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New HR strategy helps GM change its poor culture
American car manufacturers, once the big beasts of world industry, have had a rough ride in recent years. The time came to choose between total closure or drastic change. They made the right choice but a process of restructuring and reducing costs was painful. As Josh Cable reports in the August 2012 issue of Industry Week, helping to guide Chrysler through the pain barrier has been Sicilian Mauro Pino, since 2010 the manager of Chrysler's car assembly complex in Toledo where he has successfully implemented the company's World Class Manufacturing system (WCM), an adaptation of the Toyota Production System.
The stakes were high as Chrysler needed drastic improvement in quality there. WCM is an operating method that focuses on trimming waste, boosting productivity, and improving quality and safety and is also credited with helping to save Fiat SpA.
Pino, former head of Fiat's plant in Termini Imerese, Sicily, led Toledo's transformation from one of Chrysler's lowest-scoring plants to one of its highest. Within six months, workers had made more than 11,000 suggestions on improving efficiency, and almost 80 per cent of them were implemented. He says that, while Fiat's turnaround was mainly due to improvements in product design, logistics and purchasing, Chrysler's dramatic bounce back has been driven by a transformation of its manufacturing operations.
Fifty-two-year-old Pino clearly likes the products his company makes. After arriving from Italy, he drove the length of US Route 66 from Los Angeles to Chicago.
The turnaround of General Motors' business is being supported by a new human resource management strategy. In the June 2012 issue of HR Magazine, Robert J. Grossman says the company's HRM strategy failed to tackle the underlying causes of GM's difficulties in the late 1990s and 2000s, leaving the company's poor culture untouched and unable to change its ineffective human resource systems and procedures.
In April 2011 Cynthia Brinkley took over the top HR job at GM, having been head-hunted from AT&T for whom she had worked in increasingly senior roles for 23 years. She is working to change the failings at GM and initiatives have been launched to improve leadership and steer change throughout the organisation.
It isn't just car buyers who are looking for an affordable combination of comfort, performance and durability. The people who spend their time driving tractors or other farm equipment for a living can be fussy too. Dominating the manufacture of tractors is John Deere & Company which has invested $1.1 billion in its plant in the last decade.
In the July 9th issue of Bloomsberg Business Week, Bryan Gruley and Shruti Singh say Deere's equipment is bringing about an industrial revolution of sorts in the developing world's corn, rice, soybean, wheat, and sugar-cane fields. Some farmers in India and China are finally exchanging their horse-drawn and ox-drawn equipment to buy their first-ever tractors, while others are upgrading to bigger tractors and combines with more power and advanced technology to help farmers plant and harvest faster and more precisely with fewer workers.
These trends have helped Deere to remain the world's largest manufacturer of farm equipment. From its HQ in Moline, Illinois, Deere dominates the $23 billion US/Canada market for farm equipment with a 60 per cent share.
Their strategy, apart from offering state-of-the-art machines, is to ensure close links between dealers and farmers which result in customers comprising several generations of the same families.
Deere's global ambitions are important not just to the company and its shareholders but also to the world. To feed a population expected to hit 9 billion by 2050, food production must increase by 60 per cent, according to the United Nations' Food and Agriculture Organization. With arable land available, Brazil, Russia, India, and China have emerged as new agricultural powers. But even they lack enough acres to meet demand. Advances in seed, fertilizer, and pesticide technology must work hand-in-hand with tractors and other equipment to help farmers to squeeze every last bushel of yield from their fields.