Federal Reserve looks for 'secret sauce' behind a successful Wisconsin tool maker
Federal Reserve officials are studying Snap-on, a Wisconsin-based tool manufacturer, to understand its successful business model. The company maintains profitability through high customization and a unique franchise-based distribution system.
Why it matters
Offers insight into how American manufacturing can remain competitive through specialization and flexible production methods.
KENOSHA, Wis. — People are holding onto their vehicles longer these days, so spending on car repairs is on the rise.
That's good news for Snap-on. The company has been making high-end tools for auto mechanics for over a century.
"Vehicle repair is one of the great businesses," says CEO Nick Pinchuk. "Everybody's got to get their vehicles repaired. The garages are humming."
Business This factory was severely short on workers. Then it offered flexible work By catering to those mechanics, Snap-on has enjoyed steady growth and profitability, despite the challenges facing U.S. manufacturers. This week, the president of the Chicago Federal Reserve Bank, Austan Goolsbee, dropped by Snap-on headquarters in Kenosha, Wisconsin to get a taste of the company's secret sauce.
"It's interesting to see," Goolsbee says. "Customization is why they get paid a premium and how they still manufacture in America."
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