The latest issue of Manufacturing News is out and as usual it has a list of major plant closings in the United States. This particular list included some companies and industries we’ve mentioned before in this blog, so let’s spend a couple minutes analyzing them. Some are, as our friend Mark at the Lean Blog likes to say, "LAME"… Lean As Misguidedly Executed. They claim to be implementing lean, but really don’t get it. The others are just plain ignorant and have bought the yarn that it’s impossible to compete with companies from so-called low labor cost countries.
Let’s start with the LAME, such as Whirlpool. We talked about them last December when they were closing several plants, just to rehire less experienced people at new facilities in Mexico. It’s amazing how traditional accounting can make such insanity appear profitable, especially when done in the name of lean. Now they’re at it again.
Whirlpool has announced plans to stop manufacturing dehumidifiers and purifiers at its plant in La Vergne, Tenn., laying off 330 workers out of 600 at the facility. It will also stop making cooking ranges at its plant in Cleveland, Tenn., and lay off an additional 400 people, out of a workforce of 1,200 employees. The company will shift production of the appliances to factories in Tulsa, Okla., and Celaya, Mexico.
I won’t rant again about the craziness of paying severance to have the opportunity to get rid of experienced employees so you can hire less experienced people… and save a couple bucks an hour. This time I’ll just be content to pound my head against the wall.
Now perhaps for the just plain ignorant, as they don’t even claim to be trying to go lean. A couple stories from the apparel industry, and regular readers will probably know what I’ll say in a moment.
Hanesbrands, maker of apparel under the brand names Hanes, Playtex and Wonderbra, has announced plans to close its Stratford Road textile manufacturing plant in Winston-Salem and move production to lower cost plants in the Caribbean basin and Central America. Six-hundred and ten workers will be let go.
Gildan has announced plans to close two sock manufacturing plants in Mt. Airy, N.C., and move its equipment and production to Honduras. The 8,500- population town, the childhood home of American icon Andy Griffith and the basis for his show based in the fictional town of “Mayberry,” will see 520 employees laid off at the plants due to outsourcing.
Ah yes, the apparel industry. It’s impossible to be competitive from U.S. factories, right? Tell that to American Apparel, who pays 4,000 employees in Los Angeles above minimum wage to make t-shirts and other basic clothing, and are, ahem, knocking the socks off their competitors that use foreign sweatshops. How? By leveraging the value in quick cycle times. Or tell it to Tony Sapienza at Joseph Abboud, who is making high-end men’s suits in Massachusetts. I had the honor of meeting Tony last month, and his passion and determination was infectious.
And then there’s Furniture Brands. Bill told you about them over a year ago. At that time they had already closed 31 of their 57 factories, and were damn proud of it. He was so enthralled that he named a fundamental business principle after them:
The Furniture Brands Principle, which will read something like "An effective leader must not have the worst business strategy in the industry."
Well, the company is still at it, doing everything it can to downsize into oblivion.
Furniture Brands International of St. Louis, Mo., one of the country’s largest residential furniture companies, has announced plans to close three manufacturing plants in North Carolina, resulting in the elimination of approximately 150 employees along with the elimination of approximately 100 other employees involved in manufacturing operations across the company.
Like the apparel business, the domestic furniture business is struggling. But as we pointed out in a post last February titled Stop Whining and Start Competing, which also profiled two furniture companies that were closing, there are companies in that industry that are leveraging lean to survive in the United States.
Because contrary to the one-sided bent of the article, there are furniture manufacturers, both high and low end, competing successfully from U.S. factories. We’ve written about a couple of them, such as Stanley Furniture, La-Z-Boy, and Vaughn-Bassett. Stanley deserves special mention as they are battling a bunch of Wall Street investors convinced they must outsource to survive.
If companies in the apparel and furniture industries can be competitive, then practically anyone can. When someone tells you they simply can’t compete, ask them if they’ve tried to implement lean manufacturing. Real lean, not LAME.