UUSIKAUPUNKI, Finland (NYT) — Outsourcing to less-expensive places like India, China, Taiwan and Eastern Europe became routine for many American and Western European companies over the past decade. But what’s Porsche doing in Finland?

Since 1997, Porsche, the German sports car manufacturer, has headed north to this tongue-twister of a Finnish town instead of east, a move that helps explain why it is still making money even as so many automakers are tapping government aid to weather the worst industry downturn in a generation.
During the fat years, Valmet Automotive cranked out thousands of cars in Uusikaupunki to supplement Porsche’s production in Germany. Now, the assembly lines here are slowing, which means that Valmet, rather than Porsche, is bearing much of the burden of the global auto industry’s distress.
“We are a lean organization, but at the end of the day, there is a threshold here,” said Ilpo Korhonen, Valmet’s president. “We can’t run like this forever.”
Porsche, the maker of the celebrated 911 two-seater and the Cayenne sport utility vehicle, developed a production system — call it über-outsourcing — that is inspired by Japanese models of lean manufacturing and the kind of contract manufacturing common in the electronics industry. But Porsche has taken the notion even further and, at least so far, its highly supple system is molding well to the contours of an unforgiving world economy.
“This crisis will be the absolute test for the Porsche model,” said Jürgen Pieper, co-head of research at Bankhaus Metzler in Frankfurt. “Right now, Porsche is anything but a fair-weather company.”
Nothing symbolizes Porsche’s ability to steer through the storm more than its plans to introduce the Panamera, an entirely new sports car, during this difficult year for the industry.
Fulfilling a long-held dream of its founding family, the company will unveil a four-door sports car, which aims to blend Porsche’s legendary flair with a little modern functionality, at an auto show in Shanghai on April 19. Porsche designed the Panamera, which will be made in Leipzig, with one eye on Asian markets, where wealthy customers often have chauffeurs and want more space in back than a traditional sports car can offer.
Like every automaker these days, Porsche has had to buckle down and find ways to save money, and it is nipping and tucking where it can to save €100 million, or $130 million. In the first half of its current financial year, which ran from August to January, Porsche’s sales tumbled 12.8 percent, to €3.04 billion, as deliveries fell 26.7 percent. It also booked €6.84 billion during the period from the financial derivatives it used to secure control of Volkswagen.
But Wendelin Wiedeking, Porsche’s chief executive, has assured the 2,500 workers at its Stuttgart plant that their jobs are safe, securing a vital flank in a country where workers are represented on the board.
Automakers universally outsource production of parts or sections of vehicles, and some even contract for the assembly of small numbers of automobiles. This strategy shifts part of the financial risk of a downturn onto suppliers, since a falloff in demand forces manufacturers to curtail production of cars, but not spark plugs, headlights and the like.
Porsche, though, is notable for using an outside company, Valmet, to assemble one of its main product lines, the Cayman, and its convertible sibling, the Boxster. In some sense, the innovation makes Porsche the only major virtual vehicle manufacturer, a company that designs and markets sports cars without actually cranking them all out on its own production line.
The bread and butter of Porsche’s work in Stuttgart is the classic 911 sports car, but with demand for that model now falling, it is pulling Boxster production out of Uusikaupunki back to Germany. Though the system creates fiendishly complex logistical challenges, Stuttgart can keep running at capacity, evading the industry’s hoary problem of covering the fixed costs of factories and labor.