Word: volvo
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Dates: during 1970-1979
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...Kalmar system was worked out by Pehr Gyllenhammar, Volvo's managing director (see box). Three years ago, when he stepped in as chief executive, he had to cope with an incredibly high labor turnover rate. At Volvo's main assembly plant near Goteborg, turnover reached an annual rate of 41% in 1971, even though the company pays some of the highest wages in Swedish industry...
...company had to spend heavily to train replacements, and the rapid turnover contributed to declines in quality that have marred Volvo's reputation for durability. Gyllenhammar was convinced that the workers simply did not like their monotonous assembly-line jobs. "As people became more educated -and Sweden spends perhaps more money per capita for education than any other country-their jobs have become less complex," he says. "That does not make sense...
...vice versa." After two months of intensive work and study the group presented its plan. Kalmar (pop. 53,000) was chosen as a site in large part because of its high unemployment rate. Ground was broken in 1972, and 19 months later the first team-made model Volvo rolled out of the workshops...
Some workers and union leaders consider the Kalmar plant less than Valhalla. "The environment is better," says Göran Nillson, 38, who worked on Volvo's conventional assembly line near Göteborg, "but you should not forget that we have the same productivity objectives as any other plant. It looks like a paradise, but we work hard." Adds Kjell Anderson, an official of the militant Swedish metal workers' union, "They haven't really changed the system and they haven't changed the hierarchy. For example, we don't think it's necessary...
Gyllenhammar remains convinced that Kalmar will work. "We think the extra capital involved will be offset by increased productivity," he says. Still, Gyllenhammar is a prudent manager, and Volvo is prepared to adapt if the Kalmar experiment fails. The plant was designed in such a way that it can be re-converted into a conventional assembly line at a minimal cost...