Getting Religion on Globalism

A Yakima manufacturer discovers the advantages of competing—and cooperating—with China.

By George Finch | April 2010 | FROM THE PRINT EDITION

Credit: Photograph by Hayley Young

Larry Kraft, owner of
Cascade Quality Molding, found new opportunities—and met his wife, Chen
Tingxue, his translator—in China. Chen now works for the company in Yakima.

If necessity is the mother of invention, curiosity could be
the father, as the experience of Larry Kraft, owner of Yakima-based Cascade
Quality Molding, attests. Seeing his business of supplying plastic products to
Boeing suppliers endangered by the rise of Chinese competition, he ventured off
in 2005 on an odyssey to China that changed his company and his life.

Within
a year following his return, Kraft managed to broaden his client base by 20
percent, boost sales by 30 percent and raise profits by 20 percent. He is now
married to a Chinese woman, and his company has a branch in Shanghai, unusual
for a small business with fewer than a dozen employees. The China office
recently helped Cascade develop a promising relationship with a German supplier
to Boeing. And Kraft may soon begin the process of manufacturing complex
plastics for the Chinese aircraft and medical instruments industries.

Doing business with China was the furthest thing from
the eastern Washington native’s mind in the 1980s and 1990s when his
business was strong. In its heyday, his plant employed 20 workers manufacturing
plastic products from customized molds for 40 clients in the aircraft, medical
and electronic industries. Products included hydraulic and interior components
for aircraft, plastic molded enclosures for electronic instruments, and medical
instruments and laboratory products.

But sales dropped off during the 2001 recession and remained
flat through 2003. The outlook was discouraging. “Before, we would win about 50
percent of our bids,” Kraft says. “But in 2003, we only won two new contracts
out of 102 bids.”

He soon discovered the reason. “Our [domestic] competitors
were buying molds—the most costly item in the production
process—from China for about half the price.”

Kraft didn’t want to buy from China. “I am conservative and
as ‘Buy American’ as anyone. I still only buy American cars.”

Yet when he traveled to China to learn more about his new
competitors, he was profoundly moved by his experience.

“I was astounded by the massive population, and the size and
ability of manufacturers there,” Kraft says. “I came home humbled.”

He reluctantly decided to contract with Chinese companies.
“I had to do something or shut down,” he notes. But if he was going to do
it, he wanted to do it right: He wanted to avoid the quality problems many
other companies had experienced. He visited Chinese factories and monitored his
projects, and ended up making more