Volvo's Valhalla

To Henry Ford, patron saint of mass production, the new Volvo plant in Kalmar, Sweden, would seem curious indeed. It looks more like a giant repair shop than an auto factory. The working space is airy, uncluttered by stacks of spare parts. The plant is so quiet that workers can chat in normal tones, or hum along with the pop tunes playing on their cassette tape recorders. Troubleshooters on lightweight bicycles ensure a steady flow of spare parts. Sunlight plays against bright-colored walls through huge picture windows looking out on the landscape. But the most puzzling question in Ford's mind would be: What happened to the assembly line?

Busy Interest. The answer is that it has been changed beyond recognition as part of an attack on an international labor problem: the growing dislike that today's young, comparatively well-educated workers have shown for tedious, repetitive factory jobs. In the U.S. and other countries, that attitude is reflected in heavy absenteeism and high turnover among factory work forces, poor-quality production and occasional strikes by workers desperate to get away from the line for a while. Volvo's system at Kalmar is attracting worldwide attention as an imaginative effort to set up a factory that will keep workers interested while busy.

Instead of a clanking, high-speed conveyor line, the Kalmar plant uses 250 "carriers"--18-ft.-long computer-guided platforms that glide silently over the concrete floor. Each carrier delivers the frame for a single Volvo 264 to each of the plant's 25 work teams. The teams consist of 15 to 25 workers who are responsible for a certain aspect of assembly; one team, for example, will install the car's electrical system and another will work on the interior finish.

The teams organize themselves as they wish and work at the speed they choose. While a worker on a conventional assembly line might spend his entire shift mounting one license-plate lamp after another, every member of a Kalmar work team may work at one time or another on all parts of the electrical system--from taillights to turn signals, head lamps, horn, fuse box and part of the electronically controlled fuel-injection system. The only requirement is that every team meet its production goal for a shift. As long as cars roll out on schedule, workers are free to take coffee breaks when they please or to refresh themselves in comfortable lounges equipped with kitchens and saunas.

The Kalmar system was worked out by Pehr Gyllenhammar, Volvo's managing director (see box). Three years ago, when he stepped in as chief executive, he had to cope with an incredibly high labor turnover rate. At Volvo's main assembly plant near Goteborg, turnover reached an annual rate of 41% in 1971, even though the company pays some of the highest wages in Swedish industry.

The company had to spend heavily to train replacements, and the rapid turnover contributed to declines in quality that have marred Volvo's reputation for durability. Gyllenhammar was convinced that the workers simply did not like their monotonous assembly-line jobs. "As people became more educated --and Sweden spends perhaps more money per capita for education than any other country--their jobs have become less complex," he says. "That does not make sense."

Gyllenhammar assigned a task force of young executives (all under 30) to design a new plant where "machines would be the product of people and not vice versa." After two months of intensive work and study the group presented its plan. Kalmar (pop. 53,000) was chosen as a site in large part because of its high unemployment rate. Ground was broken in 1972, and 19 months later the first team-made model Volvo rolled out of the workshops.

The new plant cost $23 million, about 10% more than a conventional factory of the same capacity. It includes the most up-to-date devices to monitor production and promote quality control.

At each team's work station, for example, a computer-connected television screen projects figures comparing the team's production goal with the number of assemblies it has actually completed. On top of the screen a yellow light flashes if the team is behind schedule; a green light comes on when it is ahead. So far, the plant is only turning out 56 cars a day, but by 1975 the company hopes to achieve annual production of 30,000 cars.

Many Skeptics. A steady stream of auto executives, from Henry Ford II to Fiat Managing Director Umberto Agnelli, has visited the Kalmar plant.

Some have incorporated similar ideas in their own factories. In June, for example, Fiat introduced an entirely new system of engine assembly at its plant in Termoli on the Adriatic coast; work is now performed in fixed position "islands." There are many skeptics though.

Most U.S. auto executives insist that the Kalmar system would not work in American assembly plants, which serve a vastly larger market and so must turn out many more cars per day than Kalmar.

Some workers and union leaders consider the Kalmar plant less than Valhalla. "The environment is better," says Goeran Nillson, 38, who worked on Volvo's conventional assembly line near Goeteborg, "but you should not forget that we have the same productivity objectives as any other plant. It looks like a paradise, but we work hard." Adds Kjell Anderson, an official of the militant Swedish metal workers' union, "They haven't really changed the system and they haven't changed the hierarchy. For example, we don't think it's necessary to have a foreman when you have groups."

Gyllenhammar remains convinced that Kalmar will work. "We think the extra capital involved will be offset by increased productivity," he says. Still, Gyllenhammar is a prudent manager, and Volvo is prepared to adapt if the Kalmar experiment fails. The plant was designed in such a way that it can be re-converted into a conventional assembly line at a minimal cost.

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