Daimler-Benz needs new manufacturing capacity in Europe, and the merger with Chrysler won't help.
For one thing, both Daimler-Benz and Chrysler are operating their plants at or near full capacity. For another, they build cars in different ways.
'We are intensely trying to find solutions to shorten delivery times,' said Juergen Hubbert, Daimler-Benz board member for passenger cars. 'Our customers will not be willing to accept the current delivery times very long.'
The average delivery times are: SLK, 18 months; CLK and CLK convertible, 12 months; M-class, 7 months; and A-class, 6 months.
Daimler-Benz has added shifts at Bremen, Germany, to increase production of SLKs from a pace of 36,000 annually to 55,000, and of CLK coupes from 40,000 to 55,000. In the USA, M-class production will be increased from 65,000 to 80,000.
But Hubbert wants a new, flexible plant in Europe that could build any car in hot demand, including the M-class sport-utility.
'The market could be outside the USA,' said Hubbert. 'The production could be as well.'
The only flexible plant both companies now use is the Magna-Steyr-Daimler-Puch plant in Austria. (See Page 15.) It builds versions of the Jeep Cherokee, Jeep Grand Cherokee and Mercedes-Benz E-class.
'Daimler and Chrysler physically build their vehicles in very different ways,' said Michael Robinet, managing director of CSM Forecasting Inc., an international industry-tracking firm. 'To bring one into the other's factory would require them to build a whole new body shop, which would defeat the purpose of sharing a factory.'
Chrysler manufacturing chief Dennis Pawley will be the highest-ranking manufacturing executive on the DaimlerChrysler board. He favors a simple approach to manufacturing where systems are the same from plant to plant.
'The Germans see both Pawley and his approach as an asset,' said Ronald Harbour, president of the Harbour and Associates automotive consultancy in Troy, Michigan.
Pawley is well known for adopting ideas from other automakers, mainly Toyota, and crafting them into the Chrysler Operating System.
Daimler-Benz has been heading in the same direction. Its sport-utility plant in Vance, Alabama., is designed like a Toyota factory. At the request of union workers, Chrysler will rename its system the Joint Activities Operating Principles on 14 June.