Fiat's World-Class Manufacturing Key to Chrysler Turnaround

Even though its finances were unraveling before being forced into reorganization last year, the former Chrysler LLC was not a manufacturing basket case.

While it once ranked dead last by the Harbour Report in productivity, in 2008 it tied Toyota Motor Engineering & Mfg. North America Inc. for the No.1 spot.

Four Chrysler assembly plants ranked in the Harbour Report's top-10 most efficient plants that year, and the auto maker's Global Engine Mfg. Alliance facility was the top-rated engine plant.

Even so, Fiat Automobile SpA's World Class Manufacturing system is changing the way Chrysler Group LLC builds vehicles, says Scott Garberding, senior vice president-manufacturing.

“Everywhere you look around Chrysler, there is so much happening and it's all laying the groundwork for an exciting revival,” he says. However, nowhere at Chrysler do the winds of change blow stronger than in manufacturing.

Implementing the WCM production system was a key piece of Sergio Marchionne's turnaround strategy after he assumed the CEO job at Fiat in 2004, Garberding says.

Chrysler's new strategy already is paying off big. To date, he says the auto maker is on track to reduce plant injuries 30%, chop operating costs 8% and improve productivity 10% and first-time quality 15%.