CLEVELAND TWIST DRILL Secton A Ana

Jim Bartlet assumed managerial control at Cleveland Twist Drill with an inadequate grasp of both the internal strengths and weakness of the company and the position of the company in the market. Additionally, Bartlet assumed his responsibilities at the company, and developed and implemented policies based on a gross misreading of the state of the broader economy. As a consequence, the situation at Cleveland Twist Drill deteriorate rather than improved under the leadership of Jim Bartlett. While Jim Bartlett is not the only major problem at Cleveland Twist Drill, he certainly is one of the major problems at the company. His autocratic, tsarist-like approach to management quickly destroyed a corporate culture based on trust and cooperation and the non adversarial relationship between the company and the labor unions representing the companies, each of which had required decades to build. Bartlett was a bottom-line number cruncher of the Harvard Business School tradition who never experienced and never desired any shop floor management experience with the firms he managed. The results he achieved at Cleveland Twist Drill were both predictable and dismaying.

Bartlett identified labor costs as a major issue confronting the company. In 1981, cost of products sold (which includes direct labor costs) at Cleveland Twist Drill rose to 79.5 percent of sales revenues. This level was a substantial increase over the 74.3 per

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be to mend fences within the company and with the Cleveland community. To accomplish this objective, Bartlett should acknowledge the mistakes that he has made, and he should openly provide employees and the general public with information on wages and company profitability that demonstrate the need for an improvement in the company's labor wage ratio to sales revenues. The way to accomplish this objective is not to make threats about moving the company's manufacturing operations to some low-cost backwater, but rather to enlist the help of the employees in addressing the labor costs issue. A reasonable approach would be the suggested introduction of a system similar to that employed at Lincoln Electric--another Ohio-based company, wherein base wages would be reduced while a profit-sharing scheme was put in place. In this way, the labor costs problem would be effectively addressed while simultaneously maintaining worker motivation to perform. With respect to the $17 million investment proposal, Bartlett should defer action until the labor cost initiative has been accepted by the company's employees and their labor unions and is functioning, or until such time as it is certain that the proposal will not be accepted. At that po
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Approximate Word count = 1757
Approximate Pages = 7 (250 words per page)