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Chrysler Installs Fiat Production System Before Plants Restart


June 26 Chrysler Group LLC, the U.S. automaker run by Fiat SpA, is rushing to implement the Italian automaker’s manufacturing processes in its factories before production next week at seven assembly plants.

Plant managers have begun adopting the measurement system designed to reduce waste and improve efficiency in making vehicles, said Michelle Hill, a researcher with management consultant Oliver Wyman who has interviewed supervisors. A push is under way to complete initial training, the union said.

Successful implementation of Fiat’s system may cut costs and give the new Chrysler a better chance at profitability when auto sales in the U.S. rise from their lowest rates in almost three decades. Fiat’s plants in Italy and South America have improved efficiency in the past two years, she said.

“I think it’s working,” said Hill, who visited three Fiat plants last year to study the process. “There will be very specific metrics to measure all aspects of performance. It will be very consistent across the plants.”

Chrysler shut its plants May 1, the day after it entered bankruptcy. It restarted its Dodge Viper sports-car factory on June 15 and said it will resume production at several other sites the week of June 29. Chrysler Group, based in Auburn Hills, Michigan, was formed from the best assets of bankrupt Chrysler LLC on June 10. The old company remains in bankruptcy.

Fiat, based in Turin, uses a system that emphasizes measuring every aspect of work and stopping inefficiencies, Hill said. It is similar to Toyota Motor Corp.’s highly regarded lean-manufacturing system, using teams of employees trained to do several jobs instead of having workers perform only one task, she said.

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Dianna Gutierrez, a Chrysler spokeswoman, said the system is being implemented, without commenting further.

The company is pushing to train supervisors on the system before production resumes, said Ken Lewenza, president of the Canadian Auto Workers union. Production employees probably won’t be fully trained for weeks, he said.

Production workers will create a daily checklist at their work stations, such as whether a tool was working properly, that will be entered into a database.

“It’s not much different from the Chrysler operating system other than the fact that it is emphasized and audited,” Lewenza said. “We’ve been told the results from plants has an impact on decisions made by the company in terms of product allocation.”

LINK:Chrysler Installs Fiat Production System Before Plants Restart - Bloomberg.com
 
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