Seeking to Define Factory of the Future : Working: UCLA researchers say the key to whether industry can remain profitable lies in whether it can dramatically change human relationships on the job.

SAN JOSE —  Martha Quesada remembers the old days on the General Motors assembly line, when she watched a co-worker suffer a heart attack. “They pulled him out and the line never stopped running,” she said. “That shapes your attitude about the place you work. . . . I was a number.”

These days, the same GM plant in Fremont is jointly owned with Toyota. It’s called New United Motor Manufacturing Inc. Quesada is called a “team member” in the assembly maintenance department. She--like every NUMMI worker--has the authority to stop the assembly line by pulling a cord.

Quesada told her story of industrial change last week during a seminar attended by 150 business executives, state legislators, educators and workers who grappled to define the factory of the future--a style of factory that is efficient enough to stem the erosion of California’s manufacturing base.

The seminar unveiled the results of a two-year study by a team from UCLA’s Graduate School of Education, which spent 6,000 hours working on production lines in four large California factories.

In a novel approach to determine why companies succeed or fail as they strain to meet global competition, the researchers operated as industrial anthropologists, developing close relationships with production workers and managers.

Scores of thousands of $10- to $15-an-hour blue-collar jobs disappear from the state each year as factories fold or move to other states, often citing California’s tough environmental regulations. The researchers, whose work was financed by legislative committee grants, organized labor and numerous corporations, echoed that complaint.

But the primary key to whether manufacturing industries can remain profitable enough to survive, they said, lies in whether they can dramatically change human relationships in the workplace. Those changes between workers and bosses are symbolized by the authority of people like Quesada to single-handedly stop an assembly line.

The most important struggle they witnessed on the factory floor, the researchers said, was when management tries to improve quality, speed of production and flexibility by extending unprecedented trust and decision-making authority to their workers, allowing them to “flatten” their companies by cutting layers of middle management.

This “reinvention of industrial culture,” often the result of sheer economic desperation within companies, is being achieved amid much emotional pain and with decidedly mixed results, said UCLA associate professor Willford Wilms, a vocational training expert who headed the study.

The UCLA researchers labored at two plants where change flourishes: NUMMI, a new company that started after the old GM plant closed, and a Hewlett-Packard computer division in Roseville that was forced to improve quality to avoid being closed. They worked at two other less successful plants where the new approaches have come with great difficulty: Douglas Aircraft in Long Beach and USS-POSCO Industries, a steel finishing plant in Pittsburg, Calif., a joint venture between Americans and Koreans.

The study was unusual not only because of its methodology, but because its examination of sensitive workplace and economic issues was jointly sponsored by corporate, legislative and labor interests--forces normally at war with one another.

As a result, the sponsors, each of whom had veto power over the study’s conclusions, came to regard it as an unofficial policy guide for all sides. Such documents are rare in American society, which lacks the formal government policies so common in Japan and Western Europe.

The researchers concluded that:

* State policy-makers “often fail to see the connection between regulating the environment and the state’s economic health.” Environmental and economic policies must be developed jointly, rather than by separate legislative committees.

* To allow employees to feel at ease in wielding new authority, businesses need to assure workers of secure employment, treating them like fixed assets--a radical departure from current practices. NUMMI was applauded for its no-layoff policy--revolutionary in the cyclic auto industry--by which workers are assigned to training when assembly line work lags.

“When they’re laid off they feel like a piece of dirt,” even with the normal union income-security clause that continues to pay wages, said Dennis Cuneo, NUMMI’s vice president of corporate planning. “If we’d laid people off (during a downturn in 1988) we would have lost it all. We would have been back to a traditional system.”

* Managers and workers must consciously change their beliefs about one another. Replacing “deeply seated antagonistic relationships with trust takes a long time.” Workers must evolve into active participants. Managers must evolve into educators.

“Our pattern has been to apply technology as a solution” to productivity and quality, “but what is more important is the social system--how people relate to one another,” said Kathy Hendrickson, a Hewlett-Packard consultant. “We’re talking about pushing toward a more egalitarian environment.”

* Job classifications and evaluation systems must be remodeled to reflect a far broader and more flexible range of responsibilities.

* In a unionized plant, labor leaders and managers must commit to a “shared economic destiny.”

* Training, recognized as a weakness in most American companies, must not only be dramatically increased, but moved to the shop floor.

In the seminar, which concluded Friday with a tour of NUMMI by Gov. Pete Wilson, executives and workers described the tension inherent in trying to break away from hierarchal, top-down decision-making and rigid job categories that have characterized American mass manufacturing since the 19th Century.

These change in rules and customs, popularized by Japanese and Western European business leaders and often referred to in American business jargon as “getting lean,” are taking place in many quality conscious companies. Doing it properly, however, has often proved more costly and more difficult than anticipated. For example, a little more than 30% of U.S. businesses use the quality strategy of self-managed work teams, a recent study says.

Learning to extend more trust to workers is “the hardest thing,” said Ronald Berger, general manager of professional and technical development at Douglas Aircraft, which introduced a “total quality management” program two years ago that has sputtered and--in the minds of many workers--collapsed. “You don’t train it, you don’t buy it, you don’t sit in a room and play games and walk out. You take a leap of faith. You have to be prepared to understand there are going to be mistakes made. . . . It’s probably the most difficult thing in human nature to do.”

Gary Convis, NUMMI’s vice president of manufacturering and engineering and a former Ford Motor Co. manager, recalled his surprise at being told by his first Japanese boss at NUMMI: “We are the beneficiaries of the team members’ hard work.”

“I’d never heard that in two decades with Ford. I don’t think I’d ever thought it,” Convis said. “It’s a big change. It takes a different mind-set.”