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Effective and ineffective cost control (2002)

by Bob Sheaves

The downsizing of the Chrysler group of DCX is painful, stressful, and could have been avoided, in my opinion. The problems did not start with Daimler (although it intensified under their "stewardship").

Ever since Bob Eaton took over from Lee Iacocca, levels of management were added between the "worker bees" and the corporate decision makers. My first question for reflection would be "How many people below Grade 9 ever got to voice their concerns and issues with the upper (meaning staff and above) level management and have their comments acted upon?"

In the Chrysler of the late 80s and early 90s, a system called QIP (for Quality Improvement Process) was developed. In this process, everyone in the corporation, regardless of "rank," was expected to question everything that the corporation did and look for ways to streamline the process, cut out waste and any "re-" anything (re-work, re-pair, etc.).

As an example, one of my friends from Jeep-Truck Engineering took (at that time) an unpopular position, that is to say that the then-current practice of painting mules and bucks the corporate "Petty Blue" was wasteful and involved too much money. In the span of (as I remember) 3 weeks this procedure was changed to painting these vehicles and parts "polar white," saving the company an estimated $900,000 per year (as I remember) in paint, labor, material storage and handling, and order processing, all reflected in a color that was used to simply identify some special parts.

The reason this was so quick was simple, it went to his management staff group (people charged with identifying cost reductions), was approved, then went to immediate implementation....not through the convoluted process in place even three years later (let alone the process used now that would require Daimler approval for such a massive change across the company).

The thinking of "bigger and bigger" is what got Chrysler into this current mess and Daimler has just made it worse with their hamhandedness. It will be up to the employees of Chrysler to straighten it out and pay the price for others' ineptitude.

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