Blending Finnish and Italian Flair

It is testament to the Finnish spirit that diesel engineering force Wärtsilä NSD, having suffered bruising financial results in 1998, has staged an effective fightback based in part on tactical change and in part on increased control of every theater of its operations. As the latest expression of the corporation's growing influence on the industry in Europe, the famous Grandi Motori Trieste name and its vast engine manufacturing complex on Italy's northeastern border with Slovenia, have been subsumed into the Finnish-controlled group and retitled Wärtsilä NSD Italia. Occupying a total area of 550,000-sq.-m., including 150,000-sq.-m. under cover, the Trieste plant is one of the most extensive in the world. But last year's total engine deliveries of 303-MW paled by comparison with its latent capacity. The new Finnish-headed management has wasted no time in setting about measures to raise productivity and boost net returns from what surely ranks as one of the jewels in Europe's heavy engineering crown. As a frontline objective, integration of the plant into the group's international manufacturing network has seen the application of Wärtsilä NSD's 'focused factory' philosophy. This is most graphically expressed in its selection for the manufacture of the potent, Finnish-designed Wärtsilä 64 engine, the world's most powerful medium-speed diesel. At the same time, certain merits have been perceived in blending the concept of product concentration with an involvement in distinct categories and markets. Drawing on the skills base, capacity and an indigenous, in-depth technological capability, reflected in the earlier GMT engine range and the now-absorbed Diesel Ricerche development company, Wärtsilä NSD Italia will pursue a well-rounded business approach. The production remit covers Sulzer RTA two-stroke types, Wärtsilä 64 and Sulzer ZA40S four-stroke medium-speed designs, and also high power-density engines intended for fast ferry transportation and naval applications. During this writer's recent visit to the establishment, steps taken by the management team led by Johan Stoor to put the plant on a sounder footing were clearly in evidence in aspects of the work organization and manufacturing arrangements. In addition, the strengthening of the product platform for the future was apparent in the production of blocks for the first of the compact new Wärtsilä 26X type, and in the readying of the first Wärtsilä 64 engines for shipment. It was also evident in the endurance trials of an X-type engine and in the Orimulsion fuel trials with a Wärtsilä 46 in the test cells. Furthermore, continuity was expressed in the lineout of Sulzer ZA40S machines and two-stroke models such as the Sulzer RTA62U, and in the production of Wärtsilä 46 engine blocks for the Turku plant in Finland. The fact that the Italian factory's program this year also includes newbuild GMT-series machinery for Venezuelan frigates and overseas power stations demonstrates responsiveness to the client markets, although the longer-term aim must be to widen the reach of the Wärtsilä NSD-grown products. Although the workforce has been cut, the commitment to the Italian plant is patent in the investments made to support efficient manufacturing of the Wärtsilä 64 engine, for which serial production has been implemented on the basis of the initial tranche of 11 contracts, and in the bolstering of Trieste's role in the naval and high-speed commercial vessel propulsion sectors. It is also geared-up to produce the RTA60C low-speed engine, unveiled at the recent NorShipping event in Oslo, and especially significant as a launchpad for the future-oriented RTA-flex system and 'intelligent engine' concept. Building on the august Diesel Ricerche team, Wärtsilä NSD Italia will also play an important role in the group's technology activities. Wärtsilä NSD had secured an initial 40-percent stake in GMT in 1997 in conjunction with the merger of Wärtsilä Diesel and New Sulzer Diesel, the latter having been previously owned by Fincantieri. Earlier this year, the state-owned shipbuilding organization signed-over its 60-percent shareholding in the engine building operation to Wärtsilä NSD, giving the Finnish-owned group outright control of the business and the huge complex at Bagnoli della Rosandra. The fact that a companion element in the agreement raised Fincantieri's holding in Wärtsilä NSD from 12.2-percent to 15.4-percent should help ensure that the Italian yard group remains a key customer of the Trieste plant and the wider Wärtsilä portfolio. Goals for the future relate not simply to output and productivity, but also to cutting delivery times for all engine types. Johan Stoor and his colleagues at Wärtsilä NSD Italia are intent on reducing lead times for two-stroke models to 20 weeks from the 32 weeks typical right now, under the aegis of the strategic plan for the 1999-2004 period. He is also set on getting lead times for in-line models of the Wärtsilä 64 down to just eight weeks, and to be able to offer 10 weeks for vee-form engines. When Stoor arrived at the factory two years ago, the unit shipment size was 200 tons, constrained by the nature of the road access over the short distance to Trieste harbor. The limit has since been upped to 300-tons, but further improvements should enable pieceweights of 500-tons to be rolled-out of the plant and transferred direct to the waterfront by November this year. Not only will this better match the pure assembly capacity of the works, it will better suit the lead time requirements and man-hour economics of recipient shipyards able to handle engines in complete form. Closely following the wholesale purchase of GMT, the Finnish corporation bought out the Stork group's 40-percent holding in Wärtsilä NSD Nederland, giving it 100-percent control of the Dutch company and one of Europe's most extensively modernized medium-speed diesel manufacturing facilities. The Finnish organization had originally obtained a 60-percent interest in Stork-Werkspoor Diesel in 1989, renaming it Stork-Wärtsilä Diesel. The subsequent styling of the company as Wärtsilä NSD Nederland was a mark of the strengthened Wärtsilä brand identity and the absorption of New Sulzer Diesel. Given a solid foundation to the long-term manufacturing program at the Zwolle plant in the Netherlands, a new Wärtsilä 38B design has been developed as the group's future standard-bearer in the 380-mm bore category. The B-engine offers a substantial advance in power rating, to 725-kW per cylinder from the 660-kW/cyl of the original Wärtsilä 38 type, but with enhanced environmental and production features. Far-reaching restructure implemented in the wake of last year's heavy losses had a positive impact on Wärtsilä NSD Corporation's results for the opening four months of 1999. The operating loss was trimmed to Eur 0.2 million, from the Eur 35.2 million deficit of the corresponding period of 1998.