American Axle & Manufacturing - Three Rivers Manufacturing Facility: IW Best Plants Profile 2010

Dec. 14, 2010
Driving Home the Benefits of Productivity: World-class manufacturing systems and employee involvement enable AAMs Three Rivers plant to win new business.

American Axle & Manufacturing - Three Rivers Manufacturing Facility, Three Rivers, Mich.

Employees: 560

Total Square Footage: 730,946

Primary Product/Market: Automotive driveline products

Start-Up Date: 1994

Achievements: Installed 93 new pieces of equipment without increasing the number of skilled tradesmen; received a zero-defect PPM quality rating from main customer for 24 months; productivity as value-added per employee increased 115% over past three years

In 2008, AAM's Three Rivers Manufacturing Facility endured a bitter 87-day strike. Finally, the UAW's Local 2093 decided to separate itself from the national union's pattern bargaining agreement and agreed on a new contract that substantially reduced the plant's labor costs. That "landmark" agreement, says plant manager Greg Yezback, "allowed us to insource a tremendous amount of work over the last two years." In fact, the plant has transferred in 24 salaried employees from other AAM facilities and hired 352 new hourly associates.

A supermarket approach allows market attendants to pick the right parts to make an axle in an efficient manner.

When Three Rivers and four other plants were purchased from General Motors in 1994, AAM CEO Richard Dauch immediately set the expectation that AAM would become a world-class manufacturing organization. In 1994, the Three Rivers plant had a customer reject rate (PPM) of 570. Dauch told the facility the bar was being set at 25 PPM. "He took the approach of setting stretch goals and challenging the organization to meet goals that maybe we didn't think we were capable of meeting at the time," Yezback recalls. But by 2000, the rate had been slashed to 22. Today, it is zero.

The Three Rivers facility is a leader in implementing AAM's continuous-improvement system, called the Lean Manufacturing System. The system is focused on safety, quality, delivery and cost. Managers use value-stream maps to optimize an entire value stream rather than simply individual processes. The plant employs lean steering committee meetings to review and update the value-stream maps and ensure appropriate progress is being made on key initiatives. Standardized work is used extensively by production workers and management. The plant employs a host of other continuous-improvement tools, including level schedules, pull systems, tugger routes, 5S and standardized work-audit systems.

IW's 2010 Best Plants

See the other winners of IW's 2010 Best Plants award and find out how they made the top ten.

All the more remarkable, plant quality has improved dramatically while the facility has taken on new business. In 1994, the plant only produced driveshafts. In 2002, the plant began building rear axles. "Through our agreement with the UAW, we were able to bring that axle out of Mexico and build it here at a profit," Yezback notes. In 2004, the plant brought in a second axle. In July 2010, the plant began producing a front axle. Now, the plant produces all the products that go into a chassis. Moreover, it has added products for commercial vehicles to its existing truck and SUV business.

Plant management is quick to credit the workforce with being receptive to new ideas and to doing what it takes to win new business. Employees average 40 hours of training a year and are increasingly cross-trained to provide flexibility in job assignments. The plants frequently use team-based A3 problem-solving initiatives. While all salaried employees have been assigned an A3 project, Yezback says, he wants hourly associates to begin using this tool. "Our vision is we will have an hourly workforce that can use an A3 problem-solving tool to make their operation better. They can decide what their biggest problem is and how they can solve it."

Despite the plant's continuous-improvement progress, Yezback rates it as a 3 or 4 on a scale of 10. "We are constantly learning," he says. "I don't think that's a bad thing. It makes us focus."

About the Author

Steve Minter | Steve Minter, Executive Editor

Focus: Leadership, Global Economy, Energy

Call: 216-931-9281

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An award-winning editor, Executive Editor Steve Minter covers leadership, global economic and trade issues and energy, tackling subject matter ranging from CEO profiles and leadership theories to economic trends and energy policy. As well, he supervises content development for editorial products including the magazine,, research and information products, and conferences.

Before joining the IW staff, Steve was publisher and editorial director of Penton Media’s EHS Today, where he was instrumental in the development of the Champions of Safety and America’s Safest Companies recognition programs.

Steve received his B.A. in English from Oberlin College. He is married and has two adult children.

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