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Health Snacks Had Never Had A Major Presence In Japan
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The plant in Mexico manufactured small household appliances such as toasters, electric irons, blenders, and coffee machines. In addition, the factory produced parts for wash-ing machines to be assembled by the subsidiary of an American multinational company. The small appliances were mostly for the domestic market, whereas the washing ma-chines were for both the domestic market and export, mainly the other North American Free Trade Agreement (NAFTA) countries. Over the last two years the production lines had been upgraded to make use of the latest manufacturing technology. Projections called for future expansion and increasing profits.
A few weeks earlier Van West had received a phone call from the production manager of the American subsidiary that manufactured the washing machines. The manager voiced concern over the quality and the delivery schedule of the washing machine parts. The number of defective parts had increased considerably over the last three months, and five times the parts had been delivered late enough to affect production schedules for the washing machines.
Van West had talked to Hernandez about the issue; Hernandez did not seem to think that it was a big deal, but he promised to look into it. Nevertheless, Van West was concerned, and he started checking on his own. He went to the factory floor. In the past he had never gone by himself; Hernandez had always been with him. Van West felt a bit uncomfortable and intimidated. His Spanish was limited; he had had three years in high school, and although he had started taking private lessons after his arrival in Mexico, it was slow going and he was self-conscious about making mistakes. The line supervisor, Duarte Gonzales, spoke enough English to lead him around.
Gonzales mentioned some difficulties with some of the new machines and the reasons they had broken down several times. He also indicated that some of the newer employees were not as dedicated as the long-time employees. Gonzales did not talk about Hernandez, but Van West picked up that their relationship was a bit tense. He grew concerned that Hernandez had never mentioned any of those problems and decided to talk to Hernandez again to emphasize the importance of quality and timeliness of delivery. Health Snacks was a major manufacturer of convenience foods and health food products. The company had registered several patents for extending shelf life while maintaining quality. The company had sales of roughly $3 billion and had subsidiaries in 30 countries around the world. In the last year roughly 34 percent of corporate sales had come from international sales. Tim Davis, the president for international operations at Health Snacks and Carter's predecessor, was given the task of exploring expansion into the Japanese market.
When Van West talked to Henandez the next day, Hernandez brushed aside the issue of the washing machine parts. Gonzales was exaggerating the problems. Sure, there had been some problems in the past, but nothing to worry about. Things would be just fine. However, he also pointed out that Van West would have to make some concessions to local work attitudes. He said.- "You know things are looser here. You just cannot expect the same performance you are used to. Take it easy; every-thing will be fine. Just don't worry. Leave it to me. I know how to take care of things.
Hernandez came from a distinguished Mexican family. His grandfather had been a prominent surgeon, and his father was a well-known lawyer. Hernandez had gone to the best schools in Mexico and had received an MBA from the University of Michigan. He knew everyone of importance in the business circles of Mexico City.
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