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Detroit has had its problems, notably a 2013 bankruptcy filing that ranks as the largest of any municipality that is discouraging to new business development. And despite the fact that the automotive industry, with which Detroit is most famously associated, is long past the doldrums of the last recession, there remains a perception that it represents an outmoded, “old-school” manufacturing approach that caused so many jobs to go offshore.
All of which Detroit Chassis is dispelling, both by its implementation of global best practices and techniques to reduce manufacturing costs and improve a product that is literally a foundation of the auto industry, but also in its commitment to the community and contributions to the city’s business and quality of life renaissance.
A subsidiary of Spectra LMP, LLC, Detroit Chassis designs, engineers and manufactures rolling chassis, complex subassemblies and modules, and complete vehicles to the automotive, recreational vehicle and commercial truck industries. Together with sister companies Magnys and Detroit Custom Chassis (DC2), it provides seamless concept-to-customer sourcing solutions that are exceptionally efficient to produce while also cost-effective to attain highest possible quality.
Detroit Chassis was founded on the concept of innovation, when it began producing Ford’s F-30 motor home chassis, which had previously been built in Mexico, in 1998 in a former metal stamping plant. Shortly thereafter it began making chassis for the Ford’s Explorer Postal truck and Think Neighbor electric vehicle, instituting measures that resulted in more than $13 million is savings due to reductions in warranty repairs and inventory, quality improvement processes and flexible machinery use.
“You have to give the owners—Michael and Carlton Guthrie—a lot of credit, not only for the success of this company, but for the success it has brought to the people who work here and the city of Detroit,” says Michael A. Boyle, vice president of operations and general manager.
“When I first talked to Michael and Carlton about coming to work here, I was particularly impressed by how open they were to new ways of doing things, as well as their vision for running a business in Detroit that contributes to the local economy and provides people in the community with rewarding work. There two guys are Harvard grads with keen entrepreneurial instincts who view Detroit as an incubator of new ideas that become global standards.”
While there are number of companies that manufacture chassis, Detroit Chassis is unique in providing one-stop, end-to-end solutions from design through production. This approach better enables them to implement benchmark processes used in a variety of industries throughout the world that result in the highest quality product with the highest cost-efficiencies.
“Essentially, what we do is apply the approach of Swiss fine watchmaking, which involves a number of refined parts and process, to the supply chain and production processes,” Boyle explains. “The traditional way to make a chassis is the OEM provides you a print and you build it according to spec. It’s the way it is still made. What we do is to get in on the design phase, look at all the parts that are needed, and then push the most expensive parts to the end of the supply chain. Because the earlier you put expensive products into the manufacturing process, the more expensive it becomes to make the product.”
He likens it to making a gold ring with a diamond setting. “You could make the ring with the diamonds already on it, but every time you reshape it or resize it, you’ve got to allow for protecting the diamonds that are already part of the ring,” Boyle says. “So, you spend more time and more effort, which even then doesn’t eliminate the possibility you might have to replace a diamond or two. Consequently you’ve got a more expensive ring to make than one that didn’t put the diamonds on until the very end.”
Building Out Expense
The same principle applies to chassis. “One of more expensive parts is the engine. If we wait until the end to install it, then we don’t have to send the chassis back and forth to the OEM as we make it, we don’t have to maintain a parts inventory for the engine because we don’t need it yet, so the whole process becomes simpler and less expensive. There’s also less scrap because you don’t have to work around this big and expensive component all the time that you don’t really need to be there. The end-result is you’ve got a higher quality product that you’ve made at a lower cost.”
He adds, “When you just look at a blueprint, all you’re thinking about is what part goes with want in what sequence. What we do is look at the design to see what’s the most economical way to make it without compromise, and then examine the entire supply chain to achieve minimal inventory and scrap and add value to achieve the highest possible quality at the least cost.”
Applying best practices and technologies requires a workforce that knows how to apply them. “Manufacturers typically complain they can’t find people with the necessary skill sets,” Boyle says. “Particularly in the Detroit area you’ve got people whose work experience is in traditional manufacturing. We find that once we train people to do the work the way it needs to be done, if anything people are more enthusiastic about and focused on their jobs.”
Supporting Local Employees
Detroit Chassis employs 260 hourly associates and 30 salaried. Because Detroit Chassis is located in a designated renaissance entrepreneurial zone, the company is required to draw 33 percent of its employees from local residents. But as Boyle points out, “Well over half our employees are local. That’s just one example of the Guthrie’s commitment to revitalizing Detroit. A related example is that we have a full-time social worker on staff to help out our people with things like arranging day care or getting medical attention for their family or just figuring out bus schedules. Because they’ve effectively managed their personal responsibilities, they can better focus on the jobs without the stress of worrying about things outside of their jobs.”
The Detroit Chassis plant comprises 218,000 square feet on 33 acres and is capable of producing 90,000 units a year. It is MMBDC, ISO 9001 and QS 9001 certified. “While we do source certain components, the chassis is entirely manufactured here,” Boyle notes. “We are a prime example of how you can produce a better product less expensively here rather than going offshore by implementing better and more efficient processes.”
Alternative Fueled Vehicle Growth
Today, the economy is good, as is the auto industry in general. “We see the market of traditional chassis as remaining steady,” Boyle says. “The real growth opportunity is to make chassis for alternative fueled vehicles. FedEx and UPS delivery trucks as well as waste haulers, they all basically go on a set route every day. At the end of the day they can just plug in and be ready for the same travel route the next day. They are the ideal market for electric powered vehicles. In fact, we are just about ready to announce one of the first chassis using compressed natural gas compulsion.“
Boyle also points to Detroit as essential to the company’s future success. “Our operations are at the heart of the renaissance zone. We have quick access to all major railroads and highways, as well as being right across the border from Canada. You couldn’t ask for a better spot to be a manufacturer.”