New Chairman Prepares To Reshape Chrysler

UNTIL three months ago, Robert Eaton had never stepped foot inside the confines of the Chrysler Corporation's suburban Detroit headquarters.

Now Mr. Eaton faces the daunting task of reshaping the No. 3 carmaker in the country.

In December, Eaton will succeed Chrysler's retiring chairman Lee Iacocca, without question the most colorful figure in the domestic auto industry. Stepping in has not been easy for Eaton. His appointment, announced March 16, came as a stunning surprise, for he had spent 29 years working for General Motors, the last three of them in charge of that automaker's profitable European operations.

So for Eaton, his first semester on the job has been a learning experience.

"It took a month or so to adapt," Eaton said as he took a rare moment to relax during a recent interview. "It was a slow recognition this was permanent. [But] at this point, I feel totally at home and totally comfortable."

Overseas, Eaton helped turn General Motors of Europe into the Continent's leanest and most efficient carmaker.

Improving Chrysler's bottom line is now one of his top priorities. The auto-maker lost $795 million last year, and another $13 million during the first quarter of 1992.

"We've got to get waste out of the system [and] anything a customer won't pay for is waste," Eaton said, explaining one of his first projects: a critical analysis of Chrysler's assembly operations.

If a worker must take five steps to pick up a part, that is an opportunity to reduce wasted time. If it takes five separate dies to stamp a body panel, that presents an opportunity to simplify operations, he says.

"We don't have to make people work harder or faster," Eaton said. But he emphasized the need to tap the brainpower as well as the brawn of assembly-line workers, people he feels "know more about their jobs than any methods engineer will ever know."

Eaton's call for cooperation with the United Autoworkers Union comes at an opportune time, a year before Chrysler and the UAW go back to the bargaining table.

Wherever you turn, Eaton seems to be working to patch over potential conflicts.

When he was named vice chairman, he leapfrogged over Chrysler president Robert Lutz, originally seen as Mr. Iacocca's likely heir. Mr. Lutz responded with another surprise. Declaring himself a "team player," he announced he would stay with Chrysler despite the apparent slight.

The question was whether the team would hold together. Insiders sensed friction between Lutz and Eaton. And there was concern that Francois Castaing, Chrysler's head of engineering, might also be driven away.

But sources suggest the three men are going out of their way to develop a working relationship. Eaton is "a very smart guy, very flexible and adaptable ... and he is just the perfect kind of guy to weave [together] the kind of team they will need over the long term," says David Cole, director of the University of Michigan's Office for the Study of Automotive Transportation. If anything, friends of Lutz suggest he feels freed from the handcuffs of day-to-day management. Instead, he can concentrate on his personal priority, reshaping Chrysler's product program.

For years, Chrysler was faulted for marketing stodgy, often outdated vehicles. But new models, such as the Viper sports car and Jeep Grand Cherokee, have caught the fancy of critics and buyers. The automotive press has already begun to rave about Chrysler's new line of midsized sedans due out in the fall.

"Without that product in the pipeline, we wouldn't have much of a future and I wouldn't have taken the job," Eaton said. "I have no thoughts about changing the product program. I haven't changed one squiggle."

Eaton and Lutz appear to agree on another critical issue. "If there's a bottom line to this business," Eaton said, "it's customer satisfaction. We're not in the business of selling cars. We're selling customer satisfaction."

As if to underscore those words, Chrysler recently launched a $25 million dealer training program. Every employee at each of its US dealerships will be required to attend.

"I'm even thinking about teaching [some sessions]," Eaton said with a smile.

Though Eaton may be happy with the general course Chrysler is taking, he will have to make some tough calls in the coming months. One of the toughest will be whether to downsize the distribution network.

Though Eaton said Chrysler has "no specific plans to drop a division," he acknowledges the company is studying that option. Many industry analysts say that by the mid-1990s Chrysler will either merge the Chrysler/Plymouth and Jeep/Eagle divisions, or do away with the Plymouth and Eagle brands.

For more than a decade, the telegenic Iacocca has served as both Chrysler's pitchman and chairman. "I doubt I would have the appeal" to emulate Iacocca on camera, Eaton said.

Until December, he must still answer to Iacocca. But after that, he is certain to put his own stamp on Chrysler.