The Grades Are Posted

The news has been reviewed, the grading is complete, and its time to hand out the manufacturing report cards for the week.

In reverse order, the grade of F goes to Atlantic States Cast iron Pipe Company. along with their parent company, McWane.  These clowns were convicted of 32 counts in Federal Court yesterday for things ranging from lying and dumping toxic sludge all the way up to getting a guy killed while operating a forklift they knew had defective brakes.  The management said, presumably while they were changing into their newly issued orange jump suits to comply with the dress code at their new lodgings in federal prison, that they had been done wrong and were guilty only of "errors in judgment".  The McWane people have managed to have 4,600 injuries and nine deaths in the last ten years having people remove safety guards from machines in order to cut the cost of making pipe. 

In fact, not only do they fail, they are expelled from school.  According to the news, there are 300 people working in the plant in New Jersey where the worst of the crimes took place.  It is a sad statement about the educational system or the economic climate in the Garden State when there are 300 Jersey residents so desperate for work or so stupid that they would report to Atlantic States Pipe for work every morning.

The Ford Motor Company gets a D for their latest bright idea, a part of an overall marketing scam collectively called "Bold Moves" by the Ford gang.  Ford is launching a reality TV show.  That’s right.  They are going to drag a bunch of hapless folks into their design studios and hold them up for public embarrassment while these nitwits design a "dream car".  Ford’s ‘dream car’ should be any car that requires 10-15% fewer labor hours to make and a third fewer defects – in other words, a Toyota.  What the car looks like is not really the issue.  So unless the participants in the reality show are all engineers or former Toyota people, I would not hold out much hope for the idea.

Of course, the whole "Bold Moves" program is nothing more than smoke and mirrors.  They are becoming the Bill Clinton of manufacturing.  (Take a deep breath, Kathleen, and move back away from your computer.  Remember to breathe.  We’ll wait for your blood pressure to get back to normal before we move on.)   Clinton had no principles – no sense of what was fundamentally right or wrong for himself or for America.  It was government by focus group.  Where he stood on any particular issue depended on which way the polls and focus groups told him the wind was blowing.  Substance was not important – only style, and that is Ford.  Their Bold Move:  "Ford told dealers the new campaign is aimed at millions of Americans it has identified as potential customers through extensive focus groups. The target customers cut across demographic lines but share a belief in hard work, family, patriotism and enjoying an adventurous life."

So if you plan to make your next car purchase based on the model that reflects your "belief in hard work, family and patriotism", not to mention your "adventurous life", instead of value and quality, give ’em a call in Detroit and maybe they’ll put you on the show.  My only concern with the whole thing is the lingering question of how much Ford paid the advertising people for the research that led to the brilliant insight that most Americans think hard work, family and patriotism are good things.  Next time, all they have to do is pick up the phone and call- I’ll give Bill Ford that level of wisdom for nothing.  And I’ll also tell him that he might want to consider the Bold Move of making cars that don’t break.

Knowing full well that I will incur the wrath of many, I am awarding Toyota a big fat C for the week.  (My urgent plea to all of you regular readers who seem to think that Toyota should automatically get an A+ adorned with gold stars simply for being the descendants of Sakichi and Kiichiro is that you follow the same advice I offered to Katherine – remain calm.) 

The people in Georgetown announced their annual supplier awards, including six companies that were given Outstanding Business Partner recognition, and four others that received lesser awards.  Nothing wrong with supplier recognition, and, from what I can gather, it also looks like all ten are American companies. 

So what could possibly be wrong with that, you ask?  How come no gold stars?   Because I do not believe that Toyota has become so good that they are now able to conjure up components from the rarefied, thin air of Georgetown, Kentucky – yet there is not a single parts manufacturer on the list of Toyota’s best.  The honors went to Office Max, a couple of electrical contractors, a temp agency and a machine maintenance outfit, along with a trucking company and a provider of shipping containers.  The only parts provider is a distributor who basically holds inventory for Japanese companies.

Call me cynical if you will (as if I had to give anyone permission to do that) but it seems pretty apparent to me that Toyota’s supplier awards were driven more by PR than excellence.  Last year, the recognized suppliers were almost all component providers, and all Japanese owned but one.  Toyota took a minor degree of flack for their failure to buy much from American companies.  This year, GM and Ford are in trouble.  The possibility of a ‘Buy American’ consumer sentiment to help them out is a very real possibility.  Now is not the time to draw attention to the fact that the vast majority of Toyota’s purchase spending finds its way back to the Land of the Rising Sun.

I am sure that all ten companies recognized by Toyota are fine organizations, but to tell me that Office Max is a more "Outstanding Business Partner" than anyone who provides value adding parts leaves me no choice but to take quite a few points away for turning their supplier recognition program into a PR exercise.

A B goes to Mr.Wusheng Chen who visited Atlanta in search of a place to build a factory.  In fact, he has ideas about a whole manufacturing industrial park.  Now Mr. Chen is a bit of a blow hard and you need to take it with a grain of salt when he says, ""I have a dream.  My dream is to have an American-Chinese industrial city in the city of Atlanta."   I don’t know about an American-Chinese industrial city, but I think he is going to build something for the simple reason that his business plan makes sense and he has the cash to do it.

Through his ignorance of global manufacturing, Mr. Peter White of the Southern Center for International Studies in Atlanta said, "I think it’s a stretch.  It’d be terrific if he can make a go of it. But when you consider the extremely low wage rates in China, the lack of environmental concerns as well as safety issues, one wonders if you can compete here."   Wage Rate Tunnel Vision Syndrome – the seemingly incurable affliction of think tankers like the one Mr. White runs – has not affected Mr. Chen.  Mr. Chen is planning to build is industrial city for the sole purpose of serving one very big customer – Home Depot.  "Although there are higher labor costs here, we are going to cut out the middlemen and lower the transactional costs by avoiding the costs of freight and customs," Chen explained.

A big thinking, right thinking guy like Chen deserves a solid B.  It will turn into an A+ when he actually builds the plant.

Finally, at the head of the class with an A+ is Sharon Avent, CEO of Smead Manufacturing.  She took over eight years ago from her mother, who ran the company for 43 years after Ms. Avent’s father died.  Smead makes office products – file folders and systems and so forth, and has plants all over the U.S. and Europe.

Smead is working on lean and has posted some pretty impressive results at their plant in Cedar City, Utah, but what makes this company and this woman so impressive are stories like that of Janet Fox.  She went to work for Smead when her boyfriend was killed in World War II – 64 years ago – and she still works there, running a glue machine at the ripe age of 85.  Of Ms. Avent, she says, "I just think she’s a wonderful person.  She comes out on the floor and talks to us."

I also like the fact that she was smart enough to realize that there is no future in trying to compete with the Asian suppliers Walmart has built its business around, so she rejected the allure of Walmart volumes and makes money by customizing products for a whole lot of unique markets.

There you have it – the week in manufacturing running the gamut from an extraordinary leader like Sharon Avent to the dregs of the manufacturing world at the pipe company in Jersey.  The range of people and companies involved in manufacturing could not be any more diverse.  It makes it interesting, and it also demonstrates that there is little, if anything, that can be said about ‘manufacturers’ that is universally true.