Chrysler's quality push to be tested in 2011

Chrysler Group LLC's quality chief Doug Betts slid into last year's Dodge Charger, scouting for problems. He did not have to look very hard.

His fingers traced the hard plastic dashboard, partially painted a dull silver to mimic metal. Then he fiddled with the glove compartment, which shut with a harsh, loud click.

"When they talk about this car, the 2010 or the previous generation of the Charger, you see phrases like 'a sea of plastic' or 'the grayest of grays," Betts said. "You look at this and you know what they're talking about."

This year marks a critical year for Chrysler, in the midst of introducing 16 new and revamped models that will dictate the success of the company's turnaround plan, which likely includes an initial public offering the second half of 2011.

Some of the models will be introduced at this week's Detroit auto show.

Betts joined Chrysler in 2007 from Nissan Motor Co when the No. 3 US automaker was losing sales on an uninspired lineup undercut by what critics called cost cutting run amok under former owner Daimler AG.

Chrysler filed for a US government-funded bankruptcy two years later. Now under management control of Fiat SpA, Chrysler has revamped its quality testing and introduced Fiat's world class manufacturing at plants to staunch problems.

Fiat CEO Sergio Marchionne has put Betts at the center of Chrysler's efforts to stiffen its quality standards and win back jaded car shoppers.

Using the Fiat playbook, Chrysler added two new layers of quality trials, including the so-called "3/36 quality testing" in which testers cram 36,000 miles -- the normal distance over three years -- into three months.

Betts estimates that Chrysler spent USD 17 mn in 2010 on additional testing for 2011 model year vehicles. So far the results have been promising.

The first Chrysler vehicle to go through this testing was the 2011 Jeep Grand Cherokee, which received rave reviews by critics last year.

Warranty claims in the first month of the Jeep's launch were half what was seen in previous launches, Betts said.

"We attribute that to a lot of testing before the launch, finding issues and fixing them before customers (got them)," Betts said in an interview with Reuters.

199 Problems

Some of Chrysler's 3/36 testing is done in Auburn Hills, in a leased building less than a mile from The Palace, where the Detroit Pistons basketball team plays.

This type of testing helps Chrysler spot problems like a broken power window. There are at least nine conference calls a day with Chrysler engineers to discuss the problems.

Chrysler has also created a system that evaluates the perceived quality, or the likability, of the vehicle.

The 3/36 testers can drive 275 miles in an eight-hour shift and comb through a 150-line checklist. Sometimes a passenger will accompany them, going over a 600-line list of features including a car's navigation and Bluetooth technology.

It is tedious, painstaking work, but the system helped Chrysler catch 199 new, unique problems in the Jeep Grand Cherokee that would have earlier gone undetected, Betts said.

In one case, engineers found that a part near the rear axle would start "slinging grease" after the Grand Cherokee had been driven 10,000 miles, said Antonius Brenders, Chrysler's head of engineering quality.

In another instance, they learned that in certain summer weather conditions, the car's computer could calculate air pressure on the side door incorrectly and turn on the side airbag light.

"If these cars actually made it into the field, we never would have figured it out," Brenders said.

A long road

Under former owners Daimler and then Cerberus, new Chrysler cars and trucks were often launched before engineers had worked out all of the bugs, said David Sargent, vice president of JD Power and Associates.

In Consumer Reports' 2010 auto reliability survey, more than half of Chrysler's vehicles were rated below average. The Dodge and Jeep brands scored below average, the survey showed. The Chrysler brand scored dead last.

Sargent said it takes years for an automaker to turn around a reputation for poor quality because vehicle design cycles typically take four years or longer.

Consumer Reports data itself is a snapshot of subscribers' opinions of vehicle models from the previous three years.

The Jeep Grand Cherokee's reception has helped boost Wall Street perceptions of Chrysler, a company that more than a few industry experts doubted would survive the downturn.

The early signs of progress are encouraging, but Betts said Chrysler has a long road ahead.

"We've had a good string and we're proud of that," Betts said. "But we're not done."