Automakers Get the High Tech Religion

A technological revolution in the automobile industry is drastically altering the production process and changing the composition of the motor vehicle as we know it. The technological push began in 1975 when U.S. auto makers launched a ten-year $80 billion revitalization program to recover lost market shares and dwindling profit margins in an increasingly competitive world market.

The auto industry's downward slump was a consequence of two oil price shocks in 1973 and 1978 which led to drastic changes in the international automobile market over the last decade. But the rapid deployment of advanced technology in the auto industry is a new phenomena, transforming this basic industry into what auto executives are quick to assert is "high tech." To Philip Caldwell, Ford Motor Company's chairman of the board, for example, the notion that the automobile industry is a "smokestack" industry is "bunk!"

The auto industry's transition from a mechanically-based to a computer-based technology has important ramifications for other manufacturing industries. Within the next 15 to 20 years, fully automated production and assembly is conceivable; in the transition, jobs will be deskilled, employment decreased, mechanical components will be replaced with electronic gadgetry, and light weight materials will increasingly replace body parts fashioned from conventional steel and other materials.

Technological development is but one of a set of four complementary strategies orchestrated by the auto makers with the prime intent of decreasing labor costs:

• the transfer of production or assembly to plants outside the base country of the corporation, often called global sourcing.
• "whipsawing," or forcing individual plants within the U.S. to compete against each other. This divide and conquer strategy is designed to extract concessions on wages and work rules.
• new management techniques, such as assigning workers multiple jobs, reducing their rest periods, and the use of quality circles. James Harbour of Harbour Associates Management Consultants, flatly states that the primary objective of quality circles is to "achieve a full sixty minutes of work each hour by each worker."

Combining these strategies with new developments in technology, the auto corporations have undercut the power of the United Auto Workers Union, while lowering their break-even point by one-third between 1977 and 1983. And as profits in the last year have soared, unemployment levels in the industry have remained high, illustrating why the technology strategy has become so popular.

Auto-mation frenzy

Although 1980 was the most dismal year in the modern history of the auto industry, with losses of $4.2 billion, expenditures for the modernization of plant and equipment totalled $11.5 billion. From 1978 to 1981, expenditures on plant and equipment exceeded profits by a staggering $23 billion over this three year period.

The key developments on the shop floor have been robotics, computer aided design and manufacturing (CAD-CAM), and the flexible manufacturing system (FMS).

• Robotics. A new generation of versatile robots are being introduced on the shop floor. A single robot can typically be fitted with devices equipping it with the skill to pick up parts, reposition, lubricate, drill, weld, or paint. In the production process, robots now unload molded car parts once they are cast, position parts to be forged, and paint car bodies. Welding commands the largest number of robots. In Japan, nearly 90 percent of body welding is done by automated processes; in North American firms the level exceeds 50 percent.

  But most of the interest in robots now focuses on assembly applications. Assembly work, requiring a high degree of manual skill, is the last bastion of labor intensive processes in automobile manufacturing. Up to 40 percent of production time is spent on the assembly line. Consequently, auto makers are now designing vehicles so that assembly is less complex, making the assembly line more conducive to automation.

  A U.S. Department of Transportation study projects that the automobile industry will be the largest purchaser of robots this decade. The growth rate of robots in the industry will fluctuate between 35 to 40 percent a year over this period. General Motors will tally the largest number. Worldwide, the company expects to multiply its robotic work force nearly ninefold from 1,600 today to 14,000 in 1990.

  The three leading U.S. manufacturers of robots are Cincinnati Milacron, Westinghouse-Unimation, and General Motors. But U.S. companies are increasingly purchasing their robots from Japanese companies such as Mitsubishi Electric, Hitachi, and Fanuc (which is making inroads in the U.S. through its joint venture with GM).

• CAD/CAM. Computer aided design and manufacturing links design, engineering, and manufacturing of automobile parts, and is a process that began in the U.S. aerospace industry. As often illustrated in television commercials, CAD allows an engineer to draw a design on a monitor screen with a light pen; and the computer automatically generates different views and can rotate or reverse the image on command. Drawing scale and other modifications can easily be made at the computer keyboard. Data pertinent to material constraints, weight, stress, and load factors, can be incorporated into the design and tested with engineering formulas programmed into the computer.

  Computer aided design reduces engineering lead times, allows greater flexibility in producing design alternatives, and improves manufacturing quality. Because of CAD, GM cut its design time for the X-body car by a year, according to the company.

  But the greatest savings from CAD/CAM will come from the expanded opportunities to automate the shop floor by linking design and manufacture through computers. Currently, leadership in CAD/CAM systems is held by the U.S.; major suppliers of such systems include Computer Vision, IBM, and General Electric.

• The flexible manufacturing system (FMS) is the next step beyond piecemeal application of robots, numerically controlled machines, and computers. FMS is an integrated manufacturing system which coordinates these devices with automated materials handling and monitoring. The marvel of FMS is that on a single assembly line a variety of parts can be simultaneously produced in small batches at a profit. Unlike earlier systems of mass production, FMS does not require huge assembly lines. Production can be both decentralized and inputs can be changed rapidly (see illustration).

  Though the United States possesses the most advanced knowledge of flexible manufacturing, Japanese manufacturers have been most responsible for its implementation. Last March, Yamazaki Machine Works Ltd. began operation of perhaps the most advanced factory to date. The flexible manufacturing process equipped with 65 computer controlled machine tools and 34 robots is linked by fiber-optic cable to Yamazaki headquarters. There, the FMS is directed to produce particular parts in specific quantities by telling the computer the codes of appropriate machine tools and the operation sequence. A touch of a few buttons sets production in motion. This facility reduces labor requirements more than tenfold. At present, the Japanese government is helping to coordinate 20 major electrical and machine tool makers to develop FMS to be sold commercially.

  General Motors, Chrysler, Ford, and Toyota have begun to introduce flexible manufacturing. GM's new $500 million facility near Pontiac, Michigan features the flexibility to simultaneously handle Cadillac, Buick, and Oldsmobile bodies in both two-door and four-door models.

Robots in, workers out

These revolutionary developments in automation have an impact on every job on the automobile shop floor. As Harley Shaiken, a labor and technology specialist at the Massachusetts Institute of Technology, points out, "What is now different about automation is that computers and microelectronics have a much wider scope than mechanically based automation. Every occupational group from skilled trades to production machine operators, to inspectors, to assemblers are affected."

Like the Japanese automakers, U.S. companies have turned to the use of quality circles to deal with such problems on the assembly line. But increasingly, workers and unions are turning against quality circles, which are touted by management as a means of facilitating communication. Instead many in the labor movement see them as a forum to intimidate workers and galvanize their support for company policies. One UAW local in Flint, Michigan recently suspended its participation in quality circles, citing management favoritism of some workers and manipulation of the circle by management to eliminate jobs.

Harley Shaiken concludes that the impact of the technological revolution in the auto industry can essentially be reduced to the power relationship between labor and management. "The real issue is not whether or not one should have new technology, but the types of technologies that are developed, how they are deployed, and who benefits and who loses in the process of implementation," he says. "The core issue here is one of power."

Automakers now confront their work force with an ultimatum: automate and save some jobs, or resist automation and lose all jobs as a consequence of business failure. Such threats have caused confusion within the labor movement, which is still reeling from the loss of workers over the last four years. The UAW has yet to devise a comprehensive strategy to deal with technological changes in the industry. Don Thomas, an auto worker at

GM's Rochester Products Division, says, "Most workers haven't time to find out what is going on, and they are frightened by management."

Thomas contends that workers must question the existing relationship between labor and management in the United States and must eventually organize on an international scale. "We have to call into question the whole premise of labor being just the junior partner of capitalism. We need to deal with the issues of capital flight and technological changes that are going to displace workers."

One attempt at international organizing has come from the Transnational Information Exchange (TIE), a global network of forty action/research groups concerned with the power of transnational corporations. In 1983, TIE sponsored an Auto Consultation that brought together workers from four continents to begin discussing the new technology and other labor concerns.

Harley Shaiken contends that the choices offered by the companies are not the real choices. "To imply that managerial uses of technology are by definition efficient and more beneficial to society requires a big leap of faith." Shaiken explains, "It is not at all clear if a human use of technology would be less efficient. These are questions that have to be examined virtually on a case-by-case basis.

For consumers, the development of the "high-tech" auto has questionable benefits. First, the increasing complexity of American cars has made them much more expensive than Japanese products. According to a recently released study by Booz-Allen and Hamilton about $1,000 in costs are added to each American car by the many "extras" included, such as the varieties of color or engine style that can be chosen. A Honda Accord, for example, has 32 possible variations, while a Plymonth Reliant has over 23,000 possible variations.

Second, the development of the "hightech" automobile will increase the automobile maker's share of the repair market. It will be nearly impossible to service a car independently of the manufacturer. Auto makers are guaranteeing themselves billions of dollars in aftermarket revenues by equipping cars with model-specific electronic gadgetry. There is a proliferation of electronic components for everything from electronic fuel injection, to electronic suspension automatically adjusted by height sensors, and automatic day/night rear view mirror adjustment activated by a photovoltaic cell. The automotive electronics business is projected to grow tenfold through the 1980s. Frost and Sullivan, Inc., a consulting firm, expects the yearly dollar value of automotive service to grow $33 billion by 1985-a 67 percent increase over 1981 sales in the U.S. This gain is attributed to the monopoly dealerships will command over sales and service of electronic components.

Consumer frustration with service delays and workmanship is likely to worsen. Electrical systems are traditionally the weakest skill of mechanics. The automakers who are responsible for introducing electronic components are not mounting an equivalent effort to ensure that trained mechanics are available to service them. Robert Shelton, an automobile analyst with the U.S. Department of Commerce cautions, "There is a lot of catching up to be done." Arthur Glickman, an industry observer and author of Mr. Badwrench adds, "I don't see anything being done to train people. I wonder how anybody is going to fix cars in the future?"

Robert Krinsky is a student of political science at Clark University in Worcester, Massachusetts.