Firms that retool and rebound
A handful of Midwest manufacturers find ways to adapt and save jobs.
The future looked bright at Structural Composites Indiana, a small fabricating company building fiberglass tops for motor homes and travel trailers. Set in a small industrial park 20 miles from Elkhart, Ind., the RV industry’s Detroit, the company had flourished. Last March, 130 employees were working two shifts, 5-1/2 days a week.
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Then the bottom fell out.
When the market for recreational vehicles collapsed last year, so did scores of companies across northern Indiana. Structural Composites kept its workers as long as it could. Many were friends, relatives, and neighbors. “It really became a heartache to tell people, ‘We can’t support you for now,’” recalls CEO Jim Fearnow, one of the founders. But by December, the workforce had shrunk to just 20.
The company didn’t close. Nor did it simply hunker down, as many have done, to wait for better times. Even before surging gasoline prices soured Americans on motor homes, Mr. Fearnow and his business partner had been looking for new uses for their fiberglass.
The recession gave that quest a new and powerful urgency. At a trade show in Chicago, representatives of the coal industry had confided a wish to put lids on coal cars. Covers could keep swirling coal dust from escaping during coal’s long journey from the western coal fields. They might also save money by streamlining the cars, reducing drag and lowering fuel costs.
The company went to work designing a fiberglass top bigger than anything it had fashioned before – 58 feet long and weighing three-quarters of a ton. It tested two prototypes in February, lowering them with a crane onto rail cars in Bismarck, N.D. “Nobody knew what was going to happen,” says Roy Huber, who helped design the cover and had his doubts. “They loved it.”
That demonstration on the frozen plains of North Dakota yielded an initial order of 90 covers. Workers are just now making final adjustments on the mold, and the company plans to begin production by mid-June. Six workers came back to make the prototypes; another 10 will return to start production. In a region staggered by recession, they feel grateful.
“We wouldn’t be working now if it wasn’t for the new project,” says David Bacon, one worker who was rehired.
No region of the country is bound to manufacturing more closely than northern Indiana. Indiana is America’s most industrialized state, and its northeastern counties – bordering Michigan and Ohio – rank among the most industrialized in the nation. Small and medium-sized manufacturing plants turn out parts for medical equipment and automobiles and the machines that make those parts, down to the smallest bolt and fastener.
Even before the recession hit, many manufacturers were struggling, as work and jobs slipped away first to Mexico, then to China. But across the region, some companies are fighting back. Like Structural Composites, they are striving to remake themselves, adapting to the new conditions by shifting to new industries and seeking out new opportunities.
There’s a faith here that Americans can still make things.
Nick Busche has been traveling a lot lately, searching for new customers. Ten years ago, when he founded the company that bears his name in the little town of Albion, Ind., it was tied almost completely to the car industry. But a downturn in 2001 and growing financial pressure on partsmakers told Mr. Busche that bigger trouble lay ahead.