As if Ford and GM didn’t have enough problems. The November 20th issue of Business Week has an article on GAZ, the large Russian auto maker, and specifically how it is enjoying rather spectacular success. How?
… manufacturing techniques from Toyota Motor Corp. that have tripled assembly-line productivity. "The factory has changed fundamentally," says depute floor manager Oleg Popov. "I see a bright future." At the plant in the city of Nizhny Novgorod, 280 miles east of Moscow, workers in neat blue uniforms proudly show off their Japanese-inspired production methods. Graphs and electronic displays record the performance of each work team, while photos of the disorganization of a few years ago provide a reminder of how far the factory has come.
Photos of the past are a classic component of an effective 5S program, and tripling productivity is a real result. Perhaps this will be a case of being lean instead of just looking lean, although the future will provide the real evidence.
GAZ, the Gorky Automotive Plant, has been around for many years. It cranked out clones of Ford’s Model T in 1932 and tanks and trucks during the cold war. The implosion of the Soviet Union nearly dealt GAZ a death blow, but new foreign-led management brought it back to profitability. Earnings will jump nearly 30% this year to $450 million on sales of $4.4 billion.
They are now looking to grow outside of Russia, and are ambitiously targeting exports rising from the current 25% of sales to over 50% of sales by 2013. To accomplish this they hired Martin Leach, who used to run Ford’s European operations.
A big problem has been the design and technology of their vehicles. If you look at the Volga to the right, you’ll realize why. However they recently purchased an entire Sebring production line from Chrysler’s Sterling Heights, Michigan plant and are in the process of relocating it to Nizhny Novgorod. GAZ will use that model to replace the Volga and also fuel its expansion overseas.
If they continue to leverage lean better than GM and Ford, we may be witnessing the birth of another automotive powerhouse.