he Robot Revolution
In the early 1980s another foreign competitor, the Japanese, exploded onto the U.S. auto market, offering reliable, small, competitively priced cars. The Japanese approach, which emphasized such unusual (for GM) practices as just-in-time inventory, quality management, painstaking attention to production processes, extensive employee training and involvement, and close cooperation with suppliers, generated productivity rates far in excess of anything Detroit could muster and posed a real threat to the established order in automobiles. To deal with the growing global assault and reestablish its domestic leadership, GM unleashed a radical business plan to automate and modernize its factories as well as its car models. It was not a subtle strategy—the centerpiece of the plan was to substitute high-tech robotics for inefficient labor, relying on GM's huge financial resources to make it all work. The estimated cost—$40-45 billion—was 14 times Ford's annual pretax earnings at the time. Because Smith believed robots could "do anything," the bulk of the capital expenditure was spent on factory automation, including the latest technology in advanced computer services, microelectronics, and systems engineering. The brand new, automated factories would, in theory, produce fuel-saving, smaller cars of the highest quality in greater volume and more cheaply than the competition. "In one masterstroke, GM would stop the import invasion cold and leave the competition years behind."
In line with the revolutionary transition to automation, GM also announced the most widespread reorganization since the consolidation days of the 1920s. Two manufacturing fiefdoms—Fisher Body and the GM Assembly Division—were abolished and control of production was placed under two newly created operating divisions. To break down silos across functional areas, each division would