Chrysler embarks on "most advanced supplier colocation project"
by Staff -- Manufacturing Business Technology, 11/1/2004 7:00:00 AM
The Chrysler Group announced in August that it will build a new $900-million plant in Toledo, Ohio, for a new generation of vehicles, and that roughly a third of the cost will be carried by three suppliers that will colocate within the plant's footprint to manage and operate body, paint, and chassis operations.
"At the Chrysler Group, we love to defy conventional wisdom," says Thomas LaSorda, Chrysler Group COO. The savings accrued by the partnership with suppliers is enough, in effect, "to pay for an additional future vehicle," he says.
The three supplier companies involved include The Kuka Group for body-shop operations; Durr Industries for paint-shop operations; and Hyundai Mobis for chassis assembly. The deal has the endorsement of local and state agencies, which are expected to cede tax incentives, abatements, land, and infrastructure support, as well as training funds. The agreement also has the endorsement of the UAW.
"This project keeps approximately 3,800 jobs right here in Toledo, and it enables us to implement new ways to become competitive in a rapidly changing time for our industry," says Lloyd Mahaffey, UAW regional director. The project was greenlighted by an unprecedented eight-year contract signed last year between Chrysler and the UAW.
The facility will produce a family of new-generation vehicles for sale worldwide. Construction start on the new facility—"the most advanced use of supplier colocation yet in North America," according to the company—is expected this fall, with vehicle production scheduled to begin in 2006.
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