Well, that just about says it all.

[Blake Noble]

From an article over at Allpar:

Daimler (specifically Schremmp) had to know what was going on at Daimler-Benz and that the war chest that Chrysler was sitting on was the golden goose, ready to be cooked and eaten. Nothing else of Chrysler had any real value to Mercedes, except for flexible platform design and development. An outgrowth of AMC, it represented a different manner of thinking. At Mercedes, each car was developed for a specific set of conditions, with no thought of parts sharing across models, under the theory (or assumption) that the customer will pay for whatever Mercedes produced. Engineering, not the customer, mattered.

The whole article, centered around the development of the second-generation Neon and PT Cruiser, went further than that into how and why Daimler was allowed to desecrate Chrysler.

Although the popular press had ignored the warnings, internal people knew that Chrysler was heading for a massive outlay of warrenty cost repairs due to the cost cutting done and enforced by Bob Eaton's cronies. PL [Neon, etc.], JA ["Cloud cars"], LH [intrepid, etc.] were all plagued by parts problems such as air conditioning, power steering racks, transmissions, head gaskets, exhaust leaks, etc. that were starting to show up on an unprecedented scale. Engineering scrambled to fix the issues, but with the budget constraints imposed by the Eaton crowd, and later by Daimler, little more than bandaids could be applied. The trickle of people getting fed up started in earnest.

In view of all these "insurmountable problems," the Germans instituted several policies that lead directly to the implementation of poor decisions, poor design approvals, and most importantly, poor quality and durability.

In came "quality gates" and forced direction.

Going further ...

It became apparent that there was a fundamental difference in the manner of people at Chrysler and those of Daimler (note -- I am not saying specifically Mercedes for a reason. Mercedes was a unit of DCX, as was Chrysler). On the positive side for Chrysler (this is before the "merger"):

1. Vehicle engineering, manufacturing, and vehicle design (styling) were tightly integrated, leading to very fast turnaround times for a new product. The Dodge Durango was done in 18 months from approval to production. PT Cruiser was done in 24 months, which led to the first major conflict-more on that later.

2. Purchasing was subserviant to engineering, although the approval process to bypass purchasing selection and override it by engineering was complex and slowed the design process tremendously.

3. Chrysler styling, under Tom Gale, had achieved the type of approval from the marketplace that had not been seen since Bill Mitchell of GM. Gale could do no wrong and each product garnered more approval for the styling in each successive car. All were on target for exactly what the customer wanted, and the customers responded by putting their collective money where their eyes were.

The downside of this process by Chrysler:

1. Shooting from the hip. Many changes were made and approved at a low level of management. This could have worked fine—because the person designing and engineering the part—whatever that part was— knew the most about it....in theory. The problem was one of experience. Because the corporation had expanded greatly in responsibilities for the individual engineering staffs, people without the necessary experience to judge values and performance were promoted beyond their capabilities, and, as a result, quality suffered from too much concentration on price, not functionality. This shooting from the hip was required due to the pace of the process. When a decision had to be made, Bob Lutz impressed on the corporation that it was to be made then, not after endless consultations with others to build a concensus, which slowed down the development cycle.

2. Concentration on “cost to the corporation,” not “value to the customer.” Under Eaton, engineering approvals were often stopped in their tracks when Purchasing went to upper management with the complaint (paraphrased here) "Engineering is wasting money on unnecessary items." The air conditioning fiasco in the LH is a perfect example of this. Engineering specified a system capable of cooling and heating an interior that contained much more glass, due to the cab-forward design, to provide the coldest possible cooling and highest heat in under 5 minutes of engine run time. This required a system capable of cooling at, as I remember, an extra 12,000BTU/hr over the comparable GM, Toyota, Honda, and Ford systems, which were used as a cost basis for comparison. As this example was related to me, the little catch was that extra glass requirement that Purchasing carefully left out of their analysis. They concentrated on a strict cost comparison and ignored performance. We all know the end results of that little argument and decision.

The positive side of Daimler (in perceptions from this side of the pond):

1. Mercedes had the reputation of building vehicles which regularly went 250,000 miles and more, could handle climatic conditions far in excess of US domestics, and most importantly, stayed together without failing from rinky tink parts falling off. The epitome of the Mercedes, was from Chrysler's standpoint, the venerable W126 body, which was used for everything from million mile taxis in the Mideast, to the top of the line luxury cars in the EU and Americas. After all the problems in the late 1970s with the Volare/Aspen, Chrysler needed to have an MB 220D type vehicle for its stable to outdo the Valiant as "everyman's car."

2. Mercedes had access to varied and diversified advanced engineering groups. Like Chrysler of the 1960s, Daimler built everything from civilian passenger cars ,to aircraft, to spacecraft, to trains, to power systems development, to pure research labs (that did nothing but "think" and come up with "stuff"). This diversification was thought to insulate Daimler from periodic downturns of the automotive industry (they were to find out differently).

4. Daimler had a specific quality control system in place for Mercedes that was the given reason for the high quality of their cars. Eaton wanted this desperately because of the problems of his system. [Webmaster note: this system involved massive testing and rework, and was economically unfeasible for Chrysler.]I have no direct knowledge of the New York discussion that went on in private between Chrysler and Daimler execs. That has been covered extensively by the guys from the Detroit News, Bob Eaton, and even Iacocca's memoirs. Suffice to say, it appears now that there was a lot of "shining on" going on, from BOTH sides.

Daimler (specifically Schremmp) had to know what was going on at Daimler-Benz and that the war chest that Chrysler was sitting on was the golden goose, ready to be cooked and eaten. Nothing else of Chrysler had any real value to Mercedes, except for flexible platform design and development. An outgrowth of AMC, it represented a different manner of thinking. At Mercedes, each car was developed for a specific set of conditions, with no thought of parts sharing across models, under the theory (or assumption) that the customer will pay for whatever Mercedes produced. Engineering, not the customer, mattered.

Chrysler has, on the other hand, centered all product development and design around what the marketplace was demanding and was expected to demand in the future. Flex allowed Chrysler to respond quickly to problems, as long as budget was there to perform. With all the Cost Savings programs, joined under the SCORE heading, Chrysler was saving money for the next cycle downturn... which was fast approaching. I must give Eaton credit here... the corporation could survive a long time on $8-$12 billion dollars. Future development was assured.

More here: http://www.allpar.com/neon/engineering.html

Edited September 7, 2008 by YellowJacket894

[Sixty8panther]

Wow... I learned a few things.

However, I am still unsure about this:

Nothing else of Chrysler had any real value to Mercedes, except for flexible platform design and development. An outgrowth of AMC, it represented a different manner of thinking.

why would Mercedes aspire to that?

why/how would they utilize that?

[daves87rs]

Wow...lots of info....

and true........

[balthazar]

Wow... I learned a few things. However, I am still unsure about this:

>>>Nothing else of Chrysler had any real value to Mercedes, except for flexible platform design and development. An outgrowth of AMC, it represented a different manner of thinking.<<<

why would Mercedes aspire to that? why/how would they utilize that?

The next sentance explains it : >>>At Mercedes, each car was developed for a specific set of conditions, with no thought of parts sharing across models.<<<

Mercedes needed to learn AMC/Chrysler tech & SOP in order to remain competitive.

[CARBIZ]

It's always been amazing to me that Chrysler has been as successful as it has been, considering the spottiness of its quality during the '90s. One can only speculate the juggernaut Chrysler could have been if the Neon, cloud cars, original Ram, etc. had all been built better. In the mid-90s Chrysler was certainly building the best looking American cars on the road with some of the coolest looking interiors. It was only the horror stories from disgruntled owners (and easily stolen vehicles) that prevented Chrysler from becoming the jewel in Dailmler's crown.

Or rather, if GM had had Gale on the team 15 years ago, perhaps Toyota would still be picking up market share crumbs off the floor.

[Intrepidation]

I wonder if that A/C fiasco refers to the gen 1 or gen 2 LH cars. I wouldn't at all be surprised if it was the gen 2 cars, since so many of them seem to have non-working A/C units (mine included).

[Dragon]

Wow... I learned a few things.

However, I am still unsure about this:

why would Mercedes aspire to that?

why/how would they utilize that?

same MSRP + lower cost from platform sharing = more profit

[FUTURE_OF_GM]

I still remember all of the POSITIVE media headlines of how it was a 'merger of equals' and how Mercedes would HELP Chrysler.

What a load of

I still remember in one of my psych classes how my professor made the blatantly ignorant comment; "Well, now that Chrysler has bought Mercedes, Mercedes quality is going down." --- From a VERY successful Industrial Psychologist that owns his own VERY successful consulting firm (i.e. He should have a basic understanding of the business world and who owns/controls who)

I certainly hope Chrysler can recover and I wish them the best. Now that they have talent from Toyota and deep pockets at Cerberus, the sky is the limit!!!

Edited October 1, 2008 by FUTURE_OF_GM

[CMG]

I certainly hope Chrysler can recover and I wish them the best. Now that they have talent from Toyota and deep pockets at Cerberus, the sky is the limit!!!

It won't be THAT easy I bet.....

Gas prices and the economy will outweigh talent and deep pockets, for the near future anyways...