Between Brown and Green is Leanfield

RUSSELSHEIM, Germany — Like a mouse in a corner or a hawk circling the rafters, you can view every square centimeter of this all-new automotive plant with just a click of the wrist on a joystick.

General Motors Corp.'s newest assembly plant here has been digitally mapped in the most excruciating three-dimensional detail — down to the placement of waste bins, machinery and workers — and all before the first crate of equipment was carted through the doors of the 1.2 million-sq.-ft. (112,000-sq.-m) facility.

Adam Opel AG production specialists proudly show off their state-of-the-art accomplishment at GM's International Technical Development Center virtual studio, housed right next door to the new plant site. ITDC engineers and planners are responsible for all of the new GM plants — places like Shanghai, China; Gliwice, Poland; at Eisenach in the former East Germany; Argentina, Thailand and the Blue Macaw plant in Gravatai, Brazil. The Lansing, MI, Grand River plant also will reap the benefits of ITDC's production technology.

The team relied heavily on three-dimensonal layout and innovative simulation tools to produce a virtual copy of the new Russelsheim plant before construction began, making it a key tool in planning the building floorplan, machine layout, worker placement and worker training. Workers can actually “walk through” the virtual plant, and simulate the production routines — effectively learning their new jobs — before they even set foot inside the new facility.

Opel calls the all-new facility a “leanfield” plant. It's still under construction, but pilot production on its first product, the all-new Opel Vectra, has begun in some sections that have been completed. Plans call for full operation to begin in January of next year with an annual capacity of 270,000 vehicles. It's built right next door to the existing 57-year-old assembly plant with similar capacity — which now builds current generation Vectra and Omega models.

This all-new plant on an old site is an essential element of Opel's effort to survive. If the plant is profitable, Opel can put more resources into the European product battle. If it is not, some 4,000 workers will have sacrificed their jobs for nothing, the cash drain will weaken Opel's finances, and Opel Pride will have suffered a severe blow.

Opel Pride is not to be sneered at. Engineers at the ITDC believe they are as good as anyone in the world. German managers battled against GM Europe over the question of resource allocation, and won. The fight cost the jobs of GM Vice-Chairman Lou Hughes as well as the last two American Opel presidents.

And without the Opel Pride of the workforce, the factory would have been in another country with cheaper labor. Unions accepted a 40% cut in the work force and a new flexible way of working. They wanted their children to have a chance to work where their own fathers and grandfathers had.

“We've paid our contribution to having it here,” says union chief Klaus Franz, head of the plant's Works Council. “It was one of our aims, in 1997, and we hit that target. Russelsheim will remain a site of production and will remain so for a long time to come.”

Opel lost money last year — $366 million — and one of the holes has been Russelsheim. Opel's market share in Europe dropped from 10% in 1999 to 9.4% in 2000. While its share has risen back up to near the 10% mark for the first six months of this year, overall sales are down by nearly 3%.

Assembly will take half as long in the new factory, and operating costs will be about 25% less because of the new factory, explains Opel Deputy Chairman Wolfgang Strinz.

“I think the plant is really central to their survival,” said Garel Rhys, director of the Centre for Automotive Industry Research at Cardiff Business School in Wales. “This is the last throw of the dice. If this doesn't work, in 10 years' time it will be the end.”

Opel was born in Russelsheim in 1899. Allied bombers flattened the site during World War II, but GM rebuilt it in 1954. The plant was magnificent at the time. A three-story construction allowed a long assembly line in little space. But automaking changed, and after four decades the plant was inefficient.

GM tried to save Russelsheim as it was. Beginning in 1989, it began introducing a teamwork approach and other processes learned at New United Motor Mfg. Inc., its Fremont, CA, joint venture with Toyota Motor Corp. and CAMI, the joint effort with Suzuki Motor Corp. in Ingersoll, Ont. Management kept the Vectra and Omega at Russelsheim, Opel's flagships and highest profit-margin cars. But it wasn't enough.

“During the past few years we have, despite our best efforts, exhausted the scope for restructuring and plant modernization that the Ruesselsheim site had to offer,” says Robert Hendry, who was Opel's president when the plant was announced in May 1999.

GM of Europe is spending DM1.5 billion ($650 million) at Russelsheim. That buys assembly, stamping operations and body shop and a co-located suppliers “business mall” operation, run by Ferrostaal AG, for Tier 1 suppliers to deliver and sequence 58 incoming components and 15 sub-assemblies. This allows direct supply to assembly stations at the plant. The new Russelsheim operation will make use of 600 robots and will allow for up to four different models running on the same line.

Original plans included a new paint shop, but that was taken out of the original construction plan. Opel officials say it will be built by 2005.

The business mall brings suppliers much closer to the assembly plant floor, but it still is a far cry from the co-located supplier arrangement at GM's Blue Macaw plant in Brazil. “There's no room” to build a Blue Macaw in a brownfield site, says Mr. Rhys, and “there's also the trade unionists,” he notes. “It's much more difficult to outsource jobs in Europe.”

The new Vectra will be built on GM's Epsilon platform and will be the first of at least five vehicles that will share the same front-drive midsize vehicle architecture. Opel's Vectra will go into full production in January 2002, and will be followed by the Sweden-built Saab 9-3 in the second half of 2002.

Next up, on the same platform, will be the next-generation Chevolet Malibu, to be built at Fairfax, KS, with a launch in the first half of 2003 followed later by a new Pontiac Grand Am and Saturn L-Series at plants and dates “to be determined,” says Gene Stefanyshyn, GM North America Vehicle Line Executive for midsize cars and crossovers. He explains that the new platform will allow for a variety of engines — a 4- and 6-cyl. for North America and as many as five for Europe with a mix of 4- and 6-cyl. gasoline and diesel engines. The wheelbase for the new architecture can range from 103.6 to 112.2-in. (2,700 to 2,850 cm) and accommodate either 15- or 16-in. wheels.

Soothing the GM/Opel Dispute?

The new plant and the new Opel Vectra that will be built there arrive at a time when Opel is reorganizing in an attempt to survive. On June 21, GM of Europe announced its Project Olympia restructuring plan. A Turnaround Board and teams have been established to bring Opel back to profitability.

The project also will establish clearer lines of responsibility between Opel and GM Europe. A key element is the appointment of Carl-Peter Forster, former BMW manufacturing chief. “Opel has made, and will continue to make, important strides in product quality and in its portfolio orientation,” says Mr. Forster. “But our company, and GM Europe as a regional organization, have some serious structural and cost issues that need to be resolved urgently.”

Mike Burns, the American who replaced Lou Hughes at GM Europe, says GM has long wanted to name a European to Opel's top post.

Mr. Forster replaces Robert Hendry, who came to Opel from Saab in 1999 to replace the highly regarded Gary Cowger, who was hastily called back to the U.S. to rescue GM's battered labor relations following its disastrous 54-day United Auto Workers strike after just 14 months in Europe. Mr. Hendry left his post before his contract expired, although Mr. Burns says Mr. Hendry “always intended to retire at the end of this year.” There has always been stress between Opel goals and GM goals, causing huge headaches for American managers. Opel workers in Germany focus on success in their home country, while GM sees Opel in European and global terms. At the height of the dispute, Opel engineers accused GM of stripping Europe of engineering resources to support expansion goals in Asia and South America.
— Bill Diem