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The Steel Plant

A steel manufacturing plant in Pennsylvania that was owned by one of the largest and oldest American steel companies had been shut down and abandoned for two and a half years. The price and quality of foreign steel had put that plant out of business.

As I toured the plant I noted that the huge metal building and external workshops encompassed the equivalent of several city blocks along the river. Manufacturing equipment lay idle and covered in dust. Partially finished product lay strewn on the floor in disarray, as if every employee had abandoned their work stations in mid-process at the same moment. The remains of raw materials that had not yet been pilfered was stacked at various stages of the manufacturing process.

I felt a residue of the chaos and loss that must have prevailed at the closing of the plant, somewhat as if I were surveying a deserted battlefield of burned-out tanks, shattered artillery pieces, and the rusted rifles and helmets of deceased soldiers.

The plant had been purchased by an investment group at pennies on the dollar. They intended to re-open the plant with the expectation they could utilize more efficient manufacturing methods and compete successfully with foreign steel.

The investment group hired one of the supervisors that had worked for the previous employer to be the new plant manager. He had presented to the investment group some excellent ideas about how an independent manufacturer, under the right conditions, could produce steel much more efficiently than the old-school major manufacturers.

Except for a few menial jobs, he had been unemployed since the plant closed. It was obvious that he was extremely enthusiastic about re-opening the plant. In its heyday, the plant had directly or indirectly employed almost every able-bodied adult male in the town that surrounded it. The plant closing had been a disaster for the town. Those that still remained had suffered greatly.

The new manager-to-be had negotiated an unconventional agreement with the local union president. The union had also suffered. The agreement centered around making the re-opened plant efficient and competitive as the primary working relationship rather than the previous adversarial relationship that focused on job protection at all costs and culminated in closing the plant.

The manager and the union president asked if I would help them create a cohesive workforce that would rebuild the equipment and work efficiently together to make the plant competitive and profitable.

Three quarters of the experienced workforce had moved away. However, the manager assured me he could run the plant with one fourth of the previous workforce if the union would allow the employees to work cohesively and if I would provide the teambuilding method, tools, and training.

The union president had already agreed not only to suspend traditional methods and work toward collaborative efficiency, but to help with hiring the right people and enforcing the new agreement. And he did.

I agreed to provide the teambuilding.

The manager, the union president, and I explained the new vision in town-hall meetings. It seemed that every person in the town showed up. Several that had moved away returned to attend the presentations.

The manager, with employee lists from the previous regime in hand, claimed that at the close of the town-hall meetings, every qualified craftsman that had been a previous employee and was still residing in the town, plus some that had moved, requested to be interviewed for the plant re-opening.

Then, the three of us co-facilitated more detailed question-and-answer sessions for successive smaller groups with 20 to 30 re-hire candidates in each session.

I explained that I would train cross-functional teams in how to set goals, solve problems, innovate, and make collaborative decisions. I described how these teams, once trained, would be empowered to implement any action that would get the plant operational quickly and install any mechanical or procedural improvement that would increase efficiency.

The manager confirmed that his endorsement of teamwork, empowerment, and employee innovation would replace the previous regime of unilateral managerial dictates. He described, in specific detail, how employees would participate financially in the profits beginning with the first month the plant showed a profit.

The union president explained that each work unit would strive to make their segment of the manufacturing process as efficient as possible and seamlessly compatible with other segments. Job descriptions would no longer prevent collaboration either within the team or across segments. Seniority would not permit any behavior that interfered with productivity. Every employee would be an equal member of their team. A core condition of employment from both the management and union perspective would now be team efficiency within each segment and collaboration throughout the plant.

About 90% of the applicants were re-hired. The others had either started new careers or felt the stress of unemployment was preferable to the stress of changing the rules.

The re-hires brought the technical expertise to the job. I conducted training in entrepreneurial skills and teamwork for five weeks. The manager purchased raw materials and some replacement parts for the idled manufacturing equipment. The union president applied the collaborative role of the union under the new agreement.

The teams cleaned up the plant and refurbished the equipment in four weeks. They began processing steel on a limited basis the fifth week. They began full production in the second month. In the fourth month, the new plant produced as much steel as the highest production months of the previous plant, they did it with one-fourth the number of employees, and it was profitable. They continued to improve in output, efficiency, profitability, and morale.

I visited the plant on two occasions after they had hit their stride. The deathly silence was replaced with the noise of machines and activity. The dust of abandonment was now the smoke of furnaces. Implosion had become output.

As I walked along the half-mile length of the building, the guys waved and yelled greetings to me, but they didn’t stop work or even slow down. They were on a mission. They liked being employed again, they liked working together, and they liked sharing in the efficiency they created. I felt very good for them and for the role the three of us played in bringing a new spirit to a defeated town and a competitive edge to an abandoned and forgotten steel plant.

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“Frank, working with a team of executives of a Fortune 100 corporation, facilitated the strategic plans that led to the formation of a 4-billion dollar corporation.”

Scott Carpenter, Client Engagement Director

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