VW struggles with New Beetle assembly; love the new bug? Wanna buy one? Better wait until the plant and its suppliers boost their first-time quality - Puebla, Mexico automobile plant

Automotive Industries, May, 1998 by Lindsay Brooke

Love the new Bug? Wanna buy one? Better wait until the plant and its suppliers boost their first-time quality.

BEETLE-MANIACS, here's a up for your next pilgrimage: If you want to see the world's biggest Volkswagen repair shop, visit the factory where the '98 New Beetle is built Because right there on the production line at Puebla, Mexico, four out of every 10 New Beetles that reach the end of final assembly require some sort of repair before they can leave the plant. That's a 60% first-time-through rate--dismal by any standard, and a potential nightmare for VW if the 40% defect rate shows up in warranty issues. But unfortunately it's what the Puebla plant was producing in early April--five months after New Beetle Job 1--when AI toured the facility.

First-time-through is the industry's gauge of process control and quality in a given manufacturing area. Passing just 60% of the 400 car daily build (the line rate at the time we visited) means that 120 cars a day are flagged off-line for repair. The end-result I witnessed was a plant floor full of Bugs. Actually, they were brand-new Bugs full of bugs. Parked wheel-to-wheel were cars with paint blemishes--lots of them. Cars missing headlamps, mirrors and wipers. Cars with ill-fitting hoods and other visible panel-gap problems. I wandered along the rows and couldn't recall when, in the last 10 years, I'd seen an auto plant with this much stack-up in the repair department.

Amid this forest of New Beetles swarmed an army of workers. They marked defects with grease pencils, stripped off parts and installed others. One team busily masked entire door panels of some cars, readying them for the small Durr low-temp paint booth placed near the end of the line. The booth was being fed one Beetle after another. Adjacent to the paint booth were bays with freshly repainted cars being carefully buffed out. The overall scene looked vaguely surreal, like Heaven according to Maaco.

"No, this is certainly not where we want to be at this point," admits Werner Uhle, VW de Mexico's director of quality, and a 28-year VW manufacturing veteran. He claims internal audits of the New Beetles that pass through final assembly without repair have build quality equal to any VW product built anywhere in the world. And he's confident that New Beetle final assembly will achieve first-time-through levels of 80% to 85% within the year. That's equal to the best plants in North America, according to manufacturing expert Jim Harbour, of Harbour and Associates in Troy, Mich.

(VW's other ongoing new model launch is also protracted. Job One for the new Golf A4 in Wolfsburg, Germany, was in July '97. The plant will not reach full line speed until July '98.)

But for now, Uhle is tackling a raft of ramp-up problems, as New Beetle daily production rises to 500 cars by mid-June. It's slated to reach 600 cars/day by late '98. This is me first all-new model VW has ever launched at a plant outside Europe, and the fact that it's a smash-hit ups the pressure on Uhle and the 2,000 New Beetle workers at Puebla To simplify the initial build, only 2.0L gasoline-engined cars were built in volume from October '97 through Easter '98. Since then, turbodiesel and 1.8L gas variants have been gradually added.

Supplier quality and delivery glitches caused some of the missing parts noticed on cars in repair, confide officials at two vendors AI contacted, both of whom requested anonymity.

The plant even briefly stopped building yellow cars--a color that looks fabulous on the New Beetle--because the Puebla paint shop could not match the color of the plastic front fenders and bumper cover with the steel body. Improper paint chemistry was the culprit.

"BASF and Herberts, our paint suppliers, worked day and night to produce a new composition," explains Uhle, "so yellow is back in production."

Production Volume Rising

Puebla is the New Beetle's sole worldwide production source, and has capacity to build 160,000 of them on three seven-hour shifts, six days a week. Uhle says the first year's production target is 120,000 units--50,000 slated for the U.S., 10,000 for Mexico and 8,000 for Canada. Europe and Japan get most of the remainder.

The sprawling Puebla factory has three main production lines: New Beetle, Golf A3/Jetta/Golf Cabrio, and one for the "old" Beetle. Some 50,000 of the air-cooled relics are still assembled annually, mainly for the Mexican market. "It's hard to say when that car will die," quips Uhle.

Nearly 80% of last year's 265,000-unit production was the Jetta, sold mainly in the U.S. The plant will cease Golf production later this year to prepare for the '99 Jetta. The complex also includes engine and stamping plants, and a rear axle assembly department.

Puebla's engine plant currently produces 550,000 gasoline 4-cylinder engines, which are used by all VW Group assembly plants worldwide. VR-6 and diesel engines, and all transaxles fitted to Puebla-built cars, are sourced from Germany.

Most of VW's recent $1 billion investment at Puebla is for New Beetle tooling. The car, based on the Golf A3 platform and drivetrain, is heavily modularized, and key systems suppliers invested another $500 million in their local operations.