MRO Today - Manufacturing Industry News archives

Manufacturing Industry News:
News from the week of Nov. 15, 2004

Jobless claims decline in recent week
General Motors to discontinue vans, close plant
Union Tank Car to build manufacturing plant in Louisiana
Ford honors three suppliers for impact on diversity
OSHA adds manufacturer to Voluntary Protection Program
Snap-on CEO resigns
Cost-cutting efforts at Rockwell have saved millions
Boeing to expand freighter line to 777 aircraft

Jobless claims decline in recent week
Initial claims for unemployment insurance fell 3,000 to 334,000 for the week ended Nov. 13, according to the Labor Department. The four-week moving average was 338,250, an increase of 1,000 over the previous week.

The four-week moving average is generally considered by economists to be the more reliable of the two because it smoothes out week-to-week volatility. Both rates remained below 400,000, which is the level economists use to define a weak labor market and a stable one.

Continuing claims for unemployment insurance fell 16,000 to 2.8 million for the week ended Nov. 6. Continuing claims are those older than two weeks.

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General Motors to discontinue vans, close plant
General Motors announced its Chevy Astro and GMC Safari will be discontinued in 2005. As a result, the company's Baltimore assembly plant, which exclusively builds the two vehicles, will close in 2005.

The company also reaffirmed that it will maintain a significant presence in the greater Baltimore area through its state-of-the-art transmission plant in White Marsh, Md.

With the Astro and Safari reaching the end of their lifecycles, GM management initiated several production changes over the last several years to better align production at the plant with market demand for the Astro and Safari. These decisions included eliminating the plant's second shift of production in the summer of 2000 and slowing production output on several occasions.

The Chevy Astro and GMC Safari were introduced in the 1985 model year. During the first 10 months of this year, production at Baltimore amounted to approximately 41,000 vehicles.

"Long-term market softening and the products' lifecycle have driven GM to make this difficult yet necessary decision," said Joe Spielman, GM vice president and general manager of vehicle manufacturing. "GM can no longer justify building these two products at volumes that are significantly below the plant's capacity.

"The men and women of Baltimore Assembly are proud, hard-working people who have done a great job of building the Chevy Astro and GMC Safari over the years," Spielman added. "Everyone at Baltimore Assembly should take great pride in their many accomplishments and years of dedication to these products."

GM currently employs approximately 1,000 hourly and 100 salaried employees at the Baltimore plant. The UAW/GM National Agreement provides a comprehensive plan and provisions for the GM employees affected by the decision.

UAW Local 239 represents the plant's hourly workforce. In addition, management will work with affected salaried employees to pursue opportunities at other GM locations.

The Baltimore Assembly plant sits on 182 acres and consists of approximately 3.2 million square feet. It opened in 1935 and originally produced a variety of Chevrolet cars and trucks. In 1984, the facility was converted for production of the Astro and Safari.

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Ford honors three suppliers for impact on diversity
Ford Motor Co. honored three of its suppliers in three categories for their commitment to economic empowerment of diverse communities at its 9th annual Diversity Development Awards.

Brian Hall, chairman and CEO of Industrial Transport Inc., received the community service award. Jerry Diez, chairman of The Diez Group, won for entrepreneurship, and Delphi Corp. was honored for corporate citizenship.

“These three companies have gone above and beyond in the areas of community service, entrepreneurship and corporate citizenship," said Tony Brown, senior vice president of global purchasing for Ford. "They take the responsibility to grow diverse suppliers very seriously. For this dedication, we honor them and hope those of you attending this ceremony will follow in their footsteps."

The community service award is given to the diverse supplier that is a catalyst for change in the diverse community. Hall contributed time, energy and financial resources to meet a need and demonstrated how Ford's program can flow through diverse suppliers to help diverse communities.

The entrepreneurial award given to Diez goes to a diverse supplier who has overcome difficulties and accepted personal risk to create high value-added business and become a valuable Ford supplier.

Majority tier one supplier Delphi received the corporate citizenship award for establishing a successful diverse supplier development program of its own. The winner shares Ford's vision and commitment to expanding opportunities for diverse businesses.

The 2003 Diversity Development award winners were Dave Bing of The Bing Group for community service, Chuni Gala of Gala & Associates for entrepreneurial initiative, and Johnson Controls for corporate citizenship.

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Union Tank Car to build manufacturing plant in Louisiana
Louisiana Governor Kathleen Babineaux Blanco announced that Union Tank Car signed a memorandum of understanding (MOU) with Louisiana to build its new manufacturing facility in the state.

Union Tank committed to creating 850 new jobs at the manufacturing site and retaining the jobs at its Ville Platte, La., repair facility.

"We thought we had lost this project to Texas, but we never gave up. We were ready to turn the project around once negotiations with Texas ceased. Louisiana is the Little Engine that Could," said Blanco. "This is the kind of economic boost we promised to the state and we'll continue building on this to strengthen our economy."

Although the company has not yet announced its site, Union Tank's agreement is the largest construction of a new Greenfield site in Louisiana in well over a decade.

The agreement states that Union Tank will create 850 jobs at the new manufacturing plant, about 700 on the manufacturing side and 150 professional positions. Another 100 or more jobs will be supplied by contractor services at the new plant.

"Union Tank Car Co. has agreed in accordance with a memorandum of understanding to a large expansion in Louisiana of a new state-of-the-art rail car manufacturing facility and professional administrative offices," according to a Union Tank press statement. "This project is not a consolidation of manufacturing facilities. The expansion is due to a significant increase in demand for the company's tank cars and increased customer satisfaction."

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OSHA adds manufacturer to Voluntary Protection Program
The Occupational Safety and Health Administration (OSHA) recognized Jacobsen, A Textron Company, of Johnson Creek, Wis., for protecting workers and welcomed the plant into "Star" status in the prestigious Voluntary Protection Program (VPP).

"This facility has operated at a safety rate superior to the national average for injury and illness incidence in similar workplaces," said OSHA area director Kim Stille. "We believe that the cooperation between management and employees at this site is key to their success and we hope the entire industry will seek to emulate their effort."

The Johnson Creek operation manufactures turf maintenance equipment, personnel and burden carriers for the golf course, professional lawn care, sports field and general grounds maintenance markets under various brand names. Jacobsen has a lost workday injury rate that is half the industry average.

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Snap-on CEO resigns
Snap-on Inc. announced the resignation of its chairman, president and CEO Dale F. Elliott, effective immediately. The company’s board of directors elected Jack D. Michaels, recently retired chairman and CEO of HNI Corp. and a Snap-on director since 1998, to fill the position.

“Dale has made considerable contributions to Snap-on and leaves the company with a strong balance sheet and cash flow,” said Snap-on board member Bruce Chelberg. “As head of the company, he set the highest standards of integrity and commitment. The board is grateful for Dale’s many contributions during his nine years with the company.”

During Michael’s 14-year tenure as CEO of HNI Corp., the company experienced dramatic growth, more than tripling revenues while increasing profits by more than four times and earnings per share by more than five times. He achieved this performance during challenging economic conditions and in an intensely competitive marketplace. HNI Corporation, formerly HON Industries, is a manufacturer of office furniture and hearth products based in Iowa.

“Jack is a dynamic, aggressive leader with a deep reservoir of lean manufacturing and global experience, as well as a proven track record of improving operating efficiencies and driving growth,” said Chelberg. “We’re confident that he will do the same with Snap-on.”

Michaels cited as his near-term priorities the need to work with the organization to improve operating efficiencies, respond to customer needs and market changes more quickly and to correct performance issues in its commercial and industrial businesses.

“I’m very pleased to accept this position at Snap-on, well known for its quality and innovation,” said Michaels. “Snap-on is an outstanding company with a great brand, a strong customer base, quality management team, a motivated dealer organization and dedicated employees. I look forward to leveraging these strengths and accelerating the pace of change in order to drive profitable growth and take Snap-on to the next level.”

The company also said it expects to meet its previously announced outlook of full-year 2004 reported earnings to be in the range of $1.35 to $1.45 per diluted share, excluding severance costs to Elliott of approximately 4 cents per share.

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Cost-cutting efforts at Rockwell have saved millions
by Rick Barrett, Milwaukee Journal Sentinel

Six years after Rockwell Automation Inc. began looking for ways to eliminate waste and make the company more efficient, the savings added up to $180 million.

Some cost-cutting efforts came in small steps, said Ted Crandall, a senior vice president for the Milwaukee maker of factory automation equipment.

For example, the company quit mailing paper copies of order acknowledgments, a time-consuming process that cost thousands of dollars a year.

Rockwell's distributors were placing orders through the Internet and had no use for the paper copies that sometimes arrived in the mail too late to serve any purpose.

A company manager called six distributors and asked whether they wanted the paper documents, which simply acknowledged that they had placed orders. "They said, 'Frankly, no,' " Crandall recalled.

When Rockwell stopped the mailings: "Basically, we saved $65,000 a year in printing and mailing costs," Crandall said. "If we can get every one of our 22,000 employees thinking that way, that's a very powerful thing."

Crandall spoke at a "lean manufacturing" conference Friday at the Wyndham Milwaukee Center hotel. The conference attracted about 120 attendees, with most of them from Wisconsin and Illinois, but some from as far away as Utah.

Lean manufacturing generally means eliminating waste that inflates costs. Besides looking for ways to trim fat from the budget, it stresses preventive maintenance, quality improvement programs and a flexible workplace.

Rockwell had $4.4 billion in sales in 2003. It uses lean manufacturing to increase productivity and earnings.

"There is an incredible power" in controlling costs, Crandall said. It's more than just putting the brakes on inflation.

Through lean manufacturing, RB Royal Industries Inc. cut the time needed to introduce products from 109 days to 32. It reduced the time necessary to give price quotes on orders from 24 days to four.

The Fond du Lac company makes tubes, hoses and fittings for home building, recreation equipment and hundreds of other uses. It had about $16 million in sales in 2003 and has 135 employees.

It should never have taken 109 days to launch a new product, said Mark Westemeier, manager of quality and manufacturing.

"Our products are not that complicated," he said. "And by taking 24 days to quote an order, it was no wonder that we weren't getting some new business."

RB Royal Industries consolidated operations from three buildings into one new plant. Previously, the company was so strapped for space it had used a residential house for its sales and marketing departments.

RB Royal Industries pursued lean manufacturing aggressively, putting most of its employees through the training. The results were $221,000 in savings in 2003, according to Westemeier.

The company found ways to save hundreds of hours in time. Meetings that once lasted several hours, with little progress, are now down to 30 minutes and get results, Westemeier said.

Source: Milwaukee Journal Sentinel

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Boeing to expand freighter line to 777 aircraft
Boeing is expanding its 777 commercial airplane family and now is offering a cargo model that will be the world's largest and most capable twin-engine freighter.

Due to enter service in fourth quarter 2008, the new Boeing 777 freighter is based on the technologically advanced 777-200LR (Longer Range), the world's longest-range commercial airplane. The 777 freighter will fly farther than any other freighter and will provide more capacity than any twin-engine cargo airplane.

"The efficiency, operating economics and range of the 777 are unsurpassed, and cargo carriers around the globe will now share in the value of the 777 family," said Boeing Commercial Airplanes president and CEO Alan Mulally. "The 777 freighter further strengthens our leadership position in the world cargo market."

The new freighter brings Boeing's 777 family to six models. Boeing selected the 777-200LR platform for the new freighter because it offers the preferred mix of range and payload capabilities for cargo operators. The first 777-200LR will enter passenger service in 2006.

Boeing is currently in discussions with several potential customers for the 777 freighter and foresees a strong market demand for an efficient, long-range, high-capacity twin-engine freighter.

The Boeing 747 freighter family currently constitutes more than half of the world's total freighter capacity. Boeing freighters of all models comprise more than 90 percent of the total worldwide freighter lift. Boeing forecasts that large widebody freighters (65 metric tons and above in capacity) will comprise 31 percent of the market by 2023.

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