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  1. 1. Ford's Rouge Redesign By Joann Muller Business Week, November 13, 2000 Instead of abandoning the factory Henry built in 1917, Bill Ford aims to turn the huge plant into a Web-savvy, eco- friendly powerhouse From the window of his office on the 12th floor of Ford Motor Co.'s headquarters in Dearborn, Mich., 43-year- old Chairman William Clay Ford Jr. has a clear view of the industrial legacy left by his great-grandfather, Henry Ford. It is the sprawling Ford Rouge Center, a manufacturing marvel that stands as an icon of America's industrial prowess in the 20th century. Constructed from 1917 to 1925 on an arm of the Rouge River, there has never been anything like it in the world: Iron ore, coal, and other raw materials went in one end, and finished automobiles came out the other. During its heyday in the mid-1930s, the Rouge employed more than 100,000 people, cranking out a new car every 49 seconds. When workers changed shifts, the streets surrounding the Rouge were as crowded as Times Square on New Year's Eve. But the Rouge has been in decline for decades. Many of the original 29 factories in the 1,100-acre complex are gone, the work handed off to outside suppliers running state-of-the-art plants. Miles of railroad tracks that snaked through the Rouge have long since been abandoned. The steel division was sold off in 1989, and with it the docks where tons of iron ore were unloaded before being melted into steel. The old power plant, which once produced enough electricity to light up the city of Detroit, is idle following a devastating 1999 explosion. Today, Ford employs just 7,000 workers at the remaining Rouge factories and produces only one vehicle, the Ford Mustang. Yet gazing out at those distant smokestacks, Bill Ford sees opportunity—a chance to build his own legacy at the company his great-grandfather founded. If tax breaks come through, Ford plans to announce on Nov. 14 that it will redevelop the site as part of Bill Ford's vision to balance lean manufacturing with environmental sensitivity. He calls it ''sustainable manufacturing,'' an allusion to the concept of sustainable development, which means production techniques that minimize long-term environmental damage. A brand-new assembly plant will incorporate flexibility and Web-based technology with numerous environmental experiments, including the country's largest ''living roof''--blanketed with plants for energy-efficient insulation--and the use of vegetation to rid the soil of contaminants. Ford CEO Jacques A. Nasser promises that it will be ''an industrial icon as revolutionary for the 21st century as the Rouge was for the 20th.'' Saving the Rouge is also a social statement, a commitment to working America. From its first days, the Rouge was a ticket to the middle class for thousands of immigrants and poor Southern workers--many of them black--who were lured to Detroit by Henry Ford's promise of $5-a-day wages. That was more than most men of any color could earn in a week back then. A job at Ford gave blacks one of their first entrees into the American mainstream. Among them was Roosevelt Ford (no relation to Henry), a black cotton farmer from Clinton, Miss., who began working at the Rouge in 1924.
  2. 2. Since then, four generations of his family have worked there, a total of 10 Fords in all. They have survived bloody labor battles, ugly racial strife, and often difficult working conditions. And each generation has achieved greater prosperity than the one before. Today, Maria Ford-Conliffe, one of Roosevelt's granddaughters, is a senior manager at the Rouge, with a six-figure annual salary and a reserved parking space in front of the factory. In an era of dot-com millionaires, when blue-collar industries are distinctly out of fashion, reinvesting in the Rouge will ensure that the next generation--including Maria's two nephews, both in their 20s and employed at the factory--has a chance to follow the family footsteps into middle-class prosperity. If Bill Ford's vision succeeds, it could be nearly as dramatic as his great-grandfather's was in his day. ''It probably would have been a lot cheaper not to do this,'' concedes James J. Padilla, Ford's group vice-president for global manufacturing. Other companies, he says, would probably ''lock the gates, turn your back on what you've got, and go someplace else.'' But as far as Bill Ford was concerned, that wasn't an option: The Rouge represents Ford's heritage. ''If there is a symbol of the Ford Motor Co., it's the Rouge,'' says Ford. ''For us to walkaway would have been an absolute crime. We've become such a throwaway society--we just can't keep moving on and building new sites.'' Ford executives insist that sound business, not social or environmental philanthropy, is driving their decision to remake the Rouge. Sure, the effort helps nurture the auto maker's image as a responsible company--an image that sorely needs a boost after the debacle over faulty Bridgestone/Firestone tires on Ford's Explorers. It also cements the company's strong relationship with the United Auto Workers (UAW). Ford worked closely on the Rouge redesign with union officials, who give full credit to Bill Ford. ''To me, he has a vision that's very refreshing,'' says Jerry Sullivan, president of UAW Local 600, which represents the Rouge workers. But in the end, Ford's $2 billion investment in the Rouge at the turn of the 21st century is really a bet on the future of manufacturing in the U.S. It's a wager that U.S. auto companies can produce competitively at home despite the fierce winds of globalization, which have spurred a steady shift of auto jobs offshore--by Ford no less than other manufacturers. Roosevelt Ford was among the tens of thousands of poor Southerners who headed north to Detroit in the early 1920s when they heard about the fat paychecks Henry Ford was offering. A skilled mechanic, he landed a job as a millwright in the steel foundry, a hot and miserable factory where most blacks were assigned. He brought along Carrie Bruce, his childhood sweetheart, and the two married and had 12 children. He made a good living, but with so many mouths to feed, times were tough—especially during the Depression, when he was laid off from the Rouge. Roosevelt, who died in 1983, made ends meet by fixing cars and digging ditches before business picked up again and the Rouge hired him back in the foundry. ''I never remember a day that we went hungry,'' recalls his second-eldest son, Alvin Ford, now 68. In 1992, the Rouge was near death. Ford was planning to kill off the aging Ford Mustang and close the assembly plant for good. But local UAW leaders persuaded former CEO Alexander Trotman, then head of Ford's North American operations, to redesign the legendary coupe and keep the plant open. Ford agreed to invest in modern equipment--but only if the UAW went along with more flexible work rules. The cooperation was a breakthrough in Ford's labor relations, leading to a culture of employee involvement that has since spread to other Ford plants. Still, the Rouge was living on borrowed time. When the new Mustang came out in 1994, demand soared and the Rouge hummed along. But Mustang sales slowed as competing models hit showrooms. Shutdowns were common, and job security flared as an issue again. Then, in 1997, Ford and the UAW struck a deal that clinched the Rouge's survival. The auto maker vowed to update the engine, paint, and frame factories and raze the antiquated Mustang plant to make way for a modern assembly plant that would build mostly pickup trucks and sport-utility vehicles. The union, in turn, would continue to work on boosting efficiency. As a truck plant, the Rouge's future would be more secure. Alvin Ford remembers the days when Rouge workers and managers saw one another not as collaborators but as enemies. During the Depression, wages were good, but the work was miserable--''the insecurity of employment, the military style of command, and the abuse people were subjected to,'' as Wayne State University labor-history professor Steve Babson puts it. Congress gave employees the right to form unions in 1935, but Ford refused to go along. Tensions grew, and in 1937, labor and management waged the bloody Battle of the Overpass at the Rouge's gates. Union leader Walter Reuther and others were severely beaten in front of the national media. Although just a boy, Alvin remembers being told that his father was working in the plant at the time. Rouge officials
  3. 3. locked the gates, trapping Roosevelt and others inside for several days. Roosevelt wasn't a union organizer, but he believed in the union, says Alvin. Finally, after five more years of strife, Ford recognized the UAW. Despite the ugly episode, Roosevelt's children say he hoped that they, too, would work at the Rouge. In May, 1999, just months after Bill Ford became chairman, he dramatically raised the stakes for the Rouge by vowing to turn it into a model of sustainable manufacturing. The pronouncement surprised underlings, who had heard rumblings of a new approach to making cars but assumed that it would be years before anything happened. ''This has really been an upside-down process,'' says Timothy J. O'Brien, Ford's director for environmental quality. ''There was no specific plan, just an instinct from top management that we could do this.'' Bill Ford's mandate pushed the remake to a whole new level. He told executives to look beyond just modernization and instead examine what the company's long-term vision should be. What could the company do to make its factories more productive, more pleasant to work in, and better for society at large? Bill hired a renowned environmental architect, William A. McDonough, who pressed company officials to consider radical alternatives, such as using windmills to power the factory. As factories go, the new assembly plant won't be particularly dazzling. ''Our vision is not to have a lot of whiz- bang automation,'' says project manager Jay Richardson. Nonetheless, the plans are remarkable. With flexible equipment and new processes, Ford will be able to manufacture three vehicle platforms and as many as nine different models on a single assembly line. That flexibility will enable Ford to respond quickly to customer preferences without costly retooling, says Richardson. Initially, Ford will produce Ranger pickups at the Rouge, but suppliers say the plant may also build F-series pickups, Explorers, and a new small SUV. Roosevelt Ford got his wish. His oldest son, Roosevelt Jr. (Sonny), was one of the first blacks admitted to the Henry Ford Trade School after an eight-hour admission test. It was a ticket to some of the highest-paying skilled trades jobs in the Rouge. Sonny went to work as a toolmaker. Alvin attended the school, too, becoming an electrician. Younger brothers Carl and Herbert started out in grueling assembly jobs but also earned apprenticeships in skilled trades--Carl became an electrician and Herbert a metal-model maker. In an era of widespread racism, the three younger brothers managed to break through racial barriers and become supervisors in the 1960s, among the first blacks to hold such positions. If Ford succeeds with all the new manufacturing techniques it plans for the Rouge, it would put the facility on par with the most advanced auto factories in the world--most of them Japanese. To boost efficiency, the Rouge will have 40% fewer workstations, and employees will have greater responsibility. ''They'll control their piece of the world,'' which should bring higher quality, says Richardson. Employees will work in teams and use Web-enabled PCs on the shop floor to share their concerns instantly with suppliers or product engineers. Ford says the technology linkup will provide huge cost savings and cut down on lost production time. A team leader, for instance, could snap a digital photo of a poorly fitting part on the assembly line, zap it over the Web to the supplier, and get an engineering fix in minutes. Web technology will keep the new Rouge lean in other ways, too. Team members can track just-in-time shipments of materials to the factory floor, leaving fewer parts cluttering the assembly area. Parts inventory will be cut in half, to just 12 hours' worth, vs. one to two days at most auto factories. Still, Ford execs insist that people, not machines, are the real focus of the new Rouge. Even today, the assembly plant is dark and claustrophobic. By contrast, the new Rouge will feature numerous skylights, restoring the natural lighting that Henry Ford had favored but that was later lost as the Rouge expanded. Overhead walkways will separate people from machinery, reducing the risk of injury. Conference rooms, cafeterias, and rest rooms will all be on a mezzanine level, more exposed to light. Workstations will be redesigned, too, to make them more ergonomic and reduce repetitive-strain injuries. Workers in the labor-intensive trim-assembly shop, for instance, will stand on wooden palettes that can be raised or lowered to suit individual assemblers. ''If you feel good while you're working, I think quality and productivity will increase, and Ford thinks that, too, otherwise they wouldn't do this,'' says the UAW's Sullivan. The new factory will mean less wear and tear on workers' bodies, but employees will need more computer skills to run the advanced manufacturing processes to come. To prepare them for the new era, Ford and the Henry Ford Community College will build a brand-new technology-training center nearby.
  4. 4. The Rouge--and the auto industry as a whole--had ups and downs in the 1960s and 1970s, and Roosevelt's four sons learned to cope with periodic layoffs. But a job at the Rouge was still among the best-paying around. In 1978, Alvin's wife, Rose, met a woman who earned $25,000 a year there--twice what Rose made as a telephone operator. With tuition bills looming from their four children, Rose, at age 39, gave up her desk job and went to work as a welder at the Rouge frame plant. She worked seven days a week, often 12 hours a day. ''I would wake up at night and my hands would feel like watermelons,'' she says. ''I made $25,000 in six months,'' she remembers. ''But I was too tired to do anything'' with it. Eventually, a pinched nerve landed her in traction for three days, and in 1989, she left the Rouge on disability pay. What really sets the new Rouge apart from other industrial sites are its environmental features. The roof of the new assembly plant will be covered with sedum, a succulent groundcover, and other plants. This ''living roof'' can hold an hour's worth of heavy rainfall, reducing harmful storm-water runoff. Better yet, it will help keep the factory cool in summer and warm in winter, reducing energy use. That's not all. Ford hopes an experiment using mustard seed and other plants to rid the soil of harmful toxins will become an ecological alternative to hauling contaminated soil to landfills. The process, called phyto- remediation, is a joint project with Michigan State University. Natural swales, or shallow green ditches, will also be used instead of giant underground culverts to manage storm water. That alone will save Ford $35 million in construction costs. More than just minimizing the harmful impact on the environment, Ford hopes to restore much of the natural balance to the marshy land on which the Rouge sits. The company is planting mulberry bushes and other indigenous plants throughout the gritty industrial site in hopes of luring back songbirds and other species. Life at the Rouge is easier for Alvin and Rose's children. Son Kevin is a crane operator at now-independent Rouge Steel Co. Daughter Maria Ford-Conliffe is human-resources manager at the Rouge engine and fuel-tank plant. The first member of her family to graduate from college, Ford-Conliffe started out in Ford's finance and marketing departments. After earning two master's degrees, she moved to human resources, where she can help make jobs like her mother's safer. Ford execs concede that it would have been less risky to start over on a ''greenfield site,'' as most other auto companies have done. General Motors Corp. recently shut its historic factories in Flint, Mich., which it's replacing with two facilities in a rural area near Lansing, Mich. Still, the Rouge investment will hardly bankrupt the No. 2 U.S. carmaker, which is flush with $18 billion in cash. The environmental initiatives, plus the creation of a visitors' center and an employee shopping area, pushed up the cost of the entire project by only about 10%, or $200 million, estimates project manager Richardson. Bill Ford says the $2 billion budget ''is totally containable in our business plan.'' He also hopes that the new techniques being tried at the Rouge will reap long-term savings that can be applied to Ford factories around the world. A handful of other companies have experimented with some of these ideas and made gains. In 1995, Herman Miller Inc. redesigned a furniture-making factory in Holland, Mich., using many of McDonough's environmental ideas. Since then, productivity has climbed, absenteeism has declined, and shipping schedules have improved, according to an outside study funded by the Energy Dept. Bill Ford hopes his company's effort will achieve similar results. If the Rouge project only ''ends up being a very interesting environmental showpiece, then we will have truly missed the boat,'' he says. Kevin's children, DaJuan and Kevin Jr., both in their 20s, now work in the Rouge's assembly operations. But they both dream of moving up to better positions, such as their aunt Maria's. DaJuan wants to design Ford cars someday, he says, and Kevin Jr. is thinking of applying for a skilled trades job, like his grandfather and great- uncles. Ford's decision to bet on the Rouge again means they have a chance to make their dreams come true.