Case Studies

These case studies illustrate how Alcoa is acting upon its commitment to sustainable development throughout the world. We are pleased with this progress, but look forward to achieving even more.

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USA - 2009

Engaged Employees Drive Plant Turnaround

 

Following a dramatic downturn in the industrial gas turbine industry, Alcoa Howmet’s Industrial Gas Turbine (IGT) operation in Hampton, Virginia, USA, embarked on an employee engagement initiative that turned the plant around financially and resulted in significantly higher scores on Alcoa’s annual global employee survey.

Prior to 2001, the industrial gas turbine industry was on a dramatic upswing. When 9/11 and the Enron crisis hit in late 2001, the industry collapsed. The Hampton IGT operation, which was the leading producer of complex investment cast turbine airfoils for gas turbines, saw its sales shrink 74% from 2001 to 2004. Employment dropped 71% as a result, and the employees that remained felt disenfranchised.

“There was a definite ‘us against them’ mentality within the plant, and management made no effort to motivate or maintain a sense of unity with the workers,” said Kenny Wilson, an operator at the plant since 1974. “Many employees felt that they didn’t have a voice. The lack of information also was an issue. The talk on the floor was that the plant would shut down, so everyone came to work and did their job but couldn’t see beyond day-to-day.”

The location’s management, including a fairly new plant manager, realized it needed to substantially improve its relationship with all employees if the Hampton IGT operations was going to succeed.

The resulting employee engagement initiative was based on the Alcoa Business System and the stated philosophy “Your Business/My Business/Our Business.” It focused on the following, which are based on the publication “Leading Change: Why Transformation Efforts Fail” by John Kotter:

  • Establishing a sense of urgency so every employee knew that if things did not change, the plant would not remain viable;
  • Creating a guiding coalition of people on the shop floor who were the informal leaders;
  • Developing a vision and strategy that focused on winning back customers through on-time deliveries, perfect quality, world-class cycle times, and benchmark safety;
  • Communicating the changes through regular meetings, daily management, and a visible performance pay system;
  • Empowering broad-based action, where leaders became mentors and coaches and employees gained control of their part of the business;
  • Generating short-term wins, such as solving chronic problems or cleaning the work environment;
  • Consolidating gains and producing more change; and
  • Anchoring the new approaches into the location’s culture.


“There is a different spirit in the plant now,” said Wilson. “Everybody is more concerned with getting the job done. They are focused on something they have confidence in instead of wondering what the future will bring. The managers also really listen and welcome honest observations, whether good or bad. They’ve gone out of their way to alleviate any sense that they’re trying to maintain some kind of distance from the employees. No one feels uncomfortable about approaching the plant manager or any other manager with a concern or question. We feel like we are part of a larger group that’s been empowered.”

Those feelings were confirmed in Alcoa’s 2008 Global Voices survey, with the Hampton IGT operation receiving an overall score of 68% in employee engagement—well within the top 25% of all Alcoa plants. In addition, the operation has posted significant improvement in production-based measures between 2004 and 2008. These include:

  • Almost 300% increase in overall sales;
  • 80% improvement in quality;
  • 66% increase in sales per employee;
  • 74% decrease in the total recordable injury rate; and
  • 65% decrease in the scrap-as-a-percentage-of-revenue rate.


In perhaps the most telling result, the plant’s employees are generating greater profitability today as in the peak year of 2001—but with 50% fewer people.