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MICHIGAN SPOTLIGHT
The Michigan Model
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isit the General Motors Lansing Grand River Assembly plant in Lansing, Mich., and you'll see more than the new Cadillac CTS sedan. You'll see the future of manufacturing in Michigan.
The US$560-million, 1,000-employee facility covers 82.5 acres (33.4 hectares) and contains 2.2 million sq. ft. (204,380 sq. m.) of the most modern automotive assembly workspace in the world.
But the sheer size of the plant isn't as staggering as what occurs inside it. GM's first U.S. car factory in 15 years uses fewer workers and more robots than any other GM plant and is capable of producing each vehicle -- from start to finish -- in 24 hours.
The $30,000 to $40,000 CTS, a luxury performance sedan that replaced the Catera, is as close as it comes to a "make-or-break" product for GM. "If we're not successful with Cadillac, General Motors can't be successful," says Ron Zarrella, president of GM North America.
That's why every CTS built at LGR is custom-made-to-order, says Klaus Blache, director of manufacturing engineering for GM in Lansing. The 2003 model year target for production is 73,000 CTS vehicles. Next year, the CTS V-Series -- a high-performance, enhanced CTS -- and the SRX luxury sport utility vehicle will be added to this volume, making the LGR plant the only one in the world flexible enough to build cars, trucks and SUVs on the same line.
The plant incorporates GM's Global Manufacturing System (GMS), which has been used at the company's Eisenach, Germany, plant. Under GMS, all resources, processes and technology are organized around the needs of the worker, which allows the worker to construct a higher-quality vehicle.
"It's a people-focused factory," says Blache, who was part of a 15-member union and management team that traveled to Eisenach to learn more about GMS. "GMS is based on the principles of standardization, built-in quality, short lead time and continuous improvement."
The factory is so modern that it's not just a factory; it's a virtual college for GM workers. "This plant is meant to be a learning center for North America," says Blache. "The plant is based on practical problem-solving through small, collaborative teams. For this plant to be successful, labor selection had to be as critical as site selection. Eventually, GM will bring people from all over the world to come here and learn."
The team concept permeates every corner of the facility. Even Blache works in a cubicle, just like every other office worker at the plant. Except Blache doesn't just stay in his office; frequently, he can be seen walking the shop floors, talking to line workers, listening to their suggestions, and incorporating workers' ideas into improved work-flow processes.
The team concept extends to the community. The governments of Michigan and Lansing put up $174 million in incentives -- one of the largest packages in Michigan history --to make the deal happen. The deal included $22.6 million for site preparation, $63 million over 14 years in property and equipment tax breaks, $73 million over 20 years in job-creation tax credits, $12.7 million over 12 years in property tax abatements, $2.2 million in job-training grants and $1 million for environmental clean-up.
The level of incentives given to GM for the LGR project is comparable to that given to BMW in South Carolina but considerably less than Alabama provided for Honda.
"Incentives provided by government are always a key part of the site selection process, but need to be complemented by an enabling work contract and willing work force," Blache notes.
At LGR, the company got both, thanks to a long history of cooperation with UAW Local 652, the union representing Cadillac employees. The labor agreement between GM and the union allowed the company to establish the team concept, which focuses on support for the line operator. "It's these many small groups doing problem-solving on the plant floor that are at the heart of our continuous improvement and competitive practices," says Blache.
As sales increase and GM begins production of new vehicles at LGR, the work force will increase. GM production jobs pay more than $21 an hour, and at capacity the new factory will employ 1,500 workers over two shifts.
The revolutionary factory is adding more than $75 million a year to the local payroll. It is also adding a glimpse of what global manufacturing will look like in years to come.
The entire project went from formal site dedication to production launch in less than 10 months. It was built on one-third the space that a normal car plant its size would occupy. And it was built to change.
"We have three separate buildings, built to house the processes that take place inside them (body shop, paint department and general assembly)," says Ken Knight, plant manager. "What that lets us do is save a lot of money and a lot of time in constructing the buildings because they're kind of a minimalist concept. And who knows what cars will be like in 20 years, so why build a building for 100 years?"
The US$560-million, 1,000-employee facility covers 82.5 acres (33.4 hectares) and contains 2.2 million sq. ft. (204,380 sq. m.) of the most modern automotive assembly workspace in the world.
But the sheer size of the plant isn't as staggering as what occurs inside it. GM's first U.S. car factory in 15 years uses fewer workers and more robots than any other GM plant and is capable of producing each vehicle -- from start to finish -- in 24 hours.
The $30,000 to $40,000 CTS, a luxury performance sedan that replaced the Catera, is as close as it comes to a "make-or-break" product for GM. "If we're not successful with Cadillac, General Motors can't be successful," says Ron Zarrella, president of GM North America.
That's why every CTS built at LGR is custom-made-to-order, says Klaus Blache, director of manufacturing engineering for GM in Lansing. The 2003 model year target for production is 73,000 CTS vehicles. Next year, the CTS V-Series -- a high-performance, enhanced CTS -- and the SRX luxury sport utility vehicle will be added to this volume, making the LGR plant the only one in the world flexible enough to build cars, trucks and SUVs on the same line.
The plant incorporates GM's Global Manufacturing System (GMS), which has been used at the company's Eisenach, Germany, plant. Under GMS, all resources, processes and technology are organized around the needs of the worker, which allows the worker to construct a higher-quality vehicle.
"It's a people-focused factory," says Blache, who was part of a 15-member union and management team that traveled to Eisenach to learn more about GMS. "GMS is based on the principles of standardization, built-in quality, short lead time and continuous improvement."
The factory is so modern that it's not just a factory; it's a virtual college for GM workers. "This plant is meant to be a learning center for North America," says Blache. "The plant is based on practical problem-solving through small, collaborative teams. For this plant to be successful, labor selection had to be as critical as site selection. Eventually, GM will bring people from all over the world to come here and learn."
The team concept permeates every corner of the facility. Even Blache works in a cubicle, just like every other office worker at the plant. Except Blache doesn't just stay in his office; frequently, he can be seen walking the shop floors, talking to line workers, listening to their suggestions, and incorporating workers' ideas into improved work-flow processes.
The team concept extends to the community. The governments of Michigan and Lansing put up $174 million in incentives -- one of the largest packages in Michigan history --to make the deal happen. The deal included $22.6 million for site preparation, $63 million over 14 years in property and equipment tax breaks, $73 million over 20 years in job-creation tax credits, $12.7 million over 12 years in property tax abatements, $2.2 million in job-training grants and $1 million for environmental clean-up.
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Michigan Statistical Profile
Population: 10,018,735
Pop. growth (1990-2002): 7.8 % Households: 3,821,749 Housing units: 4,270,834 Median household size: 2.7 Home ownership: 67.0 % Median monthly rent: $454 Median monthly mortgage: $666 Median household income: $45,199 Per capita income: $27,573 Pct. with college degree: 15.3 % Total work force: 4,717,247 Total crime index (US avg.=100): 142.0 Annual avg. temperature: 44.2°F Annual spending per capita: $16,677 Consumer price index: 144.9 EASI quality of life index: 58.0
Source: DevelopmentAlliance.com
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The level of incentives given to GM for the LGR project is comparable to that given to BMW in South Carolina but considerably less than Alabama provided for Honda.
"Incentives provided by government are always a key part of the site selection process, but need to be complemented by an enabling work contract and willing work force," Blache notes.
At LGR, the company got both, thanks to a long history of cooperation with UAW Local 652, the union representing Cadillac employees. The labor agreement between GM and the union allowed the company to establish the team concept, which focuses on support for the line operator. "It's these many small groups doing problem-solving on the plant floor that are at the heart of our continuous improvement and competitive practices," says Blache.
As sales increase and GM begins production of new vehicles at LGR, the work force will increase. GM production jobs pay more than $21 an hour, and at capacity the new factory will employ 1,500 workers over two shifts.
The revolutionary factory is adding more than $75 million a year to the local payroll. It is also adding a glimpse of what global manufacturing will look like in years to come.
The entire project went from formal site dedication to production launch in less than 10 months. It was built on one-third the space that a normal car plant its size would occupy. And it was built to change.
"We have three separate buildings, built to house the processes that take place inside them (body shop, paint department and general assembly)," says Ken Knight, plant manager. "What that lets us do is save a lot of money and a lot of time in constructing the buildings because they're kind of a minimalist concept. And who knows what cars will be like in 20 years, so why build a building for 100 years?"