Case #7
“GM Powertrain”
Harvard Business Case #9-698-008 (Rev. April 26, 2000)
Academic instructors who are registered with the publisher’s
website (http://www.hbsp.harvard.edu) may download the Teaching
Note #5-601-036 (July 30, 2000) for this case free of charge.
ABSTRACT
A young plant manager is assigned to a small unprofitable and
inefficient GM component plant for initiating modernization by
TEACHING OBJECTIVES
The objective of this case is to allow students to deal with
the complex issues related to managing operational changes in a
unionized plant. Attention must be paid to identifying
opportunities, aligning people for implementation, and addressing
both the organizational/behavioral and technical issues involved.
SUGGESTED QUESTIONS FOR CLASSROOM DISCUSSION
1. What is Joe Hinrichs trying to do and what are his objectives
as the new plant manager in Fredericksburg? What happens if these
objectives are not met? What are the conflicting pressures a
plant manager like Joe faces?
4. What should Joe Hindrichs do with respect to the 1500-ton
press? What are the options available? What are the advantages
and disadvantages of each? Which options best support continuous
improvement in the future? Which option would you recommend that
Joe Hindrichs take?
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ANALYSIS
1. What is Joe Hinrichs trying to do and what are his objectives
as the new plant manager in Fredericksburg? What happens if these
objectives are not met? What are the conflicting pressures a
plant manager like Joe faces?
Joe Hinrichs’ objectives are to (1) improve the operations of
a small, unprofitable and inefficient component plant (e.g.,
decrease labor costs by redesigning worker jobs, reduce inventory,
The plant’s workers are represented by the United Auto
Workers union. As a rule, the local union negotiates contracts
regarding wages, benefits, working conditions, and work hours. It
also handles grievances. The local union also believes that
2. What is Joe Hindrichs’ strategy for achieving these goals?
Does he introduce the right action steps? Are these new action
steps effective? Why or why not? What are the underlining
characteristics of Joe Hindrichs’ action steps? Does anything
appear special to you?
Joe Hindrichs pays attention to the technical viability of
the changes he wants to introduce and the ways these changes are
to be phased in.
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change – decision regarding timing, scope, worker involvement,
etc.
The major changes introduced by Joe Hinrichs include the
assembly cells, job redesign, and use of new technology.
Assembly cells tend to reduce labor hours and have a number
of advantages such as : (a) more productivity and product
There is something unique or novel about his method of
introducing these changes. Specifically: (a) it wins worker trust
and cooperation – keeping the plant open during the strike to
externalize his commitment for the future of the plant and invite
workers to upgrade process, and informing union leaders,
supervisors and workers ahead of time before change is
implemented (e.g., using “inclusion” and involvement” to affect
changes); (b) “slow march” tactics – with phased sequence of
changes, not a “bold strokes” approach; (c) spread changes –
initiating changes in different areas of plant to avoid burdening
any one area with too much adaptation to the changes.
The conversion of the assembly line method to cell work
station could save about $2.6 million per year due to (1)
reduction in worker idle time, (2) elimination of machine and
worker interference, (3) reduction of waste, (4) reduction of
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3. How would you assess the leadership capabilities of Joe
Hindrichs?
Joe Hindrichs leadership capabilities are superior in at
least four aspects: (a) communicates (e.g., plant meetings, prior
4. What should Joe Hindrichs do with respect to the 1500-ton
press? What are the options available? What are the advantages
and disadvantages of each? Which option best supports continuous
improvement in the future? Which option would you recommend for
Joe Hindrichs to take?
The options available include: (1) outside repair, (2) the
vendor installing new equipment, (3) outside repair and new die,
and (4) the vendor installing new equipment and new die.