Last week, General Motors (GM) brought a cadre of journalists to its new assembly plant in Lansing, Mich., where workers build the new GMC Acadia, Saturn Outlook, and Buick Enclave SUVs. They let us work in the training area of the plant for an hour or so building wooden SUVs sized about right for a 5-year-old to drive. They use this mocked-up assembly line to train new workers.
All day long. Grab a handful of nuts, spin them onto a screw, and fasten them down with what is essentially a Dewalt power drill. No matter how quickly you work, the cars keep rolling down the line. If the cars are selling and the line is moving quickly, there's no getting ahead. And if you fall behind, you pull a cord to stop the line and suffer the shame of holding up your co-workers.
The work is dull for an important reason. GM has torn a page from Toyota's (TM) factory book. The company has standardized every task in the plant, making the jobs simple and repetitive in a ceaseless effort to strip out the constant of human error and to catch Toyota and Honda (HMC) when it comes to productivity.
Still Chasing Costs
While I was working on the line, I could see the real push and pull of what's going on with the United Auto Workers and the Detroit carmakers as they craft a new labor deal this summer—a contract that will be essential to the Big Three's ability to compete. Detroit is not only trying to wrest big-dollar concessions from the UAW, they're trying to wring out every hour of labor and dollar of cost from the company's assembly lines.
For the union workers on the line, chasing improvement is a matter of job security. GM has nearly matched Toyota when it comes to productivity. But costs are still out of line. In the past, some union workers saw productivity improvements as just another way to cut jobs. But given the pressure union auto workers are under these days, constant improvement may be the only way to preserve what they have.
Constant improvement is the Toyota way. Dale Wisniewski, a 23-year veteran of GM engineering who worked for a couple of years at the company's joint venture plant with Toyota in Fremont, Calif., says they copied everything they learned at the factory. "I can't think of a thing that hasn't been incorporated," he says.
If the union doesn't help GM match Toyota's costs, there could be dire consequences. Gary Cowger, GM's group vice-president for manufacturing and labor relations, insists that GM couldn't just move work to Mexico overnight. Union contracts force GM to negotiate plant closings and layoffs. But in the long run, if GM can't get its costs down, the company will no doubt look elsewhere. In the past two years, GM has closed several U.S. factories and opened a new one in Mexico. It's clear that assembly work is severely threatened by offshoring.
But if the union can make concessions on big cash-burners like health care, and continue to improve work on the line, they have a chance to save jobs in the U.S. Toyota, Nissan (NSANY) and Honda are, after all, adding U.S. jobs.
All in the Timing
Just in the time my team of journalists trained, we showed tremendous improvement. We first went out in groups of four with one supervisor, or team leader, who helped keep things moving along and helped if there was a quality problem or someone fell behind.
We were each given a task and about 70 seconds per vehicle to do it in. My first job was bolting the headlights and tail lights onto the car. The job requires fastening four bolts in total. The woman next to me had to bolt on the front and rear bumpers. That took eight bolts.
Because hers was a longer job, I lost productivity waiting for her. If we had spent an eight-hour day doing that, I'm sure she would have worked until her joints stiffened. Plus, she was so overloaded, we had to stop the assembly line several times. Wisniewski, our team leader, had to come over and help out to get things moving again. We finished just 21 wooden SUVs in 30 minutes. We were supposed to make 28. Of the 21 we made, 17 had defects. And we were only putting on a total of six parts.
Still Room for Improvement
After working on this job for 30 minutes, we took a break and looked at all the jobs in our workstation. Every team does this in an effort to clear bottlenecks, boost productivity, and fix quality problems. We decided I'd do the front bumper and headlights. That meant screwing on six bolts in about 70 seconds. The woman who kept falling behind would do the tail lights and rear bumper. Six bolts for her now, too.
With the jobs evened up, we went back out on the floor, cranked out 13 cars in 15 minutes—just one car off our assigned pace—and our defects dropped to just four. That was still in the red under GM's grading system for line work (you're only green if there are no defects), but it was a vast improvement.
Keeping the Jobs
It's time for a bit of full disclosure. I asked Wisniewski if the simulation we did was really close to an assembly worker's job. He said it's very close, but the real UAW workers have about 45 seconds for each task and making real cars is, obviously, more complex. In other words, they went easy on us. But in the simulation, GM trained us to do every job on the assembly line.
That leads to another concession management wants this summer. They want to do away with the restrictive work rules in today's union contract and be free to move any factory worker to any spot on the line as the Japanese do. If one job is slow, they shift workers around to boost productivity even further. And if that results in more job cuts, so be it. That's not what the union wants to hear. But those kind of changes may be the only way to safeguard what jobs they have left.