In 1992, the German luxury car producer, Mercedes-Benz, announced two major strategy shifts, toward a full line of automotive products and toward a globally diverse set of plans and activities. As part of this shift, Mercedes planned to build a major plant in Alabama for the manufacture of sports-utility vehicles. The case describes the actions Mercedes took following its decision to invest in a new plant in Alabama. Among the issues discussed are: Mercedes’ choice of Andreas Renschler to head the unit; its trans-Atlantic approach to product development; its rigorous method of hiring and training local workers; and its attraction of suppliers to Alabama. The case ends with Mercedes about to begin sales of the new vehicle, and explores issues of capacity enlargement.
