How the Dodge Viper Brought Chrysler Back From the Dead

The Dodge Viper has always been a fearsome machine. It’s the only mass-produced two-seat sports car to use a front-mounted V10 engine, and it was exclusively available with a six-speed manual transmission. The first-generation Viper RT/10 roadster had no air conditioning, no glass side windows, and no exterior door handles. The last of the Vipers, built in the 2017 model year, had all the basic creature comforts you’d expect from a pricey sports car, but with 645 horsepower and rear-wheel drive, it was still a raw, untamed beast.

But the history of the Viper is more than just a tale of horsepower and speed. According to auto industry mogul Bob Lutz, the first-generation Viper helped bring Chrysler back from the brink of failure.

Lutz was Vice Chairman of Chrysler when the Viper project was launched; his full career includes executive positions at BMW, Ford, Chrysler, and General Motors. Now 92 years old and mostly retired, Lutz is still one of the most quotable, straight-talking executives in the auto industry. Today, we’re looking back on the story of how Lutz pushed the Dodge Viper from concept car to production in the late 1980s and early 1990s—and how this iconic American sports car helped turn the tides and launch Chrysler into an era of unprecedented success. This article draws heavily from Lutz’s 1999 book, Guts: The Seven Laws of Business That Made Chrysler the World’s Hottest Car Company, with additional details from my keynote talk with Lutz at the Classic Car Club of Manhattan earlier this year.

The Viper was born on a drive through rural Michigan. It was 1988, and Chrysler was in a precarious position. The company had fought back from the brink of failure in the mid-1970s, largely on the success of two products: The compact, economical K Car, and the first incarnation of the modern minivan. By the late 1980s, Chrysler was struggling to figure out its next act. The automaker’s lineup was almost entirely made up of aging, uninspiring K Car derivatives that couldn’t compete against the latest offerings from GM, Ford, and the Japanese automakers.

All this was on Lutz’s mind as he blasted down the country roads of southeast Michigan. As he explains in Guts, Lutz was driving his Autokraft Mk IV Cobra, a replica of the legendary Shelby Cobra, powered by a big-block Ford engine. When it was introduced in 1962, the Cobra became an instant phenomenon. It was a racing success and a desirable sports car for the road, stealing thunder from the Corvette and helping Ford become a racing juggernaut.

Soon, an idea formed in Lutz’s head. Chrysler was working on a big-block V10 engine for the all-new Dodge Ram pickup truck, set to debut in 1994. What if Chrysler took that truck engine and slapped it into a small, lightweight, two-seat sports car? “[W]hat we most needed was […] some proof that Chrysler was not dead, that within our company there bubbled the optimism, creativity, and sense of outrage necessary for us to fight our way back to health,” Lutz writes in Guts. A Cobra-style sports car could provide exactly that kind of message to the world.

Thus inspired, Lutz explained his idea to the people at Chrysler who could help make it happen: Tom Gale, who was Chrysler’s head of design, and François Castaing, then the head of engineering for Jeep and pickup truck models. “It took the three of us about 10 minutes to decide to do at least some initial design sketches and preliminary mechanical layouts,” Lutz writes. Tom Gale sketched up an initial design idea, then had his team render it as a full-size clay model. When he saw the mockup, Lutz writes, “I was overwhelmed by its impact. I was immediately sold.”

The Viper concept car was displayed at the 1989 Detroit Auto Show. As Lutz describes it, the response was fervently positive. Letters came pouring into Chrysler, from all sorts of people across America, all of them desperate to own this striking new sports car. Even executives from competing automakers congratulated Lutz and his team for making such a splash—though rumors swirled that the top brass at Ford was sour about the Viper drawing inspiration from their own back catalog. “That we were shamelessly lunching off Ford’s heritage did not trouble me overmuch,” Lutz writes in Guts. “The Cobra’s mystique transcended any one company’s ownership.” Plus, as the executive points out, Carroll Shelby had long since severed ties with Ford and was an exclusive consultant of Chrysler at the time. Who better to tend to the second coming of the Cobra?

Now came the challenge of building a production, street-legal Viper. “We knew the project would have to be lean in terms of investment,” Lutz writes. “We knew it would have to be done fast, before the public forgot the show car’s impact”—and before Chevrolet could steal the Viper’s thunder with a new Corvette.

Lutz and the rest of the Viper crew knew they couldn’t build a car like the Viper through the traditional Chrysler path—slow-moving committees, endless research, and dense corporate hierarchy. “We needed a small, agile, highly motivated cadre of commando-type car buffs,” as Lutz puts it.

So Lutz, Gale, and Castaing called a meeting and asked for volunteers interested in working on Viper. From this list, the leaders picked 80 “shock troops,” and appointed Roy Sjoberg, formerly an instrumental member of the Corvette engineering team, as leader. A new Viper headquarters was established in a former AMC engineering building on the west side of Detroit. Compared to Chrysler’s business-as-usual, it was a radical departure. “Whenever a problem arose requiring input from several team members, Roy Sjoberg would ring a big handheld school bell, the signal for everyone to drop what they were doing, gather round, and hammer out a solution.”

Engineering the production-spec Viper was one problem. The team soon realized that the cast-iron V10 engine from the Dodge Ram pickup truck would be too heavy for a sports car; the Viper’s engine would be made of aluminum, adding cost to the program. A German transmission supplier wanted too much money to develop a six-speed manual gearbox that could handle the Viper’s power, so Lutz’s team worked out a deal to use the Tremec gearbox developed for the Chevrolet Corvette and Camaro.

The bigger challenge would be convincing Chrysler bosses that the Viper was worth pursuing. The team would need $80 million to develop the new sports car—”mere pocket change” for an all-new car, Lutz writes, but money that the struggling automaker might not justify spending on a low-volume sports car. At an anticipated price of $50,000, the Viper would be more than twice as expensive as anything Dodge had ever sold.

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This is where the Viper’s halo effect began to emerge. In the book, Lutz tells a story—which he repeated at the Classic Car Club event—of meeting with banks around the world in 1991 to secure ongoing financing for Chrysler. At one such meeting, an analyst asked Lutz what projects Chrysler would cut if the company was running out of money. “Putting on my most sober, fiscally responsible face, I told him we might have to cut the Viper,” Lutz writes. “The buttoned-up East Coaster recoiled in horror. ‘My god,’ he said. ‘You can’t do that! This car’s changing everyone’s perception of the company. It’s reestablishing confidence. It’s the last thing you should cut!’” In another such meeting, with a German bank, the chairman pulls Lutz aside to speak privately. Lutz braces, thinking he’s going to be told that the terms of their agreement have changed for the worse. The executive hands Lutz his business card. “I want you to contact me when that red sports car comes out,” Lutz recalls the chairman saying. “I don’t care what it costs. I want it bad.”

The first batch of production Vipers were delivered in late 1991. Early cars suffered some teething problems, but the first batch of owners were so enthusiastic about their cars, Lutz writes, that they collaborated with Chrysler engineers to help improve later cars. “It was not unheard of for a Viper team member to fly across the country with a part under his arm in order to repair an owner’s early-build Viper on the spot,” he writes.

On its own, the first-generation Viper was a fiscal success: It was inexpensive to develop, demand outpaced production capacity, and the price didn’t pose an obstacle—especially since the Viper outperformed European supercars that commanded twice the price. When the hardtop Viper GTS came out in 1996, Lutz writes, many RT/10 owners decided they needed a second Viper. Many Viper owners had never considered a Chrysler product; many of them, after taking delivery of their Vipers, ended up buying multiple Chrysler, Dodge and Jeep products for their family members.

“So it goes with many a felicitously right-brained project,” Lutz writes. “In its wake come benefits that defy left-brained analysis.” The Viper helped convince financiers, investors, automotive journalists, and even Chrysler employees themselves that the automaker had a bright future ahead. Lutz sums it up best: “The Viper, in brief, was profitable in ways impossible to quantify.”