Bruce Coventry: The engine alliance invested $803 million to build two plants in Dundee, Mich.
Last week the Chrysler group invited reporters to the first of two new plants here that will build the 1.8-liter, 2.0-liter and 2.4-liter engines. The Dundee plants are about 45 miles southwest of Detroit.
The engines were developed by DaimlerChrysler AG, Hyundai Motor Co. and Mitsubishi Motors Corp. The three automakers own the Global Engine Manufacturing Alliance.
The alliance plans to produce 1.8 million engines annually at five plants, including sites in Asan and Hwasung, South Korea, and Shiga, Japan. Each plant will be able to build 420,000 engines annually.
Production in Dundee began in September.
Bruce Coventry, president of the engine alliance, spoke with reporters, including Staff Reporter Mary Connelly.
What is the total investment in the two engine plants in Michigan?
The total program investment, including engineering and research and development, is $803 million. (That includes) $600 million for both plants at full capacity.
When does the second plant begin operation?
It will begin about October next year.
Are you comparable to Toyota in terms of efficiently making engines?
There is no question they are the rabbit that we are chasing. No question. We think we are going to outrun the rabbit.
What percentage of the engine is domestically sourced?
Eighty-two percent of the components are NAFTA-based. Eighty-two percent on a cost-weighted basis.
How hard a sticking point with the UAW was the one job classification?
For us it was fundamental, absolutely fundamental.
Was it a make-it or break-it provision?
The UAW gets it. They are going to hold us accountable because they want it to work. This is where it is going in the 21st century. It doesn't say you give up all the history and heritage and all the things you stood for. It just says you recognize that in the future things are moving in a different direction.
What does it mean when you say there is no first-line supervision?
There are no foremen in this plant at all. You've got a team that has a team leader. (The team) hand picks and selects the team leader.
How many people are on a team?
It varies by department and by geography. Typically there are six to eight people on a team. One of the things that is very different about our teams is that every team has a mechanical engineer and an electrical engineer assigned to the team.
How many employees are at the two plants?
Eventually, at full volume, 250 hourly, 150 salary and about 150 from our partners providing service support.
Why so many salaried employees compared to hourly employees?
Because every team has a mechanical and an electrical engineer.
Will the employees of the service providers be UAW workers?
Some of our service providers are currently negotiating contracts with the UAW. The union is seeking to organize most of our service providers.
What elements of this manufacturing model are transferable?
What we are finding is that these very focused partners have better systems, better processes, better costs and ultimately better results. Those are clearly transferable.
The people who are maintaining our building are the people who built our building. They know our systems.
That is where you save?
Absolutely. And they are more efficient at doing it than we were. It is not just the cost. It is efficiency.
That is where the real savings is, finding somebody who can do it better, faster and cheaper than you can.
What percentage of savings?
It depends on the actual service provided.
Our savings runs anywhere from 15 to 35 percent on an annualized basis over what we would be paying to do it.
You may e-mail Mary Connelly at [email protected]