‘An Unwinnable Fight’
That’s What Springfield Wire Waged Before Finally Conceding Defeat
Bill Bradford says impossible is a strong word — at least when it’s placed in the phrase ‘impossible to compete,’ and used to describe reality for an operation that’s been an integral part of the 85-year-old family business he’s managed for the past decade.
“But it’s an absolutely accurate word,” said Bradford, who announced three months ago that he was shutting down Springfield Wire’s plant on Cottage Street in Springfield (probably by the end of 2008) and moving the manufacturing once done there to Mexico and China, where the company opened plants over the past few decades.
This was a difficult decision for Brandford, whose great-grandfather was one of a small group of entrepreneurs who started the company in 1921 and eventually became sole owner, but a decision made fractionally easier by the knowledge that he had fought an unwinnable fight longer than most in his position would — and longer than he should have, by his estimation.
“We would say to some customers, ‘no, we’re not going to make that part in Mexico,’” he told BusinessWest, adding that such requests (and sometimes they weren’t really requests) came with increasing frequency in recent years.
And they would say, ‘fine, we’ll find someone who will.’ And they did.
“This isn’t the most efficient manufacturing operation in the world,” he continued, referring to the 110,000-square-foot Springfield plant. “But even if it was the most efficient manufacturing operation in the world, that wouldn’t be enough.”
Such is the disparity in the cost of manufacturing products such as heating elements and assemblies in Springfield and making them in China, Mexico, or other “low-cost countries,” said Bradford, who did some quick math and concluded that his company can hire perhaps as many as six people in China for the same cost ($10,000 to $12,000) that the company and an employee in Springfield would split to cover health insurance for a family.
And that number would be closer to eight employees were it not for recent salary inflation in China prompted by industrialization that has made jobs plentiful and given workers more options.
This is not a recent phenomenon, but rather an old story, said Bradford, who recently talked with BusinessWest about how he came to his decision and what lies ahead for the company. And it’s a recurring story, as businesses in his sector and many others are shutting down plants in this country because of an inability compete.
Springfield Wire will continue to have a presence in Springfield and the Pioneer Valley — 20 to 25 employees handling duties ranging from sales to process engineering will continue to work here. But it isn’t the presence Bradford wants, and it pales in comparison to the company’s high-water mark for employment (about 500 people) in the early ’80s.
But it is reality, and in this issue BusinessWest recounts the Springfield Wire saga to illustrate the extreme challenges — sometimes, as in this case, insurmountable — that face manufacturers in the Northeast today.
Taking the Heat
As he led BusinessWest on a tour of the Springfield plant at the start of a day’s second shift, Bradford pointed to several areas with little or no activity that would have been bustling years ago.
The relative quiet spoke loudly to the trends in manufacturing today, and about how the decision Bradford reached a few months ago could — and probably should — have been made many years ago.
“Over the past six months, I came to the conclusion that failing to do this [shut down the plant and move the operations elsewhere] really was failing to do my job,” he said, “and that I would put the entire business in jeopardy if I continued to be adamant about fighting global competition from a cost position that couldn’t be won.
“We don’t have a viable competitor based in the United States anymore,” he continued, “and a publicly held company would have shut down operations here a long time ago.”
The competitive landscape was much different in 1921, when Edward Bradford and several other partners started the venture. Bill Bradford said documented history of the company’s early days is scarce, and he isn’t exactly sure when his great-grandfather assumed ownership, nor is he really sure just what the company produced back then.
He does know that it eventually became one of the leading manufacturers of heating elements and assemblies for the appliance, process heating, commercial refrigeration, food service, automotive, and air conditioning industries. Management of the venture passed to his grandfather, who died in 1957, thus commencing 28 years during which the company was owned by the Bradford family but not managed by it.
That all changed in 1985, when family members sitting on the Board of Directors, including Bradford’s father, concluded that it was time for someone with that last name to get involved with day-to-day operations. That someone turned out to the Bill Bradford, who was teaching history in Delaware at the time, and admitted to be a somewhat reluctant recruit. “I got sucked in.”
He said he spent his first few years, during which he took several different titles, getting up to speed on the company — and business in general. He earned an MBA, an experience he credited with enabling him to “think like a business person, not a teacher.”
He became president in 1997, by which time he and others with the company and on its board could start to see the handwriting on the wall for the Springfield plant. It would be a few more years before it would become clear and, perhaps more importantly, undeniable.
“We had to move our highest-volume product out of here,” he said, referring to a series of events that started in the mid-’90s. “We did it incrementally … we didn’t have to do it lock, stock, and barrel because the global pressures were not that great.”
And the company could fairly easily backfill the product lines that were moved to Mexico, he said, adding, however, that before too long those global pressures, fueled by customers looking to take cost of their products, would increase, and it would become much more difficult to backfill.
“The cycle just continued to accelerate,” he continued, meaning that more product lines were being moved out of Springfield and there were fewer replacements, which added up to less profitability and, eventually, the point at which the Springfield division was losing money for the business.
And the cycle continued to accelerate.
But despite the mounting evidence that the company may not be able to meet customer demands through ongoing production in Springfield, Bradford continued to fight the good fight.
“I really believed that if we would become lean in terms of the Toyota production system, we could become world-class and take on anyone with the right product line, a limited product line,” he said. “But then, I realized that all anyone in a low-cost country would have to do is become lean themselves.
“We would not have done this as the first in our industry,” he said of the decision to halt the fight. “Our competitors got to China long before we did, and we had new competitors coming out of China that we didn’t even know existed five years ago that are knocking on the doors of our customers.”
It was over the course of several trips to China over the past few years that Bradford came to realize that the fate of the Springfield plant was essentially sealed, and that he was asking his employees here to do the impossible. “It had become a fight they didn’t have a chance to win.”
Down to the Wire
While Bradford was willing to recount the events of the past several years and especially the past few months for BusinessWest, his focus is clearly on the present and the future. There are perhaps eight to 10 major projects ongoing at the moment, he said, adding that much is involved with moving operations to China or Mexico, training individuals in those countries, finalizing the operations that will remain in Springfield, and disposing of the Cottage Street plant.
When asked about what will likely happen to that facility and where the 20-25 employees who will continue to work in this area will be based, Bradford said there are several possible scenarios, but one he believes is likely.
“In a perfect world, we would sell this building and lease back space for our operations,” he said, adding quickly, “but we all know the world isn’t perfect.”
Certainly not. In a perfect world, operations like Springfield Wire would never find it impossible to compete.v
George O’Brien can be reached at[email protected]