Chain Reactions

When the Other Shoe Drops

My most recent "Just in Time" column (which you can read here) makes a couple points about the benefits of lean manufacturing that, in hindsight, probably are a bit overzealous, given the times we live in and all that.

Specifically, I was looking at the success that a Cleveland, Ohio-based manufacturer, Cardinal Fastener, was having both as a lean manufacturer and as a player in the wind energy marketplace. I had the chance to visit Cardinal in January, when President Obama (then President-elect) appeared to sing the praises of a Rust Belt manufacturer who found the pot at the end of the alternative energy rainbow. Without discounting the real opportunities that wind power is offering, I noted in my column that it would have been nice had Obama also emphasized that Cardinal's success was in no small part due to its adoption of lean manufacturing practices.

Here's a key paragraph from that column:

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, primarily used for clamping wind turbine towers to their foundations. Cardinal expects to add as many as 40 full-time employees in 2009, according to Grabner, which would be 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.

Okay, well, so here's an update on Cardinal Fastener, from the Cleveland Plain Dealer:

"Cardinal Fastener & Specialty Co., the Bedford Heights bolt company that President Barack Obama spotlighted days before his inauguration as an example of a manufacturer able to grow by supplying parts to the wind turbine industry, has laid off about eight of its 65 workers. The layoffs came just two weeks after the company was able to hire two workers to help with expanding orders. President John Grabner said he cut 12 percent of the work force because orders have decreased significantly for the industrial products that still account for 80 percent of his business bolts for bridges, large buildings and heavy-equipment makers like Caterpillar. 'The wind business is good, but they have slowed down also,' he said. The industry seems to be waiting for Obama's economic stimulus package, he said."

So I apologize for my overzealous promotion of lean in my column. I could chalk it up to yet another instance of Obama's team not following through adequately on the vetting process, this time in picking a supposedly growing company that ends up laying people off shortly after the president left town. But in this case, as in too many cases these days, the reality is, it's just plain lousy out there right now.

TAGS: Supply Chain
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