Profitability at Jeep Plants
Date 2005/12/28 13:00:00 | Topic: Facilities
|Forbes is running a very interesting article about building multiple cars on a single assembly line to increase the profitability of a plant. Obviously, since you're reading this, you're guessing that it mentions something about the Jeep Compass, Patriot, and the Dodge Caliber - 3 vehicles that are probably going to be built on the same platform. Here's a snippet:|
For starters, Chrysler will replace the lackluster Neon with an attractive five-door hatchback called the Dodge Caliber. I can only guess at the volume, but it may be possible to produce and sell 160,000 copies of the Caliber in a full year. That's still not a full plant's worth. So Chrysler will be using that same Caliber platform and building two new Jeeps from it next year, the Patriot and the Compass.
The two new Jeeps will be more car-like that the usual "Trail Rated" rugged Jeeps. I call the newcomers "Sissy Jeeps." That aside, if Chrysler can sell/build 40,000 each in a full year, it brings Belvidere up to 240,000 for the year, a full two-shift operation, and double the 2005 year output. That's the profitable way to run a plant. If those new vehicles are hits (I have some doubts about Chrysler's plans to sell the new Caliber overseas), a highly profitable three-shift operation is possible.
Chrysler has taken the same approach with its Detroit Jefferson plant, by adding the Grand Cherokee-based Jeep Commander to the Grand Cherokee assembly line. The Commander could add another 40,000 or 50,000 units per year to that factory. Next year in Toledo, Ohio, a new Dodge sport utility vehicle, the Nitro, will come off the same assembly line that builds the Jeep Liberty.
Regardless of what you think of the Compass, Patriot, and Commander, the article makes an interesting argument for their existence.
Check out the entire article.