Fiat Chrysler and the $1 Billion Upgrade

Fiat Chrysler and the $1 Billion Upgrade

January 29, 2018

In the latest announcement in its ongoing restructuring of US manufacturing, Fiat Chrysler will invest $1 billion to modernize its plant in Warren, Michigan.

The plant currently produces Ram 1500s. Production of the next version of the 1500 will shift to another plant, allowing the modernized Warren plant to manufacture two new Jeeps.

In 2020, Fiat Chrysler will also shift production of Ram Heavy Duty trucks to Warren from Saltillo, Mexico, resulting in a net increase of 2,500 jobs at the plant.

This post is based on the NY Times article, Fiat Chrysler to Spend $1 Billion to Modernize Michigan Plant, by Neal E. Boudette, January 11, 2018.

Discussion Questions
1. What is the trend for auto demand in the US?

Guidance: Two major trends include growing demand for larger, roomy vehicles instead of compact and midsize cars, and growing pressure from the government to bring foreign auto production back to the U.S.

2. What is Fiat Chrysler’s response to the trends above?

Guidance: The company will make more trucks and fewer cars, shifting production of sedans to light trucks at its Sterling Heights plant, retooling its existing Warren plant to focus on producing Jeeps and heavy duty Continue reading

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Tesla Needs To Build Fast and Furious

Tesla Needs To Build Fast and Furious

January 24, 2018

Tesla has had multiple issues with production of its new Model 3 car. They’ve missed targets for volume production again and again, producing only 1% of the cars originally forecast for 2017. Tesla is struggling with the learning curve, and likely with the design of production processes, to mass produce a quality car.

Production rates have increased in recent weeks. Is the worst behind them?

This post is based on the Bloomberg article,  Tesla’s Model 3: Slowest. Rollout. Ever., by Dana Hull, January 11, 2018.

Discussion Questions
1. How could learning curve theory be applied to help Tesla produce the Model 3 in a timely manner?

Guidance: Review the learning curve concepts. Students should be asked how the learning curve could be applied to the production of the Model 3.  This discussion could include mentions of the learning curve for parts of the production process, the entire production process, training of workers, etc.

2. What manufacturing process should Tesla consider to mass produce the Model 3?

Guidance: Review manufacturing processes. Students should be asked to develop a list of pros and cons for each manufacturing process option as related to the Model 3.

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