CHRYSLER

THE HISTORY OF CHRYSLER

CHRYSLER CORPORATION The Chrysler Corporation was a United States-based automobile manufacturer that existed independently from 1925–1998. Chrysler and its subsidiaries became part of the German-American based DaimlerChrysler AG after being purchased by Daimler-Benz in 1998. Before being taken over in 1998, Chrysler Corporation traded under the "C" symbol on the NYSE. The U.S. operations are generally referred to today as the "Chrysler Group." HISTORY The company was formed by Walter Percy Chrysler on June 6, 1925, with the remaining assets of Maxwell Motor Company. In 1928 Chrysler founded the Plymouth brand at the low end, the DeSoto brand at the low-medium end and purchased the Dodge Brothers automobile company; all of this was in order to set up a full range of brands similar to that of the General Motors corporation. This process reached its logical conclusion in 1955, when the Imperial was made a brand of its own and Chrysler marketed a GM-like five-brand lineup. Well before then, though, Chrysler Corporation had become noted both for its engineering features as well as its periodic financial crises. By the end of the 1930s, the DeSoto and Dodge divisions would flip-flop spots in the corporate pecking order making the lineup Plymouth, Dodge, DeSoto, Chrysler, and Imperial. In the 1930s, the company introduced the Chrysler Airflow, featuring an advanced streamlined body which was among the first to be designed according to scientific aerodynamic principles. Chrysler also created the industry's first wind tunnel to develop them. Unfortunately, it was not well accepted by the public, and it was the humble Dodge and Plymouth divisions, which had not been given an Airflow model, which pulled the firm through the Depression years with its conventional but quite popular bodystyles. Plymouth was one of only a few marques that actually incresed sales during the cash-strapped thirties. It was during this decade that the company created a formal parts division under the Mopar (Motor Parts) brand, with the result that Chrysler products are still often called Mopars. The unsuccessful Airflow had a chilling effect on Chrysler styling and marketing, which remained determinedly unadventurous through the 1940s and into the 1950s, with the single exception of the installation of hidden headlights on the very brief production run of the 1942 DeSotos. Engineering advances continued however, and in 1951 the firm introduced the first of a long and famous series of Hemi V8s. In 1955, things brightened after the questionable designs of the 1953 and 1954 Chryslers with the introduction of Virgil Exner's successful Forward Look style. With these cars, Chrysler seized the industry's design leadership and produced several genuine classics, most notably the 1956 Plymouth Fury and the 1957 Chrysler 300C. With the inauguration of the second generation Forward Look cars for 1957, Torshion-Aire was introduced. This was not air suspension, but an indirect-acting-torsion-spring suspension system which drastically reduced unsprung weight and shifted the car's center of gravity downward and rearward, resulting in both a smoother ride and significantly improved handling. However, a rush to production led to quality-control problems (mostly related to body fit and finish resulting in major rust-out issues), and coupled with a national recession, soon the company was once again found itself in recovery mode. As the 1960s opened, the firm made both good and bad moves. In 1960, Chrysler introduced unibody construction in its cars, the first to offer it of the Big Three, across the board, excepting the Imperial. This gave the body more rigidity and less rattles and would soon become an industry standard. Its new compact line, the Valiant, opened strong and continued to gain market share for well over a decade. Valiant was introduced as a division of its own but would become adopted by Plymouth in 1961. Alternators would replace generators in the 1960 Valiant and then all of the 1961 models as standard equipment, an industry first. The DeSoto marque was axed after the introduction of the 1961 models due in part to the broad array of the Dodge lines being marketed and the general neglect of the division. The same affliction plagued Plymouth as it also suffered when Dodge crept into Plymouth's price range. (This would eventually lead to the demise of Plymouth several decades down the raod.) An ill-advised downsizing of the full-size Dodge and Plymouth lines in 1962 hurt sales and profitability for several years. In April 1964, the Plymouth Barracuda, which was technically a Valiant sub-series, was introduced. The huge glass rear window gave the impression of a hatchback with its "love-it-or-hate-it" styling. Beating the Ford Mustang to the market by almost two weeks, it could be argued that the Barracuda was really the first pony car. However, unlike the Mustang, it did not rob sales of other division's models. In spite of better build quality than the Mustang, the Mustang still outsold the Barracuda 10-to-1 between April 1964 and August 1965. In 1966, Chrysler expanded into Europe, by taking over the British Rootes Group, and Simca of France to form Chrysler Europe. The former purchase unfortunately turned out to be a major mistake for the company, inheriting a major industrial relations problem which afflicted the British motor industry at the time, coupled to the archaic factories and outdated product range that Rootes manufactured. Chrysler retired all of the Rootes marques in favor of the Chrysler name. The Simca division was more successful, but in the end the various problems were overwhelming and the firm gained little from these ventures. More successfully, at this same time the company helped create the muscle car market in the U.S., first by producing a street version of its Hemi racing engine and then by introducing a legendary string of affordable but high-performance vehicles such as the Plymouth GTX, Plymouth Road Runner, and Dodge Charger. The racing success of several of these models on the NASCAR circuit burnished the company's reputation for engineering. The 1970s brought both success and crisis. The aging but stalwart compacts saw a rush of sales as demand for smaller cars crested after the first gas crisis of 1973. However, an expensive investment in an all-new full-size lineup went largely to waste as the new 1974 vehicles appeared almost precisely as gasoline prices reached a peak and large-car sales collapsed; that same year marked the end of Barracuda production — 10 years to the day. At mid-decade, the company scored a conspicuous success with its first entry in the personal luxury car market, the Chrysler Cordoba. However, the introduction of the Dodge Aspen/Plymouth Volare twins in 1976 did not repeat the success of the discontinued Valiant/Dodge Dart line, and the company had delayed in producing an entry in the now all-important subcompact market. Problems were mutliplying abroad as well, as Chrysler Europe essentially collapsed in 1977. It was offloaded to Peugeot the following year, ironically just after having helped design the new Plymouth Horizon and Dodge Omni, on which the increasingly-desperate company was pinning its hopes. Shortly thereafter, Chrysler Australia, which was now producing a rebadged Japanese Mitsubishi Galant, was sold to Mitsubishi Motors. The subcompact Horizon was just beginning to reach the U.S. market when the second gas crisis struck, devastating sales of Chrysler's larger cars and trucks, and the company now had no strong compact line to fall back on. In desperation, the Chrysler Corporation on September 7, 1979, petitioned the United States government for US$1 billion in loan guarantees to avoid bankruptcy. At the same time, Lee Iacocca, a former Ford executive, was brought in to take the position of CEO, and proved a capable public spokesman for the firm. A somewhat reluctant Congress passed the "Chrysler Corporation Loan Guarantee Act of 1979" (Public Law 96-185) on December 20, 1979 (signed into law by President Jimmy Carter on January 7, 1980), prodded by Chrysler workers and dealers in every congressional district who feared the loss of their livelihoods. With such help and a few innovative cars (such as the K-car platform), especially the invention of the minivan concept, a market where Chrysler brands are still important, Chrysler avoided bankruptcy and slowly fought its way back up. By the early 1980s, the loans were being repaid at a brisk pace and new models based on the K-car platform were selling well. A joint venture with Mitsubishi called Diamond Star Motors strengthened the company's hand in the small-car market. The acquisition of AMC by Chrysler in 1987, mostly for its Jeep brand, bolstered the firm further, although Chrysler was still the weakest of the Big Three American auto makers. In the early 1990s, Chrysler made its first tentative steps back into Europe, setting up car production in Austria, and beginning right-hand drive manufacture of certain Jeep models in a 1993 return to the UK market. The continuing popularity of Jeep, bold new models for the domestic market such as the Dodge Ram pickup, Dodge Viper sports car, and Plymouth Prowler hot rod, and new "cab forward" front wheel drive sedans put the company in a strong position as the decade waned. Daimler-Benz merger Chrysler merged in 1998 with Daimler-Benz to form DaimlerChrysler AG. This was initially touted as a merger of equals, but within a couple of years the truth was evident; it was effectively a buyout of Chrysler by Daimler-Benz, with the latter being very much the dominant partner. As if on cue, the company went into another of its financial tailspins soon after the merger, greatly depressing the stock price of the merged firm and causing serious alarm at headquarters in Germany, which sent new CEO Jurgen Schremp to take charge. The Plymouth brand was phased out in 2001 and plans for cost-cutting by sharing of platforms and components began. The strongly Mercedes-influenced Chrysler Crossfire was one of the first results of this program. A return to rear wheel drive was announced, and in 2004, a new Chrysler 300 using this technology and a new Hemi V8 appeared and became a solid hit. Ironically, by most standards, Dodge, Jeep and Chrysler vehicles have surpassed the parent Mercedes in quality. Financial performance began to improve somewhat, with Chrysler now providing the lion's share of DCX profits, but the long-standing partnership with Mitsubishi appeared to be unraveling as DaimlerChrysler divested its stake in that firm. On April 7, 2005, a conclusion was announced by U.S. District Judge Joseph Farnan Jr. presiding over a bench trial in Wilmington, Delaware between Kirk Kerkorian and DaimlerChrysler AG regarding allegations that Jürgen Schrempp of Daimler Benz AG, prior to the 1998 merger, lied and manipulated the Security Exchange Commission and Chrysler Corporation's shareholders (the largest of which was Kirk Kerkorian's Tracinda Corporation) by touting the 1998 merger as a merger of equals, and not an outright acquisition. The judge was found to be in favor of DaimlerChrysler's position by rejecting Kerkorian's case. However, another case (based on the same merit) was settled in 2003 for $300 million to other shareholders. The Kerkorian case called for many more causes of action that undoubtedly needed to be carefully dealt with and took over one year to decide on. LOGOS The design shown at the top of the page is an adaptation of the original winged logo which Chrysler used on its cars at its inception in 1925. The logo was revived for the Chrysler division in the mid-1990s, and was surrounded by a pair of silver wings after the Daimler-Benz merger in 1998. In 1963, the company had switched over to a star design which became known as the Pentastar (right) and was extensively used on dealer signage, advertisements, and promotional brochures. Contrary to popular belief, it was not designed to symbolize the five divisions of the corporation at the time, Plymouth, Dodge, Chrysler, Imperial and Dodge Truck. By 1963 there were only two auto divisions in the United States, Chrysler-Plymouth and Dodge. As well there were over a dozen other divisions in the Chrysler Corporation family, and management were after a symbol that all divisions could use. Then Chrysler head Lynn Townsend was looking for a symbol that could be used by all divisions, on packaging, stationery, signage, advertising, etc. He wanted something that would be universally recognizable as "Chrysler" to anyone who saw it, from any perspective, from any culture. Chrysler's trademark symbol, the pentastar, was simple and easily recognizable from any perspective, even in motion on revolving signs. The symbol also facilitated Chrysler's expansion in the international market by removing the need to translate any text that is commonly used on logos. Thus all divisions of Chrysler adopted the Pentastar. All car brands (Valiant, Plymouth, Dodge, Chrysler, Imperial, Hillman, Humber, Sunbeam, Singer, Simca), truck brands (Fargo, DeSoto, Dodge, Commer, Karrier), and all the other Chrysler divisions (air conditioning systems, heating, industrial engines, marine engines, outboard motors, boats, transmissions, four wheel drive systems, powdered metal products, adhesives, chemical products, plastics, electronics, tanks, missiles) and services (leasing and finance) were identified by the Pentastar. It united the firm's various products and services in the public's eye as no other auto firm has done. The Pentastar appeared consistently but inconspicuously on the lower passenger-side fender of all Chrysler products, including foreign brands from 1964-71. It was placed on the passenger-side fender so it could be viewed by passers-by, a subtle method of getting the symbol ingrained in the public's mind. A nameplate has to be read, but a symbol is recognizable even to the illiterate. Thus North American and French cars had the Pentastar on the right fender and British on the left. The practice was revived in the 1990's. Beginning in 1981, the Pentastar replaced individual logos that had been used by Plymouth, Dodge and Chrysler and had in some cases identfied individual models, such as the Chrysler New Yorker in uses such as hood ornaments and decklid badges. By 1993, Chrysler started to phase out the Pentastar, with Dodge getting its own "Ram" logo, and by 1995, Chrysler revived the rosette symbol it had used prior to the Pentastar; Plymouth was given a new sailboat logo. The Pentastar's last badging appearance was on the steering wheel and keys of the Chrysler minivans produced from 1996 through 2000. Currently the only remaining traces of this motif are a large, star-shaped window at DaimlerChrysler's American headquarters in Auburn Hills, Michigan, and Pentastar Aviation, a former DaimlerChrysler subsidiary which reverted to its original name after being purchased, ironically, by a member of the Ford family. It is also likely that many dealerships still have signage and other traces still visually apparent to the Pentastar. Today, glass on Chrysler Group cars and trucks still have the Pentastar on them, however, its days appear to be numbered.

Posted in: Chrysler- Manufacturer