Detroit Free Press from Detroit, Michigan • Page 288

THE DETROIT NEWS SUNDAY, DECEMBER 18, 1994 Holbrook Avenue Renaissance ff it 5 to ri 'J 1 'irw l'I i k. .3 1 (TP But GM desperately needs axles and gears. So it sold the operations, agreed to buy parts from American Axle and left the capital improvement to the new owners. "It's different," said John Bellan-ti, a 22-year GM veteran, now plant manager of American Axle's Detroit Forge. "Under GM we were not a strategic business.

"This is the core business of American Axle. There's a very definite commitment to this plant that just wouldn't happen couldn't happen under GM." Longtime workers say GM neglected the Detroit complex during the past 10 years. There was too little preventive maintenance and too little spending on improvements. "When I came 29 years ago and it rained, the rook leaked," said the UAWs Jim Edwards. "When it was raining (GM said) they couldn't fix the roof because it was raining, and when it wasn't raining, they said the roof didn't need fixing." Times have changed.

American Axle is spending $1.5 million on roof repairs. Forge Plant No. 3 is making room for two new "upsetters" monstrous clanking machines that transform iron bars into axle shafts. Price tag: $5 million. The forge's tool-and-die room is has spent $25 million on improvements to the Holbrook complex.

Richard Dauch: "We want to be in Detroit grow in Detroit." Continued from 1A forge operations, engineering, sales and marketing units in Detroit. Spent $25 million on improvements to the Holbrook complex. Outlays include paint, cleaning, roofing, demolition and cutting-edge manufacturing technology. The company plans to spend $130 million through 1996. Announced plans for a technical center in Rochester Hills for 150 sales, marketing and engineering employees.

Landed contracts with automakers to supplement long-term deals with GM for gears, axles, brakes and forged parts. Under GM, 1993 sales totaled $1.3 billion. In 10 months of ownership, sales should exceed $1.8 billion or $2.2 billion annually. Boosted to $240 million the $200 million Detroit payroll inherited from GM. Annual taxes to Ham-tramck, Detroit, Wayne County and the state total $12 million.

Detroit's share is $3.5 million. Spent $10 million on employee training this year. An additional 15 million is earmarked for 1995, roughly one-fifth of it coming from state programs in Michigan and New York. American Axle operates two plants near Buffalo, N.Y. American Axle, owned by Dauch, Metro Detroit investor Morton Harris and Cleveland industrialist Ray Park, means 4,500 jobs to Detroit and Hamtramck and $8.7 million in annual tax revenue.

Its success or failure could provide a road map for what it takes to create jobs, renew neighborhoods and prosper in Detroit. Success won't come easily. American Axle needs help from local and state government to remove the litter of neglect. That help sometimes conies slowly, especially from a new city" administration struggling to meet the demands of a company in a hurry. "I wanted to be CEO of an American-owned, Detroit-based automobile company," Dauch said.

"The vi- Alfonso Sheeley Jr. works on the body to call." Like Dauch, American Axle's senior managers are addicted to manufacturing. They paid their dues walking plant floors from the Big Three and foreign transplants to General Dynamics Corp. and defunct American Motors Corp. and they still do.

"Manufacturing guys look for instant gratification," said William Costello, manager of quality assurance and customer satisfaction. "You have some senior executives (here) who sincerely believe that you not only don't know your business from your office, you don't know it from the aisles of the plant. Gearing up Covering 89 acres in the core of industrial Detroit, American Axle i Manufacturing is invigorating an area on the Detroit-Hamtramck border. Background: The company's operations formerly were part of General Motors Corp. The Detroit axle plant was built in 1 91 7 and was I a World War I defense supplier.

Facilities: American Axle includes the Detroit manufacturing, forge and headquarters complex on Holbrook and St. Aubin. Other facilities are In Three Rivers, and Tonawanda and Buffalo, N.Y. A GM plant in St. Catherines, Ontario, is dedicated to supplying American Axle with materials.

Technical Center: American Axle on Friday announced it will establish a technical center in Rochester Hills that will be occupied by June 1 995. The high-tech site will initially house 150 engineers, sales executives and others. Owners: The company is owned by. three longtime friends: Richard E. Dauch, a former Chrysler Corp.

manufacturing chief; Raymond P. Park, a Cleveland industrial entrepreneur; and Detroit Investor Morton E. Harris, a director of Michigan National Bank. axle assembly line. American Axle You have to get into the machines." And touch the people.

Rick Rossman, Dauch's vice-president for manufacturing, is a compact, intense man who dismisses sometimes testily suggestions that business can no longer flourish in Detroit. "All of us have worked in and around Detroit for years," he said. "Detroit doesn't frighten us. I'd rather solve the problem than run from the problem. I've never seen an army that tried to lose a war.

It's a matter of leadership." That's why senior executives took to the shop floors after the deal with GM was closed. Employment: 8,200 company-wide; 4,500 at Detroit i complex. 4 Products: Driveline systems such as axles, propeller shafts, gears and stabilizer bars for use by 25 customers. GM accounts for 95 percent of 4 American Axle's sales. Among other customers: Ford, Isuzu, Honda, New Process Gear.

The Detroit News 1 'i Detroit 1 -t WjT, jHMap 5 Il5" Detroit Yn Vi I "We had 26 or 27 meetings on all shifts, night and day, to talk about who we are, what we believe and where we are going to go," Rossman said. "Anybody can buy technology. But we have to have a sense of trust and appropriate training to build teamwork." Working together If Dauch's recent book Passion for Manufacturing had a poster boy, it would be Tom Delanoy, the 42-year-old manager of the gear and axle plant. The son of the GM executive who broke in Dauch as a college graduate in training, Delanoy arrives each day before 6 a.m. to talk with union leaders and walk the shop floor.

"The old ways don't work. We have to lift up the rugs and see the dirt and admit it's there, then clean it up," Delanoy said, conceding his front-line managers are on the spot to change the way they manage hourly workers. In American Axle's first, weeks, Delanoy served notice that there are better ways to communicate with workers than to bark orders. And before disputes or misunderstandings could escalate into formal grievances, Delanoy sought to mediate at "working together" meetings of managers and hourly workers. "Supervisors who have been foremen for 20-25 years are used to kicking ass and taking names," he said.

"I don't want no ass kicking and name taking here. We're here to build axles with people." Delanoy's mantra: The four T's teamwork, technology, training and trust. "If we don't have the first three we can't have the last," he said. "If we don't have trust, we don't have quality. If we don't have quality, we don't have anything." Gwen Turner, a lathe operator, embraces the transformation.

"They let us know we are necessary and appreciated," said Turner, who has worked at the axle plant for 21 years. "Dick Dauch is either a genius or a magician with a magic wand." Union leaders Dabney Scales and Ronnie Allen might not go that far, but they started seeing big changes soon after American Axle arrived. If workers complained of machines leaking oil, the leaks were stopped. If a grinder found himself standing in a puddle of water, the problem was corrected. "The first meeting I had with Tom, I walked out," said Allen, a pipefitter and chairman of UAW Local 235's shop committee.

"It was the same B.S. I'd heard from other management." He's since tempered his opinion, but retains a healthy skepticism. "We still have to meet with the company from time to time to make sure the union is not undermined," he said. "It takes time to gain trust and respect of this membership." Tom Jones, a UAW district committeeman in Plant No. 3, sees Delanoy giving workers a "say in what's going on." "His word has been good," Jones said.

"We've tested him and he's proven it's no longer a wrestling match." Photos by Alan Lessig I The Detroit News a said. "We haven't missed so much as a bulb." Crime rates have declined, police say. A suspected crack den and an t) abandoned liquor store have been demolished. Plant No. 7 has been.

leveled and Plant No. 5, hard by I 75, is slated for the wrecking ball. City crews have fixed or replaced 600 damaged, broken or missing street signs. Chronic flooding along St. Aubin, near Detroit Forge, has been corrected.

"There's a little heaven on Hol- brook, there's a little hell on brook," Dauch said. "It just depends wnai you mane oi n. Dabney Scales, president ofr UAW Local 235, likes what he "I was born and raised down the Bob Mathis: Officials get dose of "gentle cooperative pressure." An street. These are my roots," he said, "I want to see American Axle give, something back to Detroit. Brother, all they did back then at this plant was make noise and dirty up my mother's clothes when she hung them on the line.

I feel like they took everything out and didn't put any- thing back in." Now, plant manager Delanoy, Scales and UAW colleague Allen 7 talk to nearby Hamtramck students about careers in manufacturing "to give them insight as to what goes on in these big factories," Delanoy said. "We're telling them that the factory life can be a good life." Still, American Axle say their company has needs, too. It needs upgraded streets to ac-( commodate the 350 tractor-trailers' and 4,500 employees shuttling into the complex every day. It needs help ungrading the rail-i(. road crossing over Holbrook.

It needs help removing dilapidat- ed housing because "it is not neces-1 sarily good for America, Detroit American Axle or our Dauch said. State officials appear poised to give the company $3 million in" training funds for 1995. And the city of Detroit has formed a task force to field and respond to needs voiced by American Axle. But sometimes the help doesn't come fast enough. "We keep working with gentle cooperative pressure to let them know we're still here," said Bob Mathis, vice-president for administration.

"You can't do it any other, way with those people." Look at us now There's a rumor flying that American Axle might soon be visit ed by GM President John F. Smith who wants a first-hand look at' I the revitalized axle plant. The irony isn't lost on Ken Schaf-- fer. "No qualms about it," the UAW I district committeeman said. eral Motors and its bureaucracy just didn't know how to run the busi-J ness.

I "I'd tell him the company is head- ed in a better direction." Dave Sibley, maintenance man-l ager for the gear and axle plants, nodded in agreement and added: Td tell him they blew it." 1 Ks -J; undergoing a $5-million renovation. And the company is steering more work into its own tool-and-die operation instead of sending it to outside shops. That's refreshing for Charlie Gonchoroff, chairman of Die Sinkers 110 of the International Association of Machinists. "I see somebody spending money, making improvements we should have made 20 years ago, interested in people so far," he said. GM "never put nothing into this place and half the machines didn't run." Gonchoroff is encouraged, but not yet convinced that the new boss is better than the old boss: "Are they going to honor our 30 years and out?" he asked, referring to GM's longstanding labor agreement to provide pensions after 30 years on the job.

"If they are, I've got people who are going to stay. I want to know their intent, then the problems go away and in '96 well take our chances." American Axle's agreement with GM honors all current labor contracts and gives union workers the right to return to GM facilities before the current pact expires in September 1996. So far, 1,224 workers 533 from the Detroit operations have returned to GM. Among Machinists and UAW members, the pension question is paramount: Will American Axle honor 30-and-out? "We have protected our people on that vital issue," Dauch said. "We will make sure that employees will be treated after 30 years as if they'd been employed by GM all that time." Dauch's team American Axle's parts axle shafts and gears, connecting rods and stabilizer bars must be lighter, stronger and better engineered.

To make profits that eluded GM, the new company must improve its quality, streamline management and draw new customers. The global auto industry de mands precision and consistency. So does Dauch. A nimble management team seven senior executives comprise the company's operating committee is designed to enable American Axle to quickly push through spending, new products and processes and new hires. When customers wanted to communicate product concerns to workers, American Axle didn't filter those concerns through management.

It installed fax machines on the production floor. Now a line worker in GM's truck assembly plant in Janesville, can fax complaints and suggestions directly to counterparts on an American Axle production line. "The quicker you get the feedback, the quicker you get the problem solved," said George Delias, vice-president for procurement and materials management. American Axle is more than a personification of Dick Dauch, a former Purdue University running back who led Chrysler's manufacturing renaissance in the 1980s. Each member of the company's operating committee has close ties to Dauch.

They know the boss's priorities and values; if they didn't share them, they wouldn't be there. They rise and fall on their own decisions, recognizing the bureaucratic cover they once had is gone. They love it. "The process at GM was fraught with bureaucratic hurdles," said former GM executive Phil Lugger, now American Axle's director of labor relations. "Now, I don't even have any- Rick Rossman: "I'd rather solve the problem than run" from it.

sion was to create an entirely new automotive tier one global supply company to compete with the big boys throughout the world" like Dana, Rockwell, TRW, Eaton. "We want to be in Detroit and we want to profitably grow in Detroit. Our intentions were to buy it, fix it, improve it and make it world-class. We're here for the long pull." That's what Jim Edwards and his son, Dereick, are betting on. When Dauch signaled a willingness, to hire workers' friends and relatives, Jim Edwards watched to see if the offer was sincere.

He advised his son to keep his job as a materials handler for Jervis B. Webb Co. in South Lyon. Today, Jim Edwards is convinced. Now Dereick Edwards is a machine operator earning more than $14-an-hour and studying to enter American Axle's skilled-trades apprentice program.

"I see them trying to make it better safer, cleaning up," Dereick Edwards said of American Axle. "I heard Dick Dauch say he was committed to making a home on Holbrook. It's real." The old regime For many American Axle employees, the new boss is more appealing than the old boss. Two years ago, GM moved to sell 18 operations in its Automotive Components Group. The Detroit axle plants, Detroit forge arm sister operations in Three Rryefs, and upstate New cleaved from GM's Saginaw Division and put on the block.

iffhe plant, if it was to be profitable, was going to require a large infusion of cash, and GM didn't have it said division spokesman Gerry Hglroes. "We couldn't spend it on axjes; instead of new products." --3 Lll Mini wia mmm mimmm iiijiii 'lit l4 ifffftii5'- An American Axle employee loads steel rods onto a machine so they can be heated and shaped into stabilizer bars. 5 'Heaven on Holbrook' The blue-and-gray trestle spanning Holbrook twinkles each day with tiny white holiday lights. Large wreaths hang from outside doors. "We were told by scores of people, Don't put those out there or they will be gone in 24 hours," Rossman Plant manager Tom Delanoy talks with Annette Taylor.

Delanoy's mantra: The four T's teamwork, technology, training, trust. -4L 4.