Flexible factories win

InTech, Jun 2006

In the car industry, some plants can build one vehicle and then switch to building another.

The Japanese pioneered this skill. After some unfortunate and unprofitable gaffes, Chrysler rethought how it assembles cars, looking at everything from the order in which door parts weld together to whether it is cheaper to install windshields manually or by machine.

The Wall Street Journal reported the result is a new, flexible assembly system that Chrysler is betting can transform the company's economics. Its central feature is the ability to make more than one type of vehicle at a plant.

If the new system, which entails more robots, is successful, it should enable the Chrysler unit of DaimlerChrysler to increase profits despite a relatively high-cost unionized U.S. work force.

Even as unionized rivals General Motors Corp. and Ford Motor Co. gush red ink in their North American operations and prepare to buy out or lay off 60,000 workers, Chrysler is profitable and has been recalling some laid-off employees.