We, your shareholders, demand:

10/13/2010


This morning I was reading an article in the Chicago Tribune that said three major energy producers (Valero Energy, Tesoro, and Occidental Petroleum) are getting grief from organizers within their shareholders. The shareholder groups, while representing very small segments of the total, are organized and taking the company management to task for spending large sums of cash in political advertising to oppose California’s Proposition 23, which will require cutting industrial and vehicle emissions.

I’ll leave it to others to decide if that’s a good idea or not. My thought for this discussion is about more useful discussions that shareholders could have with company management. These could probably apply to the three companies mentioned, and a whole lot more. Here’s my suggestion:

Dear board of directors of (fill in the blank) corporation:

We the shareholders have invested in this company for the long haul. While we are interested in profits in the short term, we are more concerned with the big picture and are looking out over many years to come. We believe that there is a problematic preoccupation with the short term, and there is too little investment to ensure that we will be able to operate efficiently and profitably in two, five, or ten years.

Our plants are suffering from personnel cuts and an unwillingness to spend money on equipment and automation technology that will put us in a more competitive position in years to come. There is much we can do to improve plant infrastructure in ways that will make them more energy efficient, reduce emissions, increase availability, and boost output. We expect you to improve profits by making appropriate investments rather than simply cutting costs until we fall off a cliff. Our plants should be models of technological excellence with the best trained people in the industry. That is what will build the value of our investment, and we expect you to do it.

Rspectfully,

Your shareholders

OK, maybe this is asking too much, but as we emerge from this recession, it seems like a good time to make such a suggestion. Last December we published an article that discusses what happens when a plant gets caught in the downward spiral of cuts and has to be pulled back before a total crash. Let’s hope that rescue scenario plays out many times in the coming months, with the support of investors. In an interview I had with John Berra, retiring chairman of Emerson Process Management, he told a story about a conversation with a refinery executive that says there are still companies out there that just don’t get it. Maybe the message has to come from a new direction.



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
The true cost of lubrication: Three keys to consider when evaluating oils; Plant Engineering Lubrication Guide; 11 ways to protect bearing assets; Is lubrication part of your KPIs?
Contract maintenance: 5 ways to keep things humming while keeping an eye on costs; Pneumatic systems; Energy monitoring; The sixth 'S' is safety
Transport your data: Supply chain information critical to operational excellence; High-voltage faults; Portable cooling; Safety automation isn't automatic
Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Plant Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.

Maintaining low data center PUE; Using eco mode in UPS systems; Commissioning electrical and power systems; Exploring dc power distribution alternatives
Synchronizing industrial Ethernet networks; Selecting protocol conversion gateways; Integrating HMIs with PLCs and PACs
Why manufacturers need to see energy in a different light: Current approaches to energy management yield quick savings, but leave plant managers searching for ways of improving on those early gains.

Annual Salary Survey

Participate in the 2013 Salary Survey

In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.

Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.

2012 Salary Survey Analysis

2012 Salary Survey Results

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.