Kwikset Rules Out Move Abroad, Will Remain in Anaheim
After mulling over a move to Mexico or elsewhere, Kwikset Corp., a leading manufacturer of residential locks and one of Orange County’s largest employers, said Tuesday that it will stay put.
The company’s decision to buck the trend by other lock makers who have moved manufacturing overseas or south of the border means that its 1,300 employees in Anaheim and 500 more in Oklahoma can breathe easier.
Kwikset, a subsidiary of Emhart Corp. of Farmington, Conn., 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 two 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 so-called maquiladora plant in Mexico. In August, Weiser announced that it would phase out its Huntington Beach manufacturing plant and lay off 1,100 workers over an 18-month period.
That strategy, which has become increasingly popular with American manufacturers looking for ways to cut costs, 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.
For many companies, the lure of cheap labor south of the border has become irresistible. The number of maquiladora plants has 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 the company looked at possible manufacturing sites in Korea, Brazil and Mexico but decided to keep manufacturing in this country--even though labor costs are at least three times higher than in those nations.
Highly Automated
“There are many subjective reasons why we feel we should remain here,” he said. Chief among them is keeping a close tab on production, quality control and faster delivery of products, he added.
The new plant in Denison will use highly automated production techniques enabling the company to quickly change product lines in response to demand, Mackay said.
Kwikset’s strategy is being adopted by others in industries 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 the Builders Hardware Manufacturers Assn. in New York.
Mackay said 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.
