When Japanese carmakers entered the US market in the Seventies, Detroit was still obsessed with large cars with powerful engines and not much focus on overall quality or dependability. Soon, the players from the East started gaining market share with their relatively small, inexpensive and fuel-efficient cars. American automakers lobbied for Government protection and got import restrictions imposed on the Japanese, but they got around it by investing directly in the USA. Soon, Honda, Toyota and Nissan had shifted production to North America, and these heavily automated “transplants” started churning out an alarmingly high number of cars far more efficiently than Detroit’s Big Three. In 1980, GM posted its first loss in six decades. Something drastic had to be done to arrest this slide.
GM’s answer was building a new factory manned by robots and brimming with cutting edge technology. Under new Chairman Roger Smith, the carmaker got the Detroit city council to raze an entire neighbourhood called Poletown, which had predominantly Polish residents, to build its ultra-modern factory. Braving protests and showdowns, with the help of the city council, GM built the new Hamtramck plant. But despite huge investment, the plant’s automation was poorly implemented. Chaos ensued as robots ran amok, welding the wrong parts, spraying paint at each other and all around the assembly line, and reportedly even cutting each other up and smashing cars. Much hyped Automatic Guided Vehicles that were supposed to carry parts around the factory simply refused to move. Over the next years, GM spent a few billion dollars more trying to repair these machines and debug software.
Meanwhile, Japanese carmakers were ramping up production, streamlining their assembly lines even further and increasing the efficiency of their American workforce, who were not affiliated to any worker’s unions. GM’s market share dipped further, and America’s biggest corporation was staring at a bleak future. As demand for GM’s cars shrunk, the plant saw its workforce dwindle to nearly half its original count.
Mooted as a plan to save the brand, the Hamtramck plant’s automation is seen as one of the worst strategic failures in GM’s history.
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