COMPANY: Aluminum Company of America CORPORATE ADDRESS: 1501 Alcoa Building Pittsburgh, Pennsylvania 15219 PLANT/BRANCH ADDRESS: 300 S. Hall Road Alcoa, Tennessee 37701 SIZE (employees): 1,950 UNION(S): United Steelworkers of America INDUSTRY: Primary aluminum and rolled stock SIC CODE: 3334 NEAREST METRO AREA/MILES: Knoxville, TN (12 miles) CONGRESSIONAL DISTRICT: TN-02 SECTOR: Private OWNERSHIP: Publicly traded corporation. Stock symbol -- AA. Stock listed on the New York, Basel, Brussels, Frankfurt, Geneva, Lausanne, London, and Zurich exchanges and traded (not listed) on the Boston, Midwest, Philadelphia, Pacific and Cincinnati stock exchanges. CEO/PRESIDENT: Paul O'Neill Chairman and CEO 1501 Alcoa Building Pittsburgh, PA 15219 CONTACTS: Leonard Stinnett Human Resources Manager Alcoa 300 South Hall Road Alcoa, Tennessee 37701 (615) 977-3040 Tom Moore President, Steelworkers Local 309 P.O. Box 657 Alcoa, Tennessee 37701 (615) 982-8142 DATE: December 15, 1994 COMPANY DESCRIPTION: The Aluminum Company of America (ALCOA) is one of the largest producers of primary aluminum and aluminum products in the world. ALCOA developed the earliest technology for the production of primary aluminum. The company was founded in Pittsburgh in 1888 as the Pittsburgh Reduction Company. In 1907, the company adopted its present title. It is an international corporation and employs almost 65,000 people throughout its worldwide operations. ALCOA has aluminum and chemical facilities in Arkansas, Tennessee, Florida, Georgia, Texas, Louisiana and six foreign countries; smelting plants in Indiana, New York, North Carolina, Tennessee, Texas, Washington, and three foreign countries; aluminum fabricating facilities in Arizona, California, Louisiana, Maryland, North Carolina, Georgia, Indiana, Pennsylvania, Tennessee, and seven foreign countries, and non-aluminum products in Indiana, Mississippi, and four foreign countries. Annual revenues are over $10 billion. The production workers in the Alcoa, TN, plant have been represented by the United Steelworkers of America, Local 309, for almost fifty years. TRAINING AND CONTINUOUS LEARNING: Training is a major activity at the Alcoa, TN, plant. The plant has an ongoing apprenticeship program and trains all of its skilled craft and maintenance workers through the apprenticeship program. The Company has an educational resource center that offers employees training in everything from remedial reading and mathematics to courses that are part of a technical degree program at a nearby technical college. There is continuous training on-site in a wide variety of production-related areas such as statistical process control, problem solving, etc. The Company utilizes both its in-house staff and outside consultants to present this training. All of the training provided is designed in-house by ALCOA employees, with help from educators from Pellissippi State College. The Company has a tuition refund program that pays college tuition for employees who take courses that lead to a degree or certification. The Company has a training staff to assist the various departments in assessing their training needs and determining training strategies. Overall, employees at ALCOA spend between 5 and 8 percent of their time in training. EMPLOYEE PARTICIPATION: Employees in some of the areas in the plant are organized into work teams that have virtual control of many functions that are traditionally identified with management in other organizations. The goal is to significantly reduce the need for direct supervision throughout the operations. In some cases, the work teams have no direct supervision but are led by a lead person who acts as a team leader. The team leader is rotated among team members so that leadership opportunities are shared and leadership abilities are widely developed within the workforce. In some areas in the plant, the traditional time clock has been eliminated. The work teams, in some areas, have a wide area of authority to make product and process decisions. In a continuous process operation, frequent decisions are required. Within preset parameters, decisions regarding work and work processes are left to the production workforce, with supervisors acting as coaches and providing technical support. Teams, however, make no hiring or firing decisions. The work teams have the opportunity to meet with customers and suppliers. The Company sends teams that include production workers to the premises of its customers and has customers visit the plant. During these visits, customers and the workers making their product have an opportunity for direct contact and discussions. The same is true of suppliers of raw materials, machinery, etc. The Company is in the process of flattening its organization and is pushing decisions downward in the organization. When present plans are fully implemented, two of the traditional layers of management will have been eliminated and the responsibilities of management will have been redefined. ALCOA puts a great deal of emphasis on safety. Joint union- management safety teams are very active and get involved very early in decisions that have safety implications, such as the purchase and installation of new machinery and equipment, safety implications of process changes, etc. The safety record of the Company and this plant have dramatically improved in recent years and Alcoa's safety record is among the very best in American industry. Alcoa also employs ad hoc teams to investigate and devise solutions to specific problems. For example, four separate teams were established to help the company implement a new materials handling process. ACCESS TO INFORMATION: Employees in this plant receive a continuous stream of information on financial conditions, process performance, status of marketing plans etc. This Company intends to have a very open internal communications process that encourages information flow upward, downward, and laterally. It is in the process of installing video monitors in break areas throughout the plant to provide up-to-date information on a twenty-four hour basis. There are regularly published plant and company communications that cover a wide variety of topics of interest to employees. In addition, there are many departmental and work group meetings of all types. Conducting these meetings is considered a responsibility of departments and work areas. The Company conducts regular employee surveys and considers this an important and confidential feedback mechanism for employee concerns. ORGANIZATIONAL STRUCTURE: The organizational structure in the Alcoa, TN plant is undergoing transformation from a typically hierarchial organization to one that is flatter. Decision making responsibility and authority is being moved toward the shop floor as the self managed work teams proliferate. When the transformation is complete, there will be two fewer layers of management between the production worker and the works manager. Close relationships with both suppliers and customers are maintained. As noted above, employees are empowered to meet with both customers and suppliers on an ongoing basis. ALSO suppliers and customers are constantly brought into the plant and ALCOA employees often tour the facilities of customers and suppliers. EMPLOYMENT SECURITY: The American aluminum industry and the Alcoa corporation have been buffeted by the same economic and competitive forces that have impacted much of the rest of American industry. Very recently the most recent impact was provided by extensive exports of primary aluminum by the former Soviet Union. In the last ten years, the Alcoa plant has undertaken an extensive modernization of its processes and equipment (approximately $800 million has been spent on this effort). The result has been a significant restructuring of the operation and significantly reduced labor requirements. During this period, the Company has attempted to cushion the blow of downsizing by offering retirement incentives, outplacement services, transfer and retraining opportunities, etc. Despite its best efforts, there are still significant numbers of employees on layoff. Under the collective bargaining contract, employees whose jobs become redundant may, by virtue of seniority, bump into other areas. These employees are entitled to training to bring their skills into line with the job demands. SUPPORTIVE WORK ENVIRONMENT: The company has established many of the usual benefits for employees such as employee assistance programs, civil rights programs, health care benefits, etc. In addition, emphasis is placed on employee safety and health and a number of joint committees have been established to increase safety and health at the plant. PRODUCT/SERVICE QUALITY: The company is meeting the challenge of the marketplace in providing a high level of quality and service to its customers. Because the company competes in a world market, ongoing quality improvement and a quality reputation are vital. The ALCOA plant is a state-of-the-art rolling mill and quality products are an expected output. The establishment of teams which include production workers has served to emphasize the need to not only serve, but to anticipate customer needs. The Company promotes direct contact and consultation between customers and the work teams that produce for that customer. The Company has the capability to tailor alloys and to developo physical characteristics of roll products to meet the customers needs. The plant is presently pursuing ISO 9000 certification and expects to be certified as ISO 9002 compliant. COMPENSATION LINKED TO PERFORMANCE: Within the labor agreement, there is a wage structure of the traditional type. In addition, the company has a plant-wide gainsharing system. This system is not tied to profits (since aluminum prices, and consequently profitability, are subject to significant fluctuations). The system is instead tied to measures critical to the success of the operations, such as quality, cost and safety. Thus, excellent performance in the plant will trigger the bonus payment system even if the marketplace is temporarily depressed. WORKER-MANAGEMENT RELATIONS: The Alcoa plant offers an example of a mature plant with traditional union-management relations developing a relationship that meets the new competitive needs of the 1990s. The Union and company have established a large number of joint committees to anticipate and work on problems before they become serious. STRATEGIC INTEGRATION OF BUSINESS: The human resource function is important in the plant and is an active part of the overall strategic planning activity that foresees future needs and opportunities and the human resources impacts and needs of technological improvements. The Alcoa, TN, plant is highly computerized, employing more than 1,000 microcomputers connected to a local area network. In turn, the Tennessee plant is connected to other ALCOA facilities through a wide-area network. REMARKS: ACCOMPLISHMENTS/AWARDS: SERVICE PROVIDERS: Alcoa uses the local state college and its faculty (Pellissippi State) as consultants in designing training programs and delivering some these programs. REFERENCES: Inglesby, Tom, "Bringing the Past into the Future," Manufacturing Systems, February 1993, pages 34-37. ------------------------------------------------------------------- COMPANY: Ames Rubber Corporation CORPORATE ADDRESS: 2347 Ames Boulevard Hamburg, New Jersey 07419 PLANT ADDRESS: SIZE (employees): 425 UNION(S): Non-union INDUSTRY: Rubber products and office machine components SIC CODE: 3069 NEAREST METRO AREA/MILES: Newark (45 miles) CONGRESSIONAL DISTRICT: NJ-05 SECTOR: Private OWNERSHIP: Private PRESIDENT/CEO: Joel Marvil Ames Rubber Corp. 2347 Ames Blvd. Hamburg, N.J. 07419 CONTACTS: Bob Kenna Personnel Director Ames Rubber Corp. 2347 Ames Boulevard Hamburg, NJ 07419 (201) 827-9101 Charles A. Roberts VP, Total Quality Ames Rubber Corp. 2347 Ames Boulevard Hamburg, NJ 07419 (201) 209-3200 Fax: (201) 827-8893 DATE: 11/15/94 COMPANY DESCRIPTION: Founded in 1949, Ames Rubber Company is a family owned, closely- held company located in Hamburg, New Jersey. Ames manufactures rubber rollers for office machines and specialized parts used to protect the transaxle of front wheel drive vehicles. Ames has become the world's leading manufacturer of rollers for mid to large sized copiers and has annual sales of $45 - $50 million. TRAINING AND CONTINUOUS LEARNING: Ames provides it's employees with extensive training in such areas as statistical process control, quality techniques, management and leadership skills, and communication skills. Employees are also instructed in "Pareto analysis ", which enables each employee to separate the vital few from the trivial many. Each new employee receives an initial 24 hrs. of Quality training followed by 40 hours of training on an annual basis. The first major obstacle Ames faced was the realization that a considerable amount of Ames staff lacked proficiency in basic reading and math skills. In cooperation with Sussex County Community College, Ames offers their employees a three tier education improvement plan geared towards making the employee a more productive member to the company as well as society. The first of the three tiers, which offers basic courses in remedial math and basic literacy, can be taken during work time. The Second tier intermediary classes prepare employees for the third tier which gives employees the opportunity to obtain their High School Equivalency Certificate (GED). Ames also offers a tuition assistance program in which enables employees to take college credit classes towards any degree up to a Masters with 100 percent reimbursement from the company upon completion. EMPLOYEE INVOLVEMENT/PARTICIPATION: All employees at Ames Rubber Inc. participate in monthly "involvement group" where corporate information is exchanged and at which employees discuss product quality, compensation, safety, and new ways to improve the efficiency and workings of Ames' daily activities. Involvement group members rotate the meeting roles of leader, secretary, scribe, facilitator, and timekeeper at each meeting. Meetings last approximately one hour and any problems that are identified for improvement are passed on to task teams. Task teams meet to develop solutions to problems. ACCESS TO INFORMATION: Employees at Ames are able to monitor both the company and specific divisions profits and costs. A monthly financial sheet is posted to inform the employees of the company position, and a financial statement is also made available twice each fiscal year. ORGANIZATIONAL STRUCTURE: Ames has a traditional hierarchical structure, but has developed an open door policy with regards to employee suggestions and ideas. EMPLOYMENT SECURITY: Fluctuations in employment needs have been taken care of through attrition or temporary workforce. Employee turnover has dropped from over 80 percent to under 7 percent due to the combined benefits of training and profit sharing programs implemented. SUPPORTIVE WORK ENVIRONMENT: Ames attempts to promote an egalitarian teamwork philosophy and thus each employee is called a "Teammate" to accentuate this idea. The company has taken great caution in making its plants some of the cleanest plants in the rubber industry, and each employee is taught to take great pride in their workplace. Safety committees, made up of employees from all areas of the company, were set up to ensure safety throughout the workplace by meeting and exceeding required OSHA standards. Safety presentations on a wide variety of subjects are given to employees. Ames' three production facilities are also involved in head to head competition in which the facility maintaining the safest workplace can receive an annual bonus of up to $100 per employee. Ames promotes safety by posting signs in the production areas to let employees know how long there facility has been accident free. Accidents have been on a downward shift for the last 5 years. Mandatory drug testing, a part of the selection process at Ames, promotes a safer work environment. Teammate participation in the above mentioned groups allow the opportunity to suggest improvements in areas ranging from compensation to safety. Employees exiting the company are interviewed concerning their reasons to gain improvement ideas. PRODUCT/SERVICE QUALITY: In 1987, Ames announced a program entitled "Excellence through Total Quality" designed to promote a common vision for all employees - Total Quality. To implement the process,seventeen thousand training hours were delivered to ensure that each employee understood and was committed to the mission of becoming a Total Quality company. A steering team was formed to develop the TQ process. This team developed a strategy which included two important features of Ames total quality training: The Quality Improvement Process (QIP) and the Problem-Solving Process (PSP). The Quality Improvement Process is a nine-step process involved in identifying and satisfying customer requirements. The Problem- Solving Process is a six step process designed to help employees recognize the best solution to a problem. A quarterly meeting is held to review short- and long-term goals. Ames is committed to it's customer service. All of the products are designed-to-order to meet customer specifications. Ames offers a refund to customers for prototypes that do not meet the customers' expected standards. Ames also maintains close contact with its customers and suppliers through the company's continuous Supplier / Customer involvement program. All employees participate in an "involvement group" meetings to brainstorm and present new ideas. Ideas are then passed on to smaller task groups which meet on a weekly basis to develop problem solving strategies, and to implement new ideas. Involvement group ideas have saved the company $3 million over the last 5 years, and averaged roughly $2,700 per employee in 1993. Manufacturing times of some products have been cut from 4 weeks to just 1 week. One team redesigned a basic production process which saves Ames 600,000 per year. Ames has also reduced it's supplier base from 42 to 19, by selecting companies whose quality performance averages at least 99 percent. This emphasis on quality management has enabled Ames to cut its number of quality inspectors by 50 percent, with inspectors focusing on the inspection of incoming parts. Ames has also reduced the number of defective parts to customers from 33,000 parts per million to just 50 parts per million. COMPENSATION LINKED TO PERFORMANCE: Profit sharing has been a very effective means of motivation for Ames employees, as can be attested by the profit results. A profit hurdle is set each month as a goal for all employees to attempt to achieve. Any profits above this hurdle are placed in a pool to be distributed twice yearly, in July (summer vacation), and in December (Christmas). Involvement groups, task teams, or individuals may be recognized for suggestions which benefit the company. The most prestigious award is the Presidents Award which is awarded annually. Additionally, employees receives a general increase annually to adjust for cost of living and are eligible for merit pay increase on the anniversary date of their employment. ACCOMPLISHMENTS/AWARDS: Ames Rubber Inc. has managed to continuously increase its revenue over the past 5 years to $50 million annually. Productivity, measured by sales per teammate has increased by 48 percent between 1989 and 1992. Ames has received a number of awards and recognition, the most coveted being the 1993 Malcolm Baldrige Quality Award for small businesses. Ames' Chairman, President and CEO, Joel Marvil, has been named " Man of the Year" by the Rubber Manufacturers of America. REFERENCES: Schroer, Judith. 1993. "Ames Rubber met Xerox quality challenge" USA Today, 10/20/93, NIST. 1993. "1993 Award Winner"- Malcolm Baldrige National Quality Award Winner, Gaithersburg, Md. ------------------------------------------------------------------- COMPANY: Aqualon CORPORATE ADDRESS: Hercules Inc. P.O. Box 15417 Wilmington, Delaware 19850 PLANT/BRANCH ADDRESS: Aqualon-Hercules 1 Mill Street Kenedy, Texas 78119 SIZE (employees): 82 UNION(S): American Federation of Grain Millers INDUSTRY: Water soluble polymers SIC CODE: 2899 NEAREST METRO AREA/MILES: San Antonio, TX (60 miles) CONGRESSIONAL DISTRICT: TX-15 SECTOR: P OWNERSHIP: Subsidiary of Hercules, Inc. CONTACTS: Dickie Custer Employee Relations Manager Aqualon-Hercules 1 Mill Street Kenedy, TX 78119 1-800-292-3445 Lee Hext President Local 257 American Federation of Grain Millers Aqualon-Hercules 1 Mill Street Kenedy, TX 78119 1-800-292-3445 Oscar Danmier Aqualon-Hercules/AFGM Local 257 1 Mill Street Kenedy, TX 78119 1-800-292-3445 DATE: 2/14/95 COMPANY DESCRIPTION: The Aqualon-Hercules plant in Kenedy, Texas manufactures water soluble polymers, made from the Guar plant which is imported from Pakistan and India. The Kenedy plant has total employment of 82 people. The plant produces 20 million pounds of polymers per year, primarily for the oil and gas market. The plant was originally built as a General Mills facility in the 1950s, and was later sold to the Henkel Corporation. The water soluble division later merged with Hercules, Inc. to form Aqualon and created the Aqualon division. The Henkel share of the plant was later bought out by Hercules. In the 1960s, the plant was unionized and today the Aqualon employees belong to Local 257 of the American Federation of Grain Millers. TRAINING AND CONTINUOUS LEARNING: Plant and union officials estimate that approximately 15 percent of employee time is spent in training and development activities, most of which is accomplished as on-the-job training. Two staff people at the 82-person plant have a dedicated function as trainers. Over the past year, the union has played a more active role in the plant's training and development program. Many union members today serve as trainers, and with certain training courses such as fire training, the union administers and conducts all the training. The Kenedy plant offers full tuition reimbursement to employees who participate in outside educational and training classes. EMPLOYEE PARTICIPATION: Self-directed work teams have full responsibility for running plant operations without supervision. The teams make all decisions regarding scheduling of work, time card approvals, disbursement of checks, and fire and accident reports. Through regular team meetings, team members are consulted about all major plant projects. No project can be approved without the consent of the work teams. Team members fully participate in equipment changes and new technology decisions. During team meetings, Aqualon engineers listen to team members to get their ideas for making technology and equipment improvements. Team members also regularly visit other work sites to test new equipment. Major plant decisions, including financial decisions and decisions regarding layoffs, are made by a Plant Steering Committee which is made of roughly equal numbers of management and union representatives. Union representatives are involved not only in decisions regarding layoffs of production workers, but also layoffs of management and support personnel as well. The president of the local union also is a member of a corporate strategy team that makes decisions regarding business strategy, pricing, and sales of the company's Guar-based products. ACCESS TO INFORMATION: All Aqualon employees have e-mail accounts and access to computer terminals on the shop floor, through which they can access the minutes of plant steering team meetings and receive any financial information for the plant. All financial information is available to employees. At team meetings, team members also get regular updates on plant financial and operating information. ORGANIZATIONAL STRUCTURE: In response to fluctuating sales from the declining gas and oil market, the Aqualon Kenedy plant was reorganized in 1991 in an effort to make the plant more productive and prevent a potential shut-down. A joint team was formed by Aqualon management, with input from the local union, to review business conditions and operating practices and develop a comprehensive plan for continuous improvement. The team was comprised of four plant management representatives and four members selected by the union. For three months, the team met continuously offsite, and eventually produced the Improved Operating Plan (IOP) , which called for self-directed work teams as well as the development of a plant steering team composed of both management and union personnel. The plant steering team, comprised of members of the Kenedy support staff group, the local union president, and three union members, makes all financial and layoff decisions. A separate business team, comprised of production team members, acts as an implementation team, makes project and financial decisions, addresses team conflicts, discipline issues, production problems, personnel assignments, scheduling conflicts, and support team needs (i.e. environmental, safety), and focuses on customer concerns and needs. The Improved Operating Plan realigned plant personnel into two primary teams, the Basic Guar Team and the Derivatives Team, focused around the plant's product alignment. Today, the Derivatives group is comprised of three self-directed work teams, while the Guar group consists of one main self-directed team. Originally, team leaders were union members with greatest seniority, but now team members take turns as leaders. Extra pay provided to the team leader is now distributed equally among the team. The self-directed work teams have all responsibility for running the plant. As stated in the most recent labor contract, "the goal of the Kenedy work force is to consist of work teams, which will be self managed and cooperate jointly with each other and management in performing the following activities and any additional duties as may be jointly developed: manufacturing quality product to schedule; assisting in the budgeting process and performing to budget; housekeeping; improving employee safety and health; maintenance of equipment; material and inventory control; participate in training and provide training for others; manpower scheduling; minimizing absenteeism; discipline; obtain supplies; keep records; understand and support the team concept; assist in constructive evaluation of individual performance; maintain proficiency in required job skills; and assist in hiring and filling openings within the team." EMPLOYMENT SECURITY: Because of increased competition from foreign imports, the Kenedy plant recently experienced layoffs of 6 positions in September, 1994: four union production workers and two support staff workers. Layoff decisions, like all plant decisions, are made with joint union and management participation. Union members even participate in all decision making regarding layoffs of non-union management and support staff. Plant and union officials indicate that such joint cooperation has allowed for the maintenance of a strong labor/management partnership, despite the real threat of layoffs. The plant's layoff policy is spelled out in the labor contract. The contract states, "In the event of a layoff, department seniority shall first apply and then plant seniority with respect to all employees. The practice will be to first ask for volunteers. If sufficient volunteers are not obtained, employees having the longest department seniority will be retained. The employees not qualifying for retention within the department shall be entitled to exercise their plant seniority. Employees with the shortest plant seniority will be laid off, if possible." Outplacement services are provided to those employees subject to involuntary layoffs. Employees on involuntary layoff status continue to accrue seniority and retain recall rights for eighteen calendar months following the layoff. SUPPORTIVE WORK ENVIRONMENT: The plant has a safety steering committee comprised of both management and labor representatives, and employees from each of the different work areas. Members of the team devised the plant's safety program, and they receive additional safety training and instruction. The safety team members serve as experts to the plant's various work teams, and they are responsible for safety investigations, reports, and discipline. Because of the dangerous chemicals used in some of the plant's production process, all employees receive special training in chemical safety issues. The plant's attention to safety has paid off. OSHA TRR ratings which once hovered in the 4 to 7 range, last year were between 1 and 2, indicating a dramatic decrease in both lost-time and total accidents. The Kenedy plant was recognized by the parent company, Hercules, Inc., as having the fewest number of work hours without a lost-time accident. The plant operates on a flex-time basis, and all scheduling decisions are made directly by the teams, which enables to be able to deal with family issues and emergencies. Everyone in the plant recently participated in a full-day diversity training program. PRODUCT/SERVICE QUALITY: The Kenedy plant recently received ISO 9002 certification. During efforts to achieve certification, the plant was reorganized around self-managed work teams and all supervision positions were eliminated. In preparing for the certification process, this reorganization meant that the plant's operators had to write the procedure manuals on which the certification was based. ISO certification is basically a check to see if operators follow the specifications spelled out in the approved procedures. Since operators were heavily involved in writing the procedure manuals and followed their own self-designed methods, the plant passed the ISO certification during their first examination, a feat accomplished by only 5 percent of organizations that apply for ISO certification. COMPENSATION LINKED TO PERFORMANCE: Production operators receive base salaries based on salary levels set by negotiations at the plant, corporate, and international union level. All Kenedy employees also participate in the Kenedy Variable Merit Plan. As spelled out in the labor contract, "Merit increases may be given once per year and may be paid as a lump sum or as a combination of lump sum and increase in base salary." The amount of the merit increase is based upon business performance and the accomplishment of established annual goals. The plant steering team is responsible for recommending the annual goals, and the amount of the merit increase is approved by the Aqualon management. The annual goal is a combination of factors that include meeting specific targets with regard to Return on Capital, quality, safety, and environmental efforts. In 1993, a banner year for the plant, every employee received a merit payout of 4.4 percent of their salary (the maximum salary percentage payout) plus an extra $1200 payout bonus. Bonuses were not given for 1994 because the plant failed to meet its return on capital goal, mainly due to lower sales as a result of higher prices and increased import pressure. Because the plant did meet all its operating goals, however, each employee was given a $500 bonus. In addition to the merit pay plan, the Kenedy plant also has a pay-for-skills program. Unlike other plants where employees receive extra pay for achieving broad skills in a number of different work areas, the Kenedy plan is based on certifications that workers have achieved advanced expertise in their own specific work areas. Experienced senior operators perform evaluations for skill level certifications, which lead to increased base pay for operators. WORKER-MANAGEMENT RELATIONS: Local 257 of the American Federation of Grain Millers at Kenedy Aqualon was partly responsible for initiating the plant reorganization and other work changes which enabled the plant to make significant improvements in its competitive position. In 1990, faced with significant financial losses and layoffs at the plant, local union leaders approached a corporate official about a possible plant reorganization. The corporate official commented that he knew many of the operators with 30 years experience had the "equivalent of a Ph.D.," but that they were not being listened to by management. This led to the Improved Operating Plan, which was jointly produced by a union/management team, a plant steering committee comprised of both union and plant representatives, and the work reorganization around self-directed work teams without supervisors. Since that time, labor-management relations at the plant have been extremely cooperative. The Employee Relations Coordinator at the plant is a former union official who was instrumental in initiating the work reorganization. In early 1994, the plant participated in a three-day future search conference, designed to assess the state of the plant, examine strengths and deficiencies of the labor/management relationship, and explore possibilities and develop strategies and action plans for a preferred future. The collective bargaining process began shortly after the conference on May 31, 1994, and concluded only seven working days later with the signing of a new three-year labor contract that was reduced from 50 to seven pages. Negotiations were based on an interest-based model, where issues were presented not as positions, but rather as solutions to be worked out by everyone. The current trust and understanding that exists between management and workers at the plant is demonstrated in the language of the contract which is flexible, oriented to the future, and is focused on shared values. An example is the language dealing with the resolution of employee problems that states: "In the event that a misunderstanding or complaint arises under this agreement, an earnest effort shall be made to settle the matter promptly. There is no limit on the nature of issues which may be referred to this process by employees, the union or the company. The process will be used to advance positive ideas as well as to examine perceived wrongs. The only qualifications are that the affected person(s) certify the issue as a responsible one of genuine concern and thereafter participate first hand in its resolution in the following manner: Step 1.A conference between the employee and a union representative. Step 2.A conference between the employee and a management representative (union representative present at the employee's discretion). Step 3.If no settlement is reached the complaint shall be reduced to writing and presented to a member of management within ten (10) working days of the occurrence of the incident. An effort will then be made to resolve the issue locally through the principles of interest negotiations and issue analysis. Step 4.If not resolved within three (3) months of being referred to Step 3, the issue is automatically referred to arbitration." STRATEGIC INTEGRATION OF BUSINESS: Design criteria in the Kenedy plant reorganization were focused on three main areas: people, work teams, and management. Work was designed so that people contributed ideas, were fair, honest, and trustworthy, demonstrated pride and ownership, and were customer/community focused. Work teams were designed to respect and value other team members, and be flexible and goal-oriented with multi-skilled members. The management function at the plant was designed to eliminate barriers, provide training and development, recognize performance, act as a resource for the work teams, allow decision making at the lowest possible level, and promote union and management cooperation. REMARKS: Plant and union officials have jointly presented at the Ecology of Work Conference in Dublin, Ireland and Detroit, Michigan. ACCOMPLISHMENTS/AWARDS: The labor-management team that designed the Improved Operating Plan set as a minimum goal to achieve a 16 percent return on capital (ROC) by 1996. Within a year of the new work redesign around self-directed work teams, however, the plant achieved a 20 percent return on capital. Furthermore, the non-conforming products level was reduced to 1 percent, and employees discovered a way to salvage 1 million pounds of product devalued as reject, saving the plant over $1 million. Recently the plant has faced harder times, as a result of increased pressure from foreign imports. In 1994, the plant experienced a return on capital of only 2.8 percent. Plant officials estimate, however, that the work redesign actually enabled the plant to achieve a positive ROC figure, which resulted in profits over $200,000 for the year, compared to losses of $6 million which they estimated would have occurred without the new work redesign. SERVICE PROVIDERS: The future search conference which led into the 1994 collective bargaining was conducted by Kevin Boyle of Boyle & Associates of Corvallis, Oregon. Plant and union officials also point to Barry Macy, Director of the Texas Center for Productivity and Quality of Work Life at the College of Business Administration at Texas Tech University, as an instrumental consultant in the plant's work redesign efforts. In addition, Richard Torstrick of South River, New Jersey, a former internal consultant for Hercules, Inc., is noted for his help in developing the structure of the plant's self-directed work teams. Also, both plant and union officials point to the research and advice of Janice Klein, a professor at the Sloan School of Management at the Massachusetts Institute of Technology in Cambridge, Massachusetts, as being instrumental in the design of the plant's pay-for-skills program. They also note their joint participation in The Ecology of Work Conferences (contact Tom Chase, 603/942-8190), co-sponsored by the NTL Institute and the Organization Development Network, as having a positive impact on their partnership efforts. REFERENCES: ------------------------------------------------------------------- COMPANY: Ashton Photo CORPORATE ADDRESS: 625 Hawthorne Ave, SE P.O. Box 14190 Salem, Oregon 97309-5305 PLANT/BRANCH ADDRESS: SIZE (employees): Avg employment - 105 (90 minimum to 160 maximal due to seasonal employment). UNION(S): non-union INDUSTRY: Photo finishing SIC CODE: 3829 NEAREST METRO AREA/MILES: Portland, OR (45 miles) CONGRESSIONAL DISTRICT: OR-05 SECTOR: Private OWNERSHIP: Private CONTACTS: Steve Ashton Chief Executive Officer Ashton Photo 625 Hawthorne Ave., SE P.O. Box 14190 Salem, OR 97309-5305 Alan F. White Director Ashton Photo 625 Hawthorne Ave., SE P.O. Box 14190 Salem, OR 97309-5305 Phone:503/399-1900 Fax:503/399-1503 DATE: 4/21/94 COMPANY DESCRIPTION: Ashton Photo is a high-volume producer of photo prints for professional photographers, including weddings, family portraits, product advertisement photos, church directories, school pictures, and athletic teams. The company processes approximately 25,000 negatives per week from around the world, and had 4.4 million in sales in 1993, 97 percent from out-of- state photographers. It is the largest volume photo printer in the state of Oregon. Ashton pioneered the display of youth sports photos as if they were on magazine covers or bubble-gum trading cards. TRAINING AND CONTINUOUS LEARNING: Group leaders and experienced operators at Ashton are responsible for teaching work techniques which can range from chemical processes to customer service and shipping and packaging. The training at Ashton is focused around employees teaching each other new skills and on-the-job training. Through Ashton's pay- for-knowledge system, employees are rewarded in their wages for the new skills they acquire. Employees rate themselves on their proficiency in performing relevant skills, with the higher ratings given to the ability to teach others. Company officials estimate that employees spend 10 to 15 percent of their work time training. EMPLOYEE PARTICIPATION: To encourage employee participation, Ashton's physical building is literally a workplace without walls and employees are allowed to go anyplace they wish within the building. A large fish tank was placed next to the President's office in order to draw people in for discussions. All meetings at Ashton are open and workers are encouraged to attend and participate. Worker suggestions are solicited through an "idea lottery," in which weekly winners receive cash or other types of rewards. ACCESS TO INFORMATION: Ashton posts its weekly financial statements outside the employee lunchroom. Teams are also given weekly profit-and-loss reports on their output from the previous week. Ashton has been recognized by Inc. magazine for its innovative employee handbook, used as a communication device with charts detailing the social contract and roles of the employee and employer. ORGANIZATIONAL STRUCTURE: In 1985, Ashton Photo changed its production system to a team- based management approach. There are currently 16 teams of up to nine persons each, accountable directly to customers for the work they produce and package for shipping. Each of the company's three major product lines has a divisional manager who supports the teams in handling product orders, and in serving as a "barrier buster" to resolve issues that come up in weekly obstacle meetings. Teams set their own work schedules, and employee evaluations are team-based. If an employee does not have strong support from his or her team peers, they are unlikely to receive a raise. EMPLOYMENT SECURITY: The Ashton work force is subject to seasonal reductions due to the large seasonal-based demand in the photo industry. Employment at the company can fluctuate anywhere from a minimum of 90 to a maximum of 160. Seasonal layoffs are primarily based on the accumulated skills acquired by employees, not seniority. Individual team leaders rank employees on criteria of skill, experience, and the ability to work in a team environment, and these rankings are referred to when seasonal work force reductions are required. Company officials report they would like to end the seasonal work force reductions, and are working to find demand balancing counter-cyclical markets to retain a larger proportion of the work force throughout the year. SUPPORTIVE WORK ENVIRONMENT: Ashton employees set their own hours within their work teams, and employees with children can choose to work earlier or later hours to meet family demands. Each employee has a key to the Ashton facility and can arrange their work schedules to accommodate personal needs with the objectives of their team. Ashton is planning to build basketball and volleyball courts, and paths located by a nearby stream, for employees to enjoy during their breaks. Showers were built in Ashton restrooms for employees that wish to recreate during the day. The company has a recreation room for employees that they use for recreation or in case of illness. The best office in the building, dubbed the "vanilla office," is not designated for any particular person. Workers can arrange to claim the office for a day of their own use. Ashton employees are encouraged to write "recognition notes" commending their co-workers for outstanding performances. The notes are read aloud at general staff meetings. Also at the staff meeting, a lottery-based drawing is held which gives cash and prize awards for suggestion/recognition ideas. Ashton's new facility, opened last year, provided for a number of safety improvements including better lighting, ventilation, and equipment arrangement. PRODUCT/SERVICE QUALITY: Ashton has a strong relationship with its primary raw material suppliers. Through this cooperative working relationship, Ashton provides their suppliers with "best possible" estimates of raw material demand and seasonal fluctuation, and the suppliers in turn provide just-in-time deliveries which prevents the accumulation of inventory. Through the implementation of new technology systems, Ashton has reduced its cycle times approximately 30 to 50 percent. The new system only allows individual jobs to be loaded on a production line at any one time. Consequently, problems must be worked through before moving on to a new job, which decreases the overall amount of nonvalue-added production time per product. Ashton employees were highly involved in implementing and collecting data on the new system. COMPENSATION LINKED TO PERFORMANCE: Ashton Photo has an employee stock ownership program as well as a 401(k) tax-deferred savings plan. Approximately 11 percent of Ashton stock is held through the ESOP program. An incentive program allocates 1 percent of photo processing sales to be divided among hourly workers each month. Ashton has an innovative pay-for-knowledge program that promotes continuous learning. Each job skill at Ashton has points assigned to it, and employees achieve additional points for achieving above-average expertise at certain tasks. An employee's wage range is based on the number of skill points accumulated, with additional points gained for the ability to teach others certain skills. At least once a year during performance reviews, employees rate themselves on each skill ranging from 1, "basic" skill, to 5, "expert." There are between 200 to 300 skills that Ashton employees can be recognized for through the skill-based pay system. WORKER-MANAGEMENT RELATIONS: STRATEGIC INTEGRATION OF BUSINESS: Ashton's organizational strategy is focused around self-managing work teams. Work teams answer directly to customers, and are responsible for training, personnel and production decisions, and setting their own work schedules, REMARKS: Ashton CEO, Steve Ashton, was featured on the cover of March 1994 edition of Inc. Magazine. ACCOMPLISHMENTS/AWARDS: Since 1985 when Ashton originated the team-based management structure, worker productivity has increased 60 percent and continues to rise an average of 7.5 to 8 percent per year. Between 1989 and 1993, customer growth increased 22 percent and volume growth grew at 25 percent. In 1993, Ashton Photo was named by Inc. magazine as one of the best small companies to work for in America. It was also one of more than 90 case studies of Oregon companies in the book, Confessions of Empowering Organizations, published in 1991 by the Association for Quality and Participation. SERVICE PROVIDERS: Many of the manufacturing systems at Ashton Photo were based on the work of consultant, Richard Schonberger, author of World Class Manufacturing. REFERENCES: Ehrenfeld, Tom. 1993. "Best compensation: Cashing in." Inc. July 1993, 69-70. Hill, Jim. 1993. "Making Work Worthwhile," The Sunday Oregonian, Oct. 10, 1993, K1, K5. Inc., 1993. "The (Handbook) Handbook," November 1993, 57-64. Redburn, Ray. 1991. Confessions of Empowering Organizations: Who's Doing It and How. Cincinnati, Ohio: Association for Quality and Participation. Spring, Katherine. 1993. "Photo Company Works as A Team," Statesman Journal, Salem, Oregon, July 31, 1993, p. 6D. ------------------------------------------------------------------- COMPANY: AT&T Corp. Atlanta Service Center CORPORATE ADDRESS: 295 North Maple Avenue Basking Ridge, New Jersey 07920 PLANT/BRANCH ADDRESS: 5885 Fulton Industrial Boulevard Atlanta, Georgia 30378 SIZE (employees): 401 UNION(S): Communications Workers of America Local 3295 INDUSTRY: Telephone remanufacturing and repair SIC CODE: 7629 NEAREST METRO AREA/MILES: Atlanta (0 miles) CONGRESSIONAL DISTRICT: GA-05 SECTOR: Private OWNERSHIP: AT&T is publicly owned and traded. Stock Listing - T Stock is listed on the New York, Boston, Philadelphia, Chicago, Pacific and Cincinnati Stock Exchanges. CHIEF EXECUTIVE OFFICER: Mr. Robert E. Allen Chairman and CEO AT&T Corp. 295 North Maple Avenue Basking Ridge, NJ 07920 CONTACTS: Ms. Chris Cole Repair Director AT&T Corp. Atlanta Service Center 5885 Fulton Industrial Boulevard Atlanta, GA 30378 (404) 346-4035 Fax: (404) 346-4201 Ms. Gerrie Penn Production Manager AT&T Corp. Atlanta Service Center 5885 Fulton Industrial Boulevard Atlanta, GA 30378 (404) 346-4279 Fax: (404) 346-4201 Mr. Larry McCloud President Local 3295 Communications Workers of America P.O. Box 43550 Atlanta, GA 30336 (404) 346-4043 Fax: (404) 346-4274 DATE: 07/21/94 COMPANY DESCRIPTION: AT&T Corporation was incorporated in New York in 1885 as the American Telephone and Telegraph Company. The company developed an extensive nationwide system of long-distance telephone lines, and, in exchange for stock, acquired extension stock interests in nearly all principal telephone companies in the U.S. In 1982, the company agreed to divest itself of its local telephone companies, after an anti-trust suit was brought against it by the U.S. Department of Justice. In 1984, the stock of the 22 telephone operating subsidiaries were transferred to seven Regional Bell Operating Companies. In June, 1994, the company adopted its present title. The company is involved in the provision to customers of products, services, and systems for the movement and management of information. In 1993, the company had revenues of $67 billion and net income of $3.9 billion. AT&T Corp. and its various divisions employ over 300,000 worldwide. TRAINING AND CONTINUOUS LEARNING: The Atlanta Service Center has an extensive, two-pronged approach to employee training and continuous learning. In the late 1980s and early 1990s, both management and labor realized that the only way to save jobs at this facility was to become competitive in the global market. Both parties realized that this meant relying more and more on their skilled employees. Nationally, this realization lead to the establishment of The Alliance. At the Atlanta Service Center, the Alliance agreement resulted in the establishment of "Project Genesis." Under this program, AT&T and the Communications Workers of America (CWA) work with Kennesaw Community College to provide employees with skills and jobs training to prepare them for changes in the AT&T workplace or for jobs outside of AT&T. Under "Project Genesis," employees are given the opportunity to attend additional training both on their own time or on company time. Training opportunities on company time must be related to the job. All courses are held on the company's premises in a newly constructed area that provides two additional classrooms, providing separate areas for computer and video-based learning. Each employee has been presented the opportunity to undergo a six-hour education and aspirations evaluation and assessment. Although this assessment is voluntary, over 75 percent of the employees eligible have either gone through the assessment or have signed up to take it. The parties expect that all employees will take advantage of the opportunity. "Project Genesis" has contracted with Kennesaw Community College for a full-time instructor to be placed at the plant to perform the assessments and help design training programs. The second prong of the plant's training program is designed around the Education Team, a self-directed work team. This team is geared to providing interpersonal and personal skills training, as opposed to technical skills training. The Education Team designs all of the in-house training and identifies new training needs. In establishing the Education Team, AT&T and the CWA benchmarked a number of other companies' training programs. All Education Team members are associates from the shop floor. The team members were brought on-line and trained in train-the- trainer courses. Through the two-pronged approach, associates undergo a both wide-ranging and intensive training. The company and the union business plan targets each associate to receive over 30 hours of formal training alone (classroom) annually, while the average amount of training taken is 48-52 hours annually. On-the-job training was not documented. The actual hours spent in training are much greater than the 40 hours budgeted annually. A Methods Team has been established to provide training to associates when they move between teams. As an example of the commitment to training, presently, 10 associates are undergoing electrical training on company time. This training will take three weeks (120 hours) and plans are being drafted to offer the course to a second set of associates. EMPLOYEE PARTICIPATION: Beginning in 1992, the Atlanta Service Center began to redesign its jobs and workflows around self-directed work teams. Each team in the plant is organized around a specific product or group of products. The teams range in membership from five associates to 20 associates. The team-based system was designed totally in- house by associates and managers. Team leaders are selected for designated work teams. The role of the team leader is to coordinate movement of personnel, and interface with production and performance managers for the everyday needs of the business. Each team also has a set of coordinators who have responsibilities for coordinating different aspects of the production/repair process. There are five coordinators: cost, production, safety, employee relations/education and quality. These coordinators are selected by team members based on experience. On smaller teams, coordinators may fill more than one position. Teams are allowed to implement change in the work processes as they see fit. They are expected to coordinate across teams if changes in a process will have impacts on other teams or in other areas. Based upon needed production levels, teams are responsible for balancing work and manpower loads. If a team will be overstaffed or understaffed for a period of time, the Leader approaches other teams to determine whether there is a need for a temporary fill- in or if there are surplus associates able to fill in. These manpower shifts are handled completely by the CWA local through a job bidding process. All associates can bid on open jobs and move between teams. All coordinators receive training relevant to their production areas through training modules prepared by the Education Team. Education Coordinators are expected to identify any changes needed in the training modules and work with the Training Team to redesign training. Education and training needs are determined by the teams themselves. The training and cost coordinators work together to determine the training available in light of cost and time figures and production schedules. Formal disciplinary actions are outside of team responsibilities. However, because the workforce at the plant is an older workforce, there are very few disciplinary problems, most of which deal with absenteeism. ACCESS TO INFORMATION: Because of the self-directed team structure, a large amount of information shared with the associates. Production managers and coordinators meet every week to discuss customer commitments. This information is transmitted back to the teams to enable them to schedule their work. All financial information is also shared with all associates. Costs and operational data are packaged into a monthly financial package that is given to the cost and production coordinators. These coordinators are expected to share and interpret the information with team members. The financials are broken down by section, product, and attendance so that each team can observe its impact on the overall business. The cost and production coordinators have all been trained in interpreting data essential to their operation. ORGANIZATIONAL STRUCTURE: Because of the use of self-directed work teams, the Atlanta Service Center has been able to flatten its organizational structure somewhat. Prior to the introduction of work teams, the Center already had a relatively flat structure (three levels). Since the introduction of the team-based system, the first-level supervisory level has been eliminated. Leaders and Coordinators now perform the tasks once carried out by supervisors. Where there were once 40 people in supervisory positions, only nine remain and they are no longer supervisors. The reduction was achieved with no layoffs, but by attrition. Supervisors were moved out of first-level positions and into other positions, such as coordinators, performance managers, and new business managers. Coupled with its flat organizational structure, the plant has implemented just-in-time production systems in many areas of its facility. Each associate has been trained in JIT procedures. Additionally, the facility is requiring more and more of its suppliers to become ISO 9000 certified. AT&T-Atlanta also works closely with its customers, both internal and external. Teams coordinators deal directly with the customer to develop production plans and ensure quality levels. EMPLOYMENT SECURITY: Although there is no formal employment security program, both AT&T and the CWA work together to design solutions to maintaining employment levels. When the first-level supervisory positions were eliminated, some supervisors became new business coordinators. This move has helped AT&T-Atlanta create added demand and save some jobs. In May, 1994, AT&T-Atlanta faced a 70-person surplus. Rather than laying off 70 associates, management and the union worked together to design a voluntary retirement incentive package. This package attracted enough retirees to avoid layoffs. In general, the facility has attempted to address the problem of surplus employees by relying on attrition before considering the necessity of layoffs. In the long-run, AT&T-Atlanta has tried to grow the business to save jobs. SUPPORTIVE WORK ENVIRONMENT: Although not on flexitime, the Atlanta plant operates its shifts four days per week (Monday through Thursday) for ten hours per day. Within this time, teams have some leeway to schedule their start and finish times. This allows teams to make allowances for team members' needs. To help improve associates' safety and health, a joint Safety Committee has been formed. The Committee, made up of representatives from the associates and management, investigates hazards and accidents and makes recommendations for improvements. Under the national contract, both maternity and paternity leave are provided. There is also child care referral and child care leave. The company and union hold one or two health fairs annually. There is an on-site nurse, and a self-test blood pressure machine available for all associates. Employees may take a course in CPR. This course is free and there is a goal to have at least 20 percent of employees certified in CPR at all times. In order to help AT&T-Atlanta cope with its diversified workforce, a Diversity Council has recently been established. There is one representative from each work area in the plant. The committee is tasked to broaden awareness and create an appreciation from various groups drawn together from across the United States. PRODUCT/SERVICE QUALITY: The Atlanta Service Center has introduced a number of the philosophies and programs found in Total Quality Management programs. Associates have been trained and are being trained in such techniques as problem solving, statistical process control, and the use of Pareto charts. On the line, if a quality problem is noticed, the team has the responsibility for stopping the line until the problem can be worked out. One of the self-directed work teams is a Quality Team that has the responsibility for ensuring product quality. Additionally, there is a quality staff of two that performs sampling and testing of products. The Service Center is also designing and documenting its quality system to enable it to obtain ISO 9000 certification. COMPENSATION LINKED TO PERFORMANCE: Plant associates are compensated under a traditional hourly wage system. WORKER-MANAGEMENT RELATIONS: The AT&T-CWA relationship can be characterized by one word-- trust. Collective bargaining has, in the past, been carried out at the national level. However, the company and local plan to bargain outside of the national framework when the 1995 bargaining negotiations begin. This bargaining is expected to take place in an informal, interest-based atmosphere and will be geared to supporting the work teams. In addition, as part of the atmosphere of trust, union officials feel free to sit in on any meeting being held in the plant, regardless of the topic. STRATEGIC INTEGRATION OF BUSINESS: Overall, the union is a full partner in setting strategic goals for the facility. Each Monday morning, a Leadership Team made up of representatives from management and union officials meets to discuss the previous week's achievements, what's planned for the coming period, and the goals for the future. REMARKS/AWARDS ACCOMPLISHMENTS: SERVICE PROVIDERS: Kennesaw Community College REFERENCES: ------------------------------------------------------------------- COMPANY: Baldor Electric Company CORPORATE ADDRESS: 5711 R.S. Boreham, Jr. Street Fort Smith, Arkansas 72902 PLANT/BRANCH ADDRESS: SIZE (employees): 3,100 UNION(S): non-union INDUSTRY: Electric motors and drives SIC CODE: 3621 NEAREST METRO AREA/MILES: Fort Smith, Arkansas (0 miles) CONGRESSIONAL DISTRICT: AR-03 SECTOR: Private OWNERSHIP: Publicly-owned Stock abbreviation-BEZ Listed on New York Stock Exchange CONTACTS: Roland S. Boreham, Jr. Chairman Baldor Electric 5711 R.S. Boreham, Jr. Street Fort Smith, AR 72902 (501) 646-4711 DATE: 10/12/94 COMPANY DESCRIPTION: Company designs and produces industrial electric motors of various sizes, and adjustable speed drives. Principal plants are located in Arkansas (2), Missouri (2), Mississippi, Oklahoma (2), South Carolina, Minnesota, Washington, and Munich, Germany. Company was founded in 1920. In 1993, Baldor had net sales of $356 million, and net income of $19.4 million. TRAINING AND CONTINUOUS LEARNING: Baldor invests heavily in ongoing training and education for its employees and customers. At any one time, there are between 30 and 40 training projects happening and each employee receives training. Training offerings include both soft and technical skills, from basic literacy through computer-skills training. Baldor sponsors training seminars for customers at its headquarters in Fort Smith, Arkansas. Over 1,000 attend each year. The basis of the training is Baldor's basic literacy training. The literacy training program began in the late 1980s when Baldor began implementation of a formal total quality program and found that some of its employees could not read or write well enough to complete the original course. Baldor consulted with East Mississippi College to design a literacy course and hired a full- time educational coordinator. Baldor continues to work with area community colleges to supply training and educational programs to their workers. As part of the effort, Baldor tested all of their employees for literacy skills and found that some tested below an eighth-grade level. Because of the training provided, nearly all of these employees are now above this level. In Baldor's St. Louis plant, nearly 100 tested below the eighth-grade level (out of 300). Theses 100 were required to enroll in two 16-week courses. After the first course, 65 out of the 100 had passed the literacy test and were excused from the second course. After the second course, only seven of the remaining 35 did not pass. Four of these seven went into private tutoring and passed, and two retired. Because of the success of this program, similar programs are being established at Baldor's other plants, in conjunction with area community colleges. Coupled with the programs designed to get all employees to eighth grade literacy levels, Baldor also rewrote its literature, instruction manuals and other materials to the eighth grade level. As one means to ensure this level of writing, Baldor instituted a writing course aimed at making written material easier to understand. Many of the courses taught throughout Baldor are designed and taught by community college teachers and employees in tandem. Employees are also in the process of designing and teaching five courses built around Baldor's philosophy of the factors that determine value in the customer mind. Baldor defines this concept as its Value Formula, written as Vp = Qp * Sp/C * T. Each course is designed by a volunteer team of employees and three of the five curricula have already been designed and provided. The remaining two courses are still being designed and will be given to all employees when the last employee has completed course three. Employees have also provided with job cross-training. Baldor has an open bidding system in which any employee with minimum qualification s can bid on an open job. Selected employees are provided with elementary job training and then when they move to the floor, are given on-the-job training to help them become more accomplished. This provides Baldor employees the freedom to move within the company and provides Baldor with a flexible workstaff. All of Baldor's training is job- or customer-related, however, this requirement is defined very broadly. Tuition reimbursement is provided for outside education on an 80/20 company/employee basis. Baldor has built training classrooms on site. For example, at its Columbus, Mississippi site, Baldor built a $150,000 facility equipped with classrooms, computers, and learning software dedicated to continuing education. Teachers at these classrooms are brought in from area community colleges and adult educational programs. EMPLOYEE PARTICIPATION: Baldor employees participate on a number of ad hoc and permanent teams. At any one time, there are over 200 teams operating. Joint Action Teams (ad hoc teams) can be formed by any employee when a problem or improvement is identified. These teams meet until the improvement is implemented or the problem solved. Although formal meetings are kept to minimum (i.e., there are no weekly meetings), employees on work and ad hoc teams meet when necessary. When problems occur on the line, the work team meets then and there to come up with solutions. There is also a suggestion system called the "Bounty Hunt" which provides small prizes for recognition. Some of the suggestions arising from this program are given to an ad hoc team (that includes the suggestor) for investigation. ACCESS TO INFORMATION: Information is shared throughout the company. Baldor believes that it is necessary for employees to understand how they impact the company's results before they can make improvements. Included in the information shared are the company's financials (sales, profits, etc.), and quality and production numbers. Any employee can ask to see the books at any time. Financial training was provided to employees to help them understand the data presented. The company also distributes financial data and information via newsletter. There is one corporate newsletter put out at headquarters and one local newsletter run by the employees at each location. ORGANIZATIONAL STRUCTURE: The production system at Baldor has always been based around the team concept. Most of these teams are informal and have tended to be self-selected. More recently, supervisors have adopted the role of supervisors and facilitators. This has enabled Baldor to reduce the number of management layers to the point where there are now three layers separating the President and CEO from the shop floor employee (vice-president, plant manager, and supervisor). This is down three layers. Baldor was one of the first companies to use a flexible manufacturing system. In 1987, Baldor structured its process around product flow, using computers to schedule production. Since 1987, the process has allowed Baldor to move from monthly product scheduling to scheduling by shift. Although Electronic Data Interchange is not used to accept orders, all of Baldor's pricing, inventory, and delivery information is available to customers via an electronic network. All factories and sales offices are hooked to this network. Baldor works closely with its customers and suppliers. Baldor employees visit both customers and suppliers on an ongoing basis and host customers and suppliers almost daily. Large suppliers are visited at least once per year and all suppliers are informally graded. Baldor has been able to reduce its number of suppliers and create partnerships with those remaining. Baldor is also working more closely with customers and suppliers to institute just-in-time production systems. Baldor also supplies training on new, improved and redesigned products to its customers. Each course also includes Baldor employees. The company feels that the interaction between the customer and employees that occurs at these classes is invaluable in meeting customers' needs. Employees from Baldor return from these classes with new ideas from the customers, an appreciation for how Baldor products are used, and added respect for the customer. Nearly 1,000 customer employees and 800 Baldor employees attend these classes yearly. EMPLOYMENT SECURITY: Although there is no guarantee of employment security, Baldor does everything it can to avoid layoffs. Its largest plant has not had a layoff in 32 years. SUPPORTIVE WORK ENVIRONMENT: Baldor provides financial assistance to its employees out of an emergency fund. Baldor self-insures it health benefits, with the exception of catastrophic health insurance. Employees have full coverage and there is no limit on catastrophic benefits. Baldor's safety and health programs are tied in with its employee participation and training programs. There is a high level of safety training which is carried out continuously. Many of the ad hoc and permanent teams have identified safety and health issues as a subject for ongoing problem solving. PRODUCT/SERVICE QUALITY: All of Baldor's programs help support the company's goal of providing customers the highest quality. COMPENSATION LINKED TO PERFORMANCE: In addition to its traditional hourly wage, Baldor has a deferred profit sharing plan. The profit sharing plan has been in effect for 30 years and is based on a simple formula. Twelve percent of before tax profits are put into the profit sharing pool. At the end of the year, the entire pool is shared with employees based upon the employee's compensation level. This payout is contributed to a tax-deferred trust fund in which all employees are fully vested. Employees may choose from different investment programs (one of which is Baldor stock). All employees who have been with the company for two or more years participate in this program. There is also a stock purchase plan, separate from the profit sharing, which is open to all employees. Between the profit sharing plan and the stock purchase plan, employees own about 10 percent of the company. WORKER-MANAGEMENT RELATIONS: N/A STRATEGIC INTEGRATION OF BUSINESS: The human resources manager is a member of the short- and long- term strategic planning committee. This ensures that human resources will remain an integral part of Baldor's continued operations. Baldor employs some of the latest technology in its field, in terms of process and tools. Baldor holds the copyright on the term "flexible flow manufacturing" and was one of the first companies to identify flexible manufacturing as a competitive advantage and to implement it. Both customers and employees have participated in the design and selection of the technology used at Baldor. Baldor also considers research and development as a strategic advantage. In the 1980s, in the face of increased competition, Baldor expanded investments in R&D as a means of broadening its product line. The firm also increased its capital investments and investments in process improvements. REMARKS: ACCOMPLISHMENTS/AWARDS: In November of 1990, Baldor was given the President's E-Star Award for Exports by the U.S. Department of Commerce. Fortune magazine, in 1993, named Baldor as on the 50 stocks to buy now. In November, 1992, Business Week magazine named Baldor as the company to benchmark in the area of flexible manufacturing. SERVICE PROVIDERS: Baldor has used, and continues to use, community colleges and adult educational programs as consultants and service deliverers. REFERENCES: Benson, Tracy, "Empowerment: There's That Word Again," Industry Week, May 6, 1991, pages 44+. "Desperately Seeking the Baldrige," Distribution, August 1991, pages 94+. Ireland, H. Duane, Michael A. Hitt, and James Skivington, "Managing R&D in Diversified Companies," Research Technology Management, July-August,1990, pages 37-42. Mraz, Stephen J., 'Teaching the Write Stuff," Machine Design, September 10, 1992, pages 12, 14. Mraz, Stephen J., "Teaching Workers the Three Rs is Good for the Bottom Line," Machine Design, January 24, 1991, pages 25-27. "25 Who Help the U.S. Win," Fortune, Special Issue, Spring/Summer, 1991. "Project Literacy," ABC-TV Public Service Announcement. "The Three R's on the Shop Floor," Fortune, Spring, 1990. ------------------------------------------------------------------- COMPANY: Belden A E C CORPORATE ADDRESS: 7701 Forsyth Boulevard Suite 800 St. Louis, Missouri 63105 PLANT/BRANCH ADDRESS: 32 Hunter Street Apple Creek, Ohio 44606 SIZE (employees): 160 employees UNION(S): Non-union INDUSTRY: Electrical equipment and supplies SIC CODE: 3699 NEAREST METRO AREA/MILES: Akron, Ohio (30 miles) Wooster, Ohio (8 miles) CONGRESSIONAL DISTRICT: OH-04 SECTOR: Private OWNERSHIP: Public; NYSE-BWC CEO: C. Baker Cunningham Chairman, President and CEO Belden A E C 7701 Forsyth Boulevard Suite 800 St. Louis, MO 63105 CONTACTS: Mary Bogner Human Resource Manager Belden A E C 32 Hunter Street Apple Creek, OH 44606 (216) 698-6200 DATE: 04/05/95 COMPANY DESCRIPTION: Belden - American Electric Cordsets (AEC) designs, manufactures, and sells electrical cords for appliances, medical and scientific equipment, lawn and garden tools, and others. Annual sales are approximately $12.7 million. There was an increase of 30 percent in sales within the last four years at the Apple Creek Ohio plant. There are additional plants in Apple Creek, Ohio and Hermosillo, Mexico with sales offices in Bensenville, Illinois, and Indianapolis, Indiana. On March 23, 1995 AEC was sold to Belden Inc. of St. Louis, Missouri, a manufacturer of wire, cable, and cord products for electronic and electrical markets. Currently, the Apple Creek, Ohio plant employs 160 people. By December 1995, management hopes to increase hiring by 25 percent, with a projected total of 200 employees. TRAINING AND CONTINUOUS LEARNING: In the summer of 1990, The Ohio State Agricultural Technical Institute (ATI) had sent questionnaires to area businesses to gauge interest in a pilot program they were offering. American Electric Cordsets was chosen to participate in the development of the new program. American Electric Cordsets formally established a workforce development program called the Skills Transfer Enhancement Program (STEP) for its employees during September of 1991. Employees expressed a strong interest in having the training program. Nearly 40 percent of all employees elected to participate in the first STEP class. The company utilized an on- site classroom and the company conference room in which to conduct the training and one-on-one sessions between the instructor and the participant. STEP's focus is improving on-the-job skills that are currently being used. Through a functional context approach, actual workplace materials, such as shop sheets, procedures, SPC quality training, and machinery are used. Problem-solving, equipment troubleshooting, and working with figures, written information, and operational data are emphasized. Another important aspect of the STEP Program is development of communication and life skills, such as working in teams, enhancing critical thinking abilities, stress management, and TQM training. A variety of employees enroll in the STEP program, from assemblers to office workers. Participation in STEP is voluntary and confidential. There is a high level (80 percent) of worker participation in the program. A complete employee assessment and task analysis was conducted prior to curriculum development to insure that the level of design and instruction would adequately meet the needs of all employees. The assessment included surveys, questionnaires, a reading comprehension test, a math skills test, and a writing sample. The task analysis consisted of a videotape in which the curriculum designer interviewed competent workers performing their jobs. The designer then reviewed the tape to completely break down each task and skill required. Another aspect of the Step is the Custom Training Plan (CTP). With the STEP instructor, employees design their own CTPs that cover their learning goals and target dates for completion. This document leaves room for changes and updates. Workers may progress at their own pace. Classes are held under a flexible schedule to meet the needs of all workers. Generally, classes meet twice a week for two hours for ten weeks. Workers are paid for one-half the training time. The STEP Class includes reading comprehension, basic mathematics, writing skills, team building, stress management, mechanical and electrical training, and interpersonal communication skills. Additional course offerings include TQM and other quality training, Statistical Process Control (SPC), and managerial and supervisory training. Training providers are in two separate categories. American Electric Cordsets managers and supervisors teach employees about day-to-day things they would need to know around the plant, such as Statistical Process Control, filling out orders and shop sheets, safety, and operation of machinery. OSU/ATI instructors train employees in team-building, TQM, communication skills, and reading, writing, and math. If a worker should decide to pursue outside training sessions, American Electric Cordsets will pay for tuition and books for those courses that are directly related to the employee's job. Generally, employees at American Electric Cordsets work independently within their own Departments on various tasks. However, when anyone is "caught up" on their responsibilities, they are free to assist in another department, if that department happens to be short-staffed for that particular day. The STEP Program's structure of general education allows each employee to be trained in all aspects of plant operations and the operations within all Department levels. In this way, it is easier to transfer skills from one Department to another on short notice. Another benefit of the Program is that it encourages teamwork between employees. EMPLOYEE PARTICIPATION: Employees of American Electric Cordsets, regardless of level or position, communicate with each other about production processes that are flowing smoothly, any problems, or new ideas to improve work flow. Employees (usually one person to a Department) are elected to serve on one of several company committees. Individuals are chosen based on who would do the best job of representing employees' concerns. Should the individual accept the assignment, his or her term usually lasts one year--longer if the person is doing well and would like to continue doing it. These committees meet whenever there is a need. One such committee is the STEP Committee, which is made up of the Plant Manager, Site Coordinator, two Department Managers, and two employees who represent worker concerns about the program. An Inventory Management Team controls the amount of end products being created during the production process. During the ISO 9002 certification, the entire workforce pitched in to prepare for it. Other Committees include: the Handbook and Policy Committee (eight people); the Safety Committee (eight people); and the Steering Committee--Quality and Production Process (15 people). Evaluations are scheduled annually and semiannually. The employer and employee sit down and complete the evaluation form together. The employee's strengths and weaknesses are discussed, allowing for each person's viewpoints. Goals are set by the employee and reviewed at the next evaluation. ACCESS TO INFORMATION: The company is a public company listed on the New York Stock Exchange (NYSE-BWC). There is a great deal of general information-sharing among all employees. For the past three years, the company has used a Suggestion Box. This is an anonymous way of letting management know about work- related matters in the plant, suggestions for improvement, and general comments. At each Monday morning meeting of the Plant Manager and Supervisors, the contents of the Box are reviewed. If an item has merit, management will look into or begin to make the change. Quarterly plant-wide meetings give everyone in the company a chance to keep up to date on the status of the company, customers, suppliers, and related matters. The bulletin boards around the company provide another way for employees to keep in touch with what is going on. Production schedules and results, appreciation letters from customers, announcements, and related items are posted there. ORGANIZATIONAL STRUCTURE: American Electric Cordsets' organizational structure is relatively traditional. The Plant Manager and General Manager are the first tier, supervisors and managers are on the next, and then other employees within the various departments. There are eleven Departments within the plant. They are: Office, Maintenance, Receiving, Shipping, Cutting, Molding, Quality Control, Repairs, Terminals, Testing, and Supervisors. Efforts are being made to flatten the organizational structure. Each employee is responsible for their own workload, supplies, and quality control for their part of the job on the line, Employees are also free to assist anyone else who needs it. The General Manager, Assistant Plant Manager, and Supervisors are constantly on the floor answering questions, helping to solve problems, and providing general guidance. Employees do not need to go through channels to get questions answered. They can go directly to the supervisor or manager involved. Communication is very open. American Electric Cordsets conducts training sessions for its suppliers regarding the company's procedures and expectations. One procedure is just-in-time inventory. The company has a Supplier Certification Program. The General Manager and Assistant Plant Manager travel to their suppliers, taking with them a 30-page audit. They complete the forms as they look at the supplier's processes. The supplier must meet certification to maintain supplier status with AEC. EMPLOYMENT SECURITY: The company has not had to deal with downsizing; in fact, hiring increased 40 percent in the last four years. SUPPORTIVE WORK ENVIRONMENT: American Electric Cordsets offers employees a standard benefits package that includes health insurance with a dental and prescription rider, life insurance, vacation based on time and service, holiday pay, and a 401 (k) plan. Compared to other businesses in the region, American Electric Cordsets has implemented a flexible schedule. The plant runs two shifts per day. An employee must work one of these shifts. If an employee has to make adjustments in his or her shift on a certain day due to an uncontrollable situation, he or she must notify the supervisor in advance and make up the time. For employees with children, a list of community child care resources is available on request. A Safety Team is in place at the plant to keep track of difficulties and correct any problems. Safety is the responsibility of everyone. American Electric Cordsets provides on-site flu shots to employees. For other wellness programs, seminars, and fitness classes, American Electric Cordsets works with Wooster Community Hospital's Healthworks program. The Hospital's health tips quarterly newsletter is routinely posted on company bulletin boards. Employees who may be dealing with substance abuse may take part in the Hospital's treatment program. These employees may be granted leave during the day to attend. American Electric Cordsets has also sponsored local community events, such as United Way, Corporate Challenge, bowling, and softball. PRODUCT/SERVICE QUALITY: American Electric Cordsets is ISO 9002 certified. Their rate of error for one particular customer is 67 parts per million. The in-house rating is 216 parts per million. Workers have been trained in and utilize the principles of Total Quality Management. By taking personal responsibility and using a "team approach," everyone assures that products are in good condition and that processes are running smoothly. Statistical process control is also used. The Human Resource Manager tracks productivity levels. Customers measure quality through the level of satisfaction with American Electric Cordsets products. Rather than completing lengthy questionnaires, customers will call the General Manager to give feedback, or they will write letters. COMPENSATION LINKED TO PERFORMANCE: In January, 1995, American Electric Cordsets implemented a new pay-merit increase system based on an employee's annual and semi- annual performance evaluations. Before that, pay raises were based on seniority. An example of a merit increase might be an additional rate of 25 cents per hour, in addition to the employee's regular salary. The actual amount of this increase is negotiable between the supervisor and employee. The supervisor might compliment an outstanding worker on his or her performance and say: "Here is what I think you deserve. How do you feel about that?" Then it would be up to the employee to convince the supervisor that his or her work should be valued at a higher rate, if applicable. WORKER-MANAGEMENT RELATIONS: N/A STRATEGIC INTEGRATION OF BUSINESS: American Electric Cordsets has implemented a bar code system for their product shipments. This results in increased efficiency for customers. In fact, customers have reported that the bar code makes the packaging information easier to read. The Company hopes to implement a bar code system for their supplies within the next year. The new system makes it easier to track where everything is in the assembly process, allowing employees to process orders more quickly. REMARKS: ACCOMPLISHMENTS/AWARDS: When STEP was first implemented, monitoring three months before and three months after instruction measured effectiveness in various areas. Absenteeism decreased 14 percent. Work performance increased by 74 percent, according to supervisors. Average production efficiency increased by almost 4 percent. By comparison, there were decreases in the percentage of rejected materials, percentage of defects found, and scrap. American Electric Cordsets won the 1991 Governor's Workplace Literacy Award. American Electric Cordsets was a 1992 Labor Investing For Tomorrow (LIFT) Award Nominee. American Electric Cordsets has also won numerous Excellent Supplier Awards. SERVICE PROVIDERS: Ohio State University's Agricultural Technical Institute provides curriculum design and instruction for the STEP Program of American Electric Cordsets. American Electric Cordsets utilizes the Healthworks Program at Wooster Community Hospital for its various wellness seminars, exercise programs, and substance abuse treatment programs. American Electric Cordsets contacts the Ohio Bureau of Employment Services about job listings and employment-related workshops. The Company also uses the Ohio Bureau of Worker's Compensation, Division of Safety and Hygiene's, library to obtain safety videos for classes on the subject. REFERENCES: ------------------------------------------------------------------- COMPANY: Robert Bosch Corp. CORPORATE ADDRESS: Stuttgart, Germany PLANT/BRANCH ADDRESS: 8101 Dorchester Road Charleston, South Carolina 29418 SIZE (employees): 1,675 UNION(S): Non-union INDUSTRY: Fuel injectors and anti-lock braking systems SIC CODE: 3714 NEAREST METRO AREA/MILES: Charleston, SC (0 miles) CONGRESSIONAL DISTRICT: SC-01 SECTOR: Private OWNERSHIP: Fully owned by Robert Bosch Corp., Germany. CONTACTS: Quincy Holmes Unit Manager of Human Resources 101 Dorchester Road Charleston, SC 20418 (803)760-7360 DATE: 3/1/95 COMPANY DESCRIPTION: Robert Bosch Corp., of Germany is an international producer of a wide range of automotive parts and sub-assemblies. Twenty years ago, Robert Bosch Corp. established the Charleston, South Carolina plant, which is now one of the largest producers of fuel injection and anti-lock braking systems in the world. Its primary customers are U.S. automobile assembly plants. The Charleston plant is fully owned by the multi-billion dollar parent company. TRAINING AND CONTINUOUS LEARNING: Extensive training opportunities are available for employees at Robert Bosch. These opportunities range from mandatory pre- employment training, to internal apprenticeship programs, to tuition reimbursement for attending local colleges or technical institutes. Potential employees must go through an intensive nine week pre- employment training program. In this program, workers receive both "hard" and "soft" skills training. All job applicants must complete the training program before being considered for a job. Workers who complete the program are not guaranteed employment, but will likely receive it. Robert Bosch offers an apprenticeship program for employees who qualify based on passing a series of tests including: knowledge and skills, math, manual dexterity, interviews, and a physical exam including a drug test. The apprenticeship positions are filled by workers already in the company, as well as local high school graduates. Once a worker is accepted into the program, he or she then embarks upon a two and-a-half year apprenticeship training program. This program is based upon a model used by Robert Bosch of Germany. The apprenticeship training program consists of eight hours of classroom instruction per week at Trident Technical College. At Trident the apprentices learn math, drafting, machine shop theory, human relations, materials, physicals, numerical and computer numerical control, technical report writing, hydraulics, electricity, pneumatics, and statistical process control. The remaining thirty-two hours of the week consist of practical learning on the floor of the training department. Throughout the two and-a-half year program, the apprentices gradually learn more and more advanced skills, utilizing classroom and practical experiences. Apprentices are rotated through each department and learn all of the skills necessary to perform any job in the plant. Group projects and interpersonal skills are stressed to prepare workers for self-managing work teams. In most classes, 90 percent of the apprentices pass and graduate to journeyman status. It is emphasized upon graduation that this is not an ending of a training period, but rather, the beginning of a career. Graduates of the apprenticeship program can expect significant increases in pay. Workers attending courses at local colleges and technical schools, whether job related or not, are fully reimbursed for tuition, books, and other expenses. Employees attending courses in order to attain mandatory skill levels are paid for the time they are in class, as well as the reimbursement for tuition, etc. A minimum grade of "C" is required for tuition reimbursement. In a typical year, the Charleston plant spends $593,000, or 3 percent of payroll on employee training. Temporary employees, making up 10 percent of the workforce, have access to training opportunities as well. Each employee spends approximately 100 hours per year in training activities while on paid time. There is extensive cross-training of employees in order to achieve mastery of a family of production techniques. EMPLOYEE PARTICIPATION: Every employee at Robert Bosch is a member of a self-managed work team. These teams are organized by product line. Team members rotate among each of the various jobs on the team. While all workers are responsible for quality control, one member of each team is designated head of quality matters. This person acts as the team leader. Employees have contact with customers daily and are empowered to make decisions and solve problems as they arise. These contacts include exchange programs consisting of team members visiting customer and supplier premises, while representatives of customers and suppliers visit the Charleston premises to consult with team members. Teams meet daily to discuss production and quality issues. Employees are empowered to implement immediate process improvement or elimination of non-value adding activities. Employees may make these changes without consulting management up to a cost of $100,000. ACCESS TO INFORMATION: There are various communication channels in the Charleston plant. Teams meet once a week to exchange information and discuss important issues. Ten to fifteen minute briefings consisting of the work teams, the team leaders, and managers, are held each morning. A weekly newsletter is circulated throughout the plant with the goal of keeping workers up-to-date on issues of concern to the company. Talks are given by the company vice-presidents once-a- month to groups of employees chosen by management. Computers have been installed in various areas of the plant for all employees to use to gain information. Financial, costs, equipment, and tooling are all examples of information that employees may attain from the computer stations. Employees are trained in how to use the computers, and in how to understand the information pertinent to their product line. The company stresses upward communication rather than management talking down to employees. ORGANIZATIONAL STRUCTURE: Production at the Charleston plant is organized by product line. All workers in each product line are members of a work team. There is a separate work team for each product line. The plant is in the process of flattening its structure and plans to reduce to four layers of authority and three pay levels; two being semi- skilled and one being high-skilled. Workers are trained to perform all duties within their work team. This flexibility contributes to the success of the plant's efforts to flatten its structure. The Charleston plant has been certified as a preferred supplier by its customers. The plant has its own 10 step certification process for its suppliers as well. In this way, it assures the quality of its raw materials. EMPLOYMENT SECURITY: The Charleston plant has not had any layoffs since a low-scale, temporary cutback in 1990. The presence of a large number of temporary employees acts as a buffer for the full-time workforce. These temporary employees will be let go before full-timers when the cyclical nature of the industry decreases production requirements. In the past, the plant has utilized both shorter work weeks and job sharing when a decline in orders has reduced necessary output. Management maintains that if there are problems in the future, it will implement these policies before layoffs. SUPPORTIVE WORK ENVIRONMENT: Robert Bosch of Charleston has an extensive employee wellness program that includes on-site aerobics, walking, and medical screening. Each employee over the age of forty gets a complete annual physical exam at the expense of the company. The company is in the process of securing building permits to build a recreation center adjacent to the plant. The plant has negotiated reduced rates with three child-care providers in the immediate vicinity of the plant. These services are highly utilized by employees. The plant has an extensive affirmative action program. It currently has a workforce that is 44 percent female. The plant actively recruits workers with handicaps and disabilities. These people are trained through local vocational rehab centers. The Charleston plant has won the South Carolina Governor's Award for Employment of the Handicapped. PRODUCT/SERVICE QUALITY: Robert Bosch Corp. of Charleston makes use of TQM teams and Quality Circles. These on-going teams are made up of employees who volunteer to participate. There are presently 35 Quality teams which address different areas of the plant. The plant has a formal benchmarking task force that seeks information from and about world-class quality organizations. The task force is composed of engineers, production workers, and others who are interested in the benchmarking effort. The plant is itself a recipient of visits and requests for information from other organizations interested in benchmarking. Employees at Robert Bosch have daily contact with customers. This contact includes gaining feedback as to the quality of the plant's products and services. Employees are empowered to stop the line or make changes if a problem with workmanship or quality is discovered. The plant utilizes Statistical Process Control to monitor quality. Every employee including clerical workers has had six hours of training on SPC. The plant uses full-charted SPC to gather production information. This information is collected and used every day, and on every shift, to check process quality. COMPENSATION LINKED TO PERFORMANCE: Presently, the plant's pay system resembles a traditional structure. The plant is currently studying and designing an "at risk" compensation system which is expected to be implemented in the near future. Workers completing the apprenticeship training program receive significant increases in pay. These workers leave the program with a variety of skills and are compensated for this increased skill level. WORKER-MANAGEMENT RELATIONS: N/A STRATEGIC INTEGRATION OF BUSINESS: The human resources function is integrated into the overall strategic planning function of the plant. The HR department is an integral part of the strategic business plan, and the planning process. The HR department is not looked upon as overhead, but rather as part of the total management group. REMARKS: The Charleston plant expects to be the world's largest manufacturer of fuel injection systems. It no longer is satisfied with being a top manufacturer in the U.S., but is setting its sights on becoming world class. The plant expects to accomplish this goal through its focus on employees and customer satisfaction. ACCOMPLISHMENTS/AWARDS: The Robert Bosch Corp. Charleston plant has received the highest quality supplier designation from its automotive customers, including Ford's Q-1 Award. The plant has received recognition by the Department of Labor of the State of South Carolina for its apprenticeship and handicapped employment practices. It has received the Governor's Award for Employing the Handicapped. The plant has in the past received the designation of "Employer of the Year," in South Carolina. SERVICE PROVIDERS: Trident Technical College assists Bosch in fulfilling its training needs. Trident supplies teachers and classrooms exclusively for Bosch workers. Bosch-developed classes are taught to its workers as well as more traditional courses. REFERENCES: Vasilash, Gary S. "Where Training is a Way of Life." Production, June 1990, 60-64. Vasilash, Gary S. "A Look at Germany with a Glance at Japan." Production, September 1991, 34-36. ------------------------------------------------------------------- COMPANY: Brogan & Partners Advertising/Public Relations CORPORATE ADDRESS: 2000 Fisher Building Detroit, Michigan 48202 PLANT/BRANCH ADDRESS: N/A SIZE (employees): 36; seven additional contract workers UNION(S): N/A INDUSTRY: Advertising/public relations SIC CODE: 7311, 8743 NEAREST METRO AREA/MILES: Detroit, MI (0 miles) CONGRESSIONAL DISTRICT: MI-13 SECTOR: Private OWNERSHIP: Privately held CONTACTS: Marcie Brogan Managing Partner Brogan & Partners 2000 Fisher Building Detroit, MI 48202 (313) 874-8555 (313) 874-8575 FAX: (313) 874-8539 or (313)-874-8565 DATE: 01/13/95 COMPANY DESCRIPTION: Brogan & Partners is a communications firm offering advertising, public relations and promotional services. It was incorporated in 1984 by Marcie Brogan. The company's clients include the Michigan Travel Bureau, Genesys Health System, Allnet Long Distance, Arthur Andersen & Co./Detroit, and other local, Michigan, and Midwest companies. Brogan & Partners has capitalized billings of up to $20 million. TRAINING AND CONTINUOUS LEARNING: The employees at Brogan & Partners have ample opportunities for educational development. Since the company offers integrated services to clients, cross-training is important. Employees are cross-trained by each other as well as by touring the suppliers and vendors the company currently uses to become well versed in their procedures and requirements. These establishments include printers, editing houses, graphic design studios, direct mail houses, and radio and television stations. Representatives from each of these companies have also conducted internal seminars for Brogan & Partners. There are no formalized, written agreements to make this training relationship happen. Continued positive relations between the company and its suppliers have brought it about. The company pays for employees to attend seminars, training sessions to improve skills or to learn new disciplines. For example, employees have gone to Media School, to Leadership Skills programs, such as interactive communicating, and direct marketing sessions. The company has also sponsored internal seminars on various aspects of the profession. There is an internal track of courses for account service people which PR and promotional account managers and all interns are encouraged to attend. For many new hires, the company pays for a 16-week, 3-hours-a-week advertising course at Detroit's Adcraft Club and Midland's Northwood University. The company also encourages employees to further their formal education. Workers can be flexible in their choice of a college program, whether undergraduate or graduate. They can study marketing, advertising, public relations, communications, psychology, and related fields. The tuition reimbursement program states that Brogan & Partners will pay for 50% of an employee's course if an A is earned. If the final course grade is a C, 25% is paid. For a D or F, nothing is paid. Textbooks, supplies, and related expenses are paid by the employee. Brogan & Partners prefers these courses to be taken at night so that daily work responsibilities continue uninterrupted. EMPLOYEE INVOLVEMENT/EMPOWERMENT: Brogan & Partners has moved to an autonomous, team-based work environment, which they have been using since May, 1994. These Teams are: Advertising (13 people); Public Affairs (2 people); Public Relations (8 people); Targeted Marketing (9 people); and Support (11 people who provide administrative, new business, media buying, and broadcast production services to all Teams.) Each Team is organized around a specific group of clients, and that Team provides the specific services the client needs. If a client served by one Team needs additional help in another area, someone from another Team assists. Each Team has a Team Leader who sets the Team's goals, priorities, profit expectations; encourages performance and productivity, and maintains quality standards. The Team Leader evaluates Team members. Each person on the Team completes an annual self-evaluation. In meetings with the Team Leader, each person discusses both evaluations. ACCESS TO INFORMATION: The specifics of company projects are always shared with employees at monthly all-agency meetings where people can voice their opinions and questions, and keep abreast of all company activities. In addition, each Team has a Monday morning meeting to review every job of that week. There are also "hallway meetings," where groups of people spontaneously gather to solve problems and discuss strategy. Status sheets keep employees informed about the progress of the agency's projects. A newsletter, "B&P: Usable Tips, Trends, and How-To's," is available for everyone--employees and clients alike. In January 1995, a written plan for sharing financial information was put in place. The new plan expands on the current practice of sharing general financial information with all who handle accounts. Now all employees will be aware of their respective Team's dollar goals and will be updated at monthly meetings on how they are doing versus objectives. While individual salaries will remain confidential, each Team will be aware of its total compensation (salaries, freelance, benefits, payroll taxes) as well as its total operating expenses (rent, supplies, equipment, phones, etc.) plus its prorated share of Support Team services. Each Team will be able to see on a monthly basis what their expenses are versus what income has been generated by each client. They will then see if they are meeting their expected 30 percenty profit goal. If they are not, the Team as a whole must solve the problem. Quality of product and of client servicing are just as important as profitability. This is analyzed by the five partners at their monthly meetings, and at biweekly one-on-one lunch meetings with Marcie Brogan. Any glitches or problems are communicated to the Teams. ORGANIZATIONAL STRUCTURE: Brogan & Partners' structure is relatively horizontal. Each partner leads one of the five Teams. The Teams work autonomously for the most part, with Marcie Brogan setting quarterly standards and profit goals. The agency's partners made the decision to move to a formal team-based environment after reading Reengineering the Corporation by Michael Hammer and James Champy. With 36 full-time employees, the company was small enough for everyone to work together to bring about the desired changes speedily. Reaction to the transition has been positive. In fact, the company brought in a consultant to assist them in completing the work team process. After reviewing their process, the consultant felt that they did not need his services. EMPLOYMENT SECURITY: Given the vulnerability of the advertising and public relations field to economic fluctuations, Brogan & Partners cannot guarantee employment security for the staff. Salaries are the major expense and must be in direct proportion to income. If the company loses income, an effort will be made to reassign employees to more prosperous Teams. If that is not possible, people have to be let go--a painful process for all concerned. Partners do provide leads for new opportunities through informal networks. Many times, Team members will volunteer to work with the person being let go to "soften the blow." SUPPORTIVE WORK ENVIRONMENT: Brogan & Partners does not distinguish between vacation and sick days in order to accommodate family situations. An employee earns 5 days off after 6 months on the job. After the first year, employees have 7 mandatory holidays off, and 14 additional days off. After 5 years, an employee earns a total of 26 days and holidays off. Employees may design flexible schedules with their Team Leaders. There is no formal system in place. As long as the work of the agency gets done, an employee may integrate his or her outside activities within the workday. However, it is up to that individual's Team to approve the flextime plan. The company has had "Take Our Daughters to Work Day" before it was a national concept. Partners and employees have long brought their children to the office as an emergency alternative to day care, or as a learning experience for the child. Maternity, paternity, and adoption leave programs are available. These are extremely informal, unwritten policies that vary by seniority. There is no prescribed amount of time off in these situations. Other benefits include 75 percent employer-paid health insurance, life insurance, disability insurance, and a 401(k) plan and a cafeteria plan that allows employees to set aside pre-tax dollars for child care and health-related expenses. In the future, some employees may have to look at eldercare resources. The company is taking a closer look at this issue. As one of the top women-owned and managed firms in the Detroit area, women feel very comfortable interviewing with this company. The current staff makeup is 60% women; 40% men. Brogan & Partners is also committed to hiring minorities, particularly African-Americans. The agency has an internship program with two local schools--Detroit Northwest High School and Catherine Ferguson Academy. The latter is a specialized school for teen mothers and fathers and their babies, providing day care and the chance to finish high school, prepare for employment, college, and family life choices. The company sponsors an intern per quarter from each school. Internships are also offered to college students. Staff members also participate in career events at local colleges, and have served as mentors for college students. At the worksite, interns are mentored by virtually everyone on staff. For a new employee, the "buddy system" is used to integrate that person into the agency. Orientation handbooks are also provided for new hires. Work safety is important to all Brogan & Partners employees. They have had local police and building security in to conduct seminars on "street smarts," theft prevention, and other topics. After late nights at work, employees leave the building in groups for added protection or are escorted to their cars by security personnel. A quarterly half-day employee "Mystery Trip" boosts morale and is an informal method of internal networking. On that day, the office closes down for 3 hours midday so that everyone can enjoy the event. Recent excursions include the Motown museum, a Canadian casino, and a $50.00 per person shopping spree. The company also has a summer party at a partner's home and a winter holiday party. Spouses, friends, and significant others also attend these events. Part of the agency's mission is to have an "enthused, energized workplace that maximizes morale." Each Team Leader finds ways to reward members for quality work--an on-the- spot cash bonus, time off, or a gift. Annual employee awards are given for creativity, client servicing, and individual progress. The company strongly supports employee participation in wellness programs, including exercise classes, weight control, and smoking cessation. If the employee successfully completes the program and maintains its results for six months, the cost of that program is reimbursed. If an employee uses the workout room in the building regularly, the $25.00-a-year fee is paid by Brogan & Partners. PRODUCT/SERVICE QUALITY: Creative quality is ensured by hiring quality creative people, by making quality products part of the agency mission, stance, pitch, and persona. It is constantly monitored by Marcie Brogan and each partner using national and industry norms. No work is presented or produced without a partner's authorization. Work is entered in national competitions to see how it measures up. Results of advertising and PR production are also monitored by establishing specific objectives for each project--e.g. specific sales increase or awareness increase or number of phone calls or responses. Service quality is promoted by hiring people with a passion for servicing clients responsively and responsibly. Each client contact person is monitored by a Team Leader and must follow a set of procedures that help ensure clear communications about objectives, strategy, budget and timing. Periodic meetings with clients to get their feedback on products is another way of measuring quality. COMPENSATION LINKED TO PERFORMANCE: In January, 1995, a "pay-for-skills" plan was put in place. Traditionally, Brogan & Partners has compensated employees for acquiring skills that have expanded their professional effectiveness. But now bonuses and raises will be partly based on the number of skills they possess in communications disciplines. The more skills, the higher the compensation, and the "full-service agency" concept is even more developed. "Associates" are people within Brogan & Partners who go the extra mile on a continuous basis. These individuals are entitled to an annual bonus of up to 15 percent of their yearly salary. Bonus percentages are based on gross income and net profit. WORKER-MANAGEMENT RELATIONS: Worker relationships are generally very positive. Traditionally, when a disagreement arose, it was the responsibility of the people involved to settle it. Since moving to a team-based environment, worker conflicts have declined. STRATEGIC INTEGRATION OF BUSINESS: The partners develop the five-year-plan for the company. It is examined quarterly and updated annually by the partners. At the beginning of the year, the plan is reaffirmed or changed and shared with Team members. A computer network will soon be available. Brogan & Partners currently relies on several computer systems. Media is managed with a peer-to-peer PC network, while creative work is produced on Macs, networked through an Ethernet system. The financial operations run on a Xenix-based multi-user system. In addition, individual 389/486 PC's are used throughout the company. Brogan & Partners is also a part of the Internet. In 1995, technology is a priority for Brogan & Partners. A technology plan, an essential part of the company's reengineering, is currently in the planning stage. As the new plan is implemented, the Mac and IBM networks will be merged into a more efficient system, capable of running the latest versions of the most technologically advanced software packages. The ultimate goal is to have the company as paperless and integrated as possible. Each employee, including those who work from home, will have a computer, phone, and fax. First, Teams will be networked, and then the Teams will be hooked up electronically. REMARKS: The company is very aware of environmental issues. They practice recycling, and recommend recycled products to their clients. ACCOMPLISHMENTS/AWARDS: A+ FINALIST. (National award from the American Association of Adcraft Agencies) ADDY. Best of Show. Golds, Silvers locally and regionally ATHENA. (For best nationally in newspaper) BPAA AWARDS. (For business-to-business advertising) Golds, Silvers CADDY. (Detroit's major award show) Golds, Silvers, Best of Category CANNES. Finalist CLIO. Recognitions COMMUNITY ACTION NETWORK. (For public service advertising nationally) First place DANDY. (For effective car dealer advertising) EFFIE. (For advertising effectiveness) EMMY. (For excellence in television advertising) HEALTHCARE ADVERTISING AWARD. Best of Show. National Golds, Silvers. INTERNATIONAL FESTIVAL OF NEW YORK. Silvers, Bronzes MERCURY. (National Radio Competition) Medalist MOBIUS. National firsts and seconds RETAIL ADVERTISING CONFERENCE. National Golds, Silvers TELLY. (For television commercials) Platinums, Bronzes TOUCHSTONE. (For effective hospital advertising) Golds, Silvers ADCRAFT PM AWARD OF EXCELLENCE. DETROIT AD WOMAN OF THE YEAR AWARD. DETROIT AGENCY MANAGER OF THE YEAR AWARD. 10 MOST INFLUENTIAL AD PEOPLE OF THE DECADE. (Adweek Midwest) "WORKPLACE OF TOMORROW" AWARD. (Women's Economic Club, Detroit) DETROIT'S 100 POWERS AND PERSONALITIES. (Book listing) BUSINESS WOMAN OF THE YEAR AWARD. (Professional Women's Association) PRESIDENTIAL PRIVATE SECTOR INITIATIVE AWARD. DISTINGUISHED WOMAN AWARD. (Northwood University) SERVICE PROVIDERS: Brogan & Partners used the consulting services of the Agency Management Group of Pittsburgh, PA. Contact: Jeff Burkel, President. The company also received guidance from Hammer and Champy's Reengineering the Corporation. REFERENCES: ------------------------------------------------------------------- COMPANY: Budd Company, Stamping and Frame Division CORPORATE ADDRESS: P.O. Box 2601 3155 West Big Beaver Road Troy, Michigan 48007-2601 PLANT/BRANCH ADDRESS: 2450 Hunting Park Avenue Philadelphia, Pennsylvania 19132 SIZE (employees): 1,800 UNION(S): United Automobile Workers INDUSTRY: Automotive parts SIC CODE: 3465, 3499, 3711 NEAREST METRO AREA/MILES: Philadelphia (0 miles) CONGRESSIONAL DISTRICT: PA-02 SECTOR: P OWNERSHIP: Private, wholly-owned subsidiary of Thyssen AG (Germany). CHIEF EXECUTIVE OFFICER: Siegfried Buschmann CEO and Chairman of the Board Budd Company P.O. Box 2601 Troy, MI 48084 (313) 643-3500 CONTACTS: Al Kovach Vice-President Stamping and Frame Division Budd Company 2450 Hunting Park Avenue Philadelphia, PA 19132 Phone:(215) 221-7372 Fax:(215) 221-7420 Robert Duffy President Local 813 United Automobi