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No, the Germans don’t want to start retooling for Panzers and offer the world an opportunity to make it ‘3 out of 5’. But Yahoo! News reports that Daimler-Benz will suspend auto production on December 11th and resume on January 12th, due to flagging demand worldwide. This will be true for ALL Daimler owned plants. Although production may return afterwards… who knows? If the world economy continues it’s counter-clockwise spiral, we could see Daimler retool their plants in a similar way to what Toyota has been forced to do in Princeton, Indiana and San Antonio, Texas.
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How many units does this equate to?
I laughed hard at best 3 out of 5. That is funny.
Pardon my ignorance, but I don’t get it.
Pardon my ignorance, but I don’t get it.
1. Napoleonic Wars – Prussia (precursor of Germany) won
2. Franco-Prussian War – Prussia won
3. WWI – Germany lost
4. WWII – Germany lost
5. To be determined…
First I thought: “Heck, Germany pretty much closes down from December 15th to January 15th anyway and goes skiing, or to Thailand, Maledives or whatever other dives the world offers.”
On second thought: Goosebumps. This is bad. Real bad. That’s no re-tooling, those times are over. DB must experience a very serious buyers strike. Closing down all factories worldwide for a month? Unprecedented.
How many units? Well, from January to September the company sold 979.800 units worldwide, including trucks, Smarts, AMG, and the three Maybachs. Back-of-the-envelope: 100,000 units less.
Do they typically operate between Christmas and New Year’s? I don’t know the answer to that, but I’m guessing that they don’t. If that’s true, then the additional shutdown would effectively be about 2-3 weeks.
Companies such as Daimler are greatly exposed to a worldwide recession. I’d expect them to reduce production across the board, for everything. Unless they are updating equipment, I can’t see how retooling would do them much good, when production cuts are going to be required for everything.
1.) While white collar workers usually max out their vacation “between the holidays,” production usually moves on.
2.) Yahoo News cites AFP, which in turn has it from the “Frankfurter Sonntagszeitung.” That would be the weekend edition of the Frankfurter Allgemeine Zeitung. Their on-line version has nothing about a closure.
3.) Modern plants don’t retool anymore. The simply change the software for the robots.
Can’t reach anybody in Germany, it’s Sunday ….
3.) Modern plants don’t retool anymore. The simply change the software for the robots.…
Body part stampings…don’t they required “retooling”?
Ok. Associated Press Germany got ahold of the newspaper also. Confirms the report. AP calls Daimler spokesman Florian Martens, receives a “no comment.” Martens says no spokesperson of the Daimler Benz had given that info. However, he mentions that the company had warned that there might be “adaptions of production.”
The Frankfurter Allgemeine Sonntagszeitung also talked to Rainer Einenkel, head of Opel’s Worker’s Council. He says, Opel may close the Bochum plant for “another two weeks” end of November, and “maybe also in the week before Christmas.” Meaning: “There won’t be much production this year.” An Opel spokesman calls that “speculations.” (Or maybe he called it “Spekulatius,” a favorite Christmas cookie in Germany.) The Opel mouthpiece says the factories in Bochum and Eisenach will be closed next week. At their main plant in Rüsselsheim, everything would be going “according to plan” whatever that plan may be.
GM Europe’s Über-Flak Chris Preuss says to Automotive Week Europe: “We will continue to manage our capacities with the diminishing demands of the markets in mind. This means as many production stops as necessary.” There you have it.
Also in the news is a row between BMW and their dealers. The dealers say they can’t move the cars BMW wants to dump on their lots, refuse to take contracted quantites (yearly bonuses be damned.) BMW can’t understand why.
Pity, I thought they were going to close the lines for a month as part of a concentrated effort to improve their quality. Maybe they should take the opportunity.
Now be careful, TTAC, about giving hapless car managers a tongue lashing. Serious repercussions are on their way, you jackbooted stormtroopers.
Hans-Werner Sinn, head of the IFO Institute for Economic Research in Munich just said criticism of managers is the new antisemitism. After the Great Depression of 1929 “the Jews were blamed in Germany, today it’s the managers.” He says new Nazis are ready to exploit the situation. I’m not making this up:
http://de.news.yahoo.com/2/20081026/tbs-d-finanzen-banken-krisen-juden-f41e315.html
If DB is facing the gross overproduction of vehicles, then shutting down for a month or two makes sense. Compare that to the D3 who keep right on going, filling up dealer lots, parking lots and any other lots they find. Eventually they lose their nerve and literally start dumping the vehicles onto the wholesale/rental car market or offer crazy incentives that destroy any value in the product.
3.) Modern plants don’t retool anymore. The simply change the software for the robots.
Even so, they still have to build and install many fixtures to hold the new parts for the robots. While it’s true that much of the work changing an auto assembly plant over to a new model involves computers and automated equipment, the welding shop will still need new fixtures and all those articulated arms the workers use for installing parts will need new fittings as well.
It’s only sensible to shut down the lines for a few extra days around the Holidays to avoid overproduction. Daimler produces luxury vehicles, which understandably aren’t selling as well nowadays, and commercial vehicles (trucks, taxicabs) that must now be justified under shrunken capital outlay budgets. I doubt that workers will feel much if any pain. Germany is a welfare state and I’d expect that unemployment benefits are at least as good as the UAW’s 95%-of-pay state and SUB income. However, Turkish and Bulgarian “guest workers” may suffer.
I doubt Germany will be requiring bankers to wear yellow Euro signs on their clothing, but Sinn has a point. Class envy/hatred boosts the Left, and hard times boosts class envy. For the Nazis (and, sadly, old Henry Ford too) financiers and Jews were one and the same. J. P. Morgan, Wall Street and the Bank of England might as well have been named J. P. Morganstein, Wall Streetberg and Bank of Englandwicz. Some of that persists today and contributes to European hostility to Israel.
All I can say to the retooling part is that my former client of more than a quarter century, Volkswagen, had this great thing called “Werksferien.” Plant holidays.
During those plant holidays, the plants were retooled for the new season. I always took my holidays right after the “plant holidays” because no meaningful work was done until a month after the plant holdidays was over and everybody got back in gear. No meaningful work was done a month before plant holdidays either. “We’ll do that after the Werksferien!” – institutionalized procrastination.
Once the robots had arrived, no more Werksferien, no more plant holidays. Whatever retooling has to be done is done on the fly. It’s pretty eerie to look at a modern assembly line where different models, even different brands move through dimly lit facilities, one behind the other. At VW, stampings are done by a huge robot that pulls a tool out of storage, stamps some parts, puts the tool back, takes another one, stamps some parts ….
No, at least where I made my money, no plant is shut down for retooling. Thing of the past. Don’t know about UAW country …
@ 50merc: The standard “guest worker” won’t suffer more or less than his Teutonic colleague: Same protection, same benefits.
Much different for the “temporary workers” which officially aren’t on the payroll of VW, Opel, Mercedes et al, but are hired by sub contrators, who then have their people do supposedly outsourced work at the factories. Those people are easy targets.
On Friday, VW announced that they will no longer need the services of 750 temporary workers. They are being sent back to the companies that supposedly hired them, and which for sure will fire them. No ugly termination, and the Workers Council will gladly see them go. VW denied reports that they will send home all 25000 temporary workers which are (technically not) employed at VW plants worldwide. But it’s not being ruled out either. After all, so the reasoning goes, those temporary workers were hired because they are temporary ….
PSA Peugeoet Citroen announced that they will cut down production to a third.
More (make that less) to come
Thanks, Mr. Schmitt, for contributing your expertise to this thread. TTAC really benefits from its large community of well-informed posters.
Hmm … Schmitt … sounds German. (As are a great many Americans. In my background are people named Claycomb, who we supposed to be from England until we learned their name on arrival here was Kleckham.)
“make it ‘3 out of 5′…”
“979.800 units worldwide, including trucks, Smarts, AMG, and the three Maybachs…”
I’ve been following this blog for about two months now, and I have found the article writing and the follow-up reader commentary on this site to be top-notch.
Time for me to jump into the fray. Look for further sardonic witticisms from CynicCritic…
There are rumors that several lots are already full of product that is built with nowhere to go.
Shutting down will hopefully alleviate the “parking space” situation…for some reason when Dr.Z was at Chrysler there were lots full of product with nowhere to go.
50merc:
For the Nazis (and, sadly, old Henry Ford too) financiers and Jews were one and the same. J. P. Morgan, Wall Street and the Bank of England might as well have been named J. P. Morganstein, Wall Streetberg and Bank of Englandwicz. Some of that persists today and contributes to European hostility to Israel.
Germany historically disliked Anglo-style capitalism from 1900 onward. There were plans before WWI for bombardment of NYC and the ‘transformation’ of England. I don’t mean to diminish anti-semitism at all, but there were other cultural/economic factors.
actually a VERY good idea!
Little work actually gets done over this time period in most christian nations!
and the quality of work is probably less than perfect(lots of parties)
Daimler would rather shut things down than turn out a few barely supervised(due to vacations)products!
Even the smart fortwo? The US is getting 2/3rds of the factory output and there’s still something like a year-long backlog of orders.
From January to September three Maybachs. Why bother?
From January to September three Maybachs. Why bother?
It’s Simon Cowell’s ride of choice!
@50merc: Guilty as charged: I am German. Actually, I’m Bavarian, raised in the beautiful city of Munich, capital of the former Kingdom of Bavaria, and home of BMW, the Bavarian Motor Works. Hard-line Bavarians don’t even see themselves as Germans. Last time us Bavarians could legally shoot a Prussian was 1866, when we found ourselves on the losing side of the Austro-Prussian war. (Amiss from PCH101’s tally. Some hardcore Bavarians still want a rematch. Peace- and beer loving as we are, we’d probably lose again. The “Siegestor” – “Victory Gate” – in Munich remains unused to this day, and I hope it will.) I lived and worked in the US since 1980, before going to fraternize with the Yellow Peril. Since then, China it is.
@CynicCritic and Dangerous Dave: Those “3 Maybachs” were of course written with tongue in cheek, but I didn’t have to ram my tongue all the way into the wall of my big mouth. I can’t bring myself to research the definitive number of Maybachs built, but they never made more than a few hundred annually – when times were good. I vaguely remember that in 2005, a mere 45 Maybachs were sold, or maybe 25, any way, two digits. Newer numbers are most likely even more embarassing. The total worldwide market for super-duper-luxury-limousines is estimated to be no more than 1500. And in an epidemic of hubris, the Germans insisted to corner that market. First, Ferdinand Piech wasn’t contempt with fathering 14+ children (the world has stopped keeping track of Piechs in-house production depth) or to build a Phaeton nobody wants, he also bought Rolls-Royce and Bentley. BMW claimed brand rights to Rolls, and got them. However, Rolls now had no Bentley platform to build on. BMW had their Rolls, and they had problems. DB didn’t see it that way. They saw the riff-raff encroaching on their territory. OMG: BMW, those Bavarian peasants, got Rolls! Shudder: Blue collar Wolfsburg has Bentley (and Bugatti, and Lamborghini.) We need to do something, fast! So Maybach was (still-) born.
Incidentally, a lot (if you can use that word) of this pornography-on-wheels is sold to Asia. I know a Chinese leader of industry who is a proud owner of a Maybach. He doesn’t dare to drive the thing. When his new headquarters was built, his Maybach was put on display on the first floor, like Snow White in a glass coffin.
Monday update: As Germany woke up on Monday and went to work, I called some friends I still have in the Stuttgart area, and who are in the industry. None of them have heard of a total plant shutdown of DB worldwide for a month. Most likely bunk. Temporary production stops, drops of shifts etc. (in Germany going by the nomiker “Kurzarbeit” – short work …) are all over the place. But again, no full tilt one month closure of DB has been confirmed – yet.
The German Monday Morning press is cautiious to touch the story about closed doors at DB. Der Spiegel, usually on such a story like flies on shit, simply quotes the “newspaper report” and doesn’t add further research.
Porsches get more press: They raised their shares in VW to 42.6%, says Der Spiegel, and they want more than 50%. In the meantime, Brussels doesn’t like the new watered-down “VW-law” that gives the State of Lower Saxony, holder of 20% of the VW shares, veto power. Porsche agrees with Brussels.
What REALLY caused a firestorm was Mr. Sinn’s “managers are today’s Jews” quote.
“Irresponsible,” “crazy,” “bad taste to the nth degree” are some of the milder words that echo through Germany’s Monday media. “Der Zentralrat der Juden” demands an apology. Politicians demand Sinn’s head on a stake.
Monday-noon-time-in-Germany update: (TTAC should at least refund my China-2-Fatherland phonebills, but hey, what’s VOIP for?)
Got ahold of somebody who knows everybody and he says:
1.) “DB will close, they just don’t know for how long.” He doubts the worldwide closure.
2.) (And this is what I hear every time I talk to someone in the Fatherland:) “BMW is much worse off.”
3.) He says, there may be a political side to the leaks. German government is very sensitive to unemployment. There’s an election next year. The Grand Coalition (CDU/SPD) doesn’t look so grand. High unemployment will boost “Die Linke” – a new party formed by former East German Communists and disgruntled left wingers of the SPD. “Jobs” will get everybody’s attention. The goverment had denied any bailouts, but wants to boost demand with tax credits for environment friendly cars. Not DB’s and BMW’s big forte. So, out come the “jobs” hammer. Makes sense.
UAW plants have long had an extended shutdown around Chrismas, at least ten days, maybe two weeks.
Nothing similar in Germany?
I wouldn’t think Germany would need shutdowns with all of their paid vacation days?
Michael: Not everywhere, but apparently at DB. My contacts in Germany scanned and emailed to China today’s report of BILD Zeitung, Germany’s mass market broadsheet. In its report, which mainly regurgiates the FAZ report from the weekend (DB must have battened the PR hatches), BILD reiterates the December 11th through January 12th closure at the DB plant Sindelfingen (not worldwide!) and says: “Usual are Christmas holidays of two to three weeks … at this point, there are negotiations with the Workers Council to extend the Christmas holidays.”
Nobody in Germany, where 6 weeks of holidays are not unheard of, will turn down longer holdidays ….
According to BILD:
– BMW wants to build 25000 units less. Stops the line in Leipzig (3series) for a week
– Ford Sarlouis (Focus) etc, reduces outpout, 204 temporary workers go
– Opel: In Bochum and Eisenach the lines were stopped for 3 weeks each, Workers Council fears work stoppage for all of December. No firings planned.
– VW: Wants to build 50000 fewer cars until year’s end. 750 tempiorary workers must go
– The metal worker’s union (IG Metall) sticks to its demand for 8.5% more pay.
Spinmeister’s Tip-Of-The-Hat to the unions: “Higher wages will create higher demand and jumpstart the economy.”