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Saturn a different kind of car company case

A New Kind of Car As one of the world's best known brands, Saturnthe General Motors car division that brought new production and marketing concepts to American car manufacturers, faces tough questions in an increasingly competitive global market. Its reliance on a limited offering of compact models hurts its performance in the face of declining sales. Can it continue to set the standards for customer satisfaction and reliability without delivering consistent profits? In a speech to auto dealers in Michigan, he cited the success of the Saturn Division of GM for setting the standard for "hassle-free purchasing and services, and.

Moreover, Saturn dealers continued to lead all dealer organizations in the United States in unit sales per outlet. The Saturn complex was comprised of a series of six interconnected buildings. Four of the six buildings were manufacturing and assembly plants. The remaining two were a maintenance and utilities facility and a training and administration building. This was to be expanded to 310,000 with the addition of a third shift in 1993.

  1. The rest of GM was covered by a master contract with the United Auto Workers , which covered not only wages, benefits, and hours of work but also a complex series of work rules that restricted Gm's ability to transfer workers from one task to another on the production line. How did a business-school case study, and a rare moment of GM shining brilliance, fall so far so fast?
  2. Having established an independent brand name, Saturn had tried to emphasize a new approach in the customer service and a new way of doing business, which was unique to Saturn.
  3. Furthermore, company engineers developed a platform that was designed to move along with the car. There's not much in a Saturn showroom you can't find in any other GM brand.
  4. What strategic problems could Saturn encounter in the future?

The Saturn Corporation was the first new automotive division of General Motors since 1918. The purpose of developing a new division was to meet the competition of the Japaneseparticularly at the lower end of the product line. This was especially true for lower-priced cars. Roger Smith, then CEO of GM, felt that the only way to overcome this perception was to launch an entirely new line of cars. The technology, labor policies, work rules, and marketing of this new product were to be developed from scratch; there would be no preconceived notions concerning any of these areas brought in from the existing organization structure or culture.

One of the teams realized that labor relations would be a critical factor in the development and implementation of a successful new offering.

The rest of GM was covered by a master contract with the United Auto Workerswhich covered not only wages, benefits, and hours of work but also a complex series of work rules that restricted Gm's ability to transfer workers from one task to another on the production line.

GM felt that the effectiveness of the new Saturn Corporation would be dependent on more flexible work rules.

  • Adopting the Saturn model where the goal was to learn and to embrace new ways in designing and manufacturing cars as well as forming a new relationship between the management and the unions would benefit the whole company;
  • The Saturn complex was comprised of a series of six interconnected buildings;
  • It's no longer a different kind of car, and it's no longer a different kind of car company either, as the original Saturn organization is mostly folded into broader GM;
  • There's not much in a Saturn showroom you can't find in any other GM brand;
  • Quality as a top priority.

Management wanted the ability to develop the kind of work flexibility found in most Swedish and Japanese auto plants. The UAW finally agreed to a system of self-governing work teams on the production line at the Saturn assembly plant.

  • Furthermore, company engineers developed a platform that was designed to move along with the car;
  • With the American publics' present loss of appetite for small cars, the system may need to be revamped for cost reduction rather than output;
  • They rewarded Saturn with an unprecedented level of customer loyalty and became part of the Saturn cult of brand advocates;
  • Like the need to stay a product generation of ahead of your customers, and the idea that brands need constant feeding and the realization that brand portfolios can quickly get too big to adequately support;
  • In this manner, workers no longer needed to walk at a steady pace beside the car to be able to complete their tasks; instead, workers and the car moved together on the new platform;
  • GM felt that the effectiveness of the new Saturn Corporation would be dependent on more flexible work rules.

These teams would be designed to follow the construction of an automobile unit throughout the entire assembly line. Under the terms of the contact, workers would be cross-trained so that the members of each team could switch off on the various tasks required to complete the assembly of each individual unit.

All Saturn workers are paid at a rate equal to 88 percent of average GM compensation. The 12 percent at risk brings pay "up to a line" roughly equal with industry averages, with the reward portion providing possibilities "above the line.

With the American publics' present loss of appetite for small cars, the system may need to be revamped for cost reduction rather than output. In early 1998, the Saturn union voted to retain the innovative system, 4,052 in favor with 2,120 opposed.

What Car Brands Can Learn From Saturn's Rise and Fall

Each member of the Saturn work team was put through an extensive training program before joining the assembly line. The 350 hours of training were designed to cover both technical and team-building aspects of the job.

He had spent two years in charge of GM's Adam Opel unit in Germany, where he had supervised the development of a sporty new Kadett model.

Moreover, LeFauve had gained experience with the German labor-management system.

Saturn : A different kind of a car company : HBS Case

Under German co-determination laws, labor is required to have a say in decision making and management is required to grant labor a position on the board of directors. This, it was felt, would give LeFauve better insight into the problems that might develop as the new labor contract was implemented. GM management sought and developed new technology and machinery consistent with the new labor agreement. A great many robots and other forms of automation were incorporated into the production line to help reduce employee boredom and fatigue and to help ensure high quality standards.

Furthermore, company engineers developed a platform that was designed to move along with the car. In this manner, workers no longer needed to walk at a steady pace beside the car to be able to complete their tasks; instead, workers and the car moved together on the new platform.

  1. The Saturn Corporation was the first new automotive division of General Motors since 1918.
  2. How did a business-school case study, and a rare moment of GM shining brilliance, fall so far so fast?
  3. This was especially true for lower-priced cars. What strategic problems could Saturn encounter in the future?
  4. It's no longer a different kind of car, and it's no longer a different kind of car company either, as the original Saturn organization is mostly folded into broader GM.
  5. He had spent two years in charge of GM's Adam Opel unit in Germany, where he had supervised the development of a sporty new Kadett model. Most GM cars were criticized for obsolete designs and engines.

The new organization was built around several key factors. Quality as a top priority.