Title: Global Manufacturing and Collective Bargaining: A Case Study of GM
1Global Manufacturing and Collective Bargaining A
Case Study of GMs United States Lansing Grand
River Assembly
- Richard N. Block
- Professor
- School of Labor and Industrial Relations
- Michigan State University
- For Presentation at
- Voice and Value Making It Work
- Conference Organised Jointly by the London School
of Economics and Chartered Institute of Personnel
and Development (CIPD) - And the London Metropolitan University (Lonmetu)
- London, UK, 12 March 2004
2Michigan State UniversityLansing Grand River
Assembly Research Team
- Peter Berg, LIR
- Michael Moore, LIR
- Marietta Baba, Anthropology
- Terry Curry, LIR
- John Delaney, Management
3Manufacturing and Employee Participation
- Important for US
- Loss of manufacturing jobs requires thinking
about ways to make U.S. manufacturing competitive - 1998 17.6M, 2000 17.3M, 2003 - 14.5M
- 1998-2003, loss of app. 3M mfg jobs, -17
- 1998-2000, loss of 294,000 mfg jobs, -1.7
- 2001-03, loss of 1.9M mfg jobs, -11.7
- Important for UK and EU
- Directive on participation
- 2001-86
4General Motors in US
- From 1920s early 1980s
- Decentralized
- Independent divisions/nameplates
- Each with own marketing and manufacturing
organizations - Reorganization in early and mid 1980s
- To centralized manufacturing, production, and
marketing - Former divisions now only nameplates for
marketing purposes - Product allocated at the corporate level rather
than by the divisions
5Collective Bargaining/Labor Relations National
Collective Agreement
- Between General Motors (US) and United Auto
Workers International Union (UAW) - Establishes
- wages and benefit levels for all unionized
employees in GM system - employment security no redundancies due to
technological change
6Strategies of Parties
- GM Corporate
- Control of production facilities
- Allocation of product
- UAW (Inter)National
- Optimize Wages and Benefits
- Employment security for UAW-represented employees
- Maximize employment in UAW-represented facilities
in US
7Lansing, Michigan
- A city of about 150,000
- 90 miles nw of Detroit, 220 miles ne of Chicago
- HQ for Oldsmobile from early 1900s through early
1980s - A complete self-contained carmaking system
- Design, Engineering, Marketing, Metal
fabrication, Car Bodies, Paint, Assembly
8UAW Local 652
- Represents workers at multiple GM facilities in
Lansing - Other UAW locals also represent some GM workers
at Lansing facilities - Size
- About 13,500 in late 70s early 80s
- Currently about 6600
9Collective Bargaining Relationship
- Organic System
- Initiated and developed by GM-Lansing management
and the Lansing UAW local 652 - with minimal involvement from GM corporate labor
relations officials and/or UAW international
officials. - Industrial relations theory suggests that such
organic labor relations systems possess staying
power because the parties create, accept, and
continually adjust them - Cooperative, Respectful over the long term
- No local strikes since 1984 (data from GM and
UAW)
10UAW Local 652 Strategy
- Employment Maximization through cooperation
- Today . . . I dont know that there (is) anyone
that doesnt understand that sales and quality
dictate the market. (Local 652 Official) - From a union perspective, quality is job
security (Local 652 Official)
11BARGAINING AT LGRA
An
Profitability- Employment Curve
A
Bn
M
B
Profitability
Production
P
C
C
Product B
Production- Employment Lines
Product A
A
B
Employment or Employee Hours
12What is the Linkage Between Manufacturing and
Collective Bargaining?
- Company (GM) Interests
- low-cost, efficient, high quality manufacturing
- Good relationship with UAW
- International Union, UAW
- Maintain employment and capacity among
UAW-represented employees - Local Union
- Employment for local membership
- In context of the national agreement
13Methodology
- Analysis of Local Collective Bargaining Agreement
- Open-ended, structured interviews
- Protocol
- Respondents for each question jointly identified
- Generally at least two respondents for each
question - Questionnaire addressed
- Site, Union, Collective Bargaining Relationship
History - Plant Location Issues
- LGRA and Local 652 Administration
- Joint Structures
- Labor Relations Structures of Manufacturing
- Relationships between site and higher
organizational levels
14Lansing Grand River Assembly
- GMs newest assembly plant in the United States
- Products launched in 2002
- US 1 Billion
- About 1300
- Unionized hourly employees - 1100 production, 200
skilled trades - Nonunion salaried employees - 200
- Third Generation of GM US manufacturing
experimentation - Poletown in Detroit (early 1980s)
- Saturn in Tennessee (mid 1980s)
15Products
- CTS - 2002
- SRX - 2003
- STS
- CTS V-series - 2004
- All Cadillac Nameplates
16Insert Vehicle Photos Here
17GM Production Strategy
- Global Manufacturing System (GMS)
- It is the process that GM is moving toward to
standardize production in all plants, worldwide - Germany
- Brazil
- Belgium
- US
- Operator-centered rather than management centered
18What is GMS?
- The elimination of waste by everybody in the
plant, including production employees - GMS is a set of tools that permits employees to
participate in taking waste out of the system - Global
- Management
- Union
- Independent of union
- A way to build cars
- Team-Based
19GMS Approach
- Standardization
- Reduce idiosyncratic characteristics of
particular plants - In production
- all gas tanks will go into all products as step
241 of the process (Plant Manager) - Production system designed to support the hourly
operator/team member
20Collective Agreement
- Typical Collective Agreement in the US
- Wages
- Benefits
- Seniority
- Grievance Procedure
- Management Rights
- What to Produce
- How to Produce
- LGRA Agreement
- The production system is the agreement
- Area Managers
- Group Leaders
- Team Leaders
- Team Members
- Duties of each
21Staffing of LGRA
- Volunteers
- From LCA
- Opened to bids
- constructed a mock assembly line so employees
could experience it before volunteering - Not for everybody
- Rationale
- Acceptability within UAW Local 652
- For GM, motivated employees for a new production
system
22Reduction of Seven Types of Waste is
Responsibility of Employees
- Corrections-errors
- Overproduction
- Material Movement
- Motion
- Waiting
- Inventory
- Processing (do what is necessary on a car but no
more - exactly how many bolts and studs does one
need to attach a headlight to a car body?)
23Training
Preferred Customer Blache, Wedley
Preferred Customer
Preferred Customer
- Jointly done
- LGRA Management
- UAW Local 652 Officials
- All employees trained for 40 hours in first week
24EXAMPLE
Waste Correction
- Adjustments of a Product or Service to Fulfill
Customer Requirements
Causes
Adverse Affects / Results Cost Lead Time
Quality
- Poor Customer/Supplier Relations
- Questionable Quality
- High Inventory Levels
- Weak Process Control
- Deficient Planned Maintenance
- Non-Robust Product Design
- Inadequate Education and Training
- Undefined Requirements
- Rework, Repairs, and Sorting/Scrap
- High Inventory Buffers
- Added Inventory Cost Just-In-Case Management
- Loss of Customer Confidence and Business
Golden Rule Quality is the basis for
everything. Defects must be traced to their root
cause for permanent resolution. Do not accept,
build, or ship a defect.
SOURCE LGRA Training Materials
25Waste Exercise Worksheet
SOURCE LGRA Training Materials
26Basic Line Organization
- Salaried
- Area Managers
- Paint, Body, Quality, Housekeeping, General
Assembly, Materials, World Facilities Group
(metal fabrication) - Group Leaders
- 4-6 Teams in area
- Hourly/Represented by Union
- Team Leaders
- Team Members
- 4-6 per team
27Paint on Studs on Car Bodies Made It Difficult to
Affix Parts to the Body
- Prod. Wkr. Responsibility LGRA/GMS
- Assembly team learns excess force necessary to
affix bolts to studs - Andon cord pulled each time documented
- Team performs root cause analysis
- Bolt specification?
- Tool not working properly?
- Determination of root cause - excess paint on
studs - To Paint Shop Team
- Designed cardboard stud covers
- Solution
- Covers removed at assembly
- Extra work, better quality
- Production Worker Responsibility Traditional
Manufacturing - Production worker informs supervisor
28Team Member Comment
- Well considering my job, its two of us that
can paint. Me and this guy, if we run upon a
problem that we aint never seen, hell come and
get me. Hell ask my opinion and what I think
and vice versa what I do with him. And well say
Ill do this. Or Well do this. Well try
this. What well do is well get together, and
if we get a job that we havent seen before
something that he might send us so we get to
scratching our headsand we say How are we going
to fix this? Because weve got to fix this. If
we cant fix it we got to repaint it. If its a
three timer, we got to scrap it. And when we
scrap a car that cost General Motors 1,500. So,
a lot of cars that are supposed to be scrapped,
we save them. So, thats money in their pocket.
So we get together on a big job and say Man, we
got to do something because this is a three
timer, this is do or die. If we dont get it,
this car is dead. So, thats what we do.
29General Issues Related to Staff -type Functions
- Examples
- Team Concept Area Committee
- Team Leader Selection
30Team Concept Area Committee (TCAC)
- One for Each of Seven Divisions Within LGRA
- Paint, Body, Quality, Housekeeping, General
Assembly, Materials, World Facilities Group
(metal fabrication) - Membership
- Production System
- Area Manager (mgt)
- Shift leaders for trades and production (union)
- QN rep (union and mgt)
- Collective Bargaining System
- District Committee trade and production (union)
- Facilitator QN rep (union and mgt)
- Linkage between collective bargaining/employee
representation system and production process
31Example Selection of Team Leader
- Opening Posted
- Team Member Application
- Assessment Tool (jointly created per agreement)
- Possibilities
- One applicant
- Chosen if successfully pass assessment
- More than one applicant passes assessment
- Discussion with team members
- Jointly created questionnaire created by TCAC
32Insert Team Leader Assessment Form
33Selection of Team Leader (continued)
- Team Members complete questionnaire
- Back to TCAC joint decision-making process
- Selection
- compelling based on questionnaire responses,
that person becomes team leader - Not compelling
- tiebreaker seniority (generally), attendance,
discipline, performance - Talks to all candidates
- What might be considered a management decision in
some places becomes a joint decision through a
jointly created, agreement-based procedure
34SOURCE Lansing (Michigan) State Journal and
Associated Press, March 3, 2004
35Conclusions
- Importance of employment security
- Organic relationship builds foundation of trust
over a long period of time - Consistency between business structure (product
allocation) and local union strategy - Facilitative Higher Level Institutions
- Importance of assigning production to UAW members
- International union accepts competition among
local unions provided production allocated to a
UAW local - Transfer rights
- Employment Security
- No fundamental inconsistency between employee
participation and competitiveness