Learning from Fiat

The New York Times profiles an automobile factory in Poland that engineers from GM believe may hold the key to that company's salvation. Located in the city of Tychy, the apparent secret to the plant's success is its flexibility:

At Tychy (pronounced TICK-ee), one secret is flexibility: The latest robotic technology is balanced by workers who can quickly shift models to match demand. That is one reason Tychy is operating around the clock, six days a week, while most other auto plants in Europe and the United States are running at a fraction of capacity, increasing costly nonproductive downtime.

...The ideal combination of automated robots and individual workers has been critical to Tychy’s success, said Ron Harbour, an American industry consultant with Oliver Wyman, a consulting firm. Success is not as simple as the more robots, the better.

“With people, you can change the mix in one day or one week,” Mr. Harbour said, referring to the models a production line churns out. “You can’t do that with robots.”

...Along with the new technology came a new focus on quality. About three years ago, workers were assigned an individual identification number that is stamped on whatever sections of the car they assemble so any problems at the end of the line can be traced to the source.

As a result, Mr. Arlet said, the number of cars coming off the line with defects has fallen from 20 percent in 1996 to just 4 percent now — a figure Mr. Harbour said compared favorably to factories in the United States or Western Europe.

While GM can invest in new technology I have my doubts how they will reconcile the need for worker flexibility with a worker contract with the United Auto Workers that runs nearly 1,000 pages. (changes have been made since this contract that can be found here) Here's what the UAW contract with Ford looks like, which runs around 2,200 pages:

So the contract with GM should be a bit under half this size. I have a hard time thinking that this allows for much flexibility. Let's also remember that the UAW's health fund now owns 17.5 percent of the company.