neil birrell (neil@lds.co.uk)
Sat, 13 Jan 1996 07:06:04 +0100

scanned article

PO Box 5811, Stn A,
Toronto ON
M5W 1P2

by Bruce Allen

Three systems of manufacturing have been used to date in the auto
industry. The first was the craft system, which was relatively simple
and straightforward. It made to order one single, unique and
extremely expensive vehicle.
The craft system was replaced early in the a century by
Henry Ford's mass production system. Mass production made
cheaper vehicles that were affordable for a lot more people. But
mass production involved assembly lines, a minute division of
labour in which each worker performed an unvaried operation
without needless motion. Performing a job became a relatively
simple, repetitive and tedious exercise requiring little or no thought.
Management did the thinking and made the decisions, and workers
did the work.
The third system was the lean system, which first emerged in the
1950's and was widely applied in the early 1980's. It gradually
transformed the mass production system through costcutting
measures such as defect reduction, outsourcing, slashing
inventories and increasing workforce productivity. It relentlessly
searched for ways to squeeze more work from fewer workers. Auto
executives in particular became convinced that the lean system was
the best approach ever devised to optimize the utilization of plant
capacity and labour. Yet, like the mass production system, lean
remained limited by its focus on short, fixed-term production
cycles. The lean system did not, and could not, enable an employer
to quickly adapt or change over the production process to produce
other things. In addition, the lean system was highly vulnerable to
production disruptions because its efficiency at doing just one thing
made it fragile and resistant to change. The lean system simply did
not give an operation agility. Now a fourth system is emerging -
Agile Manufacturing. Agile builds on the streamlined work process
of lean manufacturing, but unlike lean, an agile manufacturing
system is able to shift course rapidly. It focuses across production
cycles rather than within them. This allows a factory to be
reconfigured for an unplanned production requirement, or to rapidly
build customized products. Agile allows an organization to thrive
in an environment of constant and unpredictable change by
responding quickly to competitive threats and market opportunities.
Implementing an agile system therefore means a sharp acceleration
of the restructuring process at the plant level.

Corporate America's Agile Agenda

The concept of agile manufacturing may be very new to us. But
Corporate America has been encouraging the development of agile
and working towards its implementation for the past decade. In fact,
the US Department of Defense contributed $5 million to the Agile
Manufacturing Enterprise Forum. The US government, Fortune
500 companies and the American Big Three automakers all support
the agile vision. They believe it promises "a new means of
organizing technical, human, social and natural resources into what
is likely to become the dominant world industrial order of the 21st
Century."1 By implementing agile, American corporations hope to
restore the US to a position of global supremacy in industrial
The advocates of agile envision a workforce that "shares a
common vision with management, a common commitment to
shared values for joint success, and a shared responsibility for
creating that success."2 This vision would have us believe that we
and our bosses are on the same side in a global fight for economic
survival that pits us against other workers and their bosses.
Agile manufacturing rejects the slow, hierarchical decision
chains of mass production. Because "continuous and unpredictable
change requires frequent and accurate decisions," knowledgeable,
highly trained and empowered workers who can make quick
decisions will be required for an organization to be flexible, rapid
and responsive to change. 3 Lowering the point of decision-making
depends on a workforce committed to the corporations goals. Yet,
as with the lean system, the power of efining these goals and
allocating the monies necessary to meet them belong at the top of
the corporate structure. Empowerment is only meant to go so far.

Virtual Enterprises

Agile is holistic. It applies to "production design concepts,
business relationships and corporate strategies, in addition to all the
elements of the production chain."4 Every structure within a
corporation or enterprise, must be agile in order for it to be a
genuinely agile organization. With respect to business relationships
in the auto industry, for example, this means it will generate
infinitely more joint ventures or strategic alliances between
corporations than ever before.
A central concept of agile is the virtual enterprise. These are
fluid bodies, made up of partnerships which "form quickly and
operate effectively even when distributed among many physical
locations." They share data and resources, in order to achieve
specific goals, then dissolve once the alliance is no longer useful.
Virtual enterprises will enable different corporations to make use of
each others' specific strengths on an "as needed" basis. In other
words, they will enable auto plants and other corporate facilities to
rapidly restructure or reconfigure their operations to make new
products. This makes mass customization possible in an agile
Steven Goldman compares virtual enterprises to a hospital
emergency room. The customers play the same roles as patients in
an emergency room where "on demand, emergency room personnel
must form themselves into teams in response to the needs of the
individual." In industry, corporations that employ the concept of
virtual enterprise will form strategic alliances and tap into resources
on an international scale to serve their customers with a rapid and
customized response. Virtual enterprises have only become possible
due to advances in computer networking and high speed
communications. Players need only be "plug compatible" to achieve
the tremendous agility of virtual enterprises on an "as needed" basis.

Instant Teams

The structure and composition of an agile workforce is
particularly disturbing from a labour point of view. Despite claims
that workers will be "the primary assets" of an agile enterprise, the
agile vision ominously calls for a "virtual workforce" with a very
fluid structure, capable of readily adapting to continuous change.
In an agile system, managers become co-ordinators who will
form their workers into teams within an overall network. These
teams can "integrate rapidly in the best combination or sequence
required to tailor products or services." 5 The individuals who
participate in these dynamic networks and form "instant teams" will
be expected to work together immediately. Job descriptions will
"become increasingly broad, and may even disappear."6
Agile is supposed to create "customer focused organizations."
What this actually means is that the workforce of an agile
organization is at the mercy of market forces, and Labour becomes
completely subordinated to Capital.

A Two-Tiered Workforce

A truly agile workforce has two tiers: a core of broadly skilled,
highly trained and relatively secure permanent workers, and a large
and fluid body of temporary workers. These temporary workers will
only be able to obtain work with an enterprise on an "as needed"
basis. Temporary workers will augment the core of permanent
workers to "absorb fluctuating staff requirements and to provide
speciality skills." These speciality skills must be available to the
organization on demand, in essentially the same way that a hospital
emergency room depends on getting whatever resources it requires
almost immediately. The resulting mix of temporary and permanent
workers will facilitate the easy reconfiguration of instant teams
"with skill sets matched to tasks. "7
These temporary workers will also serve as a convenient pool
from which new permanent workers will be recruited. Once they are
permanently hired on, they will be given the limited job security
denied to those still in the temporary workforce. Only then will an
employer invest in training or skill broadening for these workers,
and only then will an employer cease to arbitrarily take advantage of
these workers on an "as needed" basis.
This concept of a virtual workforce is a prescription for
contracting out on a huge scale. This will be especially true in an
industry like auto, where increased outsourcing has gone hand in
hand with the implementation of lean manufacturing, and where
global sourcing from a single supplier is now a common practice.
Indeed, agile threatens to make the very idea of keeping work "in-
house" obsolete, and this will severely limit the need for permanent
workers. Virtual enterprises will be instrumental in making this
happen precisely because they will dissolve once the goals they were
designed to meet have been achieved; the temporary workers whose
skills were employed to attain these goals will become redundant
unless they are immediately needed somewhere else.

Agile and the Autoworkers Union

Because agile is a decisive departure from the old mass
production system, it cannot co-exist with the types of collective
agreements that have been in place since the North American auto
industry was first organized by the UAW. Simply stated, these
agreements were tailored to the use of the mass production system.
For example, entire sections of the agreements implicitly recognize
an adversarial relationship between Management and Labour.
Adversarial relationships, as noted earlier, cannot exist in an agile
These collective agreements are likewise incompatible with the
whole concept of empowerment. Because they are tailored to the
system of hierarchical decision-making of the mass production
system, they are not conducive to point-of knowledge decision-
making, which is essential in a truly agile system.
Traditional collective agreements in the auto industry also
contain complex seniority structures and numerous job
classifications. These are obvious obstacles to instant teams and
virtual enterprises. There are also no provisions in these agreements
to facilitate the use of "as needed" temporary workers, and there are
obstacles to prevent contracting out. Each decision to outsource
would result in a disruptive and costly movement of employees
within the permanent workforce, as the affected workers exercise
their seniority rights and displace lower seniority workers. Mass
production auto plants are relatively compatible with the exercise of
seniority rights because each job is fairly simple, and requires little
training. This is not true in an agile system. An employer would
quickly find that all of the resources invested in developing an
employee's capabilities would be wasted in the event that he or she
is permanently displaced in a very different job requiring new
training, while the person who has taken their job will also have to
be re-trained.
According to Bruce Roberts of the Canadian Autoworkers,
another effect of agile manufacturing in the auto industry will be to
shift product design and development work traditionally done by
various skilled trades into engineering offices. Plug compatibility
will also "(make) many of the trades redundant by absorbing their
skills and experiences into computer software."8
In short, virtual enterprises will confer a decisive competitive
advantage because they enable a corporation to significantly cut the
costs associated with developing new products, especially in terms
of dedicated investment. Agile is therefore completely synonymous
with corporate efforts to downsize in the auto industry. The basic
incompatibility of traditional collective agreements and agile in
auto is based largely upon the obstacles these a-agreements ace in
the way @f ownsizing and slashing "waste. "

The Future

Agile is extremely threatening for autoworkers, because
corporations like GM force plants to directly compete against each
other for work. This practice of "whipsawing" sucks workers in
different plants into de facto bidding wars against each other. In
these bidding wars, the plants that come up with what auto
executives term "competitive agreements" by making the most
concessions stand the best chance of either retaining existing work
or acquiring new work and staying open. Agile will simply intensify
whipsawing and force autoworkers into a race to the bottom, where
they will eventually find themselves earning 1 9th century wages
and enduring l9th century working conditions while using 21st
century technology. The challenge which lies before the working
class is to fully understand the implications of agile and related
practices, and to develop a holistic, multi-faceted strategy to deal
with them effectively. Labour must succeed in rising to this
challenge, and it must do so in the very near future. Otherwise,
unionism in industries like auto and the labour movement as we
know it will be decimated by economic restructuring. Furthermore,
if this challenge is not successfully met, a new generation of labour
leaders and activists will find themselves confronted with the
monumental task of building an entirely new labour movement
amidst the ashes of the old.

Bruce Allen is a Shop Committeeperson at the GM Unit, Canadian
Auto Workers Local 199, in St. Catherines, Ontario.

1. Dr. Steven Goldman, Agile Manufacturing: A New
Production Paradigm for Society (Bethlehem, PA, The
lacocca Institute, 1993), p.1.
2. Ibid, p.4.
3. Rick Dove, Beginning the Agile Journey (Oakland,
CA, Paradigm Shift International, 1993), p.11.
4. The Agile Environment (Automotive Industries, Oc-
tober, 1993), p.A5.
5. B. Joseph Pine ll, Bart Victor and Andrew C. Bayn-
ton, Making Mass Customization Work (Harvard Busi-
ness Review, September-October, 1993), p.114.
7. Rick Dove, Op. Cit., p.5.
8. Bruce Roberts, From Lean Production to Agile
Manufacturing (North York, ON, CAW Research,
1994), p.10.