By January 13, 2007 0 Comments Read More →

WSJ Interviews LaSorda

Tom LaSorda Plebeian Prince (WSJ)

Here is a new interview with Chrysler’s Tom LaSorda, a lean leader who has been featured often here on the Lean Blog (some earlier posts here).

LaSorda is spending a lot of his time at the Auto Show talking with dealers after the inventory problems they’ve gotten themselves into (waste of overproduction).

Last year Chrysler built far more cars and trucks than it could sell. Unsold inventories piled up. The company pushed dealers to buy more cars — even shipping cars to dealers who didn’t order them.

The article continues:

Sales of the high-horsepower cars that had fueled Chrysler’s turnaround plunged. And then Mr. LaSorda, the manufacturing whiz, lost basic manufacturing discipline. “We built too much inventory last year,” Mr. LaSorda concedes. As he tells it, the problem crept up on the company. Mr. LaSorda cut production in July and August. But he didn’t cut it enough, partly because Chrysler overestimated how many cars and trucks it could sell last summer and fall.

One other topic of interest that’s covered is the future role for Chinese production in the auto industries (and Chrysler’s talks of partnering to import cheap cars):

As for concerns, expressed by GM and Toyota executives, that Chinese-made cars aren’t good enough for the U.S. market, Mr. LaSorda disagrees. “I walked through their plants,” says the manufacturing expert. “I walked through their [engineering] labs. I walked through their suppliers’ plants and their design studios.” He saw lots of Western-made high-tech equipment, he explains, and “I was quite convinced.”

It’s a shame, though, that LaSorda falls back on the “we can’t compete” mantra that’s so common in the broader manufacturing world:

Meanwhile, in the quest to add fuel-efficient small cars to Chrysler’s lineup, Mr. LaSorda is turning to China. His deal to import cars from Chery Automobile Co. likely will make Chrysler the first Detroit company to import Chinese cars to the U.S. It’s yet another irony for a man with deep union roots, but Mr. LaSorda says he has no choice.

“We can’t compete in this segment with our cost structure in Canada and the U.S.,” he says. “So what do we do, just sit and wait?”

Lean advocates and practitioners like to talk about using Lean methods as an alternative to chasing cheap labor. Chrysler can’t get their costs down low enough and quality high enough to compete with China? I guess they can afford to build cars that customers and dealers don’t want, but they can’t afford to build inexpensive cars here in North America. Is LaSorda moving away from lean or is he just being realistic? What do you think?

By comparison, Jim Womack said in our recent podcast that China is nowhere near ready to build cars for American consumption. We’ll see.

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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