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The auto maker is far from world class, insiders admit. But gains are evident, and there’s a solid strategy in place for improving productivity and quality that has top executives believing they are on the right track.
Contract manufacturing to move GAZ forward 20 years in short time, officials believe.
NIZHNY NOVGOROD, Russia – It’s 7:55 a.m. and a couple dozen top managers have squeezed into a tiny room off one of the truck assembly lines at’s sprawling manufacturing grounds to await the arrival of Bo Andersson.
It’s a scene repeated every Monday through Friday as the CEO conducts a top-of-the-morning staff meeting to take the auto maker’s pulse. One by one, he summons terse reports from his department heads on the day’s production goals, supply-line health and quality targets.
This day, plans call for 16Jetta pilots to be added into the mix with Skoda Yetis already in serial production, as well as two 10-hour shifts of regular GAZelle light-truck output.
But there’s some concern over a recurring door-panel defect discovered the previous day on one of the lines that still hasn’t been resolved. Managers tell Andersson that to catch the flawed bodies, they will need to reinstall a quality gate once thought to be unnecessary.
But’s top executive isn’t satisfied. “That’s not a root cause,” he says, addressing his staff through a Russian interpreter. “It’s OK if we don’t know (what is causing the defect), but we need to find out. It’s difficult, but we need to know. Then we can attack the problem.”
That must happen, Andersson insists, by the time the group reconvenes at 5 p.m. in another daily ritual to discuss whether the morning’s targets were met. Top management from clientis due here to inspect operations in late February ahead of the Jetta’s official launch, he reminds his staff, “so let’s stay focused.”
Andersson, a Swede by birth but Americanized during his stint as head of global purchasing for, has ruled GAZ since his arrival in 2009 with a military precision honed during his time in the Swedish armed forces.
That approach sorely was needed because GAZ is as much an emerging auto maker and profit center for its primary investor – billionaire Oleg Deripaska – as social experiment aimed at leading a lagging, often undisciplined Russian industry into the 21st century.
A relic of the Soviet era, the state-owned GAZ had far too many people producing too few goods prior to privatization in 1992. Productivity, quality, delivery and service were not exactly ingrained in the auto maker’s mission statement when Deripaska acquired control later in the decade.
“When we first came to GAZ, we produced 12 times less product with three-and-a-half times more people,” he notes.
No.104 on the Forbes list of wealthiest people in the world, Deripaska was working to transform GAZ even before new management, led by formerCo-CEO Siegfried Wolf and Andersson, hopped aboard.
It was Deripaska who initially brought theProduction System to the Russian auto maker and reputedly could be found in the early days of ownership teaching its lean-manufacturing theories to workers along the line.
The transformation of GAZ into a world-class player is far from done, executives admit, but the ground gained so far is visible in pockets of this vast complex, said to be some six times the size of Volkswagen’s enormous Wolfsburg grounds and housing Russia’s second-largest automotive factory to’s Togliatti facility.