Toyota isn't the only automaker trying to reinvent itself, as this week's announcement that Chrysler will team up with suppliers to jointly fund and operate a new Jeep plant demonstrates. The challenge, declared Chrysler Chief Operating Officer Tom LaSorda, is "finding comfort in a state of perpetual transformation." What's becoming increasingly clear is that Tuesday's announcement in Toledo is just the tip of a manufacturing revolution at the U.S. arm of DaimlerChrysler.

"There's no doubt" that some of the processes and procedures debuting in Toledo will be replicated at other brownfield plants, Chrysler CEO Dieter Zetsche disclosed in an exclusive interview with TheCarConnection.com. Without major changes at existing factories, he stressed, it would be difficult to remain competitive building cars and trucks in North America. The Toledo strategy will allow Chrysler "to get to a totally lean and competitive level."

The automaker will rebuild it old Jeep Wrangler plant, but suppliers will contribute $300 million to the effort and then operate key portions of the factory. The money Chrysler saves will help fund the development of additional products that could be spun off of the next Wrangler platform, Zetsche broadly hinted. Suppliers, he said, have been told of plans to produce "up to four vehicles" at the plant, and the factory will actually be capable of building even more. "There is a wide envelope," said Zetsche.

While he stressed there is great potential for the Toledo approach, the German executive agreed there are potential pitfalls, as well. The new Jeep plant actually lifts some of its strategy from the Smart car plant in Europe, where suppliers also played a central role. But there those partsmakers were given specific volume guarantees that cost DaimlerChrysler substantial penalties when Smart sales fell short of expectations. DCX won't make the same mistake in Toledo, Zetsche said.

thecarconnection.com

redriderbob

 

New Jeep Plant Risky but Promising:

There are plenty of risks - along with a potentially huge payoff - to the $2.1 billion Jeep plant DaimlerChrysler plans to build in Toledo, Ohio, says Laurie Felax, vice president of Harbour & Associates. On Tuesday, the automaker revealed that suppliers will kick in about $300 million towards the cost of the experimental operation, and assume control of specific portions of the plant, including the paint shop and body line. "It will truly be a test for them to learn how to better work with suppliers," said Felax, during an interview at the Management Briefing Seminars. The potential payoff is huge, and could yield significant reductions in cost and big gains in productivity, but the risks also are sizable. For one thing, Felax cautioned, DCX "won't have complete control over quality anymore." On the other hand, with suppliers "sharing the risk," they'll be even more likely to ensure that everything meets customer expectations.

thecarconnection.com

redriderbob

 

There are two main flaws to this idea. One, thousands of chrysler employees are going to lose their jobs. Two, if there is a major quality problem with the outsourced parts it very well could take out a smaller vendor. For example tower automotive stamped a lot of the 04 dakota quad parts. We had several truckloads of bad parts from them. The charge back to them almost put them out. Because remember we also charge them for the downtime as well, not just for the parts. I hope it works for the company, but I fear what it will bring to the rest of the plants.

Joe