At least three statistics suggest Foster knew considerably more about foundry operation than he lets on. One, man-hours per ton of output were quickly cut in half, from 70 to the upper 30s; two, sales per employee of $21,000 in 1983, just before Foster took over, soared to $109,000 in 1991; three, he instantly dismissed 15 of Chromalloy's 38 salaried staff. "They were skilled," he grants for the record, "but they had sanitized the business. Ownership was missing. The atmosphere was corporate. A personal business identity didn't jump out." Foster also banished six company cars and three company country clubs, and for quaint but observable effect, affixed his own stamps on personal mail from home and dropped the envelopes into company collection baskets. "It is offensive to me," Foster says, "for anyone to have special privileges. How can you ask a person to save a dime when he can see someone else is cheating?"
While cutting huge swatches out of corporate overhead, Foster also began assessing his inherited union shop -- which came complete with high-seniority workers in single-function jobs. "I didn't have a crane operator willing to come down and help somewhere else," he complains. Through prior agreements, longtime employees had earned special treatment that not only caused discord among the workers who hadn't, but taxed Foster's payroll annoyingly beyond his means. "If they're going to earn bonuses, I want to be the one to give them out."
But first Foster had to enlist employees -- none of whom, salaried or hourly, had been promised jobs in his newly acquired company. He needed to start from scratch, he realized. "If a business is really sick, it's overwhelming. You have to break it down into pieces you can fix, or you'll go nuts." He shut the plant for three days and, together with trusted Chromalloy carryovers Floyd Baum and Robert Gollmar, profiled some 300 candidates for rehire. The team penned the employees' qualities on three-by-five cards and pinned them to an office wall. The trio first selected a general supervisor, who in turn selected three plant supervisors. Then each vied for his own team of subordinates. The 100 candidates with the best performance and attendance records were offered jobs. No wages were cut, but salaries were returned to base, stripped of embellishment. Foster refers to the process as "The NFL Draft."
The International Molders and Allied Workers (IMAW), however, referred to it as union busting. A strike was threatened on Foster's first day in business. Countered Foster: "We do not think employees want five and a half weeks of vacation when they are laid off and can't use them. My priority is to get everyone back to work and provide stable employment full-time every month, so people can start making house payments again." Not only did the union back away, but shortly thereafter the plant voted overwhelmingly to decertify its bargaining agent.
The rejection of the union was at least partly inspired by a fiery I'm-in-charge-here speech from Foster. Gathering the rehired work force, he lectured: "I don't care what you used to do -- it didn't work. As of last Friday, this became a new company, and we're doing things differently. How we do them isn't negotiable. They're what we're going to live or die by." By the way, he added, driving the final nail into the IMAW coffin, "I intend to share profits with everyone here." At the end of the first year, 1984, Foster personally passed out profit-sharing checks, although profits were minimal and he could have retained them for working capital. "But we needed credibility up front," he says. "We needed to confirm in their minds what profit sharing meant -- in the form of a check, not talk."
The work force liked what it heard and -- as W-2s rose some 50¢ an hour above industry standard -- liked what it got. Because each supervisor would not allow his hand-selected team to fail, productivity immediately soared. And in Foster's eight years so far, only three employees have left, establishing an unheard-of turnover rate of, essentially, zero. As a further endorsement, more than 40 of the company's employees have enticed family members to join the force. (And Foster greets everyone by first name, reasoning, "They know mine, why shouldn't I know theirs?")
The company hires in spurts, resorting first to overtime to handle sales growth. Whenever a foundry shuts down in Pittsburgh or Dayton -- as a number have -- Foster books a nearby motel room and interviews the jobless. "I've cherry-picked from every foundry within 50 miles," he exults. Then he spends liberally on job training, so Elyria can cement its niche of complex, high-tensile castings, which require highly trained workers to execute them.
Foster's goal was better utilization of labor, and it's been achieved. In 1979, 391 employees produced 12,000 tons of castings; 10 years later, in 1989, approximately the same tonnage was produced by only 216 employees. Because of increased productivity, Elyria's wages are significantly higher than other foundries', while its labor costs are significantly lower.
From the president on down, no manager serves purely as management. Each has a line job as well. Foster's is salesperson, mostly as repairman to broken customer relationships. "I had to go out and meet customers, because they weren't going to give me any business unless I did. I had to sell them on me, that I was committed to the business. I put my name on the line that I was going to be in this business forever, whereas there was no commitment Chromalloy could make that convinced customers they'd be there even next month."
