The Budapest Business Journal spoke with Ekkehard Philipp, CFO of Mercedes-Benz Manufacturing Hungary Kft., and one of the managing directors at the auto manufacturer’s Kecskemét factory, about what winning the HIPA Local Partnership Award means, successes and challenges in doing business in Hungary, and what the future may hold.
How has the way Mercedes-Benz works with its Hungarian suppliers changed in the years since the Kecskemét plant opened? How has the number of Hungarian suppliers you use grown, and what plans do you have for further expanding their?
The plant cooperates with a number of European suppliers, of which more than 30 are registered in Hungary. They operate in the territory of the plant, at Kecskemét, and also in other parts of the country.
At the opening of the plant in 2012, the number of Hungarian-based suppliers was fewer than 20. The number increased due to the start of production of the four-door compact CLA Coupé in 2013, and most recently it has grown to more than 30 with the introduction of the CLA Shooting Brake in 2015. Both of these models are produced exclusively in Kecskemét for customers around the world.
Localization is very much linked to the ongoing expansion of Mercedes-Benz’ manufacturing operations in growth regions. It plays an important role to meet the demands of local customers and regulations. Our goal is to increase localization in our global production plants with every new model.
We always choose our suppliers based on the three criteria of innovation, supplier quality and partnership. Our traditional suppliers and others still have every opportunity to win contracts from us. Geographical proximity does, of course, play an important role to ensure today’s just-in-time/just-in-sequence production.
With respect to the production materials for the successor generation to the current compact cars, we are looking for suppliers who can supply both production sites in our production compound, that is Rastatt in Germany and Kecskemét in Hungary. This opens the door for our suppliers in Western Europe, either directly or as tier-n suppliers.
What sort of message does the success of Mercedes-Benz send to Hungary?
That you can be really proud. Two Mercedes-Benz passenger cars with this particular quality – the CLA and the CLA shooting brake – are produced exclusively in Hungary for customers all around the world. This is a real success story. Hungary is looking forward to a future within a common and strong Europe.
What are the biggest challenges facing the Hungarian economy, from your standpoint?
To my way of thinking, it is significant to make further developments of the dual education system, which was founded by Mercedes-Benz in Hungary. As the positive results show, it is also important to cooperate with further partner institutions, such as companies and schools.
The implementation of lean processes between public administration and companies is also an important factor.
Another success factor will become more important for Hungary: The relationship between companies and trade unions. To achieve sustainable solutions we have to work closely together as trustful partners in all topics.
You mentioned at the gala that you would be leaving Mercedes-Benz soon, but not Hungary. Could you tell us about your plans for the future?
This is correct. My wife and I have been living in Hungary since August 2012 and we fell immediately in love with this country and its people. Hungary has become our second home. So we decided to stay here. After the expiration of my expat-contract with Mercedes-Benz, I will leave the company, but not the brand. I will keep on driving a Mercedes-Benz! We are happy to stay in Hungary and thankful to have this great opportunity. I am very much looking forward to this big new challenge.
What does winning the award mean for you and for Mercedes-Benz Manufacturing?
I was deeply touched and proud at the same time. To receive this award, was indeed a very emotional experience I will never forget. This award is dedicated to my wife. She was and is my personal coach and supporter during my whole business life. She is my personal success factor and biggest friend, and the best thing that could have happened to me.
For me this award is like a milestone. After more than 31 years working in the management of Daimler, thereof almost five years in Hungary, this award is an obligation as well. I am really glad to work in this country and its people and to support and reinforce the positive development in Hungary also in the years to come.
This award is also dedicated to my colleagues at Mercedes-Benz in Hungary, and especially to those at Mercedes-Benz Manufacturing Hungary Kft. The award means that we are on the right path with the flexibility, the spirit of innovation and the speed of implementation at Mercedes-Benz in Kecskemét. That makes the difference. The success of Mercedes-Benz in Hungary proves us right: Mercedes-Benz decided to invest in a second plant next to our first site in Kecskemét.
But we also have to acknowledge that nothing can be taken for granted. “Who stops improving, will stop being good.” To remain successful in the future is a permanent challenge: “The best or nothing – A legjobbat vagy semmit”; not without reason is that the motto of Mercedes-Benz.