In 1979, ALCOA's Tennessee operation was the highest cost, lowest quality producer in the ALCOA system, and it had been plagued by severely strained management-labour relations for many years. For example, a leak in one plant's roof was not repaired for six months, because labour contract prohibited outsourcing the aluminium work. However, labour would not fix it because there was no job description for a roof fixer. The General Manager was told (by Corporate Headquarters) to prepare a plan to shut down the operation. He was unhappy with the assignment, and came to INTERACT for help in turning the situation around.

A description of the 'mess' - or the likely future everyone in the organization faced (if conditions in the Tennessee operation and its environment were to continue as before), was produced in the form of a newspaper article, post-dated three years into the future. The article disclosed a decision by Corporate to close the plant citing numerous inefficiencies and paralyzing management/labour conflict. The reasons stated for the closure were so believable that Management and Labour realized that if they did not turn things around, all of their jobs were in jeopardy.

Given the new realization, Management and Labour agreed to go through a redesign of the entire Tennessee operations. Especially, labour-management relationships and all the throughput processes were redesigned with the participation of everyone, including the labour union. As a result, grievance meetings dropped 70%; the safety record improved 50%; product quality and cost matched the performance of modern plants in the rest of the ALCOA system. Instead of shutting down the operations, ALCOA invested $500 million in the Tennessee operations. The latest report from ALCOA Tennessee as of August 1993, was that pounds output per employee hour had increasing from approximately 77 pounds in the 1980, when the redesign effort began, to 550 pounds in August 1993.

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