New Day Dawns Electric for Greater Baltimore

In 2006, General Motors‘ 71-year-old plant near the Port of Baltimore was razed and launched on the path to redevelopment by Duke Realty as Chesapeake Commerce Center. In June 2009 GM filed for bankruptcy protection, shuttering dozens of plants and emerging later with a 60-percent stake held by the U.S. government. In early January 2010 in White Marsh, about 12 miles (19 km.) up I-95 from the razed facility site, the “new GM” announced it would invest US$246 million in a new facility and equipment to build electric motors and hybrid components at its Baltimore Transmission Plant.

That plant, nursed from conception to the decade mark by plant manager Tom Gallagher, has from the beginning been marked by flexibility in both its hardware and its work force. The speed to market such conditions can induce was a major factor in its selection for the project, says Gallagher, who in January accepted a position as plant manager of GM’s castings plant in Defiance, Ohio.

“The nature of the initial design has enabled its flexibility to adjust with product, market and volume changes,” he says of the Baltimore plant. “We have lean, agile and flexible equipment. We’re able to pick up and move equipment in the course of hours and redesign our work flow.”

In addition to time saved, such flexibility reduces the overall investment requirements of a new facility like the one now rising in White Marsh, which will bring with it 200 new jobs to boost the plant’s overall payroll close to 400.

“It’s more than project windows, it’s also when we’re adjusting to market changes,” Gallagher says of that flexibility. “It’s a real competitive factor for the site, in line with GM’s thinking in all new investments across the board.”

‘Engines of the Future’

The new high-volume electric drive production facility will begin making 40,000 electric motors a year for GM’s two-mode hybrid system in 2013. That system was launched in October 2007, 18 months after GM chose to invest $118 million in the Baltimore site in order to produce it. GM originally invested some $200 million in the plant in 2000 ($140 million in equipment) on the 65-acre (26.3-hectare) site in White Marsh, where the complex now encompasses 507,400 sq. ft. (47,138 sq. m.). In 2008, GM paid more than $20.7 million in wages at the plant, more than $1.6 million in payroll taxes and nearly $328,000 in property taxes.

The new electric motor project is being aided by $105 million in stimulus funds awarded in August 2009 by the U.S. Department of Energy, $3 million in incentives from the State of Maryland and $6 million in conditional grant money from Baltimore County.

“Electric motors are the engines of the future,” said Tom Stephens, GM’s vice chairman of global product operations, at the project announcement in January. “By designing and manufacturing electric motors in-house at Baltimore Transmission, we can more efficiently control the design, materials and production processes. It will also enable us to lower costs and improve performance, quality, reliability, and manufacturability of the electric motors we use in our vehicles.”

Partners in Focus

Gallagher says GM considered a number of sites for the new project, evaluating them in terms of site, technical and staffing capabilities, competitiveness of labor agreements and total cost to bring the work to the site, among other factors. He says GM’s site selection team, in this and most instances, includes a project lead, flanked by a site-specific project lead, engineering, production and human resources colleagues. While some specific questions might require bringing in a logistics expert or structural engineer, those core team members know their site and equipment like the backs of their hands. “We know what those costs are,” says Gallagher. “The objective is to streamline the flow, and minimize the number of steps to bring a product to market.”

Since arriving in Baltimore in 1999 as project manager responsible for all aspects of the new greenfield operation, Gallagher helped foster a strong partnership that included union leadership, county government, state government and the Community College of Baltimore County, where the company helped to develop a new training and employee development curriculum. Gallagher also served for five years as the chairman of a consortium of Maryland-based manufacturers known as the Regional Manufacturing Institute.

He describes the state and county as “very cooperative” in working creatively to support the project and its time frame. But in an era when U.S. automotive location trends consistently point to non-union locations, the Baltimore investment stands out for the superior nature of GM management’s relationship with UAW Local 239.

“Fundamentally, it’s the competitive nature of our labor agreement that has enabled our ability to bring to market the product with the least amount of costs,” says Gallagher. “We’ve established union leadership as part of our business team. They recognize that the success of the business leads to the success of employees and job security. It’s very important to have open lines of communication to meet that level of engagement between the two groups. If we can address problems on the floor — not arguing or having disagreements on how we handle issues — we can work on how to handle the product in the marketplace.”

Another big plus is the work force’s straightforward expertise: “Having experience with this level of technology was a key enabler to the site.”

Hybrid Schedule Provides Value

More particularly, the plant’s flexible operating schedule has helped keep costs down as well, with a series of production plans driven by customer requirements that mean work schedules ranging from four to six days per week. The current Monday-through-Thursday schedule “allows us to operate at a more affordable level, and is key to generating lower operating costs for the site,” says Gallagher. “We’ve operated six-day schedules with employees rotating on a four-day schedule. That level of flexibility throughout has been very helpful.”

A simplified job classification structure has too, with “one classification that allows us to do all aspects of building a transmission,” he says. “A simplified classification structure enables us to align work in the most efficient manner and get jobs done. We’re basically setting up little business teams in the plant. They own a piece of the product, and have responsibility from beginning to end of assembly of the component of the product.”

In the meantime, the federal government now owns that 60-percent piece of GM. Asked how the new GM’s day-to-day work processes, project management and decision-making is affected by the arrangement, Gallagher says, “The ownership stake by the government has not had a direct impact, but the structure of the new GM has.”

The company is trying to smooth out processes in order to drive to quicker decisions and, hence, quicker product delivery to market, he says, with a focus on quality and overall cost, backed by safety initiatives. “Business processes have been simplified and streamlined, and decision-making has been simplified around project investments and around contracting and sourcing.”