What a Surprise! California Supremes Break Toward Business

As my son, Ben, remarked, “For a second, I thought I was reading The Onion”.

Last week, the California Supreme Court issued a decision on a case that had been pending before it since 2008. Referred to as the “Brinker Case”, the decision addresses employer and non-exempt employee rights and responsibilities regarding meal and rest period wage-hour policies.

Under the current California Labor Code, employers are required to provide employees two rest breaks and a meal break on a very strict time schedule. No issue with that here. It’s the right thing to do. The “however”, here, is that an employer can be found in violation of the Code by missing on the timing of breaks and meals by a single minute. Penalties are potentially huge.

For years, labor groups have insisted that employers are obligated to “police” their employees to ensure that no work is actually being done on break and lunch periods. A violation of the rule generally requires the employer to pay an additional hour of compensation for any part of a compromised meal period.

The larger win, I think is for the employee, not the employer, and that’s equally fine by me. I can’t count the times when an employee has asked to work through a half-hour lunch break in order to leave early for an appointment in the afternoon. We’d be happy to accommodate the requests but for the rule. It would be a violation of California’s Labor Code to permit it. Now that the California Supremes have decided on the Brinker case, we can be more flexible. Of course, the lunch period still exists (as it, of course, should), but exceptions can be made in order to help employees with meeting other obligations outside of work.

Too many times I’m asked if I know what would help businesses grow in this economy. One of my most frequent answers is for the regulators to get out of the way. Score one for employees and employers!

Until next month...

-John Belzer

P.S.

Just thought I’d include a list of 2012 upcoming events. It’s going to be a busy year for us on the road in 2012. Although the traditional trade show climate has changed over the past few years, we still believe in presenting eyeball-to-eyeball given the right opportunities. Here’s how it stacks up for the year (so far):

Offshore Technology Conference (OTC) 2012
April 30-May 3
Houston, TX
Booth # 11819
The OTC is the world’s foremost event for the development of offshore resources focusing on drilling, exploration, production and environmental production.

Mfg4 2012
May 8-10
Hartford, CT
Booth # 1310
Mfg4 (Manufacturing for the Future) is designed by SME to take place biennially alternating with Eastec, normally held annually in Springfield, MA. This show will be its first.

Amerimold 2012
June 13-14
Novi, MI
Booth # 322
Amerimold is an event for tool and mold making, molds and additive manufacturing. It is being held in conjunction with the National Tooling & Machining Association (NTMA) Purchasing Fair.

IMTS 2012
September 10-15
Chicago, IL
Booth # W-1267
IMTS is simply the largest, must-attend event in the industry, held every other year in Chicago. We have exhibited at IMTS since the 60s.

We hope that you’ll be attending one or more of the shows and take the opportunity to stop by to say hi. It’s always good to see old friends and make new ones as we take our message on the road.

The Workers’ Comp Classification Scam

Over the past few months, it’s been very busy (too busy, it sometimes seems, to have written a monthly blog). But I’m back at it, and intend to stay on track here at the keyboard. And to begin 2012, I need to let off a little steam and present an issue that is more than a cautionary tale.

I don’t know how workers’ compensation laws work where you live, but here in California it seems that the more I learn, the less I want to know. We’ve all heard about the anti-business nature of our legislature in Sacramento. It’s legendary and I’ve written about it in the past.

This next slight comes in the form of regulations set forth that govern the workers’ compensation classifications of employees. As is likely a nationwide standard, the rate we all pay for workers’ compensation insurance is based on payroll, head count and job classification. At the beginning of the “insurance year” we estimate head count and payroll and clearly identify which people are performing which job functions. After the close of the “insurance year”, the carrier performs an audit to attest that we’ve estimated correctly and honestly to understand whether we’ve paid an appropriate premium given our risk. So far, so good?

Now, it turns out that we have several job classifications, as most shops do: “clerical office employees, salespersons, machine shops and stores-wholesale”. You would think that, with all of the opportunities for injury on a manufacturing floor that the “machine shops” classification would be the highest rate per $100 in payroll. You would be wrong. It’s the “stores-wholesale” classification (in our case, picking, packing and shipping) that is the most expensive.

But that’s not the worst part, or even the point of this piece. It’s just the set-up (so to speak). For the first time in history, the carrier’s auditor asked some our clerical and sales-classed individuals whether they spent any time on the shop floor; and if yes, why and where. The answers were consistent with good business practice. First, they were honest. Second, they explained that in the normal course of business, it’s important to understand the basics, if not the complexities of how parts are made.

According to the Workers’ Compensation Insurance Rating Bureau of California (WCIRB) it turns out that an office worker or salesperson can’t spend more than ZERO minutes per day on the floor without being re-classed into the most expensive rate in the business on the theory that the risk for injury during those few minutes justifies the higher premium.

This means that a sales manager can’t walk through a facility to check on inventory or a customer’s job without being reclassified. How does that make good business sense? Seriously.

Oh. And the rate per $100 of payroll is almost 15 times higher than the rate for the position in which the person is legitimately classed.

It’s no wonder that California has developed a reputation for being business-unfriendly. And it’s just another cause-and-effect of a clueless legislature in Sacto and a perennially broken and mis-managed California workers’ compensation insurance system.

And how does small business answer that question during the next audit cycle? And what will you do when that auditor comes to visit?

When I began my monthly comments in this space, I assured you that it wouldn’t be your garden-variety blog, at least most of the time. I hope you agree that I’ve kept my promise.

Until next month…

Today’s Modern Machine Shop – Increase Throughput, Minimize Waste, and Reduce Cost

On Thursday November 3rd at 2:00PM Eastern I’ll be hosting a webinar with Modern Machine Shop Online talking about ways to increase throughput, minimizing waste and reduce costs. Mark Albert, Editor-in-Chief of Modern Machine Shop Magazine, will be the moderator.

By now, we’ve all attended a webinar or two. This is my first time presenting one and I’m looking forward to the event.

Here’s the situation: As the manufacturing sector continues to improve, there are more opportunities for those shops that successfully weathered the last recession. In addition, I believe that more work will be “re-shored” due to better quality, faster lead times and increasing upward pressure on Asian costs. Add the critical shortage of skilled workers to the mix and you end up with the issue of figuring out you’re going to satisfy your customers’ demands while holding (or even better, increasing) your margins.

Given the challenges, we’ll talk about how to increase and accelerate work through your shop, reduce costs related to procuring raw materials and machining, and grow your business without unnecessary pressure.

The Webinar promises to present useful information and strategies that will help your business and I hope that you can join us on such short notice. Click here to register.

Until Thursday…

John

Clarification
TCI Precision Metals services our customers from our single, 105,000 sq. ft. facility in Gardena, California, just 12 miles from downtown Los Angeles. It has come to our attention on many occasions that there are companies claiming to be us and actually accepting orders from our customers. If you are not working with TCI in Gardena, California, you’re not working with TCI Precision Metals. If this is the case, please contact me and I will rectify the situation immediately.

Continuous Improvement Helps Us Evolve

TCI Achieves ISO 9001:2008 and AS9100C Certification

Having been certified to earlier versions of ISO and AS quality management systems for many years, in August we were granted certification to the latest revision of the ISO and AS quality management systems standards, namely ISO 9001:2008 and AS9100C.

For those of you who have been through the latest revision process and for those who are currently working their way to (re)certification, you know how difficult and time consuming it can be. But it’s not about the paperwork. In fact, our system is, for all practical purposes, digital.

Thanks largely to the next generation, (that would be Ben), our system is relatively easy to navigate with a great deal of linkage between and among sections. I can say with some confidence that our third party auditor from QMI found his task easier and quicker at TCI than in other organizations that he has audited. And it’s all up on our company intranet available to all users.

As everyone knows, the purpose of becoming certified and maintaining an ISO and AS quality management system registration isn’t about marketing. It’s about becoming a better organization. The latest revision is also helping us to be a more process-driven company and is reinforcing the need to be on a path of continuous improvement.

In the end, the real measure of our Quality is the degree to which our customers express satisfaction with our products and services through long-term business relationships. That was the case before and is even truer now.

Until next month…

John

"TCI Goes BIG"

While my monthly topics usually are intended to cover broader issues than those under our own roof, this month I can’t resist shameless self-promotion. Over the past several years, the Engineered Products side of our business has evolved with our customers’ requirements and needs. While evolving has always been the norm here, the early 2000s brought a seismic (after all, this IS California) shift toward larger work.

At the risk of suggesting that our latest addition completes our large part machining cell, our new Hyundai-Kia Horizontal Boring Mill would seem to fit the bill. It complements 3 very large gantry-type vertical machining centers and 3 somewhat smaller horizontal machining centers in that cell.


The new boring mill has travels of 118” in X, 79” in Y, 63” in Z and 28” in W. With a full 4thaxis table that is 79” x 71” and a 22,000# load capacity, it is an addition that will help us provide our customers with larger capacities, faster lead times and throughput along with better quality and accuracy.

We just finished installing it last month and it is currently being booked for large oil & gas components and food packaging equipment.

As my friend Mike Mittler, President of Mittler Brothers Machine & Tool, and Past-Chairman of the NTMA would say, “Sell early and often”. Mike, I hope you’re reading!

I hope that this month’s message finds you well and finding a way to endure this crazy summer heat.

-John Belzer

"Make it in America"

On a recent road trip to the east coast, I took with me a new book that promised to speak to the issues that I wrote about last month - some of the same ones that NTMA Chairman Grady Cope spoke to this past spring: Marketing Manufacturing to America.

But more than speaking about the importance of manufacturing in America and doing the public relations piece, Chairman and CEO of The Dow Chemical Company, Andrew Liveris, presents a national strategy to revive American manufacturing.

In Make It in America, Liveris discusses among many other things:

• Why ideas follow where manufacturing goes (a very real potential for American "brain drain")


• Fighting offshoring (to which he devotes an entire chapter)


• Reforming our educational system


• The need for an emphasis on Science Technology Engineering and Math (STEM) disciplines on a national level


• Overhauling tax policy


• Preparing the "next-gen" workforce


• Getting trade agreements off dead center and implemented

All that in under 175 pages.

While none of us will agree with all of his analysis and prescriptive advice, all of us will agree with most, I believe. Pick up a copy - it's worth the time.

As an aside, we at TCI are participating in a program presented by the South Bay Science Foundation and the South Bay Workforce Investment Board promoting STEM education which includes the mentoring of students and inviting them to our shop to "shadow" our people and processes.

Other worthwhile reading and viewing related to American manufacturing was prolific in the past month. All of the links below are brief and worthwhile:

A segment ran recently on NPR highlighting the National Robotics League (an NTMA venture), called "Robot Wars Prepare Kids for Manufacturing Jobs".

Mike Rowe of Discovery Channel's "Dirty Jobs" fame testified in May before the U.S. Senate Committee on Commerce, Science and Transportation.

Finally, NTMA 2008 Chairman Roy Sweatman and president of Southern Manufacturing Technologies, Inc. is interviewed by the Tampa Bay Business Journal and talks about how he found his way into the aerospace precision custom manufacturing business.

Until next month...

-John Belzer

"Marketing Manufacturing in America"

At the recent MFG Conference in Chandler, Arizona, NTMA 2011 Chairman Grady Cope of Reata Engineering Machine Works in Englewood, CO gave what I feel was a passionate case for the critical importance of rebuilding a manufacturing base in America. He called it appropriately, Marketing Manufacturing in America. It was about the fact that actually making things is what builds wealth. It was about bucking the public’s perception that becoming a nation of service providers is a perfectly swell end game. At its core, it spoke to the issue of once again making manufacturing relevant to an American public and, by extension, their representatives in public office at all levels.

Speaking of the word “public”, Grady’s message was also an “ask”. That is, he was asking all of us who share his passion for manufacturing in this country to create individual public relations efforts to explain, by every means possible, why we do what we do - and why it is essential to America’s economy. Without such an endeavor, media will never understand, never mind translate our story to those who need to know.

This “blog” of mine is but one attempt to get that message out. There have been others and will be more. I hope that you’ll take the time to read Grady’s remarks (and imagine hearing them with the passion with which Grady made them). I’ve included a link to Grady’s speech that can be downloaded and distributed.

My own “ask” is that you also do what you can to make the case for manufacturing in your own way(s). Here are a few suggestions:

· Talk to other parents and school counselors about manufacturing-related careers

· Attend a local high school- or city-sponsored career day

· Write your congressmen and senators (NTMA’s One Voice makes it easy)

· Give plant tours to people and groups who are not related to manufacturing

· Invite a Boy or Girl Scout troop over

· Use social networking platforms like Twitter and Facebook

· Contact your local newspapers to attempt to get visibility

I’m sure that you can think of many, many more.

Until next month…

John

Read Grady Cope's Speech