Chrysler has been saddled with a reputation for poor quality over the last few years, but the company’s new owner — Cerberus Capital Management – is making sure that quality becomes job one at the Michigan automaker. Although Chrysler’s quality turnaround is in its early stages, it appears as though Cerberus has the automaker on the right track.
According to the Detroit Free Press, Chrysler has decreased its warranty claims rate by 29 percent since February – the same month that Cerberus initiated a new quality program at Chrysler. In all, the decrease in warranty claims will likely save Chrysler “hundreds of millions of dollars”.
But Chrysler is also finding out that fewer warranty costs doesn’t exactly translate into higher quality. While Chrysler products are showing improvements in warranty claims, its vehicles aren’t faring as well in industry surveys. In reports by Consumer Reports and J.D. Power, Chrysler vehicles still consistently rank below the industry averages in initial quality. But by saving millions of dollars a year in warranty costs, Chrysler will be able to focus more on the design and quality of its vehicles.
Doug Betts, Chrysler’s chief customer officer, admits that Chrysler’s turnaround “will take awhile”, but it’s good to see that Cerberus has nudged the once proud automaker back onto the right path.
