Flexible Manufacturing Directs Production of Jeep(R) Compass and Improves Plant Productivity

* Jeep(R) Compass, Jeep Patriot and Dodge Caliber built on one fully flexible assembly line * Sequencing center improves process, reduces costs * Multiple changes support manufacturing plant flexibility

AUBURN HILLS, Mich., June 16 -- Just four months after employees at Belvidere (Ill.) Assembly began building the Dodge Caliber in January of 2006, they started building the all-new 2007 Jeep(R) Compass. With that, the Chrysler Group began realizing the benefits of a completely new manufacturing process that allows three to four vehicle models to be built on a single production line. A third shift of production at Belvidere begins in July. Production of the 2007 Jeep Patriot begins this fall.

"We are now starting to see the results of the new flexible manufacturing process that we believe is a competitive advantage for the Chrysler Group," said Frank Ewasyshyn, Executive Vice President - Manufacturing. "Building three models out of an investment that used to produce one vehicle is clearly a benefit for us. Thanks to Belvidere's ability to build multiple models off one assembly line, we expect Compass production to cost only 15 percent of the initial investment we made in the plant to build Dodge Caliber."

At the core of the new manufacturing process is a body shop comprised of robotics instead of the dedicated tooling that was previously used. Only the robots' end affecters, or "hands," need to change in order to build different models. That tool change is done automatically, within the time it takes to cycle from one vehicle to the next. In addition, the Belvidere plant is flexible enough to vary the production mix between three products anywhere from 0 to 100 percent of each model.

"Just as the Compass will only cost a small portion of the amount invested for Caliber, the benefit will be the same when the Jeep Patriot begins to roll off the line later this year," said Ewasyshyn. "And years from now, a model refresh to any of these three products also will cost a small percentage of the original investment."

Changes Taking Place

Many changes are taking place within the Chrysler Group manufacturing process to accommodate the multiple models. For example, new ways to make the additional required stamping dies are saving the company up to 60 percent on the cost of dies. New methods of material flow are being implemented to manage the complexity of three models being built on one line.

Another example of innovation at the upgraded Belvidere Assembly Plant is its inbound parts sequencing center, which manages more than 1,797 different parts that are used in the Jeep Compass and Dodge Caliber build process. In addition to sequencing, this center provides parts metering, kitting and container management to the Belvidere Assembly Plant and delivers complete subassemblies just-in-time to the manufacturing floor. These pre-assembled modules reduce the number of components required to assemble the Jeep Compass and Dodge Caliber, improving quality, productivity and worker ergonomics.

A tunnel connects the 500,000 square-foot sequencing center to the Belvidere Assembly Plant. This facility, operated by TDS/US -- one of Chrysler Group's largest minority-owned suppliers -- represents the highest level of integration within a Chrysler Group plant. TDS/US organizes parts, puts them in "kits" for individual work stations and delivers them to the end of a connecting tunnel for Belvidere employees to transport to the manufacturing floor. This process maintains in-plant stocks at optimal levels, minimizes delivery time and reduces costs an estimated 12 percent a year compared with the previous process. By carefully managing the material flow at the plant, the sequencing center helps workers focus on manufacturing quality and allows Belvidere to remain one of the most efficient manufacturing examples in the Chrysler Group family.

A new workplace organizational model is increasing the flexibility of the Belvidere workforce, while fostering greater creativity and innovation from plant employees. This model is being implemented throughout Chrysler Group's Manufacturing organization. In addition to extensive training, the new workplace model lets employees design their own work stations. These changes provide a better work environment for employees and give increased support to assembly line team members.

"Belvidere Assembly is running on all cylinders," said Kurt Kavajecz, Plant Manager - Belvidere Assembly Plant. "In the first half of 2006, we added a second shift and started production of the Jeep Compass and Dodge Caliber. In addition, we're getting ready to launch the Jeep Patriot in a few months. Our new workplace organization model, in which employees work in small teams, has fostered greater creativity and innovation on the plant floor and made for a very smooth process."

The 3.7 million square-foot Belvidere Assembly Plant employs approximately 2,650 people on two shifts. Union members are represented by United Auto Workers' Union Locals 1268 and 1761. The plant began production of the Plymouth Fury and Dodge Monaco in 1965. The Chrysler Group will implement its flexible manufacturing process in its Sterling Heights (Mich.) and St. Louis South (Fenton, Mo.) assembly plants next.