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OM in the News: Building a Reputation for Quality No Easy Task for Chrysler

May 15, 2012

As we discuss in Chapter 6, quality can take on a wide range of attributes.  For auto makers, and their customers, these  attributes  range from safety, to the choice of interior materials, to the way parts fit together—all of which affect perceptions of a brand. The Wall Street Journal (May 10, 2012) reports the bad news for Chrysler–that through bailouts and bankruptcy, there is one liability that the automaker hasn’t yet managed to shed: its reputation for lousy quality.  “You can lose your reputation in a year, but it takes five to 10 years to rebuild it,” says the  director of the Consumer Reports.

Despite surging sales, the auto maker remains dogged by a long trail of recalls, customer complaints and poor ratings on quality surveys. In 2008,  the London Times proclaimed Chrysler’s now-discontinued Sebring “almost certainly the worst car in the entire world.”  The Journal quotes Chrysler’s quality chief, Doug Betts, as saying:  “We were building cars that were functional, and other than that, they were boxes you got into that hopefully kept the rain off your head.”

But today, dealers, customers and independent reviewers say Chrysler’s efforts are starting to pay off, with better finishes and higher quality scores on new models such as the Jeep Grand Cherokee SUV and  300 sedan. Last year, the brands earned their highest ratings in years in Consumer Reports’ annual reliability survey, rising from the bottom of the pack to the middle. That year, Betts used his new authority to delay a restyled Chrysler 300 after inspection of a prototype found a right rear tail light that wasn’t flush with the body. The one-millimeter projection was hardly visible, Betts said, but it was enough to “catch a rag if someone was hand-washing” the car.

Discussion questions:

1. Why is a quality reputation easy to lose, but hard to gain?

2. What caused Chrysler’s reputation to drop?

2 Comments leave one →
  1. fred schumacher permalink
    June 10, 2012 12:49 pm

    One needs to be careful not to confuse “quality,” the fit and finish of the vehicle at the end of the manufacturing process, with “reliability,” the long-term functionality of the vehicle. Although the two tend to go together, one can have quality without reliability, as has often been the case with Jaguar, and one can have long term reliability without initial quality, as I have found to be true with Chrysler minivans, having driven six of them past 250,000 miles with minimal problems and very low maintenance costs.

    Chrysler’s primary problem, recently, has not been quality so much as it has been mismanagement and poor product development during its Daimler and Cerebrus periods. Daimler was arrogant and bled the company of cash, and Cerebrus was clueless and only wanted to own the company in order to slice and dice it and sell off Jeep for a profit. Under the direction of Sergio Marchionne, Fiat-Chrysler is very different company today.

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