Chrysler shifting to Japanese method of 'flexible manufacturing'

Sept. 1, 2005
Daimler Chrysler AG's Chrysler Group is revamping its manufacturing process in the hopes of saving billions of dollars in development and production costs.

The Dodge Caliber concept car, a version of which will be built at Belvidere, Ill.

For nearly a decade, Japanese automakers including Toyota Motor Corp. and Honda Motor Co. have been using "flexible manufacturing" to build three or more different models in a single plant. At some plants in Japan, Toyota and Honda produce as many as six different models per assembly line. Now, rising costs are forcing Chrysler, GM, and Ford to adopt similar methods.

Key to Chrysler's new process is a new generation of stronger, less expensive robots that can carry, hold and pass on large structural auto parts such as side panels, roofs and underbodies. Industry observers say robots are now more like commodities that can be assembled with off-the-shelf parts, including stronger electric motors that can lift heavier loads. Ten years ago, a robot that could lift a 330-lb part cost about $80,000; today one that lifts 495-lb parts costs about $30,000.

These new robots should allow Chrysler to do away with the stationary equipment used to hold metal parts while they are being welded—equipment that often costs hundreds of thousands of dollars.

The process will be initially used this fall at Chrysler's plant in Belvidere, Ill. The point of the retooling is to have plants operate at close to maximum capacity, a big factor in increasing profitability.

The fragmentation of the U.S. vehicle market makes it difficult to sell all of a typical plant's production (roughly 200,000 to 240,000 vehicles a year) when all those vehicles are the same model. The new approach would reduce output of a single model to 75,000 to 100,000 per plant. The Belvidere plant will use flexible manufacturing to build a new compact hatchback and two small Jeeps. Next, Chrysler plans to install the process in its Sterling Heights, Mich. plant, eventually expanding it to 12 other North American plants.

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