The Yue Loong Company has many "firsts" in the domestic auto world--for example, it was the first auto manufacturer established in the Republic of China. It is first in terms of size, and it is the only company with integrated automated operations. It is first in terms of market share, at its highest point supplying 46 percent of the cars sold domestically. Its share has declined a little in recent years, but last year it began to spring back. Yue Loong was also the first company to export automobiles from the Taiwan region.
Chairman of the Board Wu Shun-wen says, "Our company policy is to preserve and to create even more 'firsts.'" This year she is concentrating on "quality first."
Yue Loong, once known as the Yue Loong Machine Manufacturing Factory, was founded in 1953. Founder T. L. Yen was born in Kiangsu Province. He earned his doctorate in engineering in Germany. He was the first manufacturer of textile machinery in China. He realized that the automotive industry is a comprehensive, precision industry, capable of assisting the development of related industries, and is truly the "locomotive" leading the nation's economic development. With this in mind, he turned the management of his textile factory over to his wife, Wu Shun-wen, while he set up an automobile factory.
Per capita income at that time was low, the principal means of transportation being bicycles and oxcarts. Moreover, the Japanese colonial policy was: "Agriculturize Taiwan, industrialize Japan." There was no basis for industrial production and no market or technology.
But T. L. Yen was undaunted: difficulties notwithstanding, he set up a factory in Hsintien, which started the manufacturing of motors.
In 1957 Yue Loong signed a technical-cooperation agreement with Japan's Nissan and began the manufacturing of automobiles. By the early 1960s, both cars and trucks were produced by Yue Loong in Taiwan, and Yen earned the reputation of "China's Henry Ford."
Yue Loong expanded throughout the 1960s with the financial support of the family textile business. The 1970s brought rising incomes to the citizens of the Republic of China and spurred the demand for automobiles. Yue Loong's profits and output increased. In 1980, especially, buyers had to wait as long as half a year to receive cars they had ordered. However, this does not mean that the government and buying masses were satisfied with Yue Loong and the domestic auto industry.
Since the automobile industry was considered the "locomotive industry," capable of leading the development of other industries, the government instituted protectionism for this domestic industry; nonetheless, the industry still could not meet its own requirements for locally developed technology. Production was relatively low; it was limited to assembling imported components. Since the components were imported, the price of domestic cars was relatively high. Moreover, the quality did not come up to consumers' expectations. Yue Loong was then exposed to a storm of criticism saying that "Yue Loong is merely an assembly factory."
At the time, the market was good, and all auto plants were rapidly expanding. The declining world economy in 1981 had an unfavorable effect on the consumer's buying power. Keen competition followed. In the meantime, the government planned to build its own auto plant. Although the plant is not yet producing cars, it is already threatening the domestic auto industry, and Yue Loong is likely to suffer more than any other domestic auto manufacturer.
On the management level, in 1976, Yue Loong's founder, T. L. Yen, had an accident that incapacitated him, and his wife was put in charge of the automobile operation. Yue Loong built a new factory in Sanyi, Miaoli County, for the manufacturing of passenger cars, while the Hsintien factory was assigned to produce trucks. The Sanyi factory is the nation's only automated factory, but it was not being used to full capacity; the factory was producing only about half of what it is capable of Wu had to confront these problems head on, and she did so with a detailed plan. She cut the prices of Yue Loong's cars. This was the first price cut ever offered in the domestic market, and it helped Yue Loong increase sales by 29 percent in the first three months of the year.
Wu communicates well with her staff, sending her suggestions to all levels of management. She says, "We are all conscious of the crisis, and everybody knows we're in this boat together. We have to work in unison to get through."
Last year, Yue Loong officially began promoting company-wide quality control and established a quality-planning department. Ms. Wu directly led this operation. "The biggest difference between company-wide quality control and the 'quality control' previously spoken of by the industry is this: Previous quality control overlooks the manufacturing process, whereas company wide quality control includes the company's administrative, research and development, design, manufacturing, marketing, and post-sale maintenance divisions," Ou-yang Chung- chih, manager of the quality-planning department, explained.
Quality control in manufacturing is easy for the average person to understand. The prime methodology is the creation of "quality circles," groups of seven or eight workers with similar tasks. They put forward and discuss suggestions for improving their work. "Each worker's brain allows him to use his own brainpower to solve his own problems," says Huang Ming-yi, assistant manager of the quality-planning department.
But the administrative research and development, and other divisions have no concrete end products; so how can quality control be effected there? Ou-yang Chung-chih says "Every unit in the company should treat related departments as customers, providing them with the best cooperation and service. Accordingly, every unit can criticize its own work flow and methods of handling work; that is, they can seek the rationalization of operations."
Working alongside the quality control system is a system of employee suggestions and management organized by objectives. The engineering department uses its specialized knowledge to evaluate suggestions from the quality circles to see if they are practicable and beneficial. If a suggestion is accepted, the department calculates how much money the suggestion will save the company each year, and as a reward a portion of the calculated savings is given to the circle that put forward the suggestion. The department also makes a detailed plan for the implementation of the suggestion and monthly goals. It develops its own plans as well, and encourages the circles to carry them out.
Every morning, each circle devotes ten minutes of company time to a meeting presided over by the circle. First, their work on the previous day is evaluated, then come reports on the response of units "upstream" and "downstream" and a review of suggestions originating in these units. If the circle members have suggestions for the upstream or downstream units, they can bring them up at the meetings and ask the foreman to solicit a response.
Every morning each circle engages in self-criticism such as: are there really so many problems? "Not having problems is in fact only not discovering problems. The factors influencing factory operations are many-raw materials, upstream operations and even the temperature and humidity. They cannot all be perfect. Besides, we have new objectives every day; so every day we should criticize ourselves to see if we can meet them," says welding shop manager Ch'en Shun-lung.
Yue Loong's ambitious program of expansion, which includes the construction of a satellite factory zone for component manufactures, may seem rash in today's economy, but it has the underlying motive of strengthening the nations economy. Even if others criticize the company for losing money, this goal motivates the workers. "We at Yue Loong are the most foolish," the workers all say, but their tone plainly indicates they consider this "foolishness" an honor.
(Craig Scott Galper)
[Picture Caption]
Left, Yue Loong supplies approximately 40 percent of the cars sold domestically. Right, The Yue Loong Sanyi Factory. An employee operating a Cylinder-head machine line.
Various work stations at the Sanyi factory. Upper Left, Mechanical-press line. Bottom Left, Body-welding line. Right, Before a finished car may leave the factory, it must pass a water-leakage test.
Left, Workers at Sanyi factory engaged in chassis assembly. Right, The Hsintien manufacturing plant's body-mounting line.
Right, The Yue Loong Sanyi Factory. An employee operating a Cylinder-head machine line.
Various work stations at the Sanyi factory. Upper Left, Mechanical-press line. Bottom Left, Body-welding line.
Bottom Left, Body-welding line. Right.
Before a finished car may leave the factory, it must pass a water-leakage test.
Left, Workers at Sanyi factory engaged in chassis assembly.
Right, The Hsintien manufacturing plant's body-mounting line.
