| La lettre du GERPISA | no 109 (janvier 1997) |
Firm News - Mario Sergio Salerno et Mauro Zibovicius
There is a strong difference between the model VW is adopting at Resende and other kinds of supplier participation in final assembly. Under the "modular consortium" concept, suppliers have to invest inside the plant, in their "modules" (tools, machines, etc. - VW supplies the building and facilities like water, compressed air, gas, etc.); in fact, it is not a kind of workforce outsourcing for parts assembling.
The modules at Resende are:
- cabin - stamping and body shop (Tamet, Brazilian Company)
- cabin - painting (Eisemann, German)
- cabin - trimming (VDO, German)
- engine (MWM, German, and Cummins, American)
- chassis (Maxion, Brazilian)
- suspension and axles (Rockwell, American)
- wheels and tires (Maxion, Borlem and Bridgestone, forming a new Company, called Remon)
Actually, VW has a lot of work before the plant is completed. The body shop and painting modules are still under construction; it the highest investment and the most important technical problem. In fact, the only processes VW used to fulfil were the cabin building and painting. All other parts (engine, chassis, etc.) were produced by suppliers. The plant is still experimental: VW assembles and disassembles units in order to examine their quality and improving the production system. The modules under construction are due to be completed in the second half of 1997.
Some suppliers established new companies to participate in the "consortium". For example, MWM and Cummins, engine suppliers, are planning to form a specific Company for the engine module (assembling of gearbox with engine and of the ensemble to chassis). In this module they will operate with any of both engines.
The suppliers are going to be paid for completed vehicles. A board has been established for discussing costs and selling prices. VW and all module companies participate in it. The presidency of the board is rotative.
By the moment it has opened, there were 300 VW employees in the plant (none of them blue collars) and 700 employees from other companies. The estimated production level is 150 trucks and buses per day (without body, as is the tradition in Brazil; the bodies are produced by other specialised companies, chosen by clients. The buses have front engines and are actually very similar to trucks chassis). In the rented building VW was producing 4 buses per day.
Buses and trucks production have some specific characteristics. The product is clearly modular. It is possible to very easily identify the modules (chassis, engine, cabin). It is not the same thing for a car. Therefore, there is here an important point for research and discussion: weather the "modular consortium" can resist to day-to-day proof, will it be restricted to trucks/buses production? Is it possible to make the hypothesis that in car production there is space for a model similar to Resende?
We believe that it is necessary to differentiate between modular product and production "à la Resende". If the automobile remains a systemic product, would it be possible to produce cars under some concepts of modular consortium for specific assembling? We believe as well that the main issues of such a concept are strongly linked to sharing of investment and to entry capital. By the other hand, there are remarkable risks in this scheme: can a Company be successful in the automobile market without directly participating in production? How will be the innovation process related to products?
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VW is finishing the construction of a new engine plant at Sao Carlos (Sao Paulo State) and prepares the launching of the new Golf. It will probably build a new plant for Audi models production (maybe at Resende...). It will then be possible to verify to which extension VW is going to adopt the "modular consortium" concept. A preliminary research we are conducting about the project and the building of the engine plant shows that it will be much less modular than the plant at Resende; many operations are planned to be made by VW itself.