Straight From The Top

Automotive Industries,  Nov, 1999  by Marjorie Sorge

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He also gets steamed over allegations that the former Chrysler side is now just a marketing arm of the German giant. "That's ridiculous," he retorts. "Auburn Hills is responsible for half the revenue and half the profit. And it has the largest, by far, engineering, manufacturing and procurement of the entire company. And it will remain the largest part."

He's also confident about e-business plans, which he says will help reduce the vehicle order-to-ship time to 12 days, from today's 20, and "ultimately into single digits." Programs linking dealers and suppliers will contribute to the reduction. But Eaton is less optimistic about cutting down the nine to 11 days it takes a vehicle to reach the dealer after it leaves the plant. "We aren't drastically going to improve our rail and track delivery," he says. "We keep trying to take a day out." Unlike some automakers, he says DaimlerChrysler will not store big inventories of vehicles around the country to reduce delivery time.

And he doesn't rule out a partnership with a software company in the future to help improve the distribution system.

As Eaton works to rebuild DaimlerChrysler's battered image and lackluster financial rating, he also must deal with difficulties overseas.

"Without an acquisition (in the Asia-Pacific region) it will be difficult to get more than 10% of our revenues in the next five to 10 years from that area of the world," he admits. And, while he believes the Asian economy has bottomed out, he's also concerned about slow growth in China and India.

Consequently, DaimlerChrysler will shift its attention to Latin America, where Brazil is beginning its comeback. Look for more investment there. Mexico is thriving. The PT Cruiser will be built in the Toluca plant beginning in February. The car-truck crossover garnered such rave reviews in North America, Europe and Japan that Eaton's confident "we'll be short." They've already hiked Toluca capacity from 170,000 to 180,000, and DaimlerChrysler is looking at other production alternatives as well.

The fuel-efficient Cruiser is not only a high-potential seller. It's been classified as a truck and, consequently, will help rebalance DaimlerChrysler's Corporate Average Fuel Economy situation. Under the CAFE formula, automakers must balance the sale of their popular gas-guzzling tracks and SUVs with sales of fuel-efficient vehicles, or face fines. PT will be a key to that strategy.

"We'll do everything possible to make sure we don't pay any fines," Eaton says assuredly. The goal is to bring out more PT Cruiser-like vehicles that offer utility and economy.

All these plans are geared toward DaimlerChrysler becoming the premier automaker. "There is additional value to unlock in this company once we get the earnings up to and ahead of expectations," Eaton states. "I am not concerned in the long term."

If that turns out to be the case, DaimlerChrysler's dance card may soon be full.

Eaton's Not Worried About His Legacy

Many people criticized DaimlerChrysler Co-Chairman Bob Eaton for merging Chrysler with Daimler. He says he did the right thing.