Mitsubishi 2006 Annual Report Download - page 39

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37
MITSUBISHI MOTORS CORPORATION ANNUAL REPORT 2006
Production
Capacity Utilization Improvement at U.S. Plant
At the Illinois Plant of U.S. subsidiary Mitsubishi
Motors North America, Inc. (MMNA), a multinational
team composed of staff from Japan and the U.S.
has been formed to implement various initiatives to
reduce costs and raise productivity. Capacity utiliza-
tion at this plant is projected to improve following
the July 2006 start of production of
Galant
for ex-
port to the Middle East and Russia.
Developments at NedCar
Netherlands Car B.V. (NedCar), a European subsid-
iary engaged in production of
Colt
, was contracted
by DaimlerChrysler AG (DC) to produce the
smart
forfour
model from 2004 to 2010. However, DC ap-
proached MMC with a request to end production of
this model. Following negotiations between MMC and
DC, the two companies signed various agreements
to (1) terminate
smart forfour
production at NedCar
at the end of June 2006; and to (2) transfer to DC
MMC’s entire shareholding in MDC Power GmbH, a
50-50 Germany-based joint venture engine plant
between the two companies.
In response to reductions in production levels,
MMC is pursuing rationalization measures to ensure
commercial viability of NedCar based on the current
scale of
Colt
production (70,000 to 80,000 vehicles
per year). These measures include shifting operations
from two to one-shift production, improving produc-
tivity, reducing plant-related costs and increasing
operating efficiency.
Furthermore, as part of moves to boost capacity
utilization at NedCar, MMC is currently considering
exporting NedCar-produced
Colt
models to Mexico,
South Africa and elsewhere.
*1 ISQC entails detailed management of each process on produc-
tion lines. The system calls for improvement in equipment and
operating procedure optimization to prevent defects caused by
equipment-related and human factors at each stage of produc-
tion. ISQC also establishes specific in-stage quality-checking
processes to ensure that defects are not carried over to the next
step. This significantly reduces the effort involved in inspecting
and repairing finished vehicles at the final stage.
*2The FTC rate is the proportion of finished vehicles that are as-
sembled without being removed from the production line at any
time due to defects.