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April 22, 2002 02:00 AM

C&&A set for automotive comeback (Part 2 of 3)

Rhoda Miel
Managing Editor
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    At the Port Huron plant, the 300 employees knew they were under scrutiny. They saw top-level management teams inspecting the award-winning plant. Evans stopped by. So did Stockman.

    ``We encouraged [employees] to talk to us,'' said Emad Fahim, engineering manager. ``The worst thing that could happen was to have unfounded rumors going on.''

    Some people recognized the men as they passed through. Secrecy requirements meant that those people in the loop could only say C&A and Heartland were doing a ``benchmarking'' study, but they tried to be as straightforward as possible.

    ``They knew that companies were interested in them because our team was so strong,'' said manufacturing manager Jim Thorpe. ``We told them to just continue doing what they were doing all along, what made them so strong, and things would work out great.''

    The open dialogue helped, said Rocha, an hourly worker who began assembling door trim on the site even before its official launch in 1991. The plant, about 90 miles northeast of Detroit, has tight ties among its workers at all levels. Thorpe was once Rocha's foreman, and they chatted and joked on the shop floor one afternoon in mid-March.

    ``It did kind of make everybody edgy,'' she admitted. ``You know how rumors fly in a plant. But they'd talk to us about it. If we had a question, we could go and ask them what was happening. They'd tell us if they knew, and if they didn't know, they'd find out.''

    Before the companies even announced a deal - and once they were certain it would happen - Evans created an organizational chart, letting top management of both companies know exactly who would run what parts of the business.

    Textron executives, who knew the plastics business inside and out, would run not only their operations but would fold C&A plants into their unit. Mosingo would run global manufacturing for plastics and cockpits. Rose would take on global technology. Another top Textron exec, Mike Mitchell, was named to head the newly formed Global Commercial Operations unit.

    In organizing early, C&A had a better chance of skipping the ego clash that can occur during a megamerger.

    ``In a lot of these situations, because of internal politics, the companies will announce co-CEOs,'' Robinson said. ``All of a sudden, you have a lack of clarity in the organization. There's now a lot of political infighting in the org chart.

    ``Now people can't focus. They can't move forward. All they can think about is whether they're included in what's going on: `Do I have a sense of control over my future?' ''

    The integration plans moved into full swing once Textron and C&A announced the tentative deal Aug. 7. More people in the chain knew for certain who the new players could be, and could begin to view exactly what that could mean.

    But they also could begin to see where the companies would overlap, and where job cuts might occur.

    Executives from both sides said, however, that while there were similarities between the operations, there also were vast differences. While both had plastics manufacturing, Textron's specialty was in larger systems such as instrument panels, center consoles, door panels and entire cockpits. Collins & Aikman had few major elements of the car, instead producing more components.

    C&A, meanwhile, had expertise in textiles and an expanding knowledge of acoustics that would allow it to ``tune'' the sound of a car.

    ``That really helped us a lot,'' said Surendra Khambete, vice president of technology for product development. ``There weren't too many people scared, looking over the wall and saying, `That guy does the same thing.' ''

    Even as the deal moved toward an expected close by October, though, an unforeseeable detour appeared - the terrorist attacks of Sept. 11.

    ``I was actually on a company plane going to New York for rating agency meetings that morning and got turned around and sent to Toronto,'' Evans said.

    Plans for a bond sale were put on hold, and a skittish Wall Street was not anxious to jump into backing a big deal, especially in the automotive sector.

    Textron and C&A went back to the table to reshape the deal. Some industry watchers speculated the whole arrangement could fall apart. The acquisition, they proclaimed, would be another victim of Sept. 11.

    Evans maintains, though, that he was not worried. The plans were tight and the delay just gave them more time to shape the integration. The companies re-emerged with a new purchase agreement Dec. 3.

    ``That gave us 12 weeks of delay, but it also gave us 12 more weeks to plan,'' he said. ``That allowed us to hit the ground running the day we closed.''

    When Collins & Aikman finally launched its bid to sell the $325 million worth of bonds needed to finance the buy, it found plenty of takers. It oversold by nearly $200 million, and the sale closed, as Evans had promised, before the end of the calendar year, squeaking in on Dec. 20.

    ``I did a little survey, the day we took possession, calling around to see how they answered the phone,'' he said. ``Ninety percent of the people [at TAC-Trim] would answer Collins & Aikman, without anyone in headquarters telling them to.''

    By Jan. 7, employees of the ``new'' Collins & Aikman were back at work, and ready for exposure to their corporate identity. Because of the holiday shutdown, most former Textron workers had less than two days' worth of work for C&A. Evans was about to bring them on board.

    He was hooked in live to 5,000 employees, beamed in through a videoconference line to 47 sites. Another 200 sites were connected through a telephone conference.

    He apologized for not being able to talk to them sooner, blaming federal disclosure rules that required companies to inform the public before they let workers know what was happening. He brought up key members of the management team, including former Textron executives who shook Evans' hand and assured the TAC-Trim employees that the move was a good one.

    Evans layed out the grand overview of C&A, how it could sell to automakers and Tier 1 integrators through its combination of style, substance and sound control, and how the business was a pure automotive player.

    ``You're in the big time now,'' he said. ``You're on the team.''

    A few weeks after Evans' welcome speech, development engineers from both the old TAC-Trim and C&A gathered at Collins & Aikman's acoustics lab in Plymouth, Mich., to begin an in-depth study of what they could accomplish together.

    They understood the outline of what each company could offer the other. Collins & Aikman could design an auto interior that would perform to precise standards, potentially tuning out a precise frequency of unwanted noise. But on its own, it controlled only 30 percent of the interior surface.

    With the Textron group, it could control 70 percent.

    ``At 30 percent, you don't have enough hands to plug the holes in the dike,'' Rose says.

    The Textron operation, meanwhile, lacked the skills to design the sound, and had no expertise in textiles. If it wanted to develop an instrument panel with a cloth skin to provide a different look for a customer, it simply couldn't without a development partner. It had no expertise in how textiles would react to temperature changes or pressure.

    The idea was that by working together, the companies could do new tricks with their materials. For example, the companies could tweak the curve of an instrument panel to reflect unwanted sounds away from the passenger compartment, rather than into it.

    But first all the projects that made sense for the individual companies were up for review. Perhaps 20 or 30 percent no longer would fit into the new C&A's development demands.

    An outline of each person's project was taped to the wall, and representatives from throughout the company scoured them, armed with pads of sticky notes.

    ``Everybody had to defend their project,'' Rose said. ``My pet project went up there, Graham Tompson's pet project went up there.''

    Feedback, both positive and negative, piled up along the walls. If you tried to remove a note you did not agree with, Khambete said, it just reappeared.

    Egos were battered, but the researchers also counted it as a true breakthrough in terms of what the company could do. People accustomed to the tools available in one company began to grasp what now was possible.

    ``I thought, roughly, that there might be 30 percent worth of new ideas out there for us, but it wasn't until we put them all out there, put them into the mix and challenged each other that people began to say: `OK. I get it,''' Rose said.

    ``That was the real `Aha!' day,'' said Christopher Griffen, senior director, acoustic research and development for North America. ``It got me thinking of just how expansive this could be.''

    Across metro Detroit from the technology group, workers brought in to create C&A's smaller plastics group were learning the new way to do things, with the former TAC-Trim management leading the way.

    Textron's lean manufacturing plan had won kudos in the past. In 2001, it landed three of TAC-Trim's plants in Industry Week magazine's top 25 plants in North America - two of them in the top 10.

    When C&A bought TAC-Trim, analysts were quick to ask if Collins & Aikman planned to use the strategy. Less than two months after the integration began, the system made its first appearance as part of the new C&A.

    Meanwhile, other changes to the firm's plastics business were under way.

    Becker Group housed its operations at sites throughout metropolitan Detroit. In 2000, it closed its largest facility, a Sterling Heights, Mich., plant that once served as corporate headquarters.

    Once C&A bought Becker, it reversed the design. Sterling Heights would reopen and serve as a manufacturing hub. With the purchase of TAC-Trim, the tactics hit full force, with what Evans termed the ``Textronizing'' of C&A's plastics unit.

    ``We're reshaping the entire structure,'' Mosingo said on a clear early March morning at Sterling Heights. ``There are possibilities to make this a real metro showplace facility for what we can do.''

    The 318,000-square-foot complex sits in the thick of the manufacturing sprawl north of the Detroit city borders. There is a General Motors Corp. assembly plant to the south and DaimlerChrysler AG and Ford Motor Co. operations to the north. There are other suppliers surrounding it in every direction.

    The water tower above the plant already had a fresh coat of white paint and the C&A logo.

    Workers and equipment from three of the former Becker plants had moved in. There were 22 injection molding presses up and running. Another 15 presses plus the staff from New Baltimore were due to make the shift in just a few weeks.

    By the end of this year, said Brian Tinney, the former Textron vice president of operations assigned to oversee the overhaul at Sterling Heights, there will be as many as 500 employees and 45 presses in place, with clamping forces of 150-2,500 tons.

    And the changes are more sweeping than just consolidation, he says.

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