Some crashes have potentially disastrous consequences, and not just for flesh, blood, glass and metal.
The first-generation Mercedes-Benz (W168) A-Class was one of the most radical, bold and innovative designs in the company’s history. It was not only the company’s first transverse-engined FWD production car, but featured an innovative sandwich double-floor structure and an unusually tall but short body that was designed to provide greater than C-Segment passenger accommodation within a footprint no larger than that of a B-Segment supermini. The engine and transmission were engineered in such a way that, in the event of a heavy frontal impact, they would slide beneath the floor of the passenger cell, protecting front seat occupants from injury.
Mercedes-Benz hoped that the new A-Class, although a small car, would be perceived as exemplifying the company’s traditional commitment to engineering excellence and passive safety, so be regarded as superior to other offerings in its segment. The company also needed a smaller and more economical model to help improve its Corporate Average Fuel Economy (CAFE) ratings in the vital US market.
The car was launched at the Frankfurt Motor Show in September 1997 and initial public and press reaction was very positive. This would, however, prove to be a short honeymoon.
Press demonstrators were duly provided to automotive publications for review. One of those publications, Teknikens Värld, a leading Swedish motoring magazine, subjected the A-Class to what it called its Moose Test* on 21st October 1997. This involved driving the car, carrying its maximum payload of passengers and luggage, through a slalom of cones at 60 km/h to test its stability in the event of an abrupt change of direction immediately followed by a correction. Shockingly, at the second attempt the car rolled over, injuring two passengers and leaving its driver, journalist Robert Collin, shaken.
Jürgen Hubbert, head of Mercedes-Benz’s car division, was at the Tokyo Motor Show, unveiling a design study for the forthcoming Maybach limousine, when news of the failed Moose Test reached him. Hubbert finished his press conference and flew back to Germany with his team later that same day. He quickly realised the reputational damage that this incident could do, not just to the A-Class, but to the whole company.
The company’s first instinct was to dismiss the failed test as an extreme one-off event, but news that other motoring publications were planning to subject the A-Class to similar tests forced a change of strategy.
A team of Mercedes-Benz people from development, production and corporate communications was assembled, based in a conference room adjacent to Hubbert’s office. This core team of around seven was augmented with people from Bosch, who supplied ESP systems to the company, and Springer & Jacoby, Mercedes-Benz’s advertising agency. At its peak, more than thirty were involved with the team, which met daily for over a month as it developed its technical and communications strategy in response to the crisis.
As the individual with overall responsibility for the Cars Division, Hubbert felt obliged to offer his resignation to Mercedes-Benz CEO Jürgen Schrempp. In doing so he was also nobly shielding his junior colleague Dieter Zetsche, who was Head of Product Development while the A-Class was developed, so would have had direct executive responsibility for the debacle.
In the event, Schrempp refused to accept Hubbert’s resignation, instead replying “That’s out of the question, fix it.”, according to Hubbert in an interview after he retired from the company in 2004. Zetsche would go on to succeed Schrempp as Chairman of DaimlerChrysler in January 2006 and was the chief architect of the Chrysler demerger a year later**.
Production of the A-Class was immediately halted. It quickly became clear that all 17,000 cars already built would have to have ESP installed retrospectively. This included around 2,600 already delivered to customers, which were recalled. All future cars would have ESP fitted as standard. Adjustments were made to stiffen the rear suspension to improve stability, albeit at the expense of ride quality. The total cost of the remedial work was put at DM300 million, a very substantial sum, even compared to the reported DM2.5 billion cost of developing the new model.
The public relations strategy was to admit the failing fully and demonstrate an uncompromising determination to fix the problem and ensure customers were not put at risk or financially disadvantaged. Mercedes-Benz was widely praised for its openness and swift, decisive response but, behind the scenes, some questionable actions were taking place.
It was revealed that the company had carried out its own Moose Tests on a number of models from its competitors to see how they might fare in similar circumstances. Hubbert later acknowledged that such tests had taken place but insisted that this was a learning exercise for a company unfamiliar with this particular test and not an attempt to discredit its competitors’ products.
Mercedes-Benz successfully handled the Moose Test crisis and the A-Class would go on to sell around 1.1 million units before the first generation model was replaced in 2004. However, the company allegedly lost over €2.5 billion*** on the W168 programme. The losses were incurred largely because the car’s FWD technology was unique to that model and not shared with any other vehicles in the company’s range. Also, the sandwich floor structure was complex and expensive to manufacture.
With the second generation, Mercedes extended the use of the A-Class technology to the larger B-Class and Vaneo models in an attempt to amortise the cost across a wider range of vehicles, but with limited success, hence the switch to the wholly conventional third generation model, which was not much more expensive to make, but looked a lot more car for the money.
The W168 A-Class would later be perceived as emblematic of the disastrous decline in the company’s product quality, with its cheap and brittle interior plastics, an extraordinary range of mechanical faults and propensity to rust prematurely. Top Gear Magazine rated the A-Class 12th from bottom out of 137 models in its 2003 survey of owners. The Honest John motoring website warned potential buyers that they should “…not attempt to run an A-Class more than three years old other than on a good extended warranty.”
* Which subsequently became more widely known as the ‘Elk Test’.
** Proving that there’s no room for sentiment in business, Zetsche, on assuming the Chairmanship of DaimlerChrysler, immediately began plotting the disposal of its troublesome American partner, where he had been President and CEO for the previous five years!
*** From Bernstein Research, quoted in Automotive News Europe.