GM’s Tuscaloosa Plant Turns Into University Lab
Tall, thin and dressed impeccably in dark suit and tie, J. Barry Mason looks the picture of a corporate manager as he shows a visitor around his pride and joy, General Motors’ Tuscaloosa carburetor assembly plant.
Wandering comfortably through the plant’s aisles, he greets employees by name, explains the workings of the various machines, and talks hopefully about the future, when new operations planned for the facility should bring more jobs to Tuscaloosa. All morning, he walks, talks and acts like GM management.
But after the visit is over, he leaves the plant along with his guest, incongruously stuffing his lanky frame into his well-worn 1973 Buick, and drives 10 minutes to his real office--a cramped professor’s quarters at the University of Alabama.
From Campus to Factory
For nearly three years, the 44-year-old Mason, chairman of the management and marketing departments at Alabama’s School of Business, has been leading dozens of his fellow faculty members and students on similar treks from campus to factory and back, as the school’s coordinator for a unique experiment in American business.
In a program run jointly by the university, GM and the United Auto Workers, a pool of technical talent available at the university has been used to save the aging plant from closure by making it more competitive. In the process, it has given the school’s faculty a real-life “laboratory” for applied research.
Faculty members fill in as managers while students scramble around the shop floor looking for new ways to help GM turn a profit. And, in return, GM’s Rochester Products Division, which runs the 300,000 square-foot plant, is allowing its once-struggling carburetor operation in this college town to be transformed into a research facility in fields ranging from organizational behavior to applied engineering.
University officials say they know of no other school in the country that has attempted such a comprehensive, interdisciplinary project with a local business.
Already, the professors have found more than enough cost-savings to cause GM to set aside plans to close the factory. Instead, GM has decided to invest up to $14 million to turn the plant into the company’s center for research to find more efficient ways to assemble relatively small amounts of a wide variety of auto parts.
“More than anything else, this agreement has been almost like guaranteed job security for the workers,” says Grady Cook, union shop chairman for UAW Local 2083, which represents Tuscaloosa’s hourly employees.
The Alabama faculty, meanwhile, has had the kinds of management experiences and advanced manufacturing technologies that are rarely available to business and engineering professors. And they are starting to translate their GM work into articles in academic periodicals--including a piece summarizing the project in a future issue of the Harvard Business Review.
Remarkable Laboratory
“For the university, this is a remarkable laboratory; no other school could have access to this,” Mason says.
Adds plant manager Bob Stevenson: “It would be nearly impossible for a university to buy die-casting machinery and other manufacturing equipment to do applied research on its own. But for us, it’s no problem to use the equipment for our operations and then flip a switch and turn it over for research. So we’re talking about strong scientists wanting to come in to do research because the operation is here.”
Top officials from both GM and the university say they are so pleased with the program’s success that they expect to extend their three-year agreement, which expires in January.
“I think the agreement will be extended--I’d like to work with GM to create a real factory of the future here,” says Joab Thomas, president of the University of Alabama and a key supporter of the project. “We are really already in phase two of the project now,” he adds. “We’ve gone beyond just trying to save the plant from closing.”
Meanwhile, Alabama has started to take on additional corporate partners, including a valve manufacturer in Birmingham and a small steel mill in Tuscaloosa, that are eager to copy the GM experiment.
Initially, it took a recession-induced crisis to bring GM and the university together.
It came to a head in 1982, during the auto industry’s worst slump in 50 years, when GM announced that it planned to close the plant because the carburetor market had collapsed and the facility was losing money. The decision meant the elimination of more than 200 jobs and represented another blow to Alabama, which at the time had a 14.4% unemployment rate.
Workers Worried
After the announcement, the plant’s workers were left to wait for the inevitable, worried about how difficult it would be to find new jobs in Alabama to match their old wages and benefits.
GM, which had opened the plant just four years before and considered the Tuscaloosa work force among its most productive, made the decision to close the facility reluctantly. It did so only after giving the plant’s management and workers a chance to find ways to cut costs. But even though they were able to identify annual savings of $1.5 million, GM decided that their effort was $470,000 short and announced in August, 1982, that it would close the plant.
At the last minute, however, local business leaders suggested that GM talk to the University of Alabama to see what the school could do to help. Thomas, then the university’s new president and eager to enhance the school’s relations with the business community, jumped at the chance.
In January, 1983, the university, GM and the UAW announced an agreement that designated the plant an “applied research facility” open for use by the university, provided that, within three years, the school’s faculty could find the extra $470,000 in annual savings needed to keep the plant in operation. As a reward for the university’s help, GM also agreed to provide $250,000 a year to the school for scholarships, fellowships, research grants and equipment purchases throughout the university during the three-year life of the contract.
Meanwhile, the plant’s workers each agreed to have $55.20, roughly 10% of the typical employee’s wages, deducted from their paychecks each week to help pay for the school’s cost-cutting studies.
Under Heavy Pressure
With the university’s credibility on the line in such a highly visible project, Mason says he and his colleagues were under heavy pressure from Thomas to make it work.
And they have, by bringing in specialists from all parts of the university.
Alabama engineers have suggested energy savings, less expensive package designs, and done research on how to use more computer-aided technology in designing the plant’s newest operations. Business professors have thought up ways to cut inventory and freight costs, while legal experts from the law school have found less costly ways for Rochester Products to meet federal emissions standards on its carburetors. Criminal justice faculty members have advised on improving the cost-efficiency of plant security, and the medical school has been offering help to set up a new group health program.
Even the home economics department got into the act when it studied whether providing workers with uniforms emblazoned with the company logo would increase their team spirit. (That idea was later dropped.)
So far, about 30 faculty members on a rotating basis have conducted research or helped out at the plant, and between 200 and 300 students have worked on class projects there.
One faculty member--engineering professor Charles Evces--has even taken a leave of absence from the university to become the plant’s superintendent of technical services. Mason has also served briefly on a strategic planning committee at Rochester Products headquarters in Rochester, N.Y., while other faculty members have spent time in Rochester to develop research projects that complement what the division wants to do with its Tuscaloosa plant.
Met Goal Early
The experiment produced results quickly. In September, 1983, far ahead of the initial three-year timetable, Rochester Products and Alabama announced that the initial $470,000 annual cost-savings goal had been met, that the plant closing threat had been eliminated and that, since the goal was met so early, the workers were being reimbursed for their lost wages.
To be sure, the strong economic recovery bolstered the plant’s fortunes, but Rochester Products management still credits the project with making the crucial difference.
“Those cost objectives were met much sooner than any of us expected,” says Michael Mutchler, general manager of Rochester Products. “We were amazed.”
Today, Mason figures that $1.2 million in annual cost savings have been identified since the project began, despite a commitment by the Alabama faculty not to look for ways to eliminate jobs. In fact, the plant’s employment has risen from 200 when the project started to 240 today. “This is not a job-cutting project,” Mason says. “If it ever had been, it would not have worked” because the employees would have resisted, he adds.
Rochester Products is now committed to keeping the Tuscaloosa plant open indefinitely. Although carburetors will soon be phased out of new cars in favor of fuel injectors, the Tuscaloosa plant primarily serves the so-called aftermarket for replacement parts, and the demand for its products in the used-car market should remain strong into the 1990s, Mutchler says. And when the division’s other plants switch to fuel injector production in the next few years, all of Rochester Products’ remaining carburetor assembly is likely to be consolidated in Tuscaloosa, he adds.
“That could keep the plant working for another 10 years,” Mutchler says.
Expanding Operations
The plant will also be expanding beyond carburetor assembly, he adds. Rochester Products is installing a new die-casting operation in the Tuscaloosa plant so that it can manufacture some carburetor parts as well as assemble them, and the division has announced plans to add a state-of-the-art flexible machining center and to bring in new operations that can use the machining equipment when it is installed in next year. The machining equipment is also at the heart of Rochester Products’ plan to use Tuscaloosa as a place to learn more about reducing the costs of low-volume production for a wide variety of auto parts.
Still, the project hasn’t always run smoothly. At first, some friction developed between workers and students after some students timed hourly employees and briefly performed union jobs to get a feel for the work covered by their research projects. The UAW’s Cook says some workers, fearful that the students might be out for their jobs, complained to the union.
“We asked the students to back off,” Cook says. Mason adds that the students’ lack of experience in dealing with union work rules led to the problem, and that the school backed up the union’s position.
Now most workers say they get along well with the faculty and students who rotate through the plant, and pickup basketball games between students and workers have recently helped break down the barriers.
Attitudes Changed
“At first, we felt like we were on display with the students coming around,” says Ann Skelton, a 39-year-old Rochester Products worker. “But now we are used to it, and they have had good ideas. Not all of their ideas have been good, but I think it has been a learning experience for both sides. We (the hourly workers) have been able to steer the students away from projects that would be a waste of time, and suggest some alternatives, and they have offered fresh insights to help us,” she adds.
Faculty members had their own worries. Some were initially concerned that valuable time spent on the Rochester Products project wouldn’t help them get tenure or raises, since the school evaluates them on conventional scholastic activities such as classroom teaching, research and the publication of academic articles.
Mason insists that those conventional standards still must be met by professors deeply involved in the project. But he notes that about a half dozen articles, either already published or in the works, have come out of the experiment so far, relieving some of the faculty’s fears.
Alabama’s Thomas has also tried to make sure that his faculty members don’t just become free consultants to GM on routine matters, and that applied research comes out of the project. So far, he says he is satisfied with the level of research at GM, but notes that the school has been very selective in choosing other projects to avoid such problems.
“We are being very cautious--any of these projects that we get involved in must offer legitimate educational experiences for our students and scholarly activity for our faculty.”
At least a few professors add that the experience has tempered them, given them a better perspective on their more theoretical research. James Cashman, a specialist in organizational behavior at Alabama and an organizational relations consultant at the plant, eagerly joined the project armed with abstract theories on how to streamline management by cutting out layers of bureaucracy. He learned quickly that the real world is different, however.
“I had theories about how that would work, and those turned out to be just theories,” Cashman says.
