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Recession Ready? Interview with Wisconsin Plant Manager

With the waning economy and the deteriorating US Auto Industry, The Urban Country interviewed Wisconsin Plant Manager Barry Schwartz to see how average Americans are dealing with the recession.

What is your job title and your role?

Plant Manager. We are a small plant so I do all production scheduling as well being involved in all operations of the plant.

How long have you been running this plant?

I have been running this plant for 5 years.

What does your plant produce?

We produce brake drums and rotors for cars and light trucks. These parts are strictly for the aftermarket industry.

How many workers do you employ?

We currently employ 34 people.

How has the number of workers fluctuated since you first took over the plant?

The number was about 70 when I started and has been as low as 15.

What trends have you been seeing with respect to domestic companies moving production overseas?

In our business we have seen most of our competitors change to overseas products the last 15 years. Our company stayed mostly in North America until about 5 years ago. We sold our product at a higher price, based on it being a premium product, but eventually the consumers gravitated toward low cost product as the quality improved sufficiently over the years. Our company makes other automotive products as well, and have built or purchased a number of manufacturing plants worldwide. Other products are brake pads, filters, etc. The move to overseas is not strictly to take work away from North America, but to expand into the world market. The drum/rotor business that I am in is 99% gone from North America but the other product lines are not that far gone, yet. In my division of the company, in North America, they have closed 6 out of the 7 plants. In another division that I previously worked they have closed or are closing 5 out of 7 plants. There have been other plants closed in other divisions as well.

How have you been able to stay competitive?

My plant is not competitive with foreign suppliers on high volume parts, but we are competitive with low volume parts that are hard to get. To be competitive, we have a small management staff so there aren’t layers of non value-added positions. The supervisors and production employees work together. There is no ‘this is my job’ stuff. The supervisors do set ups on the machines so the hourly people can move to a different line and keep making product. We work with our casting supplier who is next door to us on cost reductions. We have brought a few parts back from overseas by doing these reductions.

How are your workers handling the uncertainty with their jobs and their future?

Businesses in our area are closing every day, so they are very concerned with their future. Our plant was targeted to be closed a couple of years ago, but we survived. However, that has left everyone very concerned that a decision could be reversed anytime. The only thing I can do to calm their fears is to be honest and give them company updates and my opinions continuously. If I tell them nothing, then they start to think the worst.

What types of changes have you seen in your workers lifestyle since the sky started falling?

I find that most employees come to me for my opinion, before they buy something big, such as a vehicle or a house or renovations. We have many more motorcycles than ever in the parking lot during the good weather months. They are putting in wood or pellet stoves to reduce heat costs. A number of them have re-financed their homes since the mortgage rates went down. Unfortunately, sometimes that is to be able to buy a large ticket item. They still do their hunting and fishing and take vacations, but I think they stay closer to home than before. Also, some people don’t care and haven’t changed at all, but there aren’t many like that.

Is it important for your plant for the US auto companies to get a government bailout?

Since we got out of the OE business, the bailout of the auto companies isn’t that important, although I think it would hurt us somewhat. We make aftermarket product for all makes of cars and trucks. By the way, our customers are places like NAPA, Carquest, etc.

What are your tactics/strategies to get through this deep recession?

Our company has tasked all plants to reduce purchased goods by 15% this year. They have cut back company wide staffing by 10% (so far) and are working at ways to maintain cash flow. All wages have been frozen for at least 6 months. No more company matching for 401k. Incentives to employees to get physicals, etc. to stay healthy and help reduce health costs. Our company’s health incentive program made USA Today on January 20th. Here at the plant we continue to work with our casting supplier on cost reductions. The best way to survive at the plant level is to get work from someone else so that we can at least have income to cover overhead and stay afloat.

What is the hardest thing you’ve ever had to do as a Plant Manager?

As a plant manager there are many decisions that are difficult. Having to decide how to keep a GM assembly line going when they found one of our parts faulty was very tough. However, all my life the toughest decision has always been telling someone that I no longer have a job for them. I have always gotten to know all my employees quite well as well as everything about their families. Therefore, if I have to let them go, I will be up all night long thinking about their family and how they will be affected by this decision.

If you won the lottery, what would you do to pass the time?

I am not a believer of lotteries, but if I was rich, I would travel a bit (mostly to sport events). I would probably like to somehow be a person who visits the elderly who have no one to talk to. I imagine there are Christian groups or some other groups who do this now, but I’m sure there aren’t enough.