Mercedes-Benz U.S. International
1 October 1998
Another Star Is Born: A Summary Of How Mercedes-Benz U.S. International Began
TUSCALOOSA, Ala., Sept. 30 -- In the short five years since
Mercedes-Benz announced it would build its first North America passenger
vehicle manufacturing facility in Tuscaloosa, Mercedes-Benz U.S. International
(MBUSI) has traveled a long way.
To follow is a summary of how MBUSI got there.
Daimler-Benz, the world's oldest automaker, has been a global leader in
the luxury car market throughout the century. In the late 1980s and early
1990s, with increasing competition within the automotive industry, Daimler-
Benz re-focused its effort to bring more value to its customers, by becoming
more market-driven in its vehicle development and production processes.
The M-Class represents one of the first tangible vehicles developed with
this philosophy, in addition to the company's globalization efforts to produce
vehicles in their strongest markets.
After completing a feasibility study to explore the potential of Daimler-
Benz entering the growing sport utility market in 1992, Andreas Renschler was
then named President and CEO of a new, independent company -- MBUSI, which
would be responsible for the design, development, manufacturing and worldwide
strategic marketing of the M-Class.
MBUSI would not be another transplant, transferring people and processes
from an existing culture; rather it was created as a learning field -- a place
for new ideas and a catalyst for change in the company. Therefore, MBUSI began
as a "greenfield" project, using a blank sheet of paper approach.
The challenges were enormous: develop and produce a new vehicle with a
new workforce, build a new plant in a new country, engineer a new production
process and create a new corporate culture -- all at the same time.
After visiting and reviewing proposals from over 150 sites in 30 states in
North America, the site selection committee found that Alabama had the best
combination of factors it was looking for: good infrastructure, quality of
life, educated and motivated workforce, strong business climate, proximity to
shipping and receiving sea ports, proximity to both a university and
metropolitan area, and "feeling" of partnership from the state.
After only 34 months of development time, MBUSI launched the M-Class to
unprecedented reviews from the industry. In concert with its development,
MBUSI hired its management team (recruited from throughout the industry to
bring a "melting pot" of ideas to the project), engineered an entirely new
production process and built the one million sq. ft. production facility.
As MBUSI began recruiting team members, more than 40,000 applied for 1,500
jobs. Some 170 team members were sent to Germany for up to six months to train
on the line in the Daimler-Benz Sindelfingen plant, just outside of Stuttgart.
Over 75 German engineers, who were in charge of the MBUSI team member
training, then came back to Tuscaloosa with the new team members.
Meanwhile, MBUSI engineers began writing the standard methods and
procedures (SMPs), which are used as a step-by-step guide to build the M-
Class. Team members and engineers help contribute to the ongoing efficiency
and productivity of the SMPs, as part of the company's continuous improvement
philosophy.
The company began developing its corporate culture with an emphasis on
team-work, open communications and direct access to management. With the plant
production and administration all under one roof, all employees or "team
members" share the same parking, cafeteria and "team wear," (a variety of
casual shirts with each person's first name and three-pointed star embroidered
on the front).
MBUSI's suppliers were brought in during the early development stages,
because of their integral role in the just-in-time and just-in sequence
production delivery system. Helping lead a trend in the industry, many MBUSI
suppliers ship pre-assembled "modules" or sub-assemblies to the plant.
For example, Delphi Packard Electric, assembles and delivers an entire
cockpit module to the plant approximately 169 minutes after it receives and
"order" from the plant. MBUSI only has one-shift of parts at any given time,
depending on its suppliers to constantly re-furbish the inventory throughout
the shifts. This production method, reduces the capital investment in the
facility and saves valuable space on the production floor.
The first customer-quality M-Class rolled off the line in February 1997.
In May of last year, MBUSI revealed the M-Class for the first time at its
plant grand opening, where over 6,000 people from 60 countries attended what
was later called "a cross between a Broadway Show, United Nations Summit and
southern Bar-Be-Que."
During the fall of 1997, MBUSI launched the M-Class in North America.
After winning Motor Trend Truck of The Year, North American Truck of the Year,
in addition to a host of other industry awards, the ML320 was launched in
March 1998 internationally.
Less than a year after the M-Class went on sale in North America, the
company has announced two production increases to help meet the overwhelming
worldwide demand. The first production increase represents an additional $40
million investment in the Tuscaloosa plant and an additional 100 jobs to
increase production 20 percent annually, from 65,000 units in 1998 to over
80,000 units in 1999. The original plant investment was $300 million for the
facility, and over $700 million for vehicle research and development.
MBUSI also announced it would help satisfy the immediate European demand
by producing some 30,000 M-Classes at the Steyr-Daimler-Puch plant in Graz,
Austria. This plant, which has as 20-year history of making Mercedes-Benz
four-wheel drive vehicles (G-Wagen and 4MATIC E-Class), has the ability to
begin producing M-Classes as early as mid-1999.
This month, MBUSI launched the long-awaited 4.3 liter V8 ML430 in North
America, in addition to the right-hand drive ML320 in the United Kingdom,
Japan, Australia and New Zealand. By combining safety, quality, performance
and comfort of a Mercedes-Benz with SUV versatility and exceptional off-road
capability, the M-Class continues to set a benchmark in the SUV segment.