How Faurecia made over a relic

SALINE, MICH. — Everything about Faurecia SA's interior trim plant in Saline is big.

The former Ford and Visteon plant here once made instrument panels for every Ford vehicle built in North America. The plant, which opened in 1966, has 1.6 million square feet of floor space — big enough to accommodate 27 football fields.

When Faurecia bought the plant in 2012, 9 miles of conveyors snaked around the building. Boxes holding thousands of parts were stacked toward the ceiling. In short, the Saline plant was an industrial relic.

But incoming boss Mike Heneka also knew it generated $1.1 billion in annual sales. As president of Faurecia North America Inc., Heneka had the job of converting the castoff plant into a profitable operation.

The challenge would be daunting. Dozens of component plants once owned by Ford Motor Co. and General Motors have shut down over the past 15 years or so, unable to compete with the lower wages and more efficient production practices of independent suppliers.

But Saline now has three key ingredients for survival: an owner, Faurecia, with deep pockets; a loyal customer, Ford; and a pragmatic union.

Heneka is first to acknowledge that the turnaround is still a work in progress. Faurecia has introduced a variety of lean manufacturing practices at Saline, which makes instrument panels, door panels, cockpits and center consoles for Ford.

But potential customers such as General Motors and Fiat Chrysler have adopted a wait-and-see stance to see whether Faurecia's turnaround plan will bear fruit.

Saline was part of Visteon's production network when Ford spun off Visteon, its in-house parts operation, in 2000. Hobbled by high labor costs and a disjointed product portfolio, Visteon returned Saline and 16 other factories to Ford in 2005.

Faurecia acquired Saline, which was still operating, in 2012.

The factory "was an antiquated plant," Heneka recalls. "I remember thinking 'Oh my goodness, what have we done?'"

In recent years, there was no money to clear out machinery when Saline stopped making a particular part. As a result, the floor was littered with presses, assembly lines and equipment no longer in use.

"You had these monoliths sitting all over the place like the Statue of Liberty," said Raymond Boufford, vice president of Faurecia's Ford customer division in North America and Faurecia's lead negotiator in the Saline deal. "When we moved in, it was total chaos."

Heneka and Boufford cleared out some clutter by moving final assembly of the instrument panels to Detroit Manufacturing Systems, a joint venture formed in 2012 between Faurecia and minority-owned Rush Group of suburban Detroit.

Then they tore out the overhead conveyors, installed 12 new injection mold presses and rebuilt some machinery. Heneka, who retired on March 1, estimates the renovation has cost $90 million so far.

Faurecia also negotiated with the UAW a new wage of $11 an hour, which ratcheted up to $15.50 an hour after three years. Workers previously had earned up to $28 an hour.

With a new labor contract and new machinery in place, Boufford introduced lean manufacturing, which keeps inventories of raw materials and parts as low as possible to cut costs and improve quality.

It's been a drawn-out process. For example, Boufford is introducing one-piece flow. A plant with one-piece flow produces only as many parts as needed to produce the final product that day. Thus, inventories of half-finished components don't pile up on the factory floor. To do that, Faurecia got rid of long assembly lines and introduced U-shaped work cells staffed by small teams of employees.

After three years of Faurecia ownership, Saline has made progress. Quality has sharply improved. The plant has cut its defect rate in half, with less than 30 problems per million. But there's more work to be done. Other Faurecia plants have defect rates as low as 10 problems per million, a target that Boufford aspires to hit.

Saline has other challenges, too. In June, Faurecia must renegotiate the plant's labor contract with the UAW. And the company has yet to line up non-Ford customers for its products.

"We'd like to bring some other customers in here," Boufford said. "It still hasn't happened yet. A lot of people say, 'Let's see how they're doing.'"

But Boufford says he's happy with the plant's progress. With lean production practices, "we can see where our waste is and we can attack it," he said. "Our goal is to eliminate waste every day.”