The world of competition and technological change seen through the eyes of an American machine operator
The world of competition and technological change seen through the eyes of an American machine operator
The portrait of an American worker
Every manager in America should meet George Beeler. He's the kind of worker an Inc. reader would die for; at the moment he also happens to be locked in a struggle for his livelihood, as his company tries to adapt to a whole new competitive environment. Ordinarily Inc. writes about business from the point of view of top management. Here's an opportunity to show our readers what the new American economy -- the world of global competition and technological change -- looks like from the shop floor. -- J.H.
George Beeler knows exactly where he'll be when the inspectors come around to shut down the plant and terminate his job. He'll be working his day shift on the screw machine, just as he has most days for the past 30 years. Maybe he'll be picking the tools, maybe cutting and tapering the steel bars that will eventually move to the loading dock for the trip to the Ford plant down the road.
He has played out the scene a thousand times. Each time, a young man from General Motors or Ford stands up in the middle of the factory floor and announces that Gel Inc. has failed the new quality test and will be dropped as a supplier. Of course, the results might be much happier, but Beeler has been around long enough to know not to count on it. Long enough to remember when Detroit defined the physical laws of the auto universe, and long enough to watch as its hegemony exploded like a supernova. No union could help him now.
Maybe that's how it should be; the carmakers are trying to foster more Japanese-style supplier relationships. That means fewer suppliers, longer-term contracts, closer partnerships. All of which sounds fine -- except if you happen to be George Beeler or one of his neighbors or his son. "All of this," Beeler says, "might mean getting rid of people like me."
If Gel doesn't make the grade, all 145 employees will suffer. The owner will have to sell or write off the assets. The executives and managers will add a line to their résumés and head for brighter prospects in Phoenix, maybe, or Atlanta. But Beeler is different. He is one of many who will have nowhere to go. These days, people tell him 30 years on a screw machine qualifies you to work at McDonald's. "I don't know what will happen," he says. "I'm just fighting for my way of life.
"I'm not scared of changing," he adds in a hoarse voice. "I just want the opportunity to survive."
When George Beeler was growing up on the southwest side of Detroit, the automakers didn't just provide jobs. Oh, sure, everybody worked in the car industry. But the Big Three really provided a common bond, a focal point for people's lives. At quiet dinners on Saturday nights, or Sunday afternoon barbecues, "cars were always the topic of conversation," Beeler says.
Most of Beeler's neighbors were Catholics of Polish descent, and all lived in new houses on almost identical square lots. The fathers of all his friends worked in the car industry. Clifton's dad was a draftsman at Ford. Ray's worked on the assembly line. Beeler's own father toiled at a shop owned by Chrysler, setting dies for making hoods, doors, and trunks. Grandfathers, fathers, sons, they all built cars.
Just four blocks from Beeler's house, behind a steel fence, stood the Ford family's private property, which Beeler and his buddies treated as a campground. Sneaking through the breaks in the barbed wire, they would build a fire and cook up a can of pork and beans. If they weren't roaming around the Fords' property, they would tag along on a tour of the Ford plant, watching as workers stamped out roofs, attached hoods, or soldered door handles. Beeler would take dates to the Ford Rotunda, where the company displayed its latest models on pedestals.
As far back as he can remember, Beeler worked at small jobs: delivering the Polish Gazette, caddying, setting up bowling pins, and bagging groceries. He wanted to save at least $100 to buy a car when he turned 16. Not just any car, either. As a matter of pride, it had to be a Ford.
Beeler bought a 1949 Ford sedan in 1954. In the fashion of the day, he ripped off every bit of chrome, including the door handles. Then he lowered the chassis until it was about three inches from the ground.
Like his friends, Beeler thought he knew exactly what route his life would take. After a stint in the army, he'd line up a job at one of the Big Three, where he was sure he could earn "a secure, good living." Jobs were so plentiful that his friends, for a joke, would land two of them in the same afternoon -- one on an assembly line, say, and another in a glass plant. But an army injury changed Beeler's life. In Korea he slipped and fell, breaking a disk in his spine. He returned to Detroit with a weak back and a debilitating medical history. "Nobody wanted to insure me once they saw those scars," he says. Eventually he landed a job at a small company, where he learned to operate hand-screw machines.
He got along fine for years, using skills he picked up here and there, never getting much formal training. Then one morning in 1967 a giant, hand-lettered sign posted in the factory stopped him cold: Moving. Denton, Tex. Ninety days. "That day, I went home, and I bawled for the only time in my life," he says. He had a wife and two small kids and no way of supporting them. During those 90 days, he trudged from place to place, with no prospects. "I decided that I would learn a skill that would give me a chance of getting work no matter how the economy was," he says.
Beeler discovered a company that ran automatic screw machines. It looked like a fairly secure job. After all, when would you not have a need for small metal parts for cars, vacuum cleaners, lawn mowers, hydraulic valves, and more? The United States "was and always would be a manufacturing nation," he was certain. "The people in our shops are damn good." Confident the job would be secure, he took it. These machines may never make you rich, his new boss said, but you'll never be out of work, either.
If there were truer words, Beeler hadn't heard them. Mastering the new machines made him more marketable than he'd ever dreamed. He shifted from job shop to job shop, starting at $2.05 an hour, leaving at $4.00, reaching $4.50 at another job. He worked for one family three different times, twice at shops owned by the father and once at the son's shop. "I could drop two dimes in the phone and find a job," he says.
In 1976 he followed the top wage to Gel, based in Livonia, Mich. The company promised $6.50 an hour plus a retirement plan.
Gel's owner, a mathematician and engineer named Jack Cope, specialized in automotive assemblies. Thanks to his obsession with efficiency, Gel was able to bid low and win Ford and GM contracts.
Cope was not much like the other company owners Beeler had known. The first time Beeler met him he thought Cope, with his wavy gray hair, raspy voice, and calloused hands, was the night janitor. He seemed like just another "dirt hound," as Beeler puts it. Sometimes Cope would tinker with the screw machines all night, then change into coat and tie the next morning to play chairman.
Like Beeler, Cope was much more comfortable around machines than around people. The difference was that Cope was supposed to be running the place. He brought in executive after executive to run the company for him, but few of them lasted as long as a year.
It wouldn't have surprised Beeler to hear that in one year, by Cope's estimate, management changes cost the company some $500,000 in profits over several years, when sales were between $3 million and $7 million per year. Not that Cope tried to hide the problem. At a company Christmas party, he stood up, raised his glass high, and offered a toast. "I apologize for all the changes in management we've had this past year," he declared.
With no consistent leadership, departments didn't work together. Need a broom? Steal it from the department next door. Not in the mood to come to work? That's OK, because we can't agree on an absenteeism policy.
Beeler couldn't blame Cope for feeling overwhelmed. After all, Cope kept coming up with new departments: decorating, plastic molding, powder painting, and so on because, as Beeler well knew, many suppliers made shoddy products.
Beeler came to Gel because of the pay, but he stayed because he felt that Cope respected his work. "The factory is where we make our money," Cope often said. "The brains are on the floor." Cope paid his production people well, giving them 25¢-an-hour raises twice a year and introducing profit sharing in 1979. He even offered employees the option of buying stock at $7 a share. Beeler and his wife, Anne, were ready to invest $1,500, the maximum amount. Then Cope suddenly withdrew the offer, telling Beeler he didn't think the stock was worth it, given the management changes.
Working conditions at Gel were better than Beeler had seen anywhere. There were no oil puddles under the molding machines, and there were plenty of bright halogen lights. Cope was always urging his people to improve; since arriving at Gel, Beeler has collected six diplomas from courses and seminars that Cope has paid for him to attend.
Beeler never doubted that Gel was making money. In the Detroit he knew, in the rich and mighty car business that had fed his father's family and his own, everybody made money. Not that there weren't bad times. The industry's harsh cycles, Beeler thought, fed his father's bleeding ulcers. Anne Beeler could never erase the memory of her brother, who worked for a giant brake supplier, coming home without a job one afternoon in 1958. A few years later, though, Detroit was its old roaring self. Of course it was. Whatever ailed the industry was nothing that couldn't be cured by next year's model.
That's how 1980 looked to Beeler at first. It was just another slowdown, nothing lingering except for maybe a few bad memories.
He couldn't see that the world that had spawned Gel just four years earlier was disappearing fast. In 1976, the year Gel was founded, about 80% of all cars sold in the United States were American made. Detroit's factories ran near capacity. Beeler and his co-workers sometimes grumbled about too much overtime. Many of the imports still had such European names as Volkswagen, Mercedes-Benz, and Fiat. A Japanese company, Honda, housed a few executives in mobile homes just north of Columbus, Ohio.
By 1979 Gel was posting sales of $2.3 million with healthy aftertax profits of about 5%. That was the same year that gas prices rose dramatically. One year later the Japanese manufacturers, with their small, fuel-efficient cars, had blown right by Detroit in fifth gear.
It happened very fast. In 1979 Beeler asked Cope to buy another Brown & Sharpe screw machine. Even working 60 hours a week, he complained, I can't keep up with the jobs we're getting. By the time the machine arrived, in early 1980, Cope had cut Beeler's hours from 58 to 40 a week. "We just don't have the work," he told Beeler.
Throughout 1980, Beeler watched his world unravel on the nightly news. General Motors posted its first annual loss since 1921 -- $763 million. Ford lost about $1 billion. "I wanted to point a finger at somebody, but I didn't know where to point it," he says. "To me, an American car was a cherished thing."
He cherished his job, too, but there was barely enough work at Gel for two machinists, never mind the usual six. What's more, he felt trapped. Beeler called up a job shop that specialized in appliance parts. We can give you 40 hours a week, the man said, for a month, maybe two. And after that? Look, George, the man said, you know the situation. Everybody's getting hammered around here.
There was no escaping it at home. Four of his wife's brothers worked for an automotive supplier. Ray was laid off. Mike took early retirement. Their nephew, Mark, was among the friends and relatives who moved to Texas, buoyed by promises of a lucrative building boom -- much as Beeler's own forebears had been lured from eastern Kentucky by Detroit's high-paying auto factories. "You'd hear about people leaving Detroit all the time," Beeler recalls. "And you'd wonder, Are they ever coming back?" His teenaged son, John, decided to stay in high school an extra year to take more courses and "wait out the bad times."
The Beelers would wait it out. What else could they do? "We were born and raised here," says George Beeler proudly. "And we made damn good cars."
Dennis Dresser didn't know the satisfaction of making parts you could touch and feel. Beeler could tell that by looking at the three-piece suits he wore.
It was late 1983, and Dresser had just joined Gel as the new vice-president of marketing and sales. Though Beeler didn't know it, Dresser wasn't just another boyish-looking business type. Cope had brought him aboard with the promise that he would someday own a piece of the company. And Dresser had spent the past 14 years at the giant Bendix Corp., serving in different sales capacities.
Like the rest of the industry, Gel was bouncing back, thanks mostly to restraints on Japanese imports. In 1980 Gel's sales had sputtered for the first time, falling 10% to about $2 million. Margins shriveled to a slender 3.5%. Both sales and margins revived in 1982 and 1983, but Cope still didn't like what he saw coming for Gel. He needed someone who shared his vision, but also possessed the hands-on skills he lacked.
Dresser's upbringing, in fact, would have surprised Beeler. It was not that different from his own. Dresser's father fashioned parts on screw machines in the family garage. Dresser, now 36, had spent much of his youth tearing out transmissions and modifying carburetors.
Dresser's perspective didn't come from the factory floor. It grew from some auto-industry research he did for Bendix from 1977 to 1979. One report, which took nine months to complete, was grim news for Detroit. It predicted, for instance, that Japanese carmakers would grab 25% of the U.S. market by 1992. By 1982, they had already claimed about 30%. Honda, having outgrown its mobile homes, was producing cars in Marysville, Ohio. And the Japanese carmakers were bringing their own suppliers as well. But most U.S. suppliers, Dresser thought, remained as oblivious as crash dummies speeding toward a brick wall.
Beeler couldn't recite the numbers, but he was hardly oblivious. He could see that Cope's mania for saving money was accelerating. In December 1982, Cope announced that all Gel workers would have to attend a seminar at the nearby Holiday Inn. They were going to learn a technique called statistical process control (SPC). It was, they were told, a way of catching faulty parts early, thereby reducing scrap and ultimately cutting down on the need for inspectors. Cope seemed to take it seriously. "Jack didn't say, 'I'd like you to go.' He said, 'You are going to learn SPC,' " Beeler recalls. "Off we went."
The employees tried SPC for a while, gauging and recording the critical dimensions of the parts they were making. But when their machines went out of control -- producing parts that didn't fit tight SPC specifications -- there was no one to suggest a cure. So Cope hired a consultant. After each of the consultant's appearances, the SPC push resumed anew. Then it would subside again.
Cope also talked more and more about diversifying into other products. Turn signals as we know them are going to disappear, he once told Beeler. Where to? Beeler asked. Replaced by push buttons, said Cope with a shrug. Every day in the newspaper, there were accounts of top auto executives at industry functions describing a world in which suppliers would take on responsibilities such as inspection, design, and zero-defect quality. It was hard to see how a small company such as Gel would fit in. Beeler tried not to think about it too much. "In my world, I do what the man says for 8 or 10 or 12 hours a day, and then I go home," he says.
He trusted that Cope understood these things better than he did and could pave a smooth path for Gel. "I just have tremendous faith in the man," Beeler says.
Very soon, that faith would be tested.
It started out as a rumor, then the rumblings seemed to grow louder than the machines themselves. Some kind of fancy new screw machine coming from Europe, they said. Bring it on, said Beeler, who loves nothing more than figuring out the intricacies of a new machine.
Little did Beeler realize that the machine wasn't coming to him, at least not right away. He got the official word during a meeting with Cope in early 1985. It seemed that Dresser, who had recently been promoted to president, had been hard at work finding diversification opportunities for Gel. He had the opportunity to bid on a Ford contract for gearshifts. To even bid on the job, though, Gel would have to buy a screw machine that could make long, tapered parts. Cope had settled on the ultraefficient Gildemeister, which would be shipped over from Germany.
What I want you to do, Cope told Beeler, is go on a crucial mission. Beeler, who is "not comfortable anywhere but at home," guessed what was coming. Cope wanted him to go to Germany to learn how to use the machine. The part of Beeler that wasn't scared was honored. "Jack wanted me because he knew that I'd get that machine running or die trying," he says.
Beeler spent three miserable weeks in Germany. When he got there, the custom-built Gildemeister was not working at all. So he fetched coffee for the men and asked questions about different parts. He helped translate tags for the 54 buttons on the electrical panels, so Gel workers would be able to tell the feed-start button from the jog button. The rest of the time, he mostly called home. He racked up a phone bill four times his hotel bill.
Two days before he was scheduled to leave, workers managed to start the Gildemeister. "I learned nothing," he says.
He did pick up enough to assemble the machine when it arrived at Gel three months later. There it was, an eight-foot-high tangle of parts and wire deposited at his feet without instructions. The electrical cabinet alone was bigger than any screw machine he had ever operated.
Beeler worked at assembling it for a solid week, from 6:00 a.m. to 9:00 p.m., carefully figuring out how each of the 25 plugs fit together, wiring the hydraulic system through the overhead panels. The hardest task was installing the guards, the flat metal parts that prevent chips from falling inside the machine.
When he finally finished, Beeler was not about to press the start button. He called in a representative from the U.S. distributors. With Beeler at his side, the rep took a deep breath and pushed the button.
Hmm, the rep said. Did you check the computer program? Sure enough, it turned out that the computer had somehow deprogrammed itself during shipping. Three workers, including Beeler, set about reentering the 2,000-page computer program. Within a few days, they had the Gildemeister whirring. Until the safety clutch gave out. And an oil pump malfunctioned. Then the fuse bank blew.
Beeler persevered. Cope was counting on him, after all. The company's future depended on every twist of his wrench. Each evening Anne would meet him at the Gildemeister, then they'd go out for dinner. Afterward he'd return to the Gildemeister. Gel had won the Ford contract, which would bring in about $1.5 million a year. With the machine running three shifts, calls would come into the Beeler household at all hours. We've got a 14 on the computer screen. Check the oil, Beeler would instruct from his pillow.
Beeler wanted to feel proud that he was helping Gel enter a new age. But he felt underappreciated, as if this trade, which he had worked so hard to perfect, suddenly didn't count for much. Did people assume that such an advanced machine would put itself together? It was frustrating. One Gel salesman always led a group of visiting executives past the Gildemeister, where Beeler was working. "Oh, my goodness," he'd proclaim to the visitors, "is this machine down again?" Beeler growled. Once, a sensor went out. "Then there's this machine," said the salesman, who happened to be passing by. "It hardly ever runs." Beeler was fuming. A couple of minutes later he caught up with the group. His sleeves rolled up past his elbows, revealing tattoos on each arm, he stared at the executives coldly and said, "If you'd like to come back, it's running now."
Whatever new realities Gel and other auto suppliers were facing, some of the old rules still applied. A man still kept his dignity. Whenever George Beeler got fed up -- as he has on occasion at Gel -- he took all his tools home, as if it would dishonor them to be left behind. More than one argument with Cope has ended with Beeler raising his voice. "Damn it, Jack," he'd shout. "I'm a working man, and I'm proud of it!" Beeler had worked hard to buy a house in the suburbs, where he spent many hours maintaining his collection of military memorabilia. Twenty uniforms from both world wars, Korea, and Vietnam. German daggers. Russian assault rifles. "If I didn't control the money," Anne Beeler says, "we would have a tank out front and no food in the house." Beeler doesn't take things for granted anymore; he watched the house across the street sit empty for more than a year. He has neighbors who have been afraid to spend money on refrigerators or cars. If the auto companies shut down tomorrow, Beeler says, "you'd wipe out this whole neighborhood for three miles in either direction."
No matter what, they could not take his dignity away. Then again, he didn't expect them to try.
Beeler might have been more receptive had he learned about the company's plans for him in a more personable way. "Communication," he says, "that's one thing that is really lacking here, especially between the top and the bottom." Instead of in a private meeting, he read it in a memo, tacked to a bulletin board. He stepped back, drew a breath, and read it again. "It was such a put-down," he says.
He might not have felt that way last June had he known the bigger picture. In the spring of 1987, when Gel had expanded into a 10,000-square-foot space next door, Dresser had set aside 1,000 square feet, laid wall-to-wall, dark-fuschia carpeting, moved in 10 long tables, hung two grease boards, and gave the room a special name. The Training Center, he dubbed it.
For the first year only about 30 Gel employees went inside. Beeler never heard about it, but all of the internal supervisors and quality-control workers had their math skills upgraded with the help of the Livonia public schools. That extra training was important, Dresser figured, because those people were going to be answering lots of questions from their subordinates soon.
Beeler wasn't sure whether to take the memo seriously. All the workers in the machining department, it said, were to show up at the Training Center on this day at such and such a time. There, they would have to take a two-hour math and reading test. What on earth was going on here? Beeler wondered. What were they really after? Rumors spread that the test results would be used to fire people.
As the big day approached, workers yelled out math problems to one another. The exam was a killer. Much of it didn't make any sense. Why were they testing him on spelling? What difference could his grammar skills possibly make? I run a screw machine, for crying out loud, Beeler thought. It was as if suddenly they didn't understand who he was, what he did, where he fit.
They were giving him some standardized test to prove he was a dummy. Well, maybe he was a dummy to have worked so hard for a company that obviously had no respect for him. Knowing that, how could he concentrate on the test? On one section he got stuck on the second question and used up all his time. Another section left him utterly confused. He plotted a revenge fantasy: put the test designers on a screw machine and see how they do. When the test was over, he says, "I felt very low. They were trying to make me look like a fool, and they succeeded." Holding onto his last thread of dignity, Beeler vowed he would never ask about his score. "I have too much pride," he says.
And too much dignity to believe the rationale for the test, when he finally heard it. Gel was going to train everybody in SPC, management said, so the company wanted to know each person's level of understanding. That didn't make much sense. Surely, they didn't need to subject everybody to a humiliating test to do that. But Beeler gives Scott Heidler, Gel's training manager, high marks for "keeping the class down to the level of the people." Classes were held during work hours, and employees received their regular pay -- which averages $8 an hour -- even for time spent studying on the job. Workers came out of the course feeling upbeat. Beeler noticed that around the shop, people began competing to see whose machine could produce the best parts.
It seemed as if the miserable test might be forgotten. But with only a few months to go until GM and Ford would pass a verdict on Gel, his bosses weren't taking any chances on Beeler or anyone else losing interest in SPC. So last summer, after the classes were finished, they took a step that Beeler describes as "a goddamn joke."
You're all going to have evaluations, his supervisor warned, to tell you how well you're doing your jobs. Big deal, thought Beeler. After all, at $14 an hour, he was $4 above any of the other machinists.
It wasn't the best way to introduce what turned out to be a thorough revision of the compensation system. One by one, machine operators were called into their supervisors' offices and handed four sheets of paper. Each operator was ranked in different categories, then assigned a final number. Operators were categorized as class one, two, or three, depending on such skills as eliminating "red-tag" parts, adjusting the machine, and using SPC methods. From now on, supervisors told them, your raises will depend on improving your score through more training. Beeler, who ranked high as the only class-three machinist, was stunned. Important skills, such as setting up, were left out. People who did completely different jobs were rated on the same skills. "It created bad feelings," he says.
Did it ever. One employee spit on his supervisor and marched out the door. Another spent a week fuming before exiting. Beeler had no trouble understanding why employees were so irate. "Here you were running a machine, probably for 10 hours a day, producing mostly 'green-tag' acceptable parts," he says. "Maybe you're just learning to grind tools because you've only been at it for six months. Then you get called into a room, and you're told that you're a 20. What does that mean? you ask. Well, they answer, a 21 means you shouldn't even be here." Beeler shakes his head. "It's not right," he says.
Management was hurting its own cause. Workers who feared for their jobs couldn't concentrate on making better parts, Beeler says. Those who got bad evaluations figured they shouldn't care about quality, since they were going to be fired anyway. Even those like Beeler who got good evaluations were frustrated by the unfairness of it all.
Where will the sacrifices stop? Beeler had to wonder. What wouldn't Gel take from him in its scramble to win GM and Ford's love? Recently, Ken Walkerdine, Gel's vice-president of operations, issued a memo about work habits on the factory floor. Among other things, it asked that machinists like Beeler not wear wedding rings, which could get caught in machines. Beeler was furious. Finally, Walkerdine agreed to let workers cover their rings with masking tape. But the steel-toed shoes Beeler has to wear make his toes ache. And the side shields are a nuisance. What can he do? "This is a dying trade," he says softly. "I know I have to make this transition."
Beeler knows, for instance, that Gel must earn Ford's Q1 rating by the 1990 model year. "Getting that means we're still in business," he says. The stakes are very high. If Beeler were to take a drive down I-90, he'd see at least one supplier's Q1 flag flapping in the breeze, right beneath a U.S. flag. If he were to stop in and visit a few suppliers -- he'd have an estimated 15% fewer to choose from than he would have had five years ago -- he might stumble on the $20 million plastic molder who failed to pass GM's Targets for Excellence evaluation program. He'd see a man scrambling to save his company, spending his last $35,000 to build samples and prototypes for industries he knows nothing of, like aerospace and defense.
He doesn't even have to go that far to feel the squeeze. At 1:00 on a recent Monday afternoon in Gel's conference room, Ken Walkerdine was updating the supervisors on the company's doings, as usual. Through the first half of 1988, sales hovered around $900,000 per month. Now, though, $800,000 months are becoming the norm. The car companies, it appears, are starting to buy their turn signals as part of larger assemblies from bigger suppliers. Walkerdine suspects that business is gone forever.
We'd better start contemplating a layoff, he tells his managers.
This is not the world George Beeler expected to live in. "I've lived through some of the best years, when jobs were plentiful," he says. "My father had such pride in his work. How can we leave to our kids a nation that has fallen apart?"
Beeler is sitting in a restaurant booth having dinner with his son, John, as thay do most nights. "I worry more about him than me," he says, pointing to John, who is wearing a Harley-Davidson T-shirt and a scraggly beard. John earns $5.25 an hour churning out car parts on a screw machine at a small shop five miles away. "There won't be many of us left, but I'm going to be one of the chosen few," John says. "You've got to have a fighting attitude. That's what my dad always says."
The shop where he works, like Gel, will be evaluated in the next few months. "If Ford pulls out work, we're gone," says John. His father can only sympathize, nodding behind a cloud of cigarette smoke. He feels like a tiny part in a giant machine; he can't even tell who is running it anymore. Detroit? Washington, D.C.? Tokyo? Still, if the machine goes down, it will take him with it -- his job, his family, his neighborhood.
"We're all under the ax right now," Beeler says. "You drop that ax on these companies, and you're dropping the ax on a whole damn world. That's the world of my father and my son. That's my world."