The closure led us to a start-up. A big green piece of land should be our new address in about 6 months.
How does one start HR in this case?
The region that was chosen was strategic for the business, as it would become the largest commercial flight hub within Latin America.
From the sales area perspective, it was perfect. From a Logistics and Purchasing perspective, it was also the best place, since we would be close to many suppliers. From HR…well, not as much, since the labor market was booming with…job offers. Everyone wanted a piece of the prosperity that big new hub would bring, and let´s face it: workers are flexible, they can be trained, so any company was my competitor when it came to it.
Supply and demand…needless to say that wages were high, with companies disputing every headcount available. Unemployment rate as low as 2%. When situations like that come into play, one can also assume that the union has a very strong presence there, so my first initiative was to meet with the local union director.
We met at the lobby of a hotel (we still didn´t have an office there, so this was the best I could find for a meeting like that)
“You know what they say about the automotive union? We are worse than they are. We are the left wing of the left wing. We are the red ones…”
This was the way he greeted me…
“Wow. That´s impressive…how did you managed to achieve that?”
Sometimes, you need to listen a lot before finding common ground that will lead you to a successful negotiation. I am a firm believer that once you find common ground, all the rest are just details. As mentioned before, trust, to me, is the word that better describes what HR should be about. In all senses. Even when talking to union or delivering bad news. If there is trust, there is a way of coming to terms.
Wages were significantly higher in that region, so I decided to use productivity and financials to my benefit and showed him that the new plant would need some “adjustment period” for benefits and that productivity per employee could not be compared to the stronger automotive suppliers that were part of the same union. How could he compare experience, productivity (output per employee) and sales volumes (units per employee) between our business and the automotive “colleagues”?
More so, how could we start talking about automatic raises when we barely had people on board? I needed some time to come up with a proposal for it, but I needed our references, or something similar (yes, I had done my homework before and knew that they had no benchmark on that. The only capital goods factory was undergoing a major restructuring and had even lower wages that the ones we were offering)
We started recruiting by using our local personnel in a location nearby, but soon it became clear to us that we needed someone local. Big city/small city differences issues. So, I decided to hire a local agency…and to my surprise, I came to meet the person who was my left and right arms for the hard task of convincing people to work for us.
Why hard? Well, all we had was a Greenfield. Our brand was not known to the common public and the fact that we needed to train the first blue collars in our old plant that was 400 miles away was also a major argument “against” working for us.
So, when I scheduled a dinner with Diana to offer her a position with us, I made no point in sugar coating the challenges. “It will be hard; we have 3 months to have everybody on board. You are alone here; we need to make sure closing happens as planned. I will take you with me to visit the plant so that you can understand what we need”
Turns out, she became our biggest asset during this part of the project.
Being in a completely new location, everything had to get up and running from the ground up. Doing this, while also getting production on the same page it was on in Rio would require training and a sizeable investment.
Risks that arose were an untrained staff that could not meet the production quality of the previous plant as well as higher payments to get everyone trained and the benefits packages, which was a real concern because the budget was to remain the same as it was in Rio.
We hired 10 blue collars for a 3 month “on-the-job” training in Rio de Janeiro. Meanwhile, we sent 10 of our best workers to São Paulo to train the local manpower. Huge effort was made to have a “build for dummies” guide so that every part of the assembly process was accurately detailed and make sure we would not miss a single part of it, in a joint effort from engineering, production and HR.