An Efficiency Nut At Chrysler's Wheel

Stallkamp, the carmaker's No. 2, takes on tough quality issues

Chrysler Corp. President Thomas T. Stallkamp knows all about pressure. A month after joining Chrysler as a purchasing agent in 1980, he found himself working for a company on the verge of bankruptcy, with just $3 million on hand. One of Stallkamp's first assignments was to field an onslaught of phone calls from irate creditors demanding their money, including Goodyear Tire & Rubber Co., which was owed $100 million. "They had a treasurer who was just apoplectic," recalls Stallkamp.

Those dark days are long gone. But Stallkamp's baptism by fire served him well during his long, steady rise to the No.2 job at Chrysler. Named president of the auto giant in January, Stallkamp, 51, needs all the grit he can muster to deal with a slew of tough new problems facing Chrysler. Even though

the company recently posted better than expected fourth-quarter results, earnings for all of last year slid 20%, to $2.8 billion. That's in sharp contrast to General Motors Corp. and Ford Motor Co., which both reported record sales and profits for 1997. Says auto analyst John Casesa of Schroder Wertheim & Co.: Chrysler "had a lousy year. Wall Street expects better."

No one expects more from Chrysler than Stallkamp. His predecessor, the rough-and-tumble ex-Marine Robert A. Lutz, pushed through hot new models such as the Dodge Ram pickup and the Chrysler Concorde sedan. Now, it falls to Stallkamp to follow through on tough quality and cost issues.

Stallkamp could hardly be more different from Lutz. Whereas Lutz flies fighter jets and helicopters in his spare time, Stallkamp's idea of excitement is playing golf and tennis with his wife, Ann, and their two college-age sons, or reading Elmore Leonard mysteries.

But CEO Robert J. Eaton is betting that Stallkamp's subdued style is just what Chrysler needs. A self-described "regular guy," Stallkamp is an efficiency nut who studies companies such as Intel Corp. and Motorola Inc. for management tips and holds an MBA in organizational behavior. With his shock of white hair and courtly manner, he seems more like a college professor than an auto executive. But that image is deceiving, says Lutz, now vice-chairman. Stallkamp "is a guy who has the hard edge to get the job done," he says.

SUPPLY SAVVY. Indeed, Stallkamp is notoriously tough when it comes to costs. As Chrysler's top purchasing executive, he cut a total of $3.7 billion in costs since 1990 by asking suppliers to make suggestions "voluntarily." By agreeing to split any savings with suppliers, Stallkamp gave them a strong incentive to cooperate and won many fans. But those who did not help found that Stall-kamp wouldn't hesitate to "take our business elsewhere," he says. Now, he vows to cut another $1.5 billion in 1998 alone, a feat many believe Stallkamp will pull off. "Tom understands the supply chain better than anybody," says Jack W. Sights, a parts executive at Guardian Industries Corp. in Auburn Hills, Mich.

It will take much more than pinching pennies, though, if Chrysler is going to reverse its slipping market share, which fell a full point last year, to 15%. Stallkamp also urgently needs to boost Chrysler's passenger-car quality to improve its image among consumers. That means more rigorous assembly and testing to end a rash of recent recalls.

Just as crucial, Stallkamp must work to assuage strained feelings in the executive suite. His appointment to the No.2 spot was a career blow to others competing for the job, primarily Thomas C. Gale, executive vice-president for product strategy. So far, Stallkamp meets with his team of five executive vice-presidents every Monday and again with each one individually later in the week. "I just know that Tom and I are capable of making this thing work," says Gale, who is still considered a dark horse contender to succeed 57-year-old Eaton.

It's a tall order for Stallkamp. And some in the industry wonder if he is too untested for the job. Eaton, for one, appears to be easing Stallkamp into his new responsibilities. Although he currently runs manufacturing, purchasing, and sales and marketing, Stallkamp has not yet won a board seat, nor has he been put in charge of international operations and product development--all responsibilities that Lutz held. "We just felt this was enough for him to take on at this point," says Eaton.

Working in Stall-kamp's favor is his easy manner mixed with a wry sense of humor. At industry gatherings in years past, he enjoyed ribbing archrival Jose Ignacio Lopez de Arriortua, GM's former supply czar who insisted that GM purchasing agents follow a "warrior diet" that eschewed red meat, sugar, and starch. Stallkamp once even gave Lopez a dozen glazed doughnuts baked in the shape of Chrysler's pentastar logo. "He needed to lighten up a little," Stallkamp explains.

Stallkamp, though, is just as quick to direct his barbs at Chrysler itself. He worries that after years of healthy sales and profit growth, complacency could creep into the Chrysler culture. So, when he moved into his new 15th-floor office atop Chrysler headquarters, Stall-kamp mounted a framed cartoon of the Road Runner putting Wile E. Coyote into a trance. The caption: "Never get hypnotized by how good you are." That, says Stallkamp, "symbolizes my whole philosophy of business." To drive home the point at a recent meeting, Stallkamp warned that the year--just three weeks old--was getting off to a slow start. "My worry is that we're sort of on autopilot," he says.

LOVING A LEMON. Stallkamp says he traces his drive to his father, a nuclear engineer. When Tom was 10 years old, the family moved from Bryn Mawr, Pa., to Akron, Ohio. Both his brothers eventually became bank presidents, but Tom developed an early yen for wheels. "Akron was the tire capital of the world. Everybody was into cars," says Stallkamp. His first was a 1967 Corvair, considered one of the biggest lemons in automotive history. "I had it up to 100 miles an hour going downhill, showing it truly was unsafe at that speed," he says jokingly, referring to Ralph Nader's famous "unsafe at any speed" indictment of Corvairs.

After a two-year stint as a supply officer in the Coast Guard, Stallkamp was attending graduate school at his alma mater, Miami University in Ohio, when a good deed landed him his first real job. One morning, a steam pipe broke in the office of one of Stallkamp's professors. As Stallkamp mopped up the mess, a Ford recruiter poked his head in the door. "He wanted directions and thought I was the janitor," Stallkamp says. "I said: `No, I'm a graduate assistant trying to save this guy's academic life's work."' Next thing he knew, Stallkamp was offered a job at Ford. "The Ford man liked his initiative," says the now-retired professor, Harold Puff.

Stallkamp spent eight years at Ford before making the risky leap to Chrysler. Now, if he pulls off his new assignment, he's in a good position to become CEO. Stallkamp is characteristically unassuming about his prospects. "When you get all done, this is just a business," he says. True. But at least the business is no longer the target of apoplectic treasurers.

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