FRANKFURT -- A strategy of having independent, product-specific business units backed up by a small and flexible central staff has made Magna Steyr the world's largest contract auto assembler, CEO Herbert Demel said.
The start of production of the BMW X3 SUV in August in Graz, Austria, expanded Magna Steyr's roster of projects to six models for three automakers.
Magna Steyr expects total production in 2004 to reach 200,000 units, including 80,000 X3s.
The X3 is the only vehicle built at the former Eurostar plant that Magna Steyr bought from DaimlerChrysler in 2002.
The company has consolidated all other models at its adjacent assembly plant.
In addition, a nearby transmission plant produces specialty powertrains, especially four-wheel-drive and all-wheel-drive units.
It can be difficult managing so many different manufacturing operations running at the same time, Demel said.
"We have a strong and flexible project management and a 'Mr. Mercedes,' a 'Mr. Chrysler,' a 'Mr. Saab,' and a 'Mr. BMW' fully concentrated on their special work."
Independence extends to each business unit negotiating labor rates with the metal workers union, Demel said.
As an incentive for workers, part of their wages is based on the product's profitability.
Magna Steyr's central staff is small. Demel compared its function to a traffic policeman who handles scheduling for such bottlenecks as the paint shop, which is shared by all vehicle lines.
Demel, 59, took over Magna Steyr in January. He has also led Audi and has run Volkswagen's Brazilian operation.
In 1995, Magna Steyr built about 20,000 vehicles a year. This year, volume will be about 100,000 units.
"Magna Steyr was a roughly $2 billion entity," Demel said. "In two years it will be a $4 billion entity."
