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Morton International: who says America and Utah can't compete?

The projections that Morton International will soon expand its Utah air-bag manufacturing operations from 1,700 employees to more than 4,500 are not inflated. From Ogden and Brigham City, Morton's Automotive Safety Products Division is driving the economy of northern Utah and dominating the world air-bag market.

Headquartered in Chicago, Morton International has three operating groups: specialty chemicals, salt, and automotive safety products. It sees $28 billion in sales per year and has 75 operating locations in 27 countries. In Utah, the company has plants in Ogden, Brigham City, and Promontory, where engineers and assemblers manufacture one of the world's most popular products with long-term growth potential to be invented since the auto itself: the automotive lifesaving device known as the air-bag.

Utah Origins

The air-bag division of Morton has a long history with Utah-based Thiokol, the company that began working on the product in 1968. Chicago-based Morton acquired Thiokol in 1982, when it then became Morton Thiokol until 1989. Since then they have been entirely separate companies, with separate stockholders.

Following the split, Morton retained the commercial-product side of the business, while Thiokol retained the aerospace entities.

Even when the market for air bags didn't exist, Morton doggedly continued to develop them. "There was cyclic customer interest in air bags until Morton acquired Thiokol in 1982," said Ken Holmgren, president, who started with Thiokol in a manufacturing job 35 years ago.

Still, Morton employees were confident [the air bag's] day was going to come. That day finally came in 1986 when Chrysler ordered Morton's air bags for selected models of its new cars.

That was just the beginning of this success story. The federal law requiring passive restraints in all U.S. cars kicked into gear in the late '80s, and Morton's sales took off. When the demand did surface, the world's major car makers turned to Morton, which had already been developing and perfecting the device for more than two decades, as one of their major suppliers. "It would have come to market, even had we not kept at it over the years," said Holmgren.

Persistence and determination have paid off. In 1992, the company expects to sell $500 million of the safety devices. Last year's payroll to employees and subcontractors topped $50 million.

Morton's impact on the economy of northern Utah cannot be overstated, said Scott Parkinson, director of the Ogden/Weber Chamber. "When you consider what's going on in the defense sector, there is no question [northern Utah] is going to take enormous cuts. Morton represents the type of employment we want to help offset the job losses in the defense industry," Parkinson commented.

Due in part to Morton and to other successful manufacturers in northern Utah, the housing markers in Davis, Box Elder, and Weber counties are strong and personal incomes are the highest in the state.

Always One Step Ahead

Though it currently has a strong position in the expanding air-bag market. Morton is constantly ahead of the game with new developments and products. including the larger passenger-side air-bag. For every variation and color of steering wheel, Morton responds with an air-bag to fit and a plastic casing to match the automaker's steering wheel.

"All cars are different," Holmgren emphasized. "What works in one model, won't work in another. For us, it's a never-ending redesign with each new model year. Right now we're ramping up for the 1993 model year-we'll begin delivering products to customers in July."

New federal laws mandate that all cars made in the U. S. must be equipped with driver-and passenger-side passive restraints beginning in model year 1994 (late in the 1993 calendar year). And that's good news for northern Utah.

Manufactured in a highly automated process, the air-bag is a complex and sophisticated device that must activate in milliseconds. It contains chemicals that produce nitrogen gas when burned and filters to cool and clean the gas. Upon impact, an electronic signal from the remote sensor in the car ignites the gas that inflates the bag.

Quality control is tight and the production lines are fully automated. A technique called Real Time Radiography takes instant X-ray of each completed air-bag assembly. A computer is programmed to know what should be contained inside, and it immediately rejects the device if all is not perfect.

"Since it's a lifesaving device, it absolutely must work," insisted Holmgren.

Competing with the World

Presently, Morton sells air-bags to GM, Chrysler, Ford, and to automakers in Japan and Europe. Morton has 58 percent of the world market for driver-side inflators. Its primary competition is TRW, with plants in Detroit and Phoenix. Morton has offices in Japan and Europe to better serve its customers in those markets. Yet it has accomplished this sales growth without conventional sales or marketing people. Instead, it relies on its knowledgeable engineers to sell the product.

Because of the very nature of its business, Morton has had to learn how to do business with dozens of countries. "The world is one customer base. Our people who interface with people in Japan are engineers who know how to speak Japanese and provide engineering support to Japanese automakers. Most companies today are engaged in a worldbased market, whether or not they realize it. You have to compete with everyone, wherever they are," said Holmgren, who has his own views about the recent criticism of American workers as being a lazy lot. He pointed out that Toyota of Japan recently selected Morton and another supplier to talk to all of its suppliers about quality. "We've done a good job of improving our quality, and we have benefitted by constructive input and suggestions from all of our customers, including the Japanese."

Employees Set Morton Apart

Morton's long-term competitiveness, Holmgren stated, is a result of starting with a clean slate, new people, innovative ideas, and a good product. Without doubt, however, it is Morton's employees who have done the most to put Morton in the driver's seat of their industry

"Everyone here feels free to speak up. They feel responsible for even small functions and take pride in contributing, not merely doing something by rote," said Holmgren.

At Morton, the team approach to getting the job done is working. Employees two years ago worked through an intense start-up production schedule, working around the clock to meet customer delivery dates. "Amid the challenges of dynamic growth, a new product, new customers, and new technology, we are fortunate to have the most wonderful work force. I'm not sure we could have accomplished it in other places. We couldn't do elsewhere what we're doing here," Holmgren said.

Holmgren expects to add 3,000 employees in the next two to five years. "Our business programs are well-defined. We have a good idea of the programs we will be working on, except for knowing exactly how many cars will be sold," he stated.

The most exciting thing about Morton's future, Parkinson echoed, is that "there are markets out there that they haven't touched yet."

Where will they look to find 3,000 qualified employee? Holmgrem said they've been extremely pleased with the caliber of engineers from Utah schools, adding they occasionally have a tough time filling a position if the job demands experience in the automaking industry. "We strive for a mix of people with backgrounds in chemistry and auto manufacturing."

Because Utah does not have an automobile manufacturing base, Morton sometimes looks to the Midwest when filling some job openings. And with Utah's enviable economic climate of late, recruiting is getting easier, "We have a good economy here, so people are less fussy about coming here than they used to be."

Morton has a large backlog of resumes. "Not a month goes by that we don't hire someone," he stated.

Expansion: Looking for a Site

Holmgren remembers when Morton first looked at the manufacturing site it now occupies in Brigham City - the former American Greetings distribution warehouse. "We thought it was much too large for our needs; we expected to use only half of the 13-acre facility. But we bought it, and now we will be bursting at the seams in one year."

Where will Morton look to find new quarters? Holmgren said the company is considering several options:

1. Expanding the Brigham City site

2. looking at available empty

buildings (including the building

across the street from the Ogden

airport recently vacated by Volvo

GM Heavy Truck)

3. considering offers from other


"Whatever we decide to do, I'd prefer to keep our operations in Utah," Holmgren stated, adding that logistics - and shipping costs - suggest a better location might be Ohio or Kentucky. But Utah has offsetting advantages, he said.

While Utah officials are busy courting new business prospects to Utah, other states and countries are, likewise, knocking on doors at Morton. "Economic development groups from Austria have been here three or four times. They say |come see us; we'll do anything for you.' We're fortunate to be growing despite the recession, and we have apparently become a unique attraction for many. But it is our intention to keep our business in Utah, unless it is unavoidable," said Holmgren, a native of northern Utah.

Holmgren concedes, however, that the company may eventually have to establish a plant in Europe. "Europe is a larger market for us than the U.S., so we might have to produce there."

Vendors Move to Town

Aside from employing hundreds of Utahns, Morton has invested over $ 200 million in its Utah operations. In the next three years, its total capital investment in Utah for equipment and buildings will grow to between $500 and $600 million.

Not only is Morton bursting at the seams with growth - some of its suppliers are moving into Utah, as well. Denver-based OEA makes sophisticated pyrotechnic components for Morton's air-bag inflators. OEA is building a 50,000-square-foot facility near Tremonton, Utah, which will be on-line within the year.

Initially, OEA Utah Division will hire 50 production workers and assemblers. In its first year it will add a second shift. Robert Strang, general manager of the new Utah operation, knows Morton and its products. He worked for Morton on the air-bag program over 10 years ago.

"Morton has done a superb job in marketing its air-bag systems; it laid the groundwork and has done its homework," Strang said.

Morton has done everything possible, Strang said, to convince the world's automakers that they will receive a good product from Morton. "The company makes it a point to hire engineers who speak Japanese, and that makes Japanese automakers very comfortable when they do business here."

Piper Impact, a manufacturer of aluminum casings, has built a plant at Sage Creek Junction, near Park City. Reichert, of Toledo, Ohio is planning to locate in the Freeport Center. The company makes stamped metal parts for the Morton air-bag inflators. And American Pacific Corp., headquartered in Las Vegas, Nev., is constructing a $40 million plant in Cedar City, where it will manufacture sodium azide used in Morton's air-bags.

"Two or three other suppliers may also soon locate in Utah to help facilitate our growth," said Holmgren.

Filling a Need

Holmgren and Morton's other 1,700 employees recognize that the air-bag is more than a popular new gadget to outfit automobiles. It saves lives. Holmgren recalls the emotional story of one woman, Julie Whitcomb, who spoke at a gathering of Morton's employees and suppliers. Whitcomb, who now works at Morton as a manufacturing engineer, was involved in a terrible automobile accident. Her car was equipped with a Morton air-bag, and she escaped serious injury. "I thank you, my husband thanks you, and my three-year-old little girl thanks you." Holmgren tearfully recounted, adding "I know I'll feel safer when I get a car that has air-bags on both sides."

Cheryl Smith is managing editor of Utah Business.

Small Businesses, Too,

Can Profit from

Morton's Strategies

Management experts now have a name for the open communication Morton has practiced for years: total quality management, team play, personal and organizational empowerment. "It's something even small businesses can profit form," Holmgren challenged.

* Treat people with respect.

* Make them feel a part of the

business, and encourage their


* Don't be too quick to point

blame or assign fault. Problems

are opportunities for improvement

if used constructively.

* Ask "what do we know about

the problem" and "how can we

solve it." This technique invites

comment and dialogue. "In a

positive environment, people are

willing to voice their knowledge,

ideas, and concerns. Even if a

problem arises, it can be solved

in a can-do climate - whether you

have three people or 1,700. I've

found that employees don't "buy

in" to your objectives unless you

keep them informed about the

business, including financial

matters, productivity, and new-program

status. I'm amazed, for

example, when I tell them we

have a potential new customer;

they remember, and three

months later they'll ask me how

the deal is coming along."
COPYRIGHT 1992 Olympus Publishing Co.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
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Title Annotation:plans expansion of automotive air-bag manufacturing operations, with plants operating in cities of Ogden, Brigham City and Promontory in state of Utah; see related article on management strategies of Morton International Inc.
Author:Smith, Cheryl
Publication:Utah Business
Date:Apr 1, 1992
Previous Article:Utah's snowbirds fly south.
Next Article:Hail to the Cheese.

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