Eaton, Robert J.

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Eaton, Robert J.

(1940-)
Chrysler Corp.

Overview

When Robert Eaton became head of the Chrysler Corporation in 1992, it marked the start of a singular new era for the automaker. Beset by problems for years, including poorly-built cars and financial mismanagement, Chrysler had been put back on the right course by the colorful, but often tyrannical Lee Iacocca. Eaton, a longtime General Motors executive with a far more reserved demeanor, would later steer Chrysler into the history books himself by engineering a first-of-its-kind merger with German automaker Daimler-Benz.

Personal Life

Eaton was born on February 13, 1940, in Buena Vista, Colorado, but moved to the Kansas town of Arkansas City when he was young. His father was a railroad brakeman, and his mother a hairdresser. At the age of nine, he had a paper route that netted him 35 cents a day, and with that savings managed to buy his first car at the age of 11 for $10. He then spent another $15 to put the Chevy on the road. He had his driver's license at the age of 14, as was common in some states in the 1950s, and through high school and college Eaton worked a number of jobs in order to indulge his love of hot rods and classic roadsters; he also raced motorcycles. These jobs included working as a janitor in a Montgomery Ward department store, and supervising the night shift in a pea cannery.

Not surprisingly, Eaton chose to study mechanical engineering at the University of Kansas. He earned a bachelor of science in 1963 and only interviewed with one company, since he wanted no other job but one at General Motors' Chevrolet division. He was hired as an engineer, and drove to Detroit from Kansas in a 1955 Chevrolet. Cornelia Drake became his wife in 1964, and the couple would have two sons. As Chrysler chair, Eaton drives one of the high-performance Dodge Viper sportscars.

Career Details

Eaton's first job at GM was at its axle plant in Warren, Michigan, and he soon entered a graduate training program in the company for young engineers. The program introduced them to several different areas of the automaker in preparation for a future management post. "That was the best thing that ever happened to me," Eaton told Marjorie Sorge in an interview in Automotive Industries. "I got a tremendous exposure to the industry. That had a very significant effect on how I view everything. It was a very positive thing we don't tend to do as much any more."

As a young engineer, Eaton became involved in the Corvair debacle not long after he moved over to the GM Technical Center, also in Warren. The sportscar had been declared by consumer activist Ralph Nader to be "unsafe at any speed"—the title of an actual book—and GM set out to defend its reputation. Eaton became the demonstration driver in training films for the car, and when there was a Corvair accident, he investigated and staged a run-through in which he performed all the same maneuvers as the driver had, only at much faster speeds. He was often called upon to testify in court.

Eaton advanced to the position of chief engineer in the Chevrolet division in 1975, and a year later to chief engineer in the corporate programs. In 1979 he was named assistant chief of the Oldsmobile division, then GM's director of reliability and a vice president in 1982; from 1986 to 1988 he oversaw the company's technical staffs group, and then was given the plum post of president of GM Europe in 1988. When Chrysler was looking for a replacement for the retiring Lee Iacocca, Eaton's record in running GM's important European division was brought to the search committee's attention. He was interviewed for the top job, and accepted it on the condition that he would be both board chair and CEO.

Eaton's arrival back in the States in early 1992 to become head of the world's number-three automaker surprised many. A top Chrysler executive, Bob Lutz, was thought to be in line for Iacocca's job. But the directors were eager to begin a new era, and Eaton's quiet demeanor and low-key personality made him the top choice. In 1996, after Eaton took over the president's title from Lutz, who was made a vice-chair, industry watchers waited for signs of a rift at the upper levels at Chrysler, the high drama and infighting that has characterized the industry for decades, but "the two Bobs," as they are known in Detroit circles, get along famously and often poke fun of one another in meetings.

Social and Economic Impact

The fortunes of Chrysler have been the most precarious among the top three American automakers almost since its inception. It is neither the financially sound company that has perched at the top of the Fortune 500 list for years, GM, nor does it possess the strong international presence of Ford. Twice Chrysler has teetered on the verge of bankruptcy: once in the late 1970s, when it received loan guarantees from the U.S. government, and again during a recession in the early 1990s. Eaton came aboard as Chrysler was retooling for a new era and had eradicated many of the engineering, marketing, and financial problems that had led to its near demise. By 1996 it was a very profitable company that had cornered both the minivan market and virtually launched the sport-utility vehicle craze with its Jeep Grand Cherokee. It also had a line of well designed mid-sized cars and a high profit-per-vehicle ratio.

Chronology: Robert J. Eaton

1940: Born.

1963: Received B.S. from University of Kansas.

1964: Married Cornelia Drake.

1975: Named chief engineer with General Motor's Chevrolet division.

1979: Named assistant chief of Oldsmobile division.

1982: Named GM vice president.

1988: Appointed president of GM Europe.

1992: Hired by Chrysler as vice chairman.

1993: Named CEO of Chrysler.

1996: Became president of Chrysler.

1998: Engineered merger with Mercedes automaker Daimler-Benz.

Under Eaton, Chrysler's shortcomings in the growing international market were remedied in a May, 1998 event that made headlines on two continents. A merger was announced with German automaker Daimler-Benz, maker of Mercedes-Benz, that was the first of its kind, and it was a deal in which Eaton played a major role. He would become co-CEO with Daimler-Benz chair Juergen Schrempp for three years when the merger was finalized at the end of 1998. Eaton is also looking to bring Chrysler vehicles to other parts of the world. It opened plants in South America in 1998 that made Grand Cherokees and Neons for that market, and also entered Brazil as a manufacturer. He was also guiding the research and development teams at Chrysler's state-of-the-art technical center in suburban Detroit to put a viable "CCV" on the market. This "composite concept vehicle" would be an energy efficient cross between a motorcycle and a small passenger car designed for the bicycle-loving urban millions in up-and-coming Asian nations such as India and China.

Eaton's accomplishments at Chrysler, even before the Daimler-Benz deal, led the magazine Automotive Industries to name him Executive of the Year in 1997. That may have come about as the result of his thwarting of a hostile takeover bid by two major shareholders, an investor named Kirk Kerkorian who had teamed with a disgruntled Iacocca. Years away from the usual age of retirement (Eaton turned 58 in 1998), he also hopes to resurrect the idea of the intern and management training program that made such an impact on him early in his career. The reporter J. P. Donlon of Chief Executive asked Eaton how he wanted to be remembered in the industry, and Eaton commented upon the periodically precarious financial situation at Chrysler over its last few decades. "I want to be the first chairman of Chrysler who never has to bring this company back from the brink of bankruptcy. I want us to be on the opposite side of that, the most financially stable auto company in the world."