Canadian cars
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Canadian cars
By Bernard Simon
Published: December 31 2004 02:00 | Last updated: December 31 2004 02:00
A short drive north-west of Toronto's international airport, DaimlerChrysler is proving that North America's car plants can still take on their Asian and European rivals - and win.
Even as the German group's Chrysler division and the two other Detroit- based carmakers - General Motors and Ford - struggle to maintain market share and bring down inventories, the Brampton assembly line is working at full tilt.
More than that, managers sing the praises of their unionised Canadian workers, ticking off ways in which they are adjusting to a more competitive era. A $1.1bn (£570m) overhaul has given the Brampton plant a level of automation and flexibility that until recently was the preserve of Toyota, Honda and Nissan.
The plant's expanding output is one reason why Ontario is set to overtake the US state of Michigan, home to Detroit's car manufacturers, as North America's top producer of cars for the first time this year.
Ward's AutoWorld estimates that the Canadian province will account for 16.7 per cent of North American car and light truck production this year, up from 13.5 per cent a decade ago. Michigan is expected to drop to 16.1 per cent from 21.9 per cent.
Both Toyota and Honda have big, non-unionised plants in Ontario, while most of their US assembly lines are in southern and western states.
Since early this year, Brampton has been producing two of North America's most talked-about new cars, the luxury Chrysler 300 saloon and Dodge Magnum sports wagon. The 300 has been called the car that proves "you don't have to drive an SUV to look tough".
DaimlerChrysler sold 93,200 300s and 33,000 Magnums in the first 11 months of this year. A few thousand 300s have also been shipped to Europe.
The Brampton plant, which turns out about 970 vehicles a day, is set to add a third shift in early 2005 to meet demand for the 300 and Magnum and to produce a new Dodge Charger, due in the showrooms by mid-2005. The extra shift will create 900 more jobs, taking Brampton's workforce to 3,900.
Brampton is one of a growing number of plants from the big three US manufacturers being converted to a "flexible manufacturing" system that allows several models to be produced on a single assembly line.
Michael Bruynesteyn, analyst at Prudential Equity, estimates that less than a fifth of DaimlerChrysler's output comes from flexible plants, compared with 94 per cent at Nissan and 74 per cent at Toyota. General Motors has converted half its production capacity, while Ford is still at 18 per cent.
These facilities, according to Mr Bruynesteyn, will allow more frequent new models and increase capacity utilisation. He predicts DaimlerChrysler and General Motors will probably derive most benefit from the switch over the next two years.
At the Brampton plant, the Chrysler 300, the Magnum and soon the Charger, share many of the same basic components, such as engines, powertrains and floor panels. The three models - as well as pilot cars for a fourth - can be built simultaneously, with production of each tailored to sales.
The metal stamping plant at Brampton is under the same roof as the vehicle assembly line, unlike most other North American car factories. Paint colours can be changed in eight seconds. "We have the capacity to paint one red, one blue, one green," says Alberto Gonzalez, the plant's Mexican-born manager. Frank Ewasyshyn, Chrysler group's head of manufacturing, says he does not view Brampton success as "a country thing" related to Canada. "It's quality and cost," Mr Ewasyshyn says. "I'm looking for a workforce that's willing to be flexible."
For example, a combination of improved work processes and new equipment has cut the time needed to change a die in the stamping plant from 26 minutes in 2002 to 16 minutes last year and 13 minutes now.
But Ontario's lead over Michigan could be temporary. Much of the drop in the US state's output this year is due to model changeovers at old Big Three plants, requiring shutdowns for retooling.
Ontario also has some drawbacks, such as the surging Canadian dollar and the potential for delays in transporting parts and vehicles at the border because of tighter US security requirements. Border congestion "adds into your cost base", Mr Ewasyshyn says.
Canada's publicly funded healthcare system, on the other hand, is a plus for the car companies, which are burdened by liabilities for their US workers and pensioners.
Mr Ewasyshyn says that Chrysler is in talks with Canadian authorities "on other things" it wants to do. But despite Ontario's successes, Detroit is unlikely to be ready just yet to throw in the towel as North America's Motor City.
Source: news.ft.com
-Matt-
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Published: December 31 2004 02:00 | Last updated: December 31 2004 02:00
A short drive north-west of Toronto's international airport, DaimlerChrysler is proving that North America's car plants can still take on their Asian and European rivals - and win.
Even as the German group's Chrysler division and the two other Detroit- based carmakers - General Motors and Ford - struggle to maintain market share and bring down inventories, the Brampton assembly line is working at full tilt.
More than that, managers sing the praises of their unionised Canadian workers, ticking off ways in which they are adjusting to a more competitive era. A $1.1bn (£570m) overhaul has given the Brampton plant a level of automation and flexibility that until recently was the preserve of Toyota, Honda and Nissan.
The plant's expanding output is one reason why Ontario is set to overtake the US state of Michigan, home to Detroit's car manufacturers, as North America's top producer of cars for the first time this year.
Ward's AutoWorld estimates that the Canadian province will account for 16.7 per cent of North American car and light truck production this year, up from 13.5 per cent a decade ago. Michigan is expected to drop to 16.1 per cent from 21.9 per cent.
Both Toyota and Honda have big, non-unionised plants in Ontario, while most of their US assembly lines are in southern and western states.
Since early this year, Brampton has been producing two of North America's most talked-about new cars, the luxury Chrysler 300 saloon and Dodge Magnum sports wagon. The 300 has been called the car that proves "you don't have to drive an SUV to look tough".
DaimlerChrysler sold 93,200 300s and 33,000 Magnums in the first 11 months of this year. A few thousand 300s have also been shipped to Europe.
The Brampton plant, which turns out about 970 vehicles a day, is set to add a third shift in early 2005 to meet demand for the 300 and Magnum and to produce a new Dodge Charger, due in the showrooms by mid-2005. The extra shift will create 900 more jobs, taking Brampton's workforce to 3,900.
Brampton is one of a growing number of plants from the big three US manufacturers being converted to a "flexible manufacturing" system that allows several models to be produced on a single assembly line.
Michael Bruynesteyn, analyst at Prudential Equity, estimates that less than a fifth of DaimlerChrysler's output comes from flexible plants, compared with 94 per cent at Nissan and 74 per cent at Toyota. General Motors has converted half its production capacity, while Ford is still at 18 per cent.
These facilities, according to Mr Bruynesteyn, will allow more frequent new models and increase capacity utilisation. He predicts DaimlerChrysler and General Motors will probably derive most benefit from the switch over the next two years.
At the Brampton plant, the Chrysler 300, the Magnum and soon the Charger, share many of the same basic components, such as engines, powertrains and floor panels. The three models - as well as pilot cars for a fourth - can be built simultaneously, with production of each tailored to sales.
The metal stamping plant at Brampton is under the same roof as the vehicle assembly line, unlike most other North American car factories. Paint colours can be changed in eight seconds. "We have the capacity to paint one red, one blue, one green," says Alberto Gonzalez, the plant's Mexican-born manager. Frank Ewasyshyn, Chrysler group's head of manufacturing, says he does not view Brampton success as "a country thing" related to Canada. "It's quality and cost," Mr Ewasyshyn says. "I'm looking for a workforce that's willing to be flexible."
For example, a combination of improved work processes and new equipment has cut the time needed to change a die in the stamping plant from 26 minutes in 2002 to 16 minutes last year and 13 minutes now.
But Ontario's lead over Michigan could be temporary. Much of the drop in the US state's output this year is due to model changeovers at old Big Three plants, requiring shutdowns for retooling.
Ontario also has some drawbacks, such as the surging Canadian dollar and the potential for delays in transporting parts and vehicles at the border because of tighter US security requirements. Border congestion "adds into your cost base", Mr Ewasyshyn says.
Canada's publicly funded healthcare system, on the other hand, is a plus for the car companies, which are burdened by liabilities for their US workers and pensioners.
Mr Ewasyshyn says that Chrysler is in talks with Canadian authorities "on other things" it wants to do. But despite Ontario's successes, Detroit is unlikely to be ready just yet to throw in the towel as North America's Motor City.
Source: news.ft.com
-Matt-
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