GRAZ, Austria - Four thousand miles from Alabama, in an Austrian vehicle assembly plant, a handful of managers are talking about an upcoming production test.
Gerhard Wolf, a German who lives in Tuscaloosa, Ala., emphasizes to the group that 'the chief' wants this test to go well.
The chief is Bill Taylor, CEO of Mercedes-Benz U.S. International Inc., back in Tuscaloosa County, Ala.
The test is for the launch of the new European diesel version of the Mercedes M-class sport-utility, for which Taylor is responsible.
The Austrian setting is Steyr-Daimler-Puch, an independent production company owned by supplier Magna International Inc. of Aurora, Ontario.
And the drama of the moment is that Alabama - not Austria, not Stuttgart, not Auburn Hills and not Canada - is calling the shots in a launch so far from home.
When Steyr was called in to help DaimlerChrysler produce more M-class sport-utilities beginning this summer, the arrangement was different than other dual-plant production lines around the industry.
Because the Mercedes business unit in Alabama is solely responsible for M-class marketing, manufacturing and distribution, using Steyr created a management line outside the normal DaimlerChrysler structure.
Now that the sport-utilities are flowing down the line in Graz, the Alabama company must have coordinators on hand to monitor them. When a production glitch arises, the telephone rings on a manager's desk back in Tuscaloosa. When a question needs an answer, someone in Alabama gets the call. When a parts delivery is late, the purchasing and logistics office in Alabama handles the problem.
That arrangement will remain in force as long as Graz continues building the sport-utility. No parts will be localized in Europe. No management autonomy will develop in Graz. And unlike other 'transplant' automakers, the new Austrian satellite plant will remain the responsibility of the overseas parent company.
In short, building the M class in Graz has created a 4,000-mile-long supply and command line that involves a complex system of parts tracking and production control.
WORLD PARTS LINE
The line begins in the supplier plants of Michigan, Alabama, Tennessee and Mexico. The M class outsources the highest percentage of content of all Mercedes-Benz vehicles, and since it is the brand's only U.S.-made vehicle, most of that content comes from U.S. parts makers.
All parts for the 30,000 M-class vehicles that will be produced in Graz each year will come either directly from North America, or through a European pipeline that is managed on behalf of the U.S. Mercedes plant.
Earlier this year, Mercedes spent $8 million to open a new parts consolidation warehouse in Bessemer, Ala. There, supplier content is now received and separated for two different destinations: One for the 2-year-old Alabama production line, and the other for Europe.
Large components and modules that are delivered to the Tuscaloosa plant on an in-sequence basis - such as seats and cockpits - are shipped directly to Europe by the suppliers themselves.
The vehicle's outsourced body stampings, from Ogihara America Corp. in Birmingham, Ala., are shipped in specially designed cardboard boxes that are as tall and long as the M class itself.
The truck's fully assembled cockpits, supplied by Delphi Automotive Systems Corp. in Cottondale, Ala., are shipped directly to a newly established Delphi outpost near the Graz factory. And even though Johnson Controls Inc. operates seat factories all over the world, the M-class seats now manufactured in-sequence at Johnson Controls' Alabama operations are shipped to a company staging plant in Graz to be delivered in-sequence there also.
But most of Mercedes' 65 or so North American suppliers now produce one extra European part for every two that will go to Alabama. Those components are railroaded from the Bessemer consolidation center to Charleston, S.C. There, they are loaded onto ships and brought across the Atlantic under the supervision of Chrysler Austria, the Austrian business unit of the former Chrysler Corp.
The Chrysler Austria office, which is housed on the Steyr-Daimler-Puch factory grounds, tracks the parts shipments on behalf of Mercedes of Alabama until the U.S. components arrive in Graz. European-made parts - including the vehicle's engine and transmission - also are tracked into the plant by Chrysler Austria. Troubles are immediately reported to Mercedes' logistics operations back in Tuscaloosa.
Purely by coincidence, Steyr had become a vehicle assembler to Chrysler before its 1998 merger with Daimler-Benz. The supplier was already building Chrysler Grand Cherokees and Mercedes E-class cars on separate lines, accommodating both automakers, when the idea for additional M class production surfaced last year.
Chrysler Austria - which handled the flow of parts to Europe for the Grand Cherokee - can deliver imported parts on a just-in-time basis from a central warehouse that it maintains on the site.
'The production is helped by great logistics help from Chrysler Austria,' Wolf says. 'They were already very knowledgeable about moving parts across the Atlantic and into Graz.'
Graz Managing Director Gary Cash - an executive from the Chrysler side of the family - says that being able to use Chrysler's existing European infrastructure allowed Mercedes to get up and running faster. 'They didn't have time to come in here and set up a separate company,' says Cash, who refers to Tuscaloosa's Taylor as 'my boss.' 'That might have taken another 18 months to get going.'
Wolf has a team of production engineers from Alabama on call for both the day shift and the night shift in Graz. In addition, several Alabama suppliers have representatives on duty at the Austrian plant. Ogihara keeps one person in Graz, as does Mercedes' West Virginia-based structural steel stamper, South Charleston Stamping & Manufacturing. Delphi and Johnson Controls have personnel in Graz. So does the vehicle's German-based axle maker, ZF Industries, which supplies its axles from Alabama.
Production scheduling also is managed in Alabama. Managers there determine the order for M-class sport-utilities on the Graz line, notify the plant's U.S. suppliers and trigger the parts flow out of the supplier plants, into Alabama and across the ocean to Europe.
Employee training also was Alabama's job. Graz sent some workers to the U.S. plant to learn Mercedes' production methods. And at the same time, the Alabama organization - which itself was trained by European workers - sent trainers back to Austria to prepare them for the only Mercedes product made in America.