When Alcoa's automotive business units decided to unify under one roof, they did so under an open layout directive that everybody subscribes to — even Paul O'Neill, Alcoa's former chairman and CEO and former Secretary of the U.S. Treasury, used to work in an open 9x9 cubicle. That kind of impressive buy-in has been key to the divisions' launch of their new automotive center in Farmington Hills, on one of the few tracts of land in the entire community with parcels yet to

Climate Right for Cars? The California Air Resources Board (CARB) in October 2004 adopted regulations to reduce carbon dioxide and other emissions from cars and light trucks by 30 percent in 11 years. However, since the only way to less carbon dioxide is through less fuel burning, detractors from the industry say the regulations are a back-door method of regulating fuel efficiency, which is subject to regulation by only the National Highway Traffic Safety Administration.       So, on Dec. 8, 2004, the Alliance of Automobile Manufacturers - which counts seven major automakers as members - sued California in federal court to block the regulation from becoming law.       John Cabaniss, director, environment and energy for the Association of International Automobile Manufacturers, told the CARB that the enormous costs associated with such changes have not been factored into account.       "ARB's cost estimates are based primarily on per-unit charges estimated by component suppliers for what ARB refers to 'long term, learned-out' production volumes of 500,000 units in a single plant using 'flexible manufacturing' processes that enable a variety of models to be produced in one plant," he testified in fall 2004. "Such costs do not account for the sizable research and development costs for advanced vehicle technologies or the sizable investments that would be needed for establishing the advanced manufacturing facilities that may be entailed. It is like estimating the cost of a house by carefully accounting for the price of each piece of lumber while simultaneously ignoring land and labor costs. The error is so enormous that it makes quibbling over the variable piece cost of individual technologies utterly meaningless."       An independent analysis conducted by Sierra Research for the Alliance of Automobile Manufacturers found that when all costs are considered, "not just the ones selected by ARB staff," the proposed regulations would add at least $3,000 more to the cost of new cars in California.

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      Pursued for strategic reasons, not cost reduction, the 86,000-sq.-ft. (7,997-sq.-m.) project has nevertheless achieved some savings already, which Jim Thomasma, vice president of business development for Alcoa Automotive, characterized as 15 percent in space utilization alone, with an expected recoup on utility and infrastructure costs as well. In addition, close to 70 percent of its 330 employees have an improved commute.
      But the project's primary reason for being is the cross-pollination that can happen when so many business units are working for a relatively short list of high-clout customers. It all emanates from Alcoa Chairman and CEO Alain Belda, who championed the creation of "market sector lead teams" in all of the company's market segments. He is also the one calling for the company's third consecutive three-year cost-savings challenge, aiming to slash $1.2 billion in costs by the end of 2006.
      The Center brings together Alcoa's seven automotive businesses, including Alcoa Fujikura Ltd., Advanced Transportation Systems, Automotive Castings, Cast Wheels, Forged Specialty Wheels, Extrusions and Mill Products. As Craig Harju, manager of the center, suggests, "We really didn't know each other." The growth of that culture was one of the project's many criteria for success, along with promoting customer engagement and managing the fiscal considerations and time requirements of impending lease expirations.
      The Center's product showroom and literally sparkling reception floor wow first-time visitors, and its 41 bookable conference rooms allow ample opportunity for private meetings and traffic coordination, given that the company dance card may involve highly competitive end users crossing paths. Alcoa has significant new contract synergies working in its project's favor as well, announcing a dozen in conjunction with the center's grand opening. Topping it all off is maximized daylighting on all floors, a noticeable improvement over some of the three units' previous digs.
      Mike Garcia, director of sales and marketing for automotive sheet, cites one example of teamwork that has already occurred since the business unit consolidation. An OEM was concerned about the weight in its panels and hoods for a full-size pickup platform. The company wanted to improve performance without having to develop a new drivetrain or powertrain. Alcoa's aluminum sheet experts teamed with experts in its other divisions to present multiple aluminum-based solutions at one time, giving the goal of internal unity a very tangible external reality.