DaimlerChrysler Working with Suppliers to Drive Performance
01 Septembre 2004 - 10:35PM
PR Newswire (US)
DaimlerChrysler Working with Suppliers to Drive Performance
Chrysler Group President and Chief Executive Officer Dieter Zetsche
Delivers Speech to Auto Industry Action Group (AIAG) DETROIT, Sept.
1 /PRNewswire-FirstCall/ -- In a speech today at the Automotive
Industry Action Group's (AIAG) annual Auto-Tech conference,
Chrysler Group President and Chief Executive Officer Dieter Zetsche
urged auto industry suppliers to apply greater innovation and work
cooperatively with the automakers to maintain U.S. auto-making
competitiveness. "It's adapt or die," said Zetsche. "Time and
sub-par results are luxuries the North American-based auto industry
can't afford. It's a matter of survival." DaimlerChrysler, Ford and
GM combine to purchase 80 percent of all U.S. auto parts, relying
on suppliers for as much as 70 percent of the components in some of
vehicles. "In the past, many of our suppliers provided us with
components that were inferior to those they supplied to Japanese
automakers. Certainly, we bear some blame. It's our fault that
we've accepted poor quality in the past and our designs may have
had something to do with many of the poor quality components we
received. "Collectively, we set the bar too low. And we both lost."
Zetsche said that's why tough-love and sometimes acrimony have
displaced warm and fuzzy in industry relationships. He said the
Chrysler Group has worked to increase quality, raise productivity,
cut costs and streamline operations -- all at the same time and for
the long term. "For example, even though we've achieved about an
eight-percent improvement in productivity two years in a row, we're
still pushing ourselves to do more. We said we would make
double-digit improvements in product quality. And we got that two
years running as well. It's a bit unrealistic to expect to keep up
this pace in a year with the most all-new product launches in the
80-year history of our company. "But, we're not letting up on our
product offensive ... we still expect to achieve meaningful gains
in both productivity and quality in 2004." Zetsche added that over
the last four years, the five-year product plan reduced spending by
approximately 30 percent, while increasing the number of new
vehicles by about 50 percent. "I don't even want to think of the
position we'd be in if we had not pushed ourselves this hard, this
fast," said Zetsche. "The reality is that all the hard work
necessary to achieve those breakthrough successes is now a daily
requirement for us and for each of you. We're all fighting the same
battles brought about by cutthroat competition and the need to
slash costs, improve quality and innovate in every corner of our
industry." Zetsche urged the lunchtime Auto-Tech crowd of more than
1,000 to innovate and work together. "The only way for us to win
this war is by working together to find new solutions for the
problems that confront us in this industry," he said. "What it
comes down to is the need for radical approaches to some nagging
problems -- old and new -- that simply aren't going to be fixed
through old solutions." One example he pointed to was announced
last month in Toledo -- the co- location of three suppliers in new,
on-site facilities adjacent to the company's Toledo North Assembly
plant. The suppliers will own and operate the Body Shop, Paint Shop
and Chassis Assembly operations within the footprint of the Toledo
Plant -- the first time suppliers will operate as an integral part
of an American auto assembly plant. "We think this a win-win
arrangement and one that can be a prototype for many other
collaborative partnerships between OEMs and suppliers," he said.
The three suppliers at Toledo will invest about a third of the $900
million capital investment for this new facility. In fact, the
Toledo complex could see a total investment of $2.1 billion and as
many as four new products over the next few years. As many as 12
additional suppliers could become involved in this single project.
"This kind of innovation is the road to the future -- for OEMs and
suppliers alike," said Zetsche. Zetsche also gave his views on
outsourcing. "No free-market enterprise can survive if its costs
exceed its revenues in the long term. But, while most of the talk
today is about 'outsourcing,' DaimlerChrysler has a very
deep-seated interest in 'insourcing' -- much as we did in Toledo,"
said Zetsche. "I want to stress that our company is as committed as
ever to investing in America, building products in America, and
keeping jobs in America. That's not just hot air. The results of
those commitments are highly visible." Zetsche added that the
Chrysler Group has invested, for example, some $6.6 billion in
Detroit in the last 12 years in state-of-the art manufacturing
facilities like Mack Engine I and II and Jefferson North Assembly.
"That is larger than all recent investments in Detroit's new sports
stadiums, casinos and riverfront redevelopment combined," he added.
"What we really need, more than ever, is to find new ways to make
major investments in America, to continue to create high-paying,
high-tech jobs within our plants and to continue to compete
effectively against global competitors," concluded Zetsche. "We
need to develop more 'Toledos,' in many shapes and forms." The
Automotive Industry Action Group is a globally recognized
organization founded in 1982 by a group of visionary managers from
DaimlerChrysler, Ford Motor Company and General Motors. AIAG has
nearly 1,600 members, including suppliers, OEMs and small business
interested in maximizing their voice in the industry. AIAG provides
an open forum where members cooperate in developing solutions that
enhance the prosperity of the automotive industry. DATASOURCE:
DaimlerChrysler CONTACT: David Elshoff, +1-248-512-2690, or Edward
Saenz, +1-248-512-2674, both of DaimlerChrysler Web site:
http://www.media.daimlerchrysler.com/
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