Online Extra: Q&A With Chrysler's New COO

Eric Ridenour says DaimlerChrysler will remain closely involved, with him and CEO Tom LaSorda running it as a team

Don't let Eric Ridenour's name fool you. Though Chrysler Group's new chief operating officer's name may give you the idea he's from Bavaria or some other German province, he's a Yank from Detroit's west side. The promotion of Ridenour,47, and his boss, new Chrysler CEO Tom LaSorda, 51, a Canadian, means a pair of North Americans will oversee DaimlerChrysler's American half -- without a German exec riding herd. That's a first since the companies merged in 1998. LaSorda and Ridenour take over Jan. 1.

They have a tough task ahead of them. DaimlerChrysler (DCX ) Chairman Dieter Zetsche and Wolfgang Bernhard, who left the company for a top job at Volkswagen, are credited with coming up with hot cars such as the Chrysler 300 and for turning the business around. LaSorda and Ridenour, who was head of product development until his recent promotion, will have to keep the momentum going at Chrysler. "They replace two of the best in the industry," says James Hossack, a consultant with California-based AutoPacific. "Those are big shoes to fill."

Ridenour spent some time fielding questions from the automotive press when Chrysler showed some future concept cars at the company's technology center on Aug. 4. Here are edited excerpts:

Q: Now that Dieter and Wolfgang are gone, how will you keep the momentum going with new products? Will Dieter still be closely involved with product planning?


I think Dieter will be a very active chairman from that perspective. But the benefit and beauty of Chrysler is that it's really a choir with many [voices]. I have been involved for a long time. I expect it to continue very well for a long time.

Q: How much will Zetsche be involved in product decisions? Will he be more involved than [outgoing Chairman] Jürgen Schrempp?


Dieter has a great eye -- I'll always look to that. Dieter understands the market and he has a passion for this stuff. I expect him to be very involved going forward. Tom and I will run it as a team.

Q: One of the criticisms of the merger is that Chrysler and Mercedes never achieved any synergy by sharing as much in the way of parts, car platforms, and engines in the way that companies like Nissan (NSANY ) and Toyota (TM ) do. Will that change?


Clearly there are some brand-specific requirements. Sharing components will be customer- and brand-dependent. But that doesn't mean you can't share some things somewhere.

Q: Can Chrysler brands take the lower end of the market in Europe?


We have announced our strategy with Chrysler and Jeep, and we're adding Dodge in Europe. We have to find a position for all of them that's different from Mercedes-Benz. We see [Chrysler's share] doubling. But that's from 0.5% now, to 1% share.

Q: One criticism from German shareholders is that even a healthy Chrysler can only contribute margins of around 3% or so. And if Mercedes was healthy, it would contribute much higher margins, so Chrysler just dilutes the company's earning power. Can Chrysler become a more substantial contributor to Daimler?


I think we can get higher than 3%. I don't know of any company that gets higher than a premium company's margins in any business.

Q: How can you boost profitability?


It's based first on products. Then you do it by building up your reputation. It takes time. We're making progress.

Q: How important is gaining market share?


Market share is a result. We focus more on return on net assets and margins. We're very happy about our increase in market share. Chasing market share by having solid products and introducing new products is the right way to do it. But going after it by selling them at a loss is not what we do.

Q: Toyota says their hybrids will be 25% of their sales. What's Chrysler position on the hybrid market?


We'll watch the market and react. It's reported as if most sales last week or last month are hybrids. In absolute terms, they aren't big numbers yet. If you don't return the added cost of a hybrid in fuel savings, will it become a big part of the market? My guess is probably not.

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