New Engine Plant Marks a New Deal For Auto Industry

"We have to change with the times," said Nate Gooden, a UAW vice president. "My job is to try to catch up with Toyota. That's the main force we're chasing, and if we can cut some of our labor costs and get more moderate with job classifications," the new effort may succeed, he said. Toyota, which has 10 manufacturing plants in the U.S., is non-union.

"We cannot continue to continue like we did in the past," Gooden said.

GEMA is located in a town of 3,600 people, 60 miles from downtown Detroit. The plant sits in a 275-acre setting with traditional Michigan prairie tall grasses and sunflowers that was designed by Michigan State University students. The white, one-story concrete-and-glass building is now the workplace for 275 hourly workers and contractors (called "partners" here). The complex is expected to employ 531 workers in two years, when a second plant opens at the site. The initial plant will produce 420,000 engines a year.

The plant manufactures four-cylinder engines designed for the 2007 Dodge Caliber. The engine replaces older models that will be phased out.

The partnership was formed after Bruce D. Coventry, then a DaimlerChrysler vice president, asked if the company -- which had owned stakes in Hyundai and Mitsubishi -- could create more agreements among the companies. All three were hoping to develop new engines. After many meetings, the three companies created an engine that satisfied them all. It was decided that they should continue to refine and manufacture the engine together. Coventry became GEMA's president.

The group looked at the most productive engine plants in the world and used a Toyota plant in West Virginia as its benchmark. GEMA wanted to make the engine for 50 percent less than other engines. In the six-year GEMA contract, teams of workers share responsibilities. They know one another's jobs and change duties throughout their shifts. That allows any team member to work on any part of the operation, "and all are fundamentally skilled," Coventry said while walking through the plant in his black-and-white uniform. "Anyone anywhere can do anything at any time."

"The GEMA structure allows a level of engagement beyond anything we certainly have ever done and perhaps anything our peers have ever done," said Frank J. Ewasyshyn, DaimlerChrysler's executive vice president of manufacturing. The employees are "really the key to running the business," he said. "It's a big cultural shift not only for us but for the industry."

The contract also outlines a different work schedule. Three crews work four 10-hour shifts each week. A typical production schedule allows for 80 hours of production time, but under this schedule, GEMA gets 120 hours of production time per week. This allows workers to work 49 fewer days a year without a matching reduction in days of operation. There is a crew rotation in which workers switch from day to night shifts.

Other plants around the country have started alternative work schedules in recent years, and the team concept is not entirely new. But the job-classification streamlining is unique to GEMA, and GEMA is the first to put so many changes under one roof.

The schedule has not been without its controversy, Coventry admitted. Workers who never had to work night shifts now have to, and the 10-hour days seemed long to some. But "when you start counting the numbers, you see you have three months off," said Don Kingery, a bargaining chairman who works at the plant.

UAW-represented employees at the plant, who earn $21 to $30 an hour, must have at least a two-year technical degree or similar experience, which David E. Cole, chairman of the Center for Automotive Research, said is becoming the norm in the industry. "The idea that you could be a third-grade dropout and earn a salary in manufacturing is no more," he said.

Every team is made up of about six people, rather than the more typical 25, with one mechanical and one electrical engineer per team. In traditional manufacturing scenarios, engineers sat apart from the assembly line. Workers typically had to halt the line and wait for an engineer somewhere else in the plant to find and fix the problem.