TOLEDO, OH – Production of the new ’07 Dodge Nitro midsize SUV should provide a welcome boost to the sagging capacity utilization rate at Chrysler Group’s truck and activity-vehicle plants, Ward’s data suggests.

Chrysler adds a third shift Aug. 21 at its Toledo North assembly complex as it pushes toward a daily output of 1,157 vehicles, a target the auto maker hopes to reach within two weeks.

“It’s a big endeavor for us,” says Byron M. Green, vice president-truck and activity vehicle assembly.

The third shift, which will push the site’s workforce past 3,400 from about 2,600, also marks the second time Chrysler has implemented its controversial Alternate Work Schedule (AWS) at a truck or activity-vehicle plant.

Year-to-date capacity utilization at Chrysler’s truck and activity-vehicle plants is 79.3%, a full 10 percentage points below year-ago, Ward’s data show.

The rate ranges from 51.1% at Newark, DE, site of Dodge Durango SUV production, to 100.6% at St. Louis North, where the auto maker builds Dodge Ram pickups. Toledo North is at 84%, down from prior-year’s 107.7%.

However, the introduction of the Nitro signals relief is ahead, just as Chrysler Aspen production portends improvements at Newark, which also will be home in late 2007 to the auto maker’s first hybrid-electric vehicle, a Durango SUV.

Across the Chrysler network, the picture is somewhat brighter. Total capacity utilization is at 79%, 0.6 percentage points higher than the industry average but 5.4 points behind Chrysler’s year-ago rate.

Against this backdrop, the auto maker recently announced a third-quarter production cut that could hit 38% as it struggles to offset the chilling effect on sales from soaring gasoline prices.

The production cut also threatens the once-likely prospect that Chrysler’s utilization rate would reach 100% by year’s end – a line in the sand drawn by President and CEO Tom LaSorda.

Speaking to journalists gathered here for the Nitro’s official production launch, Green seems unfazed. “We’re ready to go,” he says.

Output of the 5-seat Nitro, which will be positioned below the Durango in Dodge showrooms, begins exclusively with models equipped with the base 3.L V-6 engine. Production of 4.0L V-6 unit begins in October, followed by a November launch of diesel-powered Nitros destined for the European markets.

Nitro shares a platform with the Jeep Liberty midsize SUV, which rolls off the same assembly line. And with Nitro comes increased complexity for Toledo North in the form of 50 additional sequenced components and 30 news suppliers.

No pricing has been announced, but the vehicle boasts innovative features such as Load ’N Go, a sliding cargo floor that reduces the need to bend when stowing items using the vehicle’s rear hatch.

Green is confident Chrysler’s AWS system will spark improved capacity utilization at Toledo North. It enables 24-hour production by scheduling maintenance on the fly. Other auto makers build tool maintenance time into their production schedules of high-volume plants, Green notes.

Capacity Utilization Rates for Chrysler Group’s
North American Truck and Activity Vehicle Plants
Compared to All Chrysler Plants
and All North America Manufacturers
Plant Products YTD 2006 YTD 2005
Saltillo Ram 96.1 108.8
Warren Truck Ram, Dakota, Raider 59.4 69.1
Jefferson N. (Detroit) Commander, Grand Cherokee 98.4 100.8
Newark Durango, Aspen* 51.2 67.8
St. Louis North Ram 100.6 94.0
Toledo North Nitro*, Liberty 84.0 107.7
Total plants 79.3 89.3
Chrysler (All Plants) 79.0 80.4
Industry Light Vehicle 78.7 78.5
* Chrysler Aspen and Dodge Nitro are new products for '07. Note: Exlcuded is Toledo South, a new plant that started production of the new '07 Jeep Wrangler in July. YTD is January-July. Utilization rates are production as a percent of straight-time capability over a 52-week work year. Source:

“That gives you an operating pattern of about 20 hours a day,” he says. “With our model, (production is) back-to-back-to-back. So you are getting the most use out of your production equipment.

“In other words, whereas most facilities will run two shifts and take the other eight hours to do static maintenance when the equipment’s not running, we do dynamic maintenance. And then we’ll have a Sunday, traditionally, to take care of major maintenance.”

Toledo North is the second truck plant, following Chrysler’s site in Warren, MI, home of the Ram pickup production, to see the implementation of AWS. On the car side, it already is in place at several plants.

An aggressive approach advocated by LaSorda, who has built his career on manufacturing innovation, AWS has enabled Chrysler’s plant in Brampton, Ont., Canada, to meet sustained demand for its LX-platform products – the Chrysler 300 and Dodge Charger sedans, and Dodge Magnum cross/utility vehicle.

“It’s been a successful program for us. We’ve done it at Windsor for years,” Green says, referring to the Ontario, Canada, minivan plant that also builds the Chrysler Pacifica CUV.

The knock against 24-hour production is it jeopardizes quality, but Windsor tied for second in J.D. Power and Associates 2006 Initial Quality Survey with Toyota Motor and Engineering Mfg.’s plant in Georgetown, KY.

Nitro’s arrival coincides with the production launch at the nearby Toledo Supplier Park of the redesigned ’07 Jeep Wrangler and Wrangler Unlimited SUVs. Together, the plants have benefited from $3.9 billion in investment since 2001.

“It’s a good thing for the Toledo community,” says Green. “It’s a good thing for our employees and it’s a great thing for our company.”