Fighting Back

Dec. 21, 2004
How one community went from hemorrhaging jobs to landing new ones by working with a major automaker.

As General Motors Corp.'s presence in the Lansing region shrank almost in half in five years -- from 26,500 workers in 1987 to just over 15,000 workers in 1992, you could almost see the clock winding down on auto manufacturing in Michigan's state capital. Yet today the Lansing community is brimming with optimism -- even though GM employment has shrunk even further to 12,000 and the auto-maker has not announced whether it will keep its last remaining assembly plant in Lansing after 2003. The reason? Seven weeks ago GM began construction in Lansing of its first new U.S. assembly plant since the Saturn complex was built in Tennessee 14 years ago. The $560 million Lansing Grand River assembly plant -- just east of GM's existing small-car plant -- will make the next generation of rear-wheel-drive Cadillacs as well as a Cadillac sport-utility hybrid when production begins in the fourth quarter of 2001. The plant will consist of three separate buildings -- a body shop, paint shop, and general assembly -- designed around lean-manufacturing processes. By the third year the plant is expected to employ 1,500 people -- most of them from the current GM Lansing worker base. "Lansing is a good example of how a community that has lost a lot of jobs can turn things around," says David Cole, director, Office for the Study of Automotive Transportation at the University of Michigan, Ann Arbor. "It shows the role that a leader [in the public sector] can play. Lansing Mayor David Hollister simply said: 'These are valuable jobs and we want to do what we need to do to keep GM here.'" How did Hollister effect the change? First, he formed a committee in early 1997 comprised of representatives from the city and the three county governments and convinced them "to put aside their political boundary differences" in an effort to retain GM, says Paul Roney, investment attraction director for the Lansing Regional Chamber of Commerce. Next, says Roney, the committee sat down with GM representatives, asked them what they needed, and told the automaker that the communities were "willing to work with each other and put the plant where GM wanted it as long as it was in one of the three counties. "It was simply common sense," adds Roney, pointing to the 12,000 people that GM still employs in the area and the more than 6,000 manufacturing jobs in the region that support GM. "GM was one of the three main employers here -- the other two are the state government and Michigan State University. If they [GM] stay, we will all be winners. If they move away, we all will be losers. We understood the value of keeping them here." What persuaded GM to reinvest in Lansing was a pro-business, cooperative government; the willingness of organized labor to be flexible; and government promises to improve education and train skilled workers. The communities involved also put together a tax incentive package that included $600 million in tax breaks for new machinery. "Our decision . . . is the result of tremendous cooperation with the United Auto Workers (UAW) and state and local governments," says Donald E. Hackworth, senior vice president and group executive for the GM North America Car Group. "A true partnership has been forged . . . with a focus on winning together. We have been particularly impressed with Lansing's efforts in workforce development and school improvement projects." For example, when GM expressed concern about the educational system, Hollister met with business, labor, and educators; worked to establish standards at the third- and fourth-grade level; and convinced educators to end the idea of social promotion. "About 1,000 kids in summer school got the educators' attention," says Cole. In addition, the UAW agreed to a variety of work-rule changes designed to incorporate teamwork and give GM greater flexibility. Workers will be trained in a variety of tasks and teams will be in charge of the production areas. "That team structure will play a critical role in managing safety, quality, and costs," says Hackworth. Lansing Grand River will incorporate best-manufacturing processes from GM plants around the world, said G. Richard Wagoner, GM president and chief operating officer, at the site dedication ceremony. "We'll apply what we have learned from benchmarking our competition, from working with our global partners, and from operating our own facilities worldwide." Many of the manufacturing processes were developed and proven at GM's plant in Eisenach, Germany. Those systems also have been adopted at GM's newest greenfield plants in Poland, Argentina, China, Brazil, and Thailand. The end result: Lansing now has what Cole calls its "anchor store" plant. That, he says, will lead to the development of a supplier park nearby. "GM will talk about Lansing as a community, and a whole new supply capacity will move in" because of the outsourcing and just-in-time approach now used in the auto industry. Indeed, GM has indicated to the chamber, Roney says, that 25 to 30 auto suppliers will be moving into the three counties because they are required to be within 15 to 30 minutes driving time of any GM assembly plant. "Some will build manufacturing plants," he observes. "Others will do parts sequencing and create modules that can be used for assembly." Lansing now believes that it can rebuild its auto manufacturing base. The new plant represents a turning point for the community, which dropped from 57th in 1997 to 238th in the 2000 IndustryWeek World-Class Communities ranking of metro areas. (For complete rankings of U. S. metropolitan areas based on manufacturing activity look for the fourth annual World-Class Communities issue, publishing Apr. 3.) Compounding Lansing's new optimism is GM's commitment to two more projects, with a third a strong possibility. This year, GM will move production of the Cadillac Eldorado (230 employees) from its Hamtramck, Mich., plant to its Lansing Township Craft Centre, originally built for the Buick Reatta. It's also consolidating existing tool room activities of the Powertrain Division at its engine plant -- now scattered in Lansing and Flint -- into its former Motor Wheel plant in Lansing. What's more, GM has conducted a feasibility study, but has made no decision, on moving its Chevrolet Malibu production and 1,500 jobs from Oklahoma City to free up space there for increased pickup truck production.

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