UNIONS LAST OF MANUFACTURERS’ CONCERNS
By bringing General Motors Corp. to a screeching halt, the United Auto Workers showed the punch organized labor still can deliver. But when it comes to unions, manufacturers in Illinois are as unconcerned as a GM dealer with a secret stash of Corvettes.
In a soon-to-be-published survey, Illinois manufacturers were asked by American Express Corp.’s tax and business services unit to quantify the expected impact of 13 issues or concerns on their companies. Finishing dead last: union/labor issues, which they collectively said will have little impact.
Also prompting a shoulder shrug from mid-continental manufacturers were NAFTA/free-trade agreements and foreign competition.
So what are Illinois manufacturers worried about? Topping the list of troublesome issues in the fifth annual poll by American Express are a trio of interrelated payroll concerns: escalating insurance and benefit costs, tight labor markets and poor employee work ethics.
In another section of the survey, which was mailed out to 10,000 big and medium-size companies in the second quarter, almost half of the respondents said they are concerned about industrial consolidation.
Jeff Balkan, Chicago-based director of consulting within the American Express manufacturing and distribution team, says he also was impressed by the percentage of manufacturers planning geographic and product- and service-line expansions.
Fully a third of the poll’s respondents–a respectable 20 percent sent in answers–said they are considering going abroad, and huge majorities said they plan to offer new products.
“I’ve been doing this 13 years and we’re seeing more expansion now than in quite some time,” Balkan says.
Balkan says he was surprised by only one result: Just 27 percent of manufacturers said that Year 2000 computer problems could have a serious impact on them. He speculates the percentage is low because “some are working on it and others are hoping it will go away.”
Lighting out: One Chicago manufacturer moving abroad is Tripp Lite, an affiliate of Trippe Manufacturing Co. A maker and marketer of surge protectors and battery backups for computers, Tripp Lite opened its first warehouse and distribution center in Canada this week; it also incorporated in Canada so customers can pay in Canadian currency.
Keelin Wyman, executive vice president of marketing, says Tripp Lite still sees plenty of growth potential in the United States. The price of its battery backups, known formally as uninterruptable power supplies, has dropped to under $100, opening up the home PC market.
But the greater opportunities are overseas. Tripp Lite, which took over the old Spiegel Inc. warehouse complex on the South Side last April, now has facilities in 10 foreign cities and derived 20 percent of its $175 million in sales last year from outside U.S. markets. By 1999, Wyman says, that share should be up to 28 to 30 percent.
Gary Works: Like married couples, businesses celebrate 25th anniversaries with silver and 50th anniversaries with gold. USX Corp-U.S. Steel Group is marking the 90th anniversary of its flagship Gary Works with a more appropriate metal: up to 73,000 tons of iron ore pellets.
On Thursday, the Edgar B. Speer will dock at the lakeside mill–exactly 90 years after the first Great Lakes ore ship, the Elbert H. Gary, tied up at Gary Works to feed what would become the most productive steel mill in American history, and perhaps the world’s.
At that first docking in 1908, the laker’s namesake, Elbert H. Gary–the U.S. Steel chairman who turned an empty stretch of sand dunes into the steel town that would be named for him–was not on hand to dedicate his creation.
But hundreds of others were. A band played “Garyland, My Garyland.” (That ditty about Gary, Indiana, wasn’t written until 1957 for “The Music Man.”) Three navy gunboats issued a 21-gun cannon salute. The 1908 Democratic vice presidential candidate, John W. Kern of Indiana, drove up in an automobile.
This time around, the festivities will be more modest. Gary Mayor Scott King will be there. U.S. Steel will be represented by Raymond R. Terza, plant manager of the Gary Works’ furnace operations. They plan to flip specially struck coins into the harbor.
For the record: Gary Works, which still employs 8,000 people, is the nation’s biggest mill, producing 7.7 million tons of raw steel a year. Over its lifetime, it has made 435.6 million tons of steel–enough for 480 million cars, 75 million steel-frame homes or 1,000 food cans for every person on Earth.
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E-mail Michael Arndt at marndt@Tribunecom
E-mail regular contributor Sallie L. Gaines at sgaines@Tribunecom
