Auburn Hills-- Chrysler Group LLC says glitches with the software that runs its cars and trucks caused the recent production delays that undercut the company's profits, and the automaker says it is taking extraordinary steps to improve quality and ensure that its vehicles arrive problem-free.
And Chrysler is doing it even as it struggles to keep up with growing demand, train novice workers and roll out the latest technology.
A growing number of onboard computer systems control everything from engines to entertainment systems in today's cars and trucks, and all automakers are running into problems as they work to integrate the latest technology into their vehicles. For example, software issues recently forced Ford Motor Co. to recall vehicles equipped with its new 1.6-liter EcoBoost motor.
But Chrysler also is trying to outrun its own history.
The Auburn Hills automaker is fighting to overcome a reputation for poor quality that was decades in the making, and it is doing it with the greenest workforce in the American automobile industry. More careful inspections and more stringent standards are adding to the manufacturing delays, so that flawed cars and trucks are fixed at the plants, and do not make it to dealer showrooms or customer garages.
When Chrysler released its first-quarter earnings last month, CEO Sergio Marchionne blamed the worse-than-expected financial results on a slower-than-expected introduction of the 2013 Ram Heavy Duty pickup and 2014 Jeep Grand Cherokee that left dealers with too few vehicles to keep up with consumer demand.
"The launch didn't go as we wished it to go," said Doug Betts, head of quality for the Fiat-Chrysler group, in an interview with The Detroit News. "Cars have become rolling computers. The issues that we held cars for primarily were related to software that we needed to update before we shipped them."
Betts would not specify which computer systems were affected by the problem. "We needed to update the software in several areas," he said, adding problems were corrected with a simple software update.
Regardless, Marchionne made it clear that the company needs to overcome its launch issues quickly if its turnaround is to stay on track.
"It shouldn't have caused the disruptions that it did," he told analysts and reporters last month. "We need to get the shipments and the selling cycle to rectify themselves ... We need to rectify this in the next nine months."
New workers a challenge
Chrysler is not the only automaker to struggle with recent launches. Ford's introduction of the new Lincoln MKZ was marred by supply and quality issues that left some dealers without cars for four months.
While software issues may have been the primary cause for the recent delays, sources inside Chrysler's factories say the large number of rookie workers on the assembly lines is also a factor.
Chrysler let go thousands of workers in the run-up to its 2009 bankruptcy. Since being taken over by Italy's Fiat SpA as part of a bailout brokered by the Obama administration, the company has hired more than 17,000 new workers in the United States and Canada.
"I've always thought they were shortsighted to let the skilled workers in these plants go," said Jay Baron, chairman of the Center for Automotive Research in Ann Arbor. "You can't hire anybody out of college or high school that can go into a stamping plant or body shop, find the problems and fix them. Those skill sets take years to develop and fine-tune. It takes 20 years to get that expertise."
Company reports obtained by The News show there have been a large number of "factory holds" at some facilities. Factory holds are vehicles with identified quality issues that are kept at the plant until they can be repaired by hand. Any defects are corrected before those vehicles reach the customer, but fixing them does mean fewer cars and trucks are getting to dealers.
While Betts said most of these issues have been resolved, he said they were proof that the processes and procedures that have been implemented at Chrysler's factories as part of Fiat's "World Class Manufacturing" system are working.
"Certainly, people coming in are going to make a few mistakes ... but we also have safety nets in place," Betts said, adding that Chrysler has completely rethought the way it monitors manufacturing quality. "The way that we confirm what we're shipping out the door to customers is night-and-day different. The standards for what's acceptable are significantly higher."
Erecting those safety nets is the job of Amin Alidina, director of manufacturing quality for Chrysler. He and his team have identified areas on each assembly line where there are opportunities for significant human errors. They have assigned inspectors to monitor lines in order to catch problems as soon as they happen, walk them back to the individual responsible for them and give that person on-the-spot training to avoid repeating them. They also encourage workers to identify potential problems and help the company's engineers come up with ways to avoid them.
For example, in December, inspectors at the Warren Truck Assembly Plant noticed that many vehicles were coming off the line with a small dent inside the rear door. Workers figured out that the problem was being caused by a piece of equipment with worn padding. No one had noticed it, so they replaced the padding with red foam and covered it with black tape. That way, workers could tell at a glance if it was starting to wear through and fix the problem before it damaged any vehicles.
"Our job is to protect the customer," Alidina said.
Chrysler rankings improve
There is evidence that this new approach is working. Chrysler's brands are no longer at the bottom of influential quality surveys, such as those conducted by Consumer Reports and J.D. Power and Associates, although its products continue to score worse than the industry average on those lists.
While the Fiat brand tied Smart for the dubious honor of coming in dead last in last year's J.D. Power survey of initial quality, Jeep and Chrysler fared better than Ford and Volkswagen, and Ram came in above the industry average. Betts would like to see all of his brands score above average, but that it is hard when everyone else is improving, too.
"It's frustrating, but five years ago we were in last place and couldn't even see the runner in front of us. Now, there are some pretty well-respected companies behind us," Betts said.
"We get up every day and work on being better than we were the day before. Is it easy? No. But I'm not looking for an easy life. I don't play golf, and none of the people I work with play golf. But it's important to save this company, to get the product turned over for the future -- for the people who just started working here and who will work here in the future."
Betts said Chrysler could probably make more progress faster if it still had all those experienced workers in its plants, but he said they would not make it any easier for the company to cope with the challenge of integrating new technology into its cars and trucks.
Baron agrees that the pressure to add new technology is complicating launches for all automakers, particularly as they push the envelope with more advanced powertrains in order to meet tough new government fuel-economy standards.
"A lot of it has to do with the amount of innovation that's required to launch these cars," he said. "World Class Manufacturing is a very active program to address these issues, and it will address them. But it takes time."
Unfortunately, that is one thing Chrysler does not have a lot of to spare. Marchionne set some ambitious goals for the company when he outlined his five-year turnaround plan in 2009. It has a year left to achieve them. And reports out of Chrysler's Jeep plant in Toledo -- which is preparing to launch the company's most important new vehicle yet, the 2014 Jeep Cherokee -- suggest that workers there also have been struggling with launch issues.
Marchionne said they have to.
"The onus is on us," he said. "If we fail, it's our doing. It's not the market; it's not the competition; it's not anybody else."