GM Losing Sales to Ford Due to Production Delays at Van Nuys Plant

General Motors is losing customers to Ford and other car manufacturers because its Van Nuys plant has fallen behind its production schedule after four months of using a new, highly-touted Japanese manufacturing method, according to plant manager Ernest Schaefer.

In a September 4 letter to Van Nuys’ 4,000 employees, Schaefer told workers that they are stopping the assembly line too frequently and that the lower production schedule is costing GM customers. The plant makes Pontiac Firebirds and Chevrolet Camaros.

“Our inability to build our daily schedule is causing a serious problem with our dealers and customers,” Schaefer wrote. “. . . we have not met our daily schedule and have built almost 1,200 fewer cars than requested by our customers.

“Many of these customers are not waiting for us to build their cars, but are going elsewhere to buy a competitive product. We can’t let this happen! We need every customer we can get, and we can’t let them buy Ford Mustangs, RX-7’s or other competitive products.”

This comes at a time when the Van Nuys plant, like all of GM’s plants, must contend with the prospect of a strike. On Thursday, Ford Motor Co. and the United Auto Workers agreed to a new three-year contract that includes sweeping job guarantees. Many analysts are predicting that GM will not be able to match Ford’s agreement and that a strike will result.

The Van Nuys plant has also suffered from an increase in workers taking disability leave. Those workers on disability leave would continue to get paid during a strike.

“There is an increase in sick leave,” said Jim Gaunt, director of personnel at the Van Nuys plant. “It seems to be an occurrence that happens when there is a possibility of a contract settlement or a work stoppage.” Gaunt refused to disclose the size of the increase.

Union and company officials describe the mood at the Van Nuys plant as tense. “There’s a very high level of concern,” Schaefer said in an interview Thursday night.

Peter Z. Beltran, shop chairman of UAW Local 645 at Van Nuys, said it’s not a question of whether there will be a strike. “The real question is how long the strike will last.”

It hasn’t been an easy summer for GM officials at the Van Nuys plant. In May, the company installed what it called the “team concept,” a manufacturing method that eliminates many job classifications and encourages worker-management cooperation.

Employees work in groups on entire sections of a car, instead of performing a single repetitive task. When a worker spots a defect, he or she has the power to stop the assembly line, shutting down production.

Under the old system, the cars proceeded to the end of the assembly line, then defects were repaired in the back of the plant.

In Schaefer’s Sept. 4 letter, he wrote that the Van Nuys workers were stopping the assembly line too often. “Much of our problem stems from the fact that we are stopping the assembly line for reasons that really will not improve the quality.”

Complicating matters is the fact that in August GM shut down its Norwood, Ohio, plant, the only other plant that produced Firebirds and Camaros. “With Norwood closed down, we no longer have their backup, and it makes the current situation even more critical,” Schaefer wrote.

Dee Allen, a GM spokesman, said “We think team concept is a very viable method with a lot of advantages. There is no intention on our part to scrap it.”

Workers at the Van Nuys plant ratified the team concept by a 53% vote last year.

GM is counting on “team concept” to help reverse its shrinking market share, improve the quality of its cars and reverse a plunge in corporate profits.

But Beltran insists that the new method is causing more problems than it is solving. “It’s a mess,” he said. “There’s no chain of command.”