Automakers innovate manufacturing and search native provider to regain competitiveness

With high costs, supply bottlenecks and technological changes, they outsource stages of the production process and create flexible platforms to meet demand.

Mercedes’ decision to outsource part of the production of parts for trucks and buses at the São Bernardo do Campos unit, in São Paulo’s ABC region, and not to renew contracts for temporary employees, turned on the yellow light among workers in the sector, after the departure of Ford and City Toyota.

Last year, Mercedes had already sold its factory in Iracemápolis, São Paulo, to the Chinese from the Great Wall.

Experts estimate that the changes announced by the German automaker on ABC, which will cause 3,600 layoffs, reflect a transformation in the global automotive industry. With rising costs, bottlenecks in parts supply and technological changes, automakers are reinventing themselves.

In the new business model, they seek to outsource production phases, seek to make it more flexible to demand and develop local suppliers.

— The outsourcing of processes such as logistics or maintenance has already been taken on in other automakers. It would be a regular process at Mercedes, but it happens in a traumatic scenario for the region after the departure of Ford and Toyota and the yellow light turns on for workers and the entire supply chain — says Jefferson José da Conceição, coordinator of the Observatory of Public Policies, Entrepreneurship , Innovation and Conjuncture of the Municipal University of São Caetano do Sul (USCS).

Most brands have already stopped producing many components in-house and started to use a larger chain of suppliers, in addition to outsourcing the manufacture of parts, explains the academic coordinator of the Automotive Courses at FGV, Antônio Jorge Martins. The goal is to keep the focus on the core business: assembling and selling vehicles.

— Other companies, especially the newest ones to enter Brazil, like the Asian ones, already work with a greater number of suppliers and high robotization in the production lines — says Martins.

In addition to outsourcing, Mercedes has made investments to prepare for the electrification of vehicles in recent years, a trend in the sector. In total, R$ 2.4 billion were invested between 2018 and this year in the country. Part of it in 4.0 factories of trucks and bus chassis and highly technological products, such as the urban electric bus chassis.

“With cost pressure and the speed of industry transformation, we implemented our Transformation Plan, whose objective is to focus on what is really needed and demanded by the market,” Mercedes said in a statement.

Investment in flexible mounting platforms is also a trend. In practice, it is possible to assemble different products on the same assembly line.

In the city of Porto Real, in Rio de Janeiro, the Stellantis unit, which brings together brands such as Fiat, Jeep, Citroën and Peugeot, received investments of around BRL 220 million for the implementation of a variant of the new global platform, Common Modular Platform.

It is a platform that can be used as a basis for the production of combustion or electric vehicles. In August, the company announced the hiring of 340 workers to work on the production of the New Citroën C3, which will also be assembled on this platform.

semiconductors

Another change in the industry agenda is the search for local suppliers. The semiconductor crisis, which caused more than 20 automaker shutdowns in the first half of this year alone, exposed this problem.

— The tendency is to have a process in which the largest number of suppliers is close to the automakers, or, at least, in the region — says Conceição, from USCS.

Marcio de Lima Leite, president of Anfavea, an association that represents automakers, started a road show through Japan and other European countries to attract semiconductor manufacturers to Brazil. He recalls that there is a semiconductor factory, Unitec, in Minas Gerais, but it never operated.

— The unit has infrastructure for semiconductor production, and the objective is to attract investment to the country. It is fundamental for the reindustrialization project, in addition to reducing dependence on suppliers from other regions,” he said.

New job profile

As in ABC, which concentrates five automakers and an extensive chain of suppliers, placing the region as one of the four most industrialized in the country, in other automotive centers in the world, such as Detroit (USA) and Wolfsburg (Germany), companies are restructuring, seeking competitiveness and downsizing its staff.

Lucas Sanches Padilha, 28, worked for nine years at Ford as an assembler and was fired with the closing of the ABC unit. He started his metallurgical career at the age of 19.

Now he is one of the 1,400 temporary workers whose job at Mercedes is threatened. He has a degree in mechatronics technician, but he started to take a higher course in industrial automation.

— It was a blow when I received the news of the closing of Ford. In the case of Mercedes there is still a chance of reversal. But I’ve thought about changing areas to have a little more autonomy – he says.

Marcus Ayres, a partner at consultancy Roland Berger for the automotive sector, says that local factors such as inflation and the loss of purchasing power, which bring volatility to the sector, also lead automakers to seek more flexible production models. He notes that if this process closes jobs on production lines, it also opens up jobs. The possibility of renting cars and trucks through subscriptions — and electrification itself — are examples of this.

— The changes in this sector are drastic and the worker will have to update himself or will have difficulties in relocation — says Ayres.

new formation

The trade union movement is already setting its sights on working in the new scenario of the automobile industry, in which technological changes and the path to electrification are irreversible.

The president of the Metalworkers Union of ABC, Moisés Selerges, says that this transformation in the job market needs concrete actions, whether with workers seeking new professional training, as well as State action to help guarantee jobs during this transition. .

— The new unionism has to be guided by these issues, demanding a new professional training for these workers. But it is also the role of the government to have an agenda for the national industry in these moments of profound changes, which helps to maintain jobs – says Selerges, noting that the union will try to reverse the layoffs at Mercedes.

He criticizes the lack of a policy for the sector and says that it is necessary to define the industry we want to be, for example, expanding the local production of components. Today, says Selerges, the country still depends on imported components and will continue to face supply problems until the chains are reestablished.

— It lacked a chip, but it also lacked a tire, glass. You cannot bring everything from outside. We had the Inovar-Auto program, with some defined goals. Today, we have nothing. States need to talk and reach a consensus,” she says.

Inovar-Auto was a program to encourage innovation to increase the competitiveness of companies in the sector and encourage the manufacture of more efficient vehicles. It ran from 2012 to 2017.

He recognizes that automakers are no longer the major job generators as they were in the 1970s and 1980s. The number of metalworkers in ABC dropped from 108,000 in 2010 to 70,000 today.

— A lot of people left and did what? Working in the so-called platform capitalism, being an app driver or a food delivery man, without any rights. We have to interfere in this, train people and demand a regulation from the state,” he says.

Source: The Globe