Obama Cites Lean Company as Example of How to Reinvent Manufacturing

Cardinal Fasteners attributes its growth to lean principles and emerging wind power industry.

BEDFORD HEIGHTS, OHIO -- Declaring that "we've started this year in the midst of a crisis unlike any we've seen in our lifetime," President-elect Barack Obama today urged leaders of both political parties to adopt an American Recovery and Reinvestment plan that will, he said, "immediately jumpstart job creation and long-term growth." Obama's comments were made on site at Cardinal Fastener & Specialty Co. Inc., a manufacturer of precision fasteners used in the construction of wind turbines.

As part of the recovery and reinvestment plan, the Obama Administration will commit to doubling the production of renewable energy over the next three years, the President-elect said, "and to modernize more than 75% of federal buildings and improve the energy efficiency of 2 million American homes. In the process, we'll put nearly half a million people to work building wind turbines and solar panels; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to new jobs, more savings and a cleaner, safer planet in the bargain."

Although Obama did not directly address lean manufacturing in his comments, Cardinal Fastener has instituted lean concepts based on the Toyota Production System since 1998. According to John Grabner, president of Cardinal Fastener as well as a consultant on lean thinking, Cardinal's lean initiative has led to increased efficiencies, decreased costs, and better and faster service to its customers.

Thanks to its adoption of lean principles, as well as increased interest in its products from the wind industry, Cardinal has become the largest manufacturer of American-made large-scale threaded fasteners. The fasteners are used to bolt the wind turbine towers to their foundations. Cardinal expects to add as many as 40 full-time employees in 2009, Grabner observed, a significant increase from its current roster of 65 employees. The company also forecasts a 50% increase in revenues in 2009, growing from $10 million to roughly $15 million.

Obama pointed to Cardinal Fastener as an example of how traditional U.S. manufacturers can reinvent themselves by focusing on the emerging alternative energy economy. "The story of this company, which began building wind turbine parts just two years ago and is now poised to make half its earnings that way, is that a renewable energy economy isn't some pie-in-the-sky, far-off future. It's happening all across America right now. It's providing alternatives to foreign oil now. It can create millions of additional jobs and entire new industries if we act right now."

According to statistics compiled by the American Wind Energy Association (AWEA), 80,000 U.S. workers are employed in the wind industry. The share of domestically manufactured wind turbine components, AWEA states, has roughly doubled in the past three years, from 25%-30% in 2005 to 50% in 2008.

While celebrating the accomplishments to date of U.S. entrepreneurs and researchers in developing clean energy, solar energy and bio-fuels, he sounded a note of caution, too, as he urged support for his recovery and reinvestment plan. "I'm told that if we don't act now, because of the economic downturn, half of the wind projects planned for 2009 could wind up being abandoned." He pointed to other countries, such as Spain, Germany and Japan, whose governments are aggressively investing in renewable energy projects, and suggested that if his plan does not receive the support he's seeking, then the United States will fall even further behind its global counterparts.

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