When Lisa Norris was a kid in Cookeville, Tennessee, her father worked at Acme Boots, and that plant and her childhood were intertwined. One of her earliest memories is of wandering around the factory among bins of leather, breathing in the smell of the well-oiled wood floors. Then the boot plant went to Mexico and her dad landed at Wrangler, which makes jeans, and then Red Kap, which makes workwear, and rarely ever again did he stay at a job for more than eighteen months. Each time, the plant would downsize or shutter, the jobs would cross the border, and he’d have to start all over again.
Norris spent her teenage years doing 4-H and helping out at her grandfather’s hardware store. She also went to five different high schools as her father chased work. This experience is why, in her early thirties, after several years doing human resources in the auto and defense industries, she started her own consulting firm dedicated to helping plants implement lean manufacturing principles and union avoidance, in an effort to save jobs in central Tennessee. “In all of my eleven years I never had a plant that left the area that I was involved with,” she told me proudly. “I was able to say nothing’s ever left. Nothing’s left the building.”
In late 2008, she got a call from Dave Uhrik, a veteran operations manager she deeply admired, who broke the news that he’d been hired on to manage a plant near Sparta, just down the road from where Norris grew up. The large factory produced commercial lighting fixtures and had recently been acquired by Philips, the $39 billion Dutch multinational best known for its vast array of consumer products, from light bulbs to electric toothbrushes to television sets. It took Norris “exactly twenty-seven minutes” to decide that she was going to sell her business and join what Uhrik pitched as “the dream team.” It was barely half the pay, but it was a chance to put all of her ideas into practice, to be part of “the best of the best,” a model for what was possible in American manufacturing. “It was like, Oh, my goodness, we could do great things!”
The humming Sparta plant had it all. For one thing, the town is within a day’s haul of most US markets—from New York and Chicago to Atlanta, St. Louis, and Dallas. Tennessee has decent, well-maintained highways. The plant was union—a new experience for Norris—but this IBEW local was steely-eyed about keeping and creating jobs; it had, for example, accepted a two-tier pay scale and surrendered contract protections in order to attract a highly automated production line from New Jersey. The press for that new line, known as a Bliss, was nearly three stories high (so big it had to be anchored twenty feet underground) and could stamp out eight or ten massive commercial fluorescent fixtures every minute. It attracted lucrative contracts from hospitals, prisons, grocery-store chains, and Walmart supercenters. Norris called it “a monument.” Brent Hall, the union rep, described it as a beating heart. “Every time that press rolled over,” he said, “the whole building would shake.”
Other production lines at the plant could push out smaller, custom products tailored to the needs of a specific buyer. A whole swath of the maintenance crew had been sent, on the plant’s dime, to get certified as industrial electricians and welders and millwrights so that they could retool machines on the fly, switching production from one job to the next in a matter of minutes. “Anything they wanted, we’d build it for them,” Scott Vincent, one veteran electrician told me. With Uhrik and Norris at the helm, the plant started buying steel and other inventory on consignment, and trimmed turnaround times to the point that its invoices would be getting paid before the bills on raw materials were even due. Tasked with cutting costs by $4 million, the management team tapped employees to identify inefficiencies in the assembly process, worked with suppliers to reduce components costs, and drastically reduced the number of products with defects. The plant boosted productivity by 7 percent and kept labor costs low, at around 4 percent. Still, thanks to the union, most workers were earning $13 to $15 an hour—“real decent money around here,” as one maintenance worker told me, especially for a workforce where many had never graduated high school—with two to three weeks of vacation and a blue-chip health plan. Employees stuck around for years, knew their jobs inside and out, and had a rare esprit de corps. When they faced tight deadlines, fabricators would volunteer to come in as early as 4 or 5 a.m. so they could get a head start before the paint crew arrived at six. In December 2009 the Sparta facility was named by IndustryWeek as a Best Plant of the year, one of the top ten in North America. In the months that followed, it won Best Plant within Philips’s global lighting division as well as the firm’s global “Lean Challenge.” That summer, plant managers invited state officials and legislators to Sparta to celebrate.
Then, one morning in November 2010, a Philips executive no one recognized drove up and walked into the plant, accompanied by a security guard wearing sunglasses and a sidearm. He summoned all the employees back to the shipping department and abruptly announced that the plant would be shut down. Though the workers didn’t know it at the time, most of their jobs would be offshored to Monterrey, Mexico. The two of them then walked out the door and drove off. “It was a shock, I’ll tell you,” Ricky Lack said more than two years later. Still brawny in his late fifties, he’d hired on at the plant in 1977, when he was nineteen years old. “My dad worked there,” he said. “Half the plant’s mom or dad or brother worked there. We still don’t know why they left.”
If you listen to any mainstream economist—say, former White House economic advisor Gregory Mankiw, the author of one of the nation’s most popular economics textbooks—you’ll learn that “productivity growth is good for American workers.” Productivity goes up, and with it comes rising prosperity for all. As Adam Davidson, the popular economics guru of Planet Money and the New York Times Magazine, wrote recently, “Productivity, in and of itself, is a remarkably good thing. Only through productivity growth can the average quality of human life improve.”
American workers are astonishingly productive. In fact, American labor productivity has grown every single year for the past three decades, according to the Bureau of Labor Statistics. US productivity zoomed up after the most recent financial crash, rising sharply from 2008 to 2009, and again from 2009 to 2010. By contrast, productivity actually shrank during this period in such industrialized nations as Japan, Germany, and the UK. Sure, a share of these productivity gains are due to American firms outsourcing and offshoring jobs to cheap labor markets, but the bulk of it comes from American workers adapting to new, more efficient technologies and working harder and faster than ever before—and for less pay.
Politicians on both sides of the aisle tend to lean on American productivity as the solution to our current economic woes, a phenomenon in force during the last presidential campaign. “I know we can out-compete any other nation on Earth,” Barack Obama told the nation in a weekly address in January 2011. “We just have to make sure we’re doing everything we can to unlock the productivity of American workers, unleash the ingenuity of American businesses, and harness the dynamism of America’s economy.” Mitt Romney, too, argued that “[a] productivity and growth strategy has immediate and very personal benefits,” and that “economic vitality, innovation, and productivity are inexorably linked with the happiness and well-being of our citizens.” The idea being that if we sprinkle a little stimulus money here or some deregulation there, depending upon your orientation, American workers will somehow, through sheer grit and generous doses of Red Bull, be able to dig deep and work even faster, even harder, and even more efficiently than before—even though they’ve been doing so for decades—thereby jump-starting our economic engine. After that, the sky’s the limit.
So why didn’t this play out for the ferociously productive workers at Philips’s award-winning plant in Tennessee?
Norris spent her teenage years doing 4-H and helping out at her grandfather’s hardware store. She also went to five different high schools as her father chased work. This experience is why, in her early thirties, after several years doing human resources in the auto and defense industries, she started her own consulting firm dedicated to helping plants implement lean manufacturing principles and union avoidance, in an effort to save jobs in central Tennessee. “In all of my eleven years I never had a plant that left the area that I was involved with,” she told me proudly. “I was able to say nothing’s ever left. Nothing’s left the building.”
In late 2008, she got a call from Dave Uhrik, a veteran operations manager she deeply admired, who broke the news that he’d been hired on to manage a plant near Sparta, just down the road from where Norris grew up. The large factory produced commercial lighting fixtures and had recently been acquired by Philips, the $39 billion Dutch multinational best known for its vast array of consumer products, from light bulbs to electric toothbrushes to television sets. It took Norris “exactly twenty-seven minutes” to decide that she was going to sell her business and join what Uhrik pitched as “the dream team.” It was barely half the pay, but it was a chance to put all of her ideas into practice, to be part of “the best of the best,” a model for what was possible in American manufacturing. “It was like, Oh, my goodness, we could do great things!”The humming Sparta plant had it all. For one thing, the town is within a day’s haul of most US markets—from New York and Chicago to Atlanta, St. Louis, and Dallas. Tennessee has decent, well-maintained highways. The plant was union—a new experience for Norris—but this IBEW local was steely-eyed about keeping and creating jobs; it had, for example, accepted a two-tier pay scale and surrendered contract protections in order to attract a highly automated production line from New Jersey. The press for that new line, known as a Bliss, was nearly three stories high (so big it had to be anchored twenty feet underground) and could stamp out eight or ten massive commercial fluorescent fixtures every minute. It attracted lucrative contracts from hospitals, prisons, grocery-store chains, and Walmart supercenters. Norris called it “a monument.” Brent Hall, the union rep, described it as a beating heart. “Every time that press rolled over,” he said, “the whole building would shake.”
Other production lines at the plant could push out smaller, custom products tailored to the needs of a specific buyer. A whole swath of the maintenance crew had been sent, on the plant’s dime, to get certified as industrial electricians and welders and millwrights so that they could retool machines on the fly, switching production from one job to the next in a matter of minutes. “Anything they wanted, we’d build it for them,” Scott Vincent, one veteran electrician told me. With Uhrik and Norris at the helm, the plant started buying steel and other inventory on consignment, and trimmed turnaround times to the point that its invoices would be getting paid before the bills on raw materials were even due. Tasked with cutting costs by $4 million, the management team tapped employees to identify inefficiencies in the assembly process, worked with suppliers to reduce components costs, and drastically reduced the number of products with defects. The plant boosted productivity by 7 percent and kept labor costs low, at around 4 percent. Still, thanks to the union, most workers were earning $13 to $15 an hour—“real decent money around here,” as one maintenance worker told me, especially for a workforce where many had never graduated high school—with two to three weeks of vacation and a blue-chip health plan. Employees stuck around for years, knew their jobs inside and out, and had a rare esprit de corps. When they faced tight deadlines, fabricators would volunteer to come in as early as 4 or 5 a.m. so they could get a head start before the paint crew arrived at six. In December 2009 the Sparta facility was named by IndustryWeek as a Best Plant of the year, one of the top ten in North America. In the months that followed, it won Best Plant within Philips’s global lighting division as well as the firm’s global “Lean Challenge.” That summer, plant managers invited state officials and legislators to Sparta to celebrate.
Then, one morning in November 2010, a Philips executive no one recognized drove up and walked into the plant, accompanied by a security guard wearing sunglasses and a sidearm. He summoned all the employees back to the shipping department and abruptly announced that the plant would be shut down. Though the workers didn’t know it at the time, most of their jobs would be offshored to Monterrey, Mexico. The two of them then walked out the door and drove off. “It was a shock, I’ll tell you,” Ricky Lack said more than two years later. Still brawny in his late fifties, he’d hired on at the plant in 1977, when he was nineteen years old. “My dad worked there,” he said. “Half the plant’s mom or dad or brother worked there. We still don’t know why they left.”
If you listen to any mainstream economist—say, former White House economic advisor Gregory Mankiw, the author of one of the nation’s most popular economics textbooks—you’ll learn that “productivity growth is good for American workers.” Productivity goes up, and with it comes rising prosperity for all. As Adam Davidson, the popular economics guru of Planet Money and the New York Times Magazine, wrote recently, “Productivity, in and of itself, is a remarkably good thing. Only through productivity growth can the average quality of human life improve.”
American workers are astonishingly productive. In fact, American labor productivity has grown every single year for the past three decades, according to the Bureau of Labor Statistics. US productivity zoomed up after the most recent financial crash, rising sharply from 2008 to 2009, and again from 2009 to 2010. By contrast, productivity actually shrank during this period in such industrialized nations as Japan, Germany, and the UK. Sure, a share of these productivity gains are due to American firms outsourcing and offshoring jobs to cheap labor markets, but the bulk of it comes from American workers adapting to new, more efficient technologies and working harder and faster than ever before—and for less pay.
Politicians on both sides of the aisle tend to lean on American productivity as the solution to our current economic woes, a phenomenon in force during the last presidential campaign. “I know we can out-compete any other nation on Earth,” Barack Obama told the nation in a weekly address in January 2011. “We just have to make sure we’re doing everything we can to unlock the productivity of American workers, unleash the ingenuity of American businesses, and harness the dynamism of America’s economy.” Mitt Romney, too, argued that “[a] productivity and growth strategy has immediate and very personal benefits,” and that “economic vitality, innovation, and productivity are inexorably linked with the happiness and well-being of our citizens.” The idea being that if we sprinkle a little stimulus money here or some deregulation there, depending upon your orientation, American workers will somehow, through sheer grit and generous doses of Red Bull, be able to dig deep and work even faster, even harder, and even more efficiently than before—even though they’ve been doing so for decades—thereby jump-starting our economic engine. After that, the sky’s the limit.
So why didn’t this play out for the ferociously productive workers at Philips’s award-winning plant in Tennessee?
by Esther Kaplan, VQR | Read more:
Image: David M. Barreda
