The “Lean Manufacturing Push” at Chrysler

Selling Lean manufacturing to the world isn’t easy with headlines like Chrysler Cuts Trade Workers: In Lean Manufacturing Push, Automaker Also is Reducing Number of Job Classifications at Plants. Chrysler must be getting public relations advice from the same people as Merck. Read the January 22, 2006 Detroit News article for full details.
Chrysler is laying off some skilled trade workers “As part of the push toward Japanese-style lean manufacturing” according to a Chrysler spokesman quoted in the article. I guess I still have a lot to learn about Japanese-style Lean manufacturing.
To quote the article: Lowering employment costs and increasing productivity moves the automaker closer to goal of reaching parity with its Japanese competitors building cars in the United States.
I beg to differ. I think this approach will take them further from their goal of reaching parity. This type of “Lean manufacturing push” may put Chrysler’s numbers closer to Toyota’s in the short term but will stop organic, persistent daily improvement dead in its tracks.
Sadly, how Chrysler’s actions and how they they communicated their intentions, and how the UAW responded will cost the workers at Chrysler more than anyone else. Read the letter from the UAW representative to the skilled trades and you’ll get an idea of the impact this type of decision on the part of Chrysler management wil have on their efforts to become more productive. Following the advice in this letter just locks the two sides in a fruitless struggle. Who wants to hire workers who are only single-skilled, and furthermore have been trained to believe that sticking to a narrow range of skills is the key to job security? Invest in people and pay for skill and flexibility and both the worker and the company that invests in them will win.
Perhaps Chrysler management is facing off with the UAW on purpose, taking advantage of the confrontational atmosphere between automotive companies and unions that exist due to bankruptcies, GM’s woes, etc. these days. It’s hard to say why this would be.
Chrysler CEO Tom LaSorda made some good comments in an article last October, and recently told analysts that goal for 2007 is to build a car in 30 hours on average. “We will do more with less and that’s the message,” LaSorda is quoted in the article.
I’m all for doing more with less. It’s how you do this that’s at issue. The Lean Manufacturing Blog has useful suggestions on what Chrysler could do other than simply put people out of work. Suffice to say that for long-term organization change (e.g. Lean transformation) to succeed you need the help of the people in the organization. Telling them that eliminating their jobs is the essence of this transformation is not an effective strategy.
Unless you can offset the improved productivity (requiring fewer resources of all types to do the same work) through natural attrition or growth, you will have a very tough time at Lean manufacturing. In the end, kaizen must reduce cost. It’s people that keep kaizen alive, so when you do kaizen please make a commitment to protect the jobs that have been kaizened. For Chrysler to announce that Lean manufacturing or kaizen will let you eliminate jobs is to demonstrate a lack of understanding what kaizen is all about.
If you want your Lean manufacturing efforts not to fail, never use these words: At Chrysler’s Belvidere, Ill., plant, where the new Dodge Caliber small car will be built, the company expects to cut 5 percent to 10 percent of the body shop workers because of production improvements. This according to a Chrysler spokesman in the Detroit News article. The emphasis is mine, in case the point is missed.
I hope Chrysler is very successful at their “Lean manufacturing push” and cost reduction efforts. I hope Chrysler gives Toyota a real run for their money. I hope they design and build cars that customers want to buy and I hope they make lots of money in the process. I hope they hire back as many people as want to go back to work at Chrysler from their “jobs bank”. That’s one bank where I hope Chrysler makes more withdrawals then deposits.