5 Product Teams for Chrysler

Detroit — Chrysler LLC is expanding its product-development process, internally and externally, in an aggressive bid to satisfy consumer demands in an increasingly competitive environment, the auto maker's top executive says.

Internally, Chrysler has replaced its architecture-oriented product-development structure with five product teams that feature a segment or brand focus. Externally, the auto maker plans to establish regional centers of excellence.

“They're going to be all-encompassing centers where we'll have design, we'll have engineering, we'll have sourcing capabilities,” says Robert Nardelli, Chrysler Chairman and CEO. “They may eventually lead to actual manufacturing centers.”

Echoing a sentiment expressed by Chrysler procurement chief John Campi at last month's North American International Auto Show in Detroit, Nardelli says the auto maker must “make sure we're scouring the world” to ensure development of the highest-quality products at the lowest-possible cost.

“This is not an outsourcing strategy,” he adds. “This is about a customer-satisfaction strategy.”

The five new product teams are Jeep, Dodge truck, cars and minivans, future midsize products and high-performance vehicles under Chrysler's SRT (Street and Racing Technology) brand.

Nardelli also gives a vote of confidence for Chrysler's Mopar division. Asked if the unit is on its last legs, he replies: “Absolutely not.”

Nardelli says he learned, during his tenure at General Electric Corp., that parts and service is a key component of manufacturing enterprises. And aftermarket does not mean “afterthought,” he adds.

Meanwhile, Nardelli says he is encouraged by the Federal Reserve's 0.75% rate cut.

“It demonstrates a tremendous awareness, a recognition that we really need to improve some liquidity,” he says.

“For us, what it does is give the auto-financing companies the ability to really bring some more credit, more funds into the marketplace. It's going to help consumers. It's going to help consumer confidence. It sends a very strong message of encouragement, stability. It will re-ignite some energy back in the consumer sector.”

Nardelli also sticks to the auto maker's expectation that 2008 will see a market with 15.5 million to 16 million unit sales and does not anticipate cuts beyond the measures Chrysler took in November, when it slashed production by 10.1% and killed four under-performing product lines.