PUEBLA, Mexico - The Volkswagen New Beetle is being assembled here in a plant that was the laughingstock of the industry only five years ago.
The entire work force was fired; new Golf and Jetta models were a year late; initial quality problems were nearly double the industry average.
Today, after painful and drastic improvements, quality studies indicate Volkswagen de Mexico has made great strides in improving the quality of the Jetta, Golf and Cabrio models leaving this sprawling complex.
The plant, which is 75 miles southeast of Mexico City, is the sole source of New Beetles, and will produce about 160,000 of the reborn Bug annually.
VW is banking on the New Beetle to draw people into its showrooms to stimulate Jetta, Golf, Cabrio and Passat sales. Giving buyers a high-profile, problem-free New Beetle will go a long way toward building confidence in the brand.
Puebla-built cars scored 95 problems per 100 cars in the J.D. Power and Associates 1997 Initial Quality Study. That was above the industry average of 86 problems per 100 cars. But it was down 58 percent from Volkswagen's 1993 score of 226 problems.
'They have been improving at a faster rate than the industry, but they also had a longer way to go,' said Chance Parker, director of product research at J.D. Power in Agoura Hills, Calif.
Volkswagen this year expects to match or beat the industry average on initial quality. The company has set a goal of 65 or fewer problems per 100 cars.
'We are very hopeful,' said Werner Uhle, director of quality control management in Puebla. The quality of Puebla-built cars is very similar to the quality of vehicles made by Volkswagen in Wolfsburg, Germany, he said.
'It is very important for Volkswagen to have the same level of quality around the world,' Uhle said.
The turnaround at the plant began soon after Ferdinand Piech became Volkswagen AG chairman on Jan. 1, 1993. He made quality improvement paramount in Puebla, and visited the plant frequently.
Uhle points to several key steps to improve quality at Puebla since 1993:
Workers received better training and cross-training on several jobs.
Communication between Wolfs-burg and Puebla improved dramatically, particularly during development of new or redesigned vehicles.
Germans with experience at Volkswagen were placed in many key management positions at Puebla.
Suppliers were included early in the vehicle development process and held to strict quality controls.
ROCK BOTTOM IN '92
The Puebla plant hit rock bottom in 1992. The Golf and Jetta lost a model year of sales. They were scheduled for introduction in fall of 1992, but were delayed a year by quality problems and labor unrest.
Volkswagen's attempts to adopt Japanese-style work practices in Puebla led to a bitter intraunion fight. When it was all over, the government granted Volkswagen's request to cancel its collective bargaining agreement with 14,000 workers. In rehiring its work force, VW was able to rid itself of workers it considered a problem, and began a program to improve productivity.
The Puebla plant will reach an annual production rate of 430,000 by the end of this year. It produced 265,000 vehicles in 1997. VW invested more than $1 billion in the plant and in the development of the New Beetle. The plant may be able to crank up production to 450,000 by 2000.
Managing the Puebla plant is a challenge because it involves three assembly lines. The plant continues to build the original Beetle on a separate, low-tech line. About 50,000 are assembled here annually for sale in Mexico and South America. The New Beetle is built on a second line, and the plant produces the Jetta, Golf and Cabrio on a third line.
The plant is deluged with more than 5,000 job applications each year. The plant employs 15,000.