Saturday, September 02, 2006

GM keeps rollin'

Tuesday, August 29, 2006
Despite massive restructuring, thousands of buyouts
GM keeps rollin'
Brett Clanton / The Detroit News

ORION TOWNSHIP -- It's hard to say which is more astonishing: that General Motors Corp. is cutting nearly 35,000 U.S. factory jobs this year or that the automaker's plants, by all accounts, are still running smoothly amid the jaw-dropping downsizing.

There have been small hiccups along the way, and more are possible as thousands of GM workers depart in waves through December and the automaker races to train legions of replacements.

But a look inside GM's Orion Township assembly plant this month -- where more than a third of the 2,700 workers took cash buyouts or early retirement packages -- suggests the transition is going better than most had anticipated.

The factory, home to the Pontiac G6 midsize sedan, is running at roughly the same speed it did before the buyout program. Quality levels have not slipped. And replacement workers say they have been readily accepted by the old-timers, even though many are new to jobs on a modern vehicle assembly line.

"They made us feel real welcome," said Tammy Grimes, 48, who arrived in June from bankrupt auto supplier Delphi Corp. under a special deal among GM, Delphi and the United Auto Workers.

Careful planning credited

GM credits the smooth hand-off to months of painstaking planning that tried to anticipate every problem that might arise from the unprecedented turnover.

Experts say it is also a byproduct of hard-fought changes GM has implemented over the years to improve the efficiency and flexibility of its factories.

"In the past, when the process was set up to be more dependent on the individual skill level of the operator, this would have been disastrous," said Ron Harbour, president of Harbour Consulting, a Troy-based firm that produces a closely-watched annual report on auto plant productivity.

Now, with GM relying on a more standardized manufacturing process, inspired by the Japanese, the buyouts likely will have minimal impact on GM's short-term factory output, and will almost certainly create productivity gains later, Harbour said.

Now GM must build on the strength of that start to its post-buyout transition.

After a $10.6 billion loss last year, the automaker's turnaround is beginning to gain momentum and GM must convince Wall Street that its management team knows how to find the way back to profitability.

Perhaps more than ever, GM also wants to set itself apart from Detroit rivals Ford Motor Co. and DaimlerChrysler AG's Chrysler Group, which are showing new signs of trouble.

New vehicles touted

But the real test will be how -- or if -- American consumers respond to a raft of new vehicles GM is introducing this year.

The product offensive, including a redesigned Chevrolet Silverado pickup, GM's top-selling model, is at the heart of an effort to stem decades of U.S. market share losses and improve the perception of GM cars and trucks.

"It's not about surviving anymore," said Pam Mader, manager of the Orion factory. "It's about truly being the best."

The buyout program has created a unique challenge for Mader and her team, who continue to be assigned aggressive performance targets even as her plant's work force undergoes seismic changes.

The Orion plant is in the process of shedding 986 of the 2,695 workers on the job in March, when GM and the UAW reached a deal on the historic buyout and early retirement plan, officially known as the "special accelerated attrition" program. But at no point has the assembly line stopped cranking out vehicles.

With Pontiac G6 sales on the rise and the recent addition of a convertible model, the plant kicked into high gear and even added Saturday hours.

Workers have been replaced

GM had to act quickly to plug holes created by the buyouts. In what may seem counter to GM's cost-cutting goals, the automaker has replaced every one of the 620 Orion workers who have left through a buyout or early retirement.

Each week, a new group of replacements completes a five-day training course that preps them to take over for one of the departing workers.

They begin with an orientation and class time to discuss safety and details of the job. Then, there's a ropes course in back of the plant to teach teamwork, followed by job-shadowing, test runs on the assembly line and one-on-one feedback sessions.

On a recent tour of the factory, plant superintendent Don Arthur joked that with all the new blood, it might be a good idea to stay off the path where new forklift drivers learn the ropes.

"The green aisle," he said, pointing to a narrow area hugging the plant wall, "is a very good place to be."

But many newcomers have experience in manufacturing, even if they've never worked a modern auto assembly line.

Take Chuck Becker. Prior to landing at GM's Orion plant this summer, he made steering components at a Delphi plant in Saginaw. When the bankrupt parts maker announced plans to close or sell the Saginaw plant, Becker, 54, jumped ship.

Now he hops a van each day with half a dozen other former Delphi workers for the 75-minute drive to Orion, and counts his blessings for the opportunity.

"I'm too young to retire," he said.

About 260 replacement workers in Orion have come from Delphi, a former GM subsidiary spun off in 1999 that will return 5,000 workers to the automaker in coming months. Another 64 are from the GM jobs bank, a pool of idled workers earning nearly full pay despite there being no work for them. And 300 temporary workers were hired by referral or off the street at about $18 per hour with no benefits. A typical UAW plant worker earns closer to $27 per hour and gets a pension and top-shelf medical benefits.

Payroll will shrink in time

Once the buyout program is completed and the temporary workers leave, there will be fewer workers on payroll.

"We don't anticipate the need to replace all the employees who participated in the attrition program," said GM spokeswoman Katie McBride, declining to specify how many hourly workers GM will eventually have left.

The buyout program, a key piece of the automaker's North American turnaround plan, aimed to usher out thousands of retirement-eligible workers as GM moves to close all or part of 12 factories by 2008.

But a better-than-expected response -- nearly 35,000 of GM's 113,000 U.S. hourly workers signed up -- left the automaker with many holes to fill to keep its plants running.

Early on, the fear was that GM's quality would take a hit as it put a sea of inexperienced replacement workers on the job. But analysts, workers and union officials at plants other than Orion also said the process is going smoothly.

"I can't say we've missed a lick yet," said Jim Kaster, president of UAW Local 1714, which represents workers at a GM small car plant in Lordstown, Ohio, that will lose 900 of 1,450 workers.

"I thought quality would suffer greatly," said Eldon Renaud, president of UAW Local 2164, which represents GM workers at the Chevy Corvette plant in Bowling Green, Ky. But he has not noticed many slip-ups as 300 of the plant's 1,075 workers make for the exits. In fact, new workers have come up to speed faster than he thought they would.

"It's not rocket science," he said.

Still, the entire process has been a poignant reminder to the UAW of its declining ranks within the domestic auto industry. After peaking at 1.5 million in the late 1970s, UAW membership now hovers under 600,000.

Since workers began leaving in July, Mike Dunne, chairman of UAW Local 5960, which represents workers in Orion, has lost count of the farewell parties he has attended for long-time co-workers and friends.

"We're going broke throwing them," he said.

But Dunne is hopeful that GM is making the right moves no matter how painful they may be now.

"GM has turned the corner," he said, "and we're on the way back."

You can reach Brett Clanton at (313) 222-2612 or

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