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Mercedes' Maverick In Alabama


People: INNOVATORS

MERCEDES' MAVERICK IN ALABAMA

One spring day in 1994, two Mercedes executives, Roland Folger and William Taylor, clung to a narrow ledge above the raging Aache River in the Austrian Alps. Below them, their handmade raft bounced crazily in the icy current. Despite their neoprene wet suits, the men shivered as they waited for companions to lower a rope from the cliff above.

A wilderness adventure gone awry? Nope--just a team-building exercise cooked up by the men's boss, Andreas Renschler. The lanky, 37-year-old Renschler is helping to shake up Mercedes-Benz as part of the ongoing transformation of the once-ponderous German luxury carmaker. As president of Mercedes-Benz U.S. International Inc., which in 1997 will start making the company's first mass-market sport-utility vehicle, in Vance, Ala., Renschler is overseeing Mercedes' most radical experiment yet with manufacturing and engineering techniques.

"A LAB." At stake in the more-than-$1 billion project is Mercedes' ambition to position itself as a cost-competitive global manufacturer. The Vance factory will be Mercedes' first big foreign plant, and the All Activity Vehicle (AAV) to be made there will be its first product aimed mainly at a foreign market. The venture is also the carmaker's boldest gambit yet to apply CEO Helmut Werner's new cost-driven ethic. "The AAV is a lab for us," says Dieter Zetsche, a managing director. "It has to be very successful."

Renschler's youth makes him an unusual choice for such a critical job. It's also a key reason Werner tapped him: He's not steeped in the Mercedes culture, where slavish dedication to engineering excellence drove product costs off the chart. Says Zetsche: "You don't need to know all the paths and solutions of the past to find new ways. Sometimes it's better if you don't."

Some observers think Renschler is in for a rough ride. As Werner's assistant in the early 1990s, he helped plan the current turnaround and became known as a deft manager and a creative problem-solver and idea generator. He also planned strategies for light trucks in Europe and Latin America and ran the feasibility study for the AAV. Still, he has been at Mercedes only six years, has little operating experience, and has never launched a product. Moreover, his task is daunting. While Japanese transplants typically copy plants back home and assemble existing models at first, Renschler will have to simultaneously debug a product, a manufacturing process, and a workforce. "It's a prescription for disaster," says James E. Harbour, a Troy (Mich.) manufacturing consultant. "There are too many variables."

Renschler certainly belies the stereotype of the buttoned-down Mercedes executive. Raised on the family farm near Stuttgart, he's as comfortable with factory workers as he is with board members. Even if he weren't 6 feet 4 inches tall, his ebullient, gregarious nature would make him stand out. His boss, Juergen Hubbert, managing director in charge of the passenger-car unit, admits he sometimes asks Renschler to don a more conservative tie or jacket before addressing the board. A night owl, Renschler usually arrives at work late in the morning but toils as late as 3 a.m.

As part of a plan to adapt the best operating techniques of other companies, Renschler has tapped managers from the likes of Chrysler, Ford, Mitsubishi, and Sony. But their varied backgrounds can spark lengthy debates. For instance, Toyota alum Taylor, vice-president of production, spent Thanksgiving weekend of 1993 holed up in a Tuscaloosa motel with a dozen German and American colleagues, hashing out a factory layout. German engineers wanted a sprawling E-shaped building with departments linked by complex conveyors. But after endless wrangling--and a break for turkey dinner--those with Japanese experience prevailed, and the group settled on a compact, rectangular design.

To forge his diverse group into a team, Renschler is going all-out to erase Mercedes' stiff formality and encourage personal bonds. Hence his three-day wilderness trek with eight lieutenants. Even more unusual for a top Mercedes executive, he has tried to build ties with employees at all levels. In May, he and Taylor hosted seven Alabama maintenance workers who had been sent to Germany for training. After dinner at an Italian restaurant, the group moved to a pub and then to late-night clubs, dispersing just in time for Renschler to meet his girlfriend's 10:30 a.m. flight from England. "That's the way communication gets going," he asserts, "not in an official appointment in my office."

ADAPTABLE. Renschler is pushing changes in Mercedes' leaden product-development process, too. To save time and money, the AAV will have 100 primary suppliers--vs. 1,000 for the just-introduced E-class sedan. In addition, suppliers get a freer hand in designing parts, sometimes adapting off-the-shelf components instead of always starting from scratch as in the past. And rather than make suppliers bid for business annually as Mercedes usually does, Renschler has been offering multiyear contracts in return for annual 5% price cuts.

Renschler has also championed in-depth market research, hoping to emulate Japanese success in tailoring products to U.S. buyers. In the past, Mercedes sought consumer input only after designs were set, but with support from Renschler and Zetsche, Folger in early 1993 organized consumer focus groups in New York, Los Angeles, Cologne, and Munich. When the S-shaped rear roof support reminded potential U.S. buyers of a homely, 1970s-era AMC Gremlin, the design was changed, perhaps averting a disaster.

Renschler's boat-rocking has won him his share of enemies within the company. "Lots of people are envious" of his rise or are threatened by the changes he's pushing, says one insider, and some are quietly hoping for him to fail. Such sour feelings could slow Mercedes' effort to remake itself. Top execs say the AAV project is already influencing other future products, such as the Micro Compact Car, a two-seater being developed with Swatch parent SMH Corp. A similarly freewheeling team will design it, and it will be assembled in France. But wholesale adoption of Renschler's innovations may come only if the AAV is a smash when it hits showrooms in 1997. Until then, Renschler himself is out on a ledge.

ANDREAS RENSCHLER

BORN:

March 29, 1958, Stuttgart

DEGREES:

Economic engineering, Technical Academy, Esslingen

Business administration, Eberhard Karls University, Tubingen

CAREER:

First job: Bank apprentice

1983: Management trainee at mechanical engineer Trumpf Machinenbau

1986: Joined Hewlett-Packard GmbH

1988: Joined Mercedes-Benz

1993: Named President, Mercedes-Benz U.S. International Inc.By David Woodruff in Detroit, with Karen Lowry Miller in Stuttgart


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