Anaheim’s Kwikset Bucks Trend, Will Grow Domestically
Kwikset Corp., a leading manufacturer of residential locks and one of Orange County’s largest employers, said Tuesday it will buck the trend of moving manufacturing overseas or south of the border and will instead expand its domestic operations.
The company, a division of Emhart Corp. of Farmington, Conn., employs about 1,300 at its plant in Anaheim. A second plant in Bristow, Okla., has about 500 workers.
Kwikset also said that it will break ground this week on a $6.5-million parts and metal forming plant in Denison, Tex., that will employ 250 workers after it is finished in April, 1990.
Construction of the new plant and modernization of existing facilities follows 2 years of record-breaking sales, Kwikset said. The company declined to release actual sales figures, and Emhart does not disclose revenue for its divisions.
The decision to expand operations in the United States contrasts with recent actions by Weiser Lock, another large Orange County lock manufacturer.
Several years ago, Weiser tried to reduce costs by moving some of its operations to a maquiladora plant in Mexico. In August, Weiser announced it would phase out its Huntington Beach manufacturing plant and lay off 1,100 workers over an 18-month period.
That strategy, which has increasingly become the norm for embattled American manufacturers, was one that Kwikset considered but ultimately rejected.
“Many of our domestic competitors have gone to manufacturing in Asia or maquiladora assembly in Mexico,” Kwikset President John Lang said in a prepared statement.
“We looked very hard at that. But in the final analysis, we determined that by being innovative and extremely efficient, we can retain virtually all our employees (and) make a better product” in the United States, Lang said.
Lure of Cheap Labor
For many companies, the lure of cheap labor south of the border has become irresistible. The number of maquiladora plants had grown to 1,259, employing 322,743 workers at the end of 1987. That compares to about 300 plants employing 30,000 workers 10 years ago, according to the U.S. Commerce Department. The total is expected to exceed 1,900 by 1990.
Donald L. Mackay, a vice president in charge of industrial relations for Kwikset, said that the company looked at possible manufacturing sites in South Korea, Brazil and Mexico but decided the company’s future would be better served by keeping manufacturing in the United States--even though labor costs are at least three times higher here.
“It’s not as if we came up with a number, that it will cost us 10 cents less per lock to stay in the United States.” he said. “But there are many subjective reasons why we feel we should remain here.”
Automated Production
Chief among those reasons, he said, is keeping a close tab on production, quality control and faster delivery of products.
The new plant in Denison will use highly automated production techniques, enabling the company to quickly change product lines in response to consumer demand, Mackay said.
Kwikset’s strategy has increasingly been adopted by other American manufacturers--in industries ranging from semiconductors to clothing--that need to produce a variety of products, said Allen J. Scott, professor of urban and economic geography at UCLA.
“Kwikset, it would seem, has decided to produce a higher-quality product with wider variability,” Scott said. “That is one reason you see investment coming back to the United States. We see this happening a great deal at the present time. Manufacturers need skilled labor and fast marketing strategies.”
The move is also part of an effort to combat the inroads made in recent years by foreign lock manufacturers, Mackay said.
Asian competition has been particularly intense. The wholesale value of Taiwanese lock imports, for instance, has grown from $1.3 million in 1980 to $43.6 million in 1987, or about 9% of the total market, according to Builders Hardware Manufacturers Assn. in New York.
Mackay said that an increasing portion of Kwikset’s business, now about 50%, is on the East Coast. The company plans to begin construction next year on a fourth plant in the Southeast, pending approval from its parent company.
KWIKSET CORP. AT A GLANCE
President: John Lang Products: Residential locksets (knob, lever and handset styles) and deadbolt locks. Parent Company: Emhart Corp., a $2.5-billion multinational company based in Farmington, Conn. Divisional Headquarters: Anaheim Manufacturing Facilities and Employees: Anaheim: 1,300 Bristow, Okla.: 500 Denison, Tex.: 250 (expected completion date in April 1990) Year Founded: 1945
