Recession and Tougher Economic Times
Lincoln Electric Presentation – July 19, 2013
1. Introduction
a. Joint presentation
b. Agenda and timeframe
i. Introduction
2. Early History of Lincoln electric
a. Founded by James F. Lincoln in 1895 in Cleveland, Ohio
b. Closely held until 1995 with voting rights of 40% active in 2005
c. Produces welding equipment – expensive
i. Less produced in tougher economic times
d. Produces consumable supplies – commodity priced
i. Still produced in tougher economic times and helps the compnmay weather the storm
3. Founding philosophy of James F. Lincoln – the Incentive Management System (“IMS”)
a. Piecework
b. Annual bonus
c. Guaranteed employment
d. Limited benefits
4. How has the IMS worked in the US market
a. Good news
i. Productivity ii. Lay-offs iii. No union iv. Survived the 2008 economic recession
b. Bad news
i. Some employee complaints ii. There were some layoffs in 2008
5. International Expansion
a. Expanded manufacturing to Canada in 1925
b. 1938 Australia
c. 1955 France
d. Between 1988 and 1992 plants acquired in 9 more countries
i.
6. How has the IMS worked in the international markets
7. 1996 “A New Approach”
a. Expansion into the developing markets of Latin America and Asia
b. Lincoln Electric – Asia
i. Strategy
8. Potential Expansion into Indonesia – local production of consumables
a. Country and market
b. Competition
i. How to compete?
1. Commodity price war
2. Differentiation on quality
3. other
c. Economic and Political Risks
d. Market entry options
i. 100 ownership ii. Joint venture iii. Other
Should Lincoln adopt its incentive policy?
It should adopt local incentive policy.
Piecework – NO (under piecework system most workers could earn more but some workers could earn less) -> no factory in Indonesia was using piecework. How to introduce piecework into Indonesian market??? Will it be working???
Indonesian workers are more effectively managed with traditional management methods.
1. Introduction
a. Joint presentation
b. Agenda and timeframe
i. Introduction
2. Early History of Lincoln electric
a. Founded by James F. Lincoln in 1895 in Cleveland, Ohio
b. Closely held until 1995 with voting rights of 40% active in 2005
c. Produces welding equipment – expensive
i. Less produced in tougher economic times
d. Produces consumable supplies – commodity priced
i. Still produced in tougher economic times and helps the compnmay weather the storm
3. Founding philosophy of James F. Lincoln – the Incentive Management System (“IMS”)
a. Piecework
b. Annual bonus
c. Guaranteed employment
d. Limited benefits
4. How has the IMS worked in the US market
a. Good news
i. Productivity ii. Lay-offs iii. No union iv. Survived the 2008 economic recession
b. Bad news
i. Some employee complaints ii. There were some layoffs in 2008
5. International Expansion
a. Expanded manufacturing to Canada in 1925
b. 1938 Australia
c. 1955 France
d. Between 1988 and 1992 plants acquired in 9 more countries
i.
6. How has the IMS worked in the international markets
7. 1996 “A New Approach”
a. Expansion into the developing markets of Latin America and Asia
b. Lincoln Electric – Asia
i. Strategy
8. Potential Expansion into Indonesia – local production of consumables
a. Country and market
b. Competition
i. How to compete?
1. Commodity price war
2. Differentiation on quality
3. other
c. Economic and Political Risks
d. Market entry options
i. 100 ownership ii. Joint venture iii. Other
Should Lincoln adopt its incentive policy?
It should adopt local incentive policy.
Piecework – NO (under piecework system most workers could earn more but some workers could earn less) -> no factory in Indonesia was using piecework. How to introduce piecework into Indonesian market??? Will it be working???
Indonesian workers are more effectively managed with traditional management methods.