IW Best Plants Profile - 1994

Heavily dependent upon sales of shipboard combat systems and radars to the Navy, Lockheed Martin's huge Government Electronic Systems (GES) plant in Moorestown faced a bleak future in 1991. Defense budget cuts and scheduled outsourcing made layoffs appear inevitable.

Then, the 1994 Best Plants award winner took its future into its own hands.

The story goes back to 1989, when the plant's then-parent, General Electric Aerospace, launched its outsourcing program. Soon half of GES' production was gone, along with some 1,100 jobs. When plans were announced in November 1991 for 400 more layoffs, concerned union leaders proposed joining forces with management.

Within weeks a delegation visited GE facilities that had been through similar trauma. A variety of initiatives were undertaken, including reducing organizational layers and union job classifications. Results were dramatic. For example, in the work center that builds water-cooling equipment for the Aegis weapons system, an employee team trimmed manufacturing cycle time from 253 to 126 days. This enabled the plant to bid on, and win, contracts to build outsourced components in-house. Instead of a scheduled 40 percent cutback, the work center has increased its production by 80 percent.

Management and union officials agree that communication helped turn the corner. The focus is on face-to-face meetings, featuring a "48-hour flow-down" process in which key messages about the business are transmitted from management to each employee.

GES is positioning itself to cope with further defense cuts through a diversification strategy. It already has won military contracts with Japan and Germany, and is working to expand its U.S. nongovernment, nondefense sales.

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