Motors & Drives Information

Something unexpected is happening on the road to lean manufacturing.

The United Auto Workers union, with a little help from Ford Motor Co., has found a clue. Just-in-time inventory, the logistical bedrock of lean production, is becoming one of the UAW's most effective tools since the Wagner Act, the federal law that established the ground rules for collective bargaining.

Exemplified by February's 24-day stand-off with Johnson Controls Inc., where Ford Expedition seats became pawns in the dispute, the UAW is beginning to reverse a 20-year slide in membership among independent suppliers.

With nine words: "We will not accept seats produced by replacement workers," Ford took the most potent management weapon out of JCI's hand, sending tremors throughout the supplier community in the process.

"It's caused all of us to step back and ask ourselves what the OEMs mean by partnership," says Robert D. Albert, chief operating officer of Becker Group Inc., a Warren, MI-based interiors supplies with both union and non-union plants. "We must have a clearer understanding of that definition before we make long-term commitments. There's no question it has heightened the suspicions between some OEMs and some Tier 1 suppliers."

Another supplier executive puts it more bluntly. "I won't buy another Ford product as long as I live," he grumbles. "It's totally outrageous that a customer dictate the way I run my business."

For most of the last decade, the UAW was beginning to look like roadkill on the highways taking the U.S. industry's center of gravity further south. Not only did Japanese and German automakers opt for the nearly union-free climate below the Mason-Dixon line, suppliers followed by the score.

As those same suppliers produced larger chunks of new cars and trucks, the prospect of further erosion of UAW membership seemed certain. Until now.

For the first time in nearly 20 years, UAW President Stephen Yokich says he will increase the number of full-time organizers, which has dwindled to fewer than 50 from nearly 200 in 1978. The union has added about 3,000 new members from independent suppliers in the last year, but that's a fraction of the 70,000 partsmaking jobs lost between 1978 and 1990 (see chart).

"We want to help suppliers where we have already organized by bringing up the wages and benefits of their competitors," Mr. Yokich says, pointing to the disparity between what Lear Corp. pays workers in its Detroit area plants ($13.50 to $15 an hour) and what Johnson Controls paid before the strike ($9 to $10.50 an hour).

The UAW wants to prove that it can help make former General Motors Corp. parts plants competitive without major wage and benefit concessions. In its first contract since buying five plants from GM's Delphi Automotive Systems, American Axle & Manufacturing Inc. agreed to a three-year pact with the UAW that retains most of the wage and benefit levels of GM's own national contract for 7,200 workers. While AA&M can start new hires at 70% of the existing UAW scale, those with three years or more of seniority earn between $18.44 and $22.14 an hour, depending on classification.

Similar agreements were reached with Rolls Royce plc, which bought GM's former Allison Turbine aircraft engine plant in Indianapolis, and Penske-owned Automotive Component Carrier Inc.

Despite these modest victories the jury is still out on whether the UAW can sustain its newfound momentum. We may find out very soon.

Most suppliers regard Chrysler Corp. as the most cooperative OEM among the Big Three, but the UAW is pondering its next move at a JCI seat plant in Taylor, MI, that supplies Chrysler's Jeep assembly plants in Detroit and Toledo. More than 50% of the workers have signed cards expressing interest in joining the UAW, but the union has not asked for a certification election. Will Chrysler allow JCI to use replacement workers in the event of a strike?

"It's pure speculation," says Chrysler spokesman Bryan Zvibleman. "We prefer not to meddle in our suppliers' labor relations."

The turning point in this paradigm shift can be traced to a simple letter crafted in the midst of last fall's contract talks in which Ford said it values its harmonious relationship with the UAW and recommends it to suppliers. We're talking about the moral equivalent of "I love my wife and I don't abuse my children."

Until the JCI strike, however, it meant absolutely nothing to the average battle-scarred supplier.

These are folks who have seen former GM purchasing czar Inaki Lopez tear up their contracts in 1992, fax their patent drawings to every competitor on the planet, then defect to Volkswagen with all the price and future product information his henchmen could download. This is no business for sissies.

Don't bore them with sermons about labor-management cooperation. They live in the New Global Reality. If you can't make a profit in Toledo, pack up the tooling and truck it to Toluca. "Those folks in Solidarity House just don't get it," is a common lament among suppliers.

# posted by Medical Information : 2:46 AM