Jeremiah 29:11

I hope Chrysler is around long enough to get my Challenger.

A chat with Jim Press, vice chairman and president of Chrysler

By Matt Nauman
Mercury News
Article Launched: 09/04/2008 02:43:36 PM PDT



Jim Press, Vice chairman and president of Chrysler, talks during an... ( Kirstina Sangsahachart )«12»Jim Press, a Toyota lifer and one of the people most responsible for that brand's U.S. success, stunned the auto industry by joining Chrysler in 2007. The smallest of the Big Three, Chrysler had just become an independent company after Cerberus Capital Management bought 80 percent of it, ending the unsuccessful German-American hybrid known as DaimlerChrysler.

Press's arrival coincided with the worst sales period for General Motors, Ford and Chrysler in a decade and a half. All three U.S. auto makers relied heavily on the profits from big pickups and SUVs, segments deserted by buyers when gas prices reached $4 a gallon. Overall, U.S. car and truck sales are down 11 percent this year. At Chrysler, which also includes the Dodge and Jeep brands, sales are down 24 percent for the year.

Press was in town this week. He showed off the new 2009 Dodge Ram pickup and talked to Mercury News reporter Matt Nauman about Chrysler's alternative-fuel plans, why the Big Three need government loans and the state of the company. Here is an edited transcript of that conversation.

Q: The Prius is one of the most popular vehicles here in Northern California, and GM continues to spend millions to advertise its forthcoming Volt, a plug-in hybrid due in 2010. What are Chrysler's plans for alternative-fuel vehicles?

A: We've chosen to enter the hybrid market with a more effective product, the (Dodge) Durango and (Chrysler) Aspen SUVs. If

you look at the footprint of a conventionally-powered Corolla versus a conventionally-powered Aspen, obviously the Aspen has a much greater carbon footprint so the advantages of savings of oil, savings of cost and global-warming issues are captured to a greater degree with the Aspen than with the Prius.

We've applied a two-mode hybrid system combined with a Hemi engine that has the multiple-displacement system (which cuts off unneeded cylinders). So you end up with a four-cylinder drive system in a seven-passenger SUV. You get a 40 percent savings in gas overall, and 20 percent on the highway. A car like the Prius doesn't help you much on the highway. We have a different approach that is more reflective of the typical American driving pattern. The Prius is more reflective of the typical Tokyo driving pattern, which is stop and go traffic .

We will have a hybrid version of the pickup truck in 2010 as well as a diesel in 2009. Diesel is part of our strategy for CO2 issues as well as mileage. The other thing we're doing is to pull the maximum mileage out of existing power trains. That means going to the drawing board on drag, on rolling resistance and on improving fuel economy and output from smaller displacement engines. We have about nine models in '09 where we'll be increasing our gas mileage by one or two miles per gallon.

Those are all steps today that will build the bridge until we start electrifying vehicles. We have a long-term electrification of vehicles program called ENVI. At the Detroit auto show we showed some of concepts — a fuel-cell hybrid, a diesel hybrid and a pure electric. We've taken those and refined them now. We're developing pre-production type vehicles. We're further along than most people think. We don't have a lot of resources so we're not building a PR stunt, we're producing cars.

Q. The Big Three are pursuing loan and loan guarantees totaling $50 billion to retool plants to build more fuel-efficient cars. Both presidential candidates, perhaps to win Michigan, have approved of the notion. Why are they so important?

A: It's not for GM, Ford and Chrysler. It's in the interest of advancing and accelerating the delivery of technology into the customer's hands at an affordable level so that we can tackle the issues of dependence on foreign oil and CO2 emissions. It's also about doing it in the United States instead of importing it. There's no question that other countries have a head start on advanced power train systems and, in particular, batteries.

The loan guarantee is not our request. It is a provision included in the energy bill that was passed last year. They included a $25 billion loan guarantee (since bumped up to $50 billion) to help defray the cost of converting production facilities in the United States — by any company that produces here, including suppliers and vendors — that will contribute to vehicles that will get at least 125 percent better mileage than the vehicle it replaces. It's not a request by the auto industry or the Big Three. It's not a bailout of the Big Three. If we don't do it, frankly, battery development will continue to come from overseas. We're worried about being overly dependent on foreign sources of oil, well, the battery become the gasoline tank. If we allow ourselves to become dependent on batteries from other countries it's the same as being dependent on oil from other countries.

Q. Where is Chrysler headed?

A: Chrysler had been run as the subsidiary of a large, global industrial company. It didn't clearly see its mission in the United States and they were trying to grow it to become a major volume player. What we see now is that the company doesn't have to chase volume for vanity. We have to create a profit for sanity. We need to focus on a business model that's sustainable going forward. The best way for us to do that is to focus on the markets that we know best. The Chrysler heritage is engineering steeped in workmanship, and an emotional, visceral bond between the driver and the vehicle. The new Ram, when you drive it, it's not just an appliance to get from here to there. It sounds right. It has power. It has a very distinctive ride quality. The Challenger is a good example. The 300 is a great styling statement that doesn't look like anything else on the road. The old story is that if you want to see who a person is, you see where they live. If you want to see what they want to be, you see what they drive. It really describes what Chrysler can do. We want to build cars and trucks that are emotionally involving and rewarding, with high design, a great feel and a very high level craftsmanship and quality. We want to become the best car company in America. Not the biggest.

Andre@Edge

Good stuff Jeremiah,

This is the most i have read about Chryslers plan for a future, in a long time.

kramtrah

It is far more than I have seen in a while, and encouraging if I must say. While the US Manaufacturers of Chrsler, GM, and Ford have their work cut out for them, they aren't going down without a fight. Detroit is genuinely putting out some decent vehicles, but right now unfortunately most of the volume sellers, inclusive of Toyota and Honda, have even seen the down side of things. Yet, it is the fuel effecient vehicles that Chrysler lacks with far too much dependency on trucks. Dodge is betting a great deal on the new Ram, but it won't be the K car to rescue them even if they need it and it's a quality rig. I'd surely like to see Jim Press and his cohorts rescue this once prized company, with many a great vehicle in their past and recent time, and hopefully, long into the future.

mopar2ya

I hear what youre saying Mark. Funny thing when I was at the dealer picking up my plates the other day the salesman said they were selling the $40k Rams at $24k... makes you wonder where the profit is if this is the vehicle they are relying on to pull them through the current sales crisis. May be just a much needed cash flow infusion to get some thing jump started. I sure hope that is the case. He assured me that Chrysler was healthier than it has been in years... but he is a salesman afterall. I hope all is well at Ma Mopar... time will tell.

clasko10

I am an hourly employee at Chrysler so I am hoping the company's financial condition is improving. I can honestly say that there have been a lot of changes made since Cerberus took over. Our workforce has been cut by more than a third and overtime has been drastically scaled back. This company no longer operates like it has unlimited funds and every department is being held to a tight budget. Little things like turning off fans, lights, and computers is now required. I have to say this is long overdue. I am afraid more job cuts are looming, but I think they will get as many volunteers as they need if the retirement and vtep packages are offered again. Now that the overtime is gone, many employees want out. I must also mention that morale in the plants is at an all-time low. This company is certainly changing but I'm not sure if Cerberus is truly trying to rebuild Chrysler or making it lean and attractive for a breakup and/or sale.

BootCamp

Compare rebuilding a company to restoring a car. You can do it the wrong way and continue to throw Bondo on old dents and rust, OR you can do it the right way and strip it to the frame and inspect each piece for fit and finish before reinstalling each and every nut and bolt.
Whether you intend on keeping it OR selling it, after restoring it the right way, the end result will be worth more and the envy of your competitors.

RLSH700

I'm concerned that Jim Press is like Bill Ford. The things he talked about doing when going in sounded like Ford was going to go in the right direction, yet once he was in charge, he lost his touch with reality. I understand that the trucks have been the money maker in recent years, but it is time to give that up. Look at the way two companies handled the situation last time gas was expensive. Chrysler made the K-car that was affordable, fuel efficient, and reliable and created a new segment the minivan that was designed to be more practical than the vehicles it replaced. AMC focused on making a smaller SUV while surrendering their car line to badge engineering. Which one survived? Regardless of how I feel about hybrids, making your first one on one of the most expensive vehicles you make is a bad idea. Work first on where the demand and desire is, not on a hope to maintain a segment you were never the most popular in and doesn't have certain demand.

The new Ram is great but the issue is full-sized trucks are dropping in demand. They should have put that effort into the Avenger as the mid-sized car market is GROWING. They should have also put it into a true Neon replacement. Also, the 300 is going into its fifth year of production, it's going to need an update. You can't depend on large cars to save your neck. Also, the Impala as dull and uncomfortable as it is, is extremely popular, more so than either the Charger or 300. You lost FWD large car sales from going to RWD only. Okay, rant off.[sm=rant.gif] Oh before I forget, offer diesels in models that can get over 40mpg and are AFFORDABLE!