Taylor Syphus and Dr. Allen W. Palmer, Communications

From Beethoven to BMW, Oppenheimer to Audi, Mendelssohn to Mercedes-Benz the highly traditional German culture that bred some of the world’s most notable musical, intellectual and philosophical geniuses has also produced some of the most technologically-advanced and best-engineered cars in the world. However, globalization and increasing competition from American, British, Japanese and Swedish car makers are forcing German automobile manufacturers to reevaluate their position in the world market.

As a summer intern at BMW’s Dingolfing, Germany, plant—where the five-, seven- and eight-series automobiles are produced—I witnessed one approach to car-making. To say BMW’s method of designing, engineering and producing private-sector vehicles is distinctly “German” is now a misnomer. BMW, Audi and Mercedes-Benz are abandoning the “Made in Germany” reputation for “Made by BMW,” “Made by Mercedes-Benz” and “Made by Audi.”

Traditionally-powerful German labor unions helped propel auto workers earnings to the highest in the world at $38.50 an hour—40 percent more than their American counterparts and almost double the $20 French auto makers earn an hour (Association of German Auto Makers). Because of better cars being produced everywhere, the Ifo Institute of Economic Research in Munich suggests German labor unions make concessions such as longer work weeks and shortened vacations (which can sometimes be as long as 10 paid weeks) to compete better in the world market.

Klaus Nesser, product/market strategist and two-year member of a globalization focus group at Mercedes-Benz, believes the changes would be good for Germany and for German car makers. The free time Germans value so highly would be shortened, but bettered. Consumers would have the money for favorite free-time activities and products.

Abroad, Nesser says Mercedes-Benz combines technology and image to compete with ever-improving luxury cars. Mercedes-Benz exports the “brainware”—the technological know-how—to those regions with the manufacturing savvy, to meet Mercedes’s quality standards. Because of globalization and the need for economization, Mercedes produces private and commercial vehicles in 16 plants on five continents. Nesser believes regions that are incapable of reaching Mercedes’s manufacturing standards will be ready in the next 10 to 20 years.

However, producing automobiles in Germany for foreign customers is still a part of Mercedes-Benz’s image strategy. Many customers, especially of MB’s prestigious Sclass, want the “Made in Germany” status symbol. They want part in the corresponding tradition of engineering precision and excellence. Such identities may create conflicts of interest among non-German customers who are purchasing 60 percent of Mercedes-Benz’s products. Nesser believes the true test of Mercedes Benz’s internationalization strategy will be the production of its M-class, their new sport-utility vehicle, in Tuscaloosa, Alabama, beginning Fall 1997. He believes the SUV will be seen as “Mercedes” as opposed to “American” and predicts sales in Europe and America will be roughly equal.

BMW entered the American auto worker arena in 1992 with its plant in Spartanburg, S.C. Despite apprehension the Americans would not reach B M W quality standards for its new Z3 roadster, the Spartanburg plant enjoyed the highest level of quality in BMW history during its first three months of operation.

BMW considers its Z3 an “American” car; abandoning the “Made in Germany” banner in favor of “Made by BMW.” BMW concept design engineer Rainer Bickman, who spent a year at the Spartanburg plant, hails German cultural changes and social-system shifts as necessary adjustments for globalization. The tradition that produced fine Bavarian cars has now shifted to the company itself. Although the path to engineering excellence may have changed, the “emotions” of driving The Ultimate Driving Machine have remained the same. Bickman says nationalistic pride takes a back seat to BMW engineering, which can be exported to produce cars anywhere.

Although Audi sells 80 percent of its cars in Europe, they are also feeling the pressure of globalization, which is affecting the German workplace. For the past five to 10 years they have also adopted the “Made by Audi” concept. Audi product strategist Peter Probst believes Made in Germany” will be an obsolete concept in 10 to 30 years.

Porsche and Volkswagen chose not to participate in the study.