Tragedy American Died Company Good

An American Tragedy: How a Good Company Died

This case study tells us the story of Burgmaster Corp which is a machine tool maker company. Burgmaster was a thriving enterprise by 1965, when annual sales amounted to about $8 million. Although it needed backing to expand, it sold out to Buffalo-based conglomerate Houdaille Industries Inc. The case study also, inform us too many machine- tool and auto parts factories are silent, too many U.S. industries still can’t hold their own. Holland uses Burgmaster’s demise to explore some key issues of economic and trade policy.

The LBO chocked off Burgmaster’s investment funds when foreign competition made

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them most necessary. Houdaille’s charge that a cartel led by the Japanese government had injured U.S. tool makers. Holland offers plenty of ammunition by creating enormous pressure to generate cash. Burgmaster pushed its products out as fast as possible. It shipped defective machines . It promised customers features that engineers hadn’t yet designed.

The External Forces for Burgmaster Corp Demise :

1- The Government policies : tax laws and macroeconomics policies that encourage LBOs and speculation instead of productive investment. 2- Pentagon procurement policies for favoring exotic, custom machines over standard, low cost models. 3- The indusrial policy: Domestic tool makers were too complacent when imports seized the lower end of the product line, the ill prepared for change and struggling to restructure. 4- A cartel led by the Japanese government had injured U.S. tool makers. 5- Foreign competition made.

The Internal Forces for Burgmaster Corp Demise :

1- The system for computerizing production scheduling was too crude . 2- High cost and much expensive machines 3- Defective machines as a result of pushing products as fast as possible without regarding to quality and customers’ needs 4- NO Cash...