In May 1994, David was hired as the Chief Operating Officer at Auto Parts Manufacturing
Corporation (APM) in Lutesville, OH. When interviewing for the position, he was very excited about the
opportunity, but then in his first week of work he was beginning to have some serious concerns.
APM manufactured motor vehicle exhaust system parts and manifolds to sell to original equipment
manufacturers in the automotive industry. The president, Michael Sawyer, along with several other
former managers bought the company from its founders in 1988, and the officers and directors owned
100% of the capital stock. Sales at the company had grown steadily from $11.5 million in 1988 to $23
million in 1992 to $100 million in 1994, and APM was projected to be the fourth largest privately
owned company in the Lutesville area within two years. In addition to the Lutesville factory
(110,000 square feet), they also had factories in Kentucky (120,000 square feet) and Saverton, OH
(120,000 square feet).
While the company had been growing and prospering, some of these benefits had been achieved at the
expense of the employees. In an effort to cut operating expenses and increase profits after the
buy-out in 1988, the new owners fired the union employees, kept the front office staff, and started
using temporary employees as the core of the workforce. At the Lutesville facility, there were about
425 employees, and 350 to 400 of these were temporary workers provided by Just-In-Time Labor. The
union employees had required wages of $10-$11 per hour with insurance benefits. Temporary workers
started at $5.50 per hour with no benefits but had piece-work incentive bonuses that could increase
their pay level by 25 to 50%. Also, worker compensation premiums were the responsibility of the temp
agencies (i.e., Just-In-Time Labor).
David was initially thrilled to join this fast growing, successful company. As he began his new job,
however, he discovered that many of the temporary workers were being injured on the job (Exhibits
1-3), and one local temp service, Help When You Need It, stopped providing workers in 1990 because
of the questionable safety environment.
In an attempt to determine the causes for so many injuries, David reviewed the company safety manual
originally developed in November 1992 (excerpts provided in Exhibit 4). The safety program required
machine guarding on all machines, including a requirement that supervisors conduct daily inspections
of their production lines to ensure safety guards and devices were in place and working properly. It
insisted on a detailed dress code to prevent any unnecessary exposure to hazards, and it provided
for a progressive discipline program up to and including discharge for employees who violated the
safety practices.
In questioning the supervisors at the site about the number of accidents, the general consensus was
that the primary driver was the quality of the employees. For example, earlier in May, there was a
major drug bust of employees dealing drugs primarily during the nightshift. There were many
anecdotes where people would come to work in the morning and not come back in the afternoon, and
several people that David talked to felt that the employees were staging accidents to collect worker
compensation.
David tried to discuss this with Sawyer, the company president, but had not been able to schedule a
meeting yet due to the president's busy calendar.
David contemplated what he should do next.
Exhibit 1 – Injuries by type for 1993
| Injuries |
APM |
Just-In-Time |
| Amputations |
2 |
4 |
| Smashed |
6 |
13 |
| Crushed |
1 |
0 |
| Broken Bones |
1 |
5 |
| Lacerations |
23 |
29 |
| Pinches |
3 |
0 |
| Back Injuries |
2 |
3 |
| Foot Injuries |
0 |
1 |
| Eye Injuries |
5 |
11 |
| Flash Burns |
0 |
16 |
| Burns |
5 |
7 |
| Other |
15 |
62 |
Exhibit 2 – Descriptions of some of the accidents in 1993
| Date |
Machine |
Description of Injury |
| 07/30/93 |
Horizontal Bender |
Employee caught in clamps injuring left first finger |
| 08/09/93 |
Swedge Machine |
Left hand injury to 5th finger (partial amputation) |
| 08/10/93 |
Air/Hydraulic Press |
Smashed two fingers on right hand |
| 09/02/93 |
#4 Bender |
Contusion left hand ring finger |
| 09/03/93 |
Air/check machine |
Sprained left hand, smashed little finger |
| 09/08/93 |
Swedge Machine |
Crushed end of 3 fingers on left hand |
| 09/14/93 |
Swedge Machine |
Smashed index and middle fingers of left hand |
| 09/15/93 |
Vertical Bender |
Pinched right hand middle finger |
| 09/17/93 |
Vertical Bender |
Right hand injured |
| 09/24/93 |
Denison Press |
Employee caught between tube and bottom die injuring
right 5th finger |
| 09/26/93 |
Horizontal Bender |
Employee caught in clamps injuring index finger on
left hand |
| 09/26/93 |
Horizontal Bender |
Broken left index finger |
| 10/03/93 |
Air/check machine |
Smashed left hand |
| 10/05/93 |
Cap machine |
Caught thumb between cap and upper die – cut finger |
| 11/22/93 |
Vertical Bender |
Smashed tip of middle finger, left hand |
| 12/05/93 |
Horizontal Bender |
Employee caught in clamps injuring right middle and
ring fingers |
| 12/06/93 |
Horizontal Bender |
Fracture to 4th digit, right hand |
| 12/13/93 |
Vertical Bender |
Right thumb caught between machine and pipe – smashed |
| 12/17/93 |
Air/hydraulic Press |
Injury to index finger of left hand and palm |
Exhibit 3 – OSHA Recordables for 1993
| |
Reported
by APM |
Reported
by Just-In-Time |
Actual
Company Rates |
| |
LWDI2 |
Incident |
LWDI |
Incident |
LWDI |
Incident |
| Recordable |
7 |
57 |
62 |
88 |
67 |
160 |
| Rate |
1.8 |
14.8 |
16.1 |
22.8 |
17.4 |
41.5 |
Formulas:
1993 Total # of APM/Just-In-Time Employees: 386
Rate = (LWDI x 200,000)/(386 x 2,000)
Rate = (Incident x 200,000)/(386 x 2,000)
Comparables:
Private Industry, 1992:
3.9 LWDI Incident Rate
8.9 OSHA Recordable Cases
All Manufacturing, 1992:
5.4 LWDI Incident Rate
12.5 OSHA Recordable Cases
Exhibit 4 – Excerpts from the APM Safety Manual
From the Introduction:
APM is fully committed to the safety of our personnel and the maintenance of a hazard free work
place by controlling the potential hazards in our work areas. To achieve this goal, a safety system
consisting of the Corporate Safety Officer, and an active safety committee working within each plant
has been established. True safety is more than simple programs and guidelines; true safety is a
philosophy, a value and above all, a type of work life behavior. At APM we are committed to "real"
work life safety and full work life satisfaction.
From General Safety Practices:
2.0 DRESS CODE
To avoid unnecessary exposure to hazards, the following minimum dress standards apply to all
facilities:
2.1 Foot Protection
Working around the manufacturing operations at APM exposes you to potential abrasions, cuts,
puncture wounds to the bottom of your foot or crushing injuries to your toes and upper foot.
Durable, hard soled, solid toe work shoes are required because they offer the most protection.
Athletic shoes are not acceptable.
2.2 Shirts
In order to protect your shoulders and upper arms from cuts and abrasions or burns from
manufacturing operations, it is necessary to wear shirts with sleeves. Personnel not involved with,
or exposed to, any welding operation may wear short sleeve shirts or tee shirts. Personnel involved
in any welding operation must wear long welding sleeves, a welding jacket, or leathers while
working. A neck flap is encouraged to prevent burns to the neck and reflection burns to the face and
eyes.
Tank tops, muscle shirts, mesh shirts, loose fitting tee shirts or shirts that expose the bare
midriff will not be allowed while working at APM.
…
2.6 Disciplinary Actions
It is your individual responsibility to comply with all stated safety rules. Failure to follow these
simple, commonsense rules will result in disciplinary actions up to and including dismissal in
accordance with the rules outlined in paragraph 5 of this chapter.
…
5.0 DISCIPLINARY ACTIONS
Safety is the number one concern at APM. Disregard for developed practices and procedures will
result in specific disciplinary actions being taken against the offender. These disciplinary actions
are as follows:
- First Offense: Verbal Warning
- Second Offense: Written Warning
- Third Offense: Sent Home Without Pay/Dismissal
…
7.0 MACHINE GUARDING POLICY
To assure operator safety while operating any piece of equipment, all machines at APM will be
protected with approved guards. Under no circumstance will any one operate, or cause to be operated,
any unguarded machine.
…
8.0 TRAINING
General safety training will be provided to all personnel as a condition of employment. Refresher
training will be provided during the monthly general safety meetings held in the break room.
Schedule will be posted in break room. Training will consist of the following:
- Contents of this safety plan
- General safety topics
- Seasonal safety items
- Notes and information derived from safety magazines and publications
| Auto Parts Manufacturing Corporation (B) |
After further research, David determined that the level of training provided to the temporary
workers was woefully inadequate. Supervisors that he interviewed admitted that they only showed
employees how to run a few parts on a machine and then watched them for 15 to 20 minutes. Employee
interviews established that most operators had either received no training or only received 15-20
minutes of "hands-on" training by a supervisor. Even Sawyer, APM's president, told the Lutesville
Town Crier, that "We train like crazy for a time and then we get caught in a spurt of growth and we
don't have time to train again." For reference, the Occupational Safety and Health Administration
(OSHA) recommended 8 hours to 2 weeks of training for the metal-working industry, depending on the
complexity of the equipment and the operator's experience. In addition, the turnover of employees at
APM was a problem. Between August 1993 and June 1994, Just-In-Time Labor needed to provide the
company with 1,500 temporary employees to maintain employment levels around 350 to 400.
Before David could do anything to remediate this situation, in June 1994, OSHA initiated a
comprehensive safety inspection of the factory as a result of the high rate of injuries occurring at
the establishment. In addition, a health inspection occurred based on a referral regarding noise in
the plant and inadequate ventilation for welders. The investigation was the result of a referral
that the Cincinnati area office of OSHA received on May 26, 1994 from a doctor at St. Luke's, the
local hospital. The doctor was concerned about the number of injuries and stated that the hospital
had been treating 2-6 people a day with injuries from APM.
On December 12, 1994, OSHA imposed four willful violations with $120,000 in proposed fines for
inadequate injury and illness recordkeeping. In February 1995, OSHA imposed an additional $1.205
million in proposed fines for willful violations in which the company allegedly intentionally
ignored OSHA regulations, and $52,500 in proposed fines for serious violations where a serious
violation is defined as "a situation in which there is substantial probability that death or serious
physical harm could result and the employer knew or should have known of the hazard."
The willful violations addressed the company's alleged failure to train employees on the safe
operation of equipment, to provide fall protection and to adequately guard points of operation on
numerous pieces of equipment. (In the case of fall protection, employees were trained by a foreman
to crawl on top of storage boxes to check for inventory with no fall protection in use). The company
was also accused of failing to provide a safe means of egress, an effective hearing conservation
program, arm and hand protection, and personal protective equipment. Serious violations included
permitting machines to operate without proper safety guards, storing unlabeled containers on site
and failing to maintain electrical equipment. Exhibit 5 provides a list of the deficiencies found
during the inspection.
Reviewing the historical injury data, APM represented 7 lost workday cases with 57 recordable
injuries for 1993. Records verification by OSHA revealed at a minimum, 67 lost workday cases with
160 recordable injuries for 1993. For January-June 1994, APM represented 23 lost workday cases with
45 recordable injuries. Records verification revealed at a minimum, 211 lost workday cases with 290
recordable injuries through December 21, 1994. Thus, updated information for January 1993 to
December 21, 1994 showed 450 injuries including 9 amputations, 54 smashed injuries, 16 broken bones,
73 lacerations, 37 back injuries, and 56 flash burns.
David was perplexed as to how the situation could have gotten so bad and was wondering what he
should do next.
Exhibit 5 – Deficiencies found during the inspection
- Inadequate to no "point of operation" guarding for machines
- Inadequate to no "guarding of rotating parts and ingoing nip points" of machinery employees were
operating
- No fall protection for employees exposed to falls of 13 feet four inches when climbing over boxes
- Inadequate training of machine operators
- Machinery not anchored to the floor
- No records of mechanical power press inspections
- Electrical cord found to be in disrepair
- Improper means of egress for machine operators
- Unlabeled containers
- Missing Material Safety Data Sheets (MSDS)
- Lack of quick drenching facilities
- Lack of hearing conservation program for noise levels that exceeded 85 dBA
- Lack of enforcement for hearing protection
- Lack of adequate personal protective equipment such as eye protection, welding shields, and
gloves to prevent eye injuries, flash burns, burns and cuts
- Lack of hazard communication training for all employees for hazardous chemicals, MSDS and
container labeling
| Auto Parts Manufacturing Corporation (C) |
The OSHA investigation provided some opinions to causes of the situation. For example, the OSHA Area
director notified APM in a written letter dated in February of 1994:
…the existence of "incentive work" is often not conducive to a safe workplace, particularly in the
absence of adequate training programs and guarding methods which are not easily defeatable…
Also, many opinions were documented as part of the investigation regarding reasons for the lack of
machine guarding including:
- Lines set up in a hurry where no time was taken to address machine guarding
- Use of old safety equipment
- Different sizes of pipe or very large pipes being used in the equipment
- Machine not considered a production machine
- Machine only used in the prototype shop where new parts were being made
- Lack of supervisor(s) monitoring or inspection
In addition to the problem of training, the high employee turn-over also was thought to contribute
to poor disciplinary practices, i.e., management did not enforce rules or discipline employees
because turnover was already extremely high. The investigation also highlighted a belief that APM
did not want to take the time to do hearing conservation programs in part because they ran so many
employees through the company.
The outcome of the problem was that in October 1995, APM agreed to be acquired by a larger
automotive supplier. The reason widely reported was "access to sorely needed capital." In a
follow-up OSHA inspection in August 1996 to check the machine guarding, of the problem machines
cited earlier, eleven machines had guards installed and twenty-two machines were removed from
service. In 1997, under new management, the former APM factory had a total recordable rate of 9.79
and a lost work day injury and illness rate of 1.09 including a 12-month period with no lost time
injuries.
Auto Parts Manufacturing Corporation
Teaching Note |
While David is a fictional character, you may find it interesting to ask students how they would
feel if they found themselves in a similar situation, i.e., should a well-intentioned manager go to
work for a rogue company in order to improve conditions or refuse to do so?
You may want to discuss what kind of commitments David would need to receive from the president in
order to stay.
Key issues to draw attention to:
- Written program was not enough.
A written program is only one component of a safety excellence model. Excellence in safety also
requires management commitment, employee involvement, and safety site leadership. All were lacking
at Auto Parts Manufacturing.
- Poor safety affects your reputation.
They couldn't get enough workers and temp companies were refusing to provide them because the temp
agency was responsible for the worker's compensation costs.
Key learning: Despite the lower wage costs, the hazardous environment created was not sustainable in
the long-term. Providing a safe work place is a key to meeting strategic business goals.
1This case is based on publicly available information regarding the events that occurred
up to 1996 at a company in Ohio. The names of all companies, individuals and locations have been
changed, but background documentation supporting this case study is available for review at OSHA by
request. This case was prepared as part of an Alliance between Georgetown University's Center for
Business and Public Policy, OSHA, and Abbott. Participation in an Alliance does not constitute an
endorsement of any specific party or any party's products or services. This case was prepared as the
basis for class discussion in the "The Business Case for Safety." No one from any of the companies
was contacted, and the decision maker and his associated thoughts and actions are fictionalized.
2LWDI rates have since been replaced by Days Away, Restricted, Transferred (DART). This
change was made to improve the information collected about the incidence of occupational injuries
and illnesses.
|
Back to Top
