Made in the shade no longer Bausch & Lomb move casts latest shadow over Md. workers

Manufacturing

January 28, 1996|By Jay Hancock | Jay Hancock,Sunglass Assn. of AmericaSUN STAFF

Bausch & Lomb Inc.'s Garrett County factory is the kind that Maryland likes to brag about.

The sunglass-lens plant pays production workers $9 an hour and more. It wins national quality awards. Modern, clean, technologically complex, it supports the idea that this state's smart, more-expensive work force is still valued by manufacturers.

Two weeks ago Bausch & Lomb announced that it will close the Oakland plant, Garrett's biggest employer. The town, its mayor said, is "in disbelief." Six hundred jobs will evaporate to Texas and overseas.

Why? Causes range from turmoil in Bausch & Lomb's management to the boom in disposable contact lenses to the popularity of wraparound sunglasses, interviews with employees, managers and analysts show.

But at bottom, the story of Bausch & Lomb's exit offers a sobering lesson for Maryland, which has lost a fifth of its factory jobs in a decade.

It teaches that cheap Southern labor is still a potent lure to industry; that even the best work force sometimes isn't good enough; and that manufacturers' concerns go far beyond the taxes and regulations that state leaders are now focusing on.

'Customer needs'

Bausch & Lomb officials, embarrassed that Garrett County officials were quoting them as saying Texas is more "business friendly" than Maryland, now deny they feel that way. "I don't want to see Bausch & Lomb end up as the poster child for economic development in Maryland," said Barbara Kelley, Bausch & Lomb's vice president of public affairs.

The company's decision to concentrate North American sunglass-making at an existing plant in San Antonio, Texas, is based purely on "customer needs," not Maryland drawbacks, said Harry "Butch" Sumpter, vice president of global eye-wear manufacturing. Maryland development bosses and regulators have been told the same thing privately.

"It's certainly not an attempt to chase labor," Mr. Sumpter added. The wage difference between Garrett County and San Antonio is "insignificant," he said.

Lower wages may not be the main reason for the change. But interviews and a review of labor data suggest that they aren't insignificant, either.

Cheaper labor

In a 1994 factory-wage study by the U.S. Bureau of Labor Statistics, San Antonio ranked lowest of the country's 192 largest metro areas. Average pay for factory production workers there: $373 per week. Average pay in Maryland: $546.

Asked what San Antonio offers Bausch & Lomb that Garrett County doesn't, "cheaper labor" is the first thing mentioned by Kenneth R. Kulju, who follows Bausch & Lomb's stock for UBS Securities in New York.

The Garrett County plant has a senior, experienced work force and little turnover, say present and former employees. Its average pay for hourly workers is $9.44, according to figures supplied by the company to county officials. Nobody makes the minimum wage of $4.25 an hour, workers said.

The San Antonio factory has much higher turnover, Bausch & Lomb employees said. It starts all new production workers at minimum wage, according to its hiring office, although more-senior employees make more.

Bausch & Lomb, based in Rochester, N.Y., declined to provide average pay figures for San Antonio. But Jon Hockenyos, a Texas economist and business consultant, estimates that $6 to $7 an hour is average for the facility. That's between 26 percent and 36 percent less than in Oakland.

"My guess is that has a substantial impact" on Bausch & Lomb's financial results, said Mr. Hockenyos, managing director of Texas Perspective Inc.

And while much of the Maryland lens-making will shift to Texas, another portion has been moving to Hong Kong, where the pay is even lower.

Model operation

The Oakland factory is a Bausch & Lomb star. It was the company's first eye-wear plant to earn the exacting ISO 9002 quality designation. It won a U.S. Senate Productivity Award in 1992.

But in the end, speculates one former manager in Oakland, "the cost of quality got to be too high."

To some people in the industry, the surprise isn't that Bausch & Lomb is trying to trim sunglass production costs. The surprise is that it wasn't done a decade ago.

Sunglasses have been a predominantly low-wage, Third World trade for years. Between 80 and 85 percent of all sunglasses sold in the United States are imports, said Richard Enholm, market research chairman of the Sunglass Association of America.

But Bausch & Lomb, riding the perennial popularity of its Ray-Ban aviator and "Wayfarer" styles, was able to charge higher prices -- $30 to $100 -- and maintain its U.S. manufacturing.

"It was part of their heritage that they always kept production in the United States," said Marge Axelrod, editorial director of 20/20 Optical Group, a publisher of several sunglass trade magazines. "They could have shifted it offshore faster than they did."

Competitive pressures

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