June 5, 2008

Transcript of interview with Tim Lee and John Buttermore, discussing results from 2008 Harbour Report on productivity.

Tom:        Welcome to GM Manufacturing’s pod cast about the annual Harbour Report on productivity.  I am Tom Wickham, Manager of Communications for General Motors.  With me today in the OnStar Studios are Tim Lee, GM North America Vice President of Manufacturing, and John Buttermore, GM Powertrain Vice President of Global Manufacturing.  Gentlemen, welcome and thank you for taking time out of your busy schedules to talk about the Harbour Report and the results for GM.  First Tim, I want to put you on the spot here.  You were in a review for the Harbour Report; you’ve seen the results, what are your takeaways? 

Tim:          For the 15th consecutive year of the entire history of the Harbour Report, General Motors Corporation is the only OEM who has consistently over the years, year on year on year, improved our overall performance.  I’m very proud of that.  Despite all the headwinds we’ve had over the last couple of years.

Tom:        I’m going to come back to that in a little bit, Tim.  But, John, from the powertrain side, you must be pleased with the results given what Tim just said about headwinds.

John:        Yes, Tom, I’m pleased, but before I comment on powertrain I’d want to congratulate my colleague Tim here with after working on this for many years to see the assembly operation of General Motors finish ahead of the Toyota assembly is just a great accomplishment, and I’d want to congratulate him and his team. 

Tim:          Thank you.

John:        With regard to powertrain, transmissions coming out, is the best transmission plant in North America, I just really want to congratulate the whole transmission team.  They were able to do that accomplishment as they’re completely converting over from four-speed to six-speed transmissions as part of our fuel economy leadership in advanced technology activities. 

Tom:        I’m going to go back to you Tim.  Assembly and stamping operations, assembly in particular, because I’m going to go back to my days when I was a reporter covering the industry and remembering in the Harbour Report GM doing very, very poorly and a lot of people wondering can GM ever close that gap.  People were always holding up certain competitors as the ideal.  But we have seen such dramatic change.  What do you attribute it to?  And can you call out some examples of, you know, the best performers?

Tim:          Sure.  Absolutely.  You know, I’ve been part of this system for quite some time and I remember those days and I remember the days when the likes of Rick Wagoner and Gary Cowger and Don Hackworth and Tom Davis would call us together as plant managers or manufacturing managers and site the gross differences in terms of our levels of productivity and the improvement required.  And I would say there has been an absolute constancy of purpose in the Company over the last ten to fifteen years to subjugate all the things that were less important and elevate those that are more important and focus, focus, focus.  I think the results have been dramatic and importantly, when we look at our quality measures, our quality measures and our productivity measures have tracked dramatically alike. 

Tom:        From that standpoint, John, we’re looking at, you know, systemic changes within the Company that, you know, I think people on the outside never thought possible, but from a powertrain standpoint you have seen a number of operations, including Toledo, make dramatic improvements, you know, given the complexity of the work that they do.

John:        Well, Tom, I think, I look at some things that are maybe key to this, and I’d probably want to highlight two of them.  One is we have a common manufacturing system that we call GMS and we are all implementing it in working on best practices, lessons learned and we’ve been at it for a while and it’s really delivering results to the bottom line.  The second thing I think is our ability to work cooperatively with our unions at our plant floor level and the teamwork that you see making these improvements.  Those are the kind of things that are delivering these lasting results.

Tom:        From the standpoint of labor relations, Tim, coming off of a contract last year that was considered revolutionary and with all the headwinds that we’re facing, Gary Cowger, Ron Harbour talked about GMS and the importance of that.  You see this everyday when you’re talking with your manufacturing managers and with the plant managers.  What do you see happening in the plants that have allowed us to make these improvements?  What are the fundamentals?

Tim:          I think the fundamentals really boil down to an understanding that GMS, or the Global Manufacturing System of the Company, is the same in all four regions and fundamentally not negotiable.  And today, whether we’re in Canada or in the United States or in Mexico, it’s not about the content of GMS, it’s about the execution of GMS.  And when we look at our plant leadership teams, and when I reference that I’m talking about both the management leadership and our union leadership in the various plants, the leadership team in the plants understand this in all of the region now, and I think we are at a point where we will truly accelerate our improvements as a result of that common focus on all elements of GMS and getting it done right.  In our local bargaining this year, and we’ve been at this now for a while, we are working on competitive operating agreements in all of our factories.  The basic elements of the competitive operating agreement have to compliment what we want to do with GMS, and so far in every case where we’ve negotiated successfully we’ve been able to do that and I clearly believe that the rate of the acceleration, the rate of improvement, will continue and will get better and better and better in safety, in quality, in throughput and in cost.

Tom:        I’m going to go to you on this issue.  You just mentioned safety.  I was just thinking about cultural changes.  We have to engrain this in our culture.  And safety has been such an important part of our culture for many years.  Productivity, quality, we’re really talking, what you’re talking about is building a stronger culture in manufacturing where when the consumer gets the product there is no question that it‘s built safely, with highest quality, with the most efficient processes. 

Tim:          Absolutely.  And we didn’t invent a safety culture overnight in General Motors.  It evolved over time, and that’s exactly where we are with quality and with productivity.  Without argument today, General Motors is the safest industrial company in the world, and it has been a result of this focus and dedication on detail and it is the same concept that we’re applying in the areas of quality and productivity and side by side with our union partners. 

Tom:        Well, John, and I can speak from experience here, back in my reporting days when I was up in Saginaw, up at central foundry, going in and seeing the processes there at the plants and actually talking to an old time (GM) doctor, Dr. (Richard) Mudd, who, he would talk about the safety in the plants of many years ago and the difficulties that employees faced.  But today you don’t hear about that.  You understand that when you go into a plant there is that culture and powertrain operations are very complex.  Share a little bit of your personal insight, your years in the plants and how that is driving, you know, the productivity improvements, the quality improvements.

John:        Tom I think you know in manufacturing we try to keep things simple.  So whether it’s housekeeping, safety or quality, you get the level of performance that you expect and accept.  And we used to make excuses for safety and think it was okay in foundries to hurt people.  But I think we adopted the concept of all accidents can be prevented, and that’s where we want to be, and we focused on it very simply: dedication, discipline, consistency.  And you can deliver that.  And it’s the same concept with regard to quality and, as Tim said, over the years on productivity.  Just focus and you’re going to get what you accept and expect. 

Tom:        We’ve covered quite a bit of ground here and I think it’s important, you know, in terms of closing this just a couple takeaways from each of you.  And Tim I’ll start with you.  When you think about people, who are out there considering GM products, or it could be the media or analysts who are offering questions up about, you know, the turnaround plan and where we’re going, what will you tell them?

Tim:          Well, I think the turnaround plan is exactly on course.  We’ve got, as I said earlier, a lot of headwind that we’re dealing into.  Ron mentioned in his comments that the basic conditions in the industry have never been more difficult.  Gary mentioned the fundamental changes in the way we will be approaching propulsion and, and, and.  But I think the fundamentals are going to be the same throughout.  We’ve got to make certain that the products we produce are compellingly, compellingly better from a styling standpoint, from a design standpoint, from a quality standpoint and from a value for the customer.  And that is our objective and we don’t sell production systems, we sell cars and trucks.  And that is our objective.

Tom:        Absolutely, but we also know, John, that the powertrains are very important in those cars and trucks.

John:        Yeah, and I think we have to deliver the fuel economy leadership, the advanced propulsion technologies, but at a competitive cost at the highest quality that the customer expects and deserves.

Tom:        Well, gentlemen, thank you for your time.  We appreciate you taking the time out of your busy schedules to joining us today in the OnStar Studios.  This is Tom Wickham with GM Manufacturing Communications.  What I’d like to invite people to do is go to gmmanufacturing.info for more information about the Harbour Report and Manufacturing at General Motors.  Thank you.