Saving GM - inside the company's "War Room."
When a massive quake struck Japan on Friday, March 11th, Bill Hurles was up north with his sons on a snowmobiling trip. Hurles is head of supply chain for General Motors.
After he saw the first footage of the tsunami slamming into the northern coast, Hurles cut his trip short and returned to Warren. By early Sunday morning, he and his team were in the War Room, desperately trying to get information.
"It was clear from what we were picking up in news broadcasts and some of our suppliers, a serious, serious event had happened," says Hurles. "Power was out, cellular communication was out."
Hurles wasn’t the only one who had to swiftly change his plans. On Friday, Paris Pavlou was driving to Ohio to meet a supplier, when that supplier called him to say one of their Japanese plants had been severely damaged by the earthquake. He immediately turned his car around.
" Yeah, in a situation like this you can’t afford to not move quickly," he notes wryly.
The War Room has been used for crises facing GM before. Not counting the bankruptcy, this is one of the worst.
The War Room has whiteboards on all four walls. Soon, it was covered with lists of parts and how many day’s supply for each part. A row of clocks shows the time in different regions of the world. There’s a big map of Japan tacked on a wall.
GM has 145 suppliers in Japan. So every one of the company’s plants around the world was at risk of shut down for lack of a part. Then, a few days after the tsunami, the first of the coast’s four nuclear reactors began to overheat. Says Hurles:
" That situation was almost deteriorating on a daily basis, and trying to assess what risk that was creating, for the supply base, for the people --"
Well, that couldn't t be done from Warren.
"We needed resources on the ground," Hurles says.
Soon, GM’s Carl Kevitch is on his way to set up a War Room in Tokyo. It’s the the first time he’s ever been to Japan.
"The very first day I was there we went to a facility that was about 63 kilometers from Fukoshima, where most of the damage was," says Kevich. "On that day we experienced a 6.2 aftershock. They call it aftershock, I call it an earthquake."
There was little bottled water available. Almost no gasoline. So Kevich had to hire a tour bus to get to one supplier. Since Western-style hotels had no power, he ate what the locals ate. And to schedule visits to suppliers, he learned how to deal with Japan’s face-saving culture.
"We called them to let them know that we wanted to come, of course they didn’t want us to come. And the reason is they don’t want to have their customer in their facility, unless their facility is running well."
Once the suppliers became convinced GM wasn't there to dump them, they were awfully happy for their customer’s help. Whatever GM could do, it did. One supplier ran out of a special form of hydrogen peroxide. GM found another source for it and shipped it in from Korea. The company hired trucks.
" When there were damage to buildings, we moved the tools to a different building," says Kevitch.
In all, Kevich was in Japan for four weeks during the peak of the crisis. The country was in shambles when he arrived. It was back to nearly normal in an astonishingly short time.
Back in Warren, things were heating up. Bill Hurles says the War Room wasn’t designed for round-the-clock operations and it didn't have air conditioning.
"This room was packed with people," he says, "And we were literally bringing food in to help feed the people, you know, and we had submarine sandwiches etc. in here.... and it was getting hot......"
Pretty soon, maintenance plopped two makeshift air conditioners in the room. They’re not pretty but they worked. They helped to cool the room along with any fraying tempers. Many people hadn't spent time with their families for weeks. The War Room now spilled over into three other rooms in Warren, along with the Tokyo War Room, one in Shanghai, and one in Korea. Engineering was pulled in, to get replacements parts made in record time, if a supplier just couldn't get back online fast enough.
"The first break we took was right around day 28, day 29," remembers Matt Joshua. He's in charge of the global purchasing supply chain for electrical commodities.
Everybody involved in the supply crisis pulled in the same direction. People volunteered to go to Japan. Vacations were put off. Everyone understood what this was about -- saving the company. Day by day, part by part, the company's War Rooms helped put the links of the Japanese supply chain back together, often just in time to keep an assembly line from shutting down.
Says Joshua: "The significant milestones are perhaps not what one would anticipate. It was things like, we have electricity. Or, we’ve got a source of fresh water."
In the end, General Motors did have to shut down its plant in Shreveport, Louisiana. One plant, for one week. Otherwise, the threat that the company might have to temporarily stop making cars was averted.
People involved in the effort say they grew as human beings, grew closer to each other, met people in the company they might never have known. It was tough. But War Room veterans are keen to point out that they’re not the heroes of this story. Ron Mills is head of engineering at GM’s Tech Center.
"We all worked really hard here, but at the end of the day, I did go home, right? And I ate well, and people in Japan could not do that. They had to work hard and also go back and try to find food and clothing and shelter for them and their families and which - I was just in awe of how hard and how they were able to endure."
Today, there’s still risk for GM, but the situation has greatly eased.
As far as lesson learned, it’s not, "don’t do business in Japan". It’s more, "if you have a global problem, the solution is also global. "