DaimlerChrysler AG's manufacturing arm is looking to cut $1 billion in non-material costs in 2001, as part of its effort to restructure operations, Tom LaSorda, senior vice president of powertrain manufacturing said Monday.
|2001 Management Briefing Seminars index|
Speaking at the 2001 Management Briefing Seminars in Traverse City, Mich., LaSorda said the automaker is achieving the savings through a variety of organizational cost cuts in areas such as training, reduced overtime and administration practices. An estimated 95 percent of the cost reduction will come through internal measures, with the other 5 percent coming largely from suppliers.
LaSorda said none of the nonmaterial cost savings will come as a result of DaimlerChrysler's demand that suppliers cut costs by 5 percent.
LaSorda also said Chrysler group will continue its commitment to design.
He said that while some of the company's underbody construction will be process driven - a method employed by its Japanese competitors - the overall philosophy of manufacturing will continue to be design driven. He said process-driven production leads to a "bland" product line.
The company has reorganized its platform design teams in order to integrate manufacturing concerns at the earliest stages of developments, but common-platform manufacturing will not compromise the exterior design of Chrysler products, he said.
LaSorda said that, along with cutting costs, the company's top concern is improving quality. He predicted that its top-level quality performers, such as the Jeep Grand Cherokee and Dodge Intrepid, will rank at or near the top of their respective classes on next year's J.D. Power and Associates Initial Quality Survey.