Prof: Innovation Can Prevent Carrier-Like Cuts

Posted: Updated:
Mohan Tatikonda is a professor of operations management at the Indiana University Kelley School of Business in Indianapolis. Mohan Tatikonda is a professor of operations management at the Indiana University Kelley School of Business in Indianapolis.
INDIANAPOLIS -

As Carrier Corp. begins the first round of previously-announced layoffs at its Indianapolis manufacturing facility, one expert says Hoosier companies must reinvest in themselves to prevent similar moves in the future. Mohan Tatikonda, professor of operations management at the IU Kelley School of Business in Indianapolis, says he would like to see companies invest in R&D to make innovative, customizable products best produced in the U.S. He says companies like Eli Lilly and Co. (NYSE: LLY) and Cummins Inc. (NYSE: CMI) have maintained work force by focusing more on innovation than competing on cost.

He says the deal Carrier’s parent struck with the Indiana Economic Development Corp. with the help of the Trump administration, while positive for the employees whose jobs it saved, is a “one spot, one time, one situation deal” that doesn’t address underlying policies to retain manufacturing jobs. Tatikonda says low-wage and low-skill work will naturally move to cheaper environments, meaning a focus on innovation can be a better strategy to retain and grow a manufacturing work force.

Tatikonda also says the impact of automation, recently outlined in a study from Ball State University, should not necessarily be seen as a threat, but natural progress. He says companies can redeploy displaced workers to focus on more innovative and value-added products, which don’t compete based on lowest manufacturing cost.

The good news, Tatikonda says, is that Indiana has all the elements needed to be a national manufacturing example: strong heritage, state leadership that cares about manufacturing, organizations like the state’s advanced manufacturing and logistics initiative Conexus, training programs and the benefit of location. He says he hopes Indiana companies will recognize industry trends and choose to invest in R&D to make innovative products that will be produced and delivered in the state.

As for Carrier, he says he’s surprised the company kept production in the United States as long as it did, adding “brilliant” local management kept the Indianapolis operations vibrant for years. More than 630 Carrier employees are slated to lose their jobs, with about 338 of them being laid off today.

  • Perspectives

    • (photo courtesy of Conexus)

      Getting the Word Out About Manufacturing & Logistics

      As the epicenter of the nation’s advanced manufacturing and logistics industries, Indiana has a compelling story to tell about how Hoosier companies make and move the goods people depend on every day. Our goal is to ensure everyone hears these stories – many of which share a common theme focused on cutting-edge technologies that are transforming the way products are made and moved around the world and the people who use them. Conexus Indiana launched an...

    More

Subscribe

Name:
Company Name:
Email:
Confirm Email:
HTML
INside Edge
Morning Briefing
BigWigs & New Gigs
Life Sciences Indiana
Indiana Connections
INPower
Subscribe
Unsubscribe

Events



  • Most Popular Stories

    • (photo courtesy of The Times of Northwest Indiana)

      Historic Hospital to be Torn Down in Gary

      A building that once represented the racial divide in the city of Gary, but long provided health care to the African American community, will soon fall to a wrecking ball. The city says it intends to raze the long-abandoned St. John’s Hospital. 

    • Parkview Heart Institute is part of the Parkview Health System

      Most Wired Hospitals in Indiana Ranked

      A national association of healthcare information executives has once again honored Fort Wayne-based Parkview Health for its commitment to using advanced technologies in their clinical and business operations. The College of Healthcare Information Management Executives says Parkview is ranked in the 97th percentile of organizations surveyed for the program, earning a “Most Wired” distinction. 

    • (photo courtesy of The Times of Northwest Indiana)

      Valpo Approves Plan to Level Mansion, Build New Homes

      The property where an aged, Victorian-era, mansion in Valparaiso currently stands will become the site of 15 new homes, described as “upscale.” The Valparaiso Board of Zoning Appeals approved the variances needed for Downtown Valparaiso Partners LLC to proceed with the project, according to our partners at The Times of Northwest Indiana. 

    • The Honda Greensburg plant opened in 2008.

      Honda to Invest $4M, Add Jobs at Greensburg Plant

      The American Honda Motor Co. continues to invest in its Greensburg, Indiana plant as it has announced the factory will be producing the company’s first electrified sport utility vehicle in the U.S. The company says it will invest more than $4 million and add 34 new jobs in the plant to support production of the CR-V Hybrid.  

    • Eleven Fifty was previously headquartered at Launch Fishers.

      Eleven Fifty to Cut Ribbon on New Location

      Eleven Fifty Academy will cut the ribbon on its new downtown location September 23. The nonprofit coding academy says it will host a grand opening ceremony November 6.