Tragedy

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 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 to fund process and procedures to face...