Productivity revised upward in first quarter
La-Z-Boy to eliminate 480 jobs in August
Goodyear aids 2-ton rhino with sore feet
Smaller, flexible automakers to increase market share
Companies slow pace of job cuts in May
Dana Corp. uses water pressure to automate steel shaping
NSC to focus on workplace safety during last week of June
Carlisle Companies buys Flo-Pac Corp.
PMI increases 4 percentage points in May, says ISM
Report: Electronics industry to migrate to China
PeopleSoft to buy J.D. Edwards for $1.7 billion
Chrysler group reorganizes senior management

Productivity revised upward in first quarter
The U.S. Department of Labor revised first quarter productivity upward to an annual rate 1.9 percent from 1.6 percent reported last month.

The report showed that the amount of output per hour of work increased as American companies boosted output while cutting workers' hours. 

Output increased at a rate of 1.8 percent in the first quarter, up from a 1.7 percent rate during the fourth quarter. At the same time, workers' hours declined at a rate of 0.1 percent in the first quarter, compared with a 0.9 percent increase the quarter before.

Federal Reserve chairman Alan Greenspan has said that productivity increases complicate a stagnant job market because companies can maintain or increase output with fewer workers.

However, he also said last month that any gain in productivity should be welcomed, even though it may require more economic growth to create jobs.

In 2002, productivity increased at an annual rate of 4.8 percent. Output for the year increased by 2.7 percent, and workers' hours fell by 2 percent. 

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La-Z-Boy to eliminate 480 jobs in August
As part of its reorganization of Casegoods Group, La-Z-Boy said it will cut a total of 480 jobs from factories in North Carolina and Tennessee, according to the Associated Press. 

The company said it will shut down two Lea Industries plants in Morristown, Tenn., on Aug. 15. The closing will remove 330 jobs from La-Z-Boy's payrolls.

Warehousing and shipping will continue operating in Morristown, allowing about 40 workers to keep their jobs.

The company said it will also eliminate 150 jobs Aug. 29 at its upholstery plant in Monroe, N.C.

La-Z-Boy said the cuts will initially cost the company about $10 million, but will end up saving the company $5 million to $6 million annually. The reorganization will also create 75 jobs at other plants within the company.

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Goodyear aids 2-ton rhino with sore feet
Sore feet create discomfort, but imagine you’re a 4,700-pound rhinoceros with hoof problems and only a concrete surface to trod.

Enter Goodyear’s Flexsteel conveyor belt. Designed for coal transport, it is being used at the Buffalo Zoo in Buffalo, N.Y.,  in a stall for Henry the rhinoceros.

But Henry isn’t being conveyed anywhere. The belt’s rubber cover cushions the concrete surface, while its steel reinforcement stands up to the ground pressure of a 2-ton animal.

Goodyear, maker of the world’s first steel-cable belt in 1942, was contacted by zoo veterinarians needing help for the 12-year-old Indian rhinoceros.

Due to Henry’s weight, cracks developed on his back 3-toed hooves, building up scar tissue, according to Veterinarian Frank Ridgley. Sixty percent of U.S. captive male Indian rhinos suffer from the same condition.

Ridgley prescribed a three-quarter-inch steel-reinforced belt with an operating tension of more than 2,000 pounds-per-inch-width.  Goodyear donated the 48-inch wide belt, which was cut into 21-foot sections – the length of Henry’s stall. 

If successful, the prescribed Goodyear conveyor belt will be just what the doctor ordered.

“The only way to alleviate Henry’s arthritic-type pain is to operate,” said Ridgley. “The conveyor belt provides relief prior to surgery and during recovery.”

Buffalo-based Belt Maintenance Group (BMG), a Goodyear splice network member, helped install the belt.  

“I actually think I saw Henry smile when he first walked onto his new cushioned floor,” said BMG branch manager Joe Hooley.

Threatened by habitat loss and poaching, maintaining a captive population to guard against extinction of the wild population is essential to the Indian rhinoceros’ survival.

“It’s an unusual use for our belts, but it’s not the first time we’ve aided a suffering member of the animal kingdom,” said Ray Paquin, manager of Goodyear’s plant in Marysville, Ohio, where the belt was manufactured.

A 350-pound sea turtle once received a fabric-reinforced rubber flipper designed and made by Goodyear, using a conveyor belt rubber compound. And today, recycled Goodyear conveyor belts cushion livestock stall floors.

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Smaller, flexible automakers to increase market share
By 2008, smaller automakers with production volumes of less than 4 million units per year will have made significant gains in their share of overall global vehicle production, according to automotive intelligence and forecasting service provider CSM Worldwide.

Production of the top six OEM groups in the light vehicle industry will grow at a pace of 1.8 percent on a compound rate from 2002 to 2008. This group includes General Motors, Ford, DaimlerChrysler, Toyota, Renault/Nissan and Volkswagen. Outside the traditional mass markets of the U.S., Canada, Western Europe, Japan and Australia, this same group will grow at a 6.3 percent rate.

Another group of smaller, more flexible OEMs will grow at a pace of 5.3 percent globally to 2008. This group includes PSA, Honda, Hyundai and BMW. Outside the traditional mass markets, this group will expand significantly, at a pace of 12.1 percent per year.

"The message is that smaller is better in today's marketplace," says CSM vice president of global forecasting services Michael Robinet. "The big automakers have more burden; some of them need to address issues of overcapacity, and the economies of scale they once enjoyed have run their course. Smaller automakers are more nimble, they tend to have strong platform rationalization strategies, and they stick to segments they understand."

Honda and PSA are prime examples of smaller companies that are forecast by CSM to gain in global production share. At Honda, a regimented global platform approach reduces development and production costs, and a strong strategy across the B, C and C/D vehicle segments will create product breadth in China. 

PSA's strategy calls for partnerships and OEM powertrain arrangements to extend into new vehicle segments without the burden of a heavy balance sheet.

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Companies slow pace of job cuts in May
Planned layoffs for U.S. employers declined to 68,623 in May, the lowest in 30 months, according to a survey from outplacement firm Challenger, Gray and Christmas.

During April, planned layoffs measured 146,399. The report was good news for a labor market struggling to keep from losing an increasing number of jobs.

"The missing-in-action kick start that will propel the economy out of the doldrums may be close at hand," the company's CEO John Challenger told the AFP. "Small and medium businesses, traditionally responsible for most new job creation in recoveries, may begin to expand investment and hiring due to the new tax cuts."

Job cuts in the industrial goods sector measured 7,176 in May. The federal unemployment report for May is scheduled to be released June 6.

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Dana Corp. uses water pressure to automate steel shaping
A Dana Corp. plant in Elizabethtown, Ky., is using water to form and mold automotive parts used in many American automobiles, according to The News-Enterprise Online in Hardin County, Ky.

The fluid energy provided by water under incredibly high pressures is enough to shape metal for the side rails currently used in the Ford Expedition and Lincoln Navigator, which are made at the Dana factory.

The giant automated machine uses more than 80 robots, conveyors and about 4,000 gallons of hydroform fluid to shape and create the side rails. 

Roughly 100 workers are currently needed to make the rails. When the factory is at full capacity, it will generate 1.5 million to 2 million rails a year.

The hydroforming process is not new. The idea has been around since 1937. However, only recently have the technological controls been manufactured that will control the process.

At times, more than 10,000 tons of clamp pressure are used to shape the steel into the side rails, with more than 16,000 pounds per square inch of pressure.

"It seems to be the way a lot of car and truck manufacturers are heading, because it allows you to reduce the weight of the product by reducing the number of welds," Hydroform Focus Factory manager Scott Osborn told The News-Enterprise.

He added: "Now we are able to create a shape that the stamping method would have difficulty with."

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NSC to focus on workplace safety during last week of June
As part of National Safety Month in June, the National Safety Council (NSC) designated June 22-30 the week to focus on methods and activities to make the workplace safer.

The NSC Web site recommended a number of steps to decrease the number of injuries in your workplace. They include the following:

• Designate a safety team leader who is committed to staying up to date on current safety issues. Form a safety team and report on its meetings to all employees. People will work harder to implement new ideas if they are given responsibility to develop those ideas themselves.

• Develop a systematic approach to accident investigation. Check out the NSC book Accident Investigation for sample forms and case studies.

• Establish an effective emergency response and evacuation plan; keep it updated and practice it regularly. The NSC's On-Site Emergency Response Planning Guide provides plan templates you can customize for any business, and helps you incorporate OSHA regulations into your emergency plans.

• Create a schedule of monthly or weekly safety briefings. Today's Supervisor from the NSC is a monthly newsletter that can serve as the basis of a quick safety session.

• Focus on safety training and continuing education. Select courses that are appropriate to your business and make it a priority to provide them to your workers. Consider offering defensive driving and first aid courses to any interested employees.

• Urge workers to take advantage of employee assistance programs when necessary. They'll find it hard to concentrate on safety if they're struggling with personal problems.

• Address off-the-job safety and health issues by promoting your company's wellness programs, or consider subsidizing health club fees.

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Carlisle Companies buys Flo-Pac Corp.
Carlisle Companies Inc. acquired Flo-Pac Corp., a manufacturer of quality brooms, brushes, rotary brushes and cleaning tools for the sanitary maintenance industry.

Founded in 1913, Flo-Pac, has operations located in Minneapolis, Atlanta and Fontana, Calif. Its sales for 2002 were $26.5 million.

"The addition of Flo-Pac to Carlisle's food service and sanitary maintenance business establishes a clear leadership position in these growing markets," said Carlisle president and CEO Richmond McKinnish. "Flo-Pac has long been known for quality products and a keen commitment to customer service, two strengths that have consistently added value to Carlisle."

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PMI increases 4 percentage points in May, says ISM
Economic activity in the manufacturing sector failed to grow in May, while the overall economy grew for the 19th consecutive month, according to the Institute for Supply Management's (ISM) Manufacturing Report on Business.

"The manufacturing sector failed to grow in May for the third consecutive month," said ISM manufacturing business survey committee chair Norbert J. Ore. "However, there are signs of life in manufacturing as both the New Orders Index and the Production Index rose above the 50 percent mark after each had seen two consecutive months of decline."

He added: "There is also good news on the pricing front as the Prices Index declined 12 percentage points, leaving it just above the breakeven point. Order backlogs grew in May following 10 months of decline. These are all signs of encouragement that manufacturing is recovering from the decline due to the war."

The PMI (Purchasing Managers Index) registered 49.4 percent in May, an increase of 4 percentage points compared to the April reading of 45.4 percent. It indicates that the manufacturing economy declined for the third consecutive month, but at a slower rate.

A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. A PMI in excess of 42.9 percent, over a period of time, generally indicates an expansion of the overall economy. The May PMI indicates that the overall economy is growing and the manufacturing sector is declining.

Comments from purchasing and supply managers focus on the continued weakness in many sectors, pressure from natural gas prices, SARS concerns in Asia and the impact of a declining dollar.

"Supply managers' comments seem to be split among those who are starting to see improvement, those who see no improvement in sight, and those who are uncertain as to the direction. This is not really unusual when the economy is at a crossroads. Judging by the reversal in a number of the indexes this month, we are apparently at or near a crossroads," said Ore.

To read the entire report, click here.

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Report: Electronics industry to migrate to China
As the electronics industry struggles to reduce costs and find new growth markets, it is increasingly shifting manufacturing operations to the developing world, with China leading the pack.

A new study by the International Finance Corporation (IFC), the private sector arm of the World Bank Group, and management consulting firm Booz Allen Hamilton found that electronics production activity in emerging markets will nearly double, from $65 billion in 2001 to $125 billion by 2005 and will account for 43 percent of total worldwide manufacturing growth.

More than three-fourths (77 percent) of the growth in developing countries will be in China, increasing its share of global electronics production from 8 percent to 14 percent, according to Booz Allen and IFC research, a growth rate that is twice as fast as any other region.

In fact, the study estimates that electronics production in China will be an $80 billion business by 2005, larger than the estimated $73 billion production in all of Western Europe. Emerging market growth outside of China will be primarily in other developing Southeast Asian countries, Eastern European countries and Mexico.

Gains in developing countries will not be limited to manufacturing. Higher value services such as engineering and design functions will increasingly migrate to developing nations over the next few years, although this transition will trail the more rapid shift in production. India and Russia in particular have an abundance of highly skilled labor, with labor costs up to 80 percent lower than in the developed world.

"This dramatic increase in production clearly demonstrates the growing strength of emerging markets," said Dick Ranken, director of IFC's global manufacturing and services department. "In fact, a main driver of this trend is the rising importance of economies such as China as end-user markets for these products, which increases their competitive advantage in the manufacturing process."

The report highlights several other major findings:
• In emerging markets, final assembly, displays and semiconductors will provide the highest level of growth through 2005.
• China will continue to hold commanding positions in key value chain elements such as assembly, displays and semiconductors, as it evolves into the hub of electronics manufacturing. By 2005, 45 percent of all high volume assembly will occur in China.
• The Asia Pacific region, particularly China, currently dominates electronics manufacturing in emerging markets.

The findings were derived from 117 in-depth interviews with electronics manufacturing firms of varying sizes and across all regions of the world. In addition, extensive secondary research was conducted to quantify the magnitude of the production shift to developing countries.

All elements of the manufacturing value chain were covered in the survey. For the purposes of the report, Booz Allen and IFC define emerging markets or developing countries as all areas outside of North America, Western Europe, Australia, Japan and other parts of the Asia Pacific region, including Hong Kong, Korea, Singapore and Taiwan PRC.

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Combined, the companies have approximately $2.8 billion in annual revenues, 13,000 employees and more than 11,000 customers in 150 countries. With this acquisition, PeopleSoft will expand its presence in more than 20 industries including a broad range of services, manufacturing, distribution and asset-intensive industries.

"The combination of J.D. Edwards and PeopleSoft is a winning one for customers. Both mid-sized and large enterprise customers will have access to the broadest suite of integrated enterprise software applications in the world," said PeopleSoft president and CEO Craig Conway. "We are excited and confident about what this acquisition will mean for our customers and the enterprise software industry."

"With PeopleSoft's strength in the large enterprise space and services industries, combined with J.D. Edwards' position as an acknowledged leader in the mid-market and manufacturing, we will be able to serve the entire enterprise software market in a way that no other vendor can," said J.D. Edwards chairman, president and CEO Bob Dutkowsky.

Under the agreement, J.D. Edwards will become a wholly owned subsidiary of PeopleSoft, and J.D. Edwards stockholders will own approximately 25 percent of the outstanding capital stock of the combined company.

The transaction is anticipated to close in the late third or early fourth calendar quarter.

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Chrysler group reorganizes senior management
The Chrysler Group announced changes in the company's senior management. Executive vice president of global sales, marketing and service Jim Schroer left the company at the end of May to pursue a new career in a marketing intensive business.

The company named Joe Eberhardt to succeed Schroer effective June 1. Eberhardt was the president and CEO of all DaimlerChrysler U.K. operations (Mercedes-Benz passenger cars and commercial vehicles, smart, Chrysler and Jeep, and Mitsubishi Canter) since October 1999.

DaimlerChrysler board of management member Thomas W. Sidlik will assume responsibility for DaimlerChrysler's global procurement and supply, succeeding Gary C. Valade, who will retire at the end of the year.

The company also named Peter M. Rosenfeld Chrysler Group executive vice president for procurement and supply, effective Dec. 16, 2003. Eberhardt and Rosenfeld will both be members of the Chrysler Group executive committee.

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