SINDELFINGEN, Germany (Reuters) - Daimler’s (DAIGn.DE) latest Mercedes-Benz S-Class limousine rolled off the assembly line for the first time on Wednesday, coinciding with the first appearance of another important newcomer - the company’s head of production for Mercedes.
Andreas Renschler talked to the press at the group’s manufacturing plant in Sindelfingen, southwest Germany, for the first time since taking on his new role in April.
Renschler faces some big challenges to deliver the bulk of 2 billion euros ($2.65 billion) in planned cost cuts at Mercedes by the end of next year.
Daimler has been struggling to compete with its rivals in small cars as well as match their growth in China. The Stuttgart-based company has fallen further behind German rivals BMW (BMWG.DE) and Volkswagen (VOWG_p.DE).
Renschler also takes on the tough job of extracting productivity gains and labor concessions from German unions at Mercedes.
He pledged to carry on with the efficiency program initiated by his predecessor Wolfgang Bernhard but is prepared to adopt a conciliatory approach.
“This is not about doing something against (the will) of the works council or against the management board. The goal of the entire workforce is to be productive and efficient,” he told reporters. “Ask the works council, they would tell you the same thing - we have a common interest to make the German plants more efficient.”
One main target is to cut the average hours needed to build each vehicle from around 40 currently to 30 in the medium-term.
The new S-Class limousine will help here. When production is fully ramped up, the car will be built as much as 20 percent faster compared to its predecessor.
Renschler also has to take on the group’s supplier base, after also inheriting the post of purchasing chief. This part of his job will include a campaign to try to offset 6 billion euros of material costs that include new features such as multimedia displays.
He needs to win over both suppliers and the workforce to help him achieve some 60 percent of the 2 billion euro savings target.
But auto industry experts say Renschler has the easy-going demeanor needed to take on such a challenging assignment.
Replacing McKinsey man Bernhard with Renschler, a fellow Swabian with whom the workforce can identify, is the first signal in a long time that they are finally heading in the right direction, said Helmut Becker, head of the IWK think tank in Munich and author of several books on the auto industry.
Renschler himself pointed to his roots in the region.
“It may sound a bit emotional, but I’ll tell you anyway. I grew up roughly 20 kilometers away from here and after I graduated from the university I started here in Sindelfingen (in Swabia) for Daimler 25 years ago, so it’s a privilege to be here again,” he said. ($1 = 0.7533 euros)
(This version of the story corrects paragraph 1 to add phrase “for Mercedes” and paragraph 3 to read “Mercedes” instead of “the plant”.)
Reporting By Christiaan Hetzner. Editing by Jane Merriman