Saturn’s ‘Classless’ Workplace
Six years after it was conceived, Saturn Corp. is about to open its multibillion-dollar battle against foreign manufacturers of small cars, which have captured nearly 55% of the auto market in Southern California.
The battle will begin in Southern California because foreign corporations, primarily Japanese, dominate the car market here more than in any other part of the country. The Saturn people plan to go nationwide after testing sales in the area.
Saturn’s most effective not-so-secret weapon may well be what many “team members” say is their almost classless workplace. They expect highly motivated employees to produce cars of such fine quality and low cost that they will rout the foreigners.
There will be problems, but this seems to be the best hope for getting GM out of the mess it’s in.
By erasing almost all traditional lines between workers and managers at its plant in Spring Hill, Tenn., Saturn has established the most advanced system of labor-management cooperation now functioning in the United States.
It is designed to be even more democratic than the very successful one used in Fremont, Calif., by NUMMI (New United Motor Manufacturing), a General Motors-Toyota joint venture.
Written company-union guidelines specify that no decision can be made until everyone involved is “at least 70% comfortable with the decision and 100% committed to its implementation.” Joint decisions are made about everything from car design and production schedules to the choice of Saturn dealers.
Deputy Under Secretary of Labor John Stepp believes that a new model for the structure of work is the “challenge of the 1990’s, and it seems that model will be Saturn.”
He is probably right, but not everyone agrees.
United Auto Workers Vice President Stephen Yokich, who heads the UAW’s GM department, says Saturn has not been tested in a full-scale production environment and, even if it succeeds--and he hopes it will--"I don’t see it as a pattern for all GM plants.”
But UAW dissidents oppose the idea, seeing Saturn and other such systems as management tricks to speed production at the expense of workers’ health--and ultimately to destroy the union.
Pete Kelly, UAW Local 160 president in Warren, Mich., asks incredulously: “Can anyone in their right mind really believe GM, one of the most powerful corporations in the entire world, is honestly going to permit true industrial democracy and allow a classless workplace? Bunk!”
Their suspicions are understandable. Despite vociferous union objections, GM directors recently voted to vastly increase executive pensions. The increases include a stunning 100% hike in the pension of retiring Chairman Roger Smith, despite GM’s slumping fortunes under his leadership. He will get $1.1 million a year.
As one dissident put it: “GM’s top managers were either incredibly greedy or stupid--or both--to make such a move on the eve of union contract negotiations, when management will fight to keep our compensation down, including our pensions. How can we believe their promises of democracy at Saturn or anyplace else?”
But at the Saturn plant in Spring Hill, Tenn., there are only enthusiastic cheers for the new way of working. The team members--they once called themselves workers and managers--seem to trust one another.
They do have some suspicions about the Detroit GM brass, who, drastically and unilaterally, cut the original outlay promised for Saturn from $6 billion to about $2 billion.
However, while it is a GM subsidiary, Saturn is operated as a separate entity, and the people in Spring Hill believe that Detroit will now leave them alone to battle the small car imports.
Saturn does have an advantage over foreign manufacturers: Americans’ inherent patriotism.
“We don’t want to wrap ourselves in the American flag,” the UAW’s Richard Hoalcraft says, “but in their hearts most Americans would prefer buying a car made by Americans in an American-owned company--only if, that is, it is as good or better than the foreign-made cars.
“So when we offer a truly superbly built small car at a low price ($10,000 to $12,000), most import buyers will start buying American again.”
Models of Saturns have been made and tested. Production will begin in a few weeks, with distribution to dealers starting around November.
There are dozens of challenging features of the Saturn system in addition to power-sharing. A few examples:
* Workers and executives are to be paid 80% of GM’s basic scales, but they can make up the difference and more if quality, productivity and sales are good. They have no individual incentives. Although part of everyone’s salary is at risk (there are no hourly employees), if the plan succeeds, they all will be well rewarded.
* There is no traditional union contract. No expiration date adorns their brief, generalized agreement. Team members can change anything they want, at any time, by consensus.
* They are still refining an already impressive job-security provision that protects most employees. Now some temporary workers can be laid off when business is slow.
* There are no time clocks and no separate dining facilities, parking or fitness centers for executives. No one wears ties.
* Each worker performs several tasks in building cars to avoid the repetition of the traditional assembly line, and each worker is responsible for quality control.
Inevitably there will be difficulties adapting the new system to production, and Saturn’s sales prospects are uncertain. But if GM’s top management doesn’t mess them up, the Saturn people should be able to teach the rest of the nation a better way to work.