Baldrige winner Wainwright Industries finding it hard to survive, seeks federal assistance.

One of the most respected small manufacturing companies in the United States is being rocked by foreign competition and has been approved to receive assistance from the federal government. Wainwright Industries, a Baldrige Award winner whose chairman Don Wainwright is the immediate past president of the National Association of Manufacturing, has been certified by the Secretary of Commerce under the agency's Trade Adjustment Assistance (TAA) program. The company can now apply for a matching federal grant to fund consultants that will help it adopt business practices to counteract the effects of cheap imports.

"We have been able to show that our business has been impacted by imports," says Wainwright Industries financial controller Susan Cutler. In order to receive assistance, the company had to document decreased sales and employment caused by overseas competition. "Unfortunately, we were able to show both," she says. Over the past year, the company reduced its staff by 6 percent and has suffered a 35 percent reduction in sales.

The St. Peters, Mo.-based manufacturer of stamped and machined products for the automotive, aerospace, home security and information processing industries, is reeling from the loss of large customers that are moving their production to low-cost regions of the world. "General Electric challenged us to put a facility in Poland, but what does that do?" Cutler asks. "It takes production out of the United States."

General Electric and other large OEMs are also becoming more aggressive in finding suppliers that can offer parts, components and services at costs that cannot be met by U.S manufacturers. "When you go onto GE's online bidding system for jobs, you're not sure who you're competing against," says Cutler. "You're not sure if you're competing with someone with the same currency or on the same playing field. You can't take a product and bid it with the cost factors of a facility in the United States when you're competing against facilities in Poland, China, Korea and Vietnam.

Does GE debrief Wainwright after an online auction is complete? No, says Cutler. "They say, 'Sign on and let the games begin.'"

Having been certified under the TAA program, the 53-year-old company, with about $30 million in sales, has two years to apply for a matching federal grant. The funds can be used "to change the face of our business to help us compete" against foreign producers, says Cutler. The company's strategy is to develop complicated products other than just stamped parts, combined with new services and support.

In order to succeed, the company "needs a technology surge," says Cutler. Web development, high-tech equipment and new business systems need to be deployed, beyond the best practices the company has already embraced using the Baldrige National Quality Award criteria.

Does Wainwright Industries expect business to come back once the economy turns around, Manufacturing & Technology News asked Cutler. "I've been around here for a long time and I don't know if I've ever seen this much leave before," she responds. "There will have to be some real changes in the United States and how we think before we see it come back or not."

Multinational corporations are being enticed by larger profits and are rewarded by shareholders for moving production offshore, she says, stating that it's her own opinion and not that of her company. "How do you change that trend?" she asks. "In the early days, investors were satisfied with a 5 or 6 percent return, but now they demand much higher returns and it forces companies to take things elsewhere or through severe cost reduction efforts with their suppliers. You can put it in two words: shareholder greed."