August 22, 2007 at 1:00 am

South America's Auto Boom: Second of three parts

FORD'S TEST BED: Brazil's Camaçari plant is model for the future

At Ford Motor Co.'s factory here, a group of Visteon Corp. workers connect the wiring in a dashboard module for a Ford EcoSport. Next to them, Lear Corp. employees are building seats for the same vehicle. A few feet away, Ford's Diede Silva dos Santos applies trim to a Fiesta subcompact. She's mastered seven jobs at the plant and is working on an eighth.

"If you do different jobs, it's more interesting," said Silva dos Santos, 24. "It gives me a chance to expand my knowledge. (It) makes me a more valuable employee, too, so that I will have a future here."

All of them exemplify a different kind of worker in a different kind of plant for a Detroit automaker.

This state-of-the-art manufacturing complex in the northeastern Brazilian state of Bahia is not only the centerpiece of Ford's Brazilian turnaround plan, it is also one of the most advanced automobile plants in the world. It is more automated than many of Ford's U.S. factories, and leaner and more flexible than any other Ford facility. It can produce five different vehicle platforms at the same time and on the same line.

Ford sources said it is the sort of plant the company wants in the United States, were it not for the United Auto Workers, which has historically opposed such extensive supplier integration on the factory floor.

Many automakers use South America to try out new manufacturing ideas. Volkswagen AG has suppliers in some of its factories, and General Motors Corp. has a supplier park surrounding its plant in Gravataí, Brazil. But analysts say no automaker has gone as far as Ford.

"South America is kind of the global sandbox for a lot of automakers to try out new methods," said Michael Robinet, vice president of global vehicle forecasts for CSM Worldwide. "Ford was able to think out of the box, and it's paying off for them."

A different way of making cars

At Camaçari, more than two dozen suppliers operate right inside the Ford complex, in many cases producing components alongside Ford's main production line. Having those supplier operations on-site allows Ford to take the concept of just-in-time manufacturing to a whole new level. Inventories are kept to a bare minimum, or dispensed with entirely. Components such as dashboard assemblies flow directly into the main Ford assembly line at the precise point and time they are needed.

"It's a good arrangement," said Mauro Ribeiro Leite of Atlas Copco AB, a Swedish company that maintains production at Camaçari. It gives us more flexibility, and we're better able to understand the customer's needs."

The system also helps with quality. If there is a problem with a part, it is a simple matter for Ford engineers to trace it to its source and work with the supplier to correct it.

"It's a simultaneous supply chain," said Edson Molina, logistics general manager for Ford South America. "When you have a problem, everybody works together to solve it."

The work force is different, too.

The entire operation, including suppliers, employs about 9,000 workers. The average age is just 26, and nearly half are women.

Most have no industrial experience when they hire on at Camaçari, so each worker receives about 900 hours of training. Much of that time is spent working on a scaled-down version of the real assembly line that was built just for that purpose.

Unlike many U.S. auto plants, where workers' responsibilities are strictly limited to specific job classifications, workers like Silva dos Santos are encouraged to learn as many different skills as possible.

Everyone -- from senior managers, designers and engineers to rank-and-file line workers and maintenance staff -- wears the same uniform here. The only difference is that those working for suppliers have their own corporation's insignia embroidered on their chest instead of Ford's Blue Oval.

More than just an egalitarian touch, the uniforms are designed to reinforce the idea that everyone is on the same team, working to achieve common success. In addition, Ford believes the uniforms encourage dialog between workers and management, because it is so hard for people to tell the difference.

Nowhere is that more evident than in the plant's four cafeterias. Each serves the same fare, and workers are free to choose whichever is the most convenient. They are also encouraged to discuss product and production issues with others at their table.

"People are more open to telling you what they think," said Hau Thai-Tang, head of product development for Ford in South America. "It fosters an atmosphere of codependence. I think we need that elsewhere."

Thai-Tang knows this because Ford's South American product development center, with its design studios and engineering offices, is inside the factory complex.

The plant even takes a novel approach to the environment.

Camaçari, like most of this part of Brazil, was once part of the vast Atlantic Rainforest. Little of that jungle survives today, as the land was long ago cleared for cultivation, but Ford had hoped to restore at least a small portion of it on the land surrounding the plant.

However, the land was so depleted that the 700,000 trees Ford planted died within a few months.

So, as with everything else in Camaçari, the company got creative. Ford decided to compost all of the food waste from its cafeterias and use that to build up the soil around the plant. Now, acre by acre, it is putting the rainforest back together again.

Building a boom

The land is not the only thing Ford is improving in Bahia, according to the state's senator and former governor, César Borges. He estimates that some 50,000 jobs have been created in the area because of the Ford plant and says the state's GDP has almost doubled since it opened.

Jobs at the plant are highly sought after in this region, known for its rampant unemployment, which officially stands at about 25 percent. The best work most of Ford's employees hoped for before the plant was built were low wage jobs in Salvador's tourist industry.

It is no wonder then that Ford employees are often seen wearing their uniforms into town on their days off.

"It's a great job," said Claudia Sena, 27, as she grinds metal burrs from the body of a Fiesta.

Borges was the governor of Bahia in 1999 when Brazil's federal government first began allowing states to offer incentives to attract industry. He jumped at the opportunity to bring good jobs to his region, where the economy had long been based on the production of cacao, the tropical plant that is used to make chocolate.

He offered Ford generous financing and other incentives to come to the rural state and even threw in a private port -- an important asset in a region that lacks road and rail connections with the rest of South America.

The plant cost $1.9 billion. Ford put up $1.2 billion; its suppliers paid for the rest.

Work began immediately, and the plant was completed in October of 2001. The first vehicle rolled off the assembly line six months later.

"We broke a lot of paradigms," Molina said. "It was not easy, but it's working."

A new model

Today, Camaçari runs three shifts, six days a week, and Ford is studying ways to increase production at the facility.

The plant is so important to Ford's South American operations that sales in the region actually slumped in the first quarter when the company took the plant off-line for routine maintenance. The products it currently builds -- the EcoSport, the Fiesta and the Fiesta sedan -- are the backbone of Ford's lineup in Brazil.

The country's main autoworkers union initially opposed the plant, but has come to see the value of this new production model.

"In the beginning, we were very concerned about the new plant in Bahia, but now we recognize the importance of that plant in keeping (Ford's other Brazilian plant) alive," said union leader José Lopez Feijóo. "The Bahia products were vital to reviving the Ford brand in the country."

To appease the union, Ford painted yellow lines on the factory floor to demarcate each company's area and separate Ford's assembly operations from those of its suppliers.

As in the United States, assembly workers make more than those employed by suppliers, and the union is eager to ensure that work reserved for the higher paid Ford employees is not being done by lower wage supplier staff.

Labor expert Harley Shaiken of the University of California, Berkeley, said similar concerns are one reason why the Camaçari model is unlikely to be duplicated in the United States. He said the UAW has relaxed work rules at many Ford factories to allow workers to do more than one job, and has even allowed experiments with limited supplier integration.

But he said the UAW is concerned that giving too much on these fronts will just allow the companies to speed up production and transfer more and more work to lower-paid supplier employees.

"Clearly, what is going on in Brazil is pushing that envelope," he said. "I would never say never, but it would be a hard sell."

You can reach Bryce Hoffman at (313) 222-2443 or bhoffman@detnews.com">bhoffman@detnews.com.

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