Belgium fights for recognition and investment ANTWERP, Belgium - What country has the highest per-capita car production in the world? Japan? Germany? The U.S.? Well, as anyone in the automotive industry here in Belgium will tell you, it's none of the above. Hardly anyone on the U.S.-side of the pond knows it, but with only 10 million inhabitants and four big auto plants churning out more than a million cars and trucks a year, Belgium leads the world in per-capita auto assembly.

It also has become somewhat of a proving ground for new types of shift schedules and supplier logistics - another secret it would like to leak to North America.

This little country sandwiched between the North Sea on the west, Germany and Luxemburg to the east, the Netherlands to the north, and France to the south, currently builds about 11.5 vehicles per 100 inhabitants, compared with Japan's 9 per 100 and France's 5.5 per 100 inhabitants. The U.S. ranks sixth on this list, producing only 4.2 cars per 100, well behind Germany and Spain.

Car production here is even more concentrated than in the greater Detroit metro area. However, symbols of the auto industry don't litter the landscape like they do in Detroit. There are no giant tires on the road from the airport announcing that Bridgestone/Firestone is here, or big billboards touting BASF, Bosch, or Textron.

But this is the home of Ford of Europe Inc. and AB Volvo's highest-volume assembly plants. Plus Adam Opel AG and Volkswagen AG plants all are located within a 40-mile (64 km) radius, within the Dutch-speaking Flanders region of Belgium. They are joined by some 260 suppliers, from Tenneco Automotive (ride and emissions-control systems) to Lear Corp. (seats, interior systems) and Magna International (seats and other major modules).

What's more, Netherlands Car BV (Nedcar), currently jointly owned by AB Volvo and Mitsubishi Motors Corp., is only a few miles across the border to the east in the Netherlands; a Toyota Motor Corp. and a PSA Peugeot-Citroen/Fiat plant lie a few miles to the south in France. To some this may sound like mere automotive trivia, but to the state-funded Flanders Foreign Investment Office (FFIO) they are key statistics in its bid to make North American suppliers aware that Belgium makes more than great waffles and chocolate. Belgians do indeed take their food very seriously, but in fact Belgium is a major industrial, logistical and economic hub for all of Europe. Only 200 miles (322 km) or less from London, Paris and Frankfurt and with three of the biggest, busiest ports in Europe, Belgium has been a major trade center for centuries. It claims to have more highways than any other country in Western Europe plus a large network of railways. And now the city of Brussels is the headquarters of the European Union.

They're key selling points to the self-governing region of Flanders, one of three in Belgium that are more autonomous than states in the U.S. (The other two major regions are the city of Brussels, which is an autonomous region similar to Washington, DC, and the southern, more rural French-speaking region.)

Make no mistake about it: Just as automakers are battling over global market share for vehicle sales, countries and economic regions such as Flanders are fighting for automotive jobs and investment.

Flanders recently has won some victories in this area. Volvo Car Corp., now a unit of Ford Motor Co., is shifting its small-car production from the nearby NedCar factory to its Ghent, Belgium plant, following Mitsubishi's decision to purchase full ownership in Nedcar. The production shift means Volvo is doubling production at Ghent from 160,000 to 325,000 units annually, adding 1,900 jobs.

As of 2004, production of the successor to the Volvo S40 and V40 (now built by NedCar) will move to Ghent, already Volvo's largest car assembly plant. It currently builds S70 and V70 models for the U.S., Europe and Japan. A sport/utility vehcile based on the same small-car P1 platform also is rumored to be scheduled for the plant.

"We are ahead of of the French and Germans because of our more flexible labor regulations and our regulations regarding temporary unemployment. Belgian car assembly plants have a high productivity and deliver outstanding quality. This has grown historically. Because Belgium has no marques of its own, its plants always had to perform better than those in the home country," says Herwig Jorissen, a Volvo official.

But the region has suffered losses as well. Renault SA closed its Vilvoorde plant in 1997, eliminating 3,100 jobs, and Toyota Motor Corp. chose France over Flanders for its new European plant, locating it in Valenciennes, just 10 miles (16 km) from the Belgian border. The 150,000-unit capacity plant is nearing completion now and will begin producing Yaris models early next year.

Flanders touts its location, highly skilled work force and the strong work ethic of its citizens, but it also has to fight a reputation for having tough unions and some of the highest hourly wages in the world - second only to Germany.

Dennis L. Profitt, operations manager at Ford's Genk Operations - which launched production of the new Mondeo last month - also points out that in Belgium hourly employees typically work only 1,580 hours per year, compared with 1,966 in the U.S. Only German workers put in less time on the job.

Even so, Mr. Profitt speaks highly of his Belgian workforce and says Ford has been able to work with unions and the government to dramatically cut costs and improve productivity in recent years. Since 1992, headcount at the plant has been reduced from 13,099 to about 9,480 through a government-subsidized early retirement program and by outsourcing component work such as seat and instrument panel assembly.

Hourly workers 52 years of age were able to retire with full benefits, thanks to a special agreement with the Belgian government, which is subsidizing some of the costs.

Part of the outsourcing arrangement includes a giant conveyor over a half mile (900 m) long that feeds modules from nearby supplier plants directly to the assembly line - in sequence with the vehicle build schedule.

Ford and supplier officials say the conveyor system brings a new level of timeliness and efficiency to the production operation, eliminating costly inventory at both supplier and OEM plants.

Ford didn't pay for the conveyor. The $25 million cost of the conveyor is shouldered by suppliers and then added to the piece cost of each component.

Some 10 to 12 suppliers have invested $231 million (BF8 billion) to build new plants in the supplier park to supply Ford and other automakers.

General Motors Corp.'s Opel Belgium plant in Antwerp, which has been building cars since 1924, caught the world's attention in 1988 by implementing a revolutionary shift system that resulted in a 43.5% increase in plant utilization and a 20% reduction in operational costs.

For the first time anywhere, the plant used three separate crews to work two shifts 10-hours for four days per week with a rotating swing shift operating on the weekends. Requiring little or no new capital investment, it was widely seen as a means for boosting production without making a commitment to new bricks and mortar.

The new shift schedule has been widely copied by other General Motors and some Ford plants eager to boost production without committing to expensive new factories or equipment. GM's Saturn plant in Spring Hill, TN, adopted the 3-crew system in the mid '90s when it was hungry to increase production, and so did Ford's Michigan Truck plant in Wayne, MI.

Antwerp lost Opel Vectra production in 1998 (it still produces the Opel Astra, to the tune of 323,000 units annually), volume has dropped and the plant has ceased three-crew production. But it now is moving on, becoming the first GM plant to leap headlong into full-scale lean manufacturing techniques - what GM terms a "brownfield" to "lean-field" transformation.

Once again Antwerp made some big producitivy leaps which have been lauded by independent experts and studied and copied internally. Faced with rising costs and a graying workforce, the Belgium government helped Opel Belgium reduce headcount by 1,200 jobs recently, subsidizing early retirement costs. Hourly workers were allowed to retire with almost full pay and benefits at age 55. However, because the government is footing much of the bill, retired workers are discouraged from the practice of "double dipping": in other words, coming back to work immediately as "consultants" or part-time workers.

Antwerp also appears to be experimenting with a downsized version of its discontinued "Yellowstone" vision of modular assembly: A nearby warehouse owned by a third party is assembling cooling modules, wiring harnesses, bumpers and other components and then shipping them to the assembly line in-sequence with production.

Belgium isn't the only European country using modular manufacturing, supplier parks and giant conveyor systems to hone the process of in-sequence component delivery or just-in-time manufacturing techniques, but the country's eagerness to improve the innovations of others could give it a leg up in the future.

After some reporter guests recently marveled at Belgium's great food, Eddy L. Geysen, managing director of Opel Belgium, quipped "We took France's food and improved it."

If Belgium can improve manufacturing like it can French food, Toyota's French plant may soon find some serious competition next door.