Joe Hinrichs, a recent Harvard Business school graduate, was hired in February 1996 to run the General Motors’s the Fredericksburg Torque Converter Clutch (TCC) manufacturing plant. At 29 years old, Hinrichs was GM’s youngest plant manager. Hinrichs was inheriting a poor performing plant that continually underachieved, losing money year after year. Improvements were desperately needed to increase the efficiency of the manufacturing process and reduce operating costs. GM had considered shutting down the plant; however, when a new bonding process, using carbon fiber, for the TCC was approved in 1995, GM instead invested thirty million dollars into the Fredericksburg plant to incorporate the new process.
From the beginning, Hinrichs faced a difficult situation. The previous plant manager committed the plant to ambitious budgetary goals. Hinrichs was also tasked with preparing the plant to use the new TCC manufacturing process and attaining QS-9000 certification. If that weren’t enough, Hinrichs still had day to day emergencies to handle; the latest being the 1500-ton press breaking down, an important machine in the production process. Despite his situation, Hinrichs met the challenges head on, impressing both GM management and plant staff.
Hinrichs knew that in order to be successful, he needed to rally the plant staff around him, gaining their trust and respect. Being an outsider at a small town plant and also being so young, Hinrichs knew accomplishing this would be a huge challenge.
During the first month on the job he started to show that he could be the capable leader this plant needed. Hinrichs had just received word that a UAW strike at two Dayton area plants would shut down all of GM’s automatic transmission production plants, leaving him without customers. The standard procedure was to lay off the plant workers until the strike was over, instead Hinrichs used the lay off as an opportunity to show his workforce that he would take care of them. As an alternative to laying them off, he worked with the staff to get as many people as possible to take vacation during the time or mandatory training. The remainder worked on some of the improvements he wanted to make. Not only did this improve his relationship with the plant workers, it also gave him a way to start bring efficiency improvements to the plant.
Historically, the Fredericksburg plant saw little gains from efficiency improvements. While not stated in the case, this was most likely due to the highly-skilled staff’s resisting change, preferring the comfort of their undocumented processes that they had been using for decades. Hinrichs knew that he wouldn’t be successful unless he could ease them into the changes and frame the changes in a way the staff would see as beneficial. In addition, Hinrichs had to overcome the fact that improvements meant less overtime, a disincentive for the staff.
First, Hinrichs used the guise of necessary process changes to produce the new TCCs in order to bring in process improvements without upsetting the workers. By framing the changes as improvements to get the plant prepared for producing the new high tech part, the staff would be more open to changes. Second, Hinrichs eased the workers into change by first meeting with the union weeks before the changes were implemented in order to get their feedback and buy-in as well as time to come to terms with the changes. Third, Hinrichs spread change throughout the facility, so that no area would experience too much change all at once, giving the staff more time to adjust. Finally, Hinrichs kept the workers very involved in the installation of new cells, encouraging them to examine them and provide him with feedback. This approach got some of the more senior workers to take a closer look and get excited about the changes, some actually applying to work in the new cells....