Businessweek Archives

The Racy Viper Is Already A Winner For Chrysler


Top of the News

THE RACY VIPER IS ALREADY A WINNER FOR CHRYSLER

Car buffs got their first look at Chrysler Corp.'s Viper in January, 1989, at the North American International Auto Show in Detroit. The curvaceous show car drew huge crowds, and Chrysler President Robert A. Lutz quickly gave the preliminary O. K. to develop a mass-production version. But he set strict guidelines. Get the Viper ready in three years, he ordered--two years faster than usual for Chrysler. And he set the development budget at just $70 million, 45% less than Mazda Motor Corp. spent on its Miata roadster.

Now, with the first Vipers starting down the assembly line on Nov. 18, the car looks like something of a milestone. The $50,000 model's sales won't be large--Chrysler plans to build only 200 Vipers next year, rising to 3,000 annually in the mid-1990s. But the sexy two-seater should draw car buyers into showrooms--which is crucial, because Chrysler can't live off hot minivan sales forever. Chrysler's car market share fell again in the 1991 model year, to 8.9%. And for the first time, Japan's Honda Motor Co. passed its U. S. car sales.

However the Viper sells, Chrysler used the car as a laboratory for learning efficient new development techniques. With the company's losses through Sept. 30 estimated at about $1 billion, that could be a key to helping troubled Chrysler stay independent. "There just aren't the money, the people, or the time to do it the old way," says David E. Cole, director of the University of Michigan's Center for the Study of Automotive Transportation.

TOGETHERNESS. Chrysler already is adapting some of the lessons it learned on the Viper to its new LH line of midsize cars, due out next year. But Lutz admits that "by Japanese standards, there's still a lot of waste" in the LH program. On later models, he says, using Viper-style development will cut costs dramatically. He claims Chrysler will develop its new PL subcompact line, due out in 1994, for just one-third of the $2 billion Ford spent redoing its Escort in the late 1980s. Viper also is helping cut costs on the new JA compact line due out in 1995, he says.

What's the secret to the savings? In developing the Viper, Chrysler fully embraced the simultaneous engineering techniques pioneered in Japan. This meant forming a small team composed of specialists in engineering, manufacturing, and marketing, as well as outside suppliers. The teams performed development tasks together, avoiding, for example, the need for designers to keep making changes after manufacturing engineers couldn't produce what had been asked for. Most glitches were addressed early on. Chrysler also cut costs by having Viper suppliers engineer key components such as the transmission. More than 90% of the Viper's parts will come from suppliers, vs. 70% for a typical Chrysler.

To cut bureaucracy, the Viper was developed as a lean "skunkworks" project. The model has a development team of just 85, hundreds fewer than most Detroit projects. In contrast to Detroit's usual cumbersome hierarchy, the team works out of a big open room on Detroit's west side, where Chief Engineer Roy H. Sjoberg mingles with other members, making decisions on the spot. That makes for nimbleness. In January, Lutz griped that the car was late and too heavy. But since then, the team has scrambled back to meet its original timetable. The team plans to trim the Viper's weight with steps such as making body panels thinner after production isbegun.

Developing the Viper required tight cooperation with labor. The development team includes six workers who have built all the Viper prototypes, including one that paced the Indianapolis 500 on May 26. These workers will lead assembly teams at Chrysler's New Mack Manufacturing plant in Detroit, where 120 skilled assemblers will build the cars.

WINDSHIELD VIPER. The Viper also uses innovative materials and production tricks. For instance, supplier Guardian Industries Corp. helped perfect a "press bent" windshield that avoids the optical distortion common in the corners of dramatically curved glass. Chrysler plans to use the new glass in its LH sedans. And the Viper is the first Chrysler with an all-plastic body. The innovative resin-transfer molding process being pioneered in the U. S. by Chrysler and its suppliers saves bundles: Epoxy molds used for most body panels cost 90% less than steel ones used with sheet metal.

All that said, Viper's success is far from assured. Its appeal lies in its sleek lines, a brutish new 400-horsepower V-10 engine, and the road-holding grip of a race car. Sjoberg promises that the Viper will be able to jump to 100 miles per hour and then slam to a stop in less than 15 seconds--a feat few cars have ever matched. But the Viper is austere next to a $65,000 top-end Corvette. It has none of the high-tech goodies, such as all-wheel drive and electronically controlled suspension, that most high-dollar sports cars have. It doesn't even have roll-up windows: There are 1950s-roadster-style snap-on side curtains instead.

Moreover, Detroit's track record with pricey two-seaters hasn't been good. Chrysler flopped with its $37,000 TC, designed by Italy's Maserati: It looked too much like a $17,000 Le Baron convertible. Cadillac's $58,000 Allante, introduced in 1987, has never sold well. And Buick finally pulled the plug on its money-losing Reatta earlier this year.

Chrysler figures, though, that the Viper will boil the blood of enough auto enthusiasts at least to sell out the first few years' production. The carmaker has to sell only 2,000 Vipers annually for a few years to break even, Lutz says. Chrysler is already hinting that it will bring out other niche models--it won't say what kind. So even if sales fizzle, the lessons Chrysler learned will still make the Viper worth the trip.THE VIPER: ZOOMING FROM A STANDING START TO THE SHOWROOM

JAN. 4, 1989 Viper show car unveiled at Detroit's annual international auto show

MAR. 28 Viper feasibility study launched

DEC. 15 V-8-powered prototype completed

APR. 15, 1990 V-10-powered prototype done

MAY 18 After a Viper test drive, Chairman Lee Iacocca gives final go-ahead

AUG. 29 First crash test

JAN. 10, 1991 Chrysler President Robert Lutz scolds team for being behind

schedule with a car that's 200 pounds over its 3,000-pound goal

MAY 26 Viper paces Indianapolis 500 with racing great Carroll Shelby at the

wheel

NOV. 18 Production starts, with first models expected off the line by Dec.

MARCH, 1992 Deliveries of cars to customers scheduled to begin

DATA: BW

David Woodruff in Detroit


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus