Chrysler aims to cut costs by 25% over three years

Chrysler has revealed another element of its three year turnaround plan with news today from the carmaker’s purchasing chief John Campi that plans are in place to reduce costs by 25 percent over the next three years. Speaking at a recent supplier conference, Campi said that significant changes in manufacturing and purchasing operations will help reach the target and that any potential savings will be shared among the suppliers as well.

Some of the initiatives include a 30 day timeframe for production schedule changes rather than the one-week notice presently used, increased parts sharing and reduced engineering and requirement changes during development. Chrysler will also open new engineering offices in China and India as well as expand its Mexico-based Latin American engineering operations.

The cost savings will allow suppliers to both boost profits and reduce costs, reports Automotive News. Chrysler also wants to see suppliers in North America match prices of companies in low-cost countries such as China and India.

Other strategies we’ve already seen include the forming of strategic alliances with a number of carmakers including Chery Auto and more recently Nissan, which will provide Chrysler with whole vehicles as well as new technologies.