US, Japanese labor standards compared
Negotiations between General Motors and Toyota have been under way for more than four months with no signs of progress. The delay has surprised many people, especially William Usury, the labor consultant and former secretary of commerce, who blithely promised last spring that he'd shortly have a labor agreement that would permit the GM assembly plant in Fremont, Calif., to resume car production.
This, of course, can only happen after the Federal Trade Commission officially authorizes the cooperative venture between GM, the world's largest automaker, and Toyota, the world's third-largest company. The FTC decision also has been slow in arriving.
Observers have often said that the lack of a broad labor agreement - it's too early for a real contract - has been due to the failure of the United Automobile Workers (UAW) and the joint venture to agree on whether the ex-workers at the former GM plant will be rehired.
The real roadblock to an agreement between the UAW and Toyota, which will manage the Fremont plant, is whether the plant will be operated on the UAW system of car-building or with the system which prevails in Japan.
There are many differences between these two approaches.
The greatest difference is that it takes about 200 hours for UAW members to manufacture the parts and then assemble them into a car compared with about 100 hours in Japan.
Currently, the US auto industry, usually with UAW cooperation, is trying to adopt the Japanese system in some of its plants. Most American plants, however, still use the UAW system, either entirely or in part.
This is not an assault on the UAW, which generally has an intelligent and successful record of representing its members. The elements of the American carmaking approach have been generally pushed over the years by the UAW and then agreed to by the four US automakers under the threat of a strike.
Here are the principal differences between the UAW and the system employed in Japan:
* Work standards. Many years ago the union and the company decided on how many parts, components, or completed cars each worker would produce in a day. Generally, these standards permit the average workman to be idle a substantial portion of every day. The standards cannot be changed without risking a major dispute.
In Japan, by contrast, the productivity of each worker is constantly being upgraded. This, the Japanese point out, by no means calls for the employees to work more feverishly, only smarter.
* Job demarcation. US auto plants have an incredible number of skilled and unskilled job classifications and it's strictly forbidden for a person in one classification to do the job of another classification.
The classic example of this system is a job in which an electrical fixture was moved two feet away and five different skilled tradesmen were required before the job could be completed.
* Inspection and repair. Without meaning to, the substantial inspection operations and large repair departments become very costly and inefficient because they tolerate and almost encourage poor quality.
The Japanese, by contrast, rely almost entirely on statistical-process control which results in almost 100 percent good parts. With this approach the plant managers and the workers use processes that are carefully and continually monitored, thereby continuously producing first-class parts.
* Local contracts. While the national UAW contracts get most of the attention because they often set nationwide patterns, the local agreements hammered out in each plant often have even more impact on the product costs, productivity, and quality. The Japanese do not have both national and local contracts.
* Clean-up crews. The large staff of sweepers and other housekeepers add considerably to car costs in US automotive plants. In Japan, the assemblyline workers themselves as well as other production workers keep their own work areas clean.
* Grievances. The UAW employs a comprehensive and widely used employee grievance procedure.
* Bumping system. The UAW bump-ing system requires a great deal of transferring of workers because of their seniority, regardless of their experience on a job. The result is often poorer productivity and poorer quality.
* Union officers. In the US auto industry, union officers work full or part time for the union while being paid by the auto companies.
* Strike threats. The greater number of strikes or threatened strikes in the US often results in loss of production and more costly cars.
The Fremont plant negotiations are extremely important because Ford, Chrysler , and American Motors already have said that any concessions granted by the UAW will have to be recognized in their plants as well.