Monday, April 14, 2008

Chrysler's quest for quality lured Nissan exec Betts

Chrysler's Doug Betts: "Everybody in the company has an effect on customer satisfaction or dissatisfaction."

DETROIT — When Chrysler LLC first contacted Doug Betts last summer, the Nissan quality chief's main worry was that Chrysler was trying to poach members of his Nashville-based staff.

Little did Betts realize that the initial contact would lead him to a new job, one that's virtually unheard of in the auto industry: chief customer officer. Betts' task is to launch a new quality system into every department of Chrysler.

"Everybody in the company has an effect on customer satisfaction or dissatisfaction," he says. "Somebody needs to oversee that."

Betts, 44, has a big job. This year Chrysler vehicles tied Suzuki for last in Consumer Reports' annual auto issue, where Chrysler vehicles finished at or near the bottom of rankings for overall quality in every segment in which they compete.

Chrysler is trying to react quickly to what customers say about its vehicles. The company has announced about 500 changes to its vehicles and promises many more.

Betts' task: Improve performance on the assembly line; at parts factories, retail lots and dealer service bays; and on industry score cards. He has moved quickly, forming 18 customer satisfaction teams that started work in February and involve nearly 250 people.

"He's got a tough challenge ahead of him," said Neal Oddes, director of product research at J.D. Power and Associates. "He's got to get the new products off to a good start and get the old products back to where they were. It's a very important task."

Betts' odyssey started with a phone call from an official at Cerberus Capital Management last July, shortly after DaimlerChrysler AG announced that the New York private equity firm was the winning bidder for Chrysler.

Quality checklist
Doug Betts' 6 types of vehicle quality

1. Ordinary: A power window doesn't work properly

2. Dissatisfaction: Cupholders sit too low

3. Regulatory: A vehicle recall

4. Perceived: Customer thinks interior is cheap

5. Performance: Road noise inside the vehicle

6. Service (before or after sale): Salesperson lacks product knowledge

'You're right!'

The Cerberus executive offered Betts a job. Betts declined. But the executive persisted. In August, Betts went to Atlanta to talk with newly anointed Chrysler CEO Bob Nardelli.

What ensued was a three-hour conversation in which Nardelli picked Betts' brain about quality issues.

"I told him my view, which is that the way quality needs to be managed is similar to the way a CFO manages money in a company," Betts says. "Everybody in the company has an effect on customer satisfaction and dissatisfaction, and somebody needs to oversee that plan.

"He said: 'You're right!' "

Betts didn't want to leave Nissan. He and his family were happy in Nashville. Nissan CEO Carlos Ghosn had given Betts wide-ranging authority to build a quality system within Nissan.

But Nardelli was persistent.

"He eventually convinced me to give it a try," says Betts. "He got it. He understands how complicated quality can be."

Doug Betts
Vice president and chief customer officer, Chrysler, Oct. 2007

Previous experience
-- Nissan Americas: Senior vice president of total customer satisfaction, April 2006; vice president of manufacturing quality, Sept. 2004
-- Toyota Motor Manufacturing of Indiana: General manager of quality, 1997
-- Michelin Tire Corp.: Various jobs, 1987-95
-- General Motors: Quality engineer/supervisor, Buick City Complex, 1986

Bachelor's in mechanical engineering, Georgia Tech, 1986

BlackBerries buzzing

One other factor tipped Betts' decision to move to Chrysler. He was sitting in a Nissan meeting one afternoon when the participants' BlackBerries all started going off at the same time. One of the executives blurted out an expletive. The BlackBerries were buzzing because Jim Press had just jumped ship at Toyota to join Chrysler.

"I decided it might be a good idea to go there if he went," says Betts.

Press, Chrysler co-president, is now Betts' boss. Both spent time at Toyota, where Betts worked at the Princeton, Ind., truck plant. Earlier in his career, Betts was a quality manager at Michelin North America Inc., where he worked for Ghosn.

What caught the attention of Cerberus and Chrysler were the dramatic improvements in quality Betts made in vehicles manufactured at Nissan's Canton, Miss., factory. After Nissan experienced problems, Ghosn put Betts in charge of finding a solution.

Betts formed 13 strike teams covering areas such as electronics, brakes, handling, suspension, interiors, squeaks and rattles and other issues.

The teams aggressively set about working on areas where Nissan fell short in customer satisfaction surveys or had been hit with warranty claims.

Nissan's quality ratings soared. The Quest minivan was the most improved vehicle in the industry from 2004 to 2005. That got Betts promoted to another job: Nissan global chief of customer satisfaction.

Professor of quality

Betts, a soft-spoken man with dark hair and a droll wit, got his first auto-related customer satisfaction job at the tender age of 14, when he worked at Washburn Chevron, a full-service gas station in Albany, Ga.

The owner's entire business was "regular customers who were paying 20 cents more per gallon," Betts recalls. "He built his business on relationships with those customers."

Traditionally, the industry has approached quality in a reactive way, fixing defects after they've appeared. Betts likes to say: "A defect is like a dead body. We're at the crime scene, but we're too late."

So it's important to Betts to find the root cause of a problem. That's why all his quality teams have people from manufacturing, procurement, product development and product quality areas of Chrysler sitting in on the meetings.

Betts also listens in on complaint calls to Chrysler's customer call center.

"I'm looking at a way to get the emotion of those calls," he says.

Taking the information he hears from customers and what his quality teams are gathering, Betts hopes he can help transform Chrysler in the eyes of consumers.

"We want the next batch of cars we launch to be winning competitions."

Lindsay Chappelln contributed to this report

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