Chrysler’s Toledo North Renovations Improving Flexibility, Productivity

TOLEDO, OH – When Chrysler’s renovated Toledo North assembly complex reaches its intended annual capacity next year, the facility will be capable of building four different models, although current plans call for production of the Jeep Liberty replacement exclusively.

The factory’s ability to manufacture multiple models on a single line, a practice the industry must move toward to keep pace with fickle consumer demands amid shrunken capacity, speaks to the extensive retooling needed to make the site’s body shop more flexible.

Previously, the Liberty line built just one other product in the Dodge Nitro SUV. Nitro production ceased late last year and current Liberty builds end Aug. 16.

The new body shop, which goes dark along with the rest of the complex for three weeks this month for retooling, will expand by 300,000 sq.-ft. (27,870 sq.-m) to 872,000 sq.-ft. (810,088 sq.-m). Employment in the shop will surge to 538 workers from 329, and the number of robots will jump to 959 from 439.

But Toledo North Plant Manager Zach Leroux tells WardsAutothe expansion is necessary mostly because Chrysler shopped out sub-assembly body work on the current-generation Liberty SUV. The yet-unnamed Liberty replacement brings that back in-house.

“That makes the plant flexible to build other models, but the current plan is for (the Liberty replacement) only,” he says during a tour of Toledo North Wednesday. Chrysler is investing $500 million in the plant to accommodate the next-generation SUV’s $1.7 billion program.

After this month’s shutdown, when the entire body shop will be gutted and replaced with all-new machinery, initial builds of the new SUV will begin in October. Job One is scheduled for second-quarter 2013.

The auto maker will start fielding applications for new positions soon. Toledo North will add a total of 1,100 new employees by next July, when a second shift of SUV production starts. At that time, some 3,000 people will be employed at the plant.

The current 5-passenger Liberty was last redesigned for ’08. Deliveries through July were up 35.1% to 50,142 units, according to WardsAuto data, although the pace reflects the weakness of Chrysler’s sales in 2010.

The ’14 replacement will move to Fiat’s platform codenamed “KK.” Reports say the architecture will feature more car-like attributes, although the new model will retain SUV capabilities and may be sold only as an all-wheel-drive vehicle.

Those changes likely would move it into the hyper-competitiveMiddle CUV segment, where through July the top-selling Honda CR-V accounted for 167,236 U.S. deliveries, the Ford Escape 148,739 and the Chevy Equinox 130,796.

“Right now, this is everything to us,” Leroux says, underscoring the importance the new model will have in Chrysler’s post-bankruptcy universe.

To pull alongside its CUV competitors, Chrysler will increase the line speed of the current Liberty in general assembly to 64 jobs an hour from 60. The faster speed also will help meet expectations of greater demand for the SUV worldwide, given Fiat’s global distribution capability.

Another key element of the Toledo North renovation is the implementation of Chrysler’s World Class Manufacturing quality and productivity process.

WCM was adopted by Fiat almost 10 years ago and saved it from insolvency. Fiat CEO Sergio Marchionne scooped up Chrysler during its 2009 U.S. bankruptcy thinking WCM could work similar magic for the American auto maker.

WCM already has reaped benefits at Toledo North. Its initial implementation last year won the 11-year-old Jeep facility production rights to the next-generation Liberty. Additionally, the factory ranks as the No.1 plant for sharing best practices with others in Fiat’s global manufacturing footprint.

Toledo North occupies the lowest “bronze” level of the WCM grades, but it got there as quickly as any in the Fiat empire. Leroux says the facility is “well on track” to meet its 2012 goals. “Just absolutely phenomenal,” he says of the turnaround.

A tour of Toledo North reveals the WCM blueprint recently laid out at other Chrysler U.S. facilities, such as Belvidere, IL, and Jefferson North in Detroit.

At the Work Place Integration Room, for example, a training area for building the next-generation Liberty has been set up and includes sophisticated 3-dimentional tools with which engineers and trainers can implement best practices.

That could include improving ergonomics for the assembler, or making his “Kit Cart” tool and parts carrier more efficient. Unlike the Chrysler of old where workers reached for tools and parts behind their workstation, Fiat’s WCM places those items within easy reach at the station in a 5-tray Mega Kit.

Toledo North also receives a Metrology Center, where supplier components are verified to specifications. The center will not fold its tent after the launch of the new SUV, Leroux says. The 25,000-sq.-ft. (2,322 sq.-m) room will continue to employ 30 of the plant’s best workers to ensure quality levels.

Leroux admits the addition of WCM, a new product and a batch of new employees over the next few months will not be easy. “Our task is tall,” he says. “We have a big challenge in front of us.”

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