Schmitz Trailer Expanding East

Schmitz, the largest trailer manufacturer in Germany and the second-largest in Europe, has made impressive productivity improvements to increase production internally, and has added new capacity to extend its growth externally. And it has a new name. Formerly Schmitz-Anhanger Fahrzeugbau-Gesellshaft mbH (Schmitz Trailer Manufacturing Inc), it has now adopted its elephant logo, Schmitz Cargobull. At the same time, it has changed from a private limited liability company to a public stock company (Aktiengesellschaft). So the full name is now a much simpler Schmitz Cargobull AG.

5.6% Profit Margin Financial results for the 1998 year show that Schmitz is gaining rapidly on the number one trailer firm in Europe, SESR (now General Trailers France SA), the former Fruehauf-owned group that includes both Fruehauf Benalu and Trailor in France, Crane Fruehauf in the UK, and Netam Fruehauf in the Netherlands.

For the fiscal year ending March 31, 1998, the Schmitz Group had total revenue of DM944 million ($560 million), a 34% increase over the DM705 million the previous year. Half-year results reported the first of October indicate that the current year will be up more than 30% again. This would be a doubling of total revenue in three years.

What is more impressive, says Peter Schmitz, president of Schmitz Cargobull, is that the net profit after taxes rose from 1.6% of sales in the previous year to 5.6% of sales in the fiscal year ending in March 1998. 100 Trailers a Day

Expressed in terms of units produced, Schmitz is building more than 100 trailers a day as of the first of the year. This includes the Altenberge home plant building 45 a day, Vreden building 24 foam-insulated trailers a day, the new Schmitz-Gotha plant in the former East Germany building 15 dump trailers and platform or container chassis a day, the Mecklenburg works building five a day, Schmitz-UK turning out six refrigerated trailers a day, plus incomplete trailer chassis for other body builders to complete.

Contract manufacturers also build about 10 Schmitz trailers a day because the Schmitz-owned plants are producing at capacity. The company is also selling trailer kits for assembly in Italy. The CKD (completely knocked down) kits are shipped with two chassis stacked on top of one transport chassis, plus all the parts for body builders to assemble the fitted tarp bodies to make three soft-side dry freight vans.

The 45 units a day built in the home plant in Altenberge represent a doubling of the build rate in the past year. The production rate is four times the rate six years ago. All of this was done without increasing the plant size. 20% Productivity Bonus

Part of the increase came from adding a third shift. Another large part of the increase came from a continuous improvement process, trying to avoid unproductive time and reduce rework. To get worker involvement in the improvement of productivity, Schmitz offers the workforce a bonus of 20% of the first-year cost savings from productivity gains. For example, savings from productivity improvement during the last fiscal year amounted to five million marks ($3 million). One million marks ($600,000) of this savings was awarded to employees as a productivity improvement bonus.

Schmitz has streamlined production by building fewer of its own parts and purchasing more. Rear doors, drop sides, and front bulkheads are purchased from contractors who build to Schmitz designs. Other savings come from doing less painting and using prepainted parts or aluminum parts instead of parts requiring a paint finish. For example, the Schmitz refrigerated trailer is made by assembling insulated panels that have prepainted side skins. The aluminum extrusions that cap the corners of the box are of anodized aluminum that needs no painting. Bogies and trailer frames are prepainted before trailer assembly starts.

"We're trying to remove the bottleneck at the final paint booth," says Schmitz.

In addition to improving productivity and production through worker involvement in a continuous improvement process, Schmitz is expanding geographically. The latest addition is Schmitz-Gotha Fahrzeugwerke GmbH in the former East German city of Gotha. First established in 1898 as a railcar and streetcar manufacturer, the Gotha works started building truck trailers and buses in the 1920s and 1930s, and during the war years produced aircraft. After WWII during the days of the German Democratic Republic, it continued building truck trailers, and also supplied automobile frames and axles for the Wartburg auto assembled in nearby Eisenach. Production was high-some 350 rolling chassis a day.

This is a huge plant that had employed as many as 9,500 workers during the war. It has over 300,000 square feet under roof on 37 acres, but Schmitz-Gotha is using only half the buildings. Schmitz-Gotha is a new corporation 70% owned by Schmitz Cargobull and 30% by Josef Koch, its managing director.

Koch has a long history in the trailer business in Germany. For many years, he was the production manager for Kassbohrer when it was the largest trailer manufacturer in Germany. He continued on with Kogel Fahrzeugwerke AG when Kogel bought the Kassbohrer factory near Ulm, and then worked as a consultant for several years.

High Cost Labor There are many reasons why prosperous West German companies are investing in the eastern states that were once part of the GDR. For one, wage costs are almost 40% less. Koch says the average worker in the West makes about DM28 ($17) an hour, but the wage cost including taxes is DM48 ($29). In eastern Germany, workers make about DM18 ($11) an hour, or DM30 ($18) including taxes.

However, balanced against this, productivity is less in eastern Germany. "East German workers do not understand market forces and the need for improving productivity," says Koch. "But in 10 years they will."

There is a great deal of pressure to make the newly privatized companies in the East more successful, and the government is offering incentives. Unemployment is running about 11% to 12% in eastern Germany and about 24% in Gotha, compared to 8% to 9% in the northwestern part of the country where Schmitz Cargobull is headquartered.

With an inflation rate of less than 1% and the lowest interest rates since the war, unemployment is the biggest problem facing the country. However, the government's social policies are contributing to that unemployment, says Koch. Unemployed workers are paid 70% of their last salary, or a maximum of DM4,800 ($2,900) per month. About 30% of government spending is for social work, which contributes to the high labor cost in Germany. Factories are forced to automate to be competitive with countries having lower labor costs.

Schmitz is bringing automation to the Gotha plant. The first robot installed at Gotha is a new, custom-built machine that picks up each axle assembly and positions it accurately on the trailer frame so that no further axle alignment is necessary. The computer is programmed to handle 45 different types of axle arrangements, including three-axle and two-axle semitrailers, front steering axles for full trailers, center-axle drawbar trailers, lift axles, and self-steering axles. Using the computer-controlled axle alignment robot, one man can position and tack weld the three axles for a semitrailer in 20 minutes.

Most of the Schmitz-Gotha production is platform trailers, curtainsiders, and tarped dry freight pritschen, dump trailers, and container chassis. This means every trailer starts with a steel I-beam frame. The new frame fixture in the plant helps mechanize beam welding. The bottom flange of the I-beam is formed to the contour of the web by hydraulic cylinders in the fixture. After tack-welding, frames are shifted to three turning fixtures for full welding. The plant can weld 20 frames a day on a three-shift basis.

Two new 1,000-ton press brakes were installed in September to fabricate the new 400-Brinnell steels. Each press can handle 4250-mm (14-ft) long material, and they are installed side-by-side. When operated together, they can form 28-ft long pieces. The longest Schmitz steel dump bodies are 8200 mm (27 feet) long, so the two presses can form full-length parts. The dump boxes have 6 mm (1/4") floors and 4 mm (5/32") sidewalls.

Reduced Handling Time The extensive system of bridge cranes in the Schmitz-Gotha plant saves much on handling time. Operated by radio control, a crane can clamp onto a trailer frame, lift it straight up, shift it left or right, and swivel the frame from a north-south orientation to east-west or anywhere in between. A telescoping square tube provides a straight lift with no swinging or unwanted pivoting or twisting. The plant has a 12-meter (39-ft) ceiling height, and the crane has an 8.5-meter (28-ft) clearance under the hook. This makes it easy to leap-frog trailers on the assembly line.

After trailers are equipped with axles, tires, and landing gear, they enter the paint booth where the polyurethane primer and topcoat are baked at 801/4 C (1751/4 F) for one hour. Then they are rolled to the final assembly line where a drag chain moves them every 30 minutes.

At the first station, the air bags are bolted to the suspension arms. The preassembled brake system is bolted in place. This subassembly includes both the air brake reservoir and the air suspension reservoir, brake relay valves, antilock brake valves, and all the hoses for each axle. The rear bumper is preassembled with all the lamps ready to be plugged into the wiring harness when that is added. Installation of the air reservoir and brake subassembly and hooking up the electrical takes about 20 minutes on the line.

The final assembly line includes mounting of the dump body or installing the platform deck plus any curtainside body or dropsides and tarp framework for the pritschen bodies.

At the end of the line, the axles are 100% tested for proper brake application and air suspension operation at different operating pressures. Every axle is tested on a brake dynamometer as required by federal regulations. About 30% of the axles installed on Schmitz trailers have disc brakes and some have electronic controls.

The new Schmitz-Gotha plant is building 20 different types of trailers and semitrailers, and 2,000 variants of those specific models. Most orders are for one to five trailers. However, the new plant built one big order for 500 Schmitz trailers for a company in Russia.

Schmitz-Gotha started with 100 experienced employees in October 1997. Employment had more than doubled by the first anniversary. And the company is being equipped to more than double its growth in another year. If future growth for German companies lies to the East in Europe and Asia, then Schmitz-Gotha is well positioned to take advantage of that trend. o

Hard-Foam Sandwich Panels with Steel Skins Adhesively Joined on Schmitz Insulated Vans The Schmitz refrigerated trailer plant in Vreden in northwestern Germany is increasing its output after a long ramp-up period to work the kinks out of the automated equipment. This plant builds not only insulated trailers, but it also produces the insulated modular sandwich panels.

Called Ferroplast, the sandwich consists of an outer skin of hot galvanized steel that is prepainted with a baked-on acrylic finish and an inner skin of hot galvanized sheet plus an abrasion-resistant plastic coating. The hard-foam core between the skins is polyurethane having a density between 31/2 and 6 pounds per cubic foot, depending on the application. Besides being very durable, the Ferroplast panel keeps its insulating qualities better than fiberglass-reinforced-plastic skins over a foam core, says Peter Schmitz, president of Schmitz Cargobull. The metal skins are impervious to vapor intrusion, while fiberglass surfaces are not.

Modular Panel Assembly Schmitz says that Ferroplast refrigerated trailers have been proven over the last 18 years, with thousands on the road. The original trailers had full-length sidewall panels, but a later version introduced in 1990 is built with 33 modular panels, 11 for each sidewall and 11 for the roof.

Each modular panel is about 48 inches wide and adhesively joined to make full sidewalls and roofs. No rivets or other fasteners are used, and the adhesively joined insulated box has no full-length frame. It is true monocoque construction similar to US-made trailers. Tie-downs, logistics track, and second-decking fittings are embedded in the sidewalls.

Over 8,000 of these adhesively joined refrigerated trailers have been built during the last 10 years and are now on the road, Schmitz says. The price-performance ratio is much better than insulated trailers built with fiberglass-reinforced plastic-plywood skins, says Schmitz. FRP-plywood is very popular for reefers in Europe.

Adhesively Joined Panels The Schmitz reefer plant was described in detail in a seven-page article in the February 1993 issue of Trailer/Body Builders. At that time, it was producing just a few panels a day while the automatic panel-producing line was fine-tuned and while the adhesively joined trailers were being proven during millions of kilometers of carrier testing.

Today the Schmitz plant in Vreden is manufacturing 750 of the modular panels a day, 250 on each of three shifts. Each trailer requires a total of 33 panels. This modular panel production is supplemented with full-length panels of Ferroplast produced in the Schmitz plant in Berlin.

The most popular versions are 80/60 Ferroplast insulated vans with an 80 mm (3.15") thick roof and 60 mm (2.36") sidewalls. Compared with US-made reefers, the Ferroplast insulated van has a very thin front wall in order to squeeze 33 pallet positions inside a 441/2-ft van. Most Schmitz reefers have a front wall only 50 mm (2") thick. It is reinforced with steel to carry the 800-kg (1,765-lb) refrigeration unit. The standard refrigeration unit for European trailers is an ultra-thin unit that does not extend beyond the swing radius from kingpin to the front corners of the van. European regulations limit the maximum swing radius for any part of the front to 2,040 mm (80.3") from the kingpin.

Ferroplast Dry Freight Vans It is notable that another large portion of these Schmitz Ferroplast trailers are of a thin-wall design for use as dry freight vans. The most popular thicknesses for Ferroplast dry freight van sidewalls are 20 mm and 25 mm (.79" and 1"). Logistics track and tiedowns can be inset in the panel to provide a smooth sidewall surface. Schmitz says there are over 4,000 Ferroplast dry freight vans on the road assembled with adhesively joined modular panels. Some have been in use for 10 years.

Since Schmitz vans and reefers are chassisless, the integrity of the adhesive joints is critical. The adhesive quality is proof-tested electronically everywhere that the adhesive could affect trailer stability. The integrity of the foam core is critical also. Electronic controls on the polyurethane foaming equipment will shut down the line if the ratio of the resin and hardener varies by more than 2% plus-or-minus from the specified mix for that panel. Individual panels have different densities. The front wall foam is more dense than that for the sidewalls and the roof panels.

100% CFC-Free Foam for Sweden Most of the "CFC-free" urethane foam in the European Union is blown with an HCFC gas, and it has minute quantities of chlorine. European regulations permit use of this HCFC blowing agent until the year 2004. In Sweden today, however, the foam must be 100% free of CFCs. For trailers sold into Sweden, Schmitz uses a carbon dioxide blowing agent. Also, the Swedish trailers must pass a pendulum test that hits the front wall with a l g force. Swedish vans also are required to have 13 pairs of lashing rings in the floor in addition to any logistics track or tiedowns in the walls.

These export orders are important to Schmitz. Orders outside Germany account for 48% of the sales at Schmitz Cargobull, and 2% to 3% of sales are to Russia, so the financial crisis in Russia is of great concern. Schmitz says they have a good service network in Russia, with a trailer service shop every 200 to 300 km (152 to 200 miles). Service technicians are well trained, and some of them have come to the Schmitz service shops in Germany for training. Much of the consumer goods going into Russia is food, since 80% of the food supplies in Russia are imported. The Ferroplast modular panel body was designed for ease of assembly by outside body builders, says Schmitz. The upper side rail, for example, is a two-piece extrusion that clips together after the side panels have been assembled into a complete sidewall, and the roof panels have been glued together for a one-piece roof. o

Schmitz Licenses Volvo To Build Trailers in India Following the signing of a license agreement between the companies Volvo AB and Schmitz Cargobull, Schmitz semitrailers are being produced at the new truck factory in Hoskote, Bangalore, operated by Volvo India Pvt Ltd. The semitrailer assembly line at Volvo's Hoskote works has been designed with Schmitz production know-how in accordance with the Schmitz assembly layout concept.

Schmitz has developed two semitrailers especially for the Indian market. These European-standard trailers are designed for a particularly sturdy construction to meet the usual rough Indian operating and loading conditions and the roughest road conditions.

One trailer is a skeleton container chassis in the form of a steel frame without a floor or end wall. It is designed to transport one 40-ft or two 20-ft containers.

The other is a flatbed trailer with a corrugated steel floor welded to the chassis. It has container tiedown fittings to double as a container transporter. As an option, it is available with a bolted, easily removable steel end wall. Both trailers will be fitted with Volvo axles, ABS brakes, European-standard pneumatic brakes, and a pneumatic parking brake as standard. Both have modular structures and identical components, and can be built in either two-axle or three-axle versions.

The front section of the trailer around the kingpin and the approach plate are designed to assure damage-free coupling and uncoupling. As is standard in developed countries but rare in India, the height of the support legs can be adjusted using a crank lever. The Indian Schmitz Cargobull trailers are equipped with European-standard lighting equipment.

For the start of the production, the trailer components were assembled in kit form in Schmitz's home plant in Altenberge, Germany, and shipped to India. However, Schmitz and Volvo are implementing a program for sourcing the trailer components through local Indian suppliers working to European quality standards.

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