The new Taycan production facility is currently being built in Zuffenhausen, with around 700 million euros being spent on the buildings and facilities alone. SOP is planned for mid-2019. Is everything on schedule?
We’re keeping to our timetable. The buildings will be completed and most of the production facilities will be installed by the end of the year. We will be able to start pre-series production in the new technical sections as we move towards full production.
The Taycan will be a niche model with predicted sales of 20,000 units per year. Why, then, does it need its own paint shop and assembly line?
Production of our two-door sports cars in Zuffenhausen is nearing maximum capacity. We currently manufacture around 250 vehicles per day. This assembly line no longer has any capacitive flexibility. This is why we took the decision to build a new paint shop and assembly area as we firmly believe the Taycan has the potential to sell more than just 20,000 units per year. The new manufacturing facility gives us the requisite flexibility for the future.
Could the new Taycan production facility also be used to assemble the 911 product line?
We could if we wanted to. All facilities are designed to be flexible, including those in the body shop.
The Taycan will be assembled on an FTS Flexi Line, which is said to be 40% cheaper than a conventional skillet system. Where is the cost advantage?
The stated cost advantage relates primarily to the structural conditions. A conventional production line, which is significantly heavier than the FTS conveyor technology, would have incurred significantly greater costs in terms of the higher static design of the multi-tiered structure. Another advantage is how relatively straightforward and quick it is to install this kind of system. We are already reaping the benefits of this for the Taycan. The FTS system is easy to move, so we have set it up elsewhere for pre-production testing and are now moving it into the new production hall.
Will this kind of highly flexible system be used in assembly for medium and small series?
The system has plenty of advantages, and I can well imagine that we will also use it to manufacture other model ranges in future – when it makes technical and economic sense to do so.
You have concluded a pact with the Zuffenhausen Works Council: the employees finance investments in the production site in the form of a “future contribution”. Can Porsche not manage this alone, despite a return on sales of 17.6%?
If we want to preserve jobs in the long term, I see it as perfectly legitimate for us to discuss with employees what contribution they are prepared to make. The decision was made in light of the fact that we wanted to build the Taycan here at the Zuffenhausen site, the birthplace of Porsche, even though this requires more investment in an existing factory than, say, Leipzig. The Works Council came up with the pivotal offer: to give our colleagues a stake in the future. The pact involves using part of the collective wage increases for financing and repaying them later. The employees and the board members are also participating in the pact. I think it is a great idea, and is one that is being implemented for the first time in the automotive industry.
Porsche is currently developing the Premium Platform Electric (PPE) architecture in conjunction with Audi. Was the Taycan ahead of its time?
Yes. The next generation of Taycan will also be manufactured using the PPE. When we revealed the Mission E 2015 study at the Frankfurt Motor Show, the platform idea for electric vehicles was not so advanced.
The PPE project with Audi is expected to result in three model families, one of them from Porsche. The first PPE-based models are expected in late 2021. What is the objective of the shared architecture?
The PPE – and Volkswagen’s MEB – is the platform on which we can present all future electric vehicles efficiently and economically in terms of development costs. It would cost around 30% more if we had to deal with the forthcoming workload on our own.
You have been the member of the Board of Management for Production since 2016. What interests you about this area?
It is the challenge of showing a high level of individuality while at the same time designing a highly efficient manufacturing system that makes individuality possible in the first place. This is the only way that we can master the complexity resulting from the diversity of customer requirements – in production, logistics and interaction with our suppliers. Porsche traditionally has a low level of vertical integration at around 20%. Our partners undertake excellent work on our behalf, both in terms of technology and organisation.
What is the secret of your success?
We have to remain alert because we are very successful. You tend to make the most mistakes when you are enjoying a period of success. This is why I fight to ensure we are always aware of it and that we keep both feet on the ground. We must strive for success every day.
What are the pillars of your production strategy?
Clear customer orientation, efficient processes and sustainability. At Porsche, customer orientation also means creating values. We are focusing on the issues of electrification, digitalisation and connectivity. But we also have to create added value to be profitable in the long term. This is where the efficiency of our processes comes into play. In our “Strategy 2025”, we defined areas of action for the company that will have a decisive impact on our future.
How do you create efficient processes?
By minimising resources, eliminating interfaces and diligently pushing ourselves forward. In terms of operation, for example, this includes minimising handling levels, starting with the receipt of purchased parts at the factory until they are delivered to the assembly point. What applies in the factory applies equally to our internal cooperation across all departments. We need to look beyond our own department more and at an earlier stage. At present, we do so through interdisciplinary process teams in which questions and solutions are discussed and actively promoted. To put it bluntly, a company has to keep ticking over efficiently.
Where do you see the technical and, above all, economic advantages of digitalisation in production, i.e. the concept of the smart factory?
People often refer to Industry 4.0 as a revolution. I see it differently. Today, we are continuing to build on what we have created in the past in terms of automation, simulation and virtual product and manufacturing planning. With a greater level of digitalisation and networking in the factory in future, we are essentially pursuing four objectives: First is optimisation of planning and digital simulation; second is ensuring complete real-time control of the manufacturer process from order acceptance at the dealership to vehicle delivery; third involves the continuous recording and analysis of deviations that occur in the manufacturing process in relation to parts and to the process itself. The fourth and final point is the provision of greater support for people in their day-to-day work.
Can you provide specific examples in relation to your last point?
On the one hand, digitalisation helps us to make the working environment more ergonomic. Human-machine cooperation is a good example of this. It also helps employees to analyse complex processes and procedures that we would not be able to monitor and control without modern data technology. For example, it creates transparency as to where and why a digital flow may not follow the most ideal path. We can see potential that we might not otherwise detect.
You consistently promote the concept of sustainability and have already implemented a great deal, including certified alternative energy at all sites and climate-neutral rail transport. Does sustainability also make economic sense?
Our previous experience indicates that, overall, sustainability is cheaper. However, it may sometimes cost a little more because it is the right thing to do for the company and for society in general. Promoting sustainability is always better than not doing it. After all, the indirect benefit is also important – doing a good deed for our environment and the world. Ultimately, sustainability is a puzzle made up of many small, individual actions that will one day combine to achieve a major, tangible success.
Which pieces of the puzzle will be assembled in Porsche production in future in order to further promote sustainability?
We intend to use a range of individual measures to create a Zero Impact Factory, which is not only carbon-neutral, for instance, but which manufactures products that are 100% recyclable. This will ensure we are not taking away any more precious resources from Mother Earth. We also have to convince our suppliers to join us on this journey.
Where is Porsche on this journey?
With the Taycan project, we have deliberately begun to focus on sustainability in terms of both material selection and process design. Of course, the complete transition cannot be achieved overnight. But we are working on it. We are already about to achieve a milestone on this path: start of production of the Taycan in Zuffenhausen is expected to be carbon neutral.
When could a Zero Impact Factory become a reality?
It is our vision for 2025. We still have a great deal to do. But we can’t make progress without a vision.
Up to now, it has always been said that a Porsche production site in the USA or China would not pose a problem. Is it necessary to reconsider this in light of geopolitical changes and aggressive market influences?
Solely for reasons of capacity, there is currently no pressing reason to commit ourselves to other production facilities. We are, of course, also dealing with current changes, whether it is the punitive tariffs being introduced by the USA or the localisation rates that foreign automotive manufacturers have to comply with in China. We are keeping an eye on new framework conditions and legal requirements so that we can react quickly if necessary. Nevertheless, we are not making any specific plans at present. From our point of view, there is currently no compulsion to react in the short term.
Several hundred million euros are being invested in expanding the Leipzig plant. The next generation of Macan is expected to roll off the production line there after 2020. What are the highlights?
Since the foundation stone was laid in February 2002, we have invested more than €1.3 billion in the development of the Leipzig plant, transforming a pure assembly plant into a fully fledged factory. We manufacture the Macan and Panamera in full there and have also become a Group supplier – currently of vehicle bodies for Bentley’s Flying Spur, Continental GT and its convertible variant. The renewed expansion in Leipzig will future-proof the factory, also because the location offers the most favourable conditions in terms of investment requirements and operating costs. This is the result of an internal invitation to tender that was won by Leipzig.
What will be the technical highlights of the future Macan production in Leipzig?
The largest single investment planned is a new and highly flexible body shop, with a view to achieving an increase in model variance. The requirements of lightweight construction are continuing to increase. This means an even greater material mix, which we also have to master in production with the associated innovative joining technologies. For the new Macan, we will use aluminium mixed with high-strength steels, a combination not previously used in this vehicle.
How do you involve suppliers in cost optimisation measures?
A factory works in a highly efficient manner if the right material is available in the right place at the right time – at the best possible cost. We work very closely with our suppliers to achieve the optimum result in this area. In doing so, we analyse the processes between the supplier and ourselves very precisely, for example using test items. The question on our minds is: can we eliminate costly duplicate work?
The VW Group has three sports car manufacturing sites – in Zuffenhausen, Neckarsulm and Sant’Agata Bolognese. Do you believe cooperation between them will intensify in the newly established Sports Car Group run by CEO Oliver Blume?
Yes, that is a clearly stated objective. We will seek synergies even more closely within the Sports/Luxury brand group, and join forces and coordinate projects more closely than in the past. The cooperation between Bentley and Bugatti shows how successful a close exchange can be. They leveraged synergies totalling almost €100 million within a year. In other words, it is possible to make major progress without our brand or any other Group brand suffering as a result.
Albrecht Reimold, 57, started as a trainee at Audi in Neckarsulm in 1987 following his apprenticeship as a toolmaker and degree in production engineering from Heilbronn University of Applied Sciences. He went on to manage Audi’s A8 body shop and the A2 production facility. In 2002 he helped with the start-up of the Lamborghini Gallardo in Sant’Agata Bolognese. He returned to Neckarsulm a year later where he was responsible for production planning for the A6, A8 and R8. He was appointed factory manager in 2009. Reimold was the CEO of VW Slovakia in Bratislava from 2010 to 2016. In February 2016 he was appointed Member of the Board of Management for Production and Logistics at Porsche AG.
Text first published in the journal “Automobil Industrie”, edition 9/18