Labor-Management Case Study
Colfor
Manufacturing,
Inc.
and
the
Written by the
Northeast
Ohio Center for Labor Management Cooperation
at
Work
in Northeast Ohio Council
(WINOC)
for 
with support from the
Ohio Labor-Management Cooperation Program
of the
Case Study
On
(American
Axle & Manufacturing Company)
Background
Colfor Manufacturing, Inc., based in Malvern, Ohio, with other plants in Minerva and Salem, Ohio (Carroll and Columbiana counties) is engaged in the production of world-class precision cold and warm machined forgings for applications in the automotive and light truck industries.
The company began forging operations in Malvern, Ohio in 1956, started the machining operations in Minerva in 1995, and acquired the forging/machining operations in Salem in 1998.
In 1999, Colfor became a wholly owned subsidiary of American Axle & Manufacturing Company of Detroit, Michigan.
American Axle & Manufacturing Company (AAM) was founded in 1994 by Richard E. Dauch (a former Chrysler executive and author of Passion for Manufacturing) and others. AAM’s vision is “to achieve profitable growth as the Premier Global Supplier of driveline systems, chassis components and forged products and services while providing our customers with competitive advantages.”
AAM has fourteen locations in the United States (in Michigan, New York, and Ohio), and also has offices and facilities in Brazil, England, Germany, Japan, Mexico, Scotland, China and Poland. The ten domestic plants are all unionized (under the UAW). AAM has National Agreements and local collective bargaining agreements with the International Union, UAW and the International Association of Machinists (IAM) covering approximately 6,500 and 300 hourly associates, respectively, in the U.S.
When AAM purchased Colfor in 1999, the UAW organized the previously non-union Colfor based on a neutrality pledge by the corporation, AAM. The initial stand alone labor agreement was for five years, and has recently been renegotiated for another five years. Employment at Colfor exceeds 700 associates and plans to expand in the near future.
Colfor Manufacturing, Inc. with its operations in rural Carroll and Columbiana counties of Ohio had difficulties in the mid-nineties and was under bankruptcy protection for a while. The workforce is perceived to have a very good work ethic and wages are competitive for their industry. Business for Colfor is growing and plans to significantly increase the size of the Minerva machining plant were realized in the fall of 2005.
Leadership
AAM’s Metal Formed Products group is under Richard (Rick) F. Dauch. The Colfor Manufacturing, Inc. team is lead by Inacio Moriguchi as President and his staff which includes three plant managers: Tom Fry of Malvern, Greg Gilbert of Minerva, and Rich Varagliotti of Salem. Human Resources and Labor Relations are under Bob Nappi.
The UAW Local 4199 is lead by Ron Boggess, President. Each plant has committee chairman: Tim Myers, Salem, Lyle Hall, Malvern, and Brett Wollever, Minerva.
Company
Culture/Mission
Colfor’s mission is driven by its parent AAM, who has an established “Code of Business Conduct”. AAM has achieved its leadership position in the automotive industry while maintaining a reputation for honesty and integrity.
AAM was founded on a core set of values based on a strict code of ethics and total integrity. It works to treat all associates, customers, suppliers, stockholders and other stakeholders with honesty, integrity, fairness and respect.
The mission of Colfor Manufacturing, Inc. states, “the company and its associates are committed to meeting customer requirements through measurable quality improvement, cost reduction, and on-time delivery of products and services, while achieving profitable growth.”
The company’s monthly reports such as the “Five Zero Summary” report tracks progress to attain their mission. Their goal is to be best in the AAM family of companies and world-class in their operations.
The top leadership at Colfor operates within an “open-door” mode that enhances communications to all associates. Plant managers have good rapport with the union leaders and deal with employee concerns quickly. The grievance backlog is very low and averages about one new grievance per month per plant.
UAW Local 4199 covers all three plants, and is constantly looking out for what is good for the entire company. The recent contract negotiations were held in a professional manner over a five-week period. The five-year length of the new contract attests to the respect that the company and union have for each other.
Marketplace
Challenges
Colfor/AAM now operates in a global market. Other low labor cost regions of the world (especially India and China) are beginning to develop their forging and machining technology. Raw material costs continue to rise and energy costs are uncertain.
The launching of new products and processes are very important and a top priority for Colfor’s president. An investment of over $50 million was made in the Minerva operations to support the new transmission business. This could lead to over 100 additional jobs for the company. With this growth comes the need for the company to improve its quality and costs.
Resources
to Stay Competitive
Colfor Manufacturing has been on a continuous journey to produce quality products at competitive costs.
More recent efforts began in the late 90’s when WINOC (Work in NE Ohio Council) was invited in to teach employees Lean Manufacturing and later quality approaches to ISO 9000/QS 9000. WINOC continues to provide extensive training to associates.
The local branch of Kent State University has been available to associates through a tuition aid process. Both salaried and hourly employees benefit from this.
Colfor currently partners with Stark State College in Canton, Ohio to develop training programs for new hires and apprenticeship associates. [More details from Dan Maple]
Corporate (AAM) also provide guidance and training resource in quality, productivity, and employee relations. New efforts to implement Lean Pull Systems are being guided by Matthew Joing of Colfor and AAM advisors, Harris Lean Systems.
The corporation and Colfor in particular, believe in budgeting for associate training. Each year, associates on average receive about 50 hours of training, and the company spends about .4% of sales on training.
Labor
Relations
As stated earlier, Colfor has a collectively-bargained agreement with the UAW (United Auto Workers), Local 4199.
UAW Local 4199 leadership has the respect of both hourly and salaried associates. They seem to understand the Colfor/AAM business environment, and communicate well with management.
Associates' grievances are usually handled quickly and at the first (i.e. verbal) step. The Labor Relations staff is only called in on occasion, and usually deal with plant-wide issues.
The culture at Colfor reflects the corporation’s good rapport with the UAW. Supervisors follow the corporate “Code of Conduct” and are encouraged to be leaders (not just bosses). They are provided annual training in labor relations and leadership.
Both union and management leaders are encouraged to be “good listeners” and seem to have the respect of most associates.
Communications
and Measurement Methods
The Colfor plants rely on an extensive series of communications tools. There are daily production meetings with management and associates. Safety meetings are held monthly. Operations reviews and town hall meetings are held quarterly. There are also monthly labor/management meetings with the company president.
The monthly Five Zero Summary report is covered. Topics such as: Quality PPM, Return Sales, Problem Results & Resolutions, Cost Recoveries and Controlled Shipping are also covered.
Several indicators including the number of improvement projects measure productivity. The Machining centers are now producing to world-class quality and delivery standards.
Community
Outreach
While Colfor and AAM are looking toward a more global economy, they are also committed to promoting growth of industry in Carroll and Columbiana counties. Expansion of the Minerva plant will increase employment by over 100 associates. The company now employs over 700 associates in the region with a payroll of over $30 million. This makes them one of the largest employers in the region.
The company pays over $8 million in taxes per year.
Lessons
Learned
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A good work ethic, in rural counties of Ohio, started in 1956, has evolved into continuing cooperative culture with new company ownership.
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A modern labor agreement can strengthen the competitiveness of a manufacturing company.
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An enlightened management and union leadership can quickly deal with problems and address global competitive pressures.
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Before a full-fledge Lean Pull System can be implemented, standard systems for quality, maintenance, and IT must be upgraded.
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