RESURRECTION AT GENERAL MOTORS

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)

19 Nov 1986

To:

Dear Colleague                

RESURRECTION AT GENERAL MOTORS

The Holy Bible  tells us that Christ returned  from the Dead. No eye-witnesses are  left but to millions of faithful around the world, the legend is true.  They believe it to be true.

Resurrection is return of the Life.

More than six  years ago (Mar.1980), I had  an opportunity to present to  a meeting of  Policy Review  Committee (PRC), our own

"Project Resurrection".

Briefly, it comprised :            

-    A lean, trim fighting force (Recruitment Freeze)

-    Getting rid of the Dead-wood

-    Inculcating a  high-degree of  discipline at all  levels of organisation

-    Bringing  back  the  dynamism  and  the  entrepreneurial spirit.

We did  introduce 'a recruitment freeze in 1981  for a period of 18  months and once  again we  have imposed a  freeze from July this year.  But  in the  intervening period, manpower at Powai did go  up substantially - mostly  in the Supervisory-cadre!

As far as     

-    Deadwood      

-    Discipline and    
 

-    Dynamism

is concerned, there  may be a lot to  learn from the enclosed article regarding General Motors (FORTUNE - 10.11.86)

"G.M. is tougher than you think".

If there  are similarities in  the situations  facing our own L&T and  G.M.  - then  these are  not mere  coincidences,  In their own countries, all relatively  large companies face the same malise of

-    paper-pushing bureaucrats

-    customer-hating technocrats

-    "Master" - minded autocrats.

So I am  not surprised that  last year G.M. announced  a plan to trim the managerial work-force by one-fourth before 1990 !

Next in line are 1,30,000 white-collar workers.

And when  it comes  to shedding excess  fat, G.M.  is in good company - with the  United Nations (U.N.) - which is planning to make  a 15% reduction  in its  staff of  11,423 and reduce the number of assistant and  under-secretary generals from 80 to 60!

Nearer  home, Gujarat  Govt. nationalised  12  "sick" textile mills - and promptly  decided to let 6 of these die a natural death  ! Of the 21,000 workers rendered  surplus, 11,000  got jobs  in  the  "surviving"  6  mills  and  10,000  opted   for "Voluntary Retirement".   Not to  be left out.  Central Govt. has dispensed  with 36,521  workers (till Sept.  1986) of  the N.T.C.  (out of  2,30,000) under  the "labour  rationalization scheme" in 120-odd textile mills.

But the lesson that G.M.  is learning - the hard way, perhaps - is  that "surviving" is not  enough ! A company  has got to revive - get resurrected.

In the  20th century  however, 'must a company wait  till its competitors  hang  it from  the  cross  before it  thinks  of "resurrecting" itself ?

And if  there are. any happy-go-lucky complacent amongst  us, I  request  them  to  study  the  following  picture   of  our slackening productivity-drive :

Hemen Parekh