Volkswagen reopened the world’s biggest car factory at Wolfsburg in Germany on Monday after the coronavirus forced it to shut down for the longest period in its 82-year history.
The world’s largest carmaker has made 100 changes to the way its plants operate as it tries to restart business without risking the health of hundreds of thousands of workers. Its experience underscores the daunting task ahead for manufacturers as they resume work in a world still reeling from the pandemic.
“We have never developed, produced and sold vehicles under these conditions before,” said Bernd Osterloh, the top labor representative at Volkswagen (VLKAF).
The gigantic Wolfsburg plant is located on the banks of an equally impressive feat of human engineering, the 200-mile long Mittelland Canal connecting sea and inland ports in Europe. Originally built in 1938 to house workers for Volkswagen’s factories, Wolfsburg is still home to the group’s headquarters and has produced more than 45 million cars since 1945.
It’s where the iconic Beetle was produced for more than three decades and where the automaker’s bestselling models, the VW Golf series and the Tiguan, are made today.
The plant shut on March 19 as the novel coronavirus tore through Europe, prompting carmakers to halt production across the continent after borders were closed and national lockdowns imposed. Its reopening is symbolic of wider efforts to kickstart economies in Europe, where some 14 million people work in jobs connected to the automobile sector.
The sprawling factory complex covers 6.5 million square meters (70 million square feet). It churned out about 700,000 cars last year, or roughly 3,500 a day. Some 63,000 people work on the site, about half the residents of the city after which it is named.
Reopening Wolfsburg has been anything but straightforward. The plant depends on a supply chain spanning 71 countries and more than 2,600 companies, all dealing with the fallout of the coronavirus. Volkswagen has put in place 100 different health and safety measures, agreed with its workers, with information displayed on more than 8,000 posters at the plant, and explained in booklets.
“Volkswagen is setting a standard for German industry with this agreement,” said Osterloh.
What’s changing at Wolfsburg
The company plans to ramp up production slowly, in line with the availability of parts, government requirements and the demand for cars, which collapsed as the coronavirus spread. It expects to build 1,400 cars at Wolfsburg this week, rising to 6,000 next week, or about 40% of output prior to the pandemic.
“At Volkswagen, health takes precedence over speed,” Thomas Ulbrich, head of e-mobility for the Volkswagen brand, said in a statement last week when the company reopened its electric vehicle plant in Zwickau, Germany.
Wolfsburg will restart with one shift of 8,000 production line workers instead of the usual 20,000. Hours will initially be reduced for some employees, with shift changes arranged so that workers arriving don’t meet those that are leaving. Workers will be expected to check their own temperature and change into their uniforms at home each morning, rather than on site. They will be asked to use elbows to open doors and walk in single file once inside, following markers on the floor to keep space between people.
Social distancing will be enforced during team meetings and over lunch breaks, with reduced seating in common areas and conference rooms converted into office spaces. Canteens will remain closed and workers asked to bring their own lunch. Water dispensers have been temporarily removed to reduce the likelihood of infection and air conditioners set to circulate as much fresh air as possible.
Tools will be disinfected after every shift and workers will no longer pass them to one another by hand, instead setting materials down in containers so that others can pick them up at a safe distance. Several hundred additional hand washing facilities are being installed throughout the plant.
Vehicles will be spaced further apart on the factory floor and workers will complete tasks on the same car separately where possible. Masks will be worn where it is not possible to keep 1.5 meters (5 feet) apart.
Another huge challenge for Volkswagen and other manufacturers will be ensuring that the armies of suppliers entering their factories do not increase the risk of infection. Volkswagen, which also owns the Audi, Porsche and Seat brands, said it has shared its 100-point safety plan with more than 40,000 suppliers and logistics partners throughout the world.
Before the pandemic, 2,000 trucks would ferry some 21,000 raw materials and vehicle components to the Wolfsburg plant each day. Now, drivers will be required to remain in their vehicles at all times and the machinery used to unload the trucks will be cleaned more frequently during shifts.
“We have been in close contact with our suppliers throughout the whole period of the corona crisis, throughout the shutdown and when we reopened plants, making sure they will be able to deliver the parts we need,” a VW spokesperson said.
The opening of plants in Zwickau and Bratislava, Slovakia last week went off smoothly “so we’re optimistic that we’ll handle this in the appropriate way at Wolfsburg,” the spokesperson added. Volkswagen’s experience in China, where it has already reopened 32 of its 33 plants, offers a blueprint. “There was not a single part missing when we started to produce.”
The company resumed production at plants making components across Germany from April 6, including in Brunswick and Kassel, and in Poland from April 14, to safeguard the supply of parts to its factories in China.
Volkswagen’s production in China has reached 60% to 70% of its pre-coronavirus levels. Plants there have been open for well over a month, suggesting that a return to anything close to full production in Europe is still several weeks away. But carmakers have plenty of time to get this right, given demand for their products has also evaporated.
Tough times ahead
Car sales in China, the world’s biggest car market, declined 42% in the first quarter of 2020 compared to the same period last year, according to the China Association of Automobile Manufacturers. Sales in the United States and Europe have plunged too.
Demand in China could bounce back quite quickly, but car sales in Europe will take at least 10 years to return to 2019 levels, according to Ferdinand Dudenhöffer, founder of the Center Automotive Research at the University of Duisburg-Essen.
Volkswagen and other German carmakers, BMW (BMWYY) and Daimler’s Mercedes-Benz, will fare far better than rivals such as Renault (RNLSY) and Citroën because of their heavier exposure to China’s recovery, he added.
Still, the institute expects Germany’s automobile manufacturing sector to cut 100,000 jobs over the next three to four years, about 12% of the total, as a prolonged demand slump forces production cuts.