W.L. Gore: Dry GoodsBy John Moore | Posted 2005-05-23 Email Print
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As rival textile producers move their operations overseas to save money, W.L. Gore is staying put in the U.S. Its competitive advantage? Democracy.
What can a textile manufacturer that still wants to make fabric in America claim as its competitive advantage?
If you're W.L. Gore & Associates of Newark, Del., it's democracy.
Gore's technology to make plastic-based fabrics and its iconic Gore-Tex brand of outdoor clothing, with its Guaranteed to Keep You Dry pledge, may be the company's hallmark.
But its organizational style also stands out. Founder Bill Gore banished the typical corporate chain of command in favor of what the company terms a "flat lattice" organization.
New employees"associates" in Gore-speakare assigned to general work areas. Associates learn the business and gravitate toward projects under the tutelage of seasoned "sponsors."
Projects are highly collaborative. A person with an idea recruits like-minded associates, who may represent several different disciplines. Team members are accountable to each other. Bosses, in the usual sense, don't exist.
That's why Thomas Malone, professor of management at MIT's Sloan School, describes Gore as a miniature democracy.
"At W.L. Gore ... the chief executive does not select managers," Malone wrote in a Financial Times article adapted from his 2004 book, The Future of Work. "Instead, people become managers by recruiting enough other people from within the company to work for them."
Gore has made Fortune's best-companies-to-work-for list every year since the program's inception in 1998. The magazine lauded Gore for keeping employees engaged "by letting them choose what to work on."
Getting employees to manage their own operations is Gore's answer to the cost-cutting that has pushed most other American textile makers to move the bulk of their operations outside the country.
Gore operates 17 manufacturing plants near Newark, Del., and Elkton, Md. Those facilities churn out a range of products, from fabric laminates to industrial sealants. Polymer processingthe basis for the company's varied product linealso occurs there. Gore operates manufacturing centers in Europe and Asia as well.
Companies that hope to keep manufacturing operations in the U.S. face a difficult struggle. In Asia, the average worker's salary is around $100 a month. So apparel makers, who need human hands to stitch together their goods, have shifted manual work overseas. According to Michael Jennings, president of Michael Wesetly Clothing, 97% of Americans don't own a single piece of clothing manufactured domestically. Michael Wesetly aims to buck that trend as it uses U.S.-based manufacturers. But overall, moves such as the elimination on Jan. 1 of worldwide textile quotas exacerbate the U.S. manufacturing situation.
"It's hard to close the labor gap just through automation or I.T.," says Rich Kauffeld, managing director of the consumer products industry at BearingPoint, a McLean, Va., systems integrator.
Some fabric concerns try to offset the labor rate differential through automation. Yarn spinning mills, for example, are virtually lights-out operations; about the only workers roaming the shop floor are the technicians who repair machinery. Textile firms use information technology for order processing, resource planning and distribution.
But Jennings and Kauffeld say textile and apparel makers must pursue more fruitful sources of competitive advantage. Among those: quality, leading-edge products and manufacturing processes, and efficient movement of raw materials and finished goods in the supply chain.
For Gore, it's a combination of most of the aboveplus collaboration between the rank-and-file workers who run its plants.