lines were set in stone; and the new corporate headquarters, next to the CTC, entered the planning phase. Huntsville got Chrysler’s first child care center. To raise cash for engineering and retooling, $215 million of Mitsubishi Motors stock was sold in 1992, along with its full 50% ownership of Diamond Star Motors for $100 million and debt release), and some financial operations.
There were problems, to be sure. Chrysler was losing money on each Spirit, Acclaim, Shadow, and Sundance they sold; and the market share for cars was at just 8.3%, losing ground even in 1992, with truck market share rising from 18.4% to 21.1% (market share figures are for the US and Canada). The proportion of retirees to active workers was then, as now, hurting the company as it paid medical expenses to its retirees. But long-term debt was being cut, equity was rising, capital expenditures were shooting up (from $1.6 billion in 1988 to $2.3 billion in 1992), and people could see that the tide was turning. The next few years would be a new golden age for Chrysler Corporation, with ever-increasing profits, sales, innovation, and optimism.
The turbocharged 2.2, a generally reliable, long-lasting powerplant, managed to pump out more power, even without an intercooler (Turbo I form), than the V8s of the late 1980s had, not to mention the modern Chrysler and Mitsubishi V6 models — even the big 3.8 liter V6; and it made peak horsepower at fairly low engine speeds, helping its responsiveness when coupled to a stick-shift. Unfortunately, the automatic transmissions were not always well suited to the turbo engines.
The Turbo III entered its second year for 1992; it appeared in 1991, long after the 1989 debut of the Turbo IV.
The big news in trucks for 1992 was in the 3.9 liter V6, designed for the Dakota but now used in the Ram Van and Wagon as well, and the 318 V8; now in Magnum form, with sequential multiple-port fuel injection, a tuned intake manifold, and other changes, they produced 180 hp, 225 lb-ft (V6) and 235 hp, 285 lb-ft (318 V8), a stunning power upgrade. Nearly four fifths of the components of these engines were redesigned, and along with better performance came better durability, lower emissions, fewer (if any) leaks, and better mileage. The Dodge Dakota in particular gained from this as the only mid-sized pickup to have a V8 (which arrived for the Dakota in 1991); and it could be ordered with a five-speed manual transmission and the V8 for even better performance.
The Dodge Ram of course got both new engines, as well as a new heavy duty manual transmission; and the Club Cab was now available with the diesel. A dual rear wheel option was also given to the Club Cab. The Ram 50, imported from Mitsubishi, was cut back to two series with a single 2.4 liter engine. It may be hard to believe in 2007, with over 300,000 of the pickups selling every year, but only around 80,000 Rams were sold in 1992, with a large proportion being Cummins-equipped models (sold largely on the strength of the engine); just about 5,000 Ram 50s could be added to that. Ram vans were down to about 70,000 units, including the wagons. Ramchargers were still going but in very small numbers, with the only trucks to sell over 100,000 units being the then-hot Dakotas - selling at nearly double their 2007 rate.
Ram Van and Wagon, still running off their basic two-decades-old design, but with more modern sheet metal and interiors, were given minor upgrades; a one-inch diameter front stabilizer bar was used with gas-charged shocks in front and back. The alternator was up to 75 amps, and three-point seat belts were added to outboard positions of the rear seat.
On the Jeep side, the Grand Cherokee (originally intended to replace the Cherokee) was still new and very hot, and the old Cherokee was soldiering on, as it would until the next generation came out and the aged design was finally retired. The Wrangler was still there, square headlights and all, with two AMC-designed engines - the 2.5 and 4.0. The Wagoneer had reached the end of its life in 1991, and 1992 was the first Wagoneer-less model year for quite some time.
The Jeep Comanche was still being produced, but with few sales — and competing as it was against the Dodge pickups — it was quietly dropped in May 1992. Cherokee fared far better, doing so well it would last into the 21st century.
Also at the end of the 1992 model run, the Wrangler moved from the Brampton, Ontario plant to Toledo, Ohio. Jeep managed to rack up over 200,000 sales, a strong showing compared with the large line of Dodge trucks, and historically a good year for Jeep.
The big news for 1991 had been the minivan refresh, an extensive re-engineering of the basic K-car based platform which conquered the economy feel of the minivans. Changers were made to the suspension and steering, antilock brakes were optional, standard
shoulder belts were installed for all passengers, and all wheel drive was optional; the
next year (1992), driver air bags were made standard, even in the C/V, and an integrated child
seat was offered for the first time. The interiors reached a new point of refinement, and the new vans would be hard to beat - even for Chrysler itself.
Chrysler was focused on making the Town & Country a luxury minivan, and it came standard in extended-wheelbase form with the new and up-to-date, 3.3 liter engine coupled to the adaptive four-speed automatic; all wheel drive was newly available for 1992 (as were an aerodynamic luggage rack, woodgrain delete, gold wheels, and standard Infinity II sound). The interior was soft cloth and gathered leather. Of some note, the V6 engine, entirely designed by Chrysler, was now producing 150 horsepower and 185 lb-ft of torque, essentially matching both the 318 V8 and the 2.2 Turbo I.
The Dodge Caravan dominated the minivan market, with Plymouth Voyager coming in at #2. Both had the highest resale value of any small wagon; new for 1992 were standard drivers airbags and optional dual integrated child seats, with various cosmetic updates, a three-speed automatic available with the long-wheelbase mini and 3-liter V6 (as part of a value package), standard manual mirrors on base models, new wheels, passenger assist handles on the roof rail, stalk-mounted wiper controls, and automatic transmissions standard on the long wheelbase models. Buyers could choose between the Mitsu and Chrysler V6 engines, even on short wheelbase models, with the short wheelbase carrying a base 2.5-liter four-cylinder again.
The biggest Chrysler car-related news for 1992 was the result of an experiment — the Dodge Viper, the first car engineered in the company’s new platform-team system, which was publicly attributed to Honda but privately credited to AMC under François Castaing. The Dodge Viper, at $50,000, featured a V-10 based on the version used in trucks, but highly modified; it could do 0-60 in a mere 4.5 seconds, easily beating the contemporary Corvette and Stealth R/T Turbo, and, more impressively, could reach 100 mph and stop again in 14.5 seconds. Though few were sold and they were highly impractical for anything but racing, the Viper gave Chrysler much-needed credibility and magazine cover photos — where the Dodge Spirit R/T and Daytona R/T, despite 0-60 times of under 6 seconds at a much more affordable price and with more day to day functionality (and gas mileage), had failed to gain any real attention.
The EEK (extended K-cars) were still very much in evidence, dominating the lineup. Though the LH cars were introduced and sold in 1992, the 1992 model-year was almost entirely based on the original K-car architecture. Topping the list was the critically acclaimed Imperial, which distanced itself from its K-cousins quite well; it was the highest rated American car by Consumer Attitude Research, and came with a unique five year, 50,000 mile bumper to bumper warranty. It was powered by the 3.8 liter engine (introduced in 1991), producing 150 horsepower and 203 pound-feet of torque at low rpm, coupled to a four speed automatic. It performed well against the Cadillac Deville and Lincoln Town Car in tests, with the V6 matching their V8s in everything but prestige, and with a suspension that could meet or beat the others’ cornering and comfort. Sales were extremely low throughout its run.
The New Yorker Salon was a full-sized car related to the Imperial, but without much of the extra care and plush materials or sound insulation of the Imperial; it came standard with the 3.3 liter V6. Closely related was the Dodge Dynasty.
A variety of LeBarons were sold on different platforms. The sedan was essentially an Acclaim/Spirit, with 2.5 liter four or 3.0 liter Mitsubishi V6; it now had illuminated entry. The coupe and convertible were substantially different, and gained for 1992 optional four-wheel antilock disc brakes as well as 14 inch cast-aluminum wheels, a clutch or Park interlock system, and, with the 3.0 V6, sequential multi-point fuel injection, raising power to 141 hp. The base engine was the 2.5, with an optional Turbo I.
The Dodge Daytona got its second and final major facelift in 1992; the popup headlights were made into wraparounds, the tail was redone, and ground effects were changed. Antilock brakes became available, and the IROC and IROC R/T models entered their first full year of production after being introduced in February 1991; new features included a clutch interlock or park interlock, new exterior mirrors, and side daylight opening moldings. The IROC came with the 3 liter V6, and the rare 2.5 liter turbo as an option; but the big news was the R/T model, with its 224 horsepower 2.2 liter Turbo III engine, shared only with the Spirit R/T (except in Mexico). This model could actually do 0-60 in around six seconds; but only around 250-300 were made in 1992 (they had also been made in 1991). The Daytona was also raced in IROC, heavily modified, and using 355 cubic inch Chrysler V8s. Despite the Daytona R/T, which was barely marketed and remains almost unknown outside hard-core Mopar circles, sales dropped to fewer than 11,000 Daytonas. The failure of this sporty car to rack of sales was almost unaccountable, given its strong popularity in 1988 and 1989, and its powerful new engines; had the Daytona R/T been better marketed, it might well have had a better showing.
The Dodge Shadow and Plymouth Sundance were carried through with numerous minor modifications, mainly to increase perceived and real quality; they were available with a 2.2 liter or 2.5 liter engine with single fuel injectors, or with a Mitsubishi 3-liter V6. Reportedly, the company lost hundreds of dollars on each one sold, but they were good buys for customers willing to ignore magazine reports; the sold rear axle and independent front suspension gave them a surprisingly big-car ride, and the interiors could be plush and long-lasting. For 1992, the turbocharged engines were dropped (and the Sundance RS was converted to Sundance Duster) in favor of the Mitsubishi V6; any engine could be coupled to either a five-speed manual or an automatic (three speeds, except for the V6, which got four speeds). Only the Duster/Shadow ES was available with the V6. The Sundance/Shadow America versions, with standard equipment for low production costs and low pricing, continued to sell well.
The mainstay Acclaim and Spirit (and LeBaron) continued largely unchanged for 1992, with a new 3-liter V6/3-speed automatic powertrain combination, new colors, low-rolling-resistance tires, and consolidation to a single model. The three differed mainly in suspension tuning and standard features, with the Spirit having the stiffer suspension and the Acclaim and LeBaron having a suspension that rivalled Lincoln and Cadillac luxury cars for smoothness; they became moderately widespread as backup cars in limo fleets.
The AMC/Renault joint designed Dodge Monaco, one of the most aerodynamic cars sold in America, was unchanged except for revised seat belts and two new colors; it was built in Bramalea, and was in its final year. Mitsubishi models offered with domestic labels included the Stealth sports car, with 0-60 in under 5 seconds for the twin turbo model; the Colt small car and Colt Vista five-passenger wagon (Eagle Summit); and Laser/Talon, competing with Dodge Daytona and built in a jointly owned plant in Illinois.
The LH cars were the big news, but they were 1993 models; they brought a cavernous interior, bigger in fact than any car the company had made since the early-1960s Chrysler New Yorker, along with powerful air conditioners, excellent aerodynamics and cornering, fine brakes, comfortable, well equipped interiors, and, in general, more than any other car in their price class. Their appearance was enough to immediately triple Chrysler's stock price; and while they would turn out to have some weak points, particularly in air conditioning and transmission reliability, on the whole they were better made than the company’s legions of K-cars. The engines in the cars stacked up well to the competition, and turned out to be quite durable - and long-lasting in another way: their basic design continued over the course of two acquisitions, and are scheduled to be phased out around 2011.
In 1992, Chrysler was clearly going up — and it would continue to do so until 1998, mounting steadily higher profits and banking steadily higher credibility. Indeed, one could say that 1994 (when the Neon was brought out, and before the head gaskets and window positioning were to tarnish its image) was Chrysler’s best overall year since 1957 in terms of excitement, optimism, and apparently limitless possibilities.
Note: those who would prefer to leave Chrysler in triumph should probably stop reading here.
Many people worked to build up Chrysler after the government bailout in 1979. We all believed in one thing...we were building to be the best the world had ever seen. Not just a common auto manufacturer, we were all variously prodded, goaded, praised, condemned, and bled towards a common goal, from Bob Lutz all the way to every one among us working in the most menial capacity. Common vision and the belief that we could make a difference individually was what drove us to make ourselves secondary to the advancement of what we believed. Unless you have believed, and I mean truly believed, in an idea that was so all-encompassing, so all-powerful, that it trancended your own wants and needs, you will never know the joy of accomplishment that was Chrysler Corporation under the leadership of Bob Lutz.
Most of us were under the assumption that Bob Lutz was both the logical, and only, heir apparent to Mr. Iacocca. Many years later, Iacocca even admitted that he had made a major blunder because of the personal pride and animosity of what happened shortly before the announcement was made. It was spread around as a rumor that Bob Lutz had confronted Mr. Iacocca about the CEO position, and actively campaigned, cajoled, promoted, and desperately wanted the CEO position - as it turned out, in the same manner and forcefulness that Iacocca himself had done to Henry Ford II. Which had gotten Iacocca fired from Ford Motor Company, long before Chrysler was to receive his attentions. As the fate of history played out, Iacocca didn't do what was done to himself, but performed, in my opinion, a far more heinous act. He brought in someone from the outside to run the company and, as it was told to me (I have no proof of this), "ride herd" on the uncontrollable Lutz.
We have all seen the esults of the downward slide that began almost immediately...that has been far more than adequately chronicled by Evan Boberg in his book. The empire building, so long ridiculed as a management style under Lutz, started back in full swing almost before the ink was dry on Eaton's employment contract.
At this point, a group of formerly dedicated Chrysler employees made the secision to leave, all in one 24 hour period. The top 12 design engineers all quit Chrysler in protest of Eaton and his policies. This group, forever branded as "rabble rousers" and "disgruntled former workers" by Eaton in the Detroit newspapers (the Free Press and the Detroit News), started to work together to assist the suppliers of Chrysler in an attempt to prevent these loyal companies from failing to meet the needs of the Corporation. The Quality Improvement Process, partnering with the suppliers to bring about savings thru the Japanese keiretsu method of joint development of components and systems, all started out with the best of intentions and best of results...
Slowly, the Eaton clan brought to the corporation the worst of Lopez's GM purchasing techniques, browbeating suppliers, mandating price cuts, arbitrarily voiding contracts, sharing confidential supplier info with other suppliers to get cost cuts.... all this led to the Daimler-Benz takeover in 1998. Eaton needed money to keep his reputation and Schremp was in a buying mood to bolster his reputation. Jurgen Schremp was portrayed in the popular press as the white knight of DBAG, capable of no wrong. All failures that were discovered were the fault of others, "less capable" than Schremp. What the industry analysts failed to realize was how much hype was surrounding both Chrysler's stability and production, and D-B's failures in management of Freightliner, American LaFarance, AdTrans, Fokker, and other companies. Stripping all the companies of their assets like a vulture strips a rotting carcass, DBAG could, quite legally, project outstanding results as the profits grew. Their failures were yet to be discovered.
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