Engine of Economic Growth
DaimlerChrysler has produced commercial vehicles in Brazil for 50 years. The facility in São Bernardo do Campo is one of the company’s most efficient.
Pedro Carlos Sancho is pleased with his life. He has a good job. His children Pedro and Daiane found work with the same employer. He can afford private school for his 7-year-old daughter, Carolina. He owns a small three-room apartment in a middle-class neighborhood in São Bernardo do Campo, a suburb of the Brazilian industrial metropolis São Paulo, and he drives his own car. “I owe it all,” he says, “to Mercedes-Benz.”
Pedro Carlos Sancho has worked at DaimlerChrysler do Brasil’s truck and bus plant in São Bernardo for 21 years. When he started at age 27 in the in-house maintenance shop, changing the oil in company cars, the factory was producing as many commercial vehicles as it does now – but with twice as many employees, both on the production floor and in management. The following years were witness to one economic crisis after another. Few were willing to invest in new trucks and buses, and many workers were laid off. Sancho managed to stay, and now supervises an engine production line. He understands the need for downsizing. “The alternative was clear. Either we keep moving, or we die.” |
The plant in São Bernardo kept moving. Last year its 11,500 employees celebrated the facility’s 50th anniversary. It is one of the most efficient in DaimlerChrysler’s worldwide production network. With its lean production and flexible management, it serves as a model for other plants. The plant replaced its entire product palette in only two years. Even Brazilian President Luiz Inácio Lula da Silva, once a combative labor leader in the metalworkers’ union, voices his respect. “I’ve been going by the plant gate since the 1970s,” he said at the anniversary celebration. “I celebrated great victories, and moments of great sadness. I have seen long lines of workers being hired, and long lines of workers being fired. All that struggle was worth it.” Today Lula speaks fondly of “our beloved Mercedes-Benz factory.” He assures a positive investment climate and hopes that DaimlerChrysler, in return, will stay loyal to his country.
“We stayed. That is our key sustainable achievement in this country.” Gero Herrmann, President, DaimlerChrysler do Brasil
For DaimlerChrysler do Brasil President Gero Herrmann, loyalty to the plant location is a question of responsibility. “Other international companies closed down during the crises of the last few years,” he says. “We stayed. That is our key sustainable achievement in this country.”
The São Bernardo plant was dedicated on September 28, 1956 by Brazilian President Juscelino Kubitschek. Since then, approximately 1.6 million vehicles have been produced. Their dominant market position on the roads of the South American nation is hard to miss: Half of all trucks and 7 out of 10 buses in Brazil wear the Mercedes star. But production far exceeds domestic demand. A major portion is destined for the global market. Vehicles, engines, axles, and transmissions are exported to over 50 countries. Mercedes-Benz has contributed significantly to the once rural country’s industrialization. The trucks with the star assisted in creating the world’s second largest road network and in building the capital, Brasilia, in the center of the country. They were used in the construction of airports, power plants, and dams. The plant in São Bernardo kept pace with the country’s growing economy, setting new benchmarks. Mercedes-Benz helped the diesel engine reach critical mass in Brazil. Before the first Torpedo truck left the plant in 1956, only 2 percent of commercial vehicles in Brazil were equipped with the fuel-efficient diesel powertrain. Today non-diesel commercial trucks are unknown.
At the same time, the competition never rested. Additional international concerns discovered Brazil, and domestic industry continued its development. The era when Mercedes-Benz easily dominated the market is long gone. The brand’s commercial vehicles are still in first place, but the company fights for every point of market share. The manufacture of finished buses has been discontinued. The São Bernardo plant specializes in chassis construction, while body assembly has been taken over by local producers. Still, many customers insist on quality control performed by DaimlerChrysler. “They value our reputation,” says José Carlos das Neves, head of bus production. | ||||||||||
The plant in São Bernardo is a DaimlerChrysler Competence Center for bus chassis development and production. The Technological Development Center, at the edge of the facility, opened in 1991. Its 530 employees make it the largest of its kind in the company outside Germany. Among other products, it is responsible for the development and construction of the Accelo light truck series. But the engineers’ chief occupation is adapting Mercedes-Benz commercial vehicles to the tough local conditions. The majority of Brazil’s roads are unpaved. The trucks encounter challenges unknown in Europe or the U.S. “Our colleagues in Germany profit from our work as well,” says Décio Del Debbio, who heads up national adaptations at the Development Center. “Trucks exported to Africa have to be as tough as trucks here.”
Prosperity and sustainability
Del Debbio ensures that as many components as possible are produced in Brazil, whether at the São Bernardo plant or at one of many suppliers. “At this point, we have a local production rate of over 80 percent,” he says. That means savings on customs tariffs and fewer logistical problems – as well as more jobs for Brazilian workers. Typical Brazilian raw materials are coconut fibers. They come from the country’s north, where in 1992 a project started with the support of the local plant to encourage the use of renewable resources. Out of that project emerged the company POEMAtec, which is producing fibers for seats and headrests. The driver’s compartment in Brazilian Mercedes-Benz trucks employs around 20 kilograms (44 pounds) of environmentally friendly materials. | ||||||||||
In some cases, customs regulations hinder environmentally friendly production. For example, truck motors exported to the U.S. are not allowed to contain oil. The problem: They must be tested before shipping. After the half-hour test, the lubricant becomes waste oil. That toxic waste amounts to 2,100 tons each year requiring proper disposal. But DaimlerChrysler’s engineers came to the rescue: They developed a method for reconditioning the oil so that it can be used up to five times. That saves not only US$1.3 million per year – it also reduced annual waste oil to 377 tons. Even more significant in terms of energy policy is the development of engines that handle a high percentage of biodiesel. “In the middle and long term, biodiesel has enormous potential,” DaimlerChrysler President Gero Herrmann says. “Brazil is a leader in production, and the government is working to maintain and strengthen that position.” In the near future, an admixture of 2 percent biodiesel will be required by law, but the company’s efforts go farther: “We are testing mixtures of higher levels.” The renewable resource “could become a significant factor” in Brazil’s economic development, Herrmann says. Because it creates jobs in rural areas, it could aid the struggle against poverty. | ||||||||||
DaimlerChrysler makes it easy for employees and their families to get involved on behalf of the company. Everyone benefits from its family-friendly policies. In addition to himself and his two older children, Sancho’s wife and younger daughter take advantage of DaimlerChrysler do Brasil’s health care system, which offers more comprehensive care than Brazil’s state-run medical programs.
The plant’s health center offers a wide variety of specializations. The two older children attended a state-regulated vocational school that is integrated into the facility. Like all its graduates, they received job offers on completion of their training. In the Sancho family, even housework is organized on time-and-motion principles of “taking the shortest path.” Are the Brazilians set to beat Germans at their own game? Herrmann thinks not: “It’s the mixture of Brazilian flexibility and German discipline,” he says, that spells success. Sancho remains a Brazilian at heart: When his shift ends at midnight on Fridays, he and his coworkers head to a local soccer field to play for three hours under the lights. Try as you may, it’s hard to imagine a German voluntarily playing soccer at three o’clock in the morning. | ||||||||||
BRAZIL BY NUMBERS
187 million population
Average household income 2,400 Euros
When DaimlerChrysler opened its plant in São Bernardo do Campo, the city had fewer than 30,000 residents. Current population is 723,000
Average household income 2,400 Euros
When DaimlerChrysler opened its plant in São Bernardo do Campo, the city had fewer than 30,000 residents. Current population is 723,000
FROM TORPEDO TO AXOR
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1949 |
Polish immigrant Alfred Jurzykowski starts importing Mercedes-Benz sedans and bus and truck bodies |
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1953 |
His firm becomes Mercedes-Benz do Brasil |
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1956 |
Production starts in São Bernardo do Campo |
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1979 |
Opening of the Campinas bus plant |
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1999 |
The car plant in Juiz de Fora, Minas Gerais, starts production. Its first model is the A-Class, followed by the C-Class and most recently the C-Class sport coupe primarily for export to Europe |
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2000 |
Bus production returns to São Bernardo. Campinas becomes DaimlerChrysler do Brasil’s service facility |
