Another Bone-Headed Blunder by Obama's Car Czar

There's a reason factories stop for regular maintenance.

In "In Risky Move, GM to Run Plants Around Clock," the Wall Street Journal reports:

KANSAS CITY, Kan.-Starting Jan. 4, General Motors Co. plans to do something unprecedented in the U.S. car industry: It will run its assembly line here around the clock on a permanent basis.

We've spent many years installing computer systems in automobile plants and know from personal experience that auto plants need too much preventive maintenance to operate smoothly around the clock.  Three-shift operations are common in other industries and in plants that supply components to auto makers, but not even Toyota runs its auto plants around the clock.

There's a non-obvious cost to running 3 shifts per day - medical and pension costs mean that the company has spent a huge amount per worker before the worker tightens the first nut.  It costs so much to have an additional person on the payroll that it's far more efficient to pay 2 hours overtime, incur two sets of health benefit charges, and run two shifts of 10 hours each than to pay 3 workers' worth of benefits.  That leaves 4 hours per day for maintenance, which has become the usual pattern.

"Two shifts gives us the flexibility to perform any necessary maintenance on equipment between shifts," said Mike Goss, a spokesman for Toyota's U.S. manufacturing operations.

A few idle hours between shifts also enables a plant to perform cleaning and restocking. A plant's paint shop alone generally requires about four hours of cleaning a day, said Mr. Harbour [editor of the Harbour report], adding that the efficiencies of a third shift can disappear quickly amid slowdowns for such maintenance.

"If running three shifts means you're moving [the line] at only 60% of capacity, then you haven't gained anything," he said.

In this case, GM has to take on 900 more workers in Kansas City, with all the recruitment, training, and transfer costs that implies.  The union contract calls for GM to offer these jobs to UAW members who're being laid off at other plants; GM is offering each of the 900 workers $30,000 to make the move for a total up-front cost of $27,000,000.00 of our taxpayer dollars before one single additional hour is even worked.

Cleanliness No Longer Next To Godliness?

One of the trickiest parts of the switch to 3 shifts is figuring out how to clean and maintain the machinery without stopping it.  They're looking ways to run parts of the line at "overspeed" so that they can then slow it down briefly for maintenance without backing up the rest of the assembly line.

Most of the equipment was designed around a specific number of cars per hour, however.  Trying to run it faster than it was designed to go is generally a recipe for increased wear and more maintenance, not more production.

Assuming all goes well, the line will make 6,300 vehicles per week instead of 4,500.  That will in theory benefit the company - but only assuming they can sell the cars.  If they don't sell, they'll have to lay off the 900-person 3rd shift which they've assembled at such cost and be back where they started, only poorer and with unduly worn-out machinery.

Why would GM take such a risk before sales pick up?  It turns out that the Obama administration task force that took over the company last spring was surprised to find that industry practice was to run auto assembly plants at two shifts about 250 days per year.

The 250 days per year is a result of the many, many holidays and much time off from work which have been negotiated by the unions over the years, but two shift operation is based on extremely practical considerations involving maintenance, repair, and health benefits.  The plant could operate more days per year without difficulty, but this would require concessions from the workers.

Instead of using the powers of bankruptcy court to force the workers into a more practical schedule, the Obama task force instead recommended that the company try to operate at 120% of what was considered to be normal capacity by - guess what? - hiring more union workers, which was the object of the exercise all along.

Manufacturing experts are skeptical, noting that the task force has little experience in the auto business, but that's what comes of being owned by an administration that's more concerned with maintaining UAW jobs than with making a profit.

We'll see how this works out. It's barely possible that Obama's government minion has unearthed a massive latent efficiency improvement that has escaped the view of billions of dollars of research and thousands of engineers hoping for a great victory to boost their next promotion, but we wouldn't count on it.

More likely, Mr. Obama is headed for another F on his job-creation score.

Will Offensicht is a staff writer for and an internationally published author by a different name.  Read other articles by Will Offensicht or other articles on Bureaucracy.
Reader Comments
When you say

"We've spent many years installing computer systems"

Who is we? I didn't realize that Scragged moonlighted as an automotive engineering firm.
January 13, 2010 9:14 AM
If GM is going to close down a different plant this plan could be helpful or if it prevents GM from opening another plant. While its likely true that the marginal costs may not provide an advantage for this plan the fixed costs of operating an entire additional plant could make it a cost effective alternative.

In addition to problems of damage to machinery for working too long and too quickly you also have the problem of the workers. Accidents do happen and working faster than is prudent is a good way to get someone hurt. Let us hope they take that into consideration as well.
January 13, 2010 9:18 AM
gChang: To clarify the "we" - Will meant the "we" to refer to himself and his colleagues in his past employment experiences. We (the Editors) should have caught this and rephrased it to avoid confusion.

To your larger point, though - yes, the writers of Scragged do indeed moonlight in various other lines of work, though not currently in automotive engineering.
January 13, 2010 10:33 AM
I have operated an electronics manufacturing facility for over 30 years. With only a few hundred employees I am not quite as large as an automotive plant. I do feel that I can speak from first hand experience on this "idea" about adding a third shift in an operation that depends on a daily "maintenance" schedule. One thing will suffer extremely and that one thing GM cannot afford to give up any ground on----- that is QUALITY. Its so elementary. Pushing machinery and people beyond design or comfort limits results in substandard work. The quality of the cars will suffer and there is NO WAY to prevent it. Its a clear case of unqualified Obama idiots doing what they do best.
January 13, 2010 5:29 PM
Don't you see what's really behind all this? Another payoff to the unions! With more workers to layoff when too many cars are built, do you have any idea of how much these employees get paid when they are laid off? Last time I checked unless it's changed..90% of their usual pay. So hire more people and get them on the payroll and who cares if your laid off with the generous pay they will get for not working. Just GET MORE UNION EMPLOYEES.
April 2, 2010 2:13 AM
I don't think GM's sole purpose in existence is to provide more union jobs. While conspiracies do on occasion occur usually it is simply people being stupid. With out some form of evidence I am not impressed by your assertion.
April 2, 2010 6:10 PM
Historically, no, GM's purpose has been to make money, and jobs for union workers was just a side effect.

That's not true anymore. GM hasn't made money in years, and would have died if it wasn't saved by your tax dollars. Why was that done? Yes: to provide union jobs, and for no other reason. It's not like there aren't other places to buy cars.
April 2, 2010 6:12 PM
Is there anything to back up that assertion? Some times people just do stupid things. GM management is not interested in losing money. If the government tried to get them to do something with the stated goal of creating more union jobs I'm pretty sure GM management would not be happy about it.

Besides which, opening a new factory would also create additional union jobs, so if the goal is simply to increase the number of unionized employees where is the benefit with this plan?
April 2, 2010 6:17 PM
Yes, if the government hadn't intervened, there would BE NO UAW jobs because GM would have liquidated. That's what happens when you enter bankruptcy and cannot obtain debtor-in-possession financing, which was the case - no bank wanted to go anywhere near them.

There were plenty of other things the government could have "invested" in had saving jobs in general been the goal. They chose instead to save union dinosaurs.
April 2, 2010 6:23 PM
You can make that argument for the bailout of American car makers. Perhaps it is true perhaps it is not. However I see no advantage in the number of union jobs by running a third shift.
April 2, 2010 6:25 PM
Huh? It's simple math. If it takes 1000 people to run a factory, two shifts = 2000 employees, three shifts = 3000. Union dues are generally paid per head, not as a percentage of earnings. So a three-shift operation will generate 50% more money for the union bosses and Democrat party than a two-shift setup at the same factory.
April 2, 2010 8:40 PM
But those employees could be hired at an entirely new (or not closing) factory. Two shifts provide an additional 2000 jobs, not 1000 and productively per man hour and quality don't suffer.

Why then if the idea is to increase the number of union jobs would this be the best option. Let us not also forget that many construction jobs are union so building that new factory would be a great addition.
April 3, 2010 1:56 AM
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