Manufacturing profitably in the United States seems to be a problem for American management. Why is it not so for Brazilians?
I wonder whether, rather than an actual lack of profitable investment opportunities, a major cause for the decline of well-paying manufacturing jobs in this country is due to American hubris, combined with a decline in business management capabilities, substituted by rapacious focus on personal reward through outrageous levels of top management financial rewards.
The following is one of many examples of how foreign management resources can reignite the candles of hope for decent-paying American manufacturing employment, an ability the locals seem to have lost.
CNN Money's Manitowoc plant gets second chance to make cookware tells the story of how Tramontina, a company located in the southern Brazilian state of Rio Grande do Sul, in 2005 was able to acquire vacant cookware production facilities in Manitowoc, Wisconsin after its U.S. owners had abandoned it for cheaper labor costs in Mexico. According to the Cookware Manufacturing Association, 63% of all cookware and bake ware goods sold in the United States are manufactured abroad, a fact which the Brazilians saw as an opportunity rather than a threat.
How did this come about? Tramontina was looking for a way to get a "Made in America" label on high volume product offerings to retailers like Wal-Mart, Sears, Costco and others. Pots and pans now manufactured at the Manitowoc plant are shipped to another U.S. production facility operated by Tramontina in Houston, where final product assembly, packaging and shipping to U.S. customers take place.
The Manitowoc plant even came with its own aluminum production facilities, which enables Tramontina to recycle process waste on site without added transportation costs. As a matter of fact, the plant is even shipping aluminum raw materials to facilities in other countries, including to Tramontina's main plant is Southern Brazil.
Manitowoc mayor Kevin Crawford was quoted as saying that he is delighted to have Tramontina in town. "Antonio Galafassi - the local Brazilian CEO - is an amazing individual," Crawford said. "He treats all the people right. The employment was very important and the plant opening helped the esprit de corps of the whole city." Crawford said the Tramontina operation shows that a company can produce this product at a competitive cost at U.S. wage rates.
Why is it that U.S. management no longer seem to be able to do the same?