A turnkey production line for an automotive plant in Central and Eastern Europe was delivered under intense pricing pressure: the original forecast assumed a 5% loss, yet the project ultimately achieved a 7% profit. Erik Menke, who led the project together with his team, explains how the turnaround was achieved.
Project Brief
The customer was a manufacturing plant within a major automotive group, producing commercial vehicles and components for global markets. The plant employed more than 11,000 people, had an annual capacity of approximately 300,000 vehicles and produced around 4.5 million castings per year. An operation on this scale requires highly stable processes, precise planning and strict compliance with the group’s standards.
The project involved the delivery of a production line for a body component, worth approximately EUR 2 million. The scope covered full engineering, equipment manufacture, subcontractor coordination, on-site installation at the customer’s plant and ramp-up to series production.
From Risk to Profit
The primary risk lay in the project economics: extremely limited margin headroom, combined with the technical and organisational complexity of the delivery and dependence on subcontractor pricing and delivery schedules. Any uncontrolled change in scope could push both the budget and the timeline into the red.
The project team therefore simplified the organisational structure, clarified accountabilities, reviewed the supply chain and introduced systematic claims management. Every additional request or deviation from the original scope was immediately assessed for its cost and schedule impact and reflected in the contract terms. The project ultimately delivered a 7% profit while maintaining the required quality and customer standards.
The Project Manager’s Perspective
Erik, which specific decision do you believe contributed most to turning the projected loss into a profit?
“It was not a miracle; it was disciplined risk management from day one. The difference between the projected loss and the final profit did not come from a single decision, but from simplifying the organisational structure, assigning clear accountabilities, systematically evaluating risks every day and responding immediately to every change in scope. The project demonstrated that rigorous claims management and tight supply-chain control can turn around even an apparently loss-making contract — without compromising quality or the delivery deadline.”
The Project by the Numbers
Project Type: Turnkey production line
Contract Value: approx. 2 million euros
Final Result: 7% profit
Project duration: 15 months
Plant size: over 11,000 employees
Annual capacity: approx. 300,000 vehicles
Annual production: approx. 4.5 million castings