Making of the Chrysler PT Cruiser

10 March 2000

Making of the Chrysler PT Cruiser
    Operating Principles Ensure World-Class Quality
    120,000 Hours of Training for Toluca Workforce for Successful Launch
    Flexible Production Allows No Loss of Vehicles During Launch


    TOLUCA, Mexico, March 9 The Chrysler PT Cruiser coming off
of the assembly line at DaimlerChrysler Corporation's Toluca Assembly Plant in
Mexico is world-class -- not only in the quality of the finished product, but
in the skilled workforce and Operating Principles employed to build it.
    When DaimlerChrysler Corporation decided to produce the segment-busting
Chrysler PT Cruiser after receiving rave reviews of the Pronto Cruizer concept
car in 1998, it needed a manufacturing site with sufficient capacity,
flexibility, productivity and a trained work force to bring a high-quality
vehicle to market quickly, at a low cost and with no loss of production during
its launch.
    Faced with this challenge, and operating near full capacity at its
manufacturing facilities, the Toluca Assembly Plant met the criteria, plus had
the capacity and track-record that made it the ideal location for worldwide
Chrysler PT Cruiser production.
    "Bringing a brand new vehicle, in an all new segment like the PT Cruiser
to market quickly -- from concept to volume production -- is always an
enormous task," said Gary Henson, DaimlerChrysler Corporation Executive Vice-
President of Manufacturing.  "Although the launch curve is ambitious, we're on
schedule and we're shipping product.  We haven't lost any production, and
we've stayed focused on quality throughout the entire process.  It's a success
story for the PT launch team in Toluca and in Auburn Hills."
    Building on the design and development strength established during
previous launches as well as other best practices, the company has kept total
Chrysler PT Cruiser startup costs below $600 million, including design,
development, re-tooling, training, facility improvements, increased automation
and pre-production trials.
    "Bringing the PT Cruiser to market quickly, for relatively low cost is the
result of taking advantage of new technologies in development, implementing
best practices throughout launch, cutting waste out of the value chain, and
using our Operating Principles to efficiently produce repeatable, reliable
world-class quality," said Henson.  "The goal is to get better with every
launch, and we're doing that."

    Flexible Manufacturing Launch
    Currently the Chrysler Sebring Convertible, Chrysler Stratus and Chrysler
PT Cruiser are assembled in the plant on the same lines, demonstrating the
manufacturing flexibility of the Toluca facility.  This level of complexity
requires additional error proofing measures throughout the manufacturing
process.
    Toluca has the capacity to produce 40 vehicles per hour.  As it continues
the aggressive production launch, the number of PT Cruisers will steadily
increase, as the number of the Dodge Stratus and Chrysler Sebrings decrease.
Likewise, the new 2001 Dodge Stratus and Chrysler Sebring sedans, along with
the Sebring Convertible, will begin ramping up this summer in Sterling Heights
Assembly Plant (Michigan) while Stratus and Sebring coupes will be produced in
Normal, Illinois.  This will bring Sterling Heights to full capacity, while
creating additional capacity in Toluca to support additional demand for the
Chrysler PT Cruiser.
    At full production this summer, Toluca will have the capacity to produce
about 180,000 Chrysler PT Cruisers annually.  Approximately 3,400 team members
operate on two shifts at the Toluca plant.
    Toluca will produce both right and left-hand drive 2.0 liter and 2.4 liter
versions for the world market.  This is the first right-hand drive vehicle
produced in the Toluca plant.  In order to reduce the complexity of adding a
right-hand drive version, the vehicle was designed to maximize side-to-side
symmetry.
    Additional right-hand drive assembly and testing capabilities were added
throughout the plant, including: on-line electrical system testers, radiator
and hose installation processes, chassis dynamometers, wheel alignment
equipment, seat installation and tool duplication for all operations that vary
between the two configurations.

    Training the Trainers
    With the challenge of launching an all-new product with such innovative
design and complex engineering, team member training was extensive.
Production teams from the plant were integrated early in the design
engineering verification process.  The same teams were trained with the first
pilot vehicles developed at the DaimlerChrysler Tech Center (DCTC) Pilot Plant
in Auburn Hills, Michigan, in a "train the trainer" process.  Core production
teams from Toluca, representing every workstation in the plant, rotated to
Auburn Hills in six week intervals, over eight months.  These core teams then
cascaded the information back to the plant.
    Ultimately one team member per workstation per shift was trained in Auburn
Hills before the start of the pre-production vehicle build, representing about
25 percent of the total workforce at Toluca.  Each trainer received nearly 500
hours of instruction, for a total of 120,000 hours, and was a crucial part of
refining and evaluating production processes.
    Following the pilot build in Auburn Hills, pre-production vehicles were
built on the assembly line in Toluca during normal production.  This helped to
refine production processes on each station, and to ensure the repeatability
and standardization necessary for world-class quality.  Running pre-production
vehicles in the plant also saved both time and money in product development.

    Quality
    Through continuous improvement processes, and its experience in using the
company's Operating Principles, the Toluca plant and its workforce have a
reputation for producing high quality vehicles at low cost.  In fact, Toluca
was one of many plants benchmarked by the worldwide DaimlerChrysler
manufacturing group in developing best practices for the company's Operating
Principles, the comprehensive system it uses to produce vehicles.
    To ensure quality, the Toluca plant verifies parts, processes and fit and
finish every step of the way -- from stamping and body, to paint and final
assembly.
    Some of quality assurance processes include:

    *  Measuring dimensional accuracy of eight full bodies per day by
determining millimeter variances in the x, y and z axis of 2,000 points on the
body using 5,493 charts;
    *  visual management through quality alert systems, which are designed to
bring abnormal conditions to light immediately.  The system provides visual
and audible signals for each station for tooling, production, maintenance and
material flow;
    *  the addition of 55 robots in the dimensional and integrity welding
areas, including two framing stations;
    *  daily weld and sealing audits, performed by ultrasonic weld detection;
    *  daily body, paint and assembly audits for internal and exterior
evaluation;
    *  100% Electrical and mechanical systems audits;
    *  100% water tests;
    *  daily customer satisfaction audit (CSA); and
    *  100% road test evaluation on the Toluca proving grounds.

    The Operating Principles
    Like all DaimlerChrysler Corporation's manufacturing facilities, Toluca
conducts its business using the Operating Principles.  Rather than merely a
way to assemble vehicles, the Operating Principles represent the way the
company does business and maintains a lean extended enterprise system. It
begins with core values and beliefs, the philosophical principles from which
decisions are made.  From there, DaimlerChrysler looks at the "how,"
identifying the enablers and subsystems needed to execute DaimlerChrysler's
work (like human infrastructure, balanced schedules, value added activities
and robust processes).  DaimlerChrysler then identifies ways to support those
processes, tools for implementation, and standardized measurements to gauge
effectiveness.
    The Operating Principles give employees at the plant the big picture
framework from which to operate, at the same time providing standardized
methods and repeatable processes.  The end result can be tracked and improved
by focusing on Safety, Quality, Delivery, Cost and Morale (S,Q,D,C,M),
internal gauges that each team member contributes to.  Because continuous
improvement is one of the core beliefs, the process never stops.
    Toluca has embraced the Operating Principles, evidenced in its well-
organized workstations, standardized processes, ability to use visual
management, efficient material handling, balance of high tech and manual
processes and its commitment to training.

    The Supply Chain
    PT Cruiser suppliers were integrated in the cross functional teams early
in the development process.  They participated in the pilot builds at
DaimlerChrysler Technical Center, as well as the pre-production vehicles in
Toluca, to ensure the same high standards are met throughout the supply chain.
    The Toluca plant has many of its parts and modules delivered SPD
(Sequential Parts Delivery) and just-in-time to the plant.  This allows the
plant to maintain about a day and a half of inventory, keeping the operation
lean and efficient.  Several suppliers located operations near Toluca in order
to better serve the plant.  Depending on the type and amount of components
they supply, they either deliver to one of two nearby sequencing centers or
directly to the plant.

    Stamping On Site
    Toluca Assembly includes a satellite stamping plant on site to help reduce
logistics and production costs.  With the Chrysler PT Cruiser, Toluca is also
using DaimlerChrysler's first compression seam (mash) welding.  This enables
team members to weld different thickness of steel together and results in
better structural rigidity with fewer parts, which, in turn, leads to better
dimensional integrity and quality.



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