Car Guys vs. Bean Counters - Bob Lutz [24]
At roughly the same time as the gestation of Saturn, GM adopted a policy of gaining the upper hand through manufacturing cost reduction, primarily by automating assembly and metal stamping processes wherever possible, almost regardless of the cost.The scheme was to overwhelm the U.S. (and Japanese) competition with unprecedented capital expenditures that financially constrained Ford and Chrysler couldn’t match.The vision was for workerless plants, operating in the dark, three shifts daily, reproducing parts and subassemblies at ultralow labor cost and with high repeatability and, thus, quality.
It didn’t turn out that way.The robotics were far from perfect, and most people recall the embarrassment of GM’s paint-shop robots playfully painting each other. Most disappointing of all was the reality that, after all this, labor costs actually went up. Sure, the so-called direct labor (people actually making parts or assemblies on the line) went down, and that’s what all the measurements focused on. But indirect labor—the highly skilled, specially trained repair and maintenance crews—expanded exponentially with the overautomation. The result was a huge rise in GM’s manufacturing cost: the combination of paying for the displaced labor and more hours for the costly indirect labor, coupled with the depreciation and amortization of all that new equipment, made GM the high-cost producer, showing once again that having too much money can result in amazing folly.
Meanwhile, Ford and Chrysler, the poorer cousins, focused on the Japanese model: don’t create new plants unless necessary, automate only where absolutely needed for quality or worker fatigue, seek the optimum blend of humans and machines. It worked, just as decades later it’s working for GM as well as it ever worked for Toyota.
The misunderstood “drive for excellence” bore some really strange fruit. A favorite of mine came from a senior executive in the advertising agency that served Cadillac back in the 1950s and’60s. At the time, Jim Roche was head of the division. It was time to design the annual Cadillac Christmas card, and Mr. Roche instructed the agency to find something “heartland”—down-home American, an original work from a good artist. One painting found Mr. Roche’s favor: a snowy scene with a small boy pulling a sled upon which was tied a Christmas tree. The lad’s destination was a modest cabin on a hill, with a winding road leading up to it.
Mr. Roche loved it—but wait! Where was the relevance to Cadillac? Roche ordered the small boy-with-sled away, to be replaced by a Cadillac sedan, with the trussed tree tied to the roof. The artist was able to render the Cadillac accurately and duly pasted it over the boy-with-sled.The deadline for printing was approaching, and the modified card was again presented to Jim Roche. He discovered a new flaw: the humble cabin on top of the hill was no longer a suitable destination. Why would an achiever live in a dump like that? The agency was told to make the dwelling more appropriate for a Cadillac family, so the watercolor artist once again went to work and rendered a substantial residence which required a major expansion of the hill it sat on. After that cut-andpaste, all was expected to go well. There was one more modification to the house as a second garage was added. Mr. Roche felt that a single-car garage looked out of place next to a home of that size. Portions of the original painting were starting to get a bit thick, but it looked like smooth sailing from here on in.At