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).
22 Jan 1987
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!.
That makes American-cars expensive, very expensive!
· 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!