Global Fastener News

1981 FIN – Bethlehem Fastener Division Reorganizing

September 27
00:00 2013

June 22, 1981 FIN – The new Bethlehem Industrial Fastener Division hopes to be able to attract customers with competitive prices, then hold them with improved service and quality, and a strong emphasis on specialty, as opposed to standard, fasteners.

This is how the division’s new general manager, Dick Harris, outlined plans to FIN.
Separating the fastener operation out will relieve it of a lot of the corporate overhead it has been carrying, making it an “arms length” operation. “We are expecting to do as many things as we possibly can for ourselves,” says Harris. “The effect of that will undoubtedly be a reduction of our costs.”
Further cost reductions are anticipated from the latest agreement with steel workers at the Lebanon, Pa., plant. A portion of the agreement specifies that the first labor/management participation arrangement in the U.S. steel industry will be set up there. This is the “quality circle” approach credited for much of Japan’s success. Teams of employees will meet regularly on company time to discuss how operational costs, deliveries, and quality problems can be improved.
A reorganization of the sales effort will be a major change. Where fastener sales had previously been handled by the regular Bethlehem sales force, this will now be augmented by a special fastener sales force. “A portion of the problem in the past had been that we had a general steel sales organization which sold all of Bethlehem’s 17 steel product lines and fasteners, because of the low tonnage involved, had not always been a high priority item,: says Harris.
This sales force will work directly with the division’s headquarters at the Lebanon plant, without having to go through the previous chain of district offices and the home sales office in Bethlehem.
The Lebanon plant makes the specialty fasteners (railroad track spikes, mine roof bolts, cold and hot forgings, large threaded products, etc.) that the division expects to lead it to higher profitability.
“We see a continuous shift from standard fasteners into more specialized products,” Harris says. “They require a group of salesmen who can help a customer determine whether we can make the part. We will be going much more aggressively in the future than we have in the past after this kind of business.”

Many in the industry see the reorganization as a major “last stand” against import competition, and Bethlehem does not dispute that interpretation.
“Imported fasteners have for a long time had a definite price advantage,” Harris says. “But for many users, price is only a portion of the problem. It is normal that the first order is gained on price. But after the first order, good quality and delivery are required to maintain a good relationship with the customer. We have some advantages over the import competition because of their long supply lines and communication problems.”

Separating the fastener operation out, with its own cost structure, will also make its success or failure more visible.
Reports circulating at the Lake Tahoe, Nevada meeting of the Southwestern Fastener Association are that the new Bethlehem division has a set period of time to begin making enough money. If it does, there is a five-year program to build it further as an entity. If it doesn’t look like it is going to turn around in a year or so, it will be shut down.

By and large, the southwestern Fastener Association at Lake Tahoe are rooting for Bethlehem and think it will make it.
Tommy Grant of Grant Fasteners says he has been buying more from Bethlehem at a cost of some profit to him, “just to keep that sucker going.”
As head of SFA’s legislative committee, Grant is asking the question; “Am I going to have a pipeline of fasteners or are we putting ourselves in bed with Japan on fasteners like we did with OPEC on oil?”
Grant plans to try to get the association behind him to approach Texas Senator John Tower through a retired general. Grant wants – using national defense as the basis – “to see what can be done, without having to go through two or three years of lobbying, to gear up some of our domestic manufacturers again.”
An amazing 356 people showed up at SFA’s Lake Tahoe meeting. FIN will soon have fuller reporting on a panel discussion held there on the general topic of what the U.S., and fastener distributors in particular, have to fear, or not fear, from a dependence on imports. ©1981/2013 Fastener Industry News.
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