Chrysler Counts on 'Idea Factory'
Technology center is costly, but may allow the struggling company to speed new-car design
AUBURN HILLS, MICH.
IT rises out of the woods like a collection of crystal pyramids.The massive skylights are the first thing you see as you head north on I-75, half an hour's drive from Detroit. They top the new Chrysler Technology Center, or CTC, a sprawling, 40-acre design and engineering center that has taken Chrysler nearly five years and $1 billion to complete. Skeptics - and there are many - wonder about the wisdom of that vast expenditure at a time when Chrysler is selling off assets and issuing new stock just to fund its day-to-day operations. Proponents call CTC an "idea factory" that will help the carmaker play technological leapfrog with the Japanese. "Could we have gotten away without it?" asks Chrysler chairman Lee Iacocca. Before CTC opened, "an engineer at Chrysler had to go to 20 different places to get his job done" because the company's design and engineering operations were scattered all over metropolitan Detroit. "That's a tough way to compete with the rest of the world." At 3.3 million square feet, CTC apparently qualifies for the record books as the largest complex of its kind under a single roof. Eventually, it will house about 7,000 designers, engineers, manufacturing and marketing experts, and their support staff. They will have some of the newest technological tools at their disposal, including a wind tunnel and unmanned Automated Guided Vehicles to haul things around the building. Then there's CATIA, an electronic drafting system that allows Chrysler stylists to craft a design without ever touching a sheet of paper. In turn, engineering and manufacturing will have immediate access to those designs. And if there's a problem - say not enough room to put the engine under the hood - changes can be made early in the process. In the past, such problems might have gone undetected for months. That's one reason why it has taken United States carmakers as long as five years to bring a concept to market, versus three years or less for the Japanese. The key to CTC's design is actually not new technology, but the way the facility brings people together, emphasizes Robert Lutz, Chrysler's president. Whether you're engineering a new powertrain or designing the tail lights, if you're working on the next generation Chrysler subcompact, you'll be working on the same floor of CTC. There are wide halls and few solid walls. That allows staff to constantly reshape the interior to suit project needs. There's even a pilot production facility in the center's basement. That way, CTC employees "can take a project from concept to initial prototype ... without leaving the building," Mr. Iacocca says. In another significant step, CTC provides space for Chrysler's suppliers to station some of their own employees. That will allow Chrysler to tap into the brains and technology of its outside vendors, much as the Japanese do through their keiretsu system. The first designers and engineers are just starting to move into their offices at the CTC, which recently held a week-long dedication ceremony. But not everyone buys the optimistic assessment, especially in light of Chrysler's current cash crunch. The automaker lost $810 million during the first half of 1991 and will report another big loss for the third quarter. CTC hasn't been immune to the effect of those financial problems. The program was originally designed to cost $1.5 billion but nonessential expenditures have been put off for a second phase. "CTC is an open-ended project. No one says it will ever be completed," says Francois Castaing, Chrysler's head of engineering. Even with the first-phase cutbacks, "Some people say it could have been done a lot cheaper," says auto analyst Joseph Phillippi with Shearson Lehman Brothers. That riles Mr. Lutz, who argues Chrysler's critics are talking out of both sides of their mouths: "Some of the same people criticize American industry for taking a short-term outlook and not investing money for the future." That argument, along with recent tours, has helped sway some of CTC's former critics, including Mr. Phillippi, who now says the Center could "change the process" for the better. This change will take time, however. The first cars designed and engineered from scratch at CTC won't make it to market until mid-decade. Meantime, Chrysler will still be at the mercy of consumers. And it will have to keep up the mortgage payments on its granite-and-glass "idea factory."