By January 22, 2006 9 Comments Read More →

For "Lean", Chrysler Cuts Tradespeople

01/22/06 – The Detroit News

Don’t worry, these skilled tradesmen will go into the famous JOBS Bank and receive almost full pay for doing nothing (something I’ve written about a lot on this blog).

It *IS* necessary for Chrysler to reduce the number of skilled trades categories. The old UAW classifications forced factories to keep an artificially high number of tradesmen employed and created much waste that companies can’t afford when they’re competing against Toyota. One of the first things Toyota did when they took over NUMMI from GM was to reduce the number of trades classifications.

Let me give an example the waste rom when I worked at GM. Let’s say we were doing a Saturday maintenance project that was mainly electrical in nature. If the project required someone to turn a wrench at the start of the project and at the end of the project, the electrician was not allowed to do that work. We had to bring in a Pipefitter, who would get the minimum four hours of overtime for doing maybe one minute of “value added” work. The rest of time was spent smoking, eating, and/or sleeping. Nice gig if you can get it.

Now, I’m on the record as being opposed to layoffs as a result of lean. What if Chrysler took these folks and had them work on continuous improvement projects? Why the hell not, you’re paying them almost 100% pay anyway. You might as well potentially get some value out of them and let them feel like they are accomplishing something. Ah, I’m a bit far removed from the auto industry. I almost forgot most of these guys have a long-standing grudge against management and the company and wouldn’t want to help the company improve anyway. Sad.

Another trip down memory lane for me…. go to the article and click on the picture of the memo from the UAW. I can’t believe, in the year 2006, they STILL TYPE THEIR MEMOS IN ALL CAPS! :-) I should create a website with all of the funny memos I have from my GM/UAW days.


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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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9 Comments on "For "Lean", Chrysler Cuts Tradespeople"

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  1. JB says:

    One of my wise friends who is a very experienced and a highly respectted Lean Guru said:

    “The only value in unions today is the threat of one.”

    We’ve probably all seen unions (the people in them,) kill companies.

    They almost allways stink in my humble opinion.

  2. Mark Graban says:

    One of my wise friends says “Companies get the unions they deserve.” Ford was BRUTAL to people before the UAW, beating employees with company security goons, not guaranteeing employment beyond that given day, etc. I agree, unions have outlived much of their usefulness, and there’s a reason Toyota has been able to avoid unionization in the U.S. All of this stuff that’s happening to the Big 3 today is the slow long result of poor choices they made long ago, in my opinion. Yes, unions suck, but the UAW isn’t to blame for the downfall of the big 3. Poor management, arrogance, and hubris are the main culprits. Karma has a way of bringing down companies like this.

  3. JB says:

    Good Points Mark.

    It’s clear the 2 in the “tango” have both contributed much to what isn’t right in today’s businesses.

    Thank goodness for the brave people who stood up to companies when they threatened their very lives. Unions definitely served their purposes.

    My experience with them so far has been that the unions themselves were so powerful that work actually took a back seat to wrangling over union rules.

    The unions seemed to have an absolute strangle hold on management and progress of the entire company. I’ve watched some go down who thought they were invincible.

    Profitless companies lose their invincibility every time, no matter what the collective bargaining agreement says.

    All the Best,

    JB

  4. The senior UAW official who helped start the Saturn project, Don Ephlin, used to say “Union is a result of management. If management changes, so will the union but it will lag.” I’m generally neither pro- or anti-union, but I am pro-leadership. Without leadership on either side of the table, willing to make tough but unpopular choices, then this is the story you end up with. Imagine two trees propped up against each other, leaning harder and harder. What happens when you take a tree away? Obviously it falls. This is the relationship the big 3 have with the UAW. Unfortunately, without union rules, it is too easy for people to make the wrong decision, such as force the most skilled people to do all of the work, or to ask people to do unsafe things. And it is too easy for unions to resort back to the rules and say “I can’t do that” as a show of force. We need some leadership on both sides of the table to make some tough, unpopular choices TOGETHER. I only hope it happens before it is too late.

  5. Mike Lopez says:

    I’m wondering if GM/FORD/Chrysler ever thought about using all these Jobs Bank workers to do something else besides make cars. Why not GM brand washers and dryers? If GM has all these tradespeople, why not become the largest trades contractor in the world? Need a pipefitter, call GM. Need an electrician, call GM.

    Perhaps these automakers know that they can’t sell these services for as much as they have to pay the workers. They presently recoup no costs though, so getting anyting would be better than getting no value at all.

  6. JB says:

    Thanks Jaime & Mike,

    Both of you make some great points. Mike, your comments are really “out of the box” and they made me wonder if the “Big 3” have ever considered anything like this. They really should.

    Jaime, you obviously have found some value in unions that I have yet to see. I’m actually very glad to hear that. So much is riding on the success of our nations companies.

    One of my good friends runs a mid-sized manufacturing company. In one department they have had as much as a 50% annual employee turnover rate. Of course that is a horrible statistic and very costly to the company and workforce in so many ways. Historically, the high turnover has been blamed on low pay, long hours, and difficult to master work processes.

    Recently he called and excitedly told me they haven’t lost a single employee in that department for more than 6 months! He said productivity is up 25-30 percent, quality issues are down, employee morale is at an all-time high, and HR issues have disappeared. He even said people were trying to transfer to this once troubled department. So what changed?

    One supervisor came into the company/area from another company with the right attitude and that has made all the difference. When describing this man he said, “Bill, this guy has a perma-smile on his face, he treats everyone with respect and kindness, and people love just being around him.” He went on to say: “This guy is so good that people follow him without question and treat each other so much better too. He literally inspires everyone to be a better person and an outstanding employee.” In short, “I wish I had a dozen more just like him.”

    In the book “Good to Great” the practice of having the right people “on the bus” is emphasized. Of course, in real life, it’s not just having the “right people” but also “being the right people” that makes all the difference. My friend and senior exec. has begun placing a far greater emphasis on finding and developing people like this extraordinary supervisor. It was never about the pay or any other issue in the area, it was always about the leadership.

    Religious or not, Christian or not, I’d encourage everyone to read the book “Jesus CEO.” Another business leader friend of mine actually brought it over to my home one day and said “Bill, you just have to read this.” I think this book about the leadership style of Jesus Christ catches the very essence of what the great leader I just described practices to inspire and partner with those he leads.

    Somehow good leadership that inspires collaboration and true “ownership” transcends the need for unions and the “us against them” mentality and practices in so many companies. Perhaps it seems “Pollyannaish” to say, but, it seems it’s time to take the advice given by Jim Carey’s character in the movie “Bruce Almighty” and “Be The Miracle.

    All the Best,

    JB

  7. JB says:

    Thanks Jaime & Mike,

    Both of you make some great points. Mike, your comments are really “out of the box” and they made me wonder if the “Big 3” have ever considered anything like this. They really should.

    Jaime, you obviously have found some value in unions that I have yet to see. I’m actually very glad to hear that. So much is riding on the success of our nations companies.

    One of my good friends runs a mid-sized manufacturing company. In one department they have had as much as a 50% annual employee turnover rate. Of course that is a horrible statistic and very costly to the company and workforce in so many ways. Historically, the high turnover has been blamed on low pay, long hours, and difficult to master work processes.

    Recently he called and excitedly told me they haven’t lost a single employee in that department for more than 6 months! He said productivity is up 25-30 percent, quality issues are down, employee morale is at an all-time high, and HR issues have disappeared. He even said people were trying to transfer to this once troubled department. So what changed?

    One supervisor came into the company/area from another company with the right attitude and that has made all the difference. When describing this man he said, “Bill, this guy has a perma-smile on his face, he treats everyone with respect and kindness, and people love just being around him.” He went on to say: “This guy is so good that people follow him without question and treat each other so much better too. He literally inspires everyone to be a better person and an outstanding employee.” In short, “I wish I had a dozen more just like him.”

    In the book “Good to Great” the practice of having the right people “on the bus” is emphasized. Of course, in real life, it’s not just having the “right people” but also “being the right people” that makes all the difference. My friend and senior exec. has begun placing a far greater emphasis on finding and developing people like this extraordinary supervisor. It was never about the pay or any other issue in the area, it was always about the leadership.

    Religious or not, Christian or not, I’d encourage everyone to read the book “Jesus CEO.” Another business leader friend of mine actually brought it over to my home one day and said “Bill, you just have to read this.” I think this book about the leadership style of Jesus Christ catches the very essence of what the great leader I just described practices to inspire and partner with those he leads.

    Somehow good leadership that inspires collaboration and true “ownership” transcends the need for unions and the “us against them” mentality and practices in so many companies. Perhaps it seems “Pollyannaish” to say, but, it seems it’s time to take the advice given by Jim Carey’s character in the movie “Bruce Almighty” and “Be The Miracle.

    All the Best,

    JB

  8. Mike Lopez says:

    JB,

    You know, I think you are right on in your comments about the new superior that is winning hearts and minds. Your story is the third time in a week that I’ve been reminded of that great insight.

    Continuous improvement has a lot more to do with philosophy and human relations than measurements and priorities. Maybe that seems like heresy, but if you lead from the stick of measurements, you will only win superficial compliance. You have to instill passion for the principles of good business and the higher goal of the organization.

    I’ll break my back to change the world, but not to meet the quarter’s numbers.

  9. Mark Graban says:

    Lots of people will break their back to meet the quarterly numbers out of fear (not a good long-term incentive) or to make lots of $$$ (most of us don’t have access to that incentive, but execs do).

    I agree it’s more about leadership, how you treat people (Jim Press of Toyota acts in “servant leader” mode), and understanding psychology (that’s why Deming’s lessons are so valuable and rarely used/understood).

    The basic psychology of “lots of you are being laid off…. now go be innovative” just doesn’t fit human nature. Fear already ruled at Ford and Visteon. How “innovative” is Ford management being?? Not very, it seems, sometimes.

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