Opel's revolutionary gospel: John Eisenhammer reports from Eisenach on a model for GM's future
Monday 21 June 1993
Ultra-modern, ultra-clean and ultra-Japanese, it represents the radical cure for the 'fat in management and labour conditions' of western German firms, according to David Hermann, chairman of Opel, a subsidiary of General Motors.
'It is the model for our future,' he said. Having shown how efficiently cars can be made, the disciples of lean production will spread out, taking their revolutionary gospel to the pampered and disbelieving in established Opel plants in western Germany.
No one expected the tables to be turned so quickly. But then no one expected a recession to expose deep structural problems in car manufacturing, notably a cost disadvantage of 25 per cent or more against the Japanese.
General Motors sees in Eisenach the key to restoring competitiveness to its European operations. And that means not just in western Germany, but also in Spain and Belgium, as well as Vauxhall in Britain. All face the prospect of being turned on their heads by the men in grey trousers and white shirts from Eisenach.
'This is now the nucleus for General Motors in Europe,' Peter Enderle, Opel's head of production, said. 'Our people will study how things work here, and then apply this to the firms in the west.'
More than a statement of intent, this is a threat. For it takes just over 18 hours to make an Opel Astra or Corsa in Eisenach, compared with a time in the high 20s at the Bochum plant in western Germany and the low 30s at Zaragoza in Spain.
At the same time, Eisenach has set new quality standards, producing cars with an average of six to seven defects compared with about 20 at Bochum and more than 20 at Vauxhall. Moreover, Eisenach manages to produce cars at similar costs to its Opel counterpart in Zaragoza, despite the much lower wage levels in Spain.
Eisenach offered Opel the opportunity to surmount or circumvent most of the obstacles that make Germany such a costly place to build cars. A town with a long car- manufacturing tradition, it provided a skilled but desperate workforce, a generous local administration, pliant trade unions, initially lower wages than in the west, and a greenfield site.
The outcome was the biggest single private investment in the east (more than DM1bn), and a piece of Japan as conceived by Americans, created in the city that gave the world the Wartburg. Opel's Eisenach plant will, when it reaches full capacity later this year, have 2,000 workers turning out 150,000 cars.
Eisenach's 'model-character', as Mr Enderle described it, has been achieved by an uncompromising application of Japanese methods. 'We are trying to build a car in the same way that Toyota would build it,' Jeff Bell, a Canadian adviser, said.
He is one of the key group of lean production disciples, all of whom have experience in Japanese techniques. Mr Bell came from General Motors' Cami joint-venture in Canada with Suzuki. Having designed the Eisenach plant process, the advisers' job now is to 'coach managers and teams in how lean production works'.
Everyone wears the same grey trousers and white shirts. Japanese words are used for numerous functions. Discipline and cleanliness are paramount - the place feels more like a calm department store than a car plant.
'Every Japanese trick in the book,' as Mr Bell put it, has been used to achieve Eisenach's efficiency. Workers operate in teams of six to eight. The 'division of labour between planning and production has been done away with or totally redefined,' Mr Enderle said.
Through agreements with the unions, production workers can do skilled trade work such as stopping and starting the line, changing weld tips and minor repairs. The result is just 10 maintenance staff per shift, compared with around 300 for the admittedly larger Bochum plant.
Overall, Eisenach's work space, workforce, storage space and transport capacity are around half of those in conventional plants.
Stocks next to the production line, in boxes meticulously placed within their designated spaces, are sufficient for two to three hours, with one to three days' worth in the warehouse. At Bochum the warehouse level is two to three weeks. The warehouse stock in Eisenach could be even lower, if it were not for Opel's policy of getting the Corsa underbody stamp from its Zaragoza plant, and numerous parts from Spanish suppliers.
The Eisenach production cycle is closely linked to the railway timetable. There is also a 'buffer' of only 10 cars, or 20 minutes, between one production line and another, compared with 375 cars or six hours in Bochum. This means that any fault can be discovered in 20 minutes in Eisenach, and just 10 cars need looking at, as against six hour's worth at the western German plant. Absenteeism at Eisenach is down to 3 per cent, compared with the 10 per cent common in western German plants.
The body works is 96 per cent automated, with GM robots changing their own tool heads depending on whether a Corsa or Astra is next on the same line. The workforce, mostly from the large pool of workers left after Wartburg collapsed, is excellent, according to Chris Honda, another Canadian adviser.
'They are more highly skilled than in Canada, with good motivation. The only disadvantage is a certain reluctance to take chances,' he said.
That is precisely the test that will soon be facing Opel and GM management. Achieving breakthroughs on a greenfield site is one thing; forcing them past the entrenched practices and habits of established plants in western Germany and Britain is another altogether.
'It is not going to be easy,' said Mr Enderle. 'But we know one thing. There is no choice.'
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