What Merger?It's full speed ahead at MBUSI

It didn't take long to see how the DaimlerChrysler merger would affect Mercedes-Benz U.S. International Inc. (MBUSI) in Tuscaloosa, AL. Just two days after the mega-deal was finalized last month, MBUSI announced it would invest another $40 million in its two-year-old plant.

In other words, it's business as usual. Since it began producing the new M-Class sport/utility vehicle in early 1997, the company has added 100,000 sq. ft. to its assembly operations and announced two production increases.

Overall, MBUSI plans to build 80,000 vehicles next year in Alabama, compared with about 77,000 vehicles in 1998. Production will be split between the ML320 and the new 4.3L V-8-powered ML430, which debuted this fall as a 1999 model. The ML430 will be launched internationally in the spring, sources say, followed by a high-performance 340-hp V-8 version (ML55) late next year.

Many people already are pointing to MBUSI as a case study for DaimlerChrysler to follow as the company begins to integrate business practices and company cultures.

Before production began, for example, 170 MBUSI team members were sent to Germany for up to six months to train on the line at Daimler-Benz's Sindelfingen plant.

"Certainly, lessons we have learned about bringing together Germans and Americans and people with different experiences throughout the industry can be applied on a larger scale," says MBUSI President and CEO Andreas Renschler in a speech earlier this year, noting that MBUSI was created as a learning field to explore innovations that could be transferred to Daimler-Benz worldwide.

Despite some initial quality problems with the ML320 - including a defective key fob - worldwide demand continues to outpace supply. There's a three-month waiting list in the U.S. and up to a year wait in Europe. To help satisfy demand, Mercedes will begin assembling M-Class vehicles next year at the Steyr-Daimler-Puch plant in Graz, Austria.

Of the $40 million investment announced last month, $30 million will be spent on material-handling equipment and other machinery throughout the plant. This is expected to help reduce overtime from an average of two hours a day per employee currently to one hour per day.

The other $10 million is earmarked for logistical support and coordination of sending parts to Graz. The new expenditures brings MBUSI's total investment in North America to $1.1 billion. Stephen Plumb