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New Chrysler exec has clients, quality in mind


Just hours after news of Chrysler's sale broke last summer, then-Nissan quality executive Doug Betts' phone was ringing. Cerberus Capital Management LP was on the line.

Even before the private-equity firm purchased the Auburn Hills automaker, it recognized that Chrysler had a serious quality problem and pegged Betts, Nissan Americas' senior vice president for total customer satisfaction, to fix it.

A reluctant Betts accepted the job only after learning it would not be an isolated quality executive, but a "c-level" title that had a corporatewide reach. Hence, the industry's first chief customer officer was born.

From engineering and manufacturing to dealer sales and service, Betts monitors every aspect of the business that could affect a customer's perception of Chrysler LLC's quality.

Such a broad approach was necessary to fix a quality operation plagued with slow decision making and vehicles that outsiders criticized as cheap looking.

Old customer system tossed

At most automotive companies -- including Chrysler before Betts arrived -- various corporate operations are left to address quality on their own -- from how a customer's vehicle is serviced at an oil change to how a component is assembled on the line, he said.

"At most companies, no one except the customer ultimately judges whether that is successful or not," Betts said. "That's my job (here)."

When Betts arrived six months ago, he found Chrysler's quality operations bogged down with drawn-out decision making and interdepartmental finger-pointing.

If there was a problem with an air conditioning system, for example, the engineering department might suggest the plant didn't put oil in the unit, while the plant might say the unit was improperly designed. Weeks of back-and-forth e-mails would ensue, "and meanwhile, the customer is out there saying, 'I'm hot,' " Betts said.

Betts scrapped the old system, created standard definitions of quality, and established the view that customer satisfaction starts with a potential customer's perception of a brand and continues though vehicle ownership and repurchase.

He launched dedicated interdepartmental teams to address problems in minutes over conference tables, not weeks over e-mail.

Seriously addressing quality issues is essential for Chrysler, said David Champion, the senior director of automotive testing at Consumer Reports.

He said many of Chrysler's newly launched vehicles "missed the boat on quality." He called the Dodge Nitro among the worst vehicles the magazine tested last year, and he was critical of the plastic-laden interiors of the small Jeep SUVs.

"If the vehicle feels cheap, if it feels like a retail car, then a customer is going to ask, 'What did I get for my $299 payment this month?' " Champion said. "And ultimately those customers won't come back to Chrysler."

Quality concerns, however, are not unique to Chrysler, Champion said, and every automaker has executives dedicated to the cause, even if no other one has a chief customer officer.

At Ford Motor Co., Bennie Fowler is group vice president for global quality. Fowler has responsibility for quality in both the design and production of Ford vehicles. He also is entrusted with deploying continuous improvement strategies throughout the company.

At General Motors Corp., there is a vice president for quality in each of its four global regions. Those executives connect with manufacturing, engineering and sales and service.

Teams meet to solve problems

Chrysler is trying to establish that customer satisfaction is more than just minimizing warranty repairs.

Betts said a gap around a headlamp or poorly handled financing at the dealership are quality problems the same as a failed component. Betts monitors dealer procedures, tracks malfunctions and reviews design and engineering compromises or flaws that make the customers perceive poor quality -- like the headlamp gap.

Newly established customer satisfaction teams address perceived quality issues and the most frequently occurring warranty repairs.

Before a quality complaint could be passed from department to department, now 18 teams bring representatives from manufacturing, engineering, supplier relations and customer advocates around one table during regular meetings.

"All the sudden these guys that were natural enemies now don't care (who caused the problem) because they all have accountability to solve the problem," Betts said.

The teams are organized not by model, but by systems, such as interior, brakes and heating/cooling. Some 250 employees are dedicated only to these teams, whereas before quality oversight was only part of a larger job for many in the company.

"We have a clearer, simpler definition of what quality is," said Brian Lazarus, the customer satisfaction team leader for interiors. The cross-functional teams "improve communication ... and allow for much faster decisions."

For example, Lazarus' team found repeated warranty claims for a dashboard panel that popped out of place. It was found that two brackets were frequently broken when the panel was installed at the plant. To address the issue, the team immediately implemented a new process to install the panel, but then also ordered engineering changes to strengthen the brackets, which made the panel easier to install.

With Betts, Chrysler has an executive in place to address long-standing quality problems, said Stephanie Brinley, an industry analyst with AutoPacific. But it will take time to fix problems, and even longer for potential customers to recognize that the automaker has improved.

"As quick as Cerberus may want to be, it takes time to design parts and get moldings and assemble new parts on cars," she said. Because making significant engineering changes to existing models is difficult and expensive, Chrysler needs to make sure future models hit the quality mark where others did not.

"For customers to realize that quality has improved, it can't be done just on one vehicle launch," she said. "It has to be repeated for a few cycles before they buy in."



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