DETROIT — Sometimes it is better to trim a company's fat with a scalpel than a hatchet.
Ed Northern learned that the hard way. The last week of January Northern abruptly resigned as president of UT Automotive's $600 million Interiors Division.
UTA President Scott Greer praised Northern for shaking up an ailing organization. But Greer acknowledged that the shake-up proved to be chaotic.
``Ed was a great agent for change, and we owe him a great deal of gratitude,'' Greer told Automotive News, a sister publication to Plastics News. ``The company needed change, but it was way too quick, and we lost control.''
His replacement will be Richard Sloan, chief of UTA's European operations. Before joining UTA, Sloan spent 17 years with Chrysler Corp., where he held several posts in finance.
Northern could not be reached for comment.
During the past six months, the Interiors Division — which makes headliners, instrument panels and door panels — has improved dramatically, Greer said. But first, the unit had to recover from what Greer called the ``crash'' of 1996. Shortly after taking charge of the ailing operation, Northern shuttered six plants and cut salaried staff 15 percent. One analyst estimated the division's loss at as much as $30 million that year.
Short of staff after the layoffs, the division botched its own reorganization. Plants were unable to maintain smooth production, and parts shortages forced some plants into last-minute panicky production schedules.
Worse, certain product launches forced UTA to send special teams of supervisors to the plants. The Interiors Division also had to hire new managers to fill jobs that had been eliminated.
The results: excessive plant spending, scrap rates and overtime and high freight charges.
Last year, UTA began to recover. Product launches were smooth, and quality improved. Meanwhile, Greer launched his own reforms.
Shortly after joining Dearborn, Mich.-based UTA a year ago, he combined the firm's three electrical component units into one, a move that helped it market entire component systems rather than single parts. Then he tackled UTA's purchasing setup, which had saddled the firm with 10,000 suppliers, and laid plans to cut back their number to 1,000.
The firm still faces a battle, but in the last quarter of 1997, operating profit rose 26 percent to $67 million, mostly reflecting the Interiors Division's improvement. But operating profit for the year fell 12 percent to $173 million.
Greer says he has no plans to launch another shake-up.
``We've been very consistent about our goals,'' he said. ``We will improve through evolution. No more revolution.''