Synopsis: Communication For Productivity
Letters written to some 7500 Workers / Managers /
Union Leaders, following a period of strike / Go slow / Murders (1979 -
1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open /
honest communication led to a remarkable atmosphere of trust between
Workers and Management, which, in turn, increased productivity at 3% per year
(ave).
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22 Jan 1987
To:
Dear Friends
SUN RISES IN THE WEST
(Part VI)
The imaginary dateline that divides
"To-day" from "Tomorrow" passes in the Pacific Ocean.
Look-up any
good map of the world. You will
find that when the island of TONGA
is getting ready to
welcome Monday morning, a few
hundred Kilometers
in the East, the residents of
SAMOA island decide
to lie in
bed for another half-an-hour because it is a
beautiful Sunday morning!
So that is as
far west as the sun can
rise I No farther. For our purpose,
let the sun, this time rise in
the city of detroit - the car-capital of America.
Some 30
years ago (in 1956), I spent one summer-vacation in Detroit, working
as a draftsman,
in a company
called Massay-Ferguson Ltd. It was a temporary job. Many American companies hire college-students for a
short period of 2/3 months during their
summer vacation and I was one
of the lucky ones.
But perhaps
it. was more than mere luck.
From 1948 to
1955, for nearly 7 years, I had spent all
of my vacations in the repair-garage of
my brother in Rajkot. He was a dealer of Ferguson tractors
and 35 years ago, farmers did not know
how to use a tractor nor did the
mechanics know how to repair one. So
there were plenty of tractors to
be repaired and many-a-times I was
in the garage well-beyond the
midnight trying to find fault in
the hydraulic system. In those 6/7 years, I learnt a lot about Ferguson Tractors' - and may be
that is why I got the job in Detroit.
With
very few friends, all I could do on the long week-ends (Saturday and Sunday
were weekly-off days) was to walk for many miles on the Grand River Avenue - a straight road that perhaps
stretches for 10/15 km.
And with thousands of second-hand cars (which appeared brand-new to me!) for sale on
both the siaes of this
road, Detroit made a
deep impression on me. It was
truly the industrial-capital of
America just as Bombay is the industrial capital of India.
Detroit
was the power-house of the American
Economy. When Detroit sneezed,
America caught cold! Almighty
Detroit fought (and won) all
major battles of American
economic Mahabharata!.
And 30
years later, in 1986, Detroit
is living thru the 'Mahabharata once again
- except that this time
it is a different episode.
Those of you
who have read Mahabharata well,
know that, after defeating
the Kaurava-army,
Arjun
became very proud and considered
himself an "Almighty". So
Lord Krishna decided to teach
him a lesson. He asked Arjun to escort a group of "Gopis"
thru'
the jungle and
provide them
protection. Half-way through the jungle, a small number of
ordinary robbers challenged Arjuna who at-once readied
his famous bow "Gandiva"
and started shooting
arrows in the direction of
the robbers. Disregarding
the arrows, the robbers attacked,
captured Arjuna, tied-up his
hands and feet and ran-away with the Gopis !
So Tulsidasji was inspired to write,
In Detroit
too, the mightiest of the mighty is licking dust at the
feet of ordinary
robbers!
The Mighty General Motors!! The car (manufacturing) King of America!
And you dont have to guess "how" I will tell you,
1983 - $ 5.5
billions
During the last 7
years, GM has lost its marketshare from 46% to 42%.
So What does
GM do ?
( 1 )
On Nov. 6, 1986, GM announced plans
to shut down 11 factories
during the
next 18
months, reducing capacity to 70%.
29000
workers (about 4%
of work force ).
(a few days
ago Premier Automobile reduced price of PADMINI
model by
Rs.6500/- calling
it "economy
MODEL". I believe 4 hub-caps
have been
removed and
the metal bumpers
are substituted by
moulded bumpers!)
(I am told
you can drive-away a
PADMINI car by paying Rs. 24000/-
now and rest in easy installments - no more waiting 7 years or paying Rs.
30,000/- "ON" money!)
And since the customers are getting tough
with GM,
GM is
getting tough with the Union! (GM stands for General Motors - not General
Manager!).
UNION HAS A ROLE TO PLAY :
United Auto
Worker (UAW) is the Labour-Union of GM.
UAW has agreed to reduce the number of assembly-line
job classification from 140 to 2!
UAW also
agreed to adopt a team approach which
will put 6 to 12 workers in charge of a production area, and
try out a 4-day work-week (3
unpaid weekly-off) on one shift!.
Five
years ago when Chrysler Car Company
(also in Detroit) was about to
close-down, UAW (it is the same Union for all American Car companies) accepted a wage-cut from $ 12/hour to $ 8/hr ! - 33% reduction.
THE FATSO !
But with fat
labour-costs, the mighty Detroit
has become flabby! It is not in a fighting shape!.
Look at 1986
Wages in Car-industry:
That makes
American-cars expensive, very expensive!
w-64(iii)
And although
· its market-share is shrinking
· its capacity is
shrinking (closing down old factories),
· its profits are
shrinking,
it is installing $ 20 billion worth
- reduce costs/car
- remain competitive
So that it
can survive!
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