General Motors: Open All NightJames B. Treece
In 1985, when Detroit was losing the battle over small cars to the Japanese, managers at GM's Lordstown (Ohio) assembly plant set an ambitious goal: Instead of closing or converting to more profitable truck production, they wanted to boost output from 260,000 to 400,000 cars a year. By 1987, thanks to a new, more efficient paint shop and lots of overtime, Lordstown was cranking out 350,000 cars a year. All through the recession, strong demand for its Chevrolet Cavaliers and Pontiac Sunbirds kept Lordstown running full bore. Still, GM wanted more.
So now, it's raising the ante again. "We're going to build more cars on one assembly line than any plant in the world," says Michael J. Cubbin, manager of General Motors Corp.'s Lordstown complex. In early August, Lordstown will become GM's first North American plant to go to round-the-clock production--aiming to turn out 450,000 cars a year in a more flexible factory.
It will not be the last. When GM's directors installed John F. (Jack) Smith Jr. as president on Apr. 6, his mandate was clear: remake North American operations into a profit powerhouse. Round-the-clock factories and flexible, lean manufacturing were cornerstones of Smith's strategy when he ran GM of Europe in the late 1980s. There, he put three assembly plants on round-the-clock schedules, pushing output beyond what had been considered full capacity without spending anything extra on equipment. In North America--where it lost $7.1 billion in 1991--GM plans to shut underutilized plants, consolidate basic car chassis, and shift work to more flexible, higher-volume operations. By 1994, the auto maker expects to be able to build 14% more small cars in four plants than it did in seven when sales last peaked in 1986.
The round-the-clock strategy may help Detroit close the manufacturing-cost gap with Japan. Chrysler Corp. recently adopted this approach at the St. Louis plant that builds its popular minivans, which bring in an estimated profit of $4,000 apiece. "You get 50,000 more minivans for nothing," boasts Chrysler Chairman Lee A. Iacocca. "We've got to get efficient, and that's one big way to do it." GM's Saturn plant in Spring Hill, Tenn., may add a third crew later this year. And a GM plant in Arlington, Tex., will stay open while one in Ypsilanti, Mich., will close, partly because Arlington workers voted to go round-the-clock.
DEAD END. GM's approach is far different than it was in the 1980s. Then-Chairman Roger B. Smith wanted to build workerless factories run by robots and other automated machinery. This time, rather than firing workers, GM will boost Lordstown's production by hiring back 1,500 who were laid off when it closed a commercial van plant in March. There will be no overtime, and workers will put in four 10-hour shifts per week (table).
In short, GM's goal is to get a better return on its enormous capital investment by running the place full-tilt and redesigning cars for more efficient manufacturing. Currently, the company makes seven small cars on three "platforms," or chassis, that vary by only two inches in wheelbase length. By 1994, it will use a single small-car platform so that high-volume plants can build a wide mix of cars to meet changing demand.
To upgrade Lordstown for flexible manufacturing, workers are installing refurbished body-shop equipment that will weld the floorpan, sides, and roof into the basic frame of the car. Salvaged from GM's Janesville (Wis.) plant, which switched from cars to trucks in 1990, the robots and other machinery can easily be reprogrammed. Workers are also being trained to handle a variety of tasks instead of endlessly repeating a few rote jobs. When the new body shop starts up on May 30, its archaic predecessor will be shut, and Lordstown will be capable of building four different models. Cubbin insisted the gear be running before 24-hour work starts, to avoid changing too many things at once.
Still, putting the round-the-clock strategy in place can be as difficult as replacing a race car's pistons during the Indianapolis 500. Because Lordstown's machinery will operate more hours per week--turning out some 82 cars an hour--preventive maintenance is critical. In the early 1970s, an attempt at round-the-clock work at GM's Norwood (Ohio) plant fizzled in part because the company didn't schedule enough repair time. Logistics will be a nightmare, too, from scheduling just-in-time deliveries of parts to juggling seven-day-a-week shipments of finished cars so they don't arrive at closed dealerships.
PRETTIER PICTURE. Most important, the new regime will require the full support of the plant's work force at a time when GM's relations with the United Auto Workers are strained. But the union leadership has long urged U.S. carmakers to rehire laid-off workers instead of relying on overtime. And that's what will happen at Lordstown--with the union's blessing. Twenty years ago, after GM tried to boost production of Chevy Vegas to a Chaplinesque 100 cars an hour, Lordstown arguably had the worst labor relations of any auto plant--maybe of any plant in America. But in July, 1991, workers in UAW Local 1112 voted overwhelmingly to approve 24-hour production. "We've matured, both labor and management," says Jim N. Graham, a skilled-trades worker. "Now, most of us on both sides have kids in college, and if we screw up, they won't still be there."
Lordstown got the idea for the new schedule from a GM plant in Belgium. During local negotiations for a 1990 labor contract, Cubbin and UAW Local 1112 agreed that workers were being worn down by too much overtime. With a go-ahead from GM and the UAW, two management and two labor representatives went to Europe. They liked what they saw in Antwerp, where Jack Smith had merged a small plant with a larger one in 1988.
GM's top brass approved Lordstown's plan, and UAW leaders went to work. Committeeman Harry L. Johnson met with groups of 300 skilled-trades workers, who were reluctant to give up overtime pay of about $190 a week. But the steel-mill valleys of northeastern Ohio are labor territory. "Maybe 70% didn't like losing overtime," says Johnson, "but the same 70% liked keeping the jobs of their union brothers and sisters."
Cubbin and his UAW counterparts put together a 500-point plan, covering everything from modernization to training. They let workers, including those from the van plant, choose their shifts and departments based on seniority, as the national labor contract requires. Then, the UAW, not management, interviewed all 7,000 workers to find out what they wanted. Now, the union is matching workers to the available jobs on the shifts they requested.
Workers with seniority opted for either the daytime crew or the weekend "swing" shift--which will earn them about $100 more a week. Tuesday through Friday nights is the least-popular shift. Those workers will make only an extra $50 a week--and Friday night high-school football games, a big draw in the Lordstown area, will be out of the question. To ensure stability, no one will be allowed to change shifts for the first six months. The peculiar timing of the weekend shift--days Friday and Saturday, then all night Sunday and Monday--means those workers will face jolts to their body clocks akin to jet lag. A nutritionist is schooling them in how to eat to minimize the problem.
The changes at Lordstown are just the beginning. Before it creates a truly flexible factory, the world's biggest manufacturer has some major design work to do. For example, some GM lines install the instrument panel through the windshield space, while others attach the windshield first, then slide the instrument panel through the doorway. In the future, engineers will make sure a wide range of cars is designed to be assembled in a common sequence, and factories will have to be laid out alike so that different models can be built interchangeably. "We have to put in the flexibility we need, since our ability to forecast demand is not that great," says Vice-President Thomas J. Davis, who, as Lansing Automotive Div.'s general manager, is GM's small-car czar.
LESS CLUTTER. Consolidating car platforms will be a big help. With different skins, suspensions, and other changes, models built on a single platform will vary in looks and handling but will be easier to make. They'll share more components and use fewer components overall. For example, when the Pontiac Grand Am, the Oldsmobile Achieva, and the Buick Skylark were converted to the Chevy Beretta's platform last fall, the front bumper went from 33 parts to 17. In all, the Lansing plants that make these cars use 3,800 parts, down from 4,800 a year ago. And they're making 57% more cars per employee now than in 1985.
When Lordstown shifts to its new models in 1994, it should reap similar gains. That, together with the work-schedule changes this year, may make the plant's once-ambitious production goals as outdated as the Vega.
GM'S FACTORY OF THE FUTURE As part of its new manufacturing strategy, General Motors plans to make its assembly plant in Lordstown, Ohio, a model for high-capacity, round-the-clock operations PRODUCTION To boost output by 18% to 450,000 cars a year, Lordstown will add a third crew of 1,500 workers. One group will work 6 a.m. to 5 p.m. Monday-Thursday; a second will run 5:30 p.m. to 4 a.m. Tuesday-Friday. The third crew will work 6 a.m. to 5 p.m. Friday and Saturday, then 7 p.m. to 5:30 a.m. Sunday and Monday MAINTENANCE Preventive maintenance will be squeezed into the two-hour periods between shifts and the production gap Saturday nights and Sundays AUTOMATION GM is modernizing part of the assembly line, but, overall, no new equipment will be needed to raise output INVENTORY AND DELIVERY Suppliers will have to rearrange shipping schedules to make just-in-time deliveries of parts nearly all weekend. GM has to arrange transport of finished cars so that they don't arrive at closed dealerships on weekends FLEXIBLE MANUFACTURING Over the next two years, Lordstown will prepare to build a more flexible mix of new models that will have fewer parts and more standardized assembly procedures. That will mainly require changes in design and engineering