Just got off the phone from an interview with Shalli Kumar, chairman and CEO of AVG, a vertically integrated designer and manufacturer of electronic parts, with facilities in Carol Stream, Illinois, and Bettendorf, Iowa.
Kumar is trying to get the attention of the movers and shakers in Washington and the mainstream media with some ideas the Big Three automakers' bailout.
He started with a letter to CNN’s Lou Dobbs which says, in part, that the Big Three are “spending close to $1.2 billion per year on automation control products that are supposed to increase plant productivity and reduce costs. Most of these products are not even manufactured in the U.S. anymore. On the other hand, there are American companies that can provide better products for half the cost, saving Detroit $600 million per year, with products that are manufactured in the U.S., further creating additional high-tech manufacturing jobs here.”
He has followed the Dobbs letter up with similar ones to his Congresscritters. Now he’s coming to us covering the automation space to spread the word.
Kumar wants to make a discussion of these numbers and procurement practices part of the debate in Congress about giving more money to the automakers.
I asked him if he was suggesting that a “buy American” plan be mandated as a condition of the bailout. He wouldn’t go that far, but he did say, “We need to make sure taxpayer money is going to be used successfully. There are other savings besides labor [that the automakers can look for]. I don’t think it should be a mandate, but if they can buy American, they should. If there are better products, they should buy in America.”
Make no mistake. Kumar has a dog in this fight. What he’s zeroing in on is the tendency of the Big Three to buy all their touchpanels, drives, HMIs, etc. from the usual suspects: Rockwell, GE, Schneider and Siemens. He’s suggesting that companies such as his could provide the same products for much less money.
I’m not qualified to judge whether Kumar’s right about the savings, and he’s fighting an uphill battle. The truth is nobody ever got fired for buying Allen-Bradley or one of the other name brands, and there’s a whole lot of legacy installed base out there to make a bulwark against change.
That said, I do like the idea of asking the Detroit poo-bahs what exactly it is they intend to do with our money. Doing more of the same isn’t going to help. Putting everything on the table—even the procurement department’s sacred cows—along with all the easier targets, such as labor costs and pension agreements, is only right. And the more ideas about getting this vital industry back on the road in the right direction, the better. You go, Mr. Kumar.