Chrysler Manufacturing Savings Worth Wait

TRAVERSE CITY, MI – It does not make business sense to roll 60 different models off the final assembly line an hour, but there are substantial savings to be had with that kind of capability, says Frank Ewasyshyn, Chrysler Group executive vice president-manufacturing.

Ewasyshyn uses the Management Briefing Seminars here to outline Chrysler’s manufacturing strategy going forward, pulling together initiatives the auto maker has been rolling out with each plant upgrade.

Driving the strategy is the quest for flexibility and cost reduction.

Ewasyshyn says manufacturing accounts for 40% of Chrysler’s $30 billion, 5-year capital plan – or $12 billion.

The figure was whittled in 2000, when Chrysler restructured and pared the budget from $42 billion over five years but increased the number of products.

When other auto makers were investing in flexible manufacturing, Chrysler couldn’t afford to lock into long-term major capital investment.

Chrysler's Frank Ewasyshyn

Ewasyshyn says the forced delay turned out to be fortuitous. Technology has evolved significantly in the last three years, and the auto maker now is able to tap into it. Indeed, flexible manufacturing now is less expensive to install than conventional hard tooling.

Today, Chrysler is enjoying a 50% reduction in tooling costs. “We’re paying half of what we paid for conventional systems,” Ewasyshyn says.

Dies have come down 60% in weight, the number of machining hours has been cut in half and the cost has been reduced 45%.

“We can buy two to three sets of dies for the price of one a few years ago,” Ewasyshyn says of the new lean die standards being implemented.

The goal is to have everything in 4-die sets in the lineup, he says. The auto maker spent a lot of time looking at how much work can come from each die and how strength can be maintained while reducing mass.

Another significant breakthrough is that modern robots are much more capable, and the cost has come down significantly, Ewasyshyn says.

In the 1990s, a single robot cost about $80,000, he says. Today, the cost is under $30,000, and Ewasyshyn is hopeful they are headed to the $20,000 level in the next few years.

For quality assurance, robots will continue to replace human workers for critical welding, sealing and lifting operations. In terms of capability, the big difference now is the ability to change the robot’s active tooling, eliminating the need for expensive fixed or hard tooling.

By changing the tooling, “the ‘what’ you build becomes almost infinite,” Ewasyshyn says, envisioning the day all plants will have flexible tools in framing stations, for example, capable of changing from one model year to the next in 42 seconds, with literally no interruption.

“You can do pilots at will,” he says. As long as the sequence of assembly is reasonably close, Ewasyshyn says Chrysler can produce anything in its lineup at its flexible operations.

That is in contrast to the changeover looming for the Belvidere, IL, facility, which will cease production of the Neon at the end of the year and be down until spring 2006, Ewasyshyn tells Ward’s.

Chrysler is investing $419 million to gut the body shop and modify the paint and final assembly areas to produce the next-generation C- and D-segment vehicles. (See related story: Chrysler Commits $419 Million to Belvidere)

It will be the first plant to incorporate Chrysler’s full manufacturing vision when it launches with the Dodge Caliber small car next year. The facility will be capable of producing three distinct and separate underbodies and pilot a fourth, Ewasyshyn says.

A sister plant in Sterling Heights, MI, will go down in mid-2006 for similar renovations, but Ewasyshyn says the downtime should be a bit shorter.

Sterling Heights will retain its current flexible underbody line and have similar cells to Belvidere’s, with as many interchangeable processes as possible and equally heavy reliance on automation and elimination of hard tooling.

While competitors such as Ford Motor Co. have deadlines for making their operations flexible, Ewasyshyn says Chrysler will continue to upgrade with each new program, setting no firm dates.

On the horizon is the new Toledo, OH, Jeep plant under construction, with suppliers owning and operating all but final assembly. It will go into operation in early 2006.

Investments to date include the Windsor, Ont., Canada, plant, which has the flexibility to make the Chrysler Pacifica as well as minivans; and the Brampton, Ont., plant that makes the Chrysler 300 series, Dodge Magnum and Charger.

Among the less-flexible facilities is the Newark, DE, SUV plant that only is tooled for the platform upon which the Durango hails but has space for investment in additional platforms.

Another advantage to flexible manufacturing is the ability to build almost anything the design studios come up with. “We have a rule book, but nowhere near as complicated as some competitors,” Ewasyshyn says.

On the worker side, the rollout of teams on the plant floor, where each member can perform each task, completes the picture. Ewasyshyn says the model is boosting quality, productivity and morale.

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