While publications struggle to stay afloat in this day of free content via the internet, a one year subscription to Plant Closing News will set you back $999. In its 8 year existence, PCN has reported on over 5000 plant closings and relocations.
Paul Clemens' book Punching Out - One Year in a Closing Auto Plant, chronicles the events of dismantling a Detroit stamping plant so that it's gargantuan assets can be moved half way around the world to make the same parts and ship them back to the US at a profit. The obvious way to learn from history would be to chronicle the events that led to a plant's closing or to get inside those decisions that led to an entrepreneur creating a business success with a closed plant's redeployed assets. Instead, Clemens diary looks at the period between these two events, and gives some hints about why one plant's failure may become another's success.
An entire industry has grown up around plant closings. This industry includes a hierarchy of skilled labor that gets the job done. There are intelligence gatherers like PCN, auctioneers who advertise and sell off the good pieces, planners and project managers who oversee the relocation, skilled riggers who disassemble the machines, designers who document the interconnections, carpenters who crate up the pieces, logisticians who move out the crates in a logical order, expediters who move the crates through customs, and ultimately a whole new set of skilled people who put the machines back into service.
Security guards protect the assets while the vultures disassemble them. Then the bottom feeders come in to feed on the remaining scraps. Thieves eventually get free reign and then comes a crew with a wrecking ball unless they are beaten to the site by an arsonist. The cycle of life, dust to dust and ashes to ashes continues. Detroit, with vacant area from plant closings equal to the size of Boston, awaits developers to breathe new life into this decaying landscape.
Why do plants close? Many reasons, but I think there are primarily two. One is greed, especially when it goes unchecked because both sides, say management and labor, are both greedy. In the case of the auto industry, management allowed unions to push salaries and work rules beyond reasonable bounds because they were seeking their own short-term incentives. Recent events in Wisconsin show what can happen when management stands up for what it knows is right. I hope that, unlike in Detroit's case, it isn't too little too late.
Clemens' book points out that, as the end grew near, unions made concessions on the backs of new hires. One could make more money disassembling an auto parts plant than could be made as a new hire assembling those parts into new automobiles. Yet, it wasn't local labor that got to disassemble the plants. Their skills hadn't kept pace so skilled non-union riggers needed to be imported from other parts of the country to do the job of vulture.
One of the vultures, who had disassembled many plants, was said to have made the observation that moving the manufacturing base off shore seemed to go hand in glove with our nation's moral decline - greed. Just as the ancient Romans wanted to be entertained, a recent poll of American parents showed that, unlike parents in developing economies, our top wish for our children is that they be happy. Perhaps this is why we have more choreographers than metal casters, more people dealing cards in casinos than running lathes and more security guards than machinists.
A second reason for businesses falling into the hands of vultures and bottom feeders is our failure to recognize and act upon disruptive technology. If you have a Blockbuster or Borders near you, you may be seeing some vultures in your own neighborhood this month as many of these stores are being closed. Lack of appropriate recognition of and response to the internet, a highly disruptive technology, has and will continue to cause businesses to close. But as with disruptive technologies throughout history, while some businesses fail, others will open and thrive.
Resistance to change is a form of greed. People don't want to be uncomfortable. They negotiate for rules that make change nearly impossible. They won't change when things are going well, and by the time things aren't going so well, it may be too late to change. Greed, coupled with disruptive technology, is a perfect storm.
The automobile was a disruptive technology. It played havoc with a culture based upon horses and carriages. CNC machining was a disruptive technology. It drove much of the US machine tool business out of business and continues to affect those who have not fully embraced its use. Mechatronics is a disruptive technology, which has already finished off some machinery companies and will continue to drive out those who will not adopt mechatronic design principles or who will not, or can not, convert to the use of mechatronic equipment.
My wish for all of my readers is that no one ever has the opportunity to write a book that chronicles the scavenging of your plant. Keep your operations ethical, lean and flexible. Adapt to new technologies such as the internet and mechatronics. Let the vultures fly over someone else's plant.
