Chrysler Corp. (DaimlerChrysler)

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Walter P. Chrysler was already an experienced automotive executive when, during the 1924 New York Auto Show, he and a team of engineers unveiled the first car bearing the Chrysler nameplate. Production began later that year and the Chrysler Six sold nearly 20,000 units by the end of 1924. Due to that success, in June 1925, Maxwell Motor Corp., Mr. Chrysler's employer, was renamed Chrysler Corp.

Chrysler introduced two car brands for the 1929 model year—Plymouth was designed for the lower-priced segment, De Soto for the mid-priced market—and expanded by acquiring Dodge Brothers. Advertisers Inc., which handled the Chrysler account, took over Dodge, Plymouth and De Soto as well.

In early 1932, J. Stirling Getchell Inc. won the De Soto account and, a few months later, Plymouth; Ruthrauff & Ryan took over Dodge. That year Getchell created a print ad featuring a photo of Mr. Chrysler with his hand on the radiator of a Plymouth. Copy urged prospective car buyers to "Look at all three!" to encourage consumers to consider Plymouth alongside Ford and Chevrolet. The ad is credited with making the Plymouth brand a credible rival to the other makes.

In 1935, unit sales grew 44.1% over the prior year and, the following year, increased another 35.9%, with strong Plymouth sales alone reaching nearly 500,000 units. Mr. Chrysler resigned as president that year, but stayed on as chairman. He died in 1940 at age 65.

In 1940, Chrysler built its first two "idea cars"—Thunderbolt and Newport—to showcase and test new engineering and styling concepts. The Town & Country station wagon, with a unique wood-and-steel body and visible wood ribbing, was launched in 1941 with the "Be modern—buy Chrysler!" tag Getchell used for all Chrysler models that year.

In 1942, two years after its founder's death, Getchell closed, leaving Plymouth and De Soto without an agency. The Chrysler brand and corporate accounts for a time were handled in-house, but the automaker wanted a corporate campaign to publicize its wartime activities. In 1943, Chrysler made three new agency appointments: Plymouth went to N.W. Ayer & Son and soon afterward the Chrysler brand and corporate accounts went to McCann-Erickson. De Soto was given to Batten, Barton, Durstine & Osborn, while Dodge cars remained at Ruthrauff & Ryan and Dodge trucks at Ross Roy Inc.

When civilian automobile production resumed after World War II in 1946—factories had been converted to wartime production from 1942 to 1945—Chrysler introduced new sedan, coupe and convertible versions of the Town & Country. Starting in 1947, ads for Chrysler brand cars touted "The beautiful Chrysler," a theme that continued for three years. Postwar ads for Dodge called it "The smoothest car afloat." Plymouth's slogan was "Plymouth builds great cars," while De Soto's tag was "The car designed with you in mind." The first all-new Chrysler models since the war were presented in 1949, and Chrysler Corp. unit sales topped 1 million for the first time.

Expansion of advertising

After the war, Chrysler, which had concentrated its advertising almost exclusively in print, began to favor broadcast media, and the company moved its accounts to experienced broadcast agencies such as BBDO and McCann-Erickson. The automaker sponsored "Hit the Jackpot" and "It Pays to Be Ignorant" for Chrysler and, for seven years starting in October 1950 on both radio and TV, "You Bet Your Life" with Groucho Marx for De Soto.

In the record-breaking U.S. car market of 1955, Chrysler unit sales rose 62.3% to 1,254,124 vehicles, a record for the company. Ad spending was $68.6 million, up 60.8% over the prior year; this more than doubled newspaper spending and nearly doubled network TV spending. The Imperial nameplate was used as a stand-alone luxury brand that year and 1956 ads for Chrysler products touted a new "Magic Touch" push-button automatic transmission.

Ad spending in 1956 dropped to about $60 million, mainly due to a cutback in newspaper spending, as unit sales fell 23%. Ads of the era for all Chrysler brands touted the new "Forward look" of the finned cars. The introductory ads for the 1957 Chrysler products proclaimed "Suddenly—it's 1960!" and the Chrysler brand cars were advertised as "The most glamorous cars in a generation." Chrysler Corp. ad spending in 1957 grew by 20.3% and unit sales were up 17.2%.

In February 1958, McCann caused a stir in the ad industry by resigning the Chrysler corporate and Chrysler and Imperial car accounts to take on General Motors Corp.'s Buick business. Chrysler named Young & Rubicam to handle Chrysler and Imperial brand advertising and Leo Burnett Co. for corporate advertising. Ad spending, however dropped 18.7% in 1958, and Chrysler Corp.'s unit sales tumbled 40.4%.

To compete in the new small-car segment, in 1959 Chrysler introduced the compact Valiant for the 1960 model year, and BBDO won the account. Dodge also introduced a low-priced Dart series that year. The Dart more than doubled Dodge's unit sales over the previous year and accounted for about 85% of the division's sales in 1960. The De Soto was not faring as well, however, and the automaker dropped the brand after the 1961 model year.

In 1960, Chrysler overhauled its agency roster. BBDO lost Valiant and De Soto but gained both Dodge cars (from Grant Advertising) and Dodge trucks (from Ross Roy). Ayer, the Plymouth agency, took over Valiant and the soon-to-be-axed De Soto, mirroring the divisional alignment of the company.

Reorganization

In 1961, Chrysler named administrative VP Lynn A. Townsend president; Mr. Townsend remained president through 1967, when he became chairman. Divisions were reorganized, with Plymouth-Valiant and Chrysler-Imperial merged into a single Chrysler-Plymouth division.

The mid-1960s saw strong growth in the U.S. auto market and Chrysler capitalized on this trend. Unit sales for the decade peaked at 1.6 million in 1968, nearly 1 million more cars than the company had sold in 1962. Chrysler earnings also skyrocketed, as did ad spending, reaching more than $82 million in 1966. During this period Chrysler spent heavily on TV sponsorship, including the weekly "Bob Hope Theatre" on NBC.

In 1966, Y&R added the $30 million Plymouth account to its Chrysler corporate, Chrysler and Imperial work. Y&R's first campaign for Plymouth, for the 1967 models, used the tagline, "Plymouth is out to win you over." For 1968, the tag was changed to "The beat goes on," and the campaign featured English pop singer Petula Clark in TV and radio spots. Also in 1968, Plymouth premiered its Road Runner muscle car, purchasing the rights to the animated Warner Brothers Seven Arts Road Runner cartoon character. The cars featured a horn that echoed the "beep-beep" of the character and the animated character was used in print ads and broadcast spots.

For Dodge, BBDO used the tagline, "Join the Dodge rebellion," in 1966 and continued it with a military theme for the 1967 models. The theme was changed to "Dodge fever" for the 1968 and 1969 model years.

Chrysler moved its corporate ad account out of Y&R in 1970; the TV portion went to BBDO and print and radio advertising went to Ross Roy Inc.

Chrysler Corp.'s earnings fell sharply in 1970 as a recession hit the U.S. Ford and Chevrolet wooed cost-conscious consumers with U.S.-manufactured subcompacts, the Pinto and Vega. But Chrysler, lacking a comparable model, instead imported subcompact cars for 1971 from Japan's Mitsubishi Motors Corp. and rebranded them. Later that year, Chrysler bought an equity stake in the maker of its "captive import," marking the start of a long, sporadic association with Mitsubishi.

In 1972, Chrysler Corp. unit sales jumped 16.5% over the prior year to a record 1.7 million and peaked for the decade in 1973 at 1.8 million. Ad spending for 1973 was nearly $96 million. Chrysler's compact cars, the Plymouth Valiant, Duster and Dodge Dart, sold well in the early 1970s, and the company returned to profitability after suffering a loss in 1970. Dodge trucks, riding on the rising popularity of the recreational vehicle market, surged 72% in 1972 and another 23% in 1973. The ad theme for 1972 Dodge cars and trucks was "Dodge. Depend on it."

Energy crisis and recession

The bottom dropped out of the U.S. car market in 1974. Chrysler's unit sales fell sharply for two straight years, and the company suffered operating losses. Facing a large inventory of unsold cars, Chrysler introduced the "Chrysler Car Clearance Carnival" on Super Bowl Sunday in January 1975, promising buyers of select Chrysler products a rebate check of $200 to $300. The ads featured former baseball player Joe Garagiola, who continued as a Chrysler spokesman until 1980, and introduced the concept of automotive incentive advertising.

When Chrysler introduced a new, intermediate-sized coupe for the 1975 model year, Y&R came up with an ad campaign showing the car in a Spanish-style courtyard. In the TV spots a guitar strummed as Ricardo Montalban walked around the car, extolling its virtues. His elegant demeanor and rolling R's, most apparent as he described the "rich Corinthian leather" of the car's upholstery apparently appealed to buyers. The new Cordoba succeeded, more than doubling Chrysler brand sales in 1975, an otherwise poor year for the company and the industry. Mr. Montalban became synonymous with the Cordoba and, when Chrysler discontinued it after the 1983 model year, the automaker continued to use him in other advertising.

In 1975, Chrysler suffered a financial loss of more than $250 million; but by late that year the corporation finally updated its aging compact-car lines and introduced the Dodge Aspen and Plymouth Volare. Chrysler's U.S. ad spending for calendar year 1976 topped $100 million for the first time, as unit sales soared 32% over 1975 on the strength of a rebounding U.S. auto market. The company returned to profitability.

Chrysler's ad expenditures were up another 15.4% in 1977, largely due to increased magazine and direct-mail spending, although unit sales slipped due to delays in introducing the 1978 models.

Difficult times

The following year marked the start of a disastrous period for Chrysler Corp. in which the company nearly went bankrupt. Chrysler Corp. suffered a loss of more than $204 million. Ad spending had been increased a staggering 48% to nearly $189 million, but despite that effort, unit sales slumped. Former Ford executive Lee A. Iacocca became president of a desperate Chrysler Corp. in November, and within a year was named chairman.

One of Mr. Iacocca's early actions was to fire in 1979 longtime agencies Y&R, which had Chrysler-Plymouth, and BBDO, which had Dodge. Both accounts went to Kenyon & Eckhardt, whose Leo Arthur Kelmenson had developed a relationship with Mr. Iacocca when he was at Ford.

In 1979, Chrysler became the first U.S. corporation to lose more than $1 billion. Its U.S. market share for cars and light trucks slipped to less than 10% and, in the last half of the year, the company spent $200 million on sales incentives and cash rebates in a futile attempt to stem losses; it also launched a nearly $10 million corporate-image campaign to improve public perception of the company.

With the company's financial situation worsening, Chrysler Corp. took the drastic step of turning to the U.S. government for relief. While the politicians considered the matter, Chrysler introduced its 1980 models and Dodge's long-running "Dodge trucks are ram tough" tagline debuted. Mr. Iacocca appeared on camera in brief tags to existing commercials saying, "I'm not asking you to buy a car on faith. I'm asking you to compare." As October sales dropped 57% over the prior year, Chrysler instituted a new round of rebates. In late 1979, Congress approved a $1.5 billion loan guarantee package to bail the company out. Chrysler ran newspaper ads on the last day of the year referring to itself as "The New Chrysler Corp."

"The New Chrysler Corp." corporate campaign tried to lure customers back into showrooms by offering a money-back guarantee, free auto club memberships, no-cost maintenance and $50 for test-driving a Chrysler vehicle. Mr. Iacocca became the company's chief public spokesman, appearing in a series of TV spots and magazine ads. 1980 was another year of huge losses for Chrysler Corp., more than $1.7 billion. Ad spending was increased in an effort to stay in the game, though sales fell to barely more than 1 million units and hovered at that level through 1982.

With the introduction of the K-cars, the Dodge Aries and Plymouth Reliant, the company boosted ad spending again, to $193 million in 1981. Themes for the new cars' introduction were "The American way to beat the pump" and "America's not going to be pushed around any more"—the latter a reference to the cars' front-wheel drive and to the success Japanese automakers were having at the expense of the Big Three. The K-cars were instrumental to the company's recovery, quickly becoming the best-selling cars in its lineup.

Recovery

In 1982, Chrysler finally had a profitable year again, once again increasing ad spending. Although sales of the base K-cars declined, strong sales of the new, more luxurious Chrysler LeBaron and Dodge 400 K-car derivatives more than compensated. Chairman Iacocca continued to appear in ads, challenging consumers, "If you can find a better car, buy it."

Chrysler brought back Mr. Montalban in advertising, this time as spokesman for its overall line. Plymouth's theme for 1981 and 1982 was "The American way to get your money's worth"; Dodge used "America's driving machine" for cars and continued the "Ram tough" tag for trucks. In late 1982, Chrysler rehired BBDO as the Dodge agency and its first new commercials for the brand broke in early 1983.

Strong profits returned in 1983 and the automaker was able to repay its bailout loans seven years ahead of schedule. The company introduced the minivan, a new type of family vehicle, in fall 1983 for the 1984 model year, and Dodge's Caravan and Plymouth's Voyager led a new segment of the auto market.

Chrysler's recovery seemed complete in 1984, as it logged record profits of nearly $2.2 billion and unit sales surged 31.6%. Ad spending grew to $344 million, including large increases in network TV and magazine spending. In spring 1985, Chrysler Corp. announced plans to expand its holdings in Mitsubishi to 24%.

By 1986, Chrysler Corp.'s advertising spending topped half a billion dollars and sales continued to climb. The following year Chrysler acquired American Motors Corp. for $800 million, giving Chrysler Jeep. With the AMC acquisition, Chrysler Corp.'s unit sales topped 2 million for the first time in 1987.

Chrysler retained AMC's former ad agency, William Esty Co., soon to be Campbell-Mithun-Esty, as the agency for the Jeep and new Eagle brands. The agency continued its "Only in a Jeep" tag for the line of sport-utility vehicles, which proved to be the chief asset of the AMC deal.

For 1989 Dodge advertising changed its tagline to "The new spirit of Dodge," while Chrysler brand vehicles used the tag "Driving to be the best."

In the early 1990s, unit sales dropped sharply, reaching just more than 1.5 million units in 1991. But despite the sales drop Chrysler maintained ad spending of more than $500 million for 1990 and 1991. Also in 1991, the corporation sold its stake in Mitsubishi Motors, and "Advantage: Chrysler" became the automaker's new corporate theme.

Early in 1992, Dodge introduced the Viper and the Jeep Grand Cherokee, which would become instrumental for the company as the sports-utility market began to experience explosive growth. That year, Mr. Iacocca announced plans to retire, and in March, Chrysler appointed Robert J. Eaton, formerly president of General Motors Europe, to the position of vice chairman-chief operating officer, poised to succeed Mr. Iacocca. In his last ad appearance for Chrysler, Mr. Iacocca introduced the new family-sized LH cars, the Dodge Intrepid, Eagle Vision and Chrysler Concord, which were launched at the end of the year as 1993 models.

Advertising for the new LH cars focused on their "cab forward design." Sales of the new cars, as well as sales of Jeep vehicles, surged and Chrysler Corp.'s unit sales grew nearly 20%, topping 2 million units once again. In 1993, the automaker increased its ad spending more than 38% to $756 million, with network and spot TV as well as magazines the chief beneficiaries.

In 1994, Chrysler Corp.'s earnings reached $3.7 billion and the new Dodge Ram full-sized pickup was introduced. BBDO used "The new Dodge" as the umbrella tag for the brand. For the 1998 models, the theme became "We're changing everything again," as Dodge truck sales alone topped 1 million units; for the 2000 models the tag became "Dodge. Different."

Formation of DaimlerChrysler

In 1998, Chrysler Corp. and Daimler-Benz, the marketer of the Mercedes-Benz brand, agreed to combine their businesses. The deal, in actuality a buyout of Chrysler Corp., gave Daimler-Benz mass-market brands in North America to complement the luxury Mercedes brand. The merged company was christened DaimlerChrysler; Daimler-Benz Chairman Juergen Schrempp and Chrysler Chairman-CEO Robert Eaton became co-chairmen of the new company until Mr. Eaton's retirement in 2000.

At the end of the 1998 model year, DaimlerChrysler discontinued the Eagle brand, and in 1999 it announced the phase-out of the dwindling Plymouth. The following year, DaimlerChrysler bought a controlling 34% stake in Chrysler Corp.'s old Japanese partner, Mitsubishi, and a 10% stake in Hyundai Motor Co. of South Korea.

The new company in 1999 transferred North American advertising for Mercedes-Benz vehicles from Lowe & Partners/SMS to Merkley Newman Harty, a boutique shop within Omnicom Group, a move that turned out to be a harbinger of further agency consolidations.

In late 2000, the company consolidated the estimated $2.4 billion global advertising account for the Chrysler brands at BBDO Worldwide, which previously handled Dodge and all DaimlerChrysler media buying through its PentaCom unit. The new combined account constituted the largest in the automotive industry. PentaMark Worldwide, formed in 1998 by BBDO to oversee the agency's Chrysler business, assumed the additional work in January 2001. The agency dropped the PentaMark name in the U.S. in 2002 and returned to BBDO, but kept it outside the U.S. to avoid conflicts with car accounts at BBDO offices abroad.

Chrysler's $10 billion cash on hand at the end of 1999 dwindled to zero by the end of the next year. In the third quarter of 2000, Chrysler plunged into the red and by year's end had lost $1.8 billion. American executives were let go and Germans put in key positions.

The automaker made several advertising gaffes in attempts to be edgy from fall 2001 into 2002. Several TV commercials had to be yanked or changed due to criticism.

After six consecutive quarters of losses, Chrysler posted an operating profit in the first quarter of 2002 in the wake of thousands of job cuts and other cutbacks. German-born CEO Dieter Zetsche quipped at the opening of that earnings press conference: "Only every 10 years Chrysler returns to profitability. I can tell you this is the last time." But Chrysler again lost $1 billion in the second quarter of 2003.

The carmaker flubbed its plan to move the Chrysler brand upmarket in early 2003. It inked a $14 million, three-year deal with songbird Celine Dion, who appeared and sang in TV ads to launch the new Pacifica created by Omnicom's Arnell Group, New York with sibling BBDO. The executions didn't explain that the vehicle offered qualities of a sedan, minivan and sport utility. Ms. Dion’s presence in ads was cut in 2003, and in 2004 her music also disappeared from ads.

In 2003, DaimlerChrysler was the No. 5 national advertiser in the U.S., with ad spending of $2.3 billion, up 14.1% from 2002, according to Advertising Age. It spend $509.5 million on Chrysler, up 16.5% from the previous year; $584.8 million on Dodge, up 17.3%; $334.3 million on Jeep, up 17.4%; and $145 million on Mercedes-Benz, up 6.9%.

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