Article 13 criteria for selection:
Borg Warner embarked on communication and engagement with employees due to adversarial industrial relations; a commitment that has delivered clear business benefits. Links closely with our Expert View on worker consultation.
Business Insights
Turnover: $2.7 billion (2001)
Core Service: Automative components
Profile: Based in Wales, Borg Warner is part of Borg Warner Automative Inc (BWA). The company supplies automotive components and systems for cars (key technology for. engines, transmissions, 4WD), and employs about 13,000 people worldwide in 14 countries.
Vision and goals: Customers rely on us because we know more about powertrain systems than anyone else in the world." - John F. Fiedler, Chairman and CEO (company website)
Engaging and communicating with employees
Due to adverse market conditions in the mid-1970s, Borg Warner made many redundancies on the Last in First Out (LIFO) basis and so lost many specialised, qualified people. Industrial relations broke down to such an extent that the company began to adopt a more inclusive approach, which enabled them to reposition the business with new products and customers. The company currently has the following characteristics:
1. Communication and transparency
Financial performance of the company (costs, profits and sales) is openly discussed and long-range plan forecasts are shared with employees – ‘warts and all’. Performance is regularly reviewed at the company, department and team levels through briefing sessions.
2. Team working and increased responsibility
Employees see teamwork as essential to achieving ‘set goals and targets of improvement’ and the company has developed small teams that are responsible for improving a defined part of the manufacturing process. With support from their team, employees are able to undertake their own quality assurance, organise their own work schedules and measure themselves.
3. Employee development
The company’s philosophy is to make full use of the intellectual ability of all employees. Each employee has an annual development review with aims that are twofold: (i) to improve the ability of employees to do their jobs, (ii) to link their ability to how they can meet company and personal objectives. Employees have won ‘Apprentice of the Year’ for South Wales for the last two years.
4. Reward mechanisms
The pay and grading system supports teamwork, and there is a self-financing reward scheme to encourage innovative new ideas. Employees put suggestions into a ‘pot’ and those that are accepted receive £5. Any savings from implementation of the idea are shared 65% to the company and 35% to the ‘pot’, which is then shared out equally to employees each year (average £500 payout).
5. Continuous improvement
Borg Warner’s quality policies focus on (i) time to market, (ii) production system and (iii) supply chain management. These functions are subject to goals and measures that are driven by team targets.
Business benefits
Borg Warner’s turnover almost doubled from 1993 to 1997, from £20 million to £35 million. In the same time employees have increased from 183 to 310. As it planned, the company has gained access to a larger customer base through developing new products. Employee turnover is below 0.5% and attendance stands at 98%, and the company has enjoyed its longest ever period without compulsory redundancies since its inception.
The ‘experts’
Borg Warner is accredited to QS9000 and Investors in People.
Sources:
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© Article 13 2003
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