Assembling Cars In Belgium

If you think that Belgium is dominated by just beer and chocolates, think again. Sure, the country has built a strong reputation as a confectionary leader, but one region is trying to keep a toehold in another crucial industry: vehicle manufacturing.

Flanders, which covers the northern part of Belgium, is home to several key auto assembly plants, including those owned by Volvo, Ford and Volkswagen. Like the rest of the industrialized world, Flanders is beginning to find itself in a bit of a quandary, battling for jobs against low-cost Eastern European countries, including Hungary, Czech Republic and Turkey. Indeed, the Turks took production of the Ford Transit van from Flanders a few years ago, simply because labor costs were significantly lower. One positive sign for the region is the recent announcement by Volvo that it will be assembling a new crossover vehicle—likely to be dubbed the “XC50”—beginning in 2007 at its plant in Ghent. While the XC50 will require Volvo to invest an additional 49 million euro at the facility, it is not likely to add a significant number of new jobs at the plant. Volvo has been one of Flanders’ strongest supporters. The Swedish automaker is using Ghent—which can produce up to 270,000 S40, V50, S60 and V70 models each year—as the sole production facility for its new C30 small car. When production began in September, a third shift was added to accommodate the 65,000 C30s expected to roll off the line each year. Since the C30 shares most of its underpinnings with the S40 and V50—built on Ford’s P1 C-segment platform—it utilizes the same body shop as its two siblings, although the C30 requires an additional 2,400 spot welds. The S60 and V70, however, are built in a separate body shop and final assembly hall. Volvo relies on the nearby Ford Genk plant to provide a majority of the stamped parts for its production, which are shipped by rail and truck on a just-in-time basis. An adjacent supplier park provides an additional 21 sequential subassemblies to the plant. Peter Leyman, managing director of Volvo’s Ghent plant, says while most of the C30’s production startup was trouble-free, assembly workers did have to spend extra time making sure the uniquely shaped rear window met quality targets. With the issues resolved, Ghent began shipping C30s to various European markets in October, with shipments slated to begin to the U.S. in mid-2007, as a ’08 model.

Volvo’s parent, Ford, took a lot of flack for moving Transit production to Turkey, but that hasn’t stopped the automaker from investing more than 715 million euro in its Genk plant for production of the Ford Galaxy and S-Max multipurpose vehicles, as well as the upcoming ’08 Ford Mondeo, which begins rolling off the line on February 19. While Mondeo, Galaxy and S-Max are all based on the Ford EUCD (European C/D-Segment) platform, the Genk facility will house two separate body shops, one utilizing reconfigured tooling from the Transit line for Galaxy and S-Max bodies, while the latest flexible tooling systems are being installed for Mondeo and its three body styles: sedan, wagon and five-door. “The Transit tooling was only two years old and it did not make sense to get rid of it,” says Guy Martens, operations manager-Ford Genk. The Kuka robots used in the Transit body shop were reprogrammed over a three-day shutdown and the newly installed Mondeo line will have the ability to produce two additional top hats, if needed. To save additional resources, manufacturing experts were able to combine the closure lines used for all three vehicles. But Genk isn’t all about assembly. The facility also is home to one of the major stamping facilities for Ford of Europe, thanks to its 2 fully-automated coil shears, 7 large blanking presses, 17 conventional press lines (sizes ranging from 400 to 1,000 tons), along with four transfer presses. In addition to producing 162 parts for the S-Max and Galaxy, Genk stamping provides parts for the Ford Transit, Fiesta, Fusion, Focus, Jaguar X-Type, and Volvo S40 and V50 throughout the world. The ‘08 Mondeo required investment in 105 new dies, accounting for 172 parts. Once Mondeo reaches full output—targeted 40 days after production startup—Genk will be producing 860 copies per day in addition to 350 S-Max and 190 Galaxy models running on a three-shift operation. Martens expects man hours per unit for the Mondeo to start at 25 hours, with a goal to reduce that to 22 hours within the first year. “We’re focused on continued efficiency, especially in this tough global environment,” he says.

The fight for survival has taken a different turn at Volkswagen’s Brussels assembly plant, where the focus has shifted to improving the efficiency of its just-in-time delivery systems. The plant, which produces nearly 1-in-4 Golfs sold worldwide, along with the Polo, is home to the latest supplier park concept that focuses on automation. Operations are managed AutoVision, a separate business unit within VW that focuses solely on improving supplier and parts delivery efficiency. The park, opened in January, is a single, two-story building with approximately 700,000 ft2 of space where more than 80 trucks and 40 railway cars arrive each day carrying 350,000 ft.3 of materials from 281 suppliers. The parts are then stored in a fully-automated high rack warehouse, where robots retrieve the necessary parts for each vehicle, verify the parts via 2-D barcode readers and sort them into bins for each particular vehicle. Larger modules, including front fascias, cockpits, rear axles and other suspension components, are subassembled in the lower portion of the warehouse and delivered directly line-side. What makes the VW experiment a bit unique is the fact that AutoVision has been developed as a separate business unit, with its own profit and loss statement. The goal is to improve overall efficiency within the VW organization throughout the procurement, manufacturing and information technology organizations, with the Brussels operations playing a critical role in the experimentation of supplier/OEM relations.

The Volkswagen experiment is a testament to the fact that Belgium, and the Flanders region in particular, faces a steep uphill climb if it wants to attract future auto manufacturing investment. The turnabout taking place via the added investment by Volvo, Ford and VW is likely temporary as rumblings continue over the high cost structure engrained in the region. The government is taking some of the issues head-on, adopting several ideas presented by a task force focused on improving Flanders auto fortunes. The government has already reduced taxes on certain shift work periods and introduced flexible work week policies. The goal is simple: to protect the jobs Flanders already has and to be honest in the assessment of potential future auto manufacturing investments. “We do not expect there to be any major new plants added in Flanders, we’re focused on keeping what we have,” says Flanders Minister of Economy Fientje Moerman. The government wants to attract supplier and OEM research and development operations and has invested 21.5 million euro in the Flanders Drive engineering center, a one-stop shop for development and validation of vehicle subsystems complete with test cells and the latest CAD/CAE tools. The center, adjacent to Ford’s Lommel Proving Grounds, has been utilized by numerous suppliers, including Continental Teves, Bosch, Bosal, Tenneco Automotive and Sony, to name a few, mostly for noise, vibration and harshness testing scenarios. Moerman is hopeful projects like Flanders Drive will keep the region on the radar of auto executives, but that, too, will be complicated as other regions of the world are gaining in the race for research and development and engineering jobs.