GM’s CEO Roger Smith Thought Toyota Had Magic, But This Was the “Secret”

The plant, now closed

The GM Livonia Engine Plant, now closed

Thanks to this post by Bruce Hamilton (aka “Toast Guy” or “Old Lean Dude”), I was reminded of the old General Motors effort, spearheaded by then-CEO Roger Smith (of “Roger & Me” fame), to fully automate car factories. Their concept was the “lights-out factory” that could run without people (other than a security guard).

GM invested $90 BILLION dollars over 10 years in this quixotic (if not foolhardy) quest. The robots often famously painted each other instead of painting cars, as described in the book Comeback:

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As Dan Markovitz asked in a comment on Bruce’s post, imagine if they had invested earlier in creating a Lean culture, working with their employees instead of trying to replace them? Imagine if they had more quickly learned the lessons from NUMMI? It’s also a story that warns of the consequences of not first trying a “small test of change.”

In searching for a reference to the $90B number, I found this column written after Smith’s death by Doron Levin, who has covered the auto industry for all of my adult life and then some:

GM’s Roger Smith Was A Financial Genius With Faulty Vision For Future

This jumped out at me, in particular:

“Needless to say, robotic car factories remain a fantasy.

Union-management relations, meanwhile, are as dysfunctional as ever. To satisfy his curiosity about competition from Japan, Smith agreed in 1984 to a joint manufacturing venture with Toyota Motor Corp. at a mothballed GM plant in Fremont, Calif [NUMMI].

But the key lessons about Toyota quality that his executives learned weren’t what he wanted to hear.

He thought Toyota possessed some kind of magic,” said Maryann Keller, a former auto industry analyst and author of “Rude Awakening,” a book about the automaker published in 1990.

“The Toyota joint venture taught that GM management was the problem.”

The trick to cost savings wasn’t simply getting rid of people. GM had to motivate workers in factories and yes-men in executive suites to take more responsibility and improve output. GM quality and productivity were second-rate.

I tried and failed to find out whether Smith ever read “The Machine that Changed the World…”

I wonder if Smith ever read the book. I doubt he did.

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And think about the parallels from that Levin column to healthcare today… attempts to cut costs (laying off people), poor quality and productivity, leaders not realizing the problem is the management system…

Dr. Deming tried telling GM much earlier that GM management was the problem. That made Dr. Deming pretty unwelcome around GM.

Toyota doesn’t have some kind of magic. In healthcare, ThedaCare doesn’t have some kind of magic.

They manage differently. ThedaCare had to CHANGE the way they manage. The secret isn’t “motivating workers” — the secret is engaging them in improvement.

Others can do this… but it requires humility, dedication, and a willingness to change… not magic.

Too many healthcare executives are trying to cut costs by “getting rid of people.” Everybody needs to work together to improve quality and productivity at the same time. As Deming said, it starts in the boardroom.


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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.

8 Comments on "GM’s CEO Roger Smith Thought Toyota Had Magic, But This Was the “Secret”"

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  1. Great reflections, Mark. I believe that healthcare is going through the same struggle that the U.S. automotive companies went through. There is a lot of low hanging fruit with the basic lean process tools, but to really achieve excellence requires a change in management methods.

  2. Bob Graban
    Twitter:
    says:

    I toured GM’s Saginaw Steering Gear “plant of the future” in about 1988, which was a lights-out factory producing suspension parts – except the lights were on, and production was at a snail’s pace due to some undisclosed problem. Today, the plant is doing well under Chinese ownership as Nexteer”. A good friend of mine in production management at Delco division told me their direction was that labor costs with the UAW would keep increasing, so the only way out was to increase automation to eliminate the labor. GM was certainly in the firm grip of the bean counters.

    • Mark Graban
      Twitter:
      says:

      It’s true that labor costs would always keep increasing… same is true for other automakers, I guess, including Toyota.

      Now that I think about it, wages actually have gone down with the tiered wages that the UAW agreed to during the bailout period, etc.

      But, the automation strategy would have only worked if the automation actually worked well enough?

  3. Bob Graban
    Twitter:
    says:

    I’m not sure whether the story about robots painting robots is urban legend or not. I worked closely with the Detroit-Hamtramck plant in the late 1980’s – there may have been spray getting on other robots, but people imagine robots having a gunfight at OK Corral. We supported the workers on the line. As an engineer, I spent a day installing air conditioning compressors. On the V8 engines, it was easy, installing the refrigerant hoses to the compressor before installing the assembly on the engine. On the v6, there was not room to install the hoses first, so the compressor was installed to the engine, then the hoses were added, with difficulty. I could not keep up with the V6’s. Afterwards, warranty data showed the V6 had 3 times the leaks at the hose than the V8 – a design change was made. There were engineering and manufacturing management there who were followers of Dr. Deming, such as Cadillac Chief Engineer Bob Dorn and GM Group VP Bill Hoglund (who acted on the NBC Whitepaper “If Japan Can, Why Can’t We” and brought Dr. Deming to GM)

    • Mark Graban
      Twitter:
      says:

      “I could not keep up with the V6’s” — that’s clearly a design issue (a Design For Assembly, DFA) problem. But, the traditional old GM culture would have put “making the production quota” ahead of quality and probably would have blamed the workers for not keeping up. Maybe they were nicer to you since you were an engineer?
      Mark Graban recently posted..“The New Lean Hospitals Are Here!”My Profile

      • Bob Graban
        Twitter:
        says:

        It was the line workers who cut me slack for being an engineer, and they quickly made up for my falling behind. They really appreciated someone being there and caring.

  4. Andy Carlino says:

    I just finished 1 week tour (4 cities/4 days) visiting with some industry executives and well known lean consultants and advisors including Steven Spears. The focus was on the preparedness of industry and the lean consulting community to address the forthcoming digital transformation (don’t fool yourself–it’s coming). Unfortunately what I learned is that most don’t even know what digital transformation is or looks like and the cheery-picky has already started (I-pads, google glass, etc.) just like it did with lean (5S, kaizen workshops, etc.) when it became the vision of the future. More to the point, it’s also taking the same path as GM and the robots–magical bullets without preparedness

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