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
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• Peter Berg, LIR
• Michael Moore, LIR
• Marietta Baba, Anthropology
• Terry Curry, LIR
• John Delaney, Management
2

• 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
3

• From 1920’s – early 1980’s
– Decentralized
– Independent divisions/nameplates
• Each with own marketing and manufacturing organizations
• Reorganization in early and mid 1980’s
– 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
4

• 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
5

• 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
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• A city of about 150,000
– 90 miles nw of Detroit, 220 miles ne of
Chicago
• HQ for Oldsmobile from early 1900’s through early 1980’s
– A complete self-contained carmaking system
• Design, Engineering, Marketing, Metal fabrication,
Car Bodies, Paint, Assembly
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• 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 70’s – early 80’s
– Currently about 6600
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• “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)
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• Employment Maximization through cooperation
– “Today . . . I don’t know that there (is) anyone that doesn’t understand that sales and quality dictate the market.” (Local 652 Official)
– “From a union perspective, quality is job security” (Local 652 Official)
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Profitability
BARGAINING AT LGRA
Profitability-
Employment
Curve
M
An
A
Bn
B
P
C
Product B
Product A
Production-
Employment
Lines
A
B
Employment or Employee Hours
C
Production
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• Company (GM) Interests
– low-cost, efficient, high quality manufacturing
– Good relationship with UAW
• International Union, UAW
– Maintain employment and capacity among UAWrepresented employees
• Local Union
– Employment for local membership
– In context of the national agreement
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• 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”
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• GM’s 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 1980’s)
– Saturn in Tennessee (mid 1980’s)
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•
CTS - 2002
•
SRX - 2003
•
STS
•
CTS V-series - 2004
•
All Cadillac Nameplates
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Insert Vehicle Photos Here
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• 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
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• 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
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• 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
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• 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
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• 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
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• C orrections-errors
•
O verproduction
•
M aterial Movement
•
M otion
•
W aiting
•
I nventory
•
P rocessing (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?)
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Preferred
Customer:
Customer:
• Jointly done
– LGRA Management
– UAW Local 652 Officials
• All employees trained for 40 hours in first week
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EXAMPLE
 Adjustments of a Product or Service to Fulfill Customer Requirements
Causes
 Poor Customer/Supplier Relations
 Questionable Quality
 High Inventory Levels
 Weak Process Control
Adverse Affects / Results:
Cost Lead Time Quality
• Rework, Repairs, and Sorting/Scrap
• High Inventory Buffers
• Added Inventory Cost
Just-In-Case Management
• Loss of Customer Confidence and
Business
 Deficient Planned Maintenance
 Non-Robust Product Design
 Inadequate Education and Training
 Undefined Requirements
“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.”
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SOURCE: LGRA Training Materials

3
4
5
6
2
1
Operation Name : _______________________________
Identification of Waste
Observations Impact Areas
What types of waste do you see?
What is the waste category?
COMMWIP
Root of Waste
Plant Other
(List)
Prescription
Recommend Changes
What Would You
Do To Remove
The Waste?
Operator Excessive Walking
EXAMPLE
M
(Motion)
X X X
Remove Excess
Inventory
Reduce Container size
Definitions: Correction: Adjustments of a product or service to fulfill customer demands
Overproduction: Producing more or faster than the customer demands
Material Movement: Excess material movement
Motion: Any movement of people or machines that does not add value
SOURCE: LGRA Training Materials
Waiting: People waiting for machines, ,material waiting for processing
Inventory: Supplies in excess of customer demand or JIT inventory
Processing : Effort which adds NO value tthe product or service, or adds cost or motion
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• 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
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• Prod. Wkr. Responsibility
• Production Worker
LGRA/GMS
Responsibility: – Assembly team learns excess force necessary to affix bolts to
Traditional studs
Manufacturing
– Production worker informs supervisor
• 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
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• Extra work, better quality

• “Well considering my job, …it’s two of us that can paint. Me and this guy, if we run upon a problem that we ain’t never seen, he’ll come and get me. He’ll ask my opinion and what I think and vice versa what I do with him. And we’ll say “I’ll do this.” Or “We’ll do this. We’ll try this.” What we’ll do is we’ll get together, and if we get a job that we haven’t seen before… something that he might send us… so we get to scratching our heads…and we say
“How are we going to fix this?” Because we’ve got to fix this. If we can’t fix it we got to repaint it. If it’s 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, that’s 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 don’t get it, this car is dead.”
So, that’s what we do.’”
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• Examples
– Team Concept Area Committee
– Team Leader Selection
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• 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
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• 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
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Insert Team Leader Assessment Form
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• 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
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. . .
“
GM, the world's biggest automaker, said it sold 6 percent more vehicles in February compared with the same month last year, including a 9.4 percent increase in car sales and a
3.4 percent rise in truck sales.
. . .
"We also saw sales gains by important car entries like the
Cadillac CTS and Pontiac Grand Prix," (John) Smith (GM vice president for North American sales, service and marketing) said.
CTS sales were up 36.2 percent in February compared with the year-earlier month.
Lansing Grand River, the plant that makes the CTS, added an extra shift Feb. 28 to meet demand for the car.
"It's been outstanding. The demand for the CTS in the market is very strong," GM spokeswoman Heidi Magyar said.
. . .
Year to date, GM's sales were up 2.1 percent.

• 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
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