Han Takes Months to Change Production Line... Mercedes-Benz Making Electric Cars on Monday, SUVs on Friday

Opening of Factory56 in Sindelfingen, Germany
Revolutionizing Car Production with Digitalization and Flexibility
Production Line Replacement Done in a Weekend

[Asia Economy Reporters Hyewon Kim and Jihee Kim] The year is 2021. At the Mercedes-Benz factory located in Sindelfingen, Germany, the newly produced 7th generation S-Class sedans are rolling off the line. The factory is running at full capacity to meet the flood of orders. Meanwhile, an order for 300 units of the EQA appears on an internal monitor visible to all factory workers. This means an order has come in for the compact electric sports utility vehicle (SUV) version of the S-Class. The delivery date is as soon as next week. There is no problem. It only takes two days over the weekend to convert the sedan production line into an SUV electric vehicle line. In other words, the same production line makes sedans on Friday and electric SUV vehicles on Monday.

This scene will be visible next year at Benz’s state-of-the-art automobile production base, 'Factory56.' Factory56, which began operations on the 2nd (local time), is an ambitious project under Mercedes-Benz’s vision to present a blueprint for future automobile production, emphasizing complete flexibility, digitalization, and sustainability. It took two years and six months just to build the 220,000㎡ factory, equivalent to 30 soccer fields. The investment exceeded 1 trillion Korean won.

The core of Factory56 lies in digitalization and flexibility. Regardless of the vehicle’s drive type or size, new model production processes can be integrated within days, enabling rapid response to market demand. Especially as the automotive industry paradigm shifts from internal combustion engines to eco-friendly vehicles, the significant reduction in the electric vehicle line conversion period, which previously took months, is a true innovation. Through Factory56, Mercedes-Benz plans to produce various models starting with the New S-Class, followed by the S-Class PHEV, EQS, EQA, EQB, and more.

Markus Sch?fer, Chief Operating Officer (COO) of Mercedes-Benz Passenger Cars, emphasized during an audio conference call, "Factory56 has established an environment where production vehicle changes can be made with simple construction work within a short period, such as a weekend holiday, offering complete flexibility. Moreover, all factory employees, equipment, and parts are interconnected. It is the most efficient, safe, and high-quality production facility."

While competitors are advancing, the current state of domestic automobile factories is far removed from this. Fundamentally, adjusting factory production volumes takes months in Korea. This is because it is impossible without union agreement. Not only in Germany but also in the United States and Japan, companies autonomously decide on production model changes within factories, but South Korea is the only country worldwide where prior union consent is required. Temporary non-regular workers are effectively banned. Even inter-factory reassignment requires union agreement only in Korea. Due to significantly low labor flexibility, production flexibility also suffers in a vicious cycle.

A recent survey conducted by the Korea Automobile Manufacturers Association and the Korea Institute for Industrial Economics & Trade shows that production workers, managers, and executives all agree on the need to adjust production volumes according to demand changes, but seven out of ten respondents said it is difficult to negotiate with unions, making adjustments challenging. Jung Manki, Chairman of the Korea Automobile Manufacturers Association, said, "Recently, consumer purchasing preferences have become more personalized and premium, and the concept of productivity is changing through the integration of IT technology in product design and production stages. Instead of economies of scale through mass production, we need to shift to flexible and smart production systems tailored to one-on-one customer customization." He added, "Negotiating and obtaining union consent for weeks or even months just to change a production line is absurd and contrary to global standards. To enhance production and labor flexibility, it is necessary to allow dispatched labor, introduce replacement workers, and rapidly transition production systems to smart factories."

This content was produced with the assistance of AI translation services.