Q: Concerning the new
plant, is it a union plant?
Teerlink: It will be a union plant...we are not going to have an anti-
union campaign. It's likely that it will be an organized plant from the two
bargaining units -- dual unit international unions that we have.
Q: And that's fine with you.
Teerlink: That's fine with us.
Q: Let me ask you a little bit about outsourcing. I mean, do you contract
out a lot of parts work?
Teerlink: Oh, yes. Outsourcing is a very important part of any
organization, but unfortunately it gets a bad rap. What outsourcing really
should be based on is what are the core competencies of the organization. What
are those things that make a distinctive, competitive difference that you
produce vs. what someone else produces. And for every company they're
different. And for the things where you don't have competency, let's go to the
people who are experts at it, because that's how we get to utilize technology.
If we tried to make our own brake systems, you know, it would be heavy, heavy
investment going against people who make brakes. And the same goes with
carburetors and certain elements of suspension.
Q: Time and again companies say this and yet when they outsource,
invariably the part is made by a company that's paying significantly lower
wages than they are.
Teerlink: Well, remember, I've always said the cost is an important
determinant. We can keep wages high. The question is how many products can
you sell at the price that you're going to charge. And, you know, we always
forget that. We want to bang on the issue of wages, but we never deal with the
issue of consumer price. Where do efficiencies come from-- how can we pay
higher wages? How do we get more productive? By not having labor contracts
that are feather bedded; contracts that pay for non-work. For instance, people
know they're coming around to ask about overtime, so they go to the john and
then they didn't get asked for overtime and come Monday they put in a
grievance. And what happens? They get free money. And we've got to get rid
of free money. We've got to pay for work. People should come to work, and they
should do their job -- as they define their job, as their team defines their
job.
Q: But let me ask you this with all sincerity. A lot of companies will go
look for a low wage plant to supply them or they'll move a plant to a low wage
area. They won't invest in upgrading their facilities. They won't reorient
management practices. They develop a very narrow attitude about what makes
them competitive. It's all wages.
Teerlink: And if that is their decision and if that's what they found in
the marketplace that it takes, that's legitimate.
Q: But that's a big if.
Teerlink: Oh sure. But it's a big if whether or not I can sell
products, too. I don't think the people who are leading companies are stupid.
I don't think they purposefully make products that they can't sell. And I
think we have to understand that a lot of the costs that are in many products
are there because employees aren't working hard, because we aren't productive.
So how do we bring the balance back? We hear all the comments about bad
business -- they do this and they do that. How about the jobs they're
creating? Do we hear much about those? I don't hear much. Maybe I just don't
read the right papers. But every time someone's going to, you know, have to
lay off people it's a headline. The question I have to ask is if I didn't have
to lay off 10,000 people, what would they agree to do? Oh, can't do that,
that's concessions. I've got it and I'm going to keep it. It's a global
economy. We're competing against everybody else in the world. And as long as
we've got an "I got it, I keep it" mentality, we can expect only one thing --
more businesses moving elsewhere. We have to figure out how do we become
competitive as a family. I know people say, Oh, there he goes. Company is a
family. But that's really where it's at. It's all the stake holders.
Q: I'll just stay on this issue one more a little bit longer,
because it's a little hard for me to believe that every businessman is making
the correct decision for his company. And there certainly is an attitude in
America now that didn't exist a while ago. It's okay to go for the lowest
wage, and you know what, if wages don't rise, who's going to buy the products
that people like you make?
Teerlink: Well, if wages don't rise, they'll buy the foreign product
that comes in at a lesser cost. That's why they price it that way. So we just
open up the markets to foreign products. But, you know, let's have some shared
responsibility here about cost structure. And let's go back to free money.
Let's go back to grievance procedures or contracts that prevent people from
doing something at their own machine because that's a skilled trade, even
though you know it just means squirting oil on something once. Now, I don't
think people who are chasing low wages are doing it because they're bad people.
I think they're doing it because they're trying to preserve whatever jobs they
have. Now when are people going to come up and say, I think our costs are
getting too high around here. I think we should do something about that. And
you say, well, that's management's job. Sorry, that's everybody's job.
Q: Let's talk a little bit about the inner city. What are some of the
difficulties in keeping a plant like yours in the central city?
Teerlink: We live with all the problems that the inner city lives with.
Safety. You know, you live with crime. So you have some additional costs.
But by the same token you try to be a responsible member of the community so
that people look there and say, hey, we don't want anything to happen to that
area. Drugs. We've got drug problems. If you go through the litany of things
that people suffer in the inner city, we suffer all those also, and we have to
do something around that.
Q: What is the agenda? What's the agenda for Milwaukee? What does
Milwaukee have to do to make it a better business environment?
Teerlink: Oh gosh. I think it's a pretty good business environment.
You know, we really can't do a lot of complaining about what we've gotten in
Milwaukee. We're in the midst of building a warehouse. We've had excellent
cooperation with regard to that. We've had some incentives to do that. So, I
think what we have to do is just not view business as being bad and looking for
something for nothing. And maybe we all have to sit down and talk about how do
we get mutual benefit out of something we're doing. And, you know, we had a
thing with a tariff in 1983. The U.S. government provided a tariff for the
U.S. motorcycle industry. Now what a lot of people don't understand is that
Honda made motorcycles here, too, at that time and Kawasaki assembled them
here, but it gave us an opportunity to grow our business and to expand and
advance. We knew we were not what we should be. And we sais, these are the
things we're going to do. And when we do them, the tariff should go away. We
asked to have the tariff taken back early, because we were where we thought we
had to be. Was there a PR advantage to that? Absolutely. But the fact is we
did it. All businesses aren't sitting around just waiting for a hand-out. If
they're given an opportunity to perform and if there are measures, you might
find that they will do the right thing. But ours was an industrial protection
and I think that kind of protection is legitimate. But it has a sunset. We
can't just protect or businesses are not going to be competitive.
Q: So there is a role for government?
Teerlink: For total industry, yes. The difficulty is what is the
industry? The motorcycle industry was very simple to get at. Other industries
are very difficult.
Q: So, you don't think this is the kind of solution that could be
widespread?
Teerlink: I don't think it's a widespread solution, no.
Q: A lot of people would say that even pegging the motorcycle industry was a
tough thing to do, wouldn't they?
Teerlink: It's a very small specific industry that we were protecting
and since we were the major player, you know, you were protecting an American
industry. By Harley getting benefits you are in effect protecting the only
American motorcycle manufacturer that was available. Then they went away and
here we are. We're competitive in the world market and that had something to
do with it. But what had more to do with it was, we started to understand our
customers, we started producing.
Q: But it gave you that window of opportunity.
Teerlink: A little window of opportunity protected us. So a little bit
of protection is fine.
