Friday, April 29, 2011

What Can General Motors' Failure and a Funky Car Plant Teach us about Ed Reform?

Many of the ideas and information about this post come from a "This American Life" show originally aired on March 23, 2010. Here is a link to that show.

What happened to the General Motors company? A car company that was once the "top-dog" in terms of the American car company, filed for the largest industrial bankruptcy ever. It was a rather gradual slide that had much to do with quality (or lack thereof) and an unwillingness to change. There were people within the company that sensed the necessity of change and one plant made that change tangible to much success. But the rest of the company did not buy into this change and the bankruptcy laid bare this costly reality. As I summarize the story of those within GM that worked for change, check out some of the parallels to ed reform.

In the 1980s, GM realized it had problems with many of the plants and factory lines that contributed to the poor quality of its cars. For example, at the Freemont, CA plant, workers filed a high number of grievances, drank openly, could buy drugs, and even admitted to having sex on the job. Rick Madrid said, "I brought a thermostat of screwdrivers to work everyday." It was the outcome of a well paid workforce (especially relative to education) who felt tied to their jobs even as the work was monotonous, boring, and unfulfilling. Regardless of the high pay, the workers were seriously unmotivated.

In 1982, GM closed the Freemont factory down. In 1984 the plant was set to re-open. The new plant, named NUMMI, would be a joint venture between Toyota and GM. Toyota was going to show GM workers how to make reliable small cars and Toyota hoped to learn the American system and workers to grow its American market. As many of the same workers were hired back, they expected things to continue as the status quo. This would not be the case. Toyota flew the NUMMI plant workers back to Japan to help scaffold the changes that would take place. What the American worker saw was a completely different way of producing cars.

CC flickr picture posted by Peter Robinett

Japanese plant workers were expected to ask for help. Americans, on the other hand, were often yelled at if they asked for help because it would slow down the line. Japanese workers were routinely asked for their opinions on how to make things better and for what tools they needed. Workers were expected to come up with new ideas. Management and the workers were a team where conversation and learning led the way to high quality. This way of working was epitomized with the radical notion that at anytime a Japanese worker could stop the line to ask questions or spend more time on an area. This was all under the Japanese concept of "kaizen" or continuous improvement.

The Americans were stunned by this. Their system was one were quantity was pushed, not quality. It was thought that you could go back and deal with quality after you had pushed it through the line. This just led to stockpiles of cars that were not functional. The #1 rule of the GM system was that you could not stop the line. Workers were not to be trusted with this power because it was thought they didn't want to work and would slow down the process.

Armed with this new way of building cars, the American workers were changed. The NUMMI plant workers were overjoyed and felt a new sense of confidence as they started to control the process. Working collaboratively as a team led to a radically different notion of work itself. Managers and workers had a different relationship and these radical changes transformed the plant. The NUMMI plant in Freemont produced cars of high quality, as the number of defects was low compared to other plants. The workers were proud of the cars they produced and the plant saved money and produced almost perfect quality ratings.

The mangers of NUMMI hoped that their new system of producing cars would spread across all of GM. This never happened. People, especially managers saw the new system as a threat. At a plant in Van Nuys, one worker complained that "seniority" was being thrown away because everybody worked together and was expected to know all the different jobs. Mangers didn't like it because their bonuses were tied to how many cars they produced (regardless of defects) and this slowed down the process for quality purposes. They also didn't want to give up their separate parking lot and cafeteria. People claimed that "teamwork" just led to division and insubordination.

The "bigwigs" of GM were also half-interested in the changes that needed to take place. Although NUMMI employees hoped to spread the message of teamwork across the company, there was no buy-in from the top levels. Other programs were more important and no real plans were made to change the line for other plants. A bigger systemic change of culture was needed to support individual plants that were trying to change the ways of production. The top was not willing to implement the radical changes of NUMMI even if it led to radical success.

By the 1990s GM was struggling and by the 2000s everybody new change was needed. As more managers had been exposed to NUMMI and its notions of worker autonomy and teamwork, the culture started to change. Ironically, as GM was going bankrupt it was probably a better company than it had ever been. It was just too late. As one commentator said,"If it takes you 30 years to figure something out you are going to get run over." In the opinion of some of the workers, managers, and contributors that helped make the story, earlier change would have saved GM.

CC flickr picture by John Lloyd

GM pulled out of NUMMI and it became strictly a Toyota plant. In 2010 the plant closed indefinitely. Rick Madrid (the aforementioned man who used to bring screwdrivers to work) commented, "I am truly sad to see NUMMI go. NUMMI changed my life from being depressed and bored to be better." Another worker who worked 17 years without a vacation day said he still looks at the cars the plant produced and feels a sense of pride.

So what are the parallels to this funky plant, GM, and ed reform...I will let you decide.

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