- The Washington Times - Friday, November 15, 2002

It's a tale of two supplier strategies. One futuristic yarn has Chrysler planning a vehicle assembly plant in 2005 where suppliers own and operate sections of the facility and supplier employees outnumber the automaker's own workers by 50 percent.
The other fable has Ford deciding it has foisted too much engineering responsibility on its Tier 1 suppliers. It's time, Ford now has decided, to bring some of that work back in-house. That doesn't rule out supplier parks, but Ford still is master of vehicle assembly.
General Motors, meanwhile, isn't interested in supplier parks adjacent to U.S. assembly plants, says GM North America President Gary Cowger. The supply network is well established and well-oiled, just-in-time delivery routines make it unnecessary for suppliers to build next door.
The assumption is that supplier money is better spent on research and development of lower-cost parts than on bricks and mortar to be cozy neighbors. Ford's latest strategy shift a return to practices of old seems safe enough. And if reining in more chunks of vehicles translates into salve for its quality woes, then it definitely is the right medicine.
Chrysler's proposal is certainly the most intriguing. The automaker has approached key suppliers about building and running the body and paint shops of a planned facility in Windsor, Canada.
That would be in addition to the supplier park on site or nearby for a direct feed of components and subassemblies.
In the Windsor proposal, suppliers would employ about 1,500 workers. The 1,000 Chrysler workers would staff the final assembly line, finishing the job when the cars emerge from the paint ovens. Tom LaSorda, Chrysler head of global manufacturing, says that's where most of the labor is. "That's where all the rubber meets the road. It all happens in trim and final [assembly]."
Chrysler Group President and CEO Dieter Zetsche says he's not concerned about vulnerability: An upset supplier could stop vehicles from being framed or painted. He says the contract will be structured "in a way to limit risk."
GM's dismissal of its competitors' moves may stem from its own failure to win the necessary union support to implement Project Yellowstone in North America in 1999.
Yellowstone was GM's model for the future of car making, starting with the next-generation of the Delta small-car program. The production formula called for an assembly plant half the traditional size, pulling together the handful of subassemblies or modules built by suppliers next door. An entire interior cockpit, for example, would arrive as a single piece.
Union outcry over outsourcing led to the implosion of Yellowstone. That in turn delayed the Delta program, and GM still is seeking an affordable way to make small cars. It's hard to remember the last time the Big Three took such divergent paths when it comes to suppliers. You can be sure they're watching each other's moves carefully.


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