To Shrink a U.S. Car, Chrysler Goes to Poland

To Shrink a U.S. Car, Chrysler Goes to Poland
http://www.nytimes.com/2009/07/15/business/global/15fiat.html?hpw

TYCHY, Poland — For decades, automakers looking for the secret to
small-car success would journey to Toyota City in Japan. These days,
they are coming to Tychy.

Since Fiat effectively took over Chrysler this year, engineers from
Detroit have been making monthly pilgrimages here to see something they
can only envy: an auto plant that is hiring workers and earning a profit.

The mammoth Fiat plant here, which churned out nearly half a million
cars last year, may hold some of the answers for Chrysler (as well as
Ford Motor and General Motors), as it struggles to regain its footing
after its bankruptcy and reduce its dependence on muscle-bound trucks
and sport utility vehicles.

For those who remember Fiat before its ignominious retreat from the
American market — the name was said to stand for “Fix It Again, Tony” —
the Italian automaker may seem an unlikely role model. It left the
United States in the early 1980s after widespread quality problems.

But Fiat itself has undergone a revolution under Sergio Marchionne, who
became its chief executive in 2004, raising standards for quality and
reliability at plants like Tychy and mastering the art of building
smaller cars with high efficiency. Chrysler hopes he can do the same
thing for it now that he has assumed control of the American company.

“We are lucky there is a crisis,” said the director of the Tychy plant,
Zdzislaw Arlet, unable to resist a gibe at the bigger cars and trucks
that have traditionally stolen the industry spotlight. “Everybody wants
to build small cars now.”

At Tychy (pronounced TICK-ee), one secret is flexibility: The latest
robotic technology is balanced by workers who can quickly shift models
to match demand. That is one reason Tychy is operating around the clock,
six days a week, while most other auto plants in Europe and the United
States are running at a fraction of capacity, increasing costly
nonproductive downtime.

Indeed, for visiting Chrysler engineers, going to Tychy is akin to an
aging heavyweight boxer stepping into a gym where more agile
bantamweight fighters train.

Chrysler’s smallest car, the Dodge Caliber compact, is one-third heavier
(about 1,000 pounds) than the fast-selling Fiat 500, which is made
exclusively at Tychy.

Fiat executives say their goal is not only to produce subcompact
European models at Chrysler’s North American plants — but also for
Chrysler managers to learn how to speed the introduction of smaller cars
in the United States that Americans will want to buy, like a new version
of the Sebring, while increasing efficiency the way Fiat has at Tychy.

Chrysler’s offerings, unlike those from Fiat, have long been dominated
by Jeeps and S.U.V.’s and big trucks like the Dodge Ram, with cars
making up just 30 percent of Chrysler’s worldwide sales last year. As
bigger vehicles fell out of favor because of high gasoline prices and
the recession, Chrysler’s overall sales dived, falling 44 percent in the
first half of 2009 compared with the period a year earlier.

“It’s very difficult to go from big to small, but they are here to
compare and learn,” Mr. Arlet said as he walked amid the sparks thrown
off by robots along his production lines. “This plant was designed to
produce small cars.”

The ideal combination of automated robots and individual workers has
been critical to Tychy’s success, said Ron Harbour, an American industry
consultant with Oliver Wyman, a consulting firm. Success is not as
simple as the more robots, the better.

“With people, you can change the mix in one day or one week,” Mr.
Harbour said, referring to the models a production line churns out. “You
can’t do that with robots.”

The Tychy plant employs about 5,000 people, including about 1,700 hired
last year to make more Fiats, as well as the Ford Ka.

Tychy’s huge scale — it covers more than 4.3 million square feet — also
works to its advantage.

Although exact benchmarks are difficult, Mr. Harbour mentions Chrysler’s
plant in Belvidere, Ill., as a comparable site, since it produces
smaller cars. But its annual production capacity of 265,000 is just over
half of the plant at Tychy.

Mr. Arlet is also constantly on the lookout for time- and money-saving
improvements, adding that he himself looks to Toyota’s famous Kaizen
system for inspiration: Instead of filling up cars at different
production points with brake fluid, gasoline, water and other liquids,
one machine on each of Tychy’s three lines fills each vehicle.

“A car comes off the assembly line every 55 seconds,” Mr. Arlet said.
“In 1996, it took twice as long.”

Along with the new technology came a new focus on quality. About three
years ago, workers were assigned an individual identification number
that is stamped on whatever sections of the car they assemble so any
problems at the end of the line can be traced to the source.

As a result, Mr. Arlet said, the number of cars coming off the line with
defects has fallen from 20 percent in 1996 to just 4 percent now — a
figure Mr. Harbour said compared favorably to factories in the United
States or Western Europe.

“At the moment, Tychy is the best of Fiat as far as quality is
concerned,” said Giuseppe Volpato, a professor of economics at the
University of Venice who has long studied the company. “I think Poland
is becoming the reference point for the whole organization, even in Italy.”

For Mr. Marchionne, turning around Chrysler will probably be harder than
getting Fiat back on track. Chrysler not only relies on trucks and
S.U.V.’s, it derives 75 percent of its sales from the now-moribund
American market.

At the same time, Chrysler is facing increased pressure from Ford, as
well as G.M., which emerged from bankruptcy last week. And of course,
the original high-quality, small-car brands, like Toyota and Honda,
remain fierce competitors, even if Toyota is suffering great losses of
its own.

Partly because of the need to move quickly, the pace of cultural
exchanges like the visits to Tychy has quickened since Chrysler emerged
from bankruptcy on June 10. Fiat took a 20 percent stake in return for
technology and know-how that the Italian automaker says is worth $10
billion in lieu of any cash.

Not only engineers and line managers are heading to Europe for the grand
tour — so is the top brass.

Late last month, the executives responsible for Chrysler’s three brands,
along with the heads of manufacturing, engineering and styling, traveled
to a proving ground halfway between Milan and Turin for a weekend of
meetings and motoring with their Italian counterparts.

Back in Tychy, Mr. Arlet seemed amazed at the tectonic shift under way
in the global auto industry, with Americans coming to Poland in search
of the secrets of carmaking, rather than the other way around.

With a confident smile, he declared, “I am looking forward to when the
Fiat 500 is made in the U.S.A. and also made here, and we can compare.”

 

The Fiat 500 weighs about 2100 lbs:

http://tinyurl.com/kkspsg

The Caliber weighs about 2900 lbs.

So yes, for it's size the Caliber is heavy, in keeping with the design
tendencies of Chrysler's former owner (Daimer) to build more weight into
their products than is necessary.

Americans will not buy these motorized coffins.

Especially when they continue to see crash test video of them bouncing
off the average sedan, pickup truck or SUV.

Anyone see a pattern here?

For the past 5 years, Chrysler was Daimler's dumping ground for old
E-class suspension and drivetrain components. Looks like Fiat will now
force-feed Chrysler it's micro-car parts inventory (and make some nice
cash doing it) while those cars languish in dealer inventory as they
fail to sell.

Yes, you'll have plenty of time to compare the build quality of the
US-made Fiat 500. You'll have plenty of time to stare at it because it
won't move off the lot.

 

It will be interesting to see a FIAT 500 in an American-sized on-street car
parking space. You can probably fit two in. Jokes will follow...

It's many years ago now and things have moved on in the US (more smaller
cars) but I still recollect with some amusement my first sight of a 'large'
Jaguar in a New York on-street parking space soon after my first arrival in
the USA. My, was it small in relation to the space it was in and the cars
either side...

DAS

To send an e-mail directly replace "spam" with "schmetterling"

 

And many Americans still have that "mine-is-bigger-than-yours" mentality.
They want the largest thing they can buy. Which is exactly whats wrong
with American cars. As soon as fuel prices started dropping, the sales
of small cars stopped and larger cars, SUV's and large pickups started to
increase. They didn't increase a lot due to the economy but never the
less, it shows how short sighted many are.

 

Your average middle-class US family does not want to drive a motorized
coffin.

Maybe they'll buy it as a second car. But not their primary vehicle.

Blame urban residential planning, the desire to have a large home and
property, the desire to be ultra-mobile, to tolerate long distance
commutes, the lack of public transit in the US in urban or city-to-city
high speed rail.

All that leads to a car culture in the US which is vastly different than
in Europe or the UK.

And they won't put their family in a vehicle they think makes them
vulnerable in a collision.

The market for new compact cars in the US is limited to the under 25 and
(maybe) the over 55 demographic. You won't make money selling sub
compacts in the US like you can in Europe.

Chrysler had sub-compact concept cars for years. They have (or maybe
they had) the engineering talent to make it happen at least 3 years ago.

Sub-compact cars are not rocket science. What Chrysler needs is a
better sedan platform. The LX is not the platform for the next decade.

Chrysler will not make money selling Fiat's subcompact car, because Fiat
will siphon any possible profit away from Chrysler.

Chrysler can only make money on Jeep, Ram, their minivans and a decent
sedan. If they had brains, they'd bring back the LH platform. Even the
caliber makes them money.

 

This reminds me of the lady on a car radio talk show, who defended her
decision to buy a fair sized SUV to defend herself from all the semi
trucks on the highway. She was correctly told, "your big SUV won't help
you against those monster vehicles".
IMO the key in minor crashes is a good crush zone, which isn't available
in a minimum sized car. For major crashes, just pray.

Assuming there is a profit.
The problem is see is will NORTH Americans fit into the Fiats.
Many women yes, many men no.
My retired Chinese friend from Hong Kong would fit, but he isn't
interested in such a small car to replace his oldie run forever Corolla.
He's looking at the Ford Fusion, Nissan Altima size, whatever that is
called today.

Nope I like the LH, having two, but I'm looking for a smaller sedan.
So are many others looking for something smaller and more fuel efficient
in town.
The Sebring is the right overall size, but many aspects of it I don't
like. The Caliper looks like a squashed truck so I pass on it. The
Compass has a good profile, but that Jeep front turns me off.

Just for the hell of it I recently had a look at Honda's as I walked by
the dealer.
The Civic is now a reasonable sized car, but still a good price. It
could be a possibility if I needed a car now, which I don't.