What do you do when your world-famous brand is so smashed by the recession that your stock price falls from $75 to $8? What do you do when your manufacturing plant has a culture that leads to high rates of absenteeism on Mondays and Fridays? What do you do when your product takes 18 months to get into the hands of the customers who want it?
Generally, you go out of business.
Unless, that is, your workforce is unionized and they become aware of the problems you face and they decide to be part of the solution. That's the story of Harley-Davidson, as told by Adam Davidson of the New York Times. Members of the Machinists (IAM) and United Steelworkers (USW) who work for the motorcycle manufacturer are paid living wages compared to manufacturing workers in many parts of the world, but officials at the company never considered moving their factories out of the United States. Their image and customer base are blue-collar Americans who want their hogs made in America by highly skilled labor.
Harley tore down the existing plant and built a new one. Unlike most factories I’ve seen lately, the new plant in York [Pa.,] has people everywhere. There are no robots on the main assembly line (they have various peripheral jobs); instead, hundreds of workers, operating in teams of five or six, manually build each motorcycle. This seemed like an expensive way of doing business, but Magee said that experienced, skilled workers, unlike robots, can constantly adjust to new information. The York plant makes four basic styles of motorcycle, but each has an array of customizable options. There are around 1,200 different configurations, and a new bike starts its way through the production line every 80 seconds. Virtually each one is unique, and workers have no idea what’s coming 80 seconds later. Surprisingly, robots can’t adjust on the fly like that.
Skilled union workers were able to do a job that was too complicated for machines to do and produce a product that revived the iconic brand. While Davidson was at the York plant, he saw a worker fix an assembly problem that literally saved the company more than a million dollars. That kind of worker innovation and cooperation, teamed with a company that is committed to doing things the right way has paid off. Harley-Davidson has gained back almost all of the stock value it lost and bikes get to customers in just a few weeks now. Costs have been cut by $100 million at the York factory, which recently won an IndustryWeek Best Plants award, the industry equivalent of a Grammy. The average worker at the York location has been there 18 years and they are extremely devoted to Harley.
No question that this is a model that other companies should be paying attention to, particularly if they want to be able to weather tough economic times.