Small-engine manufacturer Briggs & Stratton was in a bind. Its core product, lawn mower motors, sold well, but costs were rising, its giant manufacturing facility outside Milwaukee was aging, and its product lines were varied and unkempt. That’s when John Shiely, now chairman and CEO, took over as president and started changing the company from a single behemoth to a collection of smaller divisions and plants.
One of the biggest problems, however, was labor costs — and Briggs was knee-deep in problematic negotiations with its local union at the Wauwatosa, Wisconsin, plant. While competitors were moving manufacturing overseas to take advantage of cheap labor, Briggs tried a different tactic. It moved south and went small.
The company opened six smaller plants, or “focus factories,” in rural college towns like Auburn, Alabama, and Murray, Kentucky. “We’re a seasonal business, and that allows us to tap into major colleges for employees while maintaining a permanent staff, too,” says George Thompson, vice president of corporate communications. It also allows
Briggs to use mostly nonunion workers. And each of the new plants is highly automated, so they require fewer employees to operate.
Briggs also decided to take advantage of its well-known name and launched a division to sell new Briggs & Stratton-branded products, including generators and outboard motors.
While its strategy isn’t popular with unions, it’s working. Briggs ended its fiscal year in June with $1.6 billion in sales, up slightly more than 15 percent over 2002. The company sees its new approach as crucial to its future: “We have to stay competitive with our major competition, which are all nonunion and overseas,” Thompson says. And as so many manufacturers flee to low-wage countries, at least Briggs is still trying to make it work at home.