Firms that retool and rebound
A handful of Midwest manufacturers find ways to adapt and save jobs.
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“When you have that much concentration in one industry, it was the tail wagging the dog,” he says. He went looking for new customers and found them in companies like John Deere, Caterpillar, Honeywell, and Navistar. The search continues. Busche Enterprise Division, Inc. recently added seven new workers when it started fabricating metal housings for a company that makes precision refrigeration equipment.Skip to next paragraph
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“We call ourselves Heinz 57,” says Busche, a gruff, fast-talking, and highly confident executive. “It’s more difficult to deal with 30 or 40 customers than one or two. But if you don’t go through the difficulty and pain, you won’t get the advantage.”
Busche hasn’t given up on cars. Indeed, experts say the industry will almost certainly remain a significant part of the Midwestern economy. But Busche said his strategy is to make “safety-critical components” like steering components – parts he believes carmakers will always want manufactured close by. The company is already picking up business from failed competitors who made steering and suspension parts for Toyota pickups.
“The strong will survive,” he says. “We’ll come out of this with half the competition.”
Not all local manufacturers see diversity as the answer. Some companies are simply yearning to move into industries of the future, like wind power. Last month in nearby Fort Wayne, Ind., hundreds of local business people showed up to hear presentations from wind-power companies seeking partsmakers.
“The same type of skills and expertise used to make engine parts and auto parts can be used in the wind turbine industry,” says John Sampson, head of a regional office promoting economic development in northeastern Indiana.
For others, the answer is medical products. Northern Indiana is already home to a prosperous and well-established medical parts industry.
“Every tool-and-die shop in the nation that used to do the automobile industry wants to do biomedical,” says Brian Emerick, CEO of Micropulse, Inc., a former tool-and-die shop that made the transition a few years ago.
It was not easy. Making surgical tools, implants, and other medical equipment requires far greater precision than making car parts. But the gambit has paid off.
Micropulse employs 160 workers and, despite the recession, has slowly been hiring more. Emerick expects the company to continue growing at a rate of 15 to 20 percent a year. “It was probably a good thing we went into it when we did,” he says. “It’s almost impossible to get into it now.”
Don Wood, a plain-spoken entrepreneur, started 80/20 Inc. some 20 years ago with a vision for a better way to make metal supports for machinery. Instead of welding “and all the hassles you go through,” he used extruded aluminum frames that could be assembled without welding. Five years ago the business had grown to 300 people. Since then, the recession has cut business by 35 percent, and 60 workers have lost their jobs. The company is still gaining customers; they simply have less money to spend.
Mr. Wood is undaunted. “We don’t spend much time at the beach,” he says. Among the company’s new products are frames for solar panels. “This is one we’re cranking up,” he says.
In some ways these companies are the exception. Economic development officials in the region struggle to name more than a handful of companies that are hiring or reporting hopeful news. Yet they celebrate the exceptions as examples of an entrepreneurial spirit that might shape a new manufacturing economy.
“This is a region that makes things and knows how to make things,” says Alan Tio, an economic development official in Whitley County, Ind. “The opportunities in the past have been in automotive. The future will hold other opportunities.”