Amid the Cuts, a Powertrain Offensive

AUBURN HILLS, MI – After announcing Chrysler Group will chop 13,000 jobs and 400,000 units of capacity by 2009, CEO Tom LaSorda says the auto maker is embarking on a $3 billion powertrain offensive to offer more fuel-efficient engines, transmissions and axles that “will give us a portfolio that is more fuel efficient and more globally diverse.”

Long-rumored to be in the works, the project is dubbed “Phoenix,” and is designed to replace the auto maker’s current four 6-cyl. engine families with one modular engine family.

LaSorda says the effort will incorporate the technology and processes used to develop the 4-cyl. World Engine built at the Global Engineering Mfg. Alliance plant in Dundee, MI.

That engine, used to power vehicles such as the Dodge Caliber, was developed in a joint venture between DaimlerChrysler AG, Hyundai Motor Co. Ltd. and Mitsubishi Motors Corp. and can be produced in three variants at dramatically reduced cost.

LaSorda says Chrysler also is putting together a common axle program and that it is working with Getrag GmbH & Cie KG on a new dual clutch transmission.

A Dodge Durango featuring a dual-mode hybrid powertrain also is on track to be introduced next year and a mild hybrid application is being evaluated as well, LaSorda says.

Tom LaSorda

According to speculative media stories prior to DaimlerChrysler’s annual press conference here, DC CEO Dieter Zetsche and LaSorda were expected to announce an engineering and component-sharing strategy between Mercedes-Benz and Chrysler even closer than what currently is in place. Instead, neither broached the subject.

LaSorda also surprises some observers by not announcing – as some enthusiasts had hoped – that the retro-styled Dodge Challenger officially would be added to the production lineup at the auto maker’s Bramalea, ON, Canada, assembly plant.

However, LaSorda does promise Chrysler will introduce eight all-new and five refreshed products in 2007 and 20 all-new vehicles and 13 refreshed products through 2009. The new product introductions will represent a portfolio shift away from trucks to more fuel-efficient cars, and the use of Bluetec clean diesel technology from Mercedes and Cummins Inc., LaSorda says.

The auto maker’s new product strategy is based on projections of fuel prices of about $3 per gallon, LaSorda says. If prices drop and the market swings back to minivans, trucks and SUVs, “that’s good, but that’s not what we’re counting on,” he says.

The total number of vehicle platforms also will be reduced from 12 to seven by 2012, LaSorda adds. Front-wheel-drive unibody platforms will be reduced from five to three; three rear-wheel-drive unibody platforms will be chopped to two; and Chrysler’s four body-on-frame truck platforms will be winnowed to two.

“At times, this will mean consolidating nameplates developed for North America to avoid redundancies and at times adding vehicle programs aimed at global markets,” LaSorda says.

The nameplate consolidation also will be reflected in numerous alliances, such as Chrysler’s recent agreement in principle with Chery Automobile Co. Ltd. to provide subcompact cars and an agreement to build minivans in North America for Volkswagen AG.

LaSorda says the auto maker recently put together a deal to sell a small cargo van made by China Motor Corp. in Taiwan through Dodge dealers in Mexico, and it has been selling a Hyundai-produced vehicle as the Dodge Atos in Mexico, as well.

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