Word: bmw
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This ability to cater to fickle tastes is just one manifestation of an extraordinary flexibility that BMW has injected into a company that sold nearly 1.4 million cars last year, bringing in $65 billion in revenues. It's a flexibility that affects almost everything the firm touches, from the layout of its assembly lines to the working hours of its administrative staff to relationships with its unions and key suppliers. BMW has mastered the manufacturing fine art called mass customization: no two cars rolling through its assembly lines on any given day are identical. Its factories can cope with...
...flexibility also extends to the rhythm of work: BMW has struck deals with its heavily unionized workforce that enable it to run its factories more or less as demand dictates. Its newest plant in Leipzig, where the 3-series and new 1-series hatchback cars are built, runs anywhere from 60 to 140 hours per week. Instead of classic two- or three-shift rosters, the company juggles some 300 working-time permutations to determine optimal use of its teams of workers, some of whom are contract "permatemps" more common...
...BMW is in some ways symbolic of the resurgent German economy. For more than a decade, exorbitant labor costs, unbending union rules and an addiction to red tape--not to mention the high price of unification with East Germany--put Germany into an economic straitjacket. BMW went through its own rough patch in the 1990s after the disastrous acquisition of Britain's Rover Group, but its fortunes have changed markedly since it ditched Rover in 2000. Production has increased steadily, and profits are buoyant. Pretax earnings last year rose 25%, to $5.5 billion, despite the soaring cost of raw materials...
Neither Germany nor BMW is yet in the clear. The changes brought about by corporate bosses and government policymakers have had an evident impact--BMW alone has whacked $1.2 billion from its cost structure over the past three years--but it'll be hard to sustain that pace. Global competition shows no sign of letting up. Toyota's Lexus is starting to make inroads into BMW's European turf, while at home, rival Audi is turning up the heat, and Mercedes looks like a formidable competitor once again, now that DaimlerChrysler has agreed to sell off Chrysler...
Drop in on BMW's Leipzig plant, and you can see what he means. It's the firm's newest, having opened just two years ago, with a luminous open-plan central building that houses white-collar workers and managers. It was designed by London-based architect Zaha Hadid, and its most striking feature is a conveyor belt that meanders inside the building just below roof level, carrying a steady stream of cars from the body shop to the paint shop. You can see it from almost everywhere in the building, including the cafeteria...