Minivan Saves the Day In Tale of Chrysler Woes
THE CRITICAL PATH: INVENTING AN AUTOMOBILE AND REINVENTING A CORPORATION
By Brock Yates
Little Brown, 306 pp., $24.95
As the smallest of the Big Three, Chrysler Corp. is the US auto industry's comeback kid. After a $1.6 billion government bailout in 1980, Chrysler again flirted with bankruptcy in 1991. Staving off financial ruin a second time depended on developing new products that could rival the Japanese in terms of innovation as well as quality. And the key product was the minivan - Chrysler's highest-volume seller. The company virtually owned this niche, but the minivans badly needed updating.
"The Critical Path: Inventing an Automobile and Reinventing a Corporation," is veteran auto pundit Brock Yates's revealing chronicle of that process from start to finish - a first in automotive journalism. Yates was privy to every meeting involving the new generation of Chrysler minivans at the design level - from discussions of the original concept and inclusion of a left-side sliding door to approval of the final body shape, designing factories, and working out bugs.
Along the way, he shares his insights on current management practices as they relate to auto industry competition. Chrysler's desperate financial straits, and an influx of new people from its AMC acquisition, act as a catalyst to force the company to restructure its management into cross-functional "platform" teams, breaking down traditional Detroit hierarchies. Much has been written about such teams, which helped make the Japanese the carmakers to beat. In this "horizontal" approach to organization, representatives from engineering, manufacturing, finance, sales, and marketing work side by side from the get-go on new models.
This process helped keep the minivan development budget in line, in contrast with most Chrysler product designs in memory, Yates says. In early production, when the project was running $20 million over budget, it was finance expert Frank Sanders who solved a critical manufacturing problem to keep the program under its $1.7 billion limit.
Management insisted that two minivan plants would each produce both the long- and short- wheelbase versions of the new van, to insulate the company from potential labor strikes and supplier shortages. This added cost, but Sanders found a way to stay within the budget by having one plant build the well optioned, high-line models and the other build the more-basic minivans.
The greater cooperation is reflected in Chrysler's top offices, which are inhabited by "car guys" - car buffs who care more about the product and the company's long-term viability than about quarterly financial statements. Yates sees this as beneficial to the health of the company that has been on a billion-dollar roller coaster for decades. He quotes chairman Bob Eaton as saying, "I want to be the first chairman ... of this company who will not preside over a 'recovery.' "
But the focus on products has drawn flak from stockholders, notably billionaire Kirk Kerkorian, who launched a takeover bid in 1995. Yates devotes an entire chapter at the end of the book to the Wall Street shenanigans. It doesn't seem central to the minivan story, but provides an unmistakable warning that restructuring in Detroit has a ways to go.
In the end, the minivan makeover was successful for Chrysler: It restored the company's domination of the minivan market, and brought much-needed strength to its bottom line.
The book is somewhat less successful, and could have benefited from better editing. While Yates is a masterful reporter, and provides clear insights into what goes into building a quality automobile, at times he rambles. He repeats background information with regularity, and the contents often seem jumbled, jumping from one subject to next.
*Eric C. Evarts is a Monitor staff writer.