"Remaking" GM?


03/23/06 – The Detroit News

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It's a rather optimistic headline in the Detroit News today, with the story about GM and Delphi paying workers to go away. Their headline is “Remaking GM”, without the question mark that I added. The Detroit Free Press headline reads “Plan for Survival” (again, with no question mark at the end).

It reminds of the W. Edwards Deming quote, “Survival is optional.”

Keep in mind I'm typing this with a GM vehicle recall notice sitting on my desk, I have to call the dealer when they open. My vehicle is about two years old and this is at least the third safety recall (this time involving a minor matter, oh, the brakes could fail). We'll see if they have the part on hand to fix it this time.

Stupid lousy workers, building lousy cars. It's all the workers' fault, eh? Blame them for costs, blame them for quality. Ugh.

OK, back to the topic at hand — GM's buyouts. The Wall St. Journal ($$$) has multiple articles that explain and analyze the deal.

The WSJ normally blames “Just In Time” for business problems. This time, they say, in part:

Some of those jobs have been lost as GM emulated the efficient “lean production” techniques of rival Toyota Motor Corp. But others have been lost because GM has been unable to stop losing market share in the U.S., despite volleys of new models and increasingly expensive price and financing discounts.

Yes, right, let's blame lean for the job losses. I wonder what the ratio is between jobs lost from lean versus jobs lost due to designing unappealing cars or building them with unimpressive quality?

I would argue that the problem isn't a lack of “lean production,” but rather a lack of “lean enterprise.” Data show that GM's plants are catching up in quality, but the company is failing. Maybe if GM had truly adopted the full Toyota Production System philosophy, they would be in better shape now.

Norm Bodek writes that TPS is 1) elimination of waste and 2) “respect for humanity.” Most everyone, including GM it seems, focuses only on the first part.

Part of the problem with the GM buyout is that you don't know how many people will take you up on the offer and you don't know which ones.

Management experts say the offers tend to attract the most capable employees, those who can most easily find jobs elsewhere. “You create incentives for the wrong people to leave,” said Peter Capelli, a management professor at the Wharton School at the University of Pennsylvania. “The lowest performers are generally not the ones who take it up.”

This may be less of a concern with assembly-line workers such as GM's than with salaried people.

The bold emphasis there is mine. There's some subtle bias shown against factory workers here. Are the hourly people really just interchangable robots where you would be less concerned about which ones you lose? Hogwash.

Everyone who has run a factory department knows that, say out of 10 people, if you lose your 3 attitude problems that you're much better off than if you use 3 people who are the best team players and the most willing to make improvement suggestions.

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Mark Graban is an internationally-recognized consultant, author, and professional speaker who has worked in healthcare, manufacturing, and startups. His latest book is Measures of Success: React Less, Lead Better, Improve More. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. He also published the anthology Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also a Senior Advisor to the technology company KaiNexus.

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