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CASE STUDY #2: AMERICAN TOOL AND DIE (DUE WEEK 6)

CASE STUDY #2: AMERICAN TOOL AND DIE (DUE WEEK 6)

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Author: Joyce Buda
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Case Study #2: American Tool and Die (Due Week 6)As the sun rose on a crisp fall morning, Kelly Mueller’s Learjet touched down onto a smallairstrip outside Tupelo, Mississippi, and taxied toward the hangar, where a festive crowdgathered to await the arrival of Toyota’s CEO. This morning, the governor of Mississippi, alongwith local politicians and business leaders from the automobile industry, would celebrate theconstruction of a new Toyota plant on a 1,700-acre site in Blue Springs. The new plant wouldproduce 150,000 Highlander sport utility vehicles each year. The energy and enthusiasm of thecrowd was palpable. The new plant would give hope to a local community that had been hit hardby the recession.The purpose of Mueller’s visit was to assess new business opportunities for the company sheran for her father, Vince Brofft, CEO of American Tool & Die (AT&D). Mueller joined thecompany in 1998 after working for 15 years as an engineer at two U.S. automakers. Then, afterseven successful years as chief operations officer at AT&D, this scrappy dynamo convinced herfather she was ready to be president. Energetic and tireless, Mueller took over the helm ofAT&D, an auto parts manufacturer that sold braking and ignition systems directly to the topthree U.S. automakers. Mueller was a mover and while she did her homework she liked to makedecisions quickly and by herself. Having worked in large organizations before she often had tomake decisions with others and while she could do this the thought that she would get to dothings on her own in the small business was intoxicating. With 195 employees, AT&D waslocated in Farmington Hills, Michigan, among dozens of other automobile parts suppliers in theUpper Midwest. AT&D, established in 1912 by Mueller’s great uncle, had a long history inFarmington Hills. Mueller had often talked with employees who would recount stories abouttheir fathers or grandfathers working in the same Farmington Hills plant—the last of the originalmanufacturing operations in town.Mueller was in Mississippi to research moving AT&D’s plant close to a foreign automaker.The foreign automakers, particularly Honda and Toyota, had been quickly grabbing market shareaway from the big three automakers, who had severely cut production as the economy worsened.As inventory started stacking up on dealer lots, U.S. automakers curtailed production in order tocope with the sudden drop in demand. Next, they put the squeeze on parts suppliers to lowerprices. That’s when AT&D leaders started feeling the crunch and watching their financial pictureturn grim.Mueller faced an unprecedented challenge to survive this economic downturn and save herfamily’s company. She pleaded with her father to think creatively and shake up the status quo atAT&D to avoid bankruptcy. Her plan was to forge into new markets and court foreignautomakers. This plan would require closing the plant in Michigan and opening one near the newToyota facilities in Mississippi. Her father adamantly resisted this plan even though he knew shewas right. “Dad,” a recent text message explained, “we have opportunities here in Mississippi.There’s no future in Michigan. We can’t sit around waiting for the big three to come back! It’sadapt or die!”

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