LUCA CIFERRI

U.S. Jeep plant shows smart way to cut costs in Europe

Automotive News | January 13, 2012 - 12:01 am EST

European automakers that are struggling to find new ways to cut costs to cope with fading domestic markets should take a look at a successful year-long experiment done in Toledo, Ohio.

Chrysler Group's plant there operates 10 hours a day four days a week to build the Jeep Liberty SUV (previously sold as the Cherokee in Europe).

While vehicle output matches that of a traditional eight-hour-a-day, five-day workweek, production costs are lower because equipment is idle one more day a week.

Labor costs are unchanged because employees still work 40 hours a week, but they benefit from having regular three-day weekends as well as a 20 percent reduction in their commuting time and costs.

The environment also benefits because emissions from the employees' cars -- as well as the plant -- are reduced.

What's interesting is that the new work schedule, which began as a two-month experiment in January 2011, was proposed by the union boss Dan Henneman after Toledo plant manager Mauro Pino, an Italian hired by Fiat-Chrysler CEO Sergio Marchionne to run production at U.S. factories, asked UAW Local 12 how it would help cut costs.

Many European countries would need to negotiate special agreements so that the two extra hours a day would not be considered overtime, but I really think it would be worth a try. European labor unions should be as creative and as proactive as their counterpart in Ohio to find better ways to match automakers' and workers' needs.

Luca Ciferri is Automotive News Europe's chief correspondentLuca Ciferri is Automotive News Europe's chief correspondent

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