Burgmaster Corp.: Case Study
1. Summary of the case study
The focus of the story is Burgmaster Corp., a Los Angeles-area machine tool maker founded in 1944 by Czechoslovakian immigrant Fred Burg. Holland covers the 1944 founding of Burg Tool, its transformation into Burgmaster Corporation, the Houdaille takeover, the 1979 leveraged buyout, the campaign for protection against Japanese competition, and, finally, the auction of Burgmaster property in 1986.
2. Statement of the problem encountered
Too many machine tool and auto parts factories are silent; too many U.S. industries still can’t hold their own. Any manufactured item is either made by a machine tool or by a machine made by a machine tool. Thus, leaving the economy’s demise. The company needed backing to expand, however, so it told out to Buffalo-based conglomerate Houdaille Industries Inc. Houdaille was in turn purchased in a 1979 leveraged buyout led by Kohlberg Kravis Roberts & Co. By 1982, when debt, competition, and a sickly machine-tool market had battered Burgsmaster badly, Houdallie went to Washington with a petition to hold the investment tax credit for certain Japanese-made machine-tools. Holland’s history of the company under Houdaille is a veritable catalog of modern management techniques that flopped. One of the most disastrous was a system for computerizing production scheduling that was too crude for complex machine-tool manufacturing. It is not possible to state that the only factor which made Burgmaster ask for trade protection was the lack of adequate strategic planning. Indeed, the company had clear managerial issues, especially after the amalgamation with Houdaille Industries, and leveraged buyout by Kohlberg Kravis Roberts and Co (Stevenson, 2012). There existed problems with operational management, which were a consequence of strategic issues and the lack of proper planning at all levels. However, the effect of government policy and the situation in the industry have also led Burgmaster create a petition for
The focus of the story is Burgmaster Corp., a Los Angeles-area machine tool maker founded in 1944 by Czechoslovakian immigrant Fred Burg. Holland covers the 1944 founding of Burg Tool, its transformation into Burgmaster Corporation, the Houdaille takeover, the 1979 leveraged buyout, the campaign for protection against Japanese competition, and, finally, the auction of Burgmaster property in 1986.
2. Statement of the problem encountered
Too many machine tool and auto parts factories are silent; too many U.S. industries still can’t hold their own. Any manufactured item is either made by a machine tool or by a machine made by a machine tool. Thus, leaving the economy’s demise. The company needed backing to expand, however, so it told out to Buffalo-based conglomerate Houdaille Industries Inc. Houdaille was in turn purchased in a 1979 leveraged buyout led by Kohlberg Kravis Roberts & Co. By 1982, when debt, competition, and a sickly machine-tool market had battered Burgsmaster badly, Houdallie went to Washington with a petition to hold the investment tax credit for certain Japanese-made machine-tools. Holland’s history of the company under Houdaille is a veritable catalog of modern management techniques that flopped. One of the most disastrous was a system for computerizing production scheduling that was too crude for complex machine-tool manufacturing. It is not possible to state that the only factor which made Burgmaster ask for trade protection was the lack of adequate strategic planning. Indeed, the company had clear managerial issues, especially after the amalgamation with Houdaille Industries, and leveraged buyout by Kohlberg Kravis Roberts and Co (Stevenson, 2012). There existed problems with operational management, which were a consequence of strategic issues and the lack of proper planning at all levels. However, the effect of government policy and the situation in the industry have also led Burgmaster create a petition for