Workers at MAN's manufacturing hub in Munich can gauge how they're doing against rival truck makers on their breaks. The walls of one rest area are plastered with performance charts, many showing Scania near the top.
"Workers need to hear from their boss what MAN's goals are," Thomas Neureither, a MAN production manager, says during a tour of the plant.
MAN chief executive Hakan Samuelsson has tried to close the gap with his Swedish competitor, Europe's most profitable truck maker, by using techniques learned during 23 years at Scania.
Now he's offering to buy Scania for €10.3-billion (R96-billion).
Scania chief executive Leif Oestling, who has cut costs by emulating Porsche's production methods, has rejected the bid.
Volkswagen, the biggest shareholder in both companies, has encouraged them to reach a friendly agreement. Scania and MAN are competing to expand in eastern Europe, where economic growth is driving demand for heavy trucks.
Europe's truck market will increase by more than a third to 390 000 vehicles within seven years, Scania forecasts.
Volkswagen last month said it wanted to wrap its Brazilian truck unit into a Scania-MAN combination to compete with DaimlerChrysler and Volvo, the world's biggest commercial vehicle companies. Truck manufacturers earn more money per vehicle than car makers.
The supervisory board of Volkswagen, Europe's largest car maker, meets today to decide how to proceed. The board is also scheduled to vote on replacing chief executive Bernd Pischetsrieder with Martin Winterkorn, head of the Audi luxury car division.
MAN yesterday set a December 11 deadline for Scania investors to tender their shares and said it expected the European Commission to rule on the proposed takeover on December 6. MAN said it was "optimistic" about completing the takeover offer.
MAN is larger than Scania, ranking third in European sales behind DaimlerChrysler and Volvo.
Yet Scania has been quicker to adopt advances by car makers, especially Porsche, the most profitable motor manufacturer, to speed the development of new models and reduce costs.
A MAN-Scania combination would leapfrog to the top spot in European truck sales. Last year the two sold 76 469 buses and trucks of more than 16 tons in western Europe, compared with 56 900 units for DaimlerChrysler, the current leader.
"If this combination doesn't happen, there will be no chance to create a more efficient, effective producer of heavy trucks," says Peter Braendle, a fund manager at Zurich-based Swisscanto Asset Management, which oversees about Sf57-billion (R332.8-billion), including Scania shares.
Every Monday morning at Scania's factory complex in Soedertaelje, Sweden, several dozen managers gather for an hour, remaining on their feet while running through about 70 active projects.
"We have really a war room," says Urban Johansson, a Scania development manager. "The meeting is fast, visual. Naturally you are more active when you are standing."
At the Scania plant he manages, Melker Jernberg points at mechanical arms hanging from the ceiling and explains how they can rotate engines as they move along a conveyor system. The new technology was installed in October.
"Porsche is the only other company in western Europe using the Variolift," Jernberg says. It will further reduce the production time for engines that has already dropped to three minutes, 48 seconds from six minutes in 2002, he says.
Such initiatives have helped make Scania's profit margins the second highest in the truck industry, behind Paccar of Bellevue, Washington. Operating profit was 11.9 percent of sales in the first nine months of this year, compared with 7.9 percent at MAN. Porsche's fiscal 2006 margin was 23 percent.
Oestling and Sweden's Wallenberg family, Scania's second- largest shareholder, said on October 11 that the company could achieve more cost savings on its own than combined with MAN.
They also argue that analyst forecasts don't fully reflect Scania's growth potential.
Plans to concentrate development, parts production and final assembly in Soedertaelje within three years would save 300-million kronor (R308.2-million) annually and help the company make decisions more quickly, Scania said in a March 14 statement.
Europe is more dependent on trucks to deliver freight than the US. Almost half the goods in Europe are shipped by truck and 8 percent by rail, according to European Commission figures.
In the US, 28 percent of goods are carried by trucks and more than a third by train.
Freight shipments are rising as the EU expands eastward.
Economies in central and eastern Europe are expected to expand 5.3 percent this year, according to the International Monetary Fund.
That's about twice as fast as what's predicted in the 12 countries that share the euro.
"The impact of eastern Europe and other markets in swallowing the population of used and increasingly new trucks is enormous," says John Hernander, an analyst in Stockholm at Kaupthing Bank, which has an "accumulate" rating on Scania.
Joining forces with Scania would help MAN make the most of that growth.
To target demand in eastern Europe, MAN is building an assembly plant near Krakow, Poland, with an annual capacity of 30 000 vehicles. The trucks will be tailored for the region with fewer options, making them cheaper than MAN's western European equivalents. Scania is in almost every country in the region, after setting up a network of 100 showrooms and garages.
"The combination of MAN and Scania will position two of the strongest brands and successful companies within the truck industry into an even better position to grow profitably," Samuelsson said yesterday. "We are looking forward to continue talks within the time frame of our offer."
Samuelsson has already squeezed annual efficiency gains of up to 15 percent out of the trucks unit. He achieved that by simplifying production, reducing inventory and moving to a more limited palette of products, all techniques he learned while serving as Scania's production chief. - Bloomberg