Tech Exchange Helps Firms Survive : Garden Grove Group Tailors Needed Training Programs
Two years ago, FMC Corp.’s Fluid Control Division in Brea was battling for its life against sinking demand for its specialized oil field equipment and a rising dollar that made it less and less competitive around the world.
The plant’s problems were compounded by a 6% absentee rate, lagging productivity and a high rate of equipment failure.
In Chicago, FMC management issued a terse directive to the 57-year-old unit: “Become profitable or close,” according to Tom Rabaut, general manager of the plant. It was a daunting challenge to a unit whose employment had already dipped to 229 from a peak of 600 in 1981 and was technologically lagging in most of its operations.
FMC needed help in a hurry and turned to the Technology Exchange Center, a Garden Grove-based nonprofit organization that FMC officials believe made the unit’s survival possible.
At FMC, Technology Exchange helped design training to convert the company’s machine programming from paper to computers, a changeover that made the procedure 90% more efficient. Similar technological upgrading and retraining programs were instituted throughout the plant, and 10% of the worker’s time is now spent in training, Rabaut said. Absenteeism has declined to 2.2%, part failures are down sharply and on-time performance has improved. Individual productivity has improved 45% in the last 18 months, the company said.
Works With Colleges
TEC works with community colleges and other occupational schools to tailor training programs for businesses. Founded in 1982, the center is a coalition of executives from about 150 Orange County businesses, schools and local governments.
It arose from a 1981 conference of county educators, local government officials and business executives concerned about a bounty of unfilled jobs despite a relatively high unemployment rate. “Something was missing,” said Bill Turner, TEC’s executive director.
The “something” was training.
At Holmes and Narver Inc., for example, TEC helped the worldwide architectural, engineering and construction management company design a computer training program for its drafting staff in conjunction with Rancho Santiago Community College. The Orange-based concern couldn’t cope internally with its need to train 150 to 200 employees in computer-aided drafting. It turned to TEC, which helped to set up an intensive training program in conjunction with the college.
FMC and Holmes and Narver are just two of 130 companies that TEC has assisted in Orange County. Others include Parker Hannafin Corp. in Irvine and Hughes Aircraft Co.’s Ground Systems Group in Fullerton. Officials estimate that its efforts have saved 2,000 jobs. Thus far, the majority of funding has come from the state, but TEC says it plans to begin asking clients to share some of the expenses of programs it establishes.
FMC has taken its training programs a step further in its attempt to motivate and involve workers. Notices on bulletin boards give employees information on current profit margins, break-even volume and production objectives. Such communication “has a lot to do with our performance improvement,” Rabaut said.
With its newly automated office procedures and computerized production, the Brea division has returned to profitability although operating at just 30% of capacity. Despite continued slack demand for oil-drilling equipment and the stubbornly strong dollar, the Brea unit said it could earn a profit this year. The investment in training programs and new technology already has paid for itself, the company said.
Typically, TEC helps a company identify training needs and then turns to the community colleges and vocational training centers to design a specific training program. Often, existing classes haven’t caught up technologically with the demands of the marketplace.
“We wanted to make sure what the educational system was putting out matched what business and industry needed.”
Develops Cooperation
TEC brings corporations and education together in a way that suggests comparison with Japan, where business and government often seem to operate in partnership. Most TEC funding has come from the state, with other funds from the schools and host companies. For calendar 1984, TEC’s operating budget was $427,056 and it arranged 96 training programs for 62 different companies, up from 56 programs at 39 companies the year earlier.
TEC has just seven full-time employees, but its 19-member volunteer board includes industrial executives, community college chancellors, government officials and a labor representative. Another 33 business and education officials form advisory groups to TEC.
“It’s cooperation around the track,” said Turner, who describes TEC as a “change agent,” helping to close the gap between technology and educational programs offered by Orange County community colleges and other regional occupational programs.
With a successful track record, TEC plans to begin asking future clients to bear a portion of the expenses for the programs it establishes.
Thus far, TEC apparently is a pioneer in California. Lt. Gov. Leo McCarthy, who toured FMC’s Brea unit earlier this week, said TEC’s methods and achievements are unique. “We ought to be imitating this in other parts of California,” McCarthy said. “We haven’t done as a country what you’ve done here.”
