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The (failed) 1972 effort to fix Chrysler’s product strategy

by David Zatz

According to retired product planner Burt Bouwkamp, Chrysler had a fairly simple strategy from the 1950s into the late 1970s. Plymouth and Dodge competed with Chevrolet, even though Dodge sold at a premium to Plymouth; when they had similar bodies, Dodge usually had a couple of extra (and very costly) inches of wheelbase to support the price increase. Ordinary buyers were, and are still, confused by this; most who know Dodge was a premium brand compared with Plymouth think it was meant to compete against Pontiac.

Burt Bouwkamp, director of product planning for Chrysler Corporation

Once DeSoto was gone, Chrysler went up against Buick, Oldsmobile, and Pontiac. Imperial didn’t really compete, Burt said, but “was a car for dealers’ wives and their wealthy friends.” (It may well have continued largely because executives liked to drive it, too.)

The Imperial’s profit margin in manufacturing must have been immense, but swamped by engineering and tooling costs which were distributed across a very small number of cars each year. Profits were often unattainable, though they shared engines and many functional components with the other cars.

product planning objectives

Lynn Townsend, a young accountant, took over the company in 1962 after considerable instability at the top. He set up the model most fans believe had always been in place: Plymouth competing with Chevrolet and Ford, and Dodge competing with Pontiac (Chrysler went up against Buick and Oldsmobile). When Burt Bouwkamp was appointed Chief Engineer and Product Planner for Dodge cars in 1964, Townsend met him one-on-one and told him to “think Pontiac.”

This was still a new idea—and Townsend hadn’t quite sold it. Dodge dealers and executives still wanted to go against the much bigger Chevrolet, and grab some of that Plymouth volume; and they were more successful competing against Plymouth than Chevrolet. The “premium” Dodge brand, which was above mainstream even in the Dodge Brothers days, had reached down to get its own version of the Valiant and would soon demand its own version of the Duster.

In some ways, refocusing Dodge to counter Pontiac was missing the forest for the trees. The real problem was that Chrysler was letting other companies define its products. Oddly, Chrysler had become successful in 1924 by ignoring its market niche, adding technology and performance earlier only found on luxury cars. The Plymouth had been successful by being a bit pricier than Chevrolet and Ford, but delivering far more than either one. As the 1950s developed, though, the base Plymouth slipped below Chevy—and Dodge went slightly above it.

In the early 1970s, designers and planners worked on minivans; but, as Burt wrote, “Chrysler management didn't approve the minivan program in the early 1970s because GM and Ford didn’t have one.” That confirmed his view, which remains firm today, that Chrysler’s product strategy was, at the time, “to get 15 to 20% of market segments established by GM and Ford.”

Product planners, engineers, and designers had tried to convince Chrysler leaders to focus more, producing a smaller number of better, more profitable cars. Part of that was combining their compact and midsized sedans into one series; since their report was written in 1972, it’s likely that would have meant the Aspen and Volare replacing the Coronet, Belvedere, Valiant, Duster, Dart, and any specialty/derivative cars. They were all fairly similar in size; and, eventually, the Volare and its derivatives did replace the B-bodies, but not before the disastrous R-bodies were created.

Burt Bouwkamp, as head of product planning, wrote the introductory memo to the report and presentation, dated April 9, 1973.

Product planning objectives report - introduction

They set a new long-range objective: a plan that could be done on time, producing cars with a “level of appearance and functional execution that will result in competitive and profitable products that meet owner expectations for quality, reliability, and cost of ownership.” This was key because Chrysler had lower than average owner loyalty, with a lower than desirable reputation—in 1972.

Countering their arguments—which concerned economies of scale, their own limited capabilities, focusing on a smaller product line which would have greater quality and better engineering—was Sales Management. They insisted Chrysler had to have both compact and midsized models to compete with Chevrolet and Ford.

Bouwkamp and his group turned out to be absolutely right, in two ways. First, with the fuel crises, large car sales fell to near zero; and midsized car sales plummeted as well, with buyers flocking to compact cars and new imported subcompacts. Before long, Chrysler ended up selling just one kind of rear wheel drive car—based on the Aspen and Volare.

M body 1983 Dodge Diplomat (product strategy illustration)

They were right in one other way: creating the “R” body cars, meant to come between the intermediate and full size products while different from each category by around one inch, may well have bankrupted the company. They sold poorly, took a great amount of corporate resources to make, and had numerous quality problems.

Lee Iacocca finally swept away the sales department’s insistence on matching GM and Ford car-for-car. His own plan was to make Dodge the sporty brand, which had been Plymouth’s province to a large degree (the Duster and Road Runner were both big volume cars by Chrysler standards). Hence Dodge got the Daytona (shared briefly with Chrysler), the sportiest Mitsubishi (Stealth), and exclusive use of the hottest engines of the day (the 2.2 Turbo III and Turbo IV). When the time came to do an all-out sports car, despite being barebones, it went to Dodge. Chrysler and Plymouth essentially shared a softer ride, but Chrysler got more features and chrome, and Plymouth sometimes only had the lower-end engines.

Lee Iacocca

Had the leaders of Chrysler Corporation listened to Burt Bouwkamp and a large number of memo co-signers, they may well have avoided bankruptcy and kept control of SIMCA. It would be a very different company today—but it may still have faltered and fallen, and would probably not have purchased AMC. That road of history is full of possibilities we can never know.


Books by MoTales writer David Zatz

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