National Association of What???
The National Association of Manufacturers is extolling the virtues of three of its members who received a prestigious award from the President this week. George Dubbya gave IBM, PACCAR and Motorola National Medals for Science and Technology. NAM also announced that their blog has been renamed ShopFloor.org: The Manufacturers Blog. Shop Floor Dot Org?? These three NAM members collectively have turned hundreds of acres of American shop floors into warehouse space and parking lots. Instead of renaming the blog, NAM should have renamed itself. The National Association of Multinational outsourcers and Wall Street toadies sounds more like it.
And someone ought to tell Mr. Bush that NAM does not actually represent the "millions of people who make things in America". You don’t even have to do much manufacturing in American to belong to the NAM club, as the three medal recipients prove. The millions of people who make things in America are actually offended by the sight of such prolific outsourcers being feted at the White House.
A Lapse In Canadian Border Security
For years you could pretty well count on Canada doing a very good job of allowing the good things the U.S. has to offer to flourish in their country, while screening the worst of the U.S. out. It is obvious that a few holes have opened up in the fence, however, and you Canucks better patch them up before its too late.
Canadian manufacturing is under even more pressure than that in the U.S. There are some great Canadian lean manufacturers – Canadian Blue Bird (the bus company) is the one I am most impressed with – but, in general, Canadian manufacturers are under the gun, losing 42,000 jobs last month alone. So how did you folks let David Wolf from Merrill Lynch sneak past the gate? This Ivy Leaguer not only got in, but has the ear of your economic decision makers. His level of concern for Canadian manufacturing: "Our sense has been that so long as manufacturing isn’t falling off a cliff, the sector is just relatively weak, that’s just part of what has to happen, given the shift in the Canadian dollar and … relative prices, particularly commodities." If I were you, I wouldn’t wait to fall off of that cliff before taking him by the scruff of the neck and tossing him back over the fence. I am sure your government officials can come up with enough lame brained notions of their own without having him advise them that ‘weak manufacturing’ just "has to happen".
Is it Just Me?
Hillenbrand industries of Indiana owns two companies: Hill-Rom, makers of hospital stuff, and Batesville Casket, makers of caskets, obviously. Hill-Rom is losing its shirt. Hill-Rom is not the least bit lean. Batesville Casket is making money. Batesville Casket is very, very, very lean. It seems obvious to me that the people running Hillenbrand would want to make Hill-Rom lean, just like Batesville Casket, so both companies can make money. For some reason, however, none of the company press releases or reports indicate that this novel idea has crossed their mind. Instead, they seem to be looking very hard at cheaper sourcing alternatives.
I wonder if the guy who came up with the old adage about being able to lead a horse to water, but unable to make it drink came from Indiana?
The Slow Learners Are Catching Up
Early last summer, I posted a blog that made a point of the obvious – the Ford family holds almost half of the controlling stock in the company, and the best "Way Forward" would be for them to grab a few more shares – enough to call the shots, and take the company private. Unloading the albatross of Wall Street from their backs is the only shot at becoming remotely like Toyota they have. Now that was no brilliant insight on my part – it is pretty obvious to everyone east of the Hudson River and south of the Ohio-Michigan state line. Beyond those boundaries, however, it must be pretty foggy.
The fog is starting to clear in New York, however. In Fortune Magazine: "There’s one way Bill Ford could make his job a little easier: Remove the scrutiny of analysts and shareholders by taking the company private. "The Ford family could pursue its vision free of second-guessing and would get any upside from any turnaround."
In Forbes Magazine: "The long-term view is better suited to a family-run company, where the interest is in preserving company assets for future generations as much as it is receiving quarterly dividends. Maybe Bill Ford, whose extended family owns 5% of the company stock, but enjoys 40% voting control, should take the company private and fix it on his own clock, sparing investors from this guessing game." (Only a Wall Street guy would suggest taking Ford private in order to ‘spare the investors’. Normal human beings would suggest it for the good of the company and its employees, but at least he has the right idea.)
It just goes to show that the Wall Street gang can learn, if they are given enough time. Now we can only hope that Bill Ford is listening.
Respect Has Its Limits
Finally, the Toyota strike in India is over, but neither side is too happy. While Toyota’s pillar of Respect for People is one of their cornerstones, it apparently does not extend all the way to respecting people’s desire to join a labor union. The plant in question has a two shift operation, each shift scheduled for eight hours, with a four hour gap between the shifts. Toyota used the four hours at the end of each shift to call for mandatory overtime whenever demand called for it. The ‘mandatory’ part irked many of the workers, and generated just enough grumpiness to enable a gang of Marxists to gain traction in their efforts to form a union. That really made Toyota unhappy, so they stomped down hard on the union organizers. The stomping, in turn, further irritated the workers and things pretty well spiraled out of control.
In the end, the Indian government declared the strike illegal, and forced everyone back to work. The underlying causes of the strike have not been resolved, however. Neither the Indian government, in their quest to become a manufacturing power, or Toyota, who has quite a reputation to uphold, like to talk about the labor problem, but this has been the fourth such strike at that plant. We need to keep Toyota’s people practices under the microscope in India. There are some new lessons to be learned as Toyota tries to deploy its principles in a place where it is obviously not as perfect a fit as it is in Toyota City and Georgetown.