Chrysler's Bling King

By Daren Fonda/Auburn Hills

Ralph Gilles is showing off his Chrysler 300C, and as he points out details like chrome accents on the door trim, he insists that he has just one complaint: "It doesn't come with dubs." In hip-hop car lingo, dubs are oversize, 20-in. wheels. And Gilles is a big-wheel guy. An amateur racer, he hits the track on weekends with his 10-cylinder Dodge Viper--a nerve-racking hobby for his wife, the mother of his two young kids. As soon as he got his 300C for street use, he supersized it with black dubs. "It looks so good, I still get chills," says Gilles, 34. Of course, you wouldn't expect him to say otherwise, given that he is the vehicle's chief designer. But plenty of other folks think this Chrysler rocks, with or without those dubs.

The sedan, which went on sale in the spring, is the hottest iron out of Chrysler in a generation. Beefy, brash, styled like a gangstermobile, it is resonating with urban hipsters, popping up in music videos and car-makeover magazines, tricked out with big wheels, lowered suspensions and interiors with mini-bars and reclining seats. Shaq owns one; so does Snoop Dogg. The top-end 300C features Chrysler's popular 340-h.p. Hemi engine--a revival of the legendary V-8s that Chrysler built in the 1950s and '60s--the most car muscle you can buy in the $35,000 price range.

Indeed, the 300 model line (which starts at $23,920) is the first since the 1998 DaimlerChrysler merger to validate Chrysler's strategy of trying to take its brand upmarket with a series of premium, high-volume cars and a new emphasis on design. And the car is fueling a dramatic turnaround at the automaker. On the basis of strong sales of the 300, Chrysler reported last month that it swung to a $628 million operating profit in its second quarter, vs. a $1.2 billion loss a year earlier. Chrysler brand sales were up 17% in July over a year ago, and the company has orders for nearly 90,000 of the 300--making the launch Chrysler's strongest since that of the Jeep Grand Cherokee in the early 1990s. Says Chrysler Group CEO Dieter Zetsche: "We want to attack on the car side."

That's a reversal for a company that has spent years focused on light trucks--and, even there, idled while Ford and General Motors dominated the trend-setting hip-hop market with such SUVs as the Lincoln Navigator and the Cadillac Escalade. Until now the DaimlerChrysler merger has been known mostly for plant closures, job cuts and jet-lagged executives. Moreover, Chrysler's gambit to charge premium prices with such new products as its luxe Pacifica wagon has met with resistance from consumers. The vehicle sold poorly out of the gate, and sales improved only after Chrysler cut prices. The Chrysler Crossfire, a two-seat sports car based on a Mercedes-Benz platform, sold weakly before a price cut too.

The 300, however, suggests that the merger is finally paying off with a product that may generate profit growth. The 300 and other cars based on its German-inspired rear-wheel-drive platform--like the Dodge Magnum that hit dealerships in June--appear to be selling on their merits, rather than being pushed by profit-killing finance incentives. "It looks more like a Rolls-Royce or a Bentley," says John Dickens, 64, who traded in his Lexus SUV, worth $65,000 new, for a 300C at a dealership in Athens, Texas.

On the hot seat after a lousy 2003, CEO Zetsche wasn't going to leave any detail of the 300 to chance. Over lunch at Chrysler headquarters in Auburn Hills, Mich., he told TIME that he held talks with the design group to determine, down to the millimeter, the dimensions of the vehicle's imposing front grille. The chrome ringlets around the air conditioning and audio knobs: "That was from Dieter," says Gilles. Zetsche even suspended production of the air vents because they didn't close the way he wanted. "We had to have the courage to go for something different," Zetsche said.

To chart that direction, Chrysler handed the sketches for the 300 to Gilles, a maverick designer who as a teenager was inspired by race cars and dreamed of designing for Chrysler. Born in New York City into a Haitian immigrant family and raised in Montreal, Gilles was drawing cars at age 8. In the early 1980s, his sketches caught the attention of an aunt, who wrote to Chrysler chairman Lee Iacocca for advice. A few weeks later, a letter urging Gilles to attend design school arrived from K. Neil Walling, then Chrysler's design chief. Following a stint at an engineering college in Montreal, where Gilles says he spent too much time "drawing cars in class," he eventually enrolled in Detroit's College for Creative Studies.

After graduating in '92, Gilles landed at Chrysler, where he rose fast. At 31 he was appointed one of just seven studio chiefs. What got him noticed? "Probably my mouth," he says. "I've been pretty outspoken from Day One." While designing the interior of the Jeep Liberty, his first production vehicle, he got in a fight over chrome ornamentation, which other executives were convinced was too pricey. He recalls a meeting that wasn't going his way. "I got really emotional," he says. "For the first time in my life I made an impassioned plea to the marketing guys that this is something you have to pay for. If you don't, you're really screwing up the car." He won, and chrome is now a design element in several Chrysler models, notably the 300C.

The billion-dollar question is whether Chrysler can sustain the momentum on the 300 and its sister cars. The company is the king of one-hit wonders; its PT Cruiser won critical accolades, but Chrysler failed to capitalize with related models. The firm's loss of its innovation lead in minivans to Honda and Toyota is a legendary tale of Detroit arrogance. Chrysler's operating results have fluctuated sharply in recent years, leaving Wall Street skeptical that the firm's latest plan to introduce 25 new vehicles over three years will generate consistent profit growth. Chrysler executives say revenues from pricier vehicles, such as new Town & Country minivans equipped with seats that fold into the floor, are driving its revival. The company also has high hopes for a new Dodge Dakota and Jeep Grand Cherokee, due later this year.

What concerns analysts like Prudential's Michael Bruynesteyn is that Chrysler's mix of all-new or redesigned vehicles will be meager next year compared with that of rising rivals such as Honda and Nissan. And Chrysler has shown a penchant for resorting to costly incentives at the first whiff of sagging sales. Looking ahead, Zetsche says, "profitability is our No. 1 guiding principle," even if that means accepting a smaller share of the market. As for Gilles, he's hard at work on the next generation of Chrysler minivans. He won't breathe a word about their design. You can assume, though, that dubs will be sold separately.

--With reporting by Joseph R. Szczesny/Detroit

With reporting by Joseph R. Szczesny/Detroit