Case Study: H&H Precision Products Division : Robert Amter

Case Study: H&H Precision Products Division

H&H Precision Products Division,

Emerson Electric Co.,

Cedar Grove, NJ

In 1982 Emerson’s H&H Division started reporting directly to Robert Amter while he was Vice President International with Emerson Electric’s In-Sink-Erator Division.

H&H manufactures two, medium technology, product lines sold to original equipment manufacturers (OEMs):

~ Bi-metal thermostat, variable volume controls for commercial air conditioning.

~ Water cooler valves and components.

Problems:

Financial Results (000 $) FY1978 FY1982 Annual Growth ’78-’82

Net Sales $3,347 $3,613 2%

Pre-Tax Profit $1,139 $1,181 1%
% to Sales 34.0% 32.7%

» High profit product line but nil growth. Sales growth limited by H&H’s practice of maintaining Carrier Air Conditioning as its only variable volume control customer. H&H was considered the industry’s technical leader in bi-metal thermostats and controls

» Water cooler product line was not growing. Sales were to a limited number of water cooler manufacturers and excluded the two largest OEMs.

» Product engineering was H&H’s strength but was working on too many priorities. Three new, high potential products were languishing because of the lack of engineering time.

» Manufacturing equipment was old, not state of the art and needed to be upgraded. Production planning system was antiquated. Standardization opportunities were available, but not implemented.

» A non-union, hourly operation. Prior to Amter’s appointment in 1982, there were two wild-cat work stoppages.

Results Achieved:

Financial Results (000 $) FY1982 FY1983 FY1984 Annual Growth ’82-’84

Net Sales $3,613 $4,602 $5,271 21%

Pre-Tax Profit $1,181 $1,743 $1,992 30%
% to Sales 32.7% 37.9% 37.8%

» Without damaging the relationship with Carrier, developed new business from other air conditioning OEMs.

» Developed new sales from key water cooler manufacturers.

» Refocused product engineering to complete the development of the three new, high potential, products. Added one new degreed engineer to the staff.

» Started upgrading manufacturing equipment and developing a production planning system.

» Replaced the Executive Vice President, General Manager.

At the same time, Robert Amter was Vice President International for Emerson’s In-Sink-Erator Division

Reason I wrote my book “Learn to Whisper”

Click on this link for a more complete description of “Learn to Whisper”

The reason I wrote “Learn to Whisper”:

My conclusion after operating as a Turnaround Chief Executive Officer for more than twenty-five years is that the majority of this country’s top management is far from first-rate. In fact top management, particularly at the chief executive officer level, is at best average with a large number that can be rated mediocre. This lack of management competence has seen this country’s market leaders lose sizeable market share to foreign manufacturers able to export better quality and lower cost products to the USA. It has seen manufacturing and service operations unnecessarily moved to foreign countries. All of which has negatively affected the economy, severely damaged former blue-chip corporations and seen quality jobs lost.

It is quite common to discover that companies struggling with this inability to compete with foreign companies have been simply mismanaged. The once successful business deteriorated because of an incompetent chief executive officer and weak senior management

Why doesn’t this nation have first-rate management? Inadequate training. Chief executive officers and vice presidents learn “on the job”. A number get promoted based on personality, political connections and drive – not merit. They are not carefully screened for the potential to become successful at managing. For some all that is needed is a well-written resume, the right interviewing style and the inability of a new employer to accurately assess skills, performance and potential.

Compare this to the process doctors go through. From medical school to internship to residency to a senior role after years of education, experience and continuous training their progress and capabilities are constantly monitored even after they become senior in the profession. Generals and Admirals go through a similar protocol. They must prove themselves in low-level assignments before they are judged qualified for senior positions. Unqualified applicants in both professions are culled out. What can be done to improve management competence? Education, on-the-job training and job performance monitoring. My book will educate people on the subject of managing. Its 101 management lessons are separated into the 17 subjects managers need to know.