BMW production boss Frank-Peter Arndt over future model approaches and works, the development of the staff, the manufacturing depth and extent of utilization.
Mr. Arndt, which are the largest challenges, which are approaching for you in the BMW Group production?
Arndt: The large challenge for me as a production executive committee is to keep the high level of the yearly 2007 durable. That is, the good degrees of the improvement with productivity to update flexibility or quality equally.
And that is not a trivial task, because 2007 were expressed for BMW in production a successful year.
Arndt: With a production of over 1,54 million units 170,000 vehicles left more the factories than 2006. That is a full plus of nearly 13 per cent – with the same personnel level. I think, which can itself let see. And despite 16 of new model approaches: in the past year eight new models ran from our volumes – three unity he derivatives, the M3-Coupe and the M3-Limousine, the M5 Touring, the RR Cabrio and the mini club man – beside it eight life cycle impulses.
As you your Facelifts call.
Arndt: Correctly, because the impulse term is more suitable according to my opinion. And we convert these eight impulses of one day on the others. There there are no long approach curves, there is at best one weekend between them. The outstanding statement with the fact is for me that we mastered 16 approaches, without we had the feeling stress. We developed an enormous approach authority. Approaches are not for us an extreme -, but normal situations. With us there is no contradiction between efficiency and quality goals. Thus we – will contribute a substantial contribution in the context – of our strategy NUMBER ONE also in the coming years to the efficiency goals.
How strongly will you increase production 2008?
Arndt: Our production volume will not grow again by 13 per cent as in 2007. We count on a one-digit proportional growth, dependent on the market need. The improvement gradients with the productivity of the yearly we would like to update 2007 nevertheless in 2008. For this we will accomplish the announced personnel measures apart from further process improvements by consistent creation of value orientation also.
8,100 coworkers – of approximately 5,000 time employees and 3,100 Stammitarbeiter – must go world-wide to end of 2008, because it in relation to original planning six billion euro within the ranges material, purchase, production, selling, development etc. to save to want.
Arndt: In order to get it straight: BMW acts from a position of the strength out. Momentarily many market watchers and also – media misjudge that. We are not at all in a crisis or in a reorganization. That will show also our outstanding balance result for 2007. Completely in the opposite: we adjust now aimed the levers for the next 10 years. We use in time all flexibility instruments, like the number of the time employees, in addition, our work time accounts and the flexibility of the coworkers between the works. We were in the past years in the lucky situation to be allowed to use flexibility in each case in a direction. This time we must go evenly into the other direction. That is the spirit of such instruments. There is the one side the medal in the life not always only.
How will BMW employ many coworkers world-wide after these Verschlankung?
Arndt: I cannot call an exact number you so today for the BMWS Group yet, because we will also develop certain specialized qualifications in the company. The order of magnitude is here with up to 500 places. Regarding the personnel reduction measures the announced 8,100 jobs are well-known. They distribute themselves on 5.000 time workers and 3,100 master coworkers. We will presumably employ end of 2008 in Germany still over 3.000 time workers. If you regard the production network in the inland alone, then here approximately 50,000 humans work.
you employ 75 per cent of your staff in Germany, where you book only 30 per cent of your global paragraph. How will that change?
Arndt: We expect growth primarily abroad, i.e. in America and in Asia. Since we in important markets philosophy ‚production follows the market’ for decades successfully convert, we expect tendentious an easy shift in the relation between inland and foreign occupation to end of this decade. That does not mean however completely clearly that we will close works in Germany to make smaller or. Germany is the backbone of production. Germany remains the heart by BMW.
Which productivity goals have you?
Arndt: For 2007 we sat down the goal of more than ten per cent. And you see me radiating. As exactly our result looks, we will call in the middle of on our bilanzpressekonferenz March.
What do you plan for 2008?
Arndt: … again a good productivity growth. Is to be realized however already much more heavily a clear productivity increase with fewer volume growth. Concretely: for 2008 we want to add than five per cent in production again clearly more at productivity.
How well are your works working at full capacity?
Arndt: Outstanding! In 2007 we had an extent of utilization of 106 per cent on average over all locations. The 106 per cent must one times on the tongue to be zergehen be able. That is me personally the well-known value best with distance in the Premiumsegment of the industry. 2006 lay you with good 94 per cent. Here change and extension measures at locations were to be considered.
How can one reach an extent of utilization over 100 per cent?
Arndt: That is because of the fact that to 100 per cent on five days in the two-shift operation correspond to a planned extent of utilization of the factories. If we drive auxiliary layers or punctually a third layer or on weekend insert one working day, then are the 100 per cent exceeded.
How will extent of utilization 2008 develop?
Arndt: After we do not go back the volume, extent of utilization will achieve again a high level. Our factories hum! Nevertheless we will continue to advance our creation of value orientation consistently and will continue to improve efficiencies. We eliminate verschwendung and simplify work structures and expirations.
Can this creation of value orientation be also measured?
Arndt: Yes, over characteristic numbers such as turn-around times or the necessary surfaces, which are used for our manufacturing processes. In all other respects I formulated a worthwhile goal for my coworkers: to lower to 2010 the turn-around times of components on the average around 50 per cent.
Where does your manufacturing production line lie?
Arndt: Depending upon model and location between 20 and 30 per cent.
Toyota ranks with 40 per cent. Do they see to change need?
Arndt: A range from 20 to 30 per cent regard I as an enterprise such as BMW for healthy. The manufacturing depth to develop or reduce is not a self purpose. We make things if they are differentiating economical and in the competition. We constantly examine, which extent should be better make or buy. Thus we announced recently that we develop our manufacturing production line for pressed parts: In Leipzig we will invest over 100 million euro into a new press work. Large volume pressed parts develop now very near at the building of bodies, in order to avoid routes of transportation and verschwendung.
World-wide you have 23 factories in twelve countries, under it 9 passenger car manufacturing plants, three engine works, four component works. Will this production net hand to realize over growth desired – or needs you additional works?
Arndt: We do not need new vehicle works in the next years. We nevertheless increase if necessary our capacities in the existing works. Thus we will increase the capacity in our mini work Oxford medium-term from 240.000 to 260.000 – without considerable investments, however by process improvements. In Spartanburg we extend the capacity of 160.000 to 240.000 units and invest for it 750 million dollar. Since grundsteinlegung in the year 1992 we invested thereby 4.2 billion dollar into our US work. And in our Joint venture work in China, Shenyang, we increased the straight capacity of 30.000 to over 40.000.
Does the statement that you do not need new works, apply until 2012 or until 2018?
Arndt: This statement refers to 2012 with 1.8 million units. We spoke in our strategy NUMBER ONE in addition, about new vehicle concepts, in order to increase our paragraph until 2018 on more than two million units. How and where we produce these, we did not decide yet.
Can you say, how it continues to go?
Arndt: As markets and rates of exchange develop, and as we can optimize our global creation of value distribution and work allocation, we regard regularly. On depends crucially how our production planning looks. Our clear philosophy is called: production follows the market. Whether it makes sense to build coming decade one large new work or two small ones is to be said today too early. There there are still no plans.
For your angedachtes megatown center automobile will give it surely a completely new work?
Arndt: First the vehicle concept must be clarified certainly and the market need. Then can be thought about the best production concept. The actual attraction of such a new vehicle concept lies however above all in the fact that one builds the car again invent can.
Why do you need an order manufacturer such as Magna Steyr, in order to manufacture models like the BMW X3 and starting from 2010 the mini SAV, if you are already today so flexible and efficient?
Arndt: For me co-operation with partners is an important element at breathing possibilities, at flexibility. Besides co-operation with Magna helped us to bring the BMW X3 faster on the market. Because our works were at that time well working at full capacity had been able to fulfill Magna free capacities and appropriate know-how our high standards.
Order manufacturers, like Magna and Karmann, are to substantial at pressure. Medium-term are orders to be expected by you?
Arndt: We confirmed only recently that we will build medium-term the mini SAV with Magna. Beyond that there are at present no plans and necessities for further order assignment in production.
Will it come to a co-operation with Mercedes?
Arndt: Co-operation with other manufacturers are for us an important strategic option in principle. Our principle is: who works alone added, who works together, that multiplies. At the same time applies: A BMW must remain always a BMW. We keep the differentiating elements with us. There there is also no clearance. Differently it looks with basic functionalities and components, which are not for the customer from high mark meaning. Let it me figurativy say: the suit, the special does not have to be immediately as BMWS recognizably, perceptible and experiencable, the underwear. We do not only hold conversations with Daimler, also with others – on all levels, from engineer to the executive committee. Both sides must move for it. The Gretchenfrage is: To say credit both sides the readiness, what they need and their clearance openly to put, instead of insisting on own, old standards. With such setting of tasks frequently the devil lies in the detail.
When will you finally decide whether it will come with Daimler to a co-operation?
Arndt: In addition I can give you today still no answer. As said, discussions run with several enterprises.
Which components does it concern in the detail with its discussions?
Arndt: It goes bundling for example therefore volumes of purchase with not mark-coining/shaping partial extent. That basic functions could be like window lifters or entrance systems, adjustment engines, ventilation systems etc.. If we bundle these volumes, scale effects can be obtained.
Would you supply with to Aston Martin with engines?
Arndt: There are not decisions for it. But me in principle no reason does not fall apart with such questions to sit down.
Applies also to GM, Fiat and Bertone?
Arndt: It is a broad interest there in the market for our exzellenten engines. We are well advised not to exclude discussions categorically on the contrary we sound out the straight landscape and look, what could fit. But I legend completely clearly, we can in principle each customer here supply. We are the Bavarian engines of works and want in this business further to open.
Will the pressure continue to increase to your suppliers?
Arndt: The international competition applies to all market participants. Of it suppliers are naturally impossible. I stress however that the creation of a department for purchase and partial economy may not be reduced to the alleged thumb screws for suppliers. That jumped clearly too briefly. It concerns to us that our creation of value thought may not end at the factory gate. We must regard the entire chain, our supplier partners enclosed. We look for efficiency paste run gene in the entire chain. That is a large chance for existing partners, in addition, for suppliers, who do not rank so far yet among our partners. I would like to underline however that we are interested in harmonious, partnership sources of supply still. Those, which deplore themselves here in individual cases loudly, without to be in particular called, are a minority.
They want to reduce your F&E ratio of 6,1 on up to 5,0 per cent. Doesn't that weaken your future competitive ability?
Arndt: The F&E ratio computes itself as well known from the conversion – and this will continue to rise with us with the paragraph. We will convince also in the future as technology leaders by creative research and developments with consistent adjustment at the customer use.