CLEVELAND TWIST DRILL: CASE ANALYSIS
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 percent level recorded in 1980 and the 71.5 percent recorded in 1979. What Bartlett failed to determine, however, was the pattern of movements in the cost of products sold at Cleveland Twist Drill. The level of these costs increased from 70.8 percent in 1973 to 74.4 percent in 1974 as the braoder economy entered a recessionary stage. The up-and-down pattern of cost of products sold at the company generally tracked the recessionary and expansion cycles in the braoder economy throu...