Hungary’s largest factory has been directed by Peter Kössler since October 1. During this interview with The Budapest Times he talked about his first impressions and the perspectives of Audi Hungaria within the Audi Group.
What is the minimum time you are surely going to spend leading Audi Hungaria?
My contract, as is usual practice at AUDI AG, is fixed for three years at first. My predecessor, Thomas Faustmann, also began with such a contract. In his case the initial three years ended up becoming 13. So now “let’s wait and see”, as we say in Bavaria, how long it will be in my case. For me my new position is not a temporary engagement for sure. When you consider that you need at least a half or a full year for the learning period in the new position, it’s clear that three years is really the minimum.
Have you been working with Hungary before?
Of course. I was already in touch with Audi Hungaria in my other functions within AUDI AG for a long time, namely from the time when the assembly of the TT started. I used to be the planner responsible for assembling parts, namely doors and flaps, and during that time I was also responsible for planning a part of assembly in Győr. Audi Ingolstadt is the parent company responsible for the one in Győr. We intensively supported the construction of the location in Győr. Many of my former colleagues are working here in senior positions. I have always followed car manufacturing in Hungary, so it’s not something new for me. As part of my role in AUDI AG’s Supervisory Board I have participated in important decisions, of course. One of them was the decision to build complete vehicles in Győr. I was involved in the whole decision-making process from the beginning. For this reason I was looking forward to my new challenge even more, namely working up close with the plant, which I already knew very well.
What are your first impressions?
Well, there was nothing unexpected for me. The impression that I already had about Audi Hungaria was completely justified: this is a highly competent factory with highly motivated employees. There is something here that I always like to experience: people are working wholeheartedly here. When you are talking to the employees you see the sparkles in their eyes, the fact that they are having fun in their jobs and are excited about creating something and continuing successful projects here. I think that this spirit really can be felt and it makes me very happy to have this kind of experience. This makes work more enjoyable. Success will only happen when people are working wholeheartedly. There is one new area for me, which is engine production. For this reason I used my first few weeks to get to know this process better. This spirit can be felt quite intensively in that area as well.
How did you get to know the city of Győr?
At the time when Audi Hungary began automobile manufacturing, the nice flight connection between Manching and Győr/Pér was not there yet, so you needed to fly through Vienna, which usually meant that you had to stay overnight [in Győr] and you had a chance to get to know the city centre a little bit. However, that was 15 years ago. Then the Manching to Győr/Pér connection was established and we started to fly in the morning and come back again in the evening. This meant that we saw nothing of the city any more; everything was just about work. On my first visit back in Győr again I was totally surprised how it has developed in the past 10-15 years in an enormously positive way.
Have you already moved here?
I have moved into a small semi-detached house in Győr. Unfortunately my wife did not accompany me because she is working in Ingolstadt. However, she works only part-time and so she will be staying with me here often, also on weekdays.
The fact that you have chosen to live in Győr shows how serious you are about your engagement in Hungary.
Yes, I am definitely serious about it. Some people asked, “Why don’t you move to Neusiedl in Austria, like your predecessor?” I simply answer: “If you do something, do it right!” I also began with my Hungarian studies relatively quickly. I believe that local people respect it when you at least try to learn Hungarian, at least that you can pronounce the names right or say a couple of sentences. Of course, I am not expecting to speak perfect Hungarian within three years, I think that would be too much to ask for. I may be very motivated but I like to be realistic.
What are your first impressions of the Hungarian partners?
I have already had a nice long conversation with the mayor of Győr, Zsolt Borkai. I feel that he is very motivated for co-operation, and also a very competent partner with whom you can discuss very well the different economic and infrastructural topics. Just like I was used to in Ingolstadt. For me as a factory leader the partnership with the city is very important.
Have you already had the opportunity to meet the Minister of Foreign Affairs and Trade, Péter Szíjjártó, who has had a good relationship with Audi Hungaria?
Yes, I had a very positive impression after that conversation too.
What is going to change in the factory? Every CEO is different, has different “priorities” and there are certain topics that are especially close to their hearts.
Within the framework of this deliberately chosen and strategically aligned rotation between the three plant directors I came here as the “vehicle man”. My predecessor, Thomas Faustmann, was more of an “engine man” due to his professional experience. We are already the largest engine production plant in the world, now the goal is to keep this position and to further develop ourselves. There will be no further big jumps on our way. The focus in Audi Hungaria will be much more on finding out how we will make vehicle manufacturing, which is still a relatively young area here, exactly as stable and economic as the engine production already is. The change of management that we have just completed is implemented surely in this context. However, the mutual exchange of executives is also supposed to bring the locations closer to each other.
What does this specifically mean for Audi Hungaria?
I don’t think that this will have such a significant effect on our daily business. Quality and productivity are processes that are clearly defined. But as you already mentioned, people are different. My focus is just there: on the people. I proved that in Ingolstadt very much as well. I am a great team player. I like to work with other people and I lead a very open management culture. I really like to hear criticism as well. I believe that only criticism and critical approach to the different topics can help to reach the optimal state. This might make a bit of change necessary in the local management culture – however, I am saying this without knowing exactly how Thomas Faustmann was leading.
Are you going to try implementing a couple of projects in Győr that have already proven to be successful in Ingolstadt?
Of course, people always take something personal with them. In Ingolstadt environmental protection was a very important issue. We have set a target in Ingolstadt to become a CO2-neutral plant, and we have gone far on that road already. I have seen very positive circumstances at Audi Hungaria concerning this issue as well. We will implement more solar panels in the near future and the topic of geothermic energy is also on our agenda. We have ideal prerequisites to be able to move to the top also in this context. Another topic in Ingolstadt was the so-called “Imagine” Process. Within this project we tried to bring different functional areas closer to each other and to dissolve the boundaries. The name of the project was inspired by John Lennon’s song, in which he is singing about a world without borders. We tried to implement his vision for Audi Ingolstadt, to tear down the boundaries between the areas and work together for one goal. This will surely be an important topic here as well: to try to make decisions together and then work for bringing our common decision to success together.
Let’s talk about daily business. How did you finish the business year that just ended? What were the last steps?
We are expecting to have a very positive annual closing, even if not mentioning any specific numbers. We will have a top result again in vehicle manufacturing. For engine production we are likely to reach at least the result of the previous year, however we suppose that we will even supersede it.
What expansions and handoffs do you expect in 2016?
One highlight for 2016 is already fixed. A few weeks ago in Budapest I signed a funding agreement for the further development of our engine production. Now it’s time to bring this contract into life. These projects are going to create a bit more than 300 jobs. Furthermore, we are constantly working on the substance of our products in automobile manufacturing, in order to make them up-to-date. These will be the most important topics in 2016.
Do you foresee any larger round numbers for development in the number of employees?
The next few years will be about stabilising before we begin with anything new. I believe that it’s important to achieve sustainable growth. We have many new employees at our site who need to settle themselves and get integrated into Audi Hungaria. The vehicle production is established with their work. Now we need to consequently consolidate and expand the existing processes before we reach the point of a new product introduction and need to start with something new. In engine production we are looking forward to start new engine projects, for which we have signed the funding agreement with the Hungarian government. Now these projects need to be finished exactly according to their timeline.
What are the new developments that are possibly going to be introduced in Győr due to the exhaust gas problem?
First of all we have to state that everything coming from Győr is completely in order. The issue that happened is a problem with the engine control, not of the engine structure itself. This is true for all the engines produced at Audi Hungaria. I assume that the Volkswagen Group will handle this problem very professionally. They will find technical solutions that are really sustainable and according to the guidelines. Accordingly I assume that there will be no major consequences for Audi Hungaria.
Not even positive ones? An intragroup higher cost pressure could possibly lead to a better position for Audi Hungaria.
The whole Volkswagen Group and especially the AUDI AG always used to be cost-sensitive. We need to respect the overall responsibility, and Audi Hungaria has a solid place within the world of Audi. The same is true in the world of Volkswagen. The current division of labour between the different locations is well-planned and based on many more factors than just the current costs.
So the exhaust gas problem will not lead to major changes in the division of labour?
We have grown thanks to the growth of AUDI AG. This is what made it necessary to open new manufacturing plants. We have done that in China and also in Europe with the plant in Győr, and currently we are doing the same at the North American zone with our location in Mexico. There are strategic reasons behind these steps. Where can you do what, where do you need more production capacity and so on. The diesel issue does not influence these plans in any way.
What about impulses of future technologies? The keyword is e-mobility. Could it lead to the acceleration of processes? In our last interview with Mr Faustmann shortly before the exhaust scandal he already pointed out that certain preparations are in progress and that Audi Hungaria will be ready once the group decides to go ahead with production.
I can only repeat the same thing. We are of course dealing with this topic at Audi Hungaria and we are part of a strategic process due to that. However, I would prefer not to shoot out everything about this topic in our interview. Let’s just let ourselves be surprised over what the future brings. Maybe we will hear more about it in a very short time.
How would you evaluate the circumstances in Hungary? What are the areas where you say that action needs to be taken?
I think that Hungary is very, very investment-friendly. The economic climate is very attractive. You can see that through the positive development both at Audi Hungary and Hungary itself. We never regretted that we decided on Hungary and we are constantly investing more and more. That already speaks for itself. In the meantime we already invested seven and a half billion euro in Hungary. The AUDI AG would not have done that if they were not convinced about this location and about this country. When compared with other locations the labour costs in Hungary are still very favourable, just like before. The infrastructure is good. Employees are well-trained and they have a high level of qualifications. Last but not least, thanks to our collaboration with universities and colleges we always receive enough workforce to be able to achieve what we want to.
So your growth aspirations are not limited by the labour market?
We are making plans for the long term in this aspect too and we are trying to invest in the future for the long term. A good example was the opening of the Audi Hungaria School last year. Then the topic of dual vocational education, the co-operation with colleges; behind that there is also the strategy to educate such workforce that we will be needing.
Taking into account all these measures are you finally able to get the employees that you need?
Up until this time we have nothing to complain about.
What about the fluctuation towards Western Europe?
Fluctuation is a challenge, of course, which is faced by all employers. This is a perfectly normal phenomenon that we also have in Germany. It’s not like someone in Germany who has a job would never want to give it up and to move on. Fluctuation does exist there as well. For mobile people other countries and other companies can always be attractive. The group sees that partly as a favourable phenomenon and does support it. So we deliberately offer the Hungarian employees to go to work for a few years in Germany, Mexico or China. Our employees like to take advantage of this offer. This is part of the internationalisation process at the Audi Group.
Isn’t it difficult to motivate the employees who have spent some time in Germany to return to Hungary again? Clearly they earn much more for the same work in Germany.
You also have to consider that the cost of living in Hungary is clearly lower. If you would like to build a house in Ingolstadt, which I know very well, or build a house here – we are talking about completely different dimensions. If you take all these factors into account then the salary gap is not that wide any more. You always have to consider the whole package. In this sense it’s very important that the quality of life in Győr clearly improved in the past years. Győr nowadays is a particularly liveable city.
So it’s not only the pay packets that influence people to stay here?
Life in Western European countries is more expensive in comparison. However, it’s not all about money, your home country offers a surplus that you are able to work where you have been born and where you know the environment. I believe that when all these things are reasonably OK, then people are happy to stay here. Of course, there will always be employees who come to Audi Hungaria to receive a good training and spend a couple of years working with us and then decide to move on. However, this is an absolutely normal process in market economy. We also have partner agreements with other companies. When someone decides to develop further in one of those companies, why not! There are also employees who come to us from other companies. As long as these two processes are in a reasonable proportion, this is no problem at all. The current balance that we have here is not really different from the situation in Ingolstadt. The local fluctuation rate, as I have learned, is only a little bit higher.
So there is nothing standing in the way of Audi Hungaria’s further development!
It’s very important to be moderate about growth. You always have to know what can you expect from a site, how growth can be made sustainable. The growth must always be in proportion with the development of local prerequisites. So here you have to be considering the whole package as well.
So when you met Mr Szíjjártó, you did not bring a wish list with you?
In the meantime we have already met three times. We spoke about the future of the automotive industry in Hungary and about the contributions that companies are able to make, but also about what the government can chip in to achieve the plans.
And what is the contribution that the government should make?
To keep up an investment-friendly climate and make sure that they can guarantee a high level of education. It’s also important for the statements made to be reliable and that the right infrastructural measures are made, which will move the country forward also as a possible location for further investments.
These are points indeed that only need to be continued.
Yes, there are no drastic changes needed. Based on what I have experienced in my first weeks spent here, I can say that in my view everything is going in the right direction.
Peter Kössler was born in Ingolstadt, Germany, in 1959. After finishing his studies as a power-equipment electrician and as a precision engineer at Munich University of Applied Sciences, he started his professional career in 1986 as a trainee at the AUDI AG Ingolstadt. After holding several positions as a team and project leader in production and manufacturing planning, from 1997 onwards Kössler was responsible for the production planning of assembly parts and the structural planning of the pressing plant. In 2002 he was appointed manager of the pressing plant in Ingolstadt. After all the Audi pressing plants were consolidated worldwide, he became the leader of the pressing plant division. Kössler managed the Audi factory in Ingolstadt from 2007 to 2015, responsible for all the areas connected to production and local topics such as plant logistics, environmental protection and work safety. In October 2015 he became Chief Executive Officer of Audi Hungaria Motor Kft. In addition, Kössler has been a member of AUDI AG’s Supervisory Board since 2009.
Audi Hungaria ‘not cutting staff’
Despite its parent company cutting investments, Audi Hungaria is not planning layoffs and is still continuously seeking professionals with specialised skills, daily Népszabadság wrote on Monday, citing top managers at the plant in Győr. Peter Kössler said that despite the emission scandal affecting Volkswagen cars – the parent company of Audi – Audi sales have not decreased. He said diesel engines are not being pushed to the background, there is just the usual seasonal fluctuation in sales between diesel and petrol engines. Kössler did not disclose production and financial data for Audi Hungaria in 2015 but said they were better than in 2014.