Chrysler flexibility can save money and avoid shutdowns

Detroit Free Press - - With the production launch of the 2007 Jeep Wrangler and Wrangler Unlimited at its Toledo Supplier Park, Chrysler Group has transformed almost all its assembly plants to build more than one vehicle on the same line.

The flexibility allows the automaker to build two or three models on the same assembly line and vary daily production based on customer demand.

Chrysler expects the four-door Wrangler Unlimiteds to make up about 60 percent of production at the factory and the two-door model to fill in the other 40 percent. But, thanks to its flexible assembly line, it should be able to change that ratio as needed and even add another vehicle.

Flexible assembly plants are expected to cut costs by using robots to automate some jobs, reducing inventory and keeping employment ranks steady. Because the plants can make more than one vehicle, declining sales of one model doesn't necessarily put an entire plant at risk.

For the company, it provides a way to make money by ramping up production of a hot seller.

"The best example of why it matters was in Belvidere," Greg Gardner, a spokesman for Harbour Consulting, said of a plant in Illinois. "Until Chrysler launched the Dodge Caliber, it could only build the Neon there. The PT Cruiser built in Toluca, Mexico, could not be built in Belvidere because it wasn't flexible. If they had been able to shift some production to Belvidere when the demand for the PT Cruiser was strong, that could have made Chrysler more profitable."

Building flexible manufacturing plants is something Japanese automakers are known for, said Erich Merkle, an auto analyst at IRN in Grand Rapids, Mich.

Chrysler, Ford Motor Co. and General Motors Corp. are becoming more flexible but are in a race to catch up, analysts said.

. GM's new Delta Township plant near Lansing, Mich., will build the 2007 Saturn Outlook crossover as well as Buick and GMC models. And Ford now has the capacity to build as many as eight different models at its Chicago assembly plant.