GM's New Plant Isn't Music to Its Ears
Problem-prone startup of the new Cavalier and Sunfire illustrates what not to do when downsizing, analysts say
LORDSTOWN, OHIO — ALONGSIDE the Ohio Turnpike stretches a gleaming whitewashed factory that General Motors Corporation claims can turn out cars at a pit-stop pace.
These days, though, the recently revamped plant at Lordstown, Ohio, is better known for comedic outbursts of the Flintstones theme song rather than state-of-the-art cars.
Indeed, the slapstick, stop-and-go launch of the new 1995 Chevrolet Cavalier and Pontiac Sunfire at this facility illustrates what not to do when downsizing, say auto industry analysts and GM employees.
GM began making the two car models here last August under a manufacturing system that promotes quality by encouraging workers to halt the assembly line when they spot an imperfection. By yanking a cord, a worker can stop the line and activate loudspeakers that blare one of several melodies: ''Cancan'' identifies one section of the assembly line, and theme songs for ''The Addams Family'' and ''The Flintstones'' mark out others. A tug on a special cord summons a quality monitor with a ditty from ''The Pink Panther.''
Mishaps so dogged initial car production that for weeks the troubleshooters dashed up and down the stalled assembly line answering the constant jangle of zany tunes, say auto workers.
Even as late as mid-January, the assembly line speed was slower than initially planned and the factory was 20,000 vehicles short of its scheduled production.
Outside the factory, signals from top GM executives were equally alarming. The company reported on Oct. 20 that during the third-quarter its operations in North America lost $328 million, in large part because of the slow start up of the Cavalier and other models. Within a few days, the value of company stock fell more than 20 percent.
Through downsizing, GM seeks to erase the stigma as North America's most inefficient automaker.
Since the mid-1980s, it has reduced United States staff by more than 250,000 and streamlined work from the boardroom to the factory floor.
The Lordstown plant was supposed to be the next phase of GM's efficiency drive. Instead, the factory's troubles illustrate the costs of imposing an abrupt downsizing from the top down, management experts say.
Last July, the company gutted and refitted the factory as part of a $1 billion program for efficient ''flexible'' manufacturing. The Lordstown plant would assemble cars faster, cheaper, and at a higher quality level than could any other GM facility.
GM designed the new Cavalier and Sunfire to be more swiftly made. For example, assembly-line workers have to fasten only three bolts in places that previously needed five. Because of such improvements, assembling the new cars would require 30 percent less labor than the '94 models, according to GM.
Also, in order to minimize labor costs, GM reduced the staff at the plant in little more than a year by 2,400 employees, or 30 percent, largely by coaxing workers into early retirement.
For the sake of quality, GM ''empowered'' remaining workers, encouraging them to suggest better assembly methods and spot cases of poor quality, which, analysts say, departs radically from GM's management tradition of rigid, top-down command and control.
''I would say the levels of empowerment and participation are unprecedented for GM; we never had the opportunity to do this much,'' says Darwin Cooper, a quality monitor at the factory and a member of the executive board at United Auto Workers Local 1112. He has worked at the Lordstown plant for 27 years.
But after starting smoothly, the factory overhaul stalled by late summer. Many problems, analysts say, stemmed from mistakes common to downsizings.
For example, inadequately trained workers stumbled when they were told to complete a hood, door, or other body panel in three or four stamps with a metal die instead of six or seven. Their panels were rippled and unusable.
The downsizing also marred the start up by decimating the ranks of GM engineers, says Sean McAlinden, a labor economist at the University of Michigan's office for the study of automotive transportation in Ann Arbor. Early retirements and limits on new hires shrank the engineering staff so much that early last year GM announced that it would hire 2,000 engineers.
GM lacked sufficient engineering expertise to smoothly move the cars from the drawing board to the assembly line, according to Mr. McAlinden.
But GM staff and some analysts say the lack of engineers should not be blamed. ''GM is buried in engineers,'' says Jim Harbour of Harbour & Associates, a consulting firm in Troy, Mich., that specializes in auto manufacturing. On a per-car basis, GM has many times the number of engineers employed by Chrysler Corporation, he notes.
Downsizing also raised the risk of flaws in equipment purchased for the Lordstown plant. Previously, GM had made some of this equipment itself. Similar problems have arisen with auto parts once produced by GM but now purchased from outside suppliers. GM would have avoided the problems had it not abruptly closed or sold many of its parts shops. Most important, the dies for stamping sheet metal into body panels were defective.
It has also broken long-term relations with suppliers and opened up the production of tools and parts to competitive bidding, the analysts say. As a result, many other parts from suppliers were also faulty, workers say.
Finally, middle managers hindered the launch of the cars by resisting the way in which downsizing reduced their decisionmaking power.
''The middle of an organization is not always flexible in letting decisions move to the lowest level,'' says David Cole, director of the University of Michigan's office for the study of automotive transportation.
The most critical test for GM is whether it applies the lessons from Lordstown as it upgrades other factories, Mr. Cole says.
Mike Cubbin, the plant manager at Lordstown, says one lesson stands out beyond all others: ''Don't reveal your production schedule to anybody.''