Challenges and Successes

6 Dec

Spending so much time in Tijuana during the construction of the plant, I had grown to enjoy it there, and decided that managing a plant down there might be fun. So, when the investors that had purchased the company made their divestiture move, I reached out to my network, and let it be known that I spoke Spanish, and was willing to relocate to Tijuana.

It wasn’t long before I was contacted by a friend, asking my permission to pass my contact info to a Swiss friend that owned a custom injection molding plant in Tijuana. He needed a molding manager, and Bob P. wanted to recommend me.

I met with the owner a few days later, in his Tijuana offices, and the next Monday, started to work. It was a little bit of a stretch for me, since from a technological standpoint, I felt I was lacking. But he decided to give me a chance, and I think it worked out well for both of us, for the two years I was there. Unfortunately, he got into some financial difficulties, and I felt that the burden of keeping me on the payroll was not paying off for him, since business was so slow. So I left, and once again reached out for contacts.

This time, it was a local friend that informed me that a Finnish company was looking for an Operations Manager for their multi-faceted operation in Tijuana. I dropped off my résumé, and started the process of four interviews and psychological evaluation, and after about a month, moved into my new office.

I was faced with some extreme challenges while in their employ, due to some practices by my Mexican predecessor. We basically had to correct every single importation and exportation (from six to 12 each, per week) from the previous 5 years. Taxes were seriously in arrears, and accounting practices were, at best, negligent. The only area that seemed to be without significant issues, was human resources. There, at least, we were in full compliance.

The owners were understandably ignorant of Mexican law and cultural practices, and made the mistake of assuming that the local manager would be honest and straightforward. Unfortunately, they had chosen poorly, and while I don’t think the man was inherently dishonest, I would have to say that he served them very poorly, due to his total lack of professionalism.

During my employ there, I learned more about Mexican law, and sound business practices, than I had ever before been exposed to. I was given every assistance from the corporate offices, and feel as though I benefitted greatly from the association.

Sadly, after a little over five years, the decision was made to “farm out” our production to various manufacturers in China. This was deemed a necessity, in order to compete, since most of the competition was already doing so.

After shutting down the plant, and liquidating the assets, I found myself once again footloose and fancy free, so, HELLO…..NETWORK!

The VP to whom I had reported had also left the company, and immediately asked me if I would be interested in a Plant Manager position at his new employer’s single manufacturing plant, in Orange County, CA. With over 350,000 square feet of plant, and nearly 800 employees, it would be the largest operation I had ever managed. I was cautiously intrigued, and I had always enjoyed working with Bill (even if he IS a West Point graduate), so I said let’s talk!

I interviewed with Bill, and another VP, as well as two managers, before being called back for a second interview session, this one to include their president. We seemed to click, and an offer was made and accepted, with the company agreeing to pay my hotel and meals for a year, during which time I could relocate my family.

Working closely with Bill proved to be another very important learning experience for me. He is a great believer in data, its analysis and USING it! He was the gas pedal to our engine, always pushing us for just a little more. I also worked very closely with Barry, the Materials Manager. That title doesn’t do justice to what Barry actually did. Barry is a veritable dynamo, and not only could we depend upon him to get things done, we also knew that it would get done well, and on-time. He was in charge of all purchasing, shipping, inventory and order processing, as well as disposition of nearly four years’ accumulation of scrap and obsolete product. We would have been SUNK, without Barry!

My forte was my operational and people skills. When I joined the team, the company was experiencing nearly 40% turnover of personnel, had just learned that over 70% of the workforce were illegal aliens, and there was a labor union trying to organize. Talk about baptism by fire!

On top of all that, order lead times were two to two and a half months, versus the two weeks that our competitors offered. We had seven and half million dollars of obsolete inventory, two and a half million dollars of accumulated scrap, and an equipment base that was ten years outdated, with an almost nonexistent maintenance budget.

What? Me worry?

First thing was to figure out how to purge 70% of our work force, before the Feds found out and shut us down. Obviously, we had to replace nearly all of them, as well. And….we had to do it not only without suffering a loss of productivity, but while increasing productivity, in increments of 10% per month. Of course, as soon as you call the very first person into the office, and call into question their VISA status, the word is out on the floor, and productivity screeches to a halt. So, Jack B., the VP of Human Resources and I had to do a lot of planning. I wanted the biggest problems gone first, so they wouldn’t be agitating. I also wanted to give as many people as possible an opportunity to make themselves well. And, I needed to keep my key people on hand as long as possible. Unfortunately, in order to protect the company, we had to go through the ranks in some unbiased or random method. So, we decided to determine what would be our drop-dead minimum manning level to continue operations. That would allow us to preserve our supervisors and those in key positions, as long as possible. We then set up a reduction in force, of a quantity that coincided with the number of “problems” we could most do without. The remainder, we dealt with in alphabetical order.

As I said, once the cat’s out of the bag, everyone that knows they’re illegal gets scared. My first job was to get everyone together (we’re talking about almost 800 people) and let them know that there will NOT be any Immigration buses pulling into the parking lot, and that we will NOT be reporting anything to anybody, if we decide to terminate someone because of their status. I had to make them comfortable enough that they would stay, right up until the moment they were called in, and not bolt. At this point, I had only been there for perhaps two months, and had not had a lot of interface with the rank and file. I made it a point to walk the entire facility several times a day, but with that many people, I had probably only actually spoken with 10 or 15% of the workforce, and most of that was just casual. I hadn’t had the opportunity to establish any credibility. Now, the fact that the workforce was more than 95% Latino, and I always spoke to them in Spanish had to help. But remember too, that I’m pale and red-headed, which probably didn’t.

So, I started out by pulling everyone into the warehouse, introducing myself, and acknowledging that there was no reason for them to take my word, since they’d never had a chance to see if I would keep my word. I then guaranteed them that if they did give me the chance, they would never regret it. And I told them what hotel I was staying at, and my room number, as well as the phone, if they ever wanted to ask me something, after hours.

I explained what was going to happen, why it had to happen, and how we would be going about it. I urged them to start looking for something else, if they knew they couldn’t stay on, so their families wouldn’t suffer. And I urged them to stay as long as they could, to take advantage of the continued income. I hit on all the details, and didn’t pull my punches. I spent two hours on that stack of pallets, trying to set their minds as much at ease as possible, and apparently it worked. By the time we had purged 570 employees, only five had left before their interview date, and one of them left because he had already found another job.

All the while this was going on, we also had the Teamsters trying to organize a union in our plant. This process, too, was educational for me. A couple of thoroughly obnoxious agitators camped outside our gate, and accosted everyone moving in or out. I was in constant contact with our attorney during this phase, as well, and learned all the things that management cannot say or do, and some of it just plain dumbfounded me!

For instance, I could purchase T-shirts bearing the statement VOTE NO! (and I did!), but I can’t comment to an individual, “I hope you vote no.” Obviously, neither can I ask him how he intends to vote. Both would constitute intimidation, and open the company up to all sorts of problems.

If one of my managers was to break that rule, and the employee reports it to the union or to the court, it would render the election unnecessary. The court would simply assume that the work force was sufficiently intimidated to make the results of an election questionable, and it would mandate the formation of the union! Consequently, we had to essentially forbid any manager or supervisor from discussing the union issue with, or in the vicinity of, ANY employee.

Conversely, peers that might be against the idea of a union are perfectly free to discuss it, any way they like, with their coworkers – no intimidation there! So, I ordered hundreds of VOTE NO! T-shirts, and gave them away free to anybody that wanted them, and encouraged them to save their street clothes by wearing them.

It was a mentally and emotionally exhausting process, but eventually the election was held, with a decisive vote against the formation of a union. When you take into consideration the loss of so many friends and family during the purge, and the huge influx of new replacement employees, this takes on a major significance.  It’s certainly one of the most interesting and challenging positions I’ve ever held. And it’s also one that I’m particularly proud of.

The workers (Bill liked to call them Associates, but as far as I’m concerned, they did a hell of a lot more than just associate! They worked!) deserve a lot of the credit for what was accomplished during that time. They busted their collective butt, not only picking up the slack for the missing hands, and the new, inexperienced people, but also in meeting, and exceeding the mandate for incremental productivity increases. When I got there, we were shipping an average of 6.5 to 7 million dollars in sales volume per month. By the time the election was held, we were shipping 13 million! And we were doing it with 25% less manpower! Employee turnover was floating around 1%, once we stabilized our staffing. Generated scrap dropped by more than 60%! And while making these adjustments, we simultaneously shortened our average delivery time to two weeks!

THAT, my friends, is accomplished by the WORKERS!


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