Is China’s Chery Lean?

Chrysler Chery-picks (commentary) | MSNBC article

So Chrysler is going the route of importing inexpensive cars from China. The deal was signed, in China, on the 4th of July, which is a curious date for finalizing such an agreement.

Chrysler chairman Tom LaSorda announced that the two firms would be exporting cars built by Chery to Latin America and Western Europe within a year and to Europe and North America by 2010. “We will combine Chrysler’s research and technology and global reach with Chery’s lean manufacturing,” he said.

Interesting. By “lean” does LaSorda (who knows what true “Lean manufacturing” is all about) mean “cheap” or “low labor cost?” I’d have to presume he means Lean as in the Toyota Production System.

Chery is only about a 10-year old company. According to the Wikipedia Page, about the company:

In its relentless pursuit of quality, Chery hired a Japanese engineer from Mitsubishi to head Chery’s Lean/Six Sigma production systems, which were first applied to their cars in 2003.

A lean and six sigma double threat! Can Chery, who has been at this for three or four years, be better at Lean than Chrysler, who has probably been working on Lean, to some extent, for 20 years? Is it about being “lean” or is this deal all about cheap labor?

What do you think? I’m asking because I honestly don’t know the answers here…

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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 book 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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5 Comments on "Is China’s Chery Lean?"

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  1. Peter Risager says:

    Oh but Mark, you are commiting a terrible mistake yourself :)

    Lean-succes is not about cheap labor, or about how much time you say you spend on it. It is about dedication, and especially managerial dedication!

    While we all know that it took Toyota many many years to get at their present stage, we also know that you can spend all the time in the world on something, but without backup from top-management, you will not get anywhere. (In all fairness I do not know anything about Chery, but it they are anything like that Indian company which I forgot the name of, they will be interesting to follow for sure)

  2. Eric says:

    Now this is a cool blog. I just stumbled in here. Bookmarking this sucker now. Will also link here from my supply chain and logistics blog.


  3. Ron Pereira says:

    While I don’t know anything of this Chery company I can say I know of some plants in China and other so called low cost countries that have far superior production systems than many Western “lean” companies. To Peter’s point about dedication, etc. I think we Americans would struggle to find US employees as “dedicated” as most of these people in low cost countries. I have seen the poverty these people live in with my own eyes and have also seen how dedicated and serious they take their jobs. We would do well to copy a little of this in our abundant country.

  4. Mark Graban says:

    Peter — maybe I wasn’t clear in what I wrote. I know that lean isn’t about cheap labor, but I was asking the question in the context of what Chrysler is getting out of this. “real lean” or just cheap labor??

  5. pcary says:

    I believe that Chery has advantages that would be hard to overcome in the U.S. Chery is in China but has Japanese management (TPS)and an international staff of engineers. Speaking from 15 years of lean experience It is much easier to start a “Lean Enterprise” from a clean slate than to change an imbedded culture, It will be interesting to follow Crysler in the next few years, but if they play there cards right I believe they may surprise everyone.

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