From Plant Rat to Auto Exec

Frankness comes naturally to Tom LaSorda, who is more Everyman than executive.

His forthright manner makes life interesting for those charged with crafting the official corporate image.

In an interview with Ward's, the new Chrysler Group CEO is asked about a recent spate of automotive supplier bankruptcies. Every year, LaSorda says, Chrysler evaluates the financial performance of its suppliers to determine what risks exist for its component pipeline.

Then out comes LaSorda, the so-called “plant rat” and son of a prominent former United Auto Workers union leader. Suggesting mismanagement, he slams a well-known non-automotive company for filing Chapter 11.

“All these people lose their jobs and everybody at the top gets rich,” LaSorda says disgustedly.

Corporate PR staffers attending the interview appear disquieted. One leaves the room shaking his head and talking to himself, only half-feigning exasperation.

LaSorda blushes. “Every once in awhile, I slip out how I honestly feel,” he says.

But his bluntness could bode well for DaimlerChrysler AG's North American subsidiary as it steels itself against 2006, which promises more of what 2005 has been dishing out: continued threats volatile gas prices pose to pickups and SUVs, its highest-margin product segments, and more crises in the supply community.

Material costs also will continue to soar, LaSorda adds, along with the price tag on employee and retiree health care-benefits.

Yet, as Chrysler's fortunes improve and seemingly run against the tide in Detroit, there seems less need to discuss legacy costs and corporate restructuring in LaSorda's office at the top of the company's headquarters in Auburn Hills, MI.

Indeed, Chrysler increasingly is trying to separate its image from that of its struggling cross-town rivals.

Through October, Chrysler sales totaled 1.96 million, up 6.1% compared with the first 10 months of 2004. And its market share had risen to 13.7% from 13.0% in 2004.

General Motors Corp. and Ford Motor Co. saw their share of the U.S. market fall to 28.5% and 18.5%, respectively — a decline of 1.3% for GM and 1% for Ford.

LaSorda wants to talk about Chrysler's most ambitious new product launch schedule ever. From small cars to SUVs, 10 new Chrysler, Dodge and Jeep vehicles will make their debuts in 2006 — most in the latter half of the year.

“This whole story's about product and drawing people to the showroom,” he says. “I will put the money on the product every time and then fight it out at retail.”

Chrysler's 2006 product push began little more than five years ago, when LaSorda's predecessor, Dieter Zetsche, arrived in Detroit from DaimlerChrysler AG in Stuttgart.

“When Dieter came, we said, ‘Hold on. We've got segments that we can really attack,’” LaSorda recalls. “And out came the (redesigned) minivan. And out came the LX-based products (Chrysler 300, Dodge Magnum and Charger) and the new Jeeps.”

Chrysler's signature Stow 'N Go seating-and-storage feature revitalized the auto maker's minivan lineup in 2004. Twenty-one years after it created the new vehicle type, and more than 11 million sales later, Chrysler still leads the minivan segment in market share. Japanese and Korean brands are catching up fast, however.

There is more to come in 2006 when Chrysler launches its next-generation minivan. Despite the relative dearth of differentiation in the segment, LaSorda predicts minivans will remain attractive for the foreseeable future. Functionality makes up for the sameness among minivan designs, he says.

The LX rear-wheel-drive passenger cars have been a critical and a commercial success since their launch last year.

Sales of the redesigned Jeep Grand Cherokee totaled 178,119 units, up 21% through October, while deliveries of the diesel-powered Jeep Liberty exceeded expectations.

And the recently launched Jeep Commander, the brand's first vehicle to feature three rows of seats, is finding favor — particularly among women, LaSorda says. His wife ordered one.

“Then we said there's a segment that we really need to go after, which would be small car,” LaSorda recalls.

The '07 Dodge Caliber with new family of fuel-efficient 4-cyl. engines replaces the Dodge Neon.

But Chrysler's crystal ball said nothing about hybrid electric vehicle powertrains. After spurning the technology in favor of alternatives such as diesel engines, DaimlerChrysler joined forces with GM and BMW AG.

“We know we're late,” LaSorda says, conceding HEV technology has captured public interest. “However, with the joint venture, we're very confident…We can come out with something extremely competitive, a breakthrough in technology.”

Chrysler's first HEV powertrain is scheduled for introduction in the '08 Dodge Durango SUV — a vehicle that might need to put on a green face to hold a significant place in the auto maker's lineup.

“When you look at the size of an SUV like a Durango — am I concerned about Durango? Yes,” LaSorda admits.

In October, when gasoline prices hovered around $3 per gallon, Durango sales dipped more than 30% compared with October 2004.

Durango's estimated consumption is 13-21 mpg in the city, and 18-28 mpg on the highway, depending on the drivetrain.

But Chrysler is expanding availability of its fuel-saving Multi-Displacement System (MDS), making it standard equipment on the 5.7L V-8 Hemi-powered '06 Durango. The cylinder-deactivation system can reduce fuel consumption by as much as 20%.

Also expected this year: a redesigned Jeep Wrangler, a pair of entry-level Jeeps with 4-cyl. engines and a midsize car (on a Caliber platform) to replace the Stratus.

Having grown up in Windsor, Ont., Canada, just across the border from Detroit, LaSorda has a strong allegiance to the domestic industry. And with a brusque wave of his meaty right hand, he dismisses doomsayers.

“GM will not go under. Ford will not go under. We won't go under. And we're going to rebound. It's full throttle for us in '06.“We want (GM and Ford) healthy,” he adds. “I always say, ‘We want them to have limited success.’”