Saturn Project: An Experiment in Togetherness
How does a huge corporate bureaucracy change fast enough to keep pace with competitive pressures? At General Motors, one answer is the Saturn project.
Much has been written about this effort to produce an American car that can compete in terms of cost with the Japanese sub-compacts pouring into the country. The United Auto Workers have agreed to cooperate closely with management to make the project go. Management has agreed to avoid traditional authoritarian approaches to running the place.
Those are radical changes indeed, and it’s important to go back to the beginning of the project to see how the stage was set for them to happen. For if Saturn really can offset the $1,400 to $2,500 a car cost disadvantage that U.S. producers face against Japan, it will be a precedent for other American firms.
The key all along has been separateness, says C. Reid Rundell, executive vice president of the venture and one of its early leaders. “Saturn is counter-culture and you can’t be counter-culture and be part of an organization.”
GM set up Saturn with its own capitalization to operate independently from the rest of the company. In that way, it was able to break bureaucratic practices that GM is coming to realize may have been costing it money for years. Counter-culture meant taking the seemingly simple but nonetheless surprising step of getting individual executives in three basic disciplines--design, product engineering and manufacturing--together to develop the Saturn prototype.
More Bureaucratic
At GM, that’s not how it’s done. Each of these disciplines is a major corporate department, its technical experts reporting up the line to each department’s own top person. The result, says Rundell, is that sometimes the experts in one department don’t get a look at the work of another until an effort may be too far along to change it. “Often it’s 18 months before manufacturing gets a look,” he says.
Decision-making at Saturn has continued to be unusual. Even when the original small band of planners was expanded to a group of 99, the rule was that decisions would not be made at the top but rather by consensus. Even though the group included such diverse members as highly-paid engineers and welders directly from GM production lines, any one person had the right to hold up a decision if he or she couldn’t, as Rundell puts it, “buy in at least 70%.” In other words, everyone had to be largely convinced.
The approach grew out of Rundell’s realization upon joining the project in 1982 that new technology alone would not get GM even with Japan. An equally important factor was people. Thus, union representatives, typically not part of a business planning group, were involved from the earliest days. That produced the environment for the UAW earlier this year to accept a base pay that will be only 80% of the industry average when the Saturn plant opens in Tennessee. To get to 100%, the work force and the company must meet goals ranging from specific targets within each work unit to general targets for the whole project. Beat the goals and pay will exceed 100%.
Streamlined Operation
Management and labor alike have streamlined, the union cutting job classifications from hundreds to a half dozen, the company reducing the tiers of supervisors in the factory to three from six.
Some care is being taken to use a different language. Foremen and other factory officials go by the title “adviser” in keeping with their role as coordinators and providers of information rather than overseers. To deal with the industry-wide problem of absenteeism, Saturn talks about “presenteeism” and the labor agreement ties some of the extra incentive pay to how often the worker is present.
The heart of the system will be a semiautonomous work unit of six to 15 people, charged with making many of its own decisions about materials handling, organizing the various tasks and maintaining product quality. To hire people willing to work in such a team environment, the company and the union are jointly screening job candidates.
GM is sinking $5 billion into Saturn, more than it would normally need to get a new car started. It is doing so expecting to reap benefits elsewhere in the company as the Saturn experiment progresses.
