Faced with increasing foreign competition, Ohio has fallen victim to the current slump in the US automotive industry. Recent troubles at Delphi Corporation and other automotive manufacturers and parts suppliers represent a grave threat to the state’s economy, as plants are closed and workers laid off.
But the citizens of Toledo, Ohio, are optimistic thanks to co-operative labour-management relations. It is a far cry from the 1980s, when manufacturers often faced ‘wildcat’ strikes, egged on by militant union officials and workers protesting over shoddy treatment. In the past two decades, leaders from United Auto Workers (UAW) Local 12, Local 14 and others in the region have banded together to convince members that getting along with the bosses produces mutually beneficial results.
Such co-operation has paved the way for Toledo plants to raise productivity, improve quality, reduce waste, improve safety, lower absenteeism and save millions of dollars in aftermarket warranty repairs, in addition to retaining jobs and attracting new opportunities to the region.
At General Motors (GM) the change began in 1983 when UAW Local 14 members were set to strike over a transmission unit that had so many problems that 100,000 had to be recalled and rebuilt. Oscar Bunch, UAW Local 14 president, recalls: “That night we met with the GM big wheels and together decided we had to do things differently than we had in the past. We made a commitment to work together.”
That commitment gave rise to labour management programmes such as the Working Council for Employee Involvement (WCEI), whereby facilitators train workers, and labour leaders exchange ideas with management to solve productivity and quality issues. WCEI is now a model for other plants around the country.
Consequently, the Harbour Report (the auto industry authority on manufacturing efficiency) has ranked UAW Local 14 number one for five consecutive years, for its top productivity among all North American transmission plants.
Now GM is investing $500m in its Toledo transmission plant, despite planning to close 12 plants and lay off 25,000 workers nationwide by 2008. Construction of the plant is under way. GM is also investing $100m for vendor tooling, containers and investments at other locations necessary to support the Toledo operations.
UAW Local 12 negotiated a new labour agreement at DaimlerChrysler’s Jeep plant, which has resulted in the automaker expanding its presence in Toledo.
“We put in a team concept that included job rotations,” explains Bruce Baumhower, UAW Local 12 president. This means that, instead of performing one task, employees work in teams to cross-train, rotate jobs and exert more control in operations, which may include having the authority to stop production to correct a quality issue.
In summer 2006, DaimlerChrysler opened the new $2.1bn state-of-the-art Toledo Supplier Park to build the Jeep Wrangler. The park is the first North American operation to have three major vehicle-building operations (body shop, paint shop and chassis assembly) owned or operated by suppliers: Magna International's Magna Steyr, Kuka Group and Hyundai Mobis-owned Ohio Module Manufacturing Corp.
“This means two more vehicles will be produced in Toledo, meaning the production goes to four,” Mr Baumhower says.
Component manufacturers are flocking to Toledo to be located near the park. One of them, Johnson Controls, is building a new plant to make instrument panels. Dana just opened a facility to build Jeep brake modules. Fauredia, a French company, has opened two plants, one to make exhaust systems and another to build door panels. In all, 1200 jobs have been created. Added to the 600 new workers at Jeep, the total comes to 1800 new jobs.
The efforts continue. Local government officials are now liaising with workers and management to prevent Ford Motor Co from closing its Maumee stamping plant in 2008. A $15.7m incentive package has been delivered to Ford, which includes an offer from the Toledo-Lucas County Port Authority to purchase the plant and lease it back to Ford. The offer is the centrepiece of a plan concocted by Maumee, Lucas County and state government officials, together with the port authority and the UAW Local 1892.