GRAZ, Austria - Beginning May 3, workers at the Steyr-Daimler-Puch plant here will assemble both the Mercedes-Benz M class and the Jeep Grand Cherokee under the same roof -and, at times, on the same assembly line.
DaimlerChrysler AG says it will save an estimated $300 million by using a common conveyor system and tooling wherever possible.
The Alabama factory that builds the M class cannot keep up with demand, so DaimlerChrysler AG is turning to Steyr for relief.
DaimlerChrysler AG executives emphasize that 'brand sanctity' will be maintained. Nonetheless, this plant in southeastern Austria offers the company a 'huge synergy,' said Dieter Zetsche, a DaimlerChrysler AG management board member in charge of Mercedes-Benz sales and marketing.
'We are exploiting what is possible in the plant without any compromise on the standards and demands we put on the M class,' he said.
Just by adding M class production here, Daim-lerChrysler AG is saving about $40 million that it would have to pay Steyr for not utilizing the plant fully. Steyr, a unit of Canada's Magna International Inc., has built 107,367 Grand Cherokees here since 1994. Production of the 1998 model concluded Oct. 23.
SEPARATE AT TIMES
On Nov. 16, just one day before DaimlerChrysler AG celebrated Day One of the new company, Chrysler Corp. and Daimler-Benz AG signed a contract with Steyr to build 75,000 M-class sport-utilities here during a 36-month period. Job 1 is set for May 3.
Production of the new Grand Cherokee, redesigned for 1999, will begin here Jan. 11.
Steyr will add 550 employees when M-class production begins.
A common conveyor system will move both vehicles through much of the assembly process. But the M class, with its body-on-frame construction, will veer off at various points for work unique to its design. For example, the M class will have a separate line to build its rolling chassis, which includes the frame, axles, wheels and other major chassis components. The Grand Cherokee has a unibody design.
The paint shop and the body shop, except for separate floor pan lines, will be two common areas. At the end of the line, each vehicle will undergo its own tests before leaving the plant.
The two vehicles will not share parts. Some tooling will be common, but it will be programmed to identify a Grand Cherokee or M class. The M class also will have plenty of unique tooling.
'The sanctity of the brand is still protected, because even though it's going down the same line, there are different applications of tooling and welding devices,' said Dennis Pawley, a DaimlerChrysler AG management board member in charge of Chrysler manufacturing.
The arrangement is not as radical as it sounds, noted Shamel Rushwin, senior vice president of international manufacturing at DaimlerChrysler Corp., the North American unit of DaimlerChrysler AG. Steyr is making the Mercedes-Benz Gelaendewagen sport-utility and 4x4 E class in an adjoining plant, he said.
Eurostar, a Chrysler-Steyr joint venture, has been assembling Chrysler Voyager minivans in a separate factory within the Graz complex since 1992.
Safeguards are being established so the M class made here is identical to the model built in Alabama. For example, a color-coded system will be used to prevent workers from grabbing the wrong tool. A blue tool will be used for the M class, and a green for the Grand Cherokee.
'So from a visual-management standpoint, if you ever saw an operator with a green air wrench working on an M class, there's a problem,' Rushwin said.
Gerhard Stiegler, Steyr's manager of Jeep production planning, summed up plant philosophy: 'Divide where necessary; commonize where possible.'