Does America Still Work?

Interview with James Beardsley: Part II

Q: Getting back to the City of Milwaukee, why do you invest so much back in the community? Is there a real practical pay-off for that?

Beardsley: Our strategy has just been to be a good neighbor here, and I think that strategy has been contagious. Our employees have found all sorts of outlets locally here to make a difference, and I think the impression that we invest a lot back is more a measure of the energy of our employees than it is a financial gauge.

Q: They really want to save Milwaukee? They want to bring it back to its former luster? Do you give them the opportunity to do that and does that somehow make them better workers for you?

Beardsley: I think that we try and set a good example -- the officers participate in a number of different organizations around here -- and we haven't had to do much more than set a good example. I think you can see by looking around this inner city neighborhood that there's a lot to do, and the challenge, the enthusiasm has been contagious. It's been easy to line up volunteers to work with youth groups locally or to volunteer at the Clarke Street School down the road here. It's something that has been relatively easy to do once we got started.

Q: There was a lot of anger, as you well know, in Milwaukee over the years about companies leaving, about less jobs, about a breach of the social contract in the minds of some workers. Is that one reason why you're so active in Milwaukee? Are you trying to ameliorate that anger?

Beardsley: No, we don't feel that we're a part of that. As a matter of fact, a lot of that predated me. I have very little knowledge of what went on then.

Q: Is there anger in Milwaukee still?

Beardsley: No, I don't think so. I think that to a great degree, we're trying to figure out how to work together. You know, the issue that we have today is not U.S. management against U.S. labor. It's U.S. management and labor against the Europeans or the Asians or the South and Central Americans. We've got to figure out how to work more effectively together.

Q: There could come a time in Master Lock's future where competition is so intense, you're going to have to cut back. You may have to let workers go. How do you do that?

Beardsley: I just hope we're smart enough to avoid that situation.

Q: You don't foresee it?

Beardsley: No. We're going to plan to avoid it.

Q: Would a smart worker today -- a smart Sheila Caldwell -- say to herself, these are different times. Anything could happen. I better keep more money in the bank. I better keep my eyes open for opportunities. Is that the plight of the American worker today?

Beardsley: What we hope Sheila is doing is figuring out how she can increase her skill levels so she has more to offer Master Lock or more to offer anther employer, so she can do a better job running the improved processes and the better equipment that we need to stay competitive.

Q: When you talk about investing and productivity, is that the future for most of corporate America? Investing more, better workers, is that how we're going to keep our standard of living rising?

Beardsley: Well, I think that's a large part of it. I think having better and better methods to make better and better products -- employing progressively higher-skilled workers -- is what will set us apart from other nations in the world.

Q: A lot of people talk about -- they use the words "social responsibility" to describe what may or may not be going on today. Some corporate managers will say social responsibility doesn't belong in a corporate lexicon at all. Should corporations have a social responsibility?

Beardsley: You're beyond me there, Jeff.

Q: Does Master Lock when it reinvests in Milwaukee have a sense of social responsibility?

Beardsley: When Master Lock reinvests in Milwaukee, we're doing it to maintain a positive environment for our workers, a positive environment surrounding our plant. We do it with the best interests of the company and the employees in mind. You can term that social responsibility, you can term it economic responsibility. In our opinion it's just good business.

Q: You don't see a distinction then? Economic responsibility is social responsibility and vice versa.

Beardsley: I think our goal is to have them coincide, to make actions in one reflect positively in the other.

Q: Let me return to this one other subject -- is there not a role for federal government? Can the federal government make it easier for corporations like you to do what you're doing? Can't they encourage what some people call the high road? Reinvestment, worker training, worker loyalty, staying in the urban center?

Beardsley: You know, I think the decisions that make Master Lock succeed are local decisions. They're decisions made here about what products we're going to market, what quality levels we have to strive to achieve, what training programs are necessary, what new equipment is necessary. This is where the decisions are made that separate us from our competition. Now, we are dependent on local service providers, like transit systems, like the high schools that provide us with educated, disciplined entry-level employees, like police protection. I think the battle is being fought on a local basis and I think that's where decisions like that have to be made.

Q: There is a lot of worker anxiety out there, I think you would acknowledge. And what they see is profits are up but wages aren't up. Stock prices are up but people keep losing jobs. Is corporate America doing all it can for the American worker?

Beardsley: You know, I think change produces anxiety, anxiety at the worker level, anxiety at the management level. Manufacturing in the United States has undergone terrific change in the last fifteen years and I think that's created anxiety throughout the operation, but I think we hit our low point in the early or mid-eighties. I think manufacturing is doing better now. We're more cost-effective on a world basis than we ever were previously. So I think we're going to see things improve. As a matter of fact, they are improving now. I think we've created more jobs in the last three or four years than any comparable period for quite some time.

Q: But pay isn't going up, there's still a lot of layoffs, probably people have to switch jobs more often than they used to. Is that just the reality of a different kind of an economy and a more competitive world?

Beardsley: Well, I think I'd argue that pay is going up. I think what we're finding is we're replacing unskilled jobs in the manufacturing sector with more skilled jobs. And so if you measure job type to job type over the last ten to fifteen years, you may see pay scales haven't kept up with inflation, but a lot of the people who were in those jobs fifteen years ago are higher-skilled workers today, taking home higher pay rates. I think you'll find that the structural economy has boosted the overall condition of the worker. I think it's starting to do that and I think we'll see more of that in the future.

Q: Well, let me ask you this then. What do we have to do better? Certainly we're not all the way there yet.

Beardsley: Well, what we can and should do better is recapture the market share that we've lost to overseas competitors over the last fifteen or twenty years, and we can do that just by concentrating on process improvement, concentrating on flexibility, concentrating on innovation.

Q: To compete better?

Beardsley: To compete better.

Q: Are American corporations competing well enough or is there still a long way to go?

Beardsley: American corporations have made a lot of progress. I mean, the automobile industry is an example, but they have a long way to go. There are certainly all sorts of things that we could do better in the future than we're doing them today.

Q: But you think we're moving in the right direction?

Beardsley: Definitely.

Q: And anxiety is going to stay with us because it's a part of the process of change?

Beardsley: It's part of the creative process, that's right. It's healthy.

Q: Workers are anxious for some legitimate reasons. Pay isn't going up. The distribution of income is highly unequal in America, the land of opportunity for all. Is that going to change?

Beardsley: In any given population at any given time you have people who are overpaid and underpaid. I think that's the nature of a rapid change process, and certainly we've been going through a rapid change process recently. What we need to focus on is moving from a manufacturing period in the sixties where we had a lot of manufacturing employees who were relatively low-skilled, to the need today for higher-skilled employees, to differentiate U.S. workers from their cohorts in other countries overseas. We have a big educational job to do to move people up the ladder in terms of the skills necessary to make us a more productive nation, a more productive manufacturing operation.

Q: Where is that education going to take place? Is it going to be on the factory floor, in the schools? Where?

Beardsley: It's got to start in the schools. We need to do more in terms of starting skill development in the high school area. Pupils need to understand that not everybody needs to go to college to make a very decent living. Skilled workers in our operation, in the automobile industry and a number of manufacturing operations make very good incomes. And yet there's very little work done at the secondary school level to prepare people for careers in manufacturing. But I think the bulk of the training is going to occur within the manufacturer itself. We've got to bring people in with basic skill sets and train them to operate advanced equipment, to help us design processes, to help us improve the productivity of our operation.

Q: Are corporations doing enough of that kind of job training?

Beardsley: I think they're certainly moving in that direction out of necessity.

Q: But there's a way to go, isn't there?

Beardsley: There is a way to go. We can succeed by working together in those directions.

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