Keeping the Crisis in Chrysler

In early 2001, a radically styled sedan called the 300 was slowly making its way through the company's development process. It had all the attributes of a Chrysler hit: With its long, straight hood, smaller horizontal windows, and big, aggressive tires and rims, the 300 didn't look like anything else on the road. It also didn't fail Chrysler's quality checks -- exactly. It just wasn't up to the standards Zetsche knew it needed to meet if it was going to break the jinx.

So he imported some of the quality-control measures adapted from Mercedes. If the cars didn't meet the tests, they didn't move to the next stage. But to make those measures feel less like metrics and more like passion, Zetsche took Creed's suggestion and heated up the fire-in-the-belly feeling by showing up at many of the initial test-drives. Input from chief executives isn't unusual in the car business. They often put their stamp on cars, picking the shape of headlights or suggesting engine changes. But this was different. "He would give them really detailed ideas," Creed says, from the way the car handled to its interior sound levels. "The people responded because it wasn't just a chief executive acting like he knew what he was talking about. He could actually detect the minute differences that needed improvement." The next time Zetsche showed up to take the latest version of the 300 out for a spin, the engineers had addressed his complaints, driven by his demands that the vehicle be the best-quality car the company had ever made. Zetsche would praise the changes. Then he would point out yet another problem he wanted solved.

By 2003, the 300 was ready for its final executive ride-and-drive, when Zetsche's team would decide if it was really ready to go into production. If it wasn't, everyone knew Zetsche would have no qualms about holding it back. In the past, especially when Chrysler was riding an upswing in sales, "we would have gotten close to the quality we wanted and said that's okay," says Eric Ridenour, executive vice president of product development, who has been with the company almost 20 years. "Now we stare the problems directly in the face and ask, How do we fix them?"

After a few laps around the racetrack, the 300 was putting a smile on Zetsche's face, and, as Creed remembers hearing from others, "tears in his eyes." The 300 has been a hit almost since it appeared in dealerships in April 2004. Chrysler sold 120,857 of the cars last year and received a slew of awards and rave reviews, including several that highlighted the quality of a car that has a starting sticker price under $30,000. While long-term reliability results are still at least two years out for the 300, Creed says it is finally beginning to feel as if the company learned another vital crisis-born lesson: Apply intensity to every nut and bolt in the car.

Never Take Your Focus off the Consumer

When Zetsche arrived in 2000, one of his biggest concerns was fixing the botched launch of the company's redesigned minivans. The original minivans came out of Chrysler's 1979 near-death experience, when the cash-strapped company had taken an aging family sedan platform -- the K car -- and refashioned it as a boxy, bare-bones people mover. Despite its lack of panache, the minivan became part of the American landscape.

But by 2000, Chrysler had been joined by a dozen competitors including the Honda Odyssey and Toyota Sienna. In the late 1990s, flush with cash, Chrysler executives took their eyes off of what consumers really wanted from its minivans and instead spent billions redesigning them to keep up with the Japanese Joneses. The updates -- things like remote-control doors and rear hatches -- put Chrysler's price tag higher than its rivals', a premium budget-minded families who bought Chryslers weren't willing to pay.

What Chrysler's former executives hadn't learned -- but what Zetsche would strive to learn in the third crisis -- was to stay focused on the consumer, not the competitor. The early '80s minivans broke through the clutter because they were so different but made so much sense. Almost no one else was making minivans. Now it was far tougher to come up with wholly new ideas for the mature category. But Zetsche demanded the minivan team go back to the drawing board and conjure up an innovation that would make Chrysler's vans stand out from the crowd. In the meantime, he cut the minivans' prices to get them moving off dealer lots.

The result of the team's efforts was "Stow and Go" seating, a design that made it far easier for people to reconfigure the vehicle by stowing seats in the floor. Before Stow and Go, customers had to completely remove the seats, which could weigh more than 50 pounds. Stowing seats in the vehicle itself solved a huge customer complaint: Drivers wanted to be able to reconfigure their vans for more parcels or people on a moment's notice.