By JOHN DEMPSEY, Kokomo Tribune staff writer
DUNDEE, Mich. - Chrysler Group's "Powertrain Offensive" began in February as part of a plan to return that portion of DaimlerChrysler to profitability by using new technologies to build better and more fuel-efficient engines, transmissions and axles.
The idea of producing engines that provide better fuel economy more efficiently began in the late 1990s and became reality in October 2005 with the opening of the Global Engine Manufacturing Alliance (GEMA) plant in Dundee, Mich.
Lessons learned from GEMA will be incorporated into Chrysler's joint venture with German transmission builder Getrag Corporate Group in a transmission plant scheduled to be built in Tipton County.
"[The Getrag plant] will be a continuous improvement of everything we've learned ... ," Chrysler Group Vice President of Powertrain Manufacturing Richard Chow-Wah said.
A joint venture among Chrysler, Hyundai and Mitsubishi, GEMA consists of five plants in the United States and Asia.
"All of us needed new engines," Bruce Coventry, president of GEMA, said of the reason they came together. "We're able to take advantage of global resources. It gives us the ability to build a flexible product."
Each of the GEMA plants machines the cylinder blocks, heads and crankshafts before assembling what is known as the World Engine, a gasoline-powered, four-cylinder, aluminum engine. It comes as 1.8-, 2.0- or 2.4-liter naturally aspirated or as a 2.4-liter turbocharged engine.
The World Engine comes on 22 models among the three companies, including the Dodge Caliber, Chrysler Sebring sedan and convertible and Jeep Compass.
It has already shown a 5 percent increase in fuel economy and averages 35 miles per gallon.
The World Engine contains dual-variable valves - something normally found only on high-end vehicles.
"Those are something you're seeing on a Lexus or Mercedes. We're doing the same thing and putting it on a $14,000 Dodge Caliber," Coventry said. "But, we can do it because our scale is the key. It allows us to add content so the engine is better, its fuel economy is better and it lowers emissions."
Savings come from the number of engines produced and through the power of buying as one in large numbers. GEMA plants, once they reach full capacity, will produce 2.2 million engines per year. The Dundee plant produces 500,000 engines a year "and it's only half open," Coventry noted.
"It's like shopping at Sam's Club," he said. "We try to go together. Instead of buying as one man, we buys as three companies and we expect a volume discount."
It also allows for the cost of tooling to be spread out.
Aluminum engine blocks come from suppliers in Korea, Japan and America. Pistons, however, come from one manufacturer in order to meet the engine's rigid specifications.
Engines from any of the GEMA plants can be shipped to any of the three companies vehicle assembly plants.
In developing GEMA, officials of the joint venture examined other companies to determine the best practices.
For innovation, Hewlett-Packard was the model, while Wal-Mart was examined for its inventory practices. Dell, Honda and Toyota were examined for their manufacturing processes. GEMA's safety model was extracted from practices at General Motors while the Center for Disease Prevention and Control and its reporting process were used to determine GEMA's people process.
Education, the company president said, and continuous training are "what make things work here."
"Everyone who works here has a two-year technical degree, is a skilled journeyman or has five years of CNC (computerized numerical control) machine experience," Coventry said. "We spend a lot of time and energy on training and education."
Each new hire goes through an extensive 10-week process that emphasizes lean use production. They spend the first week in a classroom setting as well as portions of the next three weeks before going on the floor for six weeks. They then must pass a certification exam before being allowed to work.
The Michigan plant has just 380 employees, 23 of which are in management. Hourly employees are represented by United Auto Workers while Chrysler Group has 19 of the management employees. Hyundai and Mitsubishi each have two on staff. In addition to Coventry, there is an operations manager for assembly and another for manufacturing.
"There are only five different types of employees," Coventry explained. "Many of the services here are done by outside contractors who are partners with GEMA."
Those include areas such as supplies, testing, equipment maintenance, IT support, building maintenance, landscaping, security and medical services. That lets employees concentrate their efforts on the core product - the engine.
"We leverage our resources for the best features and the quality we tend to get is much better."
Hourly employees work in teams with a team leader and each team is assigned an electrical and mechanical engineer.
"There are no first-line supervisors," Coventry explained. "With the engineers attached to teams, it shortens the time you need to solve problems."
To look at Coventry, you can't tell he's GEMA president. Along with other white-collar staff, he wears the same uniform as his employees and those of GEMA's partner companies.
Employees are scheduled on a 3-2-120 format: three groups of employees who work 10 hours per day, four days per week, which allows the plant to run six days and 120 hours per week.
"Everyone is off at least three days per week. Every 17 days, they have five days off," Coventry said. "That allows us to run 196 days per year and there is no overtime.
"There's plenty of work and we get 49 more days of production a year. We buy less equipment because it runs longer and that's very cost effective."
While employees are UAW members, "we aren't part of Chrysler's profit sharing."
"If we meet goals, we pay an amount," Coventry said. "We set aggressive targets.
"Everyone is included. Our partners' goals are aligned with GEMA."
Although the targets, which are aligned around safety, quality and production goals, may be aggressive, he said the average bonus in 2006 was $800 to $1,000.
Within each team, the company shoots for cross functioning with the 4A Principle of "Anyone, anywhere, can do anything at any time."
A major reason for GEMA's success comes from its CNC machinery.
"We can spend the first half of the day working on one part," Coventry said, "and change to a new part over lunch. All we have to do is change the computer codes on the machine before the break and when we come back, we're ready for the new part.
"By using CNC machines, we don't have to retool and shut down plants like we would have had to do in the past.
Talking boards located on the lines inform employees when to make changes, when to check machinery or if there is a problem. When its parts supply reaches a certain point, the machine itself sends a computer message asking for parts. A partner in the supply area then brings the needed supplies.
There are seven CNC machines on each on the A and B sides of the line and each one can do the same job. GEMA has bundled its capital tools as well as its parts.
"On the old transfer lines, everything shuts down if one machine goes down. You lose your production until that machine is fixed," he said. "Here, if we lose one machine, we only lose one machine out of 14."
The same machines can cut different paths using the computerized technology.
"In the old days, you had to have specially made machine tools. If a part broke, you had to make another just for that machine," Coventry noted. "These use standard components."
But, because of the cost of the machines and their life expectancy, maintenance is a huge priority and can't be overlooked.
Tags on each machine provide employees a considerable amount of information.
"They tell where it is, what it is, do you lubricate it or pull it offline. Asset life is very important," Coventry said. "We've identified everything of high risk in the plant so we never miss a maintenance cycle on the high-risk items."
Priorities are fixed for employees when it comes to problems on the lines or machines.
"Safety comes first," Coventry said. "If there's a safety problem, it's immediately addressed. Delivery and quality problems come next and cost-related are marked last."
In its first year of production, GEMA's Dundee plant beat the safety performance at 33 DaimlerChrysler plants.
GEMA's challenge, its president said, is to learn to compete in a global market.
"We have meetings, town-hall meetings, where we discuss where we are. Are we improving? Are we approaching world-class levels," he said. "We're not competing with just the Big Three (GM, Ford, Chrysler) anymore, but with the world's best."
But, as Coventry noted, GEMA's initials can also stand for another slogan: Greatest Engines Made Anywhere.