Dodge CEO: "We cannot screw it up this time"

    by Phil Zabriskie

    During the past decade, Ralph Gilles helped create some of Chrysler's most successful models: the 300C Sedan, the Dodge Magnum, and the redesigned Dodge Charger. But soon after the industry wunderkind became the company's design chief, Chrysler and America's auto industry collapsed.

    Italy's Fiat and a U.S. government bailout saved the company, and this past fall, executives pledged to become more efficient, reduce costs, double Chrysler's sales globally, nearly double its U.S. market share, and return to profitability in the coming years.

    Gilles, it was also announced, would now helm Dodge while maintaining his overall design portfolio. After what he described as "one of the most challenging years of my life," he spoke to Fortune about Chrysler's recovery plan, which analysts have given a decidedly mixed reaction. The edited interview is below.

    The year ended with news of dismal sales numbers and lawsuits from dealers who'd been shut down. Were you glad to turn over the calendar?

    Absolutely. I will not miss 2009. But to me, it was a cleansing that needed to happen. We've had new CEOs, we've had new management [in the past], but this is the first time it really has been fixed from inside out. The way the management is structured right now is so functional, it's insane.

    The November 4 plan seems hugely ambitious given recent history.

    It is and it isn't. If you look at where Chrysler's been for the last 20 years, we've been between 10 and 13% [of U.S. market share]. This year has been exceptional, not just to us but to everybody. I think this year is artificially dragged down by almost a perfect storm. If you take away some of the perfect storm elements, put in a management team, and a better product than we've ever had -- I mean, the stuff coming out is quantum leaps ahead in terms of quality, answering consumer needs, design, attention to detail. With that kind of product, I feel very, very confident.

    Are there particular models you're excited about?

    The next generation Charger 300. My new crossover from my Dodge brand. The new Grand Cherokee -- I've driven it -- it's phenomenal. There's a lot of talk about smaller cars. Our portfolio will diversify as we go forward. But Americans still like their cars, you know? The puzzle was trying to make those cars as efficient as humanly possible.

    That "American-ness" of cars is often pointed to as a flaw in the industry.

    But if you look at what sells, it's pretty much still traditional. There's a slight shift from trucks to crossovers, but people are still buying minivans, crossovers, E-segment sedans, middle market cars. There's definitely some very noticeable growth in small cars, but it's kind of slow and progressive. I think that middle market -- which is where we play -- that segment is doing well.

    The plan seems designed to keep the company hanging on for 12 to 18 months until new products roll out, while relying on marketing to convince people this really is a "new" Chrysler.

    That's very perceptive. Number one is to get this whole brand thing established. Today, finally, each brand has its own [ad] agency. I have Weiden and Kennedy. They're famous for Nike and many others. That is part one. The auto industry unfortunately has historically been a quarter-of-a-century kind of industry. The management team at Chrysler, we're looking at it as a long term, five-year plan. That's why we're not that anxious about the next few weeks. The media loves to talk about the quarter. We're aware of that. Considering what we went through, we're surprised we're doing as well as we are.

    There's a big emphasis on presentation, too, casting yourself to be humble, focused, austere.

    It's really how we feel. I'd rather under-promise and over-deliver.

    Have you seen a demonstrable impact yet?

    Huge. For a guy like me who's been around a long time -- even though I've always been here, I feel like I've worked for many different companies -- this by far is the most invasive change I've seen. The leadership team from Fiat -- these guys are fitting right in. They're bringing a can-do spirit to the team, like, "We've done this before. It seems impossible but it can be done."

    Will you be as psyched to introduce the first new Fiat as you were to introduce the 300C?

    It'll probably be the end of this year, and I'll be very psyched for it. For me, it's been a long road to get to this point when you can be truly, truly proud of a product. The beauty of all this is that we've been given the right tools. We're not shortchanging anything. We're really putting the right content in the product. In the past, there were things we could have done better. The first generation Ram -- if you look at that compared to today's Ram, it's a night and day difference.

    Is there more pressure? Do you feel like you have to get it right?

    Absolutely. We cannot screw it up this time. The whole company really wants to prove the world wrong, really wants to show up and represent and prove everybody wrong. We've seen other companies be written off in the past and come back stronger. Even Apple in the mid-90s was called junk bonds. You look at Audi ten years ago, Nissan five years ago. All these companies that had a rough time have come back. It starts with product, it starts with great leadership, and a team that is driven to success. And that is evident now. We're not just shrugging our shoulders and saying, "It was a downturn and we got sucked into it."