World Class Manufacturing: Agent of Cultural Change · WORLD CLASS MANUFACTURING Management Commitment Clarity of Objectives - KPI Route Map to WCM Allocation of Highly Qualified

World Class Manufacturing: Agent of Cultural Change

Scott GarberdingExecutive Vice President

Head of Manufacturing and World Class Manufacturing

CAR Management Briefing SeminarsTraverse City, Mich.

August 2, 2010

CAR Management Briefing Seminars August 2, 2010 2

Cherry Capital of the World


“Failure is not fatal.

But failure to change might be.”-John Wooden

U.C.L.A Basketball Coach

Embrace Change


Chrysler Group LLC Shareholders

VEBA67.69%

Canada 2.46%

U.S.Treasury9.85%

Fiat 20%

VEBA Canada/Ontario U.S. Treasury Fiat

Develop 40 mpg vehicle with

Fiat technology or platform

to be produced in U.S.

Develop fuel efficient engine

family to be produced in U.S.

Certain metrics relating to

revenue and sales growth

outside of U.S., Canada

and Mexico

Five percent gained if:


Improved U.S. market share at 9.2%

Continued strict inventory discipline with 60 days supply (June 2010)

1st Half 2010 Operational HighlightsDemonstrating Steady Improvement Over Q1 2009

U.S. sales increase 12% in first six months

Operating profit $143 million in Q1


Future Products

•Chrysler 300

•Dodge Charger

•Dodge Durango

•Fiat 500

• Many more

xvehicles will get

xsignificant exterior

xor interior

refreshes,

xor both

Future Launches

All-new 2011 Jeep Grand® Cherokee

75% of our product portfolio – a total of 16 vehicles –

will be renewed or all-new this year.


Manufacturing Initiatives and Investments

In total, we’ve invested nearly $1.3 billionin powertrains since 2007.

•$730 million investment in new Pentastar V-6 and new Trenton (Mich.) South Engine Plant

•$179 million investment in GEMA plant in Dundee, Mich. to build new 1.4-liter FIRE

•Investing more than $340 million in Kokomo (Ind.) Transmission manufacturing facilities


WORLD CLASS MANUFACTURING

Management

Commitment

Clarity of Objectives -

KPI

Route Map to

WCM

Allocation of Highly

Qualified People

Commitment of

Organization

Competence of

OrganizationTime & Budget Level of Detail

Level of

ExpansionMotivation of Operators

CO

ST D

EPLO

YM

ENT

FOC

USE

D I

MP

RO

VEM

ENT

AU

TON

OM

OU

S A

CTI

VIT

IES

PR

OFE

SSIO

NA

L M

AIN

TEN

AN

CE

QU

ALI

TY

CO

NT

RO

L

LOG

ISTI

CS

EAR

LY E

QU

IPM

ENT

MA

NA

GEM

ENT

PEO

PLE

DEV

ELO

PM

ENT

SAFE

TY

ENV

IRO

NM

ENT


Partnership with UAW


Our Future is Our People …


Journey to WCM

FIAT SpA.

Chrysler Group

Fiat: Holistic Approach to WCM

WCM Launch

2004 2006 2008 20092005

One

Common

Manufacturing

Operating

System

20102010

2010

Chapter 11

2004 2006 2008 20092005

WCM LaunchChrysler: Metric Focus

• Safety

• Quality

•Harbour Report


WCM History

A New Company Formed

June 10, 2009 Chrysler

Group

Jefferson

North

Assembly

Plant

Fiat

Cassino

Plant


Structure / Objectives

Workplace

OrganizationQuality Maintenance Logistics

People involvement, value creation, customer satisfactionValues

Co

st

Dep

loym

en

t

FocusProductivity

QualityImprovement

TechnicalEfficiency

ServiceLevel

Methods& Standards

Total Industrial Engineering

Total Quality Control

Total Productive Maintenance

Just in Time

Targetzero waste

zero defects

zero breakdowns

zero inventory

Safety


WCM Safety

2005 2006 2007 2008 2009E ytd 2010E

Fatality

Severe

Injury

Lost Time

Injury

Recordable Injury / Illness

First Aid Cases

Near Misses

Unsafe Conditions

Unsafe Acts

Teaching us to see new opportunities

Lost

wo

rk d

ay in

cid

ent

rate

(North America manufacturing)

35% improvement

17%

15%

7%


Injury PreventionSafety Improvements

1 recordable injury, 30 first aid visits from station

“Happy Seat” slides in and out of car for easy installation• operator working inside Golden Zone• installation visible to operator• developed by team

Operators previously reached inside blindly for installation



Cost Deployment - Compass for Change

NVAA (std) Unbalancing Human Errors Breakdowns Micro Stoppages Over manning / Non standard

Logistics Changeover Lack of Material Planned Maintenance -

Professional Maintenance

Driving changethrough

loss stratification


Before After

WCM in Action – Workplace OrganizationImproved Work Environment

Jefferson North Assembly Plant

Detroit, Michigan


Before After

Equipment restored to original stateEquip

Equipment conditions

hidden

Equip

Maintained for easy

inspection

WCM in Action – Workplace OrganizationRestoring Basic Conditions



WCM in ActionFocus on Quality


182022

2009 2010

0

50

100

2009 2010

19202122

2009 2010

0

50

100

2009 2010

INJURIES

Expected Results for 2010

MANUFACTURING FIRST TIME QUALITY

EMPLOYEE INVOLVEMENT

INJURIES

8090

100110

2009 2010

OPERATING COSTOPERATING COSTS

0

10000

20000

2009 2010

PROJECTSPROJECTS

PRODUCTIVITY


Transforming Jefferson North

September 28, 2009 Kickoff

//Sitmjapr.servers.chrysler.com/japshare/Plant Share/WCM/FBOD Review July 20/JNAP_Final_Townhall.wmv


Results

Execution

Working Together

WCM in Action


The Ultimate Result is Great Products …

2011 Jeep® Grand Cherokee

“On-road, the '11 Jeep Grand Cherokee is more refined and more efficient, and doesn't give up anything for its slightly larger size. Off-road at Moab, it’s hard to imagine how it could get any better."

“The 2011 Grand Cherokee is ... hardy, well sorted, handsome, agile, with a level of seriousness and interior refinement that in places outpoints Mercedes-Benz and Cadillac …The Overland edition is an absolute steal.”

“Roomier, more powerful, more fuel-efficient than its predecessor, the 2011 Jeep Grand Cherokee becomes a worthy contender among premium midsize SUVs."


A Visit By President Obama


World Class Manufacturing: Agent of Cultural Change

Scott GarberdingExecutive Vice President

Head of Manufacturing and World Class Manufacturing

CAR Management Briefing SeminarsTraverse City, Mich.

August 2, 2010

Documents

World Class Manufacturing: Agent of Cultural Change · WORLD CLASS MANUFACTURING Management Commitment Clarity of Objectives - KPI Route Map to WCM Allocation of Highly Qualified