An Embarrassment Of Glitches Galvanizes Chrysler

Last year, Rick Koch, a 31-year-old computer salesman from Jacksonville, Fla., bought a new, $13,000 Dodge Neon that quickly developed glitches. The driver's door latch sometimes refused to release, the plastic liners inside both front fenders rattled, and sealant oozed from around the rear window. By November, Koch posted an electronic memo on Prodigy, detailing his car woes for the online service's 1.2 million subscribers. "I'd never buy another," he wrote in disgust.

Unfortunately for Chrysler Corp., Koch isn't the only one taking aim at its quality problems. In its annual survey of auto quality released last June, J.D. Power & Associates Inc. ranked Chrysler cars consistently below industry averages: Of 31 brands surveyed, Chrysler finished in the bottom third. Consumer Reports also raked Chrysler over the quality coals. In its January and April issues, the magazine warned readers to be wary of such models as the Dodge Intrepid, the Jeep Grand Cherokee, and the Dodge Ram pickup, which all had above-average chances of landing in the repair shop. And in March, mounting bad publicity surrounding a National Highway Traffic Safety Administration probe forced the No. 3 carmaker to agree to replace the lift-gate latches on all 4.5 million of its minivans on the road.

There are signs, however, that Chrysler may finally be moving to improve its laggard quality. Shaken by the J.D. Power results, Chairman Robert J. Eaton has committed several hundred million dollars to fixing nagging problems on existing models. And even before industry sales slowed in January, he drastically cut overtime. Although dealers were screaming for more hot models like the Jeep Grand Cherokee, he pruned production to reduce the likelihood of mistakes by harried workers.

Most important, Chrysler has begun engineering its latest models--particularly the redesigned minivans just arriving in showrooms--with far more attention to avoiding defects. Until last year, "we simply were not putting the effort into these things that we told ourselves we were," concedes Eaton. But with internal quality audits improving, Eaton says the next Power survey, due May 24, will show "we're the most improved company out there," he says.

Chrysler desperately needs just such an independent stamp of approval. The company has promised top-notch quality before, only to fall short. And Eaton made quality a priority when he arrived three years ago. Chrysler's problems are partly a legacy of its two brushes with bankruptcy, when the auto maker lacked funds for design and testing. For all its recent hot launches, the quality woes are imperiling Chrysler's vaunted turnaround. The company risks scaring off the savvy, well-to-do consumers it is wooing with flashy new cars such as the Cirrus sedan. "Poor quality can kill [success] in a minute," warns Furman Selz Inc. analyst Maryann Keller.

LOW BLOWS. First priority has gone to fixing the problems cropping up in existing models. For example, poor engineering has meant that Chrysler's assembly workers typically have to bend and hammer the doors to get proper fit on the Dodge Intrepid and its other LH model family sedans--a practice rare at top Japanese rivals. Such crude fixes invariably leave some doors with annoying air or water leaks. So Chrysler engineers are reconfiguring the doors. By summer, one consultant estimates Chrysler will have spent $25 million to $50 million on new machine tools to stamp out doors with greater precision.

Nowhere has the attention to detail been as great as with Chrysler's minivans. They account for nearly a quarter of profits and face intense competition from Ford Motor Co.'s Windstar, so Chrysler is going all-out to eliminate glitches. Owners griped that the power-window switches were awkward to reach, for example, while their knees often bumped the power door lock button. So in mid-1994--although a full model redesign was just a year away--Chrysler spent $300,000 to move the window switches and fashion a guard around the lock toggle. By sweating such details, quality has steadily improved on such models as the Dodge Caravan, which was No.2 in Powers' minivan survey last year, behind Toyota Motor Corp.'s Previa (chart).

Eaton's claim that quality has improved is backed by an unlikely source: General Motors Corp. While Consumer Reports' assessment was based on early 1994 data, Chrysler fared better in a GM study of models on sale at yearend. The internal survey ranked the Town & Country minivan just below the Previa. More surprisingly, the Intrepid and similar LH midsize sedans placed right behind the Honda Accord, Toyota Camry, and Buick Century and ahead of the Mazda 626, one of Consumer Reports' recommended models.

Rather than belatedly fixing snafus on models already on the road, however, Chrysler needs to avoid them in the first place. To do so, engineers working on the minivan overhaul are revamping the planning process and conducting some of the most extensive testing ever performed at Chrysler. To chase down squeaks and rattles, Chrysler hired a Toronto testing company to shake prototypes in a huge hydraulic device. The shakers simulated 100,000 miles of driving at temperatures ranging from 120F to minus 20F. Then, the team probed inside components such as seats with a tiny video camera and microphone to record squeaks in action.

By the time it was done, the team had redesigned parts to quiet a chorus of 29 buzzes, squeaks, and rattles. And to make sure no new ones crop up in production, Chrysler has installed hydraulic shakers in its two plants to test vans coming off the line--something no other carmaker does. Already, that's found one last squeak in the minivan's hood that engineers are rushing to fix.

Of course, Chrysler has always tested new vehicles before production. But its financial problems meant that it often lacked sophisticated equipment to spot hidden problems. Until recently, for example, Chrysler engineers could bench-test engines at temperatures down to only 30F. As a result, some four-cylinder Neon engines have been plagued by head gaskets that leak oil when the engine metal expands and contracts in colder climes. To avoid that, the minivan designers hired a testing firm to run engines at temperatures ranging from 290F to minus 30F. The result: The new minivan's four cylinder engine came out with a stronger head gasket with silicone grommets to seal in the oil.

All the testing in the world won't ensure quality if suppliers deliver defective parts. Like Chrysler, top Japanese rivals depend on outsiders for roughly 70% of their cars' content--but they do a much better job of managing suppliers. In the past, Chrysler's product engineers simply tested prototype parts to be sure they fit or functioned correctly. But in last fall's launch of the Cirrus sedan, engineers found some suppliers couldn't produce flawless parts when their assembly lines were running full tilt. So minivan engineers participated in test-runs at full-line speed at about 80% of their 350 first-tier suppliers. When defects cropped up, Chrysler sent in engineering SWAT teams to help fix them. That's almost as thorough as Honda Motor Co., which performs such preproduction tests at all of its suppliers. "They have driven home the quality theme," says Charles E. Wolfbauer, president of Lamb Technicon, a suburban Detroit toolmaker.

SHARED WISDOM. The real test of resolve will come as Chrysler transfers the lessons learned from redesigning minivans to such models as the LH family sedans, where quality is much worse. To ensure that all adopt better practices, Eaton and his top managers are trying to force greater cooperation among the independent platform teams that design products. "They're reining them in big-time," says James Harbour, a Detroit-based manufacturing consultant. Now, for example, each model team devises its own process for welding hundreds of body panels. But Chrysler recently began studying which models are welded at the lowest cost and with fewest defects--and over time, Eaton says, all will adopt the best methods.

Of course, Chrysler has declared victory on the quality front before, only to disappoint. And real change will take several years, since many design and manufacturing improvements can only be introduced as new models are launched. But observers agree that Chrysler has a new-found urgency about quality. "Chrysler is turning the corner," says analyst Keller. "There is recognition in the company that they screwed up." While no one expects Chrysler to zoom past leaders such as Toyota, for now it is improving more quickly than the industry average. If Chrysler can keep it up, that may finally silence critics like Rick Koch and Consumer Reports.

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