Scott Kunselman, Chrysler Group's head of purchasing, says Chrysler is reaping the benefits of buying parts jointly with Fiat. Kunselman, 50, discussed some of the challenges facing Chrysler during a July 22 interview with Staff Reporter Larry P. Vellequette.
Q: How closely are you watching regulators' investigations into alleged price-fixing among suppliers? Has Chrysler been victimized?
A: I don't think we can comment on it at this point, but it's obviously something we're paying close attention to.
Are you raising quality standards, including engineering tolerances, on parts as Chrysler recovers?
Are the tolerances on the drawings different than before? No. Are we accepting deviations? No. We accepted more deviations in the past than we do now, and we have an entirely new and more rigorous process for validating this. [Almost] all of our plants now have a nice new metrology center, and that's a key piece of our validation process now: having the tools, having the activity and taking it seriously.
I don't think we specify things tighter. We just require them to be there.
In the past, it would have been a little bit easier to get approval for an exception. It's very clear with these tools how you can disrupt other places on the car.
So with these tools, if a deviation is requested, you can see if it's going to be disruptive to other places on the car.
How are you doing in efforts to combine Chrysler and Fiat purchasing?
Our combined buy is $100 billion, and in gross terms, it's about equally split.
Today, it's probably a little heavier on the Chrysler side because of the volumes.
It all starts with where are we on platforms.
We have the CUSW [platform] that we designed together, and that platform is now in place producing the Dart, the Viaggio in China and the Cherokee in Toledo. We are also now on the verge of having three plants in North America capable of building that platform.
We're starting to see the fruits of the opportunities that are driven by common parts that are part of that big buy.
We have an organization that's defined globally by commodity, so that anytime I'm looking at certain types of business or at a certain supplier, I'm looking at them globally. That means that all business is on the table.
Are European suppliers looking to North America to stay afloat while their domestic industry struggles?
In general, we don't see that. Maybe on an emergency basis, but because of logistics and labor rates, I just don't see that as sustainable.
Today more than ever, I would say that we have to be attentive to regional needs.
There was a time not very long ago where people would operate on the assumption that there was a low-cost place where I should be going to get this commodity, and it's in China or wherever.
Some of those aren't sustainable. It may have been true, but we can't assume that that's forever.
So as we look at changing economic conditions in various regions, we have to look at logistics costs, because when fuel goes up, it goes up for ships and airplanes as well.
In some ways, I see the trend almost reversing itself, in terms of regionalism being important.
I think what you'll see is big announcements of people opening shops here in North America, and not necessarily saying that I'll just go get the capacity that's available.
Do you expect more cross-platform sharing of parts?
There are certain components that are platform specific, and those are largely dictated by the laws of physics with reasonable physical limits that are designed up front.
But then there are components that aren't scaled to the physics of a platform -- like a window switch, for example.
There's no harm to the customer to have the same one in every car, assuming the features match.
So we have a long list of over 100 of those parts too that, independent of platform, are expected to be common.
Some of them are subterranean, and the design guys don't care because they aren't seen or touched by the customer.