The Grand Tour of German Automotive—Volkswagen Osnabrück

The Volkswagen plant in Osnabrück is actually the plant of the former cabriolet specialist Karmann, which went bankrupt in 2009 and was bought by Volkswagen. It is the specialist plant for the Volkswagen brand for cabriolets… but the Volkswagen brand will stop making cabriolets in 2025. It is also the overflow plant if other VW plants need more capacity… but VW itself has overcapacity. As a result, the plant suffers from a lack of love and especially money for investments from the Volkswagen headquarters. Hence, the plant looks run-down. But despite these disadvantages, the organization itself was decent, and better than in Wolfsburg or the Audi plants.

Disclaimer: The following is based on my personal observations and opinions and may not be accurate or correct. It is based on publicly available information and what I observed during public tours, and when I observed it. The observations may differ at a different time and place.

The VW Osnabrück Plant History (and Future?)

The Volkswagen plant in Osnabrück is the former Karmann plant. Karmann was a manufacturer of automobiles for other companies, founded in 1901. Its most famous model was the Karmann Ghia and the Beetle Cabriole, both produced for Volkswagen. However, they also produced for other brands like BMW, Mercedes, Ford, Kia, Chrysler, and others.

Karmann was a manufacturer that specialized especially in making cabriolets, and as such had worldwide renown among cabriolet enthusiasts. However, during the 2007 economic crisis, car makers needed to keep their own plants busy, and Karmann was running out of orders. In 2009, Karmann went bankrupt. Their last car was a Mercedes CLK cabriolet. The company was broken into parts and sold. Volkswagen bought the plant in Osnabrück.

Due to its history, the Osnabrück plant became the Volkswagen competence center for cabriolets and small-volume models. It was also set up to be an overflow plant to produce other models if Volkswagen was running out of capacity elsewhere, called Mehrmarkenkompetenz (Multi-brand-competence).

However, as of writing, Volkswagen is hurting for money. Like most German car makers, their core-competence combustion engines are on the way out, and their electric vehicles are too expensive compared to the international competition. As Osnabrück is the cabriole competence center, they are making the T-Roc cabriolet, which is currently the only cabriolet under the Volkswagen brand. (There are also Audi and Porsche cabriolets.) However, due to the small demand, the next generation T-Roc will no longer be available as a cabriolet, and production will end in 2025. It doesn’t help that the VW Osnabrück plant is the Volkswagen cabriolet competence center if the VW brand is no longer making any cabriolets!

During my visit, one production line was also running building models for Porsche, namely the Boxster, Cayenne, Spider, and some Porsche racing vehicles, including a lot of cabriolets. Currently, Porsche is one of the few VW brands that still have a high demand, and they use the Osnabrück plant to provide for their excess demand. However, this line is built with very little automation, because as soon as demand drops, Porsche will pull back production into their own plants.

Just like when the plant was Karmann, it has to fight for leftover scraps from the other plants. This was also my impression when I toured the plant. While the plant itself was performing decently, it felt overall rather old, worn out, and not overly clean. I guess you could just say that the plant does not get much love or attention from Volkswagen…

The Plant in General

The plant has a press shop, a paint shop, a body shop, two final assembly lines, a large plant engineering department, and a tooling department, many of which are also used for other Volkswagen plants. It claims to be the only Volkswagen plant besides Wolfsburg that can do everything (except engines). It also has a large historic car collection from its Karmann history, including many prototypes and rare models. During the tour, however, they show you only the VW-related models, and keep the Daimlers and BMWs out of sight.

Like many historic plants, the town grew around the plant over time. Therefore, due to the lack of space, production is on three floors, with all the problems this causes for logistics. It also makes VW hesitant to produce electric vehicles there, because a battery fire on the third floor would cause much more headache than on the ground floor (especially getting the battery out of the factory and in a tank of water to stop the reaction).

Body Shop

The tour started with a visit of the body shop. With a takt of 6 minutes, they produce car bodies for the T-Roc Cabriolet. This needs around 4000 spot welds, much less than the 6000 at other body shops, but… well… it’s a cabriolet, and you don’t need to weld a roof. When there is a break for the employees, the robots take a break too.

The cleanliness was okay-ish, similar to Wolfsburg and Audi plants. They were proud of their welding robots having an automatic tool change, and claimed that was rare, but during my next visit in the Emden plant I also saw similar welding tool changes. This is probably due to the slow takt of 6 minutes, where a robot has to cover more tasks to fill out the takt time. Strangely enough, one part (the upper attachment of the seat belt) is still welded by hand. Material transport was by forklift and milk runs, not AGVs.

Porsche Final Assembly

The final assembly line produces Boxster, Cayenne, Spider, and some racing vehicles for Porsche, both cabriolets and vehicles with roofs. Surprisingly, it was not a continuously moving line but a pulsed line at a slow takt of 5:30 minutes. As always, I estimated the percentage of value-adding time, which was 47%. This is actually quite good for Volkswagen, and only the Porsche Zuffenhausen Taycan line was better (albeit BWM and Mercedes Rastatt was better, not to mention many Japanese plants, especially Toyota).

This was surprising, because the line looked worn out and old, with quite low automation. For example, nowadays assembly is usually done on moving platforms. However, a lot of the assembly in Osnabrück was on outdated narrow dual track conveyors for the wheels, which is no longer common. In another location (transfer of bodies from press shop to paint shop), the guide pointed out that the machine moving the cars is fifty years old (and in my view terribly outdated).

Or, the marriage between the undercarriage and the car body is nowadays pretty much everywhere fully automatic, with maybe two people to plug in the cables (which is hard to automate). At Osnabrück, I was stunned to see that the bolts for the underbody were screwed in by a small group of workers one by one. They had a powered screwdriver that hung from the ceiling, and an arm reached underneath the undercarriage. The worker positioned the tool manually for every bolt and tightened them one by one. After the car was lifted off the AGV, they placed bolts by hand again on the AGV for the next round of undercarriage assembly and marriage. This is a task that could have been automated a long time ago…

…except for the special situation in Osnabrück. Porsche uses the Osnabrück plant only if it needs additional capacity. As soon as their demand drops, they pull production back to Zuffenhausen or Leipzig. It makes no sense to install a 1 million EUR automatic marriage station with a return on investment of two years if you are not sure if you will still need it in six months. Overall, nobody is willing to invest money to update an assembly line that they may drop again in a few months, and that is why Osnabrück looks the way it does. I also guess that was the reason for the line being pulsed instead of continuously moving.

T-Roc Cabriolet Final Assembly

In comparison, the T-Roc Cabriolet final assembly line looked a bit better and generally a bit more automated. Probably because this model has a longer planning horizon and would stay with Osnabrück for the duration of the model (albeit the cabriolet will no longer be produced in 2025). For example, the marriage at the T-Roc line was almost fully automatic (manually plugging in cables). Still, the line had normal hanging devices, and there were no modern C-hooks in the plant anywhere.

Despite that, the percentage of value-adding time was a bit worse than at the Porsche line with 43%. I also saw workers that had the time to play with their mobile phones while waiting for the next car. The takt was similar with 6 minutes per car. VW in Osnabrück also has a problem with demand for the T-Roc, as the line runs only with one shift, and the takt with 6 minutes is much slower than the 4 minutes per car the line was designed for. In comparison, the in-demand Porsche line was running with two shifts. Both lines had team sizes of 8–12 employees.

Overall, the VW plant Osnabrück is decently organized, but suffers from financial neglect and a lack of consistent jobs. It may help that it is in the state of Niedersachsen, which holds 20% of the Volkswagen shares, and they have an interest to keep their voters happy. On the other hand, almost all of Volkswagen Germany is in Niedersachsen, so it probably does not make much difference.

Overall, it is a plant that struggles due to external problems, but otherwise has good fundamentals. In my next post I will look at the last VW plant I visited, the highly unusual transparent factory in Dresden. This is anything but a normal car plant, but instead a showcase manufactory designed to impress visitors. And, impress it does. Unfortunately, the ability to produce cars efficiently suffers enormously from this shift of focus, and it is by far the least efficient German car plant, or any car plant in the world that I have seen. Actually, scratch that. VW Dresden is the least efficient assembly line of all the hundreds of assembly lines (cars and others) for which I have measured the efficiency. There are strong rumors that VW will close this plant soon. But again, it was designed not for efficiency, but for show, and from that aspect it is actually quite impressive. Now, go out, avoid the fanciness and instead focus on the fundamentals, and organize your industry!

PS: Many thanks to Volkswagen for offering tours through their plants to the public!