German Car Manufacturer Research Articles

When Incumbents Change Their Mind: Framing Strategic Reorientation in Emerging Fields

How actors evaluate the prospects of novel, sustainable technologies is unlikely to remain stable over time. In this paper, we employ a framing lens to study how the five largest German car manufacturers publicly reframed their strategic position on the emerging field around electric vehicles (EVs) in the 25-year period from 1993 to 2018. Based on 125 letters to shareholders and 336 public interviews with CEOs, we find that the car manufacturers maintained ambiguity about their own terms of engagement in this field by framing EVs both as an opportunity and a threat. We discuss temporal maneuvering as a distinct way of temporal framing that enables the maintenance of opposing frames over a sustained period of time. How actors such as incumbents communicate about the prospects of an emerging field and their own role in this field is important because it guides meaning-making and action by other actors. Insights into the question how incumbents handle the phase-out of old technologies and the phase-in of new technologies can support a better understanding of incumbent behavior in sustainability transitions.

Change of position within the German government as an arena of rivalling public interest groups—The case of the German buyer's premium as regulatory instrument for the purchase of electric cars in Germany

The present article deals with the role of the German federal government on promoting the increased production of electric cars in Germany. It shows the changing positions of different stakeholders in the Berlin arena, their interests, positions, and alliances. It examines the question of why and how the stakeholders, especially within the government, change their positions in the arena of electromobility. The paper refers to the principal‐agent theory associated with the empirical field of arena analysis. The empirical basis of this study comprises five high‐level expert interviews with key‐decision players in the electromobility arena: two former federal state secretaries of the Ministry of Transport and Digital Infrastructure (BMVI), Mr. Bomba, and the Ministry of Economy and Energie (BMWi), Mr. Machnig; the acting state secretary in the Ministry of Finance (BMF), Mr. Gatzer, and, in addition, the head of the Berlin representative office of a major German automobile manufacturer and the chairman of the National Platform on Electric Mobility. In addition to these interviews, a lot of participating observation was done between 2012 and 2013, as a major German automobile manufacturer provided insights into the group's representation in Berlin, the decision‐making process between the corporate headquarters and the public affairs managers in Berlin and Brussels, and the cooperation with the ministries in Berlin. The paper tries to fill a research gap: Scholarly research on the impact of the German federal government as an arena of rivalling public interest groups is scarce in Germany. The leading view takes the federal government as a monolith, which view is more based on “how it should act” as on empirical evidence (“how it acts”). Inductive evidence shows that the government does not exist, as it is a subarena of itself. The consequences of this observation for the theorization of the role of the government in the larger society, as being only one out of many players, are discussed in the text.

Strategic customer foresight: From research to strategic decision-making using the example of highly automated vehicles

Understanding changing consumer needs is crucial for a company's survival. Particularly in the context of vehicle autonomy, customer insights lay a significant foundation for strategic decision-making of organizations in the automotive industry. This paper outlines how a German car manufacturer explored customer needs in the context of highly automated vehicles (AVs).11Highly automated vehicles (SAE level 3) = highly AVs. by implementing corporate foresight research with visionary customers and how the findings supported the strategic decision-making process of the firm.A qualitative pilot study with 29 visionary, trend-receiving customers from Germany, the USA and China identified three innovative use cases for premium highly AVs. A subsequent quantitative online survey with 733 participants from the same three markets confirms the relevance of the use cases for mainstream and innovative consumers. The findings underline that highly AVs are a game changer, transforming future cars into extended living and office spaces, with several implications for practitioners. The findings helped to adapt the organization's business model and branding strategy, provided valuable insights for follow-up studies and shaped corporate communication.The contribution of the paper is threefold: It introduces the concept of strategic customer foresight, outlines specifically how organizations can implement customer foresight research as well as how such research benefits the decision-making process of companies. Further, the paper discloses future customer needs in the context of premium highly AVs.

Transformative versus conservative automotive innovation styles: Contrasting the electric vehicle manufacturing strategies for the BMW i3 and Fiat 500e

The automotive industry is a critically important stakeholder influencing the sustainability of passenger transport. How traditional car manufacturers respond to carbon reduction and vehicle targets, alongside other selection pressures, can greatly influence the availability and affordability of new innovations such as electric vehicles. In this paper, we explore the automotive innovation styles surrounding two electric vehicles: the BMW i3, and the Fiat 500e. To do so, we tie together ideas from technological innovation systems and corporate product innovation style. Our results illustrate a case of a “compliance car,” the Fiat 500e, vs. the first mass production EV by a major German car manufacturer, the BMW i3. BMW adheres to a transformative change-shaping innovation style that attempts to promote in-house learning that can create value. Fiat adheres to a conservative sustaining innovation style that attempts to outsource innovation, promotes limited learning, and focuses on maintaining value. Both styles interestingly result in converging product development patterns over time.

Trust, Investment and Competition: Theory and Evidence from German Car Manufacturers

Based on data from a comprehensive benchmarking study on buyer-supplier relationships in the German automotive industry, we show that more trust in a relationship is associated with higher idiosyncratic investment by suppliers and better part quality|but also with more competition among suppliers. Both associations hold only for parts involving comparatively unsophisticated technology, and disappear for parts involving sophisticated technology. We rationalize all these observations by means of a relational contracting model of repeated procurement with non-contractible, buyer-specific investments. In relationships involving higher trust, buyers are able to induce higher investment and more intense competition among suppliers|but only when the buyer has the bargaining power. This ability disappears when the bargaining power resides with the supplier(s).

Efficient motion analysis of IT support for information retrieval at manual workplaces

Within the context of the “Industrie 4.0” initiative, workers should be enabled by information technologies to extend their abilities to handle a wider range of work processes. However, such information technology also requires additional workload, which is not clearly measurable yet. This paper thus introduces a concept of an extended application of the MTM method to measure and analyze the information retrieval phase and to also provide a platform to compare different smart devices for their suitability to the current task at hand. Finally, the paper briefly shows the current evaluation processes at a German car manufacturer.

Automotive Paint Shop 4.0

This paper focuses on the research and development of a new paint shop concept for the automotive industry, based on Industry 4.0 and Digital Factory ideas. The Paint Shop 4.0 project has been carried out on behalf of a German car manufacturer, in cooperation with ProPoint Sp. z o.o. Sp. k. and industrial partners. The main goal of this research is to reduce the primary bottleneck in the operation of a paint shop, which is caused by frequent changeovers of painting guns. A new type of sequencing problem is studied from both an algorithmic and a practical point of view. The original ‘Car Sequencing Problem’ focuses on determining the sequence before production starts, without the possibility of later change to this sequence. The new problem consists of real-time car sequencing using a buffer for the purpose of considering dynamic changes. Work begins with identifying and analyzing the causes of the emerging problem. Then, using tools like Virtual Engineering and Virtual Commissioning, the following tasks are performed: modeling of an existing production line with a buffer, model validation, and the development of methods to improve the sequencing process. Two heuristics based on a set of simple rules and one more advanced heuristic are proposed. Their effectiveness has been tested during simulations, based on real data, and compared with current industry solutions. The extensive computational experiments show that heuristics-based proposal outperforms the methods known from the literature in terms of in terms of matching to industry requirements. This indicates that it is possible to improve the sequencing effectiveness, and as a result a smart buffer control system is proposed. Validating the proposed solution in a virtual environment paves the way to implement the Paint Shop 4.0 concept in a real plant in the future.

Designing a Human Machine Interface for Quality Assurance in Car Manufacturing: An Attempt to Address the “Functionality versus User Experience Contradiction” in Professional Production Environments

The complexity of nowadays car manufacturing processes increases constantly due to the increasing number of electronic and digital features in cars as well as the shorter life cycle of car designs, which raises the need for faster adaption to new car models. However, the ongoing digitalization of production and working contexts offers the chance to support the worker in production using digital information as well as innovative, interactive, and digital devices. Therefore, in this work we investigate a representative production step in a long-term project together with a German car manufacturer, which is structured into three phases. In the first phase, we investigated the working process empirically and developed a comprehensive and innovative user interface design, which addresses various types of interactive devices. Building up on this, we developed the device score model, which is designed to investigate interactive system and user interface in production context due to ergonomics, UI design, performance, technology acceptance, and user experience. This work was conducted in the second phase of the project, in which we used this model to investigate the subjective suitability of six innovative device setups that implement the user interface design developed in phase one in an experimental setup with 67 participants at two locations in south Germany. The major result showed that the new user interface design run on a smart phone is the most suitable setup for future interactive systems in car manufacturing. In the third and final phase, we investigated the suitability of the two best rated devices for long term use by two workers using the system during a full shift. These two systems were compared with the standard system used. The major conclusion is that smartphones as well as AR glasses show very high potential to increase performance in production if used in a well-designed fashion.

A Review of Two Crisis Communication Publications: Academic and Practitioner Perspectives

The “diesel dupe”; 75,000 “unaccompanied minors” applying for asylum; the arrest of a South Korean scion and de facto leader of a technology conglomerate; and kneeling football players. While these four national news stories appear randomly selected, they indeed share a common thread: the crisis communication profession. Hot off the heels of a global marketing campaign trumpeting diesel cars with low emissions, German automobile manufacturer Volkswagen (VW) was leveled with nearly $20 billion in fines after the Environmental Protection Agency found “irregularities” in VW cars sold in America (Hotten, 2015). VW admitted to cheating on emissions tests sold in the United States (Hotten, 2015). One aspect of the “diesel dupe” that is arguably most appealing to public relations professionals is the corporate response. Russell Hotten (2015) noted the response of VW’s U.S. boss, Michael Horn, in his BBC News story: “We’ve totally screwed up.” Martin Winterkorn, the group’s chief executive, added that the company had “broken the trust of our customers and the public” (Hotten, 2015). Outcomes of a crisis alter an organization’s self-image. Practitioners are responsible for crafting “talking points” when addressing the media; academics can dissect VW’s response with theory, such as Ryan's (1982) application of apologia.

Decision Support for the Automotive Industry

In the automotive industry, it is very common for new vehicles to be leased rather than sold. This implies forecasting an accurate residual value for the vehicles, which is a major factor for determining monthly leasing rates. Either a systematic overestimation or underestimation of future residual values can incur large potential losses in resale value or, respectively, competitive disadvantages. For the purpose of facilitating residual value related management decisions, an operative decision support system is introduced with emphasis on its forecasting capabilities. In the paper, the use of artificial neural networks for this application is demonstrated in a case study based on more than 250,000 data sets of leasing contracts from a major German car manufacturer, completed between 2011 and 2017. The importance of determining price factors and the effect of different time horizons on forecasting accuracy are investigated and practical implications are discussed. In addition, the authors neither found a significant explanatory nor predictive power of external economic factors, which underlines the importance of collecting and taking advantage of vehicle-specific data or, in more general terms, the exclusive data of corporations, which is often only available internally.

Using semantic metadata for continuous development of requirements and goals in the Smart Mobility domain – An empirical study

The continuous development and consistent documentation of requirements and goals is a major challenge in product development. Inconsistency can lead to immense changes in development time, costs or quality. If major inconsistencies are not detected, a project failure may occur. As systems-of-systems (SoS) are developed by many stakeholders from independent organizational units using many different methods, processes and tools, this brings new challenges to obtain consistency and continuity on multiple levels and in different phases of the product development process. As changes to requirements can have a wide impact on the distributed and partly independent working development teams, requirements and goals as well as their heterogeneous interrelations and boundary conditions have to be modelled as a continuous system of objectives. The KaRDF approach developed at the IPEK – Institute of Product Engineering at the Karlsruhe Institute of Technology uses the semantic web technology RDF to link development artefacts independent of their representation in order to build consistent product models for systems-of-systems on different level of detail supporting multiple development and product generations. This research work presents the results of an empirical study in the Smart Mobility domain where KaRDF was used to support the development of SoS. The KaRDF ontology and inference rules are implemented in a web-based software tool which is used by project managers from a German car manufacturer for adding semantic metadata to their development artefacts. The results show that through usage of the defined semantic metadata structure and inference rules, continuity and consistency in product development of systems-of-systems is improved and the ability of the approach to integrate with heterogeneous methods, processes and tools used in a systems-of-systems development environment is proven.

Accounting for Cross‐Country Differences in Employee Involvement Practices: Comparative Case Studies in Germany, Brazil and China

AbstractEmployee involvement is a contested concept in organizations. While the mainstream of the research debate has focused on measuring the strength of employee involvement (EI), this article emphasizes the existence of very different forms of EI. It draws on case studies of the German, Brazilian and Chinese plants of a German automobile manufacturer to analyse forms of EI and to investigate their societal determinants. The article reveals considerable differences in the design of employee involvement between the self‐organization model and the competition/social involvement model. It shows how industrial relations and cultural factors lead to these very different approaches.

The Volkswagen Scandal - Air Pollution and Administrative Inertia

This contribution deals with the manipulation of NOX emissions from Volkswagen diesel cars on the one hand, and with the manipulation of CO2 emissions from diesel and petrol cars by Volkswagen on the other. The scandal became public in 2015. Volkswagen is a German car manufacturer; to the company also belong Porsche, Audi, Skoda, Scania, Ducati, Seat, Bentley, Bugatti, Lamborghini and Quattro.

Constraint-based and SAT-based diagnosis of automotive configuration problems

We compare the concepts and computation of optimized diagnoses in the context of Boolean constraint based knowledge systems of automotive configuration, namely the preferred minimal diagnosis and the minimum weighted diagnosis. In order to restore the consistency of an over-constrained system w.r.t. a strict total order of the user requirements, the preferred minimal diagnosis tries to keep the most preferred user requirements and can be computed, for example, by the FASTDIAG algorithm. In contrast, partial weighted MinUNSAT solvers aim to find a set of unsatisfied clauses with the minimum sum of weights, such that the diagnosis is of minimum weight. It turns out that both concepts have similarities, i.e., both deliver an optimal minimal correction subset. We show use cases from automotive configuration where optimized diagnoses are desired. We point out theoretical commonalities and prove the reducibility of both concepts to each other, i.e., both problems are FPNP-complete, which was an open question. In addition to exact algorithms we present greedy algorithms. We evaluate the performance of exact and greedy algorithms on problem instances based on real automotive configuration data from three different German car manufacturers, and we compare the time and quality tradeoff.

Strategic ramp-up planning in automotive production networks

In many industries, the frequency of production ramp-ups has increased due to shorter product life cycles and increased product variety. Production often takes place at globally dispersed facilities for customers in multiple markets, for example, in the automotive industry. Therefore, ramp-up planning must be carried out for a network. The planning problem at hand is to simultaneously optimise the allocation of products of a common product platform to plants, the timing of ramp-ups and ramp-downs, ramp-up duration and shape of capacity and production and transportation volumes with respect to the net present value of the profit. We develop a hierarchical planning framework and place strategic ramp-up planning therein. We provide a mixed integer programming model for this planning problem. Following the example of a German car manufacturer in the premium segment, we conduct a numerical analysis to obtain insights into optimal ramp-up and ramp-down decisions. The results show that it could be beneficial to use both steep and flat ramp-up curves. The impact of flexibility in the choice of ramp-up slots and the number of ramp-up curves provided on the objective value is substantial. The strategic ramp-up planning model outperforms sequential planning approaches.

Scenario and roadmap-based approach for the analysis of prospective production technology needs

Technological opportunities and threats relevant to a manufacturing company have to be identified prematurely to derive purposeful measures regarding the future use of a technology in the production environment. However, the identification of technologies is resource-intensive since companies are often unable to specify their prospective technology needs. This paper therefore presents an applicable method to support producing companies in specifying technology needs. The method consists of three steps that focus on deriving, selecting and describing relevant search fields constituting those needs. Thus, technologies covering the defined needs that may represent a technological opportunity or threat for a company can be found more effectively. The method has been applied at a German automobile manufacturer.

Industrial Policy in Germany after the Global Financial And Economic Crisis

The paper gives a review of recent key German industrial policy developments after the global economic crisis. In particular it discusses the German energy policy which has redirected its activities towards renewable energy and the decision to end nuclear energy completely in the next years. Furthermore to make major progress in the decarbonization process by closing domestic coal mines and most of the electric power stations based on coal as an energy source will follow suit. From the technological site this gives the development of new green energy technologies in Germany a major demand pull. In particular beside wind and solar energy generation new storage and distribution technology will be needed including the development and implementation of smart grids. Contrary to other major industrialized countries German manufacturing industries have been successful to maintain their global market share even after Chinese manufacturing industries rose significantly over the past decade. In particular in the area of machinery and automotive industries Germany could expand or at least maintain overall their global position. However, in the automotive industry the strategy of electromobility to develop and sell electric cars in large numbers so that 1 mill. cars will be registered on the roads in Germany by 2020 has been lagging significantly behind the initial targets. This is not a particular German problem. At the global scale electromobility still is at its infancy. Two key factors hampering its market success. From the technological side the distance traveled with one battery charge is too low to compete with those cars using fossil fuels. Additionally the recharging of a battery is too slow. Both obstacles need an improvement of about a factor ten to become nearly equal to the traditional cars. From the economic side the costs are still to high to offer potential buyers an incentive to switch to electric cars. Subsidies might be a potential remedy, but will only be useful if the technological obstacles are overcome as well. Otherwise customers will still have to judge if they would accept the technological shortcoming of the current generation of electric vehicles. The push to self-driving cars is another key driver in the automotive industry. It will have major implications on the future structure of the global automotive industry. Currently German car manufacturers are well positioned, but have to be careful that disruptive innovators like Google, Apple or Tesla will not challenge the traditional car manufacturers globally. Another area where German industrial policy has become very active is the area of the digital economy which should be addressed with the digial agenda launched by the German government in close cooperation with the EU-commission. However, this is still in its infancy and Germany will face stiff competition from other major global key players like the US, Japan, South Korea and China. Strategic alliances between different countries and players are emerging. Last but not least the German government with the German manufacturing industry started a new initiative under the label of Industry 4.0. The aim is to significantly push foreward the integration of manufacturing goods and services utilizing the internet as the platform of the internet of things. The technologies which have to integrated are big data applications in global communication networks including data collection collected by embedded sensor systems, additive manufacturing technologies, and robotics based on AI embodied in self-learning and mobile autonomous robots with a much broader area of application in the society as before. Again the problem of cost savings for such systems will be essential for a successful diffusion. Last but not least training and retraining of the workforce will be important to make good use of the new technological innovations. Here Germany still needs to make more efforts to keep their current and future labor force up-to-date. All in all the past and current success of the German manufacturing industry in particular after the global economic and financial crisis gives some reason to look optimistic into the future, however, there is no reason for complacency since the global competition of the future high-tech markets will be intense and might even intensify with China as a major new player.

Datenqualität als Erfolgsfaktor im Business Analytics

“Garbage In, Garbage Out“ – this especially holds true for the fields of Business Analytics and data-driven decision support. Against this background, in this article we propose a probabilitybased metric to assess the currency of data. We demonstrate the application of the metric as well as its practical benefit using the case of a major German car manufacturer.

Financialisation of wages and works councils’ policy: Profit sharing in the German metalworking and electrical engineering industries

IntroductionFinancialisation is a big challenge for German works councils. The growing importance of the markets and the reorientation of corporate governance by serving shareholder interests, introducing short-term profit targets and focusing on a profitable core business can hardly be reconciled with long-term growth strategies and high employment stability that have been identified as main features of the German coordinated market economy and that have traditionally been supported by works councils on plant level (Hall & Soskice, 2001). The financial concept of control (Fligstein, 1990) affects works councils' policy by putting pressure on employment and labour standards (Dorre, 2009; Sauer, 2013). In a financialised environment the works councils have to fight actively for the safeguarding of jobs and the preservation of labour standards in the firms. This is one of the main reasons for the spread of local alliances of work during the last decade (Rehder, 2006).Profit sharing is an important aspect of financialisation (Breisig, 2009). For some years now, press and television reports in Germany on high profit-sharing bonuses for employees covered by collective agreements have been a regular feature of the spring months. Besides large companies in the chemical industry and banking, these reports tend to focus particularly on the large German car manufacturers. According to Bispinck (2011), the bonuses paid in 2010 and 2011 are the main reasons why the reduction in the wage drift (i.e. the difference between the wages actually paid and the collectively agreed rates), which had begun as long ago as the 1990s, has now come to an end and actual pay in Germany has for the first time risen more sharply than collectively agreed rates. At the same time, profit sharing is one of the main issues of works councils' wage policy in the German system of labour relations, based on the legal right of codetermination in case the company wants to change given standards of fringe benefits and wages paid by the companies above the level of the collective bargaining agreements. In most of the industries, among them the metalworking and electrical engineering industry, profit sharing is paid on top of agreed wages in collective bargaining.Given the problems of financialisation and the central role of works councils in plant level regulation of profit sharing, this paper aims to analyse policy and practice of the works councils in implementing and regulating profit sharing in the companies. There are four questions that will be tackled: First, how do the main patterns of regulation of profit sharing in the plants look like? Second, in how far is profit sharing coupled with the broader trend of financialisation of corporate governance in the companies, and what are the rationales used to legitimise profit sharing in the plants? Third, what are the positions and strategies developed by works councils with respect to profit sharing? And fourth, what are the effects of profit sharing both on the development of wages and on the position of works councils in plant-level labour relations?The analysis is based on the results of a research project financed by the HansBockler-Foundation in the years 2012 and 2013 in the course of which we made use of three methods. First, we evaluated various sources of data on profit sharing like the Socio-economic Panel (SOEP) and the IAB Company Panel in order to get an im- pression of the spread and dynamics of profit sharing. Second, we surveyed and analysed the agreements on profit sharing in the forty largest firms of the metalworking industry as far as they exist. In this way, we could identify patterns of plant level regulation of profit sharing with respect to the definition of profits, the entitlements of employees or procedures of codetermination. In addition, third, nine case studies in large companies of the metalworking industry were undertaken. The cases have been selected in accordance with the metalworkers' union IG Metall and were to represent practices of profit sharing, mainly along the value chains of the automotive industry where profit sharing is most widespread. …

Custom and Moral Sentiment: Cross-Cultural Aspects of Postgraduate Student Perceptions of Leadership Ethicality

The recent crisis in a prominent German car manufacturer generated by unethical leadership practices has brought into sharp focus, once again, the need for radical and fundamental ethical transformation among members of capitalism’s leadership elite. The divide between ethics and business needs to be closed and to do this effectively in a globalized world, cross-cultural aspects of moral sentiment need to be better understood. The current paper contributes to the extant literature in this regard by describing and analyzing cross-cultural aspects of German and South African student’s ‘sympathy’ towards business ethical phenomena, using Adam Smith’s ‘Theory of Moral Sentiment’ as a theoretical framework and qualitative methods. The paper constructs a heuristic device based on Adam Smith’s theoretical framework and then proceeds to empirically analyze the theory by investigating German and South African student moral sentiments towards specific ethical leadership behaviors. The study indicates that while there is general cross-cultural homogeneity in moral approbation among students for fundamental aspects of ethical leadership behavior, nuanced custom-based differences emerge from the qualitative analysis. Following Adam Smith, fine grained differences in moral sentiment arising from ‘custom’ are evident. Thus, although ethicality of specific leadership behavior is found to be viewed similarly by both groups of students, significant nuanced differences arise in German students who emphasize intellectual autonomy over the conservatism favored by their South African counterparts. Practical aspects of these findings are briefly discussed.