Plant 41, a Nova Scotia aircraft engine factory where robots are the stars, is a model of teamwork between humans and computers for its giant U.S. parent, and an example of the ominous jobless recovery
By DEBORAH JONES
HALIFAX, Nova Scotia, Canada March, 1994
There’s not a human in sight on the vast shop floor but, as always, Plant 41 of Pratt & Whitney Canada is producing parts for aircraft engines. An invisible electronic signal is sent through the plant’s neural network. In the dim and cavernous warehouse, the message reaches a massive gantry crane gliding softly along steel tracks. At a fifth-storey shelf, it seeks a huge chunk of magnesium alloy. The crane plucks the 200-kilogram pallet off the shelf and effortlessly moves it to the warehouse entrance far below. It shifts the pallet and its cargo, a partly finished casing for a P&W aircraft engine, onto a driverless electric vehicle. Guided by a magnetic field embedded in the floor, the vehicle silently rolls over spotless concrete toward a series of robotized workstations. Each consists of a computer console, empty chairs and a large horizontal milling machine that resembles a squat car wash. Before one of these, the cart halts and shifts the casing to the robot’s workstation. In response to the same ghostly stream of electronic data, this robot has tooled itself up to machine the casing with a precision and speed far beyond human abilities. Its “car wash” door engulfs the alloy casing. As it begins machining the part, a coolant spray made of animal fats can be seen, through a window, gushing over robotic arms. The cart, an Automated Guided Vehicle that looks like a go-cart on steroids, trundles off and now reveals, on its rear end, the plant’s sole symbol of human deviation from robotic harmony- a bumper sticker that declares improbably, This Car Climbed Mount Washington.
Though far from any mountain – it’s in an unobtrusive building surrounded by woods a half-hour drive from Halifax – Plant 41 does represent the pinnacle of social and technological organization for United Technologies Corp. of Hartford, Conn. UTC is a multinational aerospace, construction and automotive systems giant, the 16th-biggest industrial company in the United States, with $22 billion (U.S.) in revenues in 1992. It employs about 173,000 people worldwide at subsidiaries including Pratt & Whitney, Sikorsky helicopters, Otis elevators and Carrier air conditioning.
The UTC colossus has designated Plant 41, which epitomizes flexible manufacturing by blending computer-aided design and manufacturing with an innovative employee structure, as the model for all of its plants worldwide. In a time of recessionary cutbacks throughout its empire, UTC has not only left Plant 41 unscathed; the plant’s workforce has grown slightly. The payroll is of modest size, however: Just 320 highly skilled men and women working in carefully designed teams run the 25,000-square- metre plant around the clock every day of the year. Plant 41 performs in about four weeks tasks that would take 20 weeks at an older Pratt & Whitney plant. UTC is betting the model facility will help Pratt & Whitney increase productivity, retain its lead in the world market for small aircraft engines, and show the way for other UTC subsidiaries to remain globally competitive. UTC has similarly modernized manufacturing techniques at Otis, Carrier and Sikorsky, which have abandoned traditional assembly-line production in favour of worker teams that assemble products from start to finish. The teams give workers more responsibility, resulting in fewer mistakes and reduced downtime.
Plant 41 is a window on tomorrow, says Jan Grude, assistant dean of the faculty of management at Dalhousie University: “Plant 41 is a very good indication of where manufacturing is going in the future. The speed of change is so rapid now that production of standard items is rare. There is much more customization to meet market niches, there are shorter production runs, plus the absolute need for quality and flexibility.” Grude, who has studied Plant 41 extensively, adds that, “In future much of the grunt work will be done by robots and computers. That means often the technology of organization and social relations are equally important to the so-called hard technology of machines.” Grude points out that Plant 41 has effectively combined “socio-tech” theories developed in Norway in 1963 with Japanese concepts of continuous improvement and the creativity of a North American workforce-a combination that’s only now working its way into Canada’s economy. The men and women who run Plant 41 are highly skilled, socially well-rounded team players who, with little supervision and much help from machines, can outperform the much larger plants using time clocks and traditional assembly-line methods. There are also far fewer of them than a traditional plant would employ, which is why Plant 41 also exemplifies the term “jobless recovery” from recession-improvements in productivity and quality without increases in employment.
As its robots go about their tasks on this fall morning, Plant 41 is even quieter than usual. Today, explains human resources manager Ivano Andriani, many employees are home resting after an intensive week of brainstorming with consultants from Japan, hired to inculcate in Plant 41 employees the concept of kaizen, the Japanese term for continuous improvement. A few men and women dressed in blue overcoats are on break in the bright cafeteria, where colourful kites flutter from the lofty ceiling. Just outside the glass patio doors a handful of smokers huddle at a picnic table. Most of the facility is an open plan. The absence of industrial dirt and the low noise level mean no partitions are necessary between the shop floor and the eating area. Upstairs, beside the computer programming centre and main offices, the gymnasium overlooks the ground- level cafeteria. The gym boasts a large collection of weight equipment and a karate area. A nearby seminar room is used for company-sponsored Lunch and Learn sessions on subjects like financial planning. P&W’s sole purpose in providing these amenities is to improve workers’ productivity. “If you’re not worried about your money and your health, then you can concentrate on your job,” says Andriani.
“Almost immediately after we opened we began to kaizen our plant,” Andriani says. Employees are asked to develop better ways of doing things, from tool-storage boxes to the plant layout, and their suggestions are entered into a computer programmed to monitor the time it takes to respond to each idea. The results of kaizen are evident today; electricians are implementing a worker’s idea to contain the plant’s electrical lines in flexible rubber conduits instead of the rigid steel conduits previously fixed to the ceiling. The flexible conduits, Andriani explains, allow large machines to be easily moved the next time that parts are changed.
Plant 41’s shop floor is divided into two main areas. In the half where robots handle the largest engine parts, like casings, the plant computer supervises most operations with little human intervention. The other half of the plant, where smaller parts are machined, is more balanced between robots and people, yet even there the humans interspersed between the huge machines seem almost incidental. The job for most of these workers is to load engine parts from numbered carts onto computerized grinders, push a button and ensure that the machining process-which ranges from minutes to hours, depending on the part-proceeds smoothly. The part then moves to a quality checkpoint, where, says manufacturing specialist Rob Shaw of the quality department, 99% of parts are passed. Many of the jobs seem simple, but Plant 41’s policy that employees must be able to handle many tasks within the facility, from computer programming to machining to running the ultrasonic part cleaner, means that workers must be reasonably well educated (Grade 12 is the minimum, plus a combination of university, college or work experience) and willing to continue training indefinitely. Several workers say they like the rotation of tasks. “The monotonoy of some jobs would drive you insane,” says Patrick Smith, who is taking courses in computers so that he can move from Plant 41’s ultrasonic cleaner to the computer controlled grinders. “Everyone here grumbles, but they’ll also tell you it’s one of the best places to work in Canada.”
Says Grude, “The plant is humane in the approach of management, the openness, the integration of workers and management. There’s no separation; the manager has to go and get his own coffee in the cafeteria, for example. There’s no dress code or preferred parking. It’s an extremely warm place, people are comfortable where they’re working and they’re highly motivated.” Evidence that Plant 41’s style works, he says, is that the employee turnover rate is less than 1% and absenteeism is 2% to 3% (average absenteeism in Nova Scotia is about 6%). But Grude points out that Plant 41 is still new and its workers are young, and dissatisfaction could set in in the future.
Plant 41 is just one cog among many needed to make a Pratt & Whitney engine, the kind that power Beech, Piper, Cessna and de Havilland small aircraft. The 65-year-old Canadian division of Pratt & Whitney, which had sales of $1.4 billion (Canadian) in the year ended Oct. 1, 1992, is responsible for making all of P&W’s small gas turbine engines sold worldwide. Fortunately for P&W Canada, demand for such aircraft has been less drastically affected by recession and government cutbacks than for commercial and military aircraft. “The diverse markets that (P&W Canada) serves, such as communter airlines, corporate jets and helicopters have not been hit as hard financially as the long-haul passenger market,” says Martin Moore, spokesman for UTC in Hartford. UTC does not release divisional figures, but says P&W’s Canadian division is profitable.
The Canadian engine assemblies start out with outside contractors, many in the United States, which produce rough castings to P&W specifications. Dozens of parts, including blades, engine casings and vanes, are shipped to Halifax. At Plant 41 each part is assigned a serial number, stored in the warehouse and then, over a period of several weeks, gradually machined. The machining specifications, some of which must be accurate within two ten-thousandths of an inch, are developed at P&W’s other facilities and downloaded through long-distance phone lines into the Halifax computer, which then passes machining instructions to robots on the shop floor. When the machining is completed in Halifax, the parts are trucked to be assembled into engines in Mississauga, Ont., and Lethbridge, Alta.
On the surface, it seems inefficient to ship raw parts to Halifax for machining and then move them elsewhere, and downright strange that UTC should tout a plant in Halifax, isolated from its major markets and other operations, as a model for its worldwide operations. But Plant 41 is a result of a strategic decision made by P&W during the 1970s to broaden its manufacturing outside of the Montreal area, where P&W set up its first Canadian plant in 1928 and where the bulk of its Canadian workforce is still located. With a $40 million restructuring under way, the Montreal area will remain P&W Canada’s headquarters. However, the geographic diversification started with a research and development facility in Mississauga, in 1979, followed in 1987 by the Halifax plant and, last May, a small engine assembly plant in Lethbridge, Alta., modelled on the Halifax facility.
In expanding out of its Quebec base, P&W was paying dues to Canada’s un-stated and Byzantine system of regional economic development, under which Canadian customers-governments and corporations alike-look more favourably at companies that provide jobs throughout the various economic regions where their products end up. “It was part of being a Pan-Canadian company, wanting to diversify throughout Canada,” says Louis Chenevert, P&W Canada’s vice-president of operations.
In the case of Plant 41, P&W felt a regional location was better suited to the new type of facility it wanted to create, a just-in-time, kaizen- embracing departure from traditional manufacturing operations. Just as important as Plant 41’s robots is the facility’s team-based system and a flat management structure, in which just eight managers supervise a 320- member workforce. Plant 41’s employees are highly skilled, young (the average age is 32), psychologically screened and hired for their ability to work well with other people on teams that are so autonomous that the members have a say in who Pratt & Whitney will hire to work with them. Their pay, ranging annually from about $25,000 to $40,000 in manufacturing and up to $50,000 for support personnel, is not out of line with contract pay before overtime of $30,000 to $45,000 at P&W’s unionized Longueuil, Que., plant or the Nova Scotia manufacturing average of $29,141. The company figured it would be easier to build such an innovative plant in an area without a large manufacturing base, a place where it wouldn’t have to break down widespread preconceptions about technical procedures and labour relations. “Pratt & Whitney wanted to be out of the traditional Central Canada manufacturing culture, in terms of employees and labour relations,” says economist James McNiven, dean of the faculty of managment at Dalhousie University in Halifax, who was deputy minister of Nova Scotia’s development department in the 1980s, when P&W located in Nova Scotia. “There isn’t grunt labour and fat management with watches on chains in this plant.”
Pratt & Whitney doesn’t say so outright, but it was also easier to set up a non-union shop in Halifax. “We felt the type of workforce in Halifax was an advantage to gaining productivity,” says Chenevert from P&W’s Longueuil head office. “Halifax doesn’t have the level of classification that we have in Montreal. It has much more flexibility.” Not surprisingly, the Canadian Auto Workers is not pleased with the plant’s non-unionized status and is working to organize Plant 41, says Claude Vincent, president of CAW Local 510 in Longueuil, where 1,500 jobs have been cut in recent years. The CAW insists that the Halifax plant is so new that worker discontent has not had much time to grow, and says that several of Plant 41’s employees have expressed interest in helping a union drive.
In determining the location for Plant 41, P&W Canada narrowed its choice of sites to Winnipeg and Halifax. Halifax won because Nova Scotia offered P&W Canada some $30 million in government grants to help build the first $90-million phase of Plant 41, including a computer-aided design and manufacturing training facility at a Halifax community college, which would provide the new P&W plant with skilled workers. The incentives were part of Nova Scotia’s strategy in the mid-1980s to attract blue chip companies to Nova Scotia. “If Fortune 500 companies come here, they’re staying,” says McNiven. “There weren’t a lot of jobs at the plant. But having these kinds of things can be very important to changing the profile or image of a province, and as a demonstration project for community colleges.” McNiven argues that Nova Scotia has been paid back within four years for its subsidies to Plant 41 through taxes and other benefits. But Nova Scotia abandoned its grant system in the late 1980s when bidding wars among provinces offering incentives to companies became a highly charged political issue.
Pratt & Whitney opened Plant 41 in 1987 with just 75 workers. When the company originally announced the facility, it said Plant 41 would employ 1,000 people by 1994. The facility has grown-100 of the 320 employees were added in the past year alone-but the recession and downturn in the global aerospace industry have delayed expansion. Still, Plant 41 has fared better than its corporate siblings. Racked by recession and a downturn in the aerospace industry caused by the end of the Cold War, UTC is slashing 26,100 jobs worldwide by the end of 1995. Pratt & Whitney Canada alone is losing 2,500 positions from its 1990 workforce of 9,500, with all job losses in Ontario and Quebec. In contrast, Pratt & Whitney is spending $25 million at Plant 41 to install a new line of computer-manufacturing equipment to machine engine parts. Not surprisingly, Plant 41 has attracted attention from officials in the aerospace and other industries. Visitors from throughout North America regularly arrive to tour Plant 41. Canada’s $9-billion aerospace industry regards it as a model, says Bryan Smit, which criticizes government incentives that lure companies to regions where plants cannot be profitable, touts Pratt & White’s decision to put Plan 41 in Halifax as an example of good regional development.
UTC itself places such stock in Plant 41 that the company held its 1992 annual general meeting in Halifax to showcase it, the first time UTC has held the event outside the United States. Plant 41, boasted UTC chairman Robert F. Daniell as shareowners, directors and visitors set off for a tour, embodies “modern manufacturing, technology and people working together, which is going to be part of the way we do business.” That’s just fine with Darell Bunn, 37, a Maritimer who returned home in 1991 after 10 years of working in Ontario factories, and who plans to work at Plant 41 until he retires. “This is the cleanest plant I’ve seen and the management system is the easiest to work with,” says Bunn, who seems content with his metallic co-workers, such as the vacuum “furnace,” used to reduce stress on machines parts that he’s handling today. Possibly because Plant 41 represents the cutting edge in robotic technology, the flesh and blood personnel at the facility seem determined to set new, higher standards in the labour relations. Says Bunn, “There’s a lot of other places where the plant managers wouldn’t know your name.”
Copyright Deborah Jones 1994
Originally published in The Globe and Mail Report on Business Magazine, March, 1994