Chrysler went into 1998 with a good, new product line and strong profits, and optimism for the future. The Eagle brand was being dropped, but the other brands were being re-invigorated by new image leaders. Dodge had its Viper; Chrysler was working toward its flagship with the Chronos; and Plymouth had the Prowler and Pronto Spyder, with the PT Cruiser in planning. The Durango, Dodge’s long-awaited big SUV, was introduced mid-year, along with the Ram Quad Cab, Dakota R/T, revised B-vans, and the Jeep Grand Cherokee 5.9 Limited. The very first of the cars to be developed under the AMC/Honda-influenced engineering system, the LH series, was re-engineered just five years after their introduction.
Chrysler was making high profits ($5.7 billion operating profit in 1998, including Financial), and had both more loyal customers and more new customers than average. Profit-sharing checks were sent out annually, and suppliers were given a share of the billions of dollars they saved Chrysler Corporation each year. New cars were designed with supplier, customer, line-worker, and mechanics’ input to make them more reliable, easier to work on, cheaper, and more desirable. Every new or redesigned vehicle seemed leapfrogged competitors, and enthusiast magazines covered each introduction with positive words, still surprised that the “K-car company” had outdone the Japanese with the Neon and Intrepid, had beaten Ford and Chevy with the Ram, and had outrun just about everyone with the Viper.
Chrysler sold a record 2,510,011 vehicles in the U.S. (9% more than in 1997); and, for the first time, over 3 million units were sold worldwide, including nearly 300,000 in Canada and just over 200,000 in the rest of the world. (3,093,716 cars and trucks were sold in 1998.) The company had 123,180 employees — nearly five thousand more than in 1997. (In 2007, Chrysler had just 72,000 employees.)
Most of the increase in the US was from minivans, SUVs, and trucks, which increased 13%; one third of these were Jeeps and other SUVs. Car sales were slightly higher than 1997. Records were set by the Dodge division, the Dodge Dakota, and the Chrysler Concorde, as well as minivans (up 11% despite intense competition), and the Ram pickup. Car-based market share in the U.S. was 9.2% for the first 9 months of 1998, while truck/minivan market share was 22.7%; combined, Chrysler Corporation had a market share of 15.7% in its last reported nine months of existence (16.0 % for the US and Canada combined). While car share was still low, each carline was critically acclaimed and “hot,” and the company had plans to conquer more share.
Chrysler Mexico, the third-largest market, sold 92,299 vehicles in 1998, 37% more than in 1997, with a higher proportion of car sales. Intrepid sales quintupled, Neon sales rose 127%, and the Grand Cherokee rose 29%. Mexican police were buying Intrepids and Neons for squad duty. At the same time, sales fell 50% in Asia/Pacific, 1% in Europe, and 16% overall outside North America, but the company was working on deals and vehicles to increase sales in these areas.
In its last-ever public report, for the third quarter of 1998, Chrysler Corporation announced that earnings from sales had risen from $40,650 million to $45,805 million. The financing arm earned $300 million more than they had in the previous year’s first three quarters.
Net profits in the third quarter of 1998 were a whopping $2.74 billion - compared with the already high $1.95 billion profits in January-September 1997. 1998 was shaping up to be a record year. The company claimed $7.85 billion worth of cash, cash-equivalents, and marketable securities; not to mention $2 billion in prepaid benefits, taxes, and expenses, $13.5 billion in finance receivables, and numerous other assets totally $60.4 billion, with liabilities of $49 billion. Inventories, including raw materials, parts, and vehicles held for short-term lease, totalled $6 billion. Chrysler still appeared to be the auto industry’s fastest-rising star.
As for reliability, WhatCar?’s study of 80,000 leased vehicles included 422 Chrysler vehicles in the UK, mainly Jeeps with a scattering of minivans and Neons. In 1997, 15.8% had mechanical breakdowns, a fair-to-middling performance. In 1998, this improved to 14.7%, far better than Land Rover (whose figure was over 27). Most of the Cherokee's breakdowns were due to a faulty hose which had been revised in 1997, and which was covered by a service bulletin for a free repair. The number of Neons and Voyagers was too small to be listed separately.
The Chrysler Technology Center bunched together engineers from every discipline, all on top of the world’s most advanced and extensive testing center, able to make snow, heavy winds, and burning heat.
Covering 424,000 sq. ft. and representing an investment of more than $140
million, the laboratories simulated hundreds of driving conditions to speed product cycle time while boosting product reliability and customer satisfaction.
1998 also saw Robert Eaton’s proclamation that Chrysler needed to merge with another company to remain profitable, despite ever-increasing profits and successful products. Business journals were filled with articles supporting the “every industry can only support two or three companies” fad, and Eaton’s announcement met with overwhelming support from a finance community that made immense profits from such deals. Employees, owners, and small stockholders objected and were ignored. The deal went through, with no objection from an ungrateful government which had forgotten Chrysler’s extensive (and often free) contributions to America’s military and space programs.
For 1998, there were few changes from the deal, and many people were optimistic. Though Mercedes quality ranked far below Chrysler’s for most vehicles, on most surveys, analysts and reporters almost universally felt that Mercedes would teach Chrysler to increase quality; and even many who opposed the acquisition had to admit Mercedes knew a few things about sound insulation and customer care that would be helpful. The successes of 1998 would, though, be forgotten fairly quickly as it became known as the year of the merger.
On November 25, 1998, the allpar.com domain name was created; shortly afterwards, work began on transferring the Web’s largest Chrysler-oriented Web site from z.simplenet.com/cc/ (its third domain since 1994) to allpar.com. The Valiant portions had already settled in at valiant.org. In both cases, the sites were hosted at $8.95/month accounts at Esosoft.com; virtual private servers and, later, a dedicated server were both in the future. Allpar started out 1999 attracting around 10,000 - 20,000 unique visitors per month.
The Allpar name was chosen largely to show up above “autos” and just about every other listing in the then-dominant, then-free Yahoo Directory (now a largely ignored part of the massive Yahoo empire). It’s alphabetical and meaningful (a layman’s list of practical auto resources). It took many hours to get the change of URL spread around to the hundreds of sites that referred to Allpar’s various antecedents, and some never did change. At the time some other sites (such as allmarque.com) were also planned but these never went anywhere.
Allpar’s founder and current webmaster had been working with Pace University in 1997 and early 1998, but moved to Metrus Group in 1998, working on the web site on a very part-time basis. To a degree, Allpar languished a little in these early years due to his lack of time away from his full-time job and family. Two years later, though (in mid-to-late 2000), thanks largely to the short-lived Luna Network, he was able to work part-time on both his Metrus job and Allpar.
In January 1998, Allpar’s predecessor recorded 23,889 individual visitors (as judged from IP addresses) and was featured on the then-popular Starting Point web site. By December, Allpar recorded 31,556 unique visitors with 141,907 page views, the most popular pages being the cars index, engines index, FAQ, dealer-trouble repairs, and Daytona. Viewership would increase every year until 2007.
Refined anti-lock brake (ABS) systems for 1998 vehicles made emergency stopping smoother; the new ABS system was lighter, simpler, and quieter while as effective as the system it replaced on the cloud cars and Neon. All Chrysler passenger cars, minivans and Jeep® vehicles used similar ABS systems, which integrated the computer controls and hydraulic braking unit, previously housed in different locations, into one system. The simplified design eliminated 22 external circuits and improved system reliability by using internal wiring connections.
Chrysler's Smart Key Immobilizer (SKIM) system would only let the engine start when it sensed the owner’s specially programmed key. It was phased in starting with Sebring Convertible and Jeep Wrangler. The system used a radio transmitter with changing codes. For all vehicles, an additional tumbler was added to the ignition lock, and a side bar inserted with a horizontal latch on the outside of the cylinder; this helped prevent forcible entry.
The 3.8 liter engine gained 14 hp with lower emissions thanks to a new head design, higher compression, and better airflow, and the 2.4 liter engine had a smoother cylinder bore finish and new piston design for quicker engine break-in.
In 1998, the Plymouth and Dodge Neon (outside the US, Chrysler Neon) was no longer the hot car to get, with waiting lines at dealers; that was in 1994, before the Neon’s flaws had become evident. Now, the sporty car had been flagged with a bad reputation for its short-lived head gaskets, less than ideal three-speed automatic, exhaust-donut noise, poorly aligned window glass, and a host of other minor problems that were slowly or rapidly fixed. Now, in 1998, the Neon had a new three-layer head gasket, and nearly every problem had been addressed, other than dealers not being able to adjust the windows properly. Unfortunately, the damage had been done, and Neon sales were no longer as high, or as easy, as they had been. The Neon was still highly competitive, with the highest performance of any car in its price class, and continued to sweep SCCA racing; desparately needed, but not to come until it was far too late, was a hot turbocharged model. Those who wanted to get from 0-60 in fewer than the stock 7.8 seconds had to make modifications themselves, or send their cars to outfits like Howell Automotive for a workover.
With most of its earlier flaws fixed and any ongoing changes being made silently, the Neon had no announced changes for the 1998 model year other than a new anti-lock braking system that was smoother and quieter, and softer rubber on the exhaust hangers to reduce exhause noise and vibration. The 1998 Neon felt very different from the 1995 models, slightly slower - the earlier cam was reputedly hotter - but more solid-feeling, quieter, and certainly more reliable. Had Chrysler actually promoted these changes loudly and openly, perhaps the Neon could have changed its reputation, but no such sense of pride was to be seen eminating from Auburn Hills.
The larger Chrysler Cirrus and Sebring Convertible, and closely related Plymouth Breeze and Dodge Stratus, also continued with few changes; they had been brought out in 1995, sweeping “best in class” awards, and easily beating the new Ford Contour and Mercury Mystique, which had been developed at surprisingly high cost and introduced at the same time. The accolades did not equal strong sales, and, indeed, the late, lambasted (by reviewers) Spirit/Acclaim/Lebaron had sold many more units.
For 1998, Chrysler quieted the optional sunroof through better aerodynamics, used a quieter, smoother antilock brake system, added foam in the dashboard, put in dampers to reduce steering wheel vibration at idle, and used a refined cowl screen to reduce wind and road noise (the latter in the Stratus and Breeze only).
Also new for the 1998 Sebring Convertible was a four-wheel disc brake system with low speed traction control. The system was included in the Sebring Convertible JXi Limited package and is optional on all other Sebring Convertible models.
The biggest cars were the first other than the Viper to be redesigned by the “new” Chrysler, using the AMC engineering process. These were the Dodge Intrepid, Chrysler Concorde, New Yorker, and LHS, and Eagle Vision, all basically the same vehicle, and all on the LH platform. These entered the first model year of their second generation in 1998, getting heavier and looking bigger, with substantial power boosts to the engines. The aging 3.3 and 3.5 liter V6 engines were replaced with new 2.7 and 3.2 liter designs, while the 3.5 V6 was reeengineered to produce 250 horsepower, up from 214. The Eagle Vision had disappeared with the close of the 1997 model year, to resurface in 1999 as Chrysler 300M; it was given the high-end interior of the LHS along with the Vision’s tight suspension tuning and smaller, more Europe-friendly body.
The 2.7 liter engines would become a problem, partly because they were not seen as being as strong as the old 3.3, and partly because some owners encountered oil sludge due to the design of the PCV system — a problem encountered by Toyota, Honda, and others at the same time. Many preferred the first generation 3.3-powered Intrepids to the second-generation 2.7; and the 3.2 liter engine was eventually dropped. The 3.5 liter V6, though, would survive for over ten more years.
The Dodge Ram pickup was nearing the end of its first “big-rig” series, but it was still gaining in popularity as factories churned out more and more of the new pickups and Ford and GM scrambled to match them. The combination of user-friendly interiors, high capacity chassis, powerful Magnum engines (with “gassers” from the 3.9 liter V6 to the 8.0 liter V10 — all based on the ancient LA V8 family — and the Cummins straight-six turbodiesel), and better than usual ride and handling all made the Ram the pickup to get, for those who didn’t just head to their usual dealer out of habit. The automatic transmissions proved to be a problem in many of these pickups, unfortunately, but it was not nearly as bad as the 1989 Ultradrive debacle. The new Ram had taken Dodge from selling 90,000 full-size pickups a year in 1992 - a 6% market share - to a whopping 383,960 in 1996, good for a 19% market share. For 1998, the main change was a completely new interior package that absorbed more sound, while better chassis tuning cut vibration.
Introduced in 1998 was the Durango, which jumped into the mid-sized SUV market with a surprisingly smooth suspension (credit reportedly goes to Bob Sheaves for that) that provided better-than-expected cornering, the same powerful engines as the Dakota, and a comfortable, attractive interior. The Durango was a success story in its early years, due partly to its combination of ride, cornering, and capability - combining a car-like (or minivan-like) feel that made it fun to drive with the ability to haul or tow hefty loads.
The 1998 Dodge Durango sought to do for SUVs what the Dakota did for pickups: strike a balance between the heavy-duty loads and cargo space of a big truck, and the parkability and handling of a small truck. It was billed in press statements as a 'Smart-Size' SUV, but Dodge also classified it as a compact SUV so it would have the most powerful engine, largest interior, and highest towing capability and hauling capacity, with seating for up to eight people, making it the only "compact" with that capability. Alternatively, one could have called it the most nimble and easily parked full-sized SUV.
Built in Newark, Delaware, the hallmark of the Durango was the 245-horsepower, 335 ft.-lb. of torque, 5.9-liter Magnum V-8 engine, the biggest in its class. In addition, a 5.2-liter Magnum V-8 (230 hp, 300 ft.-lb. of torque) and a 3.9-liter Magnum V-6 (175 hp, 225 ft.-lb. torque) were available. All three engines came with a four-speed automatic, and either rear and four wheel drive. Gas mileage, however, was barely better than GM's full-sized Suburban. To be fair, the maximum tow rating was 7,300 pounds, with a maximum payload of more than 1,800 pounds in an interior package with 88 cubic feet of volume (with the seats folded down). A unique floor pan depression created an additional hidden storage compartment behind the rear axle, while a second, and larger, compartment replaced the foot well when the third-row seat was not ordered.
The Dakota itself had been newly redesigned for 1997, nicknamed “Baby Ram” with styling matching the big-rig setup of its big brother. With a sophisticated, well-tuned suspension, the Dakota provided a luxurious ride combined with good cornering and high capability. Under the hood was a standard AMC 2.5 liter four, a 3.9 liter V6 (based on the LA series V8s), and a 318 cubic inch V8 engine; the 250-horsepower 360 (5.9 liter) V8 was added in 1998 for the quick Dakota R/T.
The vehicle that probably would have sent Jeep to the next level had it been introduced years earlier and called the Wagoneer was the Jeep Grand Cherokee 5.9 Limited, a lighting-quick SUV that boasted a 360 cubic inch V8 under the hood along with high-level trim and a price tag to match.
This was not even a single-year model, but it was set up to sell the Grand Cherokees when people knew a new version was coming for 1999. Every option they could think of was added; it was called the 5.9 Limited in the US and Limited LX elsewhere. The 360 provided 245 horsepower and 345 pound-feet of torque for a 0-60 time of about 7 seconds, making it the world’s fastest SUV for 1998.
Finally, there was the Ram Van and Wagon - the B-Vans, which got the last major changes they would see. A new user-friendly, dual airbag equipped instrument panel was installed; a longer new front moved the engines forward, shrank the doghouse (interior engine bay), and improved front-to-rear access. The 360 was upgraded to 245 horsepower and 335 lb-ft of torque, the and tires brakes were enlarged, the suspension was refined, the body was made stronger, stiffer, and more accurately assembled. Numerous fit, finish, and quality changes were made, taking advantage of the tooling changes needed to make the B-vans conform to new safety codes and to upgrade the interior and powertrain. The front doors had better seals; a passenger airbag shutoff was added for cargo vans; the spare tire moved under the floor to increase usable cargo area; audio was upgraded, and adjustable seat belt turning loops were added.
Tannon Weber wrote, “The 1998 models gained a lot of creature comforts. The seats finally left the old E-body designs and went to a high-backed, comfortable, bolstered design that includes folding armrests on the van I'm driving, and the engine cover's redesign finally has a decent cupholder for 44 ounce drinks. The side mirrors are better too, and don't tend to adjust themselves due to wind resistance on the freeway like the older design does.”
Minivans stayed essentially “as-is” for 1998, having been redesigned in 1996 - the first truly complete redesign of the Chrysler minivans. The 2.4 liter four-cylinder moved the base short-wheelbase models with surprisingly good responsiveness — or perhaps not so surprising, since it was rated at the same power output as the original V6! The minis had gotten heavier, but a strong tip-in and appropriate gearing helped the 2.4 engine to be quick enough for most people. Those who climbed steep hills with full loads would feel better with the sturdy, reliable 3.3 liter V6.
1998 saw some of the more interesting concepts produced by Chrysler Corporation, including the V-10 Chrysler Chronos, low-cost high-recycled-content Plymouth CCV, and the PT Cruiser-foreshadowing Plymouth Pronto Spyder. Plymouth was clearly on the company’s mind, at least until just before the PT Cruiser was brought out; suddenly, then, the PT became a Chrysler, and the decision to drop Plymouth became apparent and, probably, irrevocable, long before it was announced. The search for the perfect Plymouth had ended with the PT, and unfortunately Plymouth would also end with the PT. Chrysler’s search for a flagship ended with a handshake between Juergen Schrempp and Robert Eaton.
Concept trucks for 1998 were the T-Rex, with a 500-horsepower V10, 593 lb-ft of torque, 6x6 drive, 26,000 pounds of towing capacity, and off-road mobility on all surfaces coupled with a surprisingly small turning radius; and the Sidewinder, a street-rodded Dakota with a 600-horsepower Viper GTS-R engine and weight of just 2,700 pounds.
Chrysler had a mix of new and old engines; the V8s dated back to the 1950s in basic design, but had been updated dramatically in virtually every way in the meantime. The “Magnum” V8s had modern fuel delivery systems, computer-designed heads, pistons, and valves, and efficiency as good as or better than most of its peers, coupled with strong reliability and durability. For 1998, the 318 (5.2 liter) was given 15 degrees more spark advance and a 25 percent reduction in backpressure in the Grand Cherokee, adding 25 bhp but requiring premium fuel. The Grand Cherokee also switched to an electric cooling fan motor, eliminating a power drain of up to 20 bhp. The 360 (5.9 liter) V8 was given a new camshaft which allowed an increase of up to 15 hp, and made the torque curve wider for more responsiveness during normal driving. Though a 4.7 liter V8 was about to come out in the Grand Cherokee, the 318 would survive some time longer, along with the 360, before being replaced by the new 5.7 liter Hemi, which was probably under development in 1998.
The 3.8 V-6, long-neglected and used only in top-of-the-line minivans, was given new air ducting, a revised intake manifold, and a 24% larger throttle bore, with redesigned heads and pistons to raise the compression ratio from 8.9:1 to 9.6:1. The result was higher gas mileage, 17% lower hydrocarbon emissions, and a gain of 14 hp and 13 lb-ft of torque. The closely related 3.3 liter engine was given new combustion chambers, smoother cylinder bores, and new piston designs to cut hydrocarbon emissions by a whopping 33%. These engines would survive for quite a long time, with phaseout scheduled for 2010-2012.
The 2.4 liter engine, still fresh from its introduction, got a smoother cylinder bore finish, new head gasket, and new piston design for quicker engine break-in, better durability, and a 20% reduction in hydrocarbon emissions. A structural transmission collar made of lightweight aluminum was used with both the 2.0 and 2.4 liter engines, on all vehicles, to reduce noise and vibration at high engine speeds. A new intake manifold for the 2.4L engine on Plymouth Voyager and Dodge Caravan minimized "rumble," improving the sound quality of the engine. The 2.0 and 2.4 were fairly strong engines when equipped with the proper head gaskets, and were efficient in comparison with most competitive engines, producing decent torque and revving high when needed.
In the Viper, the V-10 engine was given new, lighter exhaust manifolds that heated up faster, allowing the catalyst to reach operating temperature more quickly; and tubular stainless steel exhaust manifolds replaced cast iron components, saving 24 pounds. A new reduced overlap camshaft smoothed the idle and allows an increased spark advance at idle without compromising emissions. In the Ram, computer changes increased power slightly from 295 bhp to 300 bhp, and bumped torque from 425 lb-ft to 440 lb-ft.
Talks about ending the Plymouth brand most likely started in 1998, led by the Daimler crew, though Plymouth sales were once again rising. Efforts were under way in the styling studios to renovate the brand, through a new vehicle called the PT Cruiser which would, with the Plymouth Prowler, pioneer a new signature look for the brand. While the PT Cruiser was reportedly ready to be produced even in 1998, it, along with everything else, underwent a “review” and came out years later, with hundreds of added pounds. (The chart below does not include Plymouth’s staple minivan, the Voyager.)
The leader for Chrysler was now Dodge, by far; even when Dodge’s strong-selling trucks were not included, Dodge outsold Chrysler and Plymouth with ease. The Intrepid was the best selling LH car, by a good margin; it was also the entry level, which helped. The Stratus could be optioned with a four cylinder or V6 engine, unlike the Breeze or Cirrus; and the Dodge version of the Neon seemed to get most of the publicity efforts. No wonder, then, that Dodge was ahead of the game. Plymouth did not have an LH car at all, though Eagle had one (the Vision, which was hurriedly made into the Chrysler 300M when the Eagle brand was closed down.)
On January 12, 1998, Jurgen Schrempp approached Bob Eaton to talk about a takeover, or as he called it then, a merger. Eaton, terrified that Lee Iacocca would return as the head of a corporate raiding party, was all too eager to agree. Starting in March, teams from both companies started working on the deal, signed on May 6, 1998. Chrysler and Daimler-Benz shareholders both agreed to the proposal, with over 97% of both groups voting in favor. DaimlerChrysler (DCX) stock appeared on November 17, 1998, and the merger was official registered on December 21, 1998.
For fiscal year 1998, Daimler-Benz’s car groups announced an operating profit of $2.3 billion on $38 billion of revenues. Their commercial vehicle group announced profits of $1.1 billion on $27 billion of revenues. Chrysler’s former brand announced $4.9 billion of profit on $66 billion in revenues. The Chrysler part of the company had 123,180 employees; Daimler-Benz cars had 95,158; and Daimler-Benz commercial vehicles had 89,711. Chrysler sold 3.1 million cars and trucks, Daimler sold 922,795, and Daimler Commercial sold 489,680.
In non-auto, Chrysler Financial, with just 3,513 employees, generated $765 million in profit. debis (Services) generated $460 million. Daimler-Benz Aerospace generated $731 million in profit off $10 billion in revenue, with 2,047 employees. Finally, everything else (Daimler-Benz businesses including railways) — with 32,581 employees, lost $171 million with $4 billion in revenues. As a combined entity, DaimlerChrysler had $258 billion in revenues, a net operating income of $12.9 billion, and 441,502 employees.
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