What is Tecumseh Thinking?

About three years ago, the Tecumseh Products Company (best known for producing refrigeration compressors) closed a manufacturing plant in Wisconsin, and I read interesting commentary about it on Mark Graban’s blog at that time. It appeared to be yet another case of a U.S. manufacturer outsourcing its production to foreign countries with extremely low labor costs.

This month, however, I was happy to read this press release detailing Tecumseh’s recent hiring of Michael A. Noelke (as executive vice president, sales, marketing, and engineering) and James J. Connor (as vice president, treasurer, and chief financial officer). Both gentlemen have strong backgrounds in lean applications and impressive track records of performance improvement results. Noelke’s tenure at Sporlan reveals many noteworthy accomplishments – Sporlan is a division of Parker Hannifin, which embraced a quite successful lean transformation many years ago. Connor’s implementation of lean thinking at Newcor helped that organization rebound from bankruptcy.

Time will reveal the depth of Tecumseh’s commitment to cultivating a lean culture, but a general question to all U.S. manufacturers remains: Is any lean overhaul powerful enough to challenge the lure of outsourcing production and competing primarily on the basis of low labor costs?