Bring Our Industry Back? Shift Your Attitude

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The I-Connect007 Editorial Team recently spoke with longtime columnist Dan Beaulieu about his recent series on bringing PCB fabrication back the the United States. Dan was happy to expound on his viewpoint. In this wide-ranging interview, he explained how our industry can rise up and take advantage of today's opportunities, and why we need to stop making excuses, such as blaming China for our problems. 

Barry Matties: I wanted to talk about your recent series of columns on bringing PCB fabrication back to America. First, you noted a list of what you deemed as excuses that you have heard from fabricators over the years about why their businesses are struggling. No doubt, you’ve heard it all. Second, and the impetus for our discussion, was your statement, “Yet all we must do is figure out how to take advantage of this situation and find a way to bring our industry back, make it strong again.”

When you say, “bring our industry back,” what does that mean? What do you expect to come back? What about “making it strong again?” Are you saying that we’re going to bring back mass production? Are we going back to 3,000 shops, like we had in the 1980s?

dan_beaulieu-100.pngDan Beaulieu: The giant factories are not coming here; mass production is not coming back. I don’t see how it can. We must look at reality and do an attitude shift. In North America, we have a gap in business, maybe around $8 billion, that we could get back.

The whole premise of my column was that we’ve given up. When the business was growing by leaps and bounds in the 1980s, and we had 2,000 or 3,000 board shops, that global market was $10 billion.

Matties: And the profits were insane.

Beaulieu: Yes, and it was a relatively young industry. During this period, there was acceptance of terrible service, and there was a lot of R&D. I grew up with touchback schedules, and I was in one of the finest shops in America, the Rockwell shop in Maine. We had touchback schedules because we were doing cutting edge, and our customers still had their board shops.

Everybody had their shops, like IBM and RCA. Development was being done there. But you’re right, the profits deteriorated. To me, this is more a call to the owners.

Now, if you look at the column, it talks about strategy. All of us are pulling our hair out because there are not enough people doing marketing. If you think about marketing, it’s developing strategies for your own business, whether it’s $3 million or $50 million. I worked with companies that live their lives on strategy. They’re figuring out where their company is going all the time. Leading companies have whole teams of people doing this.

There might be a few smaller companies that do true marketing, allowing us to sit down occasionally and talk about the strategy of the company. We talk about things like, “What does this company mean? Where are we going tomorrow? Not in two months, but in five years.” The Japanese are doing it; the Chinese are doing it. You can look at the capacitors, all the components—it’s all planned strategy. Remember the old NEC thing where they were going four years in advance to load the system? We don’t do any of that.

Once a year, I’ll show up in a shop and wrestle them to the ground for two days to talk about their company, and where it’s going. Frankly, they’re bored to death. They can’t wait to get out of there. There will always be a guy who comes up with something like a super board they built once, and then you lose them. They start talking about the super board, or anything but the customer and their strategy.

I focused my column on the tactics for how to get there. What do you care about? There’s a joke I’ve said a thousand times: When you run out of customers, you buy a drill machine, and you think the drill machine will solve it. We always think technology will solve it. Well, if no one knows you have that technology, who will beat a path to your door? They don’t even know you have the mouse trap. That’s the space we’re in and it gets particularly frustrated. Saying it again: What is marketing? What is branding? It’s all sitting down to think about your company, and what the company is.

Matties: Marketing is your ability to communicate the story.

Beaulieu: Perfect.

Matties: Once you have the strategy, then you must tell your story. You can’t just buy a drill, and say, “That’s our strategy.” You must go out and say, “Here’s what we’re doing. Here’s what it means.” There are a lot of examples of those doing this quite well in our industry.

In our October PCB007 Magazine issue on capital expenditures, we focused right to the heart of what you’re thinking. When people are coming to capital expenditures, they’re looking at their strategy. Some expenditures are more strategic. To me, method is more of a competitive advantage than the actual piece of equipment.

Beaulieu: Yes. All the things I listed in my column, all the excuses: “We know all these things. We’re screwed by China. IPC is not supporting us.” Blah, blah, blah. That’s not the point at all. So what? Companies who do well are doing it intentionally. For exampIe, I’m watching Calumet and they could have sat back and added 10 more excuses to my list. “We’re out in the middle of nowhere,” for example. But look at what they’ve done with strategy. They laid out what they would do and look at where they are today.

Matties: Yes. They are telling their story. Another factor in strategy is automation. It’s going to happen one way or the other over time, whether you want it to. You will either embrace it, or ultimately be priced out of the market because labor is going up.

Beaulieu: Yes, and it will continue to go up. I don’t want to mistake this for my political philosophies, but CEOs used to be paid six times what an employee was. Now they’re 12 and 13 times more. That’s a factor. It’s pretty bad when government handouts exceed pay. That’s not what they were supposed to do. And we’re seeing that.

Once again, we get back to attitude. You really think you have a great place to work if you can’t even convince people to work there? I’ve been in more than one shop where they’ve said, “We’re in a closed room. These people have no future here.” Well, if that’s the way you feel, then that’s why they’re leaving. As a leader, you must create the future. You must create the career path. Let’s face it. We know companies where a good person with a high school diploma in customer service is making more than a first-year teacher with a four-year, $200,000 degree. There are opportunities, and we know people who have made a lot of money in this industry.

Matties: Yes, but to your point of strategy, there must be a strategy of changing the way that you attract people.

Beaulieu: Exactly. There’s an attitude right now, right or wrong, of geopolitical animosity with China. The respirator/ventilator shortages, and other shortages, made us open our eyes and ask, “What did we give up for a $29 DVD player?”

I believe that will flatten, but it’s going to make our customers more cognizant, “There’s more we can do here. There’s another level of circuit boards we can buy.” I believe we are still the most innovative country in the world. We still have Silicon Valley. We still have Austin. We are still developing some pretty cool stuff. You and I talk about that all the time. It’s not going to China anytime soon—like SpaceX or Blue Horizon, for example. It stays here for a long time. How many Blue Horizon rocket ships are you really going to make?

Nolan Johnson: Dan, looking forward, this is an opportunity for our industry in North America to retool and refocus. I think we’ve established in this conversation that going after the mass volume is not the right approach. So, what do we focus on as an industry?


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