Saturn girds to start a revolution in carmaking. But will GM's modernization fare better than those of past?
| Troy, Mich.
After four years of planning, General Motors' Saturn Corporation subsidiary is slowly preparing itself for the difficult task of building cars - and living up to some tough expectations. On paper, Saturn promises to bring revolutionary change to the domestic auto industry. Company executives and planners will have to prove that they can fare better than many of the other supposed modernization programs that have seemingly stymied the nation's largest carmaker.
Unveiled in early 1985, Saturn was given the mandate of working from ``a clean sheet of paper,'' as GM chairman Roger Smith described it. The goal was to bring significant changes in virtually every aspect of operations, from product design to manufacturing and from management to marketing.
Saturn executives recently opened the doors of their headquarters in suburban Detroit to discuss a broad range of their plans and operations.
Careful screening of applicants
The first production Saturn car won't roll off the assembly line until mid-1990, but while work is barely half complete on the company's Spring Hill, Tenn., assembly ``campus,'' Saturn has already begun looking for the first 300 of the 3,000 employees it will eventually hire. Saturn expects to receive as many as 40,000 job applications, though priority will be given to current and laid-off GM employees.
The screening process will be unusually long and complicated, and that is a clear indication of how Saturn plans to break with tradition. In the past, when GM hired new workers, those who passed a brief interview on Friday were likely to be on the job by Monday.
Potential Saturn employees, however, will go through an extensive battery of tests and interviews.
``Working in the [Saturn] organizational structure is not for everyone,'' says Jim Lewandoski, Saturn's vice-president for human resources. ``This can be a very uncomfortable place to work'' if an employee is expecting a traditional factory labor-management hierarchy.
At Saturn, even union employees will be salaried. Many of the traditional work rules and labor-management divisions built up over more than half a century will be abolished. Workers will be able - and required - to do a variety of jobs.
To test their ability to work in a cooperative team environment, one of the first steps facing an applicant is a series of problem-solving tasks. In one, five applicants are bundled off to a small room together and given a sheet of 12 factors that they must rank in order as the most likely reasons that tires coming off an assembly line are out of balance.
``We're not looking to see if you've got the right or wrong answers,'' explained human-resource staff member Jack O'Toole, as he conducted a mock exam for a group of reporters. ``We're looking to see how you work with other people.''
Tough standards for suppliers
This is not the only place where Saturn breaks with tradition. Its supplier selection process is every bit as rigid as that used to select employees.
A typical GM assembly plant might deal with 1,000 or more direct suppliers. Saturn hopes to cut the number back to no more than 150. In many cases, there will be no backup suppliers, meaning that vendors will get a very lucrative contract. In return, they will have to ensure rigid standards of quality and reliability.
To see if these suppliers measure up, Saturn reviewers will rely on a multiphase review, not only examining a vendor's bid, but also making trips to the supplier's plants, where they may even talk to employees to see what the work environment and labor-management relations are like.
Saturn executive Alan Perriton insists that a low bid will not be top priority: ``If we believe they're simply trying to buy our business, we'll turn somewhere else.''
This criterion also applies to Saturn's ongoing search for an advertising agency. About 50 agencies have pitched for the lucrative contract. Indeed, the company is expected to spend nearly $100 million to launch the first Saturn cars.
As one step in the winnowing-out process, semifinalists were asked to give extensive assessments of three other car companies' ad campaigns, and then suggest changes that would have made the programs more effective.
Currently, the field has been narrowed to three finalists, all being judged in 10 separate areas, with the highest weight assigned to creativity. One unusual factor playing a major a role in Saturn's pick is how these agencies - N.W. Ayer; Hill, Holliday, Connors, Cosmopoulos; and Hal Riney & Partners - will be paid. The firms have been asked to design a compensation package tied to Saturn's performance in the marketplace. The more it sells, the more they are paid.
A final decision is expected by late May or early June.
Although the new company was willing to discuss much of its planned operations during the recent news-media preview, Saturn officials kept specific details of their forthcoming products off limits.
First: a small family sedan
Sources indicate that the Saturn will have its debut as a small family sedan. Soon afterward, several other models, including a sporty coupe, will be added to the line.
All the media hype and promises made for Saturn have built up consumer expectations tremendously, Saturn president Richard (Skip) LeFauve says: ``I wonder how many people were going to expect Saturn cars to be able to lift off the ground, tuck in its wheels, and zoom off down the street.''
That is obviously beyond reach. Saturn's real target is to deliver a cost-competitive car that matches the quality and reliability of imports such as Honda and Toyota.
When Saturn was announced three years ago, it was expected primarily to compete against low-end Japanese imports. Today, with a flood of new low-cost products from countries such as South Korea, Mexico, and Yugoslavia, Saturn has moved somewhat upscale. But the division will continue, at least initially, to aim for so-called entry-level buyers.
To compete in that niche, Saturn will have to shave as much as $2,000 off the cost of building a small car in a conventional General Motors assembly plant.
``We're not there yet,'' says Mr. LeFauve, though he asserts that the goal will be met by the time Saturn finally goes into production.