Interviewed by David Zatz, April 2015, at the New York Show
How do you define Chrysler? The brand.
Do you want the long version or the short version?
Let’s go for the deep version.
This is an interesting brand. 90 years of history. The original brand set up by Walter P. Chrysler was, very simply, a mainstream brand built on design, craftsmanship, technology, performance, and value.
We have done this wonderful up-and-down cycle through near premium, premium, back to mainstream. And every time we come back to mainstream and invest in the brand from product and marketing it does very well. You go back to 2005, 2006, 2007.
To me, it’s always been about when you invest and you put the product and you genuinely do what you’re supposed to do, I mean look at 2005 and 2006, we’d sell 800,000 units a year. And it was a PT Cruiser with a Town & Country, with a Pacifica sitting next to it and an Aspen and a full line of vehicles and they sold in big numbers. That’s what this brand is supposed to be, and that’s what effectively we went to in 2009.
“Imported from Detroit” was a return to what the roots are, the grit of Detroit. Is it working? Back to the roots, back in 2009, we’ve transitioned mildly off “Imported from Detroit” to “America’s Import” on the 200, and we’re going to move from there. For the 300, we’re going to go something called Drive Proud.
There’s a big caveat. Mainstream’s boring, in my opinion. Mainstream is go from A to B. And there are lots of boring cars out there that you can’t tell the difference. Midsize cars are the perfect example. They’re good cars, they’re very competitive, Camry and Accord and Altima. If you look at them on a dark night, you’d never know the difference between them.
When you get in a 200, you’re supposed to know there’s a difference. Because if we really build a mainstream car and build it with design, craftsmanship, and technology as the key pillars, then you get in and it’s a beautiful design on the outside but they can all do that, you’re supposed to go in and go “Wow, this is a stunning interior.” That’s what the 200 was designed to do.
Then you pack it full of technology. Everyone’s got a four-cylinder. Everyone can get 35 to 37 miles per gallon, but not everyone has a V6 and not everyone has an all-wheel drive. Not everybody has different safety features. Nobody has adaptive cruise control with full stop in the mid-size car segment, along with a lot of other stuff.
So, I’ll define it as mainstream with this big caveat: it’s mainstream, but it’s not boring, and you should accept something special from Chrysler. So I hope that – that’s the longest version you'll get out of me.
So who do you see as your primary competitors right now?
I think it’s very simple. If you have mainstream, you recognize the guys who are very good at what they do. It’s Ford; it’s GM; it’s Toyota; it’s Honda; it’s Kia and Hyundai. They do it well. They do it competitively. Frankly, I would tell you we can do it better. And you can do it better without charging the customer a stunning amount of money.
You can make it affordable, but you can give them something special. And if you can’t do that, then I think we all miss the mark because that’s what FCA is genuinely known for. We’re known for our trucks, and we’ll build you a special-looking truck that isn’t your mainstream, typical truck. We can do it with SUVs. Jeep proved it year-in, year-out, and that’s why their volume has increased fairly dramatically.
The Dodge side is all performance. We sure as heck know how to build something that’s performance, and we have fun doing it. And then Chrysler is the other piece of it.
Whether you look at the 200 that is not your average mainstream or the 300 that is a rear-wheel drive car, big American sedan, a lot of luxury in it, but the price down to around $32,000. It’s priced mainstream, but it does not look mainstream. That front end on that car is going to get you noticed. Some people love it; some people hate it. The vast majority, we think, love it.
That’s why we sell 9% to 10% share, and that’s why [Charger] gets on top of that another 15% share. We sell one of every four full-sized cars in the United States, so we think we’re pretty good at this. As we expand the brand, lots of upside.
Let me shift gears just a little bit. You’re also the vice-president of dealer relations I understand.
Yes, sir. We call it network development.
Network development. I apologize.
I'm sorry, dealer relations is, “I'm going to take care of my dealers.” I am Network Development. It puts me in the genuinely develop, operate, improve, and train, and that’s obviously a big piece of what we’re doing in the future.
What steps do you take to increase customer satisfaction with the dealers?
I think the significant plans in place today are, whether it’s the quality of the vehicle or the quality of the service, to take it to the next level. We build a very, very good car. The backside of that says we know how to sell cars, and we certainly know how to deliver them, and we can always do a better job.
One of the challenges with 2,400 dealers is to insure they’re trained; that the sales department is trained. We have slightly different challenges than the other guys because we have four brands on one showroom floor, so our salespeople don’t need to know five, ten, fifteen cars. They need to know the full range, which is effectively 22 cars on the showroom floor.
There’s huge training to do, to ensure they understand the product and they understand how to sell the product and they understand how therefore to get the appropriate vehicle or package the appropriate vehicle for the customer to make sure it’s affordable.
That’s one piece of it, and the backend side of it is the same thing. We need to train our service advisors, our service managers, our technicians on not just the technical ability to fix it but the ability to assist their customer when they have an issue. So that’s the major issue.
We certainly have some markets in my world that we look at, “Do we have the right presentation from the right dealer and the right location?” But by and large, we’ve weeded through that over the last five or six years and it comes down to, we need processes in place that are disciplined, that take care of every customer appropriately every time. That’s a hard thing to do, especially when we’ve tried to put four brands on one showroom floor.
In the recent past, there have been a couple of surveys where Chrysler has not done particularly well on customer satisfaction with the sales process.
We do better, then we don’t do better, in my opinion. Every time we launch a vehicle, we seem to dip, which means there’s a training breakdown. Either we’re not training our people up front, or we’re not taking care to spend enough time with them as they deliver the car. None of those are particularly difficult to fix. There’s a long list. We have a discipline process.
And I've got to look – seriously, I've been on the job 30 days. I'm in the fact-finding piece of it today. I spent a lot of time talking to our National Dealer Council Group which is an advisory board of 24 dealers — effectively that’s what they do, day-in, day-out.
There are things we definitely need to tweak, to improve. I think you've got a fairly consistent basis approach from every brand nowadays that things are good. We can be better. We need to live up to the product we have on the showroom floor, that’s exceptional. We need to go from good to exceptional. I don’t see it as a huge mountain to climb; we just need to go on and do it.
How do you measure customer satisfaction with dealers at this point?
Different ways. We have a system called the Customer Experience Initiative which is a tool that measures sales averages. Unlike what JD Powers, JD Powers will measure the specific transaction. Did your delivery go as expected? Was your car clean? We do all that as well.
The first question we ask is would you recommend this dealership? My measure of success is when our customers will tell their friends and their family that this dealership did an exceptional job and you should go do business with them. I think that’s the ultimate recommendation. So we take exactly what everyone else does, which is effectively SSI, Sales Satisfaction, or in the backend, CSI, in service advisor. Then we add effectively one question: would you recommend this dealership? If we’re running 90 to 95% of the dealers’ customers who would recommend the dealership, then I'm very satisfied. I will tell you we’re not there today, and I think we can get there quickly though.
Do you still do mystery shopper, or no?
We do it on an ad hoc basis. We did it under a program that we ran a couple of years ago that we consistently did it. We don’t do it on a consistent basis today. Haven’t decided if that needs to come back or not.
Are we still seeing the mid-sized Chrysler crossover that was on the investor plan?
Yes, the basic plan hasn’t changed.
As we look at this, we’d say okay, three cars today. Effectively 200, 300, and a minivan. There’s a plan that we’ve extended the new 200, replaced the 300. The minivan will be out at some point next year. Hopefully we’ll be able to announce that in Detroit, so we’ll look forward to that.
Then, beyond there, there were three other products on the plan. Nothing’s changed.
One of them you actually had titled 100 in the plan.
For the crossovers, are sticking to numeric numbers, or are we . . .
No. We said it was a D-CUV that would go against an Escape, CR-V, RAV4. And then there was a big one, an E-CUV, that will go up against the Traverse or the new Pilot or something like that.
So should we be expecting 400 or 700?
We should expect something.
That’s a really good answer.
Yes, we should expect something. No, there’s no decision and no answer on that.
This is Pete’s question: we’re in New York City, where the first Chrysler was shown, and the longest-running nameplate in America was New Yorker. There were many Fifth Avenues.
Yes, there were.
There were also many New Yorkers, sometimes the same year.
Yes, and a New Yorker Fifth Avenue occasionally. That’s exactly right.
So are there any plans to link into the New York name at any point? Is it at least being batted around?
Not today. I think we have a very rich history that yes, it’s tied to a selection of things. Could we go there at some point? Yes. Do we have a plan to do that today? No. As you've noticed from the way we’re setting the volumes up and at least the vehicle lines up, we’re on a numeric plan.
We haven’t decided what the UV world looks like today. Could we do special packages? Potentially. You know, we love to do buzz models, things that are fun. Could we build a top-end 300 that’s even higher than a Platinum, a C Platinum? I suppose so, but no plans to do it today. It’s an interesting thought.
Are you planning a longer wheelbase 300 again?
Will the mid-sized crossover compete against Dodge Journey, or is Journey going to ...
Well, first of all, you understand that I'm not going to talk for Tim Kuniskis on Dodge. And anything we do, we all recognize that we have one showroom floor brand. So competing makes no sense. If there’s a defined area that Dodge is playing in, Chrysler won’t.
That is basically true for both sides. The same thing is true with Jeep, for instance. Jeep is off-road-capable. Chrysler will never want to be off-road-capable. It will always be mainstream, on-street, effectively. So as far as competition between the brands, we won’t invest in a product that competes head-to-head with another product on our showroom floor. It doesn’t make good sense.
There has been rumors back-and-forth about what we’re going to see in the next-generation 300. Can you comment at all on whether that’s been pushed back?
Yes, there are lots of rumors, and no, I have nothing to add to it. I think the rumors are fascinating, considering we just launched brand new 300 – the Charger is sitting out there, the Challenger with the Hellcat, and everyone’s talking what’s next? I want what’s now, because the launch for the 300 is effectively early April. It’s April 1st. We’re going to leave April Fool’s Day sitting over here, and I've got to focus on selling 300s today.
Fascinating question. We have a lot of similar conversations inside the house, but I'm not going to talk about it.
The other question that people are asking what wasn’t actually on my list, but just to throw it out there, the 392 engine in the 300.
No? Okay. Good answer.
We’ve got this beast of a V8 sitting on the 300 today that gives us 363 horsepower. No one has complained about a lack of power on that car. The one I'm driving, the big V8, is fun. It’s lively. It’s fuel-efficient. It’s what the brand should be.
The wonderful thing with the 300 to me is we’re able to have a cross-section of customers; the typical mainstream large car customer on average is 61 years old, yet we sell the 300S, which is the monotone, blacked-out wheels, change the interior, to a customer that’s somewhere between 48 and 52. There’s no reason to move off that. Let Dodge play in the performance side with the limited volume that it is and let Chrysler play mainstream. We have engines that are great. That’s not a focus.
Speaking of mainstream, how important are the drive wheels to the typical 300 customer? Front-wheel drive, rear-wheel drive.
You know, that’s actually an interesting question. We have surveyed our customers today and a lot of them would not know if it was front-wheel drive or rear-wheel drive. What they would tell you is it’s about the ride and handling of the characteristics of the car and the way the car sets off that is driven off rear-wheel drive.
Having said that, we run 30% all-wheel drive as well. So we do a significant piece of our business is an all-wheel drive vehicle that’s outstanding in snow, rain, all performance. I don’t think it’s a factor in the way we think about what do we do with the next vehicle, which I guess would be the next question, right?
Right. 2018, 2020, whenever it is.
But our customer today recognizes that they like the way it rides and handles and drives, but they also recognize that if they’re in call it inclement weather, they like an all-wheel drive, and we sell a large proportion of all-wheel drives on top. So to me we have the best of both worlds today. Not looking to change it. All set?
In Europe, reports are that the dealers have been told Chrysler and Lancia have four years or so, winding it down. What are dealers getting in return, and will there still be Chryslers exported under some other brand?
I can’t answer the first question. I don’t know the answer specifically or I'm not supposed to talk about it. Pick one as you like.
The other piece is yes, there’s a plan to pull the Chrysler brand out of Europe and Lancia out of all of Europe except Italy. That was communicated to the dealers, but it was also communicated in the five-year plan. We made a decision at that point.
Part of that was because we decided we were not going to bring the 200 to Europe. The market segment is small. For that vehicle, we have no plans to put a diesel in it. There’s significant investment in order to meet pedestrian protection rules. You’d have to build a different front end on that vehicle. Frankly, we looked at the volume and the opportunity and decided that wasn’t where we want to go. So the short answer is yes, we’re coming out of Europe with the Chrysler brand. And no, I won’t ship 300s and the Town & Countrys over there in the future.
That’s extremely definitive. Thank you.
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