[Readers’ forum] Corporate greed is killing manufacturing

opinions

July 26, 2010 - 12:00 AM

Hurray for Emerson Lynn, jr. His view of global business practice is correct.
I wish to add my complimentary view from having been intimately associated with American manufacturing for 38 years with four different companies. I have worked as an hourly employee and many other positions up to plant staff. The point that I want to make, in the example below, is that the transformation of an original company like Midland Steel Products to Midland-Ross to Midland-Berg to Midland Brake and ultimately to Haldex is symptomatic to what has gone wrong with the evolution of American manufacturing in general.
When manufacturing companies were started they were headed by “manufacturing people,” not masters of business administration and accountants. The manufacturing people designed and produced robust products that were of very high quality. Those values were the keys to the reputation and profits of American industry. Blue collar workers were proud of the products they made. The whole world wanted American-made products. The accountants kept track of the financial well-being of the company. They would ring the alarm when the management was spending more than was in the bank. They did not run the company, but only kept the books. Society then started changing. Generally people were starting to be more and more interested in staying ahead of the Joneses. More mothers started working. Families had to have two cars and bigger houses. This change in society quickly evolved so that the mentality was money, money, money; and eventually being the mentality in American manufacturing. Short-term profits became king, not robust and high quality products for the longer term. So how does the corporation make more money? Answer … make the financial managers the ones to make manufacturing decisions! Now they look at the next quarterly profit, they do not look at making money and quality products for the long term. The finance guys ask, “Can we take some cost out of this product? Can we purchase parts for less? Can we save on the cost of labor?” They want more money… NOW!
 I retired from Haldex in 2001. The manufacturing business had changed considerably since my early days with the company. When I started employment at Midland-Ross Corp. in Owosso, Mich., the plant there had over 700 employees working three shifts. The products manufactured were originally designed and manufactured from Midland Steel Products Co., which was taken  over by M-R. A railroad spur delivered steel (coil, bar, tubing, etc.) to the dock. That raw steel was pocessed into stampings, turned parts, etc. Parts were painted or plated within that large facility, then assembled into power brake boosters, valves, air tanks, etc., then tested and shipped to the various customers. Castings were purchased, but machined and finished in-house. Communication between departments was easy. Problems could be detected and solved quickly. They were all manufacturing people from the top on down. As a side note: Ford’s Rouge plant was fully contained in its early years, too. That’s when Henry (a real manufacturing guy and visionary) was in charge.
Then the evolution began. The board of directors started looking six months ahead, where they were previously looking further into the future. They could avoid the union wages if they moved some product to a lower wage and no union state like North Carolina. They purchased an abandoned plant that once produced Hanes clothing. Hanes management must have been a step ahead of Midland-Ross management, because they had saved (what I heard from ex-Hanes employees) 10 cents per T-shirt by moving overseas. Just think, we could have bought American for only 10 cents more! The move to N.C. must have been good, because M-R opened a product rebuild plant there too. This short-sighted management led to Midland-Ross’ demise. The whole corporation dissolved shortly after the moves. Echlin Corp. bought the Midland Brake portion. Echlin Corp. still had some of John Echlin’s sons on the board and the head guy, Fred Manchesky, was still somewhat old school. With the Midland acquisition Midland-Berg (and later Midland Brake, Inc.) survived several recessions. The union plant, in Owosso, was closed. Employment at the lower wage plant in Iola thrived. We had two buildings at full capacity. Echlin was growing Midland by acquiring various other related companies, including Wagner and Aeroquip. It appears to me that the finance people were taking over Echlin. Quarterly profits were stressed. Business plans had to include “cost reduction” goals. Echlin Corp. soon met the same fate as Midland-Ross. They sold all of their businesses. Midland Brake was sold to Haldex of Sweden. We are now the victim of the slippery slope created by hu-man greed.
Unless society changes its values, American manufacturing as we once knew it will never return. There are companies out there that still possess the right attitude and values. Most are privately owned and control their own destiny with sound management. Bill Maness is right, we must look ahead not rearward; however, our community must realize what happened so that we can lure companies that will be here for our future. Hopefully, they will have values like Humboldt’s B&W Trailer Hitches, for example, and pay a living wage. Maybe Allen County can thrive. We can, if we don’t settle for less!

Bill Fritsche
Iola, Kan.

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