In a conversation with Stefan Heulsenburg at this year’s AMS China conference, the vice-president of manufacturing at BMW Brilliance noted that factory workers at the plant did not earn enough to be able to afford a new car. Not a BMW, of course, but any new car.
Although this is perhaps the norm for automotive workers in China, it flies in the face of a basic manufacturing principle. While Henry Ford’s personal politics cause most observers to rightly raise an ethical eyebrow, his manufacturing wisdom is beyond doubt – a key part of this, you may recall, was that workers at Ford’s first plant in Highland Park, Michigan, were paid sufficient wages to allow them to purchase one of the Model T cars they helped to produce.
In a later presentation at the conference, Thomas E. Callarman, Professor of Operations Management at the China Europe International Business School, stated that China’s OEMs must raise finished vehicle quality before they could expect to compete with carmakers in other global regions. Continuing this thought, he noted that problems in overall vehicle quality were not down to the build processes at China’s OEMs, which he said could be compared favourably to those in place at plants around the world. Instead, improving finished vehicle quality depended on raising the quality of parts delivered to final assembly lines.
The two points could be related. In China, it’s quite possible that a person producing a given part, a brake pad, for example, has never aspired to purchase a new car. Beyond vehicle ownership, it is possible that the worker producing the brake pad has never even been in a car. With such a cavernous void between individual part producer and vehicle buyer, it’s not wholly unanticipated that the worker making the brake pad has never considered that should his part quality slip, it could at best affect a vehicle’s handling, while the worst-case scenario is all too easy to imagine.
Callarman stated that the best way to improve part quality was to ‘involve Tier companies from the outset of vehicle development’. Yet while this would get management involved in the final product, such an incentive would be unlikely to trickle down to the factory floor, leaving the worker to continue producing sub-standard parts simply through a lack in involvement with the finished product.
Wages for automotive workers are continuing to increase in China, but until they are at a sufficient level where these jobs reward with sufficient cash to allow workers to consider purchasing the product they are helping to deliver, the gap between factory floor and finished vehicle is likely to remain sizeable, making it that much more difficult to achieve the required step-change improvements in Chinese vehicle quality.