The union has worked with us and has even led in cost reduction programs. Now corporate is talking about outsourcing additional products. What more can we do to keep the business?
mike lewis, plant manager
The Automotive Component and Fabrication Plant (ACF) was the original plant site for Bridgeton Industries, a major supplier of components for the domestic automotive industry. The history of the plant dated back to the 1840s when the adjoining river attracted mills that processed the rich lumber resources in the area. The site progressed through several industrial uses, including an early wagon works, until it was finally purchased by the founder of Bridgeton. He opened his first office there in the early 1900s.
All of ACF's production was sold to the Big Three domestic manufacturers. Competition was primarily from local suppliers and other Bridgeton plants. As long as the market was growing and dominated by U.S. manufacturers, this strategy worked. It became less effective when foreign competition and scarce, expensive gasoline caused domestic loss of market share. Suppliers found themselves competing for a shrinking pool of production contracts. Throughout the 1980s, ACF experienced serious cutbacks due to this competitive pressure. However, as the 1989/90 model year budget approached, ACF was still considered a critical plant. Model years ran from September 1 to August 31 and were the basis for budgeting. Production contracts were usually awarded for a model year.
THE ENGINE PLANT SHUTDOWN
ACF first felt the effects of domestic loss of market share in 1985. After the first oil crunch in the mid-1970s, Bridgeton had built two plants for manufacture of fuel-efficient diesel engines in anticipation of a continued growth in the market. One of these plants was at the ACF facility. When the growth in diesel-powered cars was not sustained, one of the operations had to be shut down.
Special studies were made of the relative costs of the two plants, and ACF's facility was the one chosen to be closed. When the production workers at ACF were told they were not cost competitive, they took actions to reduce unit product cost, bringing it down to within a few cents of the competing quote. Despite these efforts, ACF's facility was closed. "Management told us we were not cost competitive. We worked ourselves into the ground and lowered the unit cost, and still lost the business," recalls Ronald Peters, a long-time production worker in the old engine facility.
When the engine plant closed at the end of 1985/6 model year, all of the related production jobs were eliminated. The skilled trades positions were eliminated where possible. However, tradespeople who had unique skills that were needed in other areas of the plant were retained. The physical machinery, equipment, and building were written down and taken off the plant books.
During the 1986/7 model year, the corporation hired a strategic consulting firm to examine all of Bridgeton's products and classify them in terms of world-class competitive position and potential. Four criteria were considered: (a) quality, (b) customer service, (c) technical capability (engineering and sophistication of plant processes), and (d) competitive cost position.
The data used to evaluate quality included warranty failure rates, product rejects per million, percent scheduled maintenance versus breakdown maintenance, customer complaints per million, and published user rating service scales. To evaluate customer service, in addition to interviews, the study examined percent on-schedule production and shipments, percent variation in these schedules, time to respond to requests for information, time to respond to customer complaints, leadtime from design of concept to production of product, and degree of manufacturing flexibility. Technical capability...