It’s not a job many industry veterans would have even considered: running an auto plant still reeling from an embarrassing sexual harassment scandal for an underperforming Japanese carmaker with a questionable future.
Richard Gilligan couldn’t wait to roll up his sleeves.
“Those problems became opportunities,” Gilligan said in an interview last week, reflecting on his eight-month tenure as chief operating officer of Mitsubishi Motor Manufacturing of America Inc. in Normal.
“Throughout my career, I have always looked for a challenge,” he said. “Anybody can go into a place that is running good. There’s more gratification in going somewhere and making a significant improvement.”
Gilligan, a second-generation auto worker who learned the business from the ground up during 27 years with Ford Motor Co., already has helped the plant put its sexual harassment problems behind it, say people who are closely watching Mitsubishi’s giant factory in central Illinois.
The athletically built former assembly line worker looks like he would be more comfortable in a shop uniform than a suit and tie. He has an easygoing, comfortable manner that contrasts with the formal structure of a Japanese company.
“I have an extremely positive impression of Mr. Gilligan,” said Nancy Kreiter, research director of Chicago’s Women Employed and one of three court-appointed monitors charged with ensuring that Mitsubishi abides by a consent decree with the government to prevent sexual harassment in its workplace.
“He came in right from the start and embraced the principles of the consent decree. It’s part of an ongoing theme with him rather than something he crossed off his to-do list.”
Adds John Hendrickson, the Chicago attorney for the Equal Employment Opportunity Commission, who brought suit against Mitsubishi: “He knows what it’s like to have grease under your fingernails. He knows what life on the assembly line is like.”
Not long ago, the EEOC didn’t have anything good to say about Mitsubishi. The company’s Japanese managers went to war with the government agency after it charged that the Normal plant was rife with sexual harassment. The protracted battle ended in June last year with Mitsubishi adopting a zero tolerance policy toward harassment and agreeing to pay $34 million to settle the EEOC lawsuit, the largest such settlement ever.
Gilligan’s arrival is another outcome of the settlement, observers say. Before him, all the plant’s top managers were Japanese.
“He represents a decision to Americanize the management,” said one source close to Mitsubishi. “They got themselves into some very American types of problems, and the Japanese didn’t have a clue.”
No doubt, Gilligan’s honeymoon at the plant has been prolonged because he arrived with a clean slate and a long industry track record.
But he still has his work cut out for him.
The plant’s workforce has been divided and demoralized by the scandal. Bad feelings were resurrected last month when the U.S. District Court in Peoria approved the $34 million payment by Mitsubishi to almost 500 women.
Gilligan, 55, has had other unpleasant issues to deal with as well. As one of his first tasks, he had to lay off 700 of the plant’s more than 4,000 workers as part of Mitsubishi Motors Corp.’s plan to turn itself around. Overall, Gilligan is supposed to come up with $100 million in cost savings in fewer than two years.
While he was delivering the bad news about downsizing, Gilligan had to ask the survivors to improve the quality of the cars they were building and find ways to boost productivity.
More than 10 years after it was unveiled as a state-of-the-art plant, Mitsubishi’s Normal factory has real problems. It produced 157,000 vehicles last year, 28 percent fewer than it had in 1995, with the same number of workers. Its cost per vehicle is significantly higher than the industry average, and quality scores, while on the way up, aren’t improving fast enough, Gilligan says.
Meanwhile, parent Mitsubishi Motors has its own problems and can’t afford to make major investments in retooling the Normal plant. Some industry watchers believe Mitsubishi may have to find a merger partner if it is to survive.
So Gilligan is doing what he has done before: evaluating the way cars are made so that quality is built in while the car is being manufactured, not when it is inspected.
In less than three months, a pilot program to control and standardize quality in work stations has reduced defects by 75 percent and equipment downtime by 80 percent. That saves money by reducing fixes at the end of the line, and it also reduces the cost of warranty repairs.
“This is a collaborative effort with our associates to build a car right the first time on the line,” he told auto analysts gathered in Las Vegas last week to hear about Mitsubishi’s progress.
Caring about how cars are made is nothing new for Gilligan. As a 4-year-old, he decided the auto industry was for him when he saw the maze of conveyor belts at Ford’s Mahwah assembly plant in New Jersey where his father worked.
Gilligan was even ready to skip college and go right to work at the plant, but his dad convinced him that working part-time while going to school was the right thing to do. His father, who headed up labor relations at the plant, “made sure it wasn’t a cakewalk for me. He wanted me to go back to school,” Gilligan said.
Seven years later, Gilligan completed his degree while working at the New Jersey plant. By 1971, he was promoted to Detroit to gain broader experience about Ford.
It was the start of a peripatetic career that would take him all over the country for Ford.
By the early 1980s, Gilligan was the engineering manager at Ford’s Chicago assembly plant on the South Side. It was his job to get the plant ready for the launch of the Taurus sedan, Ford’s answer to the Honda Accord and Toyota Camry.
“We converted that plant from dirt floors and lanterns to Star Wars,” he remembers.
More promotions followed. In 1992, Gilligan became manager of Ford’s Kansas City plant. There he earned a reputation for fairness, according to Pete G. George, a former Ford regional manager who was Gilligan’s boss.
“We both lived by the Four A’s: attitude, awareness, accountability, and when you have all three of these, the fourth is accomplishments,” George said.
“He respected the people who were on the line. He wasn’t a manager who lived in the office. He lived with the people, listening to them. If they were right about something, it was corrected. If they were wrong, he discussed it with them.”
Gilligan also believes that managers have civic responsibilities. In Kansas City he sat on the Chamber of Commerce and was active at the Salvation Army. At a time when the Salvation Army’s financial situation was grave, Gilligan turned things around, preserving programs such as a drug rehab house.
“He took the social service department and refocused it into a very productive, successful operation without unnecessarily affecting the lives of people,” said Clarence Harvey, president of the Harry J. Lloyd Charitable Trust in Kansas City.
No question, Gilligan was a rising star at Ford. But he surprised many by leaving the company in 1993 to become president of House of Lloyd, a Kansas City company that sells everything from cookware to Christmas decorations through home parties similar to Tupperware parties.
His reason was simple. “I went there so my family could stay put. I have five children. My two oldest ones went to seven school systems; the middle one did five; and younger two did three. I wanted them to have what I hadn’t given to the other three.”
Gilligan was happy at House of Lloyd, but when a headhunter called about the Mitsubishi job last summer, Gilligan jumped at the chance. His three youngest children are in college or law school, so he and his wife, Gail, were no longer anchored to Kansas City. And the auto industry really is in his blood.
“You could cut my wrist back then, and it would flow Ford blue,” he said. “Now it will flow Mitsubishi burgundy.”
Despite Mitsubishi’s serious problems, Gilligan is encouraged.
He isn’t so naive as to believe that all traces of sexual harassment have disappeared from the plant, but Gilligan believes the excesses are gone and workers now know what is expected.
“Zero tolerance doesn’t say there will be zero occurrence. But it’s about choice. We won’t allow the rest of the workforce to suffer because of the choices of a few,” he said.
Gilligan also believes Mitsubishi is serious about fixing its business and designing new products for the U.S. market that will keep his workforce busy.
“The parent company truly recognizes we need a new product mix. The people at the plant are yearning to be the best. If you get their hearts and minds, they’ll give you more quality and productivity than you can handle.”
