LeSabre’s Success Proved Point for GM: Quality Sells

This may be the most improbable place in America for the domestic auto industry to make a stand against the Japanese.

After all, Flint--the aging birthplace of General Motors--is a town that has come to symbolize everything that went wrong with the U.S. auto industry in the 1980s.

Devastated by plant closings and layoffs that cut GM’s Flint payroll nearly in half during the decade, the city is now most famous as the setting for “Roger and Me,” a savagely funny new movie about filmmaker Michael Moore’s attempts to take GM Chairman Roger B. Smith on a tour of the desolate landscape left behind by GM’s virtual collapse here.

Yet amid Flint’s industrial rubble, one GM factory has been transformed into a showcase of American quality, building cars that are nearly as trouble-free as the best from Japan.

For here at its “Buick City” assembly plant, GM produces the Buick LeSabre, which received the highest quality ranking of any American car in 1989 from J. D. Power & Associates, an Agoura Hills research firm that is considered the last word on automotive quality in Japan and the United States.

In fact, after years of languishing near the bottom in the annual rankings, the 1989 LeSabre turned in the highest quality score ever posted by a domestic car under J. D. Power’s rating system.

Remarkably, the LeSabre also came in with higher quality scores than almost every Japanese car on the market and was rated the second-most trouble-free car sold in the United States, trailing only the Nissan Maxima.

The LeSabre’s success in the J. D. Power ratings--usually dominated by the Japanese--has acted as something of a tonic for Detroit’s auto makers.

After a decade in which the Big Three were never able to become fully competitive with the Japanese, the LeSabre has provided a glimmer of hope that Japan’s quality advantage can finally be erased in the 1990s.

“This is a great American success story,” Buick General Manager Edward Mertz said. “It tells the world that the American worker can do the job on a world-class level.”

And, for GM in particular--now amid its worst sales slump since the early 1980s--the LeSabre’s surprising success comes at just the right time, when the organization is so badly in need of a win.

“I really get encouraged when I look at the LeSabre,” said J. T. Battenberg, vice president and group executive of GM’s Buick, Oldsmobile and Cadillac Group. “Our dealers tell me that as the recognition grows that we are building cars of comparable quality to the Japanese--that sells.”

Indeed, the LeSabre has proven once and for all to GM executives that if they build quality cars, people will respond; the LeSabre took off like a rocket on the sales charts after last June’s release of the Power survey.

In July, LeSabre sales rose more than 91% compared to those of the July, 1988; in August, nearly 99%.

The public perception of quality made the LeSabre the hottest domestic car on the market.

“The dealers told us that people started coming in with newspaper clippings about the quality ranking and would say, ‘I want one of these cars,’ without even knowing what a LeSabre was,” said George Gurnsey, Buick’s product satisfaction manager.

For managers at the plant here, the LeSabre’s success has been all the more rewarding because they remember too well just how bad the quality was when LeSabre production began at the renovated Buick City complex in September, 1985.

Buick City, conceived as a model plant where GM would introduce the latest in robotics and innovative manufacturing processes, along with a fresh approach to labor policies, instead quickly became one of GM’s biggest headaches.

Today, even top GM executives admit that the quality of the early LeSabres from Buick City was terrible.

Quality suffered, they acknowledge, because the company tried to introduce too many new elements into the production system all at once.

Not only did the LeSabre have a new design, but the Buick City plant itself was essentially new as well. GM had gutted a 75-year-old Buick plant and stuffed it with the most advanced robotics available.

Meanwhile, the plant’s workers were unaccustomed to each other, having been brought in from different plants in the Flint area. And, as production began in the fall of 1985, even the management in Flint was being restructured as part of GM’s corporate-wide reorganization.

“An upheaval that massive is more than anyone needs,” Buick City plant manager Nelson Gonzalez said with a sigh.

The result was chaos on the line at Buick City, and some of the worst quality anywhere inside GM.

“We were unhappy with the start-up and the quality of the plant, no question about it,” recalled Battenberg, who from 1986 to 1988 was in charge of GM’s Flint Automotive Group, which runs Buick City.

Stories abound of how Buick City’s robots went haywire, militant workers silently stared down managers, absenteeism went sky high and the assembly line was repeatedly shut down because of parts shortages--even as trucks carrying auto parts backed up outside the plant.

By the time Battenberg took over in Flint in 1986 after spending six years in Europe with GM, Buick City seemed destined to go down as yet another failure in GM’s decade-long campaign to catch up with the Japanese.

When he arrived, Battenberg was horrified to find out just how messed up Buick City really was. “I had just been trying to sell cars against the Europeans, so I knew how important quality was,” he recalled.

Quickly, Battenberg tried to pour a cold dose of reality on Buick City.

Robots that weren’t working were pulled out, and the level of automation in the plant was drastically reduced.

Outside suppliers were ordered onto the shop floor at Buick City until problems with the machinery they had sold to GM were corrected. Materials that were defective were returned to their suppliers, and Buick City imposed a new rule that it would not perform repairs on materials coming from outside.

Soon, GM engineers came in from around the corporation to simplify both the LeSabre’s design and the layout of the plant to make it easier for workers on the assembly line to consistently build quality cars.

“That plant had been over-engineered,” Battenberg said. “There were too many robots and too much automation. There were just too many variables in a brand-new plant, so we tried to minimize the variables by taking out automation.”

Management also proved willing to scale back on some of its overly ambitious attempts to copy Japanese labor policies. An early, unsuccessful attempt to introduce the Japanese practice of andon --allowing workers to pull a cord at their workstation to shut down the line when things went wrong--was modified. At first, workers unaccustomed to such power had pulled the cord constantly, leading to repeated stops and starts; later, a yellow warning cord was added, so that workers could call for help without shutting down the line because of minor glitches.

But the turnaround at Buick City did not really begin until management and labor started to share a new sense of urgency about their plight.

To foster that sense of urgency and to make it clear to the work force that GM was serious about quality, Battenberg started shutting down the plant--and sending its workers home--whenever quality sagged. In addition, all outside visitors were barred from the plant for a year to “refocus people on quality,” Battenberg said.

“We had to stress to the organization that their future depended on selling world-class quality,” he added. “So we set some demanding standards for quality.”

The United Auto Workers and local community leaders were brought in to try to boost the spirit of teamwork and to deal with absenteeism, and drug and alcohol abuse at the plant; absenteeism dropped by 40%. A new problem-solving method helped speed the process of turning management and labor into more of a team.

The full-court press at Buick City quickly started to show results. Quality turned around, and by late 1988 GM’s own internal quality surveys showed the plant was one of its best. Now, GM says its warranty costs on the LeSabre have dropped 59% since 1986, while the number of defects per car has fallen 77%.

By the time the J. D. Power survey was released, quality levels at Buick City had surpassed those of GM’s joint venture with Toyota in Fremont, Calif., which had previously produced the highest-quality cars inside GM.

“The (Buick City) plant was really running rough in 1986, but now it is one of the smoothest-running plants in the industry,” Battenberg said proudly.

GM hopes to transfer what it has learned at Buick City to its other assembly plants, but some outside analysts are still not convinced that GM has made the fundamental changes in its system needed to maintain high levels of quality.

Chris Cedergren, an automotive analyst at J. D. Power, says he won’t be sure that the Buick LeSabre has really changed until he sees where the LeSabre ranks in Power’s 1990 quality survey.

He remains cautious because the other two GM cars that share the LeSabre’s basic design--the Pontiac Bonneville and the Oldsmobile Delta 88--have not fared as well as the LeSabre in independent quality surveys. If basic changes in the car’s design were made to improve the LeSabre’s quality, Cedergren argues, such alterations should also have benefited the Bonneville and Delta 88, which were being built at plants in Willow Run, Mich., and Wentzville, Mo.

But the Delta 88 came in 58th and the Bonneville 82nd in the same survey of 154 models that ranked the LeSabre second.

Thus, it seems that the improved quality of the LeSabre came instead from a gritty determination on the assembly line--which is more difficult to sustain than a good design, Cedergren observed.

Japanese theories about quality would tend to support Cedergren’s concerns; engineers in Japan constantly talk of “building in” quality early in the design process to minimize the chances that problems will crop up later on the assembly line.

The LeSabre’s high ranking “could be just a fluke,” Cedergren warned. “If these products all had a high level of quality engineered into their ‘basic design’ platform, then they should all have been relatively close in the rankings. Instead, these quality levels are based just on the assembly plant, which is hard to maintain if quality isn’t built in.”

In fact, the improved labor climate on the assembly line, which played such a big role in helping Buick City to better its quality, may suffer a setback this year. Dave Yettaw, president of UAW Local 599, which represents Buick City workers, says he will campaign for reelection this spring on a platform calling for the local to disengage from the plant’s joint union-management programs.

He charges that management is using the team concept approach to run roughshod over the union. “The teamwork concept is becoming quite shaky at Buick City,” Yettaw complained.

Meanwhile, the LeSabre’s high ranking came at a time when it was the only car that Buick City was producing. But since then, Delta 88 production has been shifted to Buick City, further complicating the plant’s production process.

“I want to see how the LeSabre comes out this year,” a skeptical Cedergren added. “Then I will be more confident.”