Survival of the fittest

When a historic auto plant faced extinction in the late 1980s, its union and management employees realized survival required working together. Today, as a DaimlerChrysler engine plant, that philosophy blended with continuous improvement, powers a new era of ingenuity and prosperity.

by Paul Arnold

Kenosha, Wis., is a factory town. More accurately (with apologies to Snap-On, Jockey and Ocean Spray), Kenosha is an auto factory town.

Since Thomas Jeffery opened one of America’s first automobile plants in this southeastern Wisconsin city in 1902, few residents have been unaffected by the health and well-being of the car plant. The locals say, if you don’t work there, a relative, friend or neighbor does. Or, your dad, mom or grandparent did.

Since the current production site opened in 1917, the plant has housed Nash Motors, Nash-Kelvinator, American Motors, Chrysler and, now, DaimlerChrysler, and has produced everything from Ramblers, Fifth Avenues and Diplomats to the engines for more than two decades of Jeep and Chrysler nameplates.

“People here have auto blood in them. Some families are in their fourth generation here,” says Ron Rosmann, a senior manufacturing manager at the plant. “Automobile manufacturing is their way of life.”

With such history and community presence, it isn’t surprising that plant leaders spent much of a recent Monday lunch meeting dealing with issues related to . . . history and community.

Topic 1: The Kenosha museum wants to display some milestone engines produced at the plant.

Topic 2: The upcoming Fourth of July parade will feature 100 years of cars made in Kenosha or powered by Kenosha engines.

Topic 3: Female plant employees will walk the parade route wearing special “Rosie the Riveter” T-shirts.

If you’re a local history buff or a manufacturing plant employee, this is interesting and important. Not the museum, parade or T-shirts. Noteworthy is the mix of DaimlerChrysler (DCX) employees at the plant leaders meeting. There’s plant manager Bob Hollingsworth and a half-dozen manufacturing, engineering, finance and human resources managers. But, there also is an equal representation of hourly workers — leaders and members of the United Auto Workers Local 72 and the International Association of Machinists Lodge 34.

“Twenty or 30 years ago, you wouldn’t see this,” says Phil Anastasi, the local UAW vice president. “The historic presence in this plant is very important. But you have to remember, if you don’t know history, you will be doomed to repeat it.”

Around the meeting table, managers and hourly workers nod their heads in agreement.

“This plant is still around,” says Anastasi, “for three reasons:1) we produce quality products; 2) we are the lowest-cost engine producer at DCX; and, 3) union employees and management work as a unit.”

That wasn’t always the case.

Day of reckoning
Every DCX employee in Kenosha can tell you about Dec. 21, 1988.

At 2 p.m. on that Wednesday afternoon, a maroon Dodge Omni rolled off the assembly line, marking the last of approximately 11 million cars built at the plant. Chrysler ceased assembly and stamping operations in Kenosha on that day, and laid off 5,300 of the plant’s 6,500 employees. The 1,200 survivors made engines for Jeep products.

“The only reason they remained was because the company couldn’t find an engine anywhere else,” says Hollingsworth.

In a 1996 PBS documentary, former Chrysler executive Robert Eaton defended the job cuts.

“Through the 1980s, there is no question about the fact that the auto industry in the United States was not very competitive, either from the time it took to do a product, the amount of investment it took, the cost to build it or the quality,” Eaton said. “We were either going to have to change or we weren’t going to survive.”

Hollingsworth, who came to Kenosha as an operations manager in 1990, says even the plant’s remaining products were struggling.

“At the time, our scrap cost per engine was excessive,” he says. “For every 10,000 engines we produced and shipped to customers, too many were shipped back because of defects. Our overall cost per engine was not competitive.”

Many rightly blamed such performance on the untrusting, uncooperative relationship between salaried and union employees.

“Management didn’t listen to the union, and the union didn’t listen to management,” says millwright Keith Lindquist.

Says Anastasi, “Quality programs prior to 1988, including PIP (Partners in Progress) and BRIFT (Build It Right The First Time), failed here because the feeling was that management wanted to use that quality endeavor to do nothing more than eliminate jobs.”

PQI, the great unknown
Progress came at an unlikely time and from unlikely sources.

In 1989, then-plant manager Ron Lightcap introduced another acronymed Chrysler quality initiative to the local bargaining committee. This one was PQI, Product Quality Improvement.

Lightcap positioned PQI as an olive branch. PQI, he said, would place union and management on a level playing field. It was about getting union employees to not only speak their mind, but open it as well. Their ideas and actions for improving relations, the plant, and productivity and profitability would make the plant competitive with other Chrysler engine facilities and with engine plants around the world. That would help Kenosha keep current engine lines and secure the lines of tomorrow.

The announcement was met with intrigue and a healthy amount of skepticism.

“Quite frankly, given our opinion of quality programs and the fact that we had just laid off 5,000 workers, we thought Ron Lightcap had lost his mind,” says Anastasi.

But then came a twist.

“Shortly after that, Rudy Kuzel (the UAW local president at that time) got up in front of the entire membership and said we all have to get involved in PQI,” says Anastasi. “I would say that about two-thirds of the membership thought he was absolutely out of his mind. Rudy was known for nose-to-nose confrontation. Management was deemed to be no good. And here he was, our beloved leader, asking if we were up for the challenge.”

Kuzel did not back down from his stance on PQI. After some time, union members coalesced, believing that if Kuzel had faith, perhaps there was something to this. They swallowed hard, closed their eyes and supported it.

The plant and its employees have never been the same since.

My way . . . or your way
Chrysler had rolled out Product Quality Improvement to other plants in the 1980s with varying degrees of success. But things would be different in Kenosha.

Maybe it was because plant and UAW leaders were in lockstep. Maybe everyone was tired of the bickering and finger-pointing. Maybe it was the plant’s precarious position. People’s perceptions were changing. They were fired up.

“When I heard about PQI, I was like, ‘Nah,’” says hourly employee Astrid Mayek. “But when I went to a meeting, I was like, ‘This is really it.’”

Co-worker Al Grice had a similar experience.

“I told people, ‘I will be damned if I am ever going to let the old way —my way or the highway —get in the way,’” he says. “If this guy is telling me that I have a voice and I can stop the line and say, ‘Hey, there is something wrong here; let’s get that fixed,’ I’m not going out that door (through a layoff or job elimination).”

That’s because, for years, hourly workers believed they held the keys to solving plant problems, big and small. However, they felt as if they had to check their brain at the door.

Jeff Lutz vividly recalled one such incident in the PBS documentary. It pointed out past small-picture (downtime) and big-picture (communication) issues.

“(When AMC owned the plant), the machine that I was running broke down. I said, ‘Ithink there’s something wrong with the table. . . . It’s supposed to rotate. It rotates, but there seems to be something wrong,’” he said. “And they told me, ‘Shut up, we’re engineers. We know what we’re talking about.’”

After an hour of looking, the engineers said the table was off line.

“That’s what I told him in the first five minutes,” said Lutz. “But because I was a peon, they didn’t listen to me.”

That is a thing of the past.

“Now the first thing they would do is ask me, ‘What do you think is wrong?’” he said.

Check your title at the door
Semi-permanent, cross-functional teams, consisting of hourly and salaried workers, are the heart of PQI. Any employee can request formation of a PQI team to address a specific plant need or issue. An issue might be engine debris and contamination. Or, it could be reconfiguring a production area, reducing scrap or eliminating piston-to-piston contact.

A steering committee, made up of union and management representatives, decides the fate of each request. If a team concept is approved, approximately 10 volunteers fill the team. Union volunteers come from the shop floor and skilled trades. Salaried volunteers are engineers, department and line managers, or even the plant manager.

Each team elects a leader and recorder to head the group and document its progress, initiatives and performance. Nearly 100 percent of the time, the leader is an hourly employee. That’s fine with Hollingsworth, because in a PQI meeting, everyone checks his or her title at the door.

“When we step into a PQI team meeting or steering committee meeting, I’m no longer plant manager until I step back out,” he says. “Everyone has an equal say. There is total consensus on that thinking.”

Teams receive eight hours of training on PQI principles, and then meet a minimum of one hour per week to work on projects.

Teams can disband after solving the big issue, but most stay together.

“Hopefully, they’ll stay together for years,” says PQI facilitator Sam Perry. “There are always opportunities. A few groups have been together, on and off, since 1991.”

PQI unplugged
There are currently 34 PQI teams at the plant, and all have made significant contributions to quality and profitability. In 2001 alone, the teams saved the company almost $4 million.

Johnny Jackson, an operator who helps produce 2.7-liter V-6 engines, beams when relating one example of PQI team success.

A cylinder head on the 2.7 consists of a left head and a right head. In order to allow oil and water to flow properly, the cylinder head must be machined and sealed with small metal plugs. After the plugs are in place, the cylinder head is pressurized to check if leaks exist.

Jackson’s area had problems getting the plugs from Point A, a hopper located at ground level, to Point B, the head, which was stationed on the production line at ground level. In the former method of transportation, the hopper fed a plug into a plastic tube. Compressed air pushed the plug through the tube to its final resting place.

What was wrong?

First, the traveling distance.

“The plugs had to go through the tube, up and over a bench and back down, and wind up in the head,” says Jackson. “It was up, over, down and around.”

Second, machine downtime.

Dirt, as well as debris from the plugs, collected at certain points in the round-about tube track.

“Plugs got trapped in the line all the time,” he says. “We would have to disconnect all the tubing, shake it and do whatever we could to dislodge the plug from the hose.”

Jackson estimates there were 30 to 40 “rejects” —trapped or non-loading plugs —per shift. Each reject cost three to five minutes of production time and kept 10 to 12 heads from moving to the next area.

Third, compressed air usage.

The tube track required 70 pounds per square inch (psi) of compressed air to propel the plug.

An outside contractor brought in to assess the situation stated that a solution would cost the plant close to $250,000. A PQI team led by Jackson developed a better solution.

“We decided to elevate the hoppers overhead and then utilize gravity to allow the plugs to naturally fall down into the heads,” he says.

Skilled tradespeople constructed the new setup. The completed project cost less than $100,000. Now, the tube lines are shorter, cleaner and require 30 psi air (instead of 70). Rejects are down to three per shift, meaning there is around 12 minutes of downtime per shift instead of 2 hours.

“It’s saving us a lot of money,” says area manager Joel Nelson.

You can’t spell PQI without IQP
Another component of PQI is Individual Quality Participation (IQP). Here, an employee or employees help tackle isolated problems in their work area.

If an employee has a particular solution, he or she spells it out on an IQP form and submits it to PQI communicator Lavern Richards, who posts it in a computer database. The work area’s supervisor retrieves the computerized form and decides whether to implement the solution. If possible, the supervisor tries to make the fix within 30 days.

Last year, 271 implemented IQPs saved the company $4 million.

The initiative expands
The plant would have been well and good with simply PQI, but a funny thing happened over the past decade: Joint programs and free expression flourished.

The early 1990s saw the advent of Operating Principles, or OP. Its focus is the facilitation of cross-functional teams in a workshop format to develop and implement solutions that improve product quality and reduce plant operating costs.

Similar to PQI, employees request workshops, which are either approved or shelved by a steering committee. Employees volunteer to be in a workshop. But unlike PQI, whose teams can have indefinite tenure, OP workshops are finite —typically four hours a day for a total of five days.

“One of the first things we do is go out on the floor and assess the current state,” says facilitator Greg Stark. “We see what is really going on out there and what the problems really are. Then we go back up to the classroom and discuss what the real improvement opportunities are. The next step is to develop solutions. We present those solutions to the union and management leadership for approval.”

In 2001, the plant held 35 kaizen-like OP workshops, resulting in 195 improvement tasks and $3.5 million in cost savings.

In 1992, the plant created an Uptime Team, a group of four skilled tradespeople (a machinist, pipefitter, millwright and electrician) whose full-time job is to scout the plant for improvement opportunities. They also lend a hand to PQI teams (they constructed the elevated hoppers in the plug area) and assist OP workshops. Since its inception, the Uptime Team has saved DCX nearly $14 million.

In the mid-1990s, an overarching joint initiative began called the Local Employee Participation Council. The LEPC is the oversight body that watches over joint programs and cost improvements at the plant.

Joint program components include PQI, training, safety, skilled trades utilization (see sidebar) and Manufacturing Quality Assurance Systems (DCX’s internal version of ISO).

The cost improvement piece focuses on eliminating bottlenecks (through things like PQI and OP) and improving communication.

The plant expands Over the past five years, the DCX Kenosha engine plant has worked hard . . . together. And, it’s paying off.

Hollingsworth says that by 1994, the plant reduced scrap cost 75 percent per engine, engine pulls more than 90 percent and overall cost per engine more than 40 percent. The company and outsiders have noticed.

In 1997, Chrysler awarded the plant the business of building a high-tech 2.7-liter, V-6, all-aluminum engine. That $400 million investment and 250,000-square-foot expansion allowed Chrysler to substantially reduce the number of V-6 engines it purchased from facilities in Japan.

In 1999, the company, now DaimlerChrysler, awarded the plant the business of building a new high-tech 3.5-liter, V-6 engine that will power a new 2003 model year category, the luxury touring car. It’s a $635 million investment that added 500,000 square feet to the 1.3 million-square-foot plant.

Also in 1999, the Wisconsin Manufacturers &Commerce organization named the plant its Manufacturer of the Year.

What’s the history lesson here?

“At one point in time, there was an unfair competitive advantage, meaning that all the new product and all the new business was not steered at Kenosha,” says Hollingsworth. “We recognized that and took it as a challenge. We still take it as a challenge every day. There isn’t a day that goes by when we aren’t working together on something to improve as a plant. We’ve been successful in doing that.

“We are among the lowest-cost engine producers at DCX and one of the premier quality builders at DCX. We realize that isn’t good enough because we are no longer competing with our sister plants at DCX. We are competing with every engine plant in the world. We are competing for the jobs of tomorrow. Everyone here is committed to succeeding.”

This article appeared in the June/July 2002 issue of MRO Today magazine. Copyright 2002.

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