More MBS CoverageTRAVERSE CITY, MI – Kuka Robot Group will put its managers at the center of the body plant it is building for Chrysler Group’s Jeep operations in Toledo, OH, so they always are aware of what is happening on the floor.

The idea, taken from the BMW AG plant at Leipzig, Germany, is an innovation in a facility that otherwise will use tried and true processes, says Larry Drake, president and CEO of Kuka USA, which will operate a body shop for the first time.

"We had a mantra from the beginning to keep it simple," Drake says here at the Management Briefing Seminars’ World Class Manufacturing conference.

He says the plant will use some processes that are rare in North America, such as employing one robot to hold a part while others weld it. But no new process was invented for the plant, which is to start production next August.

"Technically, it should be a great success. We'll make great bodies – we know how to do that," Drake says. "The only question is on the commercial side, whether the business plan will work."

Kuka will make bodies for the Jeep Liberty and Wrangler, but the welding lines are flexible enough to add more products in the coming years.

Flexibility is key, he says. While 3-shift capacity is 151,000 units a year, "no one can say what customers will want in three or four years," he says. "You have pretty good binoculars if you can see two years out."

Larry Drake

So if demand is just 80,000 units, "we have to try to get new product in there."

Kuka, like paint shop operator Haden International Group and rolling chassis supplier Hyundai Mobis, are equity investors in the Toledo Jeep plant and will be paid per unit made.(See related story: Jeep Toledo Plant on Track)

Kuka is a $1 billion company based in Germany, with its North American operation at about $200 million a year after growing 240% since 2000. Kuka Robots is a separate business unit, which like Kuka is owned by IWKA AG in Germany.

Drake praises United Auto Workers union Local 12 President Bruce Baunhower for his vision of workforce flexibility that has made the Jeep experiment possible.

"He's a caring person about his people," Drake says, "and I'm not just saying that because I have to negotiate with him in a few weeks. He wants to talk about how we can get more product down there."

Some workers already are being hired, and Kuka's employees are certain to adopt Local 12 when a union vote is taken after the first 120 or so are hired, as they will come from the existing Jeep workforce.

The total hourly workforce in the body shop will be about 310. Kuka employees will get the same salary and benefits as Jeep assembly line workers, but they will have different – and more flexible – work rules, Drake says.

Instead of dozens of different job categories, the UAW workers will have just two designations, mechanical and electrical, and will be trained to do more than one job. If production falls, flexible costs – such as the workforce – will be cut, and "the Local 12 guys understand that," Drake says.

Flexible employees are the key to Kuka's success, Drake says. He says when Kuka instituted its Internet-like Kuka Operating System that links all the processes at the company with all the quality documents required, the employees adopted it as their own. They made many suggestions, he says, and discovered areas where people working in sequence could be reorganized on a parallel basis, saving time.

Kuka and its competitors no longer will add value to body shops by selling "huge hunks of steel" but by selling engineering, off-line programming and other intellectual contributions.

For auto makers, Drake says, "the biggest thing that can save money is to design their products to be flexible," so that the underpinnings can be used by many vehicles, and new products can be made by using new sheet metal. Tools must be designed so they can be moved around the world to where vehicles are being made, he says.