Interested People with a Need to Know but No Responsibility for Action

Excel Industries, Inc.

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COPY: Interested People with a Need to Know But No Responsibility for Action

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SUBJECT: Strategy Memo: Excel Industries

Background

The help in the field of care of children became a family problem since 2002. Rendering of services on care of children for employees often is considered as social responsibility, but public financing of the USA for this sector doesn't exist.

Several years ago, Excel Industries, Inc., a supplier of window systems to the automotive industry, purchased Nyloncraft, Inc., a $40 million injection molding company. Both firms are headquartered in northern Indiana, in the heart of the domestic automobile supply region. At the time of the acquisition, Nyloncraft was a highly-regarded firm with great promise for growth, and had exactly the sort of manufacturing capacity, equipment, and labor force that Excel Industries was looking for.

James J. Lohman is Chairman, President, and Chief Executive Officer of Excel Industries. “When the Learning Center was opened,” he said, “it suited the needs of Nyloncraft very nicely. It was expensive, but it helped us to attract and retain a reliable workforce that would help the company grow. We had a number of female workers who were of child-bearing age and it made good sense for us to assist them with their child care needs. We knew from experience,” he added, “that a first-class, on-site learning center would reduce turnover, absenteeism, and tardiness. It was good for business, it was good for our employees, and it was good for the kids.”

When he said expensive, Lohman wasn’t exaggerating. “When Excel acquired Nyloncraft, we immediately invested $200,000 in the Learning Center, improving it so that it met or exceeded all recommended standards for facilities of that type.” The center’s annual budget was in excess of $400,000 to provide round-the-clock care and instruction for 162 children.

Discussion

The training center provides exceptional educational activities and food for registered children and the flexibility of increasing the availability of twenty-four hours of work for parents. The practicality of the facility justified the excessive cost when a large percentage of children in the facility, 162 registered at one time. However, as soon as the percentage of employees' children dropped down to seven percent of the center as a whole, the company's excessive cost for small corporate financial benefits began to make less sense. With all working parents, regardless of their employer, receiving nutritional discounts for tuition, the Excel industries spent large budget portions and did not benefit little to any return on investment.