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IQ Magazine

SUMMER 09

Contents 12

ABOUT THE COVER: In central Minnesota, the economic impact of manufacturing is grrrrrreat.

17

22 OUR MISSION:

Unlock the power of central Minnesota people to build and sustain healthy communities. INITIATIVE FOUNDATION GOALS:

26

28

31

F E AT U R E S 12

D E PA R T M E N T S 4

Kathy’s Note For Crying out Loud

6

IQ Points Your Two-Minute Digest

8

Innovators Wanted Imagination, Competition Drive Manufacturing Success

10

The Lime Light Public Interest Illuminates Outlook for Green Manufacturing

39

A New Brand of Science “Project Lead the Way” Lures Students to In-Demand Careers

40

The Perfectionists A High-Tolerance Look at Precision Manufacturing

42

Keynotes The Initiative Foundation Newsletter

52

Brainiac An IQ&A with Randy Olson

Cover Story: Manufacturing Part of This Complete Economy

17

–Strengthen Economic Opportunity –Preserve Key Places and Natural Resources –Support Children, Youth, and Families –Build Organizational Effectiveness –Encourage the Spirit of Giving

Industrial Revolution Manufacturers Defy Century-Old Workforce Stereotypes

22

Elements of Success Wood, Metal & Plastic: Three CEOs with Stories to Tell

26

Plant Food Four Community Ingredients to Recruit & Retain Manufacturers

28

Red Sense The Manufacturing Mythology of Chinese Competition

SPECIAL SECTION

31

CMMA Adventures in Manufacturing


A leap in Your reflection will radiate with it

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Kathy’s Note

For Crying out Loud Dear Friends, Okay, I admit it. I cried. And not because I had to accept the title of Uncommonly Young Grandmother in June. There was just something overwhelming about hearing my new grandson’s voice for the first time. My tears were filled with relief, joy, hope, anticipation, and excitement. Somehow, our son, Mark, and his wife, Melissa, created this perfect little person named Jackson Peter Gaalswyk. Talk about value-added manufacturing. Of course, Jackson is entering our world at a most uncertain time. In central Minnesota, families and businesses are still dusting themselves off as they recover from the recession. To help readers understand and navigate our regional economy a little better, we’re kicking off a three-part IQ Economic Opportunity Series. In this first issue, we set the table and serve up some tasty insights about one of our region’s largest and most important industries. Regardless of where you live or work, you are inextricably connected to manufacturing. And as manufacturing goes, so goes our economy. Joining forces with the Central Minnesota Manufacturers Association (see page 31), we explore manufacturing’s economic impact, challenges, community support, and workforce mythology. The bottom line: Manufacturing is often overlooked, underestimated and misunderstood. And that’s really something to cry about. Enjoy the magazine!

BRAINERD

BAXTER

www.BrainerdSavings.com

218.829.5183

4 Initiative Quarterly Magazine

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Kathy Gaalswyk, President Initiative Foundation


Initiative Quarterly Magazine Volume 7, Summer 2009 INITIATIVE FOUNDATION Executive Editor & Director of Communications | Matt Kilian Grants & Communications Specialist | Anita Hollenhorst PUBLISHERS Evergreen Press | Chip & Jean Borkenhagen EDITORIAL Editorial Director | Jodi Schwen Managing Editor | Tenlee Lund Staff Writer | Dawn Zimmerman Staff Writer | Sarah Colburn ART Art Director | Andrea Baumann Senior Graphic Designer | Bob Wallenius Graphic Designer | Brad Raymond Design Intern | Nate Schimelpfenig Production Manager | Bryan Petersen Lead Photographer | John Linn ADVERTISING / SUBSCRIPTIONS Business & Advertising Director | Brian Lehman Advertising Manager | Kristin Rothstein Advertising Manager | Lois Head Advertiser Services | Mary Savage Subscriber Services | Anita Hollenhorst IQ EDITORIAL BOARD Initiative Foundation President | Kathy Gaalswyk Community Development of Morrison County | Carol Anderson Venture Allies | Rick Bauerly Komo Machine, Inc. | Linda Besse Close-Converse | Chris Close (Trustee) St. Cloud Technical College | Sandy Fabian Pequot Tool & Manufacturing, Inc. | Karlo Goerges LINDAR Corporation | Tom Haglin Brainerd Lakes Chamber of Commerce | Sheila Haverkamp Enterprise Minnesota | Robert Kill Initiative Foundation | Paul Kleinwachter St. Cloud Area Economic Development Partnership | Tom Moore Landmark Community Bank | Connie Nelson Pine Country Bank | Rob Ronning Wilkie Sanderson | Marc Sanderson MINPACK, INC. | Robert Thompson Initiative Foundation | Sandy Voigt Remmele Engineering | Dan Whalen Central Minnesota Jobs & Training Services | Tim Zipoy

405 First Street SE Little Falls, MN 56345 320.632.9255 | www.ifound.org

Published in partnership with Evergreen Press, IQ Magazine unlocks the power of central Minnesota leaders to understand www.EvergreenPress.net and take action on regional issues. Printed with Soy-Based Ink on Recycled Paper at Continental Press, Inc.

SUMMER 09

5


Chris McAllister

Intelligence m Every $1 in manufacturing product sales infuses an additional $1.37 in other sectors of the economy. m Manufacturing accounts for 1 in every 7 jobs in Minnesota. Manufacturers employ more than 36,000, or about 14 percent of all workers in central Minnesota.

m While other industries facilitate the regional exchange of dollars, manufacturers often do business with national and international clients. That brings in new money and generates economic growth.

m

m

Central Minnesota’s manufacturing jobs pay an average of $40,133 a year, which is higher than the salaries of real estate agents, licensed practical nurses, radio announcers, and some commercial airline pilots.

“Quotations” “It’s not your granddaddy’s work. Manufacturing is clean. It’s high-tech. It’s exciting. It’s constantly changing and challenging.”

Although manufacturers face stiff international competition, Minnesota is the eighth-largest U.S. exporter of manufactured goods to China.

“(Precision manufacturing) busts the myth that manufacturing is a low-tech industry that employs a bunch of unskilled, unmotivated workers. The experts that work at these plants have to be 50-percent artist, 50-percent scientist, and 100-percent perfectionist.”

m

Central Minnesota may see “green-collar” job increases as high as 37 percent, which should benefit the manufacturing industry. m

To recruit and retain manufacturing companies, communities must offer financing, infrastructure, workforce, and a “go-to” person.

“No doubt about it, these are challenging times, but with uncertainty comes change and opportunity. Manufacturing is alive and well, especially right here in Minnesota.”

–Sandy Voigt, Initiative Foundation –Dr. Robert Musgrove, Pine Technical College “The concern I have is that there is no public interest in (manufacturing). It isn’t that manufacturing is the only thing (that drives an economy), but in the final analysis, each community has to do something productive.”

“We do a disservice when we tell young people that manufacturing isn’t a prestigious career. Our employees are highlyskilled and well-compensated. We need top-notch people with critical thinking skills to grow our business.” –Jim Shear, Cambridge Metals & Plastics

–Dr. Fred Zimmerman, University of St. Thomas (retired) & author

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—Commissioner Dan McElroy Minnesota Department of Employment & Economic Development


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SUMMER 09

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Innovators Wanted Imagination, Competition Drive Manufacturing Success By Tenlee Lund | Photo by John Linn

T

heir plastic containers hold strawberries, herbs, cakes, muffins, and medical devices, so why not eggs? It’s the kind of question Tom Haglin asks himself often. He has to ask it. If he doesn’t, his competitors might eat him for breakfast. With two recent expansions and more than 70 employees, Haglin’s LINDAR Corporation is the Brainerd area’s largest manufacturing employer. He credits his success to hard work and something called innovation. How well can you invent new products? How well can you imagine new uses for existing products or machinery? How well can you improve your organizational structure or processes in order to make products faster, cheaper and better than your competition? Such an innocent, vague little buzzword like “innovation” can separate the expansions from the bankruptcies in the world of manufacturing. If you let up in the innovation department, chances are your days are numbered. Haglin is looking to patent a clear egg carton. “We know exactly what the price needs to be, who the competitors are, and the faults of their containers,” Haglin said. “The clear package continues to gain market share, so there’s good potential.” The company has patents on several of its unique packaging designs, which usually grow out of a need expressed by a client. These ideas are generally brought forth through the sales team because, “they’re in tune with what’s going on in the marketplace.” Then, the sales and design teams brainstorm. “Companies that are really innovative are companies that empower their employees to be original and analytical thinkers,” said Dr. Robert Musgrove, president of Pine Technical College in Pine City, Minnesota. Innovative companies often reward those whose ideas are implemented. “Most of the time, innovators are solving a problem or meeting a need,” said Deb Hess, executive director of the Minnesota Inventors Congress in Redwood Falls, Minnesota. She mentioned the Minnesota inventor of the “quad cane,” which has four legs for improved stability. Hess helps educate inventors in the process of bringing such creative ideas to the marketplace. 8 Initiative Quarterly Magazine

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PLASTIC MAN: Tom Haglin’s constant experimentation with new materials and new products has led LINDAR to become the Brainerd area’s largest manufacturing employer.

“The bottom line is, jobs and revenue are essential for the economy to succeed,” she said. “New ideas and new products create new markets, and new markets help create and retain jobs.” Haglin agreed, citing LINDAR's embrace of a corn-based material developed by Cargill to make biodegradable plastic from a renewable resource. “Our large competition has a more difficult time bringing in an alternative material, but we continue to get momentum from it and it’s opened up doors for us.” “Innovation is critical, particularly for shops here in central Minnesota,” said Sheila Haverkamp, executive director of the Brainerd Lakes Area Development Corporation. “Most of our companies tend to be smaller, in the vicinity of 100 to 200 employees. They have to constantly innovate in a number of different ways to stay competitive.” Dr. David DeGroote, dean of the College of Science and Engineering at St. Cloud State University, and his faculty work closely with area businesses. “What we do is bring the talent of our faculty to those businesses who have ideas but haven’t necessarily been able to get them out.” Another side of the education equation—preparing students to fill skilled manufacturing positions—requires the schools themselves to innovate. Pine Technical College now offers certification in rapid prototyping, a time-slashing process that uses CAD systems to produce prototype parts in thermoplastic. They also offer instruction through a virtual reality lab. According to Haglin, innovation is the key to staying one step ahead of the competition. “We’re definitely willing to step out of the box and challenge things that, in the past, haven’t been done,” he added. “It’s part of our nature. We specialize in figuring out ways to make things happen.” IQ


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9


The Lime Light Public Interest Illuminates Outlook for Green Manufacturing By Kayleen Larson | Photo by Jim Altobell

J

ohn Herou, owner/partner of E-Ride Industries in Princeton, said America’s interest in everything green has given his manufacturing company a whole new life. He started in 1989 by building luxury golf carts. When business slowed in 2001, he retooled to manufacture electric utility and transportation vehicles. Skyrocketing oil prices didn’t hurt the cause. Today, his electric cars can be found in cities, universities, airports and major industrial sites worldwide. Sales for the first six months of 2009 are double what they were for all of 2008, and the company’s workforce has increased by 25 percent. “We’re a true American company. All of our vehicles are assembled here in Princeton,” he said. “We use as many local vendors as possible, and we hire local labor.” Opportunistic manufacturers like E-Ride may be in line for a public boost through state and federal stimulus funding. In 2008, Minnesota Governor Tim Pawlenty unveiled the Green Jobs Investment Initiative, proposing tax and financing incentives to encourage business growth in the “green” sector. Created by the state legislature, the Minnesota Green Jobs Task Force conducted a market analysis to provide elected leaders with information on how to grow the state’s green economy. According to the analysis by GSP Consulting Group, Minnesota currently has an estimated 52,827 jobs that can be considered green. By 2020, the number of green jobs is expected to increase to 55,025. Central Minnesota may see increases as high as 37 percent. If proposed government initiatives are enacted, however, the analysis suggests that Minnesota may gain more than 72,467 green jobs. Such growth might even benefit rural manufacturers that don’t necessarily fit the trendy concept of greenness, like Crow Wing Recycling. The company’s 20 employees recycle consumer and industrial waste materials like steel, copper, and aluminum. Vice President Grant VanWyngeeren said increased interest in energy efficiency and recycled building is causing an uptick in business. That uptick could become a full-blown upswing if state and federal initiatives materialize. Columbia Gear of Avon has profited from the renewable energy boom. In 2002, the second largest U.S. gear manufacturer began man10 Initiative Quarterly Magazine

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ENGINE-UITY: In Princeton, John Herou retooled his E-Ride product line from luxury golf carts to electric utility vehicles, due to an insatiable market for everything green.

ufacturing gears and shafts for wind turbines. Wind gears now comprise about twenty percent of the company’s business. Vice President Kenneth Schaufelberger said state and national support for wind energy along with other trade initiatives would go a long way toward helping increase that figure. “Most of the wind companies are located outside of the U.S.,” he said. “The stronger the U.S. commitment to alternative energy, the more likely they are to do business here.” Launched with Initiative Foundation financing, Isanti-based Ever Cat Fuels is hoping changes in the transportation industry create a greater market for biodiesel. Ever Cat’s newly patented process quickly converts pond algae, waste oils, and non-edible crops into diesel fuel. The company opened a pilot plant in June and anticipates producing four million gallons of diesel fuel annually. Along with helping small companies secure financing, the green initiatives are meant to raise Minnesota’s profile among those looking to relocate or expand. According to Mark Lofthus, director of business development at the Minnesota Department of Employment and Economic Development, more than 50 potential wind, biomass, and solar power projects now have Minnesota on their list of possible locations. IQ

A

Greener Future?

t

Minnesota

Central Minnesota

2008 Green Jobs

52,827

4,117

2020 Projected Jobs

55,025

5,648

2020 Projected Growth

4.2%

37.2%

Sources: Minnesota Green Jobs Task Force and 2008 Market Analysis by GSP Consulting Group


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We often measure economic vitality by the bustle of downtown, the average length of checkout lines, and the number of vacant parking spaces on Main Street. In central Minnesota’s recovering economy, however, it’s the unheralded residents of industrial parks who are quietly setting the table. Feast or famine, our main course is manufacturing. Tucked away just outside of town, manufacturers form an unseen economic engine for central Minnesota communities. According to the Minnesota Department of Employment and Economic Development (DEED), the manufacturing industry accounts for 1 in every 7 jobs in Minnesota and 17.3 percent of the state’s total wages, providing the largest share of the gross state product. While other industries facilitate the regional exchange of dollars, manufacturers often do business with national and international clients. That brings in new money and generates economic growth. The Minnesota Trade Office reports that manufactured exports brought $16.2 billion into the state’s economy in 2007. “We need manufacturing—it’s an integral part of our community and our economy,” said Les Engel, owner of Engel Metallurgical in Sauk Rapids. “You just can’t sell enough shoes to each other.” The health of the manufacturing sector helps finance schools, city services and overall infrastructure, said Tim

Zipoy, training and development coordinator at the Monticello Workforce Center. “If we would become a service-oriented community, we would have significantly less tax-base,” he said. In central Minnesota, the impact is even greater. Manufacturing wages are 25.6 percent higher than the average of all other industries in the region, said Cameron Macht, regional analyst for DEED. More than 38,000 regional manufacturing jobs represent about 14 percent of total employment in the region. For that reason, some enterprising communities see manufacturing as the magic bullet that can revive a dying town or fuel the economy of a metropolitan area. No matter the size, cities throughout central Minnesota have rolled out the red carpet and entertained wild deals to land the manufacturer that will not only make headlines, but give their community an economic boost.

A Tale of Two Cities FREEPORT With a population of about 500, the City of Freeport sold 18 prime acres in its industrial park for $1 in 2006. It also facilitated a $500,000 state loan and named a nearby street after its prized new tenant, Whirlwind Building

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SIGNING BONUS: Whirlwind Building Components was such a coup for Freeport that it named a street after the company. EMPTY NEST: City Clerk Lori Hellman hopes a new tenant will land in the former Stearns, Inc. plant in Grey Eagle.

Components, a Houston-based producer of metal building products and solar energy systems. Besides adding 60 jobs, the deal allowed Freeport to benefit immediately from the company’s tax payments and in the end, saved the town almost $34,000 compared to the tax-exempt JOBZ program, City Clerk Paul Hetland said. Whirlwind’s new 58,000-square-foot facility infused Freeport with $2.4 million of taxable value and now represents 11 percent of the city’s total tax revenue. That has allowed the town to invest millions into the city while maintaining local taxes. Freeport has almost been untouched by the national housing meltdown, facing only three foreclosures last year and selling three new homes during the spring. Its small Catholic parochial school, on the brink of closing in 2003, is now preparing to add at least two new teachers and another classroom. From a spreadsheet on his computer screen, Hetland illustrates the economic impact of Whirlwind’s employees. Conservatively, he figures that each employee spends at least $25 in local purchases each week—$15 for gas and goods and $10 in meals. Multiply that by 50 employees, and over the course of a year, they deposit $65,000 into the small town. “Even with the lowest number of jobs (10) I could toss out, I found $13,000 going into our little economy here,” Hetland said. “That’s amazing. Not all of (the employees) move to town, but the impact is still there.” Hetland said city leaders recognized that they needed to get serious about growth. Freeport established an Economic Development Authority and hired a full-time city clerk—uncommon for a town of its size. The city negotiated an agreement with a local farmer that gave way to a new industrial park. Seeing the need for more housing, Freeport also turned its attention to residential developments. From 2003 to 2009, the town’s population grew 13 percent and its valuation nearly doubled to $48 million. “Very little of it has happened by accident,” Hetland said. “Our fruits are the culmination of very hard work.”

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GREY EAGLE What happens when a key manufacturer departs? Drive less than 15 miles north of Freeport, and that story is playing out in Grey Eagle, a small town now bracing for economic hardship. With more than 100 workers at its peak, Stearns, Inc., a manufacturer of watersports safety equipment, was the town’s largest employer. Economic challenges and a merger with Kansas-based Coleman caused the shutdown of its Grey Eagle facility in 2008. A second blow came when Grey Eagle’s elementary school closed its doors in 2009. The for-sale signs have yet to speckle the town of just over 300 people. The retailers have yet to close their doors. Residents fear it will come with time. “Definitely, there are a lot of fears,” said City Clerk Lori Hellman. “I think it has impacted our businesses. They were frequent customers of our gas station, our grocery store and our restaurant and bar in town. All of these businesses are being impacted.” Industrial Development Corporation owns the former Stearns building, so Grey Eagle has not felt the immediate loss in tax-base. Leaders of IDC are scrambling to attract a new tenant once Stearns terminates its lease – a tall order during the current recession. “There are psychological effects with people worrying about the future of the town without that employer,” said Gene Waldorf, Grey Eagle resident, former legislator and chair of the Initiative Foundation’s board of trustees. “When you have a small town and you lose a major component, people get depressed and concerned about the town’s future, because everything can start collapsing. Almost everything becomes threatened by it.”


Every $1 in manufacturing sales generates $1.37 in other sectors of a local economy, but does the industry support your job? A St. Cloud State University study of a company in jeopardy of closing its doors showed the potential impact on its employees as well as those from other industries.

(Example: Suppliers to the Manufacturer)

(Example: Acme makes machines that external manufacturers use to produce their goods.)

(Example: Attorneys, Accountants, etc.)

(Example: Garbage and recycling collectors)

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Tom Moore, St. Cloud Area Economic Development Partnership

One Step Back, Two Steps Forward Metro areas can also experience the booms and busts of manufacturing. Tom Moore remembers the 1999 hysteria that surfaced when catalog-retailer Fingerhut announced it would cease its St. Cloud operations. After leaders worked tirelessly to attract the company to its industrial park, Fingerhut grew to employ more than 4,000 workers. “People were waiting for the shoe to drop. People thought it was going to have a much larger impact than it did,” said Tom Moore, president of the St. Cloud Area Economic Development Partnership. “We, as a community, have continued to grow even after the significant closures of companies. Central Minnesota is projected to create an even larger portion of the state’s manufacturing jobs in the next 20 years.” The “multiplier effect” is one of the tools used by economists to describe what happens when a manufacturer arrives or leaves. On the positive side, every $1 in manufacturing product sales infuses an additional $1.37 in other sectors of the economy, according to the National Association of Manufacturers. Applying a similar formula, the Fingerhut closing could have jeopardized two to four other jobs per position eliminated, according to some economic models. In St. Cloud, these ripple-effect losses were projected at 6,500 to 12,800 jobs. St. Cloud, like many communities throughout the region, has regained its footing and recovered from the loss. Successes can be seen in the addition of companies like Arctic Cat, which built an $8 million start-of-the-art ATV engine assembly plant in the I-94 Business Park. The plant brought 50 new jobs to the area. The facility extends 56,000 square feet and has room to expand in the future to 200,000 square feet. “It showed we could play with the big boys,” Moore said of landing the sought-after publicly traded company. “It gave us credibility and confidence that we can attract operations of that size to our mid-size community.” CONTINUED ON PAGE 44

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Minnesota

Central Minnesota

9,134

1,324

341,617

38,026

Percent of Total Employment

12.7%

14.1%

2003-2007 Employment Growth

-5.60%

7.60%

$52,260

$40,133

Manufacturers Jobs

Average Annual Wage

Source: Minnesota Department of Employment and Economic Development, 2007


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A

merica’s image of manufacturing jobs is painted in sepia tones, where hot, overworked assemblyline employees perform the same task day after thankless day. Today, many of central Minnesota’s

high-tech manufacturers are battling this negative perception even more than the slumping economy.

That’s because the region may be facing a post-recession workforce shortage, as 381,000 of Minnesota’s Baby Boomers reach the retirement age of 65 by 2015. The Minnesota State Demographic Center estimates that their entry-level replacements (ages 16-24) will only number about 330,000. That’s 51,000 workers short, and manufacturing isn’t yet on the youth radar screen. “A lot of kids think that accepting a job in manufacturing means that they failed,” said Kathy Gaalswyk, president of the Initiative Foundation. “Their parents pass down the stereotype, and sadly, they’re bypassing some very exciting and lucrative

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career opportunities that would help strengthen our regional economy.” “It’s not your granddaddy’s work,” added Robert Musgrove, president of Pine Technical College. “Manufacturing is clean. It’s high-tech. It’s exciting. It’s constantly changing and challenging.” Today, manufacturers are looking for original thinkers who have a multitude of skills in math, science and technology. Manufacturers say an ability to learn multiple jobs—not just turning one screw on an oldfashioned assembly line—will become even more important in the next 20 years. Dark, dirty, dull, destitute and danger-

ous—those often are the adjectives used to describe manufacturing jobs. “There is a misconception about what manufacturing is,” said Sandy Fabian, director of educational partnerships at St. Cloud Technical College. “It dates back to the Industrial Revolution—back more than 50 years—when manufacturing was an assembly line.” Those misconceptions are what are most hurting the local manufacturing sector—not China or Mexico or even the economic downturn. Central Minnesota manufacturers fear the future will only increase their struggle to find qualified workers.


M e d ia n S a l a r y

Computer-Controlled Machine Tool Operators Machinists Sales Representatives Customer Service Representatives General & Operations Managers Industrial Machinery Mechanics Cutting, Punching & Press Machine Setters Purchasing Agents Computer Software Engineers, Applications Engineers (Industrial, Mechanical, Electrical)

$32,926 – $40,227 $37,086 – $45,656 $44,554 – $50,315 $31,262 – $33,717 $74,381 – $77,938 $40,560 – $50,294 $27,934 – $37,190 $46,488 – $49,379 $67,226 – $94,037 $60,195 – $83,762

Source: Minnesota Department of Employment and Economic Development

END OF THE LINE: It’s precision technology, not the mindless assembly line, that defines modern manufacturing.

More than half of manufacturers surveyed at the end of last year reported trouble attracting talent to fill job vacancies, according the State of Manufacturing Survey, released by Enterprise Minnesota in early 2009. This is in spite of the fact that central Minnesota’s manufacturing jobs pay an average of $40,133 a year, which is higher than the salaries of real estate agents, licensed practical nurses, radio announcers, and some commercial airline pilots, according to the Minnesota Department of Employment & Economic Development (DEED). Highdemand jobs such as industrial and mechanical engineers boast an even heftier pay-

check, a median annual salary of $83,800. “We can place three times the amount of students we graduate,” Musgrove said. “Sometimes they are placed when they come here.” Pine Technical College has graduated 64 students with associate degrees in manufacturing in the past three years. Those graduates earn an average of $35,400 to $72,800 per year. The loss of U.S. manufacturing jobs in the past several years has also fueled the perception that opportunities don’t exist, today or in the future. News of layoffs led to sharp declines in manufacturing programs at area technical colleges.

While lower skilled jobs may have become automated or shifted overseas, hightech skills are in demand and produce a sizable paycheck. “Manufacturing is not dead, but man, has it changed,” said Linda Besse, human resources director at Komo Machine in Sauk Rapids and vice president of the Central Minnesota Manufacturers Association.. “(Manufacturers are) trying to add value in the process through automation, and people need to learn new skills to support new processes.” Technology advancements are driving the industry and making future job opportu-

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nities virtually unpredictable. Even the world of creating prototypes has changed dramatically in the past decade. When engineers developed a new product in the past, they would send their drawing to a custom shop to transform it into a prototype. Perfecting the design required several exchanges between the engineer and craftsman, taking weeks or months to finalize a new product design. Today, rapid prototyping allows engineers to send their drawing to a 3D printer that produces a resin replica in a fraction of the time. “A process that once took weeks, now can be done in minutes,” Musgrove said. “That’s just one example.” Pine Technical College started offering advanced certifications in rapid prototyping during its spring 2009 semester. Manufacturers say they’re looking for workers with an interest in mechanical concepts, an aptitude for math and science, and

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good communication skills. “I don’t care if you’re Einstein,” said Les Engel, president of Engel Metallurgical. “If you can’t explain it to anybody, it’s useless.” Central Minnesota manufacturers have been partnering with local high schools and colleges to reverse the old mindset and debunk the negative stereotypes. By hosting company tours for high school students, companies aim to show the clean, professional work environment and the vast job opportunities in the growing industry. In late April, a dozen members of the Central Minnesota Manufacturers Association opened their doors to hundreds of students, families and interested community members. During insider tours of high-profile companies like Cold Spring Granite and New Flyer, Besse said that many participants said they had no idea of manufacturing’s career opportunities, sophisticated machinery, and

extensive international clientele. And such a paradigm shift was the intended result. In Pine City, Pine Technical College took a similar approach, hosting the Gold-Collar Career Day for juniors and seniors from several area high schools. The students spent the day in a series of breakout sessions designed to show them the opportunities in manufacturing. Before the event, 65 percent of the students said they had little to no knowledge of manufacturing jobs. By the end of the day, a survey revealed that 72 percent of students would consider a career in manufacturing. “We moved the needle in a significant fashion with that event,” Musgrove said. Manufacturers hope these educational programs translate into a wider hiring pool in the future as baby boomers retire and the economy rebounds. “It’s all about the pool—creating a better pool for manufacturers to choose from,” Besse said. IQ


The Detective

James Brusso, Senior Metallurgical Engineer Engel Metallurgical Inc., Sauk Rapids James Brusso solves metallic mysteries. Why did the bolt fail, and did it cause the vehicle accident? Will a new aviation prototype be durable and safe enough for commercial use? As a senior metallurgical engineer, Brusso uses innovative laboratory equipment to analyze and test materials of all sizes and conditions. He discovers what causes components to fail and then provides recommendations for redesigning and improving products. Attorneys and insurance companies often summon him to give expert testimony on his findings.

The Power Broker

Jonah Lidberg, Lead Machinist Orluck Industries, Elk River Jonah Lidberg commands power. As a lead machinist, he uses industrial machining equipment to produce intricate parts for aviation, military and medical devices. He works alongside design engineers at companies like Boeing, Boston Scientific and Medtronic to understand and replicate their prototypes. Lidberg’s machine creates parts that do everything from helping jets fly to helping military vehicles protect soldiers. He also worked on a titanium medical device that uses ultrasonic vibration to clean wounds without direct contact.

The Perfectionist

Nate Warzetha, Quality Assurance Manager Ultra Machining Corp., Monticello Nate Warzetha cannot tolerate imperfection. As a quality assurance manager for high-tech medical devices, he is among the first to see the latest medical technologies and ensure their highest quality. Warzetha is responsible for establishing standards and inspection procedures for precision parts that are implanted in human bodies, so there is no margin for error. He works with engineers, inspectors, regulatory affairs personnel and medical device companies to ensure that every new part manufactured and shipped from the Monticello facility is flawless. 21


Despite the economy, central Minnesota manufacturers continue to transform wood, metal and plastic into economic growth. Meet three CEOs who are proving that the rumors of manufacturing’s demise are greatly exaggerated.

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Headquarters: Sartell, Minnesota Employees: 370 Products: Engineered valves and controls for water, wastewater, and process industries worldwide. Growth: Installed global base of over 3.5 million valves. Market leader in valve manufacturing by sales volume.

It stands to reason that a manufacturing business that got its start during the Great Depression would be one of a few thriving businesses in today’s economy.

DeZurik Corporation got its name from founder, Matt DeZurik, who invented a valve in the late 1920’s to solve the paper milling problem of pine pitch building up during the manufacturing process. The concept for his invention, the eccentric valve, is still part of DeZurik’s product line today. A World of Valves DeZurik is the market leader in valve manufacturing. Its valves can be found at nearly every water and wastewater treatment facility across the nation. They are also used in the mining, oil, chemical, and food industries, as well as in many heating and ventilation systems. Within the walls of its 400,000-square-foot manufacturing facility, DeZurik makes nearly every kind of valve imaginable, from one that would fit in a person’s hand to another that fills an entire flatbed trailer. Over the years, some of DeZurik’s products were sold off to other companies and the local fam-

ily-based company became part of a much larger corporation. But, that all began to change in 2004 when Granite Equity Partners, a local investment firm based in St. Cloud, purchased majority-ownership of the company. “There’s great advantage in being locally owned and operated,” said Larry Korf, president and CEO. “We employ 370 people, and many have been with us for more than 20 years.” Family Reunion In 2009, the DeZurik brands and people were reunited when Granite Equity and its partners bought back the DeZurik products that had been separated from the company. “Now

all of our products are back together, and the majority are being manufactured here in central Minnesota,” said Duane Gasser, vice president of sales and marketing. “We are refocused and restrategized with a common goal, and that’s a very good thing.” The reunion of Dezurik products added 50 new jobs at the Sartell plant, and Gasser said the company is on track to maintain the level of growth it attained in 2008. “The federal stimulus package helps our business because of the investment in municipal infrastructure,” said Korf. “The demand for water and wastewater treatment in the next ten years is also expected to be strong, which

puts us in a good position.” DeZurik has expanded its customer base and raw material sourcing to countries around the globe. Its valves can be found in paper mills in Canada, mines in South America and Africa, power plants in China, and water and wastewater treatment plans in the Middle East. Korf believes the manufacturing industry doesn’t get the credit it deserves. “It seems like the public perception of manufacturing is negative, but I think that’s inaccurate. U.S. businesses can compete with the rest of the world, and DeZurik is a good example. We enjoy a strong workforce, a good work ethic and community support.”

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Headquarters: Sauk Rapids, Minnesota

Employees: 87

Products: Commercial architectural woodworking

Wilkie Sanderson is a woodworking company that’s far from run-of-the mill. In 1997, Walter Wilkie and Marc Sanderson purchased Ron’s Cabinets in Sauk Rapids, but the real story began in 1993 when Sanderson was a graduate student at Harvard Business School.

“I had a paper to write, and I interviewed Walter. I was fascinated by his success as an entrepreneur, having owned 13 successful businesses,” said Sanderson. “As I look back now, I realize Walter was interviewing me instead of the other way around.” Four years later, Sanderson got a surprise phone call from Wilkie. “He said, ‘Marc, I’m 55 and I promised myself I’d cash out when I was 55. I have two options—I can either invest in people or in stocks and 24 Initiative Quarterly Magazine

bonds. Now, let’s go find you a company to run,’” Sanderson recalled. Branching Out Wilkie Sanderson is more than a group of employees. It’s a group of 90 owners, who each have a personal stake in the business, thanks to the firm’s employee stock ownership program. Their motto: “We work like we own the place, because we do.” The company’s architectural woodwork adorns many familiar commercial spaces including the Minnesota Children’s Theatre, the QVC Store at the Mall of America, the Mill City Museum in Minneapolis, and the new St. Cloud Library. “We don’t do the stuff that holds the building together,” said Sanderson. “We do the sexy stuff on the walls, ceilings, and floors that

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Growth: Largest custom Architectural Woodworking Institute (AWI) firm in the state. Recently acquired a business in Des Moines, Iowa.

makes the building beautiful.” The project that helped catapult Wilkie Sanderson to industry prominence was the Bigelow Chapel at United Theological Seminary in New Hope, Minnesota. The chapel’s architect wanted translucent veneer—or seethrough wood panels. “We created something everyone said was impossible, and it put us on the national map,” said Sanderson. The Hardest Cuts Wilkie Sanderson has not been unscathed by the brutal economic recession. In January the company laid off 18 employees and Sanderson, who calls himself the chief environmental officer, the person responsible for creating an environment for employees’ success, is quick to take the blame.

“We brought our employees together. Everyone got sealed envelopes,” he said. “I told them to open them and the letter would either say: ‘I’m sorry, you are being laid off ’ or ‘We have a lot of work to do to bring these people back.’” Despite the layoff, Wilkie Sanderson seems poised to not only withstand the recession, but grow. They recently acquired a company called Woodcraft in Des Moines and are now concentrating on how to market their unique goals, which Sanderson says is the ability to be on-time in an industry that is known for delays. “I’m proud that we’ve created a business that will not only survive, but thrive without me,” said Sanderson. “Collectively, we have the raw talent to take this business to the next level.”


Headquarters: Cambridge, Minnesota

Employees: 75

Products: Custom metal stampings, sheet metal fabrication, welding, painting, tube bending, product design, and engineering services.

In spring 2007, about 100 workers in Cambridge, Minnesota, were collectively holding their breath. Sixty days until Cambridge Metals & Plastics (CMP) would close its doors, leaving a gaping hole in the industrial park and dozens without jobs.

and computers hummed as community leaders, the Initiative Foundation, and state and local governments worked together to complete the sale. Sixty days later, the deal was made and more than 80 jobs were saved.

Jim Shear and his partners at Water Works Manufacturing had their pens poised to sign a lease to expand their business in a different community when they learned about the pending CMP closure. “We knew we wanted to (acquire Cambridge Metals & Plastics), but no one had ever heard of putting a complex deal together so fast. We only had 60 days until the plant would be closed down, and the opportunity to buy the intact business would be gone,” Shear said Telephones rang, papers flew,

Beyond Plastic Today, CMP products are known by motorcyclists, snowmobilers, and ATV enthusiasts. Brush guards, winch mount kits, snowplows, sport racks—if it can be added to a motorsport vehicle, it’s found at Fuse Powersports, CMP’s aftermarket division. That’s one aspect of CMP’s diverse products and services. The company supplies parts for brands like Honda, Polaris, Kawasaki and Arctic Cat. Plumbing and telecommunications industries also look to

Growth: Over 30 percent of current business is with a new and diversified customer base. Multi-million dollar investments in new technologies have paved the way to increased productivity and profitability.

CMP for parts manufacturing. “We’re 98 percent vertically integrated, so about the only thing we don’t do in-house is lathing and polishing,” said Shear. “If it’s made of metal or plastic, chances are we can make it.” Many of CMP’s competitors offer only fabrication or welding, but CMP’s capabilities include tube bending, packaging, powder coating, component assembly and even engineering and design services. CMP is one of a few companies in the U.S. that uses a highpressure water system called hydroforming to fabricate parts. The system utilizes fewer welds, making the finished product more durable. Staying Flexible Shear says he and his partners anticipated the economic recession when

they purchased the business in 2007, and began to prepare by investing in high-tech equipment and diversifying their customer base. “We had to make some budget reductions and laid off about 15 people in January, but the outlook for Cambridge Metals & Plastics is good,” said Shear. “The economic recession is tough for everyone, but it’s also an opportunity to really listen to customers and turn their problems into your solutions.” Shear is optimistic about the future of the manufacturing industry, saying it creates the U.S. middle class. “We do a disservice when we tell young people that manufacturing isn’t a prestigious career. Our employees are highly-skilled and well-compensated. We need topnotch people with critical thinking skills to grow our business.” IQ

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By Sarah Colburn Illustration by Chris McAllister

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As communities seek to attract and grow manufacturing “plants” that enrich their local economies, they can follow the formula of central Minnesota leaders who have discovered the key ingredients of an industrial-strength fertilizer. After a fire destroyed his Detroit Lakes operations in 1989, Joel Newman visited seven Midwestern cities in search of a new home for his expanding business. He was looking for the right location, the right financing and the right people to grow Newmans Industries, a manufacturer of recreational aluminum trailers, docks and lifts. He set foot in Royalton and never left. “We weren’t five miles out of town, and I said ‘That’s where we’re going to be.’” On his visit to the small city, he was greeted by the executive director of Morrison County Economic Development, the Royalton mayor and representatives of the local bank. He toured the city, sized up the location a block from U.S. Hwy. 10, and was sold even before hammering out the numbers. CONTINUED ON PAGE 46

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Rising up from rapid industrialization, Chinese manufacturers have burst onto the scene of international competition. Facing aggressive marketing and rock-bottom price points, central Minnesota companies have been forced to innovate and compete like never before. Despite the headlines, manufacturing is still alive, but are those China rumors true?

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By Mary MacDonell Belisle | Photography by John Linn

MYTH: Chinese products are cheap junk. REALITY: Many Minnesota companies rely on Chinese quality to stay competitive, but central Minnesota may still hold an edge in precision manufacturing. “Americans complain about cheap junk pouring out of China’s mills, but they rely on China for a lot that is not junk, and whose cheap price is important to American industrial and domestic life,” said The Atlantic China expert James Fallows, pointing to audio equipment, computers, and wall-sized TVs. In central Minnesota, business leaders hold varying opinions. “If I didn’t make the move (to buy from China), I would lose my competitiveness,” said Herman Roerick, owner of Central Landscape Supply in St. Cloud. He first visited Hong Kong seven years ago and began importing lawn care and decorative items. “It’s not junk, either,” said Roerick. “We control the quality.” Also in St. Cloud, Kollmann Monumental Works reports no quality issues with the stone and sculpted products it has imported since 2001. “You give them the computer file, and they follow it exactly,” said Peter Kollmann, who also noted the Chinese excel at sculpting. Randy Olson, the Initiative Foundation’s vice president for economic opportunity, said that precision manufacturing still defines central Minnesota’s niche in the marketplace. “We’ve heard from some high-tech manufacturers who initially lost business to China, only to get it back after their precision was not up to par,” he said. “To avoid costly delays, the industry may be coming back around to local companies who are able to innovate and maintain those tight tolerances.”

MYTH: The arrival of Chinese manufacturers has triggered unemployment and depressed wages. REALITY: Fear, more than competition, could be at the center of a self-fulfilling prophecy. 1.2 billion lower-wage workers have entered the global economy via China and India, putting downward pressure on wages of similarlyskilled workers outside the U.S., according to Wing Thye Woo, Brookings Institution senior fellow and professor of economics at the University of California. The U.S. seems to have bucked the trend. Woo notes that the U.S. trade deficit began widening for the past eight years, but the average unemployment rate over this period was actually lower than the previous eight years (1993-2000). Also, U.S. wages have risen over the past 30 years, most rapidly in these past eight years, Woo said. He suggested that fear of China and globalization, not an influx of new workers, could have caused a “churning” in American jobs.

MYTH: The U.S.-China trade door doesn’t swing both ways. REALITY: National trade with China may be lopsided, but central Minnesota is still in business. Opportunity—that’s what trade with China offers to central Minnesota business, according to Orn Bodvarsson, chair of the Economics Department at St. Cloud State University and organizer of the 2009 Economic Education Winter Institute on Chinese relations. When one adds up gains and losses in central Minnesota, “you get a positive number, a net plus,” he said. Today, Minnesota is the eighth-largest U.S. exporter of manufactured goods to China and one of the state’s top-five growth markets, according to the Minnesota-China Partnership. Central Minnesota Tool and Stamping in Little Falls, is benefiting from the increase in exports. President Bob Guck believes that his international sales should increase significantly over the next five years as his company takes advantage of the opportunities for trade.

MYTH: China is pounding the final nail in the manufacturing industry coffin. REALITY: International competition has taken a toll, but central Minnesota is expected to thrive. The tidal wave of China’s manufacturing industry has now crested and entered a new phase, said Hank Cox, vice president of media relations for the National Association of Manufacturers. He noted that increased oil, shipping, and labor costs have recently caused some American manufacturing companies to announce their relocation back to the U.S. According to Woo, non-Chinese firms and joint-ventures produce about half of China’s exports. Larger central Minnesota manufacturers like Stearns, Inc. and DeZurik all have significant relationships or operations in China. However, there are good-paying manufacturing jobs waiting for skilled workers and engineers in central Minnesota, said Les Engel, owner of Engel Metallurgical and president of the Central Minnesota Manufacturing Association. The central region has become the economic engine for manufacturing in the state, and Engel expects Minnesota companies to add 3,500 new manufacturing jobs by 2014, with 90 percent of them in central Minnesota. “No doubt about it, these are challenging times,” added Commissioner Dan McElroy, Minnesota Department of Employment and Economic Development, “but with uncertainty comes change and opportunity. Manufacturing is alive and well, especially right here in Minnesota.” IQ

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Cast your Line in the Brainerd Lakes Area.

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St. Cloud, Minnesota (320) 255-3236 www.resourcetraining.com


entral Minnesota is the epicenter of manufacturing for our entire state. Every day, more than 1,300 companies and 38,000 men and women transform raw material into innovative products that drive our economy and change our world. By 2014, more than 90 percent of new manufacturing jobs will be located right here. The face of manufacturing has changed. A global marketplace has emerged, bringing with it a new world of technology and innovation. From the machinist to the CEO, today’s manufacturing professional must continue to learn, think and create. They must operate faster and smarter, with more

precision and efficiency than ever before. And when legions of manufacturers join forces, everyone wins. The Central Minnesota Manufacturers Association is a partnership of more than 65 producers, suppliers, researchers, trainers and service providers, who are working together to build a regional advantage, solve shared problems and compete at a world-class level. In this special section, we invite you into our world. Twelve cutting-edge companies where pride meets ingenuity and family legacies are built with advanced technology. Let the tour begin . . .

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All Pro Powder Coating WAITE PARK, MN Founded: 2003 Team: 7 full-time / 1 part-time employees Leadership: Al and Michele Haus Contact: 320-258-3860, www.allpropowdercoating.com NUTS & BOLTS: We are a custom powder coating and sandblasting facility in Central MN. Powder coating is a way to paint metal or aluminum, such as car rims, fencing or retail store racking. Whether it is a new part just being fabricated or an old rusty item from out back, we put the “Wow factor” back into these parts by restoring them to their factory finish. PRIDE & JOY: Quality, willingness to go the extra mile for our customers and, if necessary, to try something that has never been tried before in order to exceed the customers’ expectations. CUSTOMERS: Do-it-yourself homeowner, motorcycle/car hobbyist, industrial manufacturers. INDUSTRY SECRETS: Powder coating is an inexpensive way to restore something to its factory finish in an environmentally friendly way. There are no harmful VOCs or emissions produced in this process. BLUEPRINT FOR SUCCESS: Hard work and customer service. To succeed, we try to always exceed our customer’s expectations.

American Time & Signal Co. DASSEL, MN Founded: 1980 Team: 78 employees Leadership: Jeff Baumgartner, Founder and CEO Contact: 320-275-2101, www.atsclock.com NUTS & BOLTS: We design and manufacture synchronized clocks. When it comes to clocks, we do it all—complete systems, replacements and repairs. But the new wireless technology is where we really shine. Our engineers developed a wireless clock system that can be installed and programmed in 5 minutes! PRIDE & JOY: We’re the clock experts. No matter what kind of system clock they already have or want to purchase, we provide customers a budget-friendly solution. CUSTOMERS: Schools, manufacturing plants and government. INDUSTRY SECRETS: Fitting well into a stable niche market has kept us going strong for 29 years. People are often surprised that we have a thriving business making clocks. I guess they think clocks come from China, not Dassel. We make thousands of clocks every year for customers throughout the USA. BLUEPRINT FOR SUCCESS: We believe in working with good, solid people. This is true with employees, suppliers and customers. And we have the best of all three. 32 Initiative Quarterly Magazine

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Avicenna Technology Inc.

Kendeco Tool Crib

MONTEVIDEO, MN

ST. CLOUD, MN

Founded: 2000 Team: 100 employees Leadership: Chad Carson, President Contact: 320-269-5588, www.avicennatech.com

Founded: 1969 Team: 50 employees Leadership: Robert Miller, President Contact: 800-892-8579, www.kendeco.com

NUTS & BOLTS: Avicenna makes components and assemblies for life-changing products and devices. Avicenna continually strives to deliver the best technical and organizational solutions to its customers, thereby enhancing the customers’ ability to succeed in their marketplace.

NUTS & BOLTS: Kendeco distributes cutting tools, abrasives, safety and other industrial products to manufacturing companies. With an extensive list of supplier partners, we are able to accommodate our customers’ varying product needs and offer many options for automated ordering, including vending machines, web ordering and barcode / scanner systems.

PRIDE & JOY: Avicenna is best known for laser machining plastic components and for laser welding metal components. Avicenna also excels at mechanically machining plastic tubing. CUSTOMERS: Medical device manufacturers, catheterbased devices, stimulation and pacing leads. INDUSTRY SECRETS: Avicenna’s products are components in some of the world’s most advanced medical devices. Avicenna’s products help save people’s lives, and a few of Avicenna’s employees have directly benefited from the devices that our products support. BLUEPRINT FOR SUCCESS: Our customers’ success is our success. Avicenna offers solutions that relieve operational constraints and facilitate customer growth.

PRIDE & JOY: Kendeco provides innovative manufacturing and procurement solutions to our customers, which helps them to maintain optimal efficiency in all aspects of their manufacturing process. CUSTOMERS: Our core customers are in manufacturing, commercial and industrial sectors. INDUSTRY SECRETS: Established in 1969, Kendeco has been in business for 40 years. We earned our ISO certification in 1991 and have upheld that certification to the current standard of ISO 9001:2000. We pride ourselves on our commitment to quality and the service we provide to our customers. BLUEPRINT FOR SUCCESS: “Commitment to Excellence” is achieved by executing our customers’ objectives with quality products and value-added services that exceed their expectations.

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Millerbernd Laser WINSTED, MN Founded: 1933 Team: 86 employees Leadership: Brad Millerbernd, President Contact: 320-485-2685, www.millerbernd.com NUTS & BOLTS: Laser Systems is a job shop supporting the food and dairy industry, wind energy market as well as OEMs in construction, utility and agricultural industries. PRIDE & JOY: Designing and building cheese equipment and producing weldments for wind towers. CUSTOMERS: Dairy, wind energy and construction. INDUSTRY SECRETS: Our 6000-watt laser cutting equipment with the large cutting bed 84” X 240” can cut up to 1.25” carbon steel and 1” of stainless steel. BLUEPRINT FOR SUCCESS: Treat the customer with respect and provide quality parts and services on time at a competitive price.

Pace Industries MAPLE LAKE, MN Founded: 1985 Team: 90 full-time / 3 part-time employees Leadership: Jeff Rivers, Vice President-Operations / Jim Hegland, Director of Sales Contact: 320-963-3200, www.paceind.com NUTS & BOLTS: Pace Industries is an experienced magnesium resource serving leading OEMs worldwide. We offer turnkey solutions from product development and prototyping through full production, finishing and assembly. Let us work with you to transform your vision into a lightweight quality part. PRIDE & JOY: Magnesium die castings and precision machined castings to provide an OEM manufacturer with completed parts ready for assembly. CUSTOMERS: Hand-held electronics, electrical power tools, medical & much more. BLUEPRINT FOR SUCCESS: Magnesium specialists from concept to complete: If you dream it, we make it come to life. Integrated full service customer satisfaction.

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Palmer Printing Company ST. CLOUD, MN Founded: 1966 Team: 46 employees Leadership: Steven Palmer, CEO Contact: 320-252-0033, www.palmerprinting.com NUTS & BOLTS: As CEO, I am motivated to be in front of customers with our sales team members to listen to customer challenges and find creative solutions. My reward is customer relationships averaging 15 years! It is very rewarding to be thanked for an idea and meeting a customer challenge. PRIDE & JOY: Personalized direct marketing printing, catalogs, mailing and design services delivered with exceptional customer service and unmatched quality. CUSTOMERS: Manufacturing, financial and specialty industries: local, regional, and national markets. INDUSTRY SECRETS: Palmer is an environmentally friendly printer. Manufacturing processes use CIP4 technology enabling machines to “speak” and share information: boosting efficiencies and reducing waste. Use of vegetable inks, recycled and FSC papers, along with certifications as a “Minnesota Great Printer” and FSC provider, establishes Palmer Printing as a “green” printer. BLUEPRINT FOR SUCCESS: Listen to your customers, understand their business, always provide more than is expected and strive to build long-term relationships.

RiteWay Manufacturing, Inc. & RiteWay Machining, LLC LESTER PRAIRIE, MN & SEBEKA, MN Founded: 1999 & 2009 Team: 49 & 20 employees Leadership: Bob Green, Owner & President Denise Johnson, Owner & President Contact: 320-395-0142, www.ritewaymech.com NUTS & BOLTS: RiteWay Manufacturing was founded in 1999 when we began installing conveyor material handling equipment. Over the years we have expanded to machining and fabrication as well as prototyping and fixture building. We have one goal in mind, increase your manufacturing capacity— saving you time and money. PRIDE & JOY: CNC machining of castings, extrusions or billet, etc., prototype of production runs, replenishment pull, customer inventory management, CMM inspection, machining, fixture building, prototyping, assembly, welding and conveyor material handling. CUSTOMERS: Packaging handling, machining and fabrication. INDUSTRY SECRETS: Guaranteed lead time, flexibility—making it easier to do business, guaranteed quality. BLUEPRINT FOR SUCCESS: Your Preferred Manufacturing Partner Your Outsource Source | $Guaranteed Lead Time$

REDUCE YOUR OVERHEAD & BURDEN, YOUR EXPEDITING AND PREMIUM FREIGHT. INCREASE YOUR NET PROFIT AND YOUR MARGINS.

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RTE WAITE PARK, MN Founded: 1986 Team: 12 employees Leadership: Bruce Hagberg, President Contact: 320-252-6830, www.rte-inc.com; www.rite-soft.com NUTS & BOLTS: RTE was founded in 1986 to assist manufacturing and distribution companies in combining information and technology to make better and faster business decisions. RTE solutions help companies have the “rite” information to make the “rite” decisions at the “rite” time. PRIDE & JOY: Software and consulting for accounting, inventory management, HR and shop floor production. CUSTOMERS: Small and medium-sized manufacturing and distribution companies. INDUSTRY SECRETS: riteSOFT, a division of RTE, is the developer of riteTIME Touchscreen Labor Data Collection and riteSCAN Mobile Warehouse for SYSPRO. Both products are sold and used worldwide. BLUEPRINT FOR SUCCESS: “Put the ‘rite’ Tool in the ‘rite’ Hands in the ‘rite’ Place at the ‘rite’ Time”.

Sunrise Fiberglass Corp. WYOMING, MN Founded: 1968 Team: 40 employees Leadership: Barney Rieck, President Contact: 651-462-5313, www.sunrisefiberglass.com NUTS & BOLTS: For over 40 years and 3 generations of the Rieck family, Sunrise Fiberglass Corporation has been the manufacturer of molded fiberglass components, structures and assemblies serving customers in a variety of industries worldwide. PRIDE & JOY: The U.S. Winter Olympic team’s luge, Rainforest Café giant mushrooms, onion domes atop the Mitchell, SD, Corn Palace, and Universal Studios theme park rides. CUSTOMERS: Industrial / heavy equipment, agricultural, architectural, marine, transportation and civil engineering. INDUSTRY SECRETS: We made the enclosure used to apply the protective coating to every section of the original Alaskan pipeline. We produced the first American-made luge used by the USA Winter Olympics Luge team. The sleds were customized for each individual athlete and we had the opportunity to test ride one. BLUEPRINT FOR SUCCESS: Our success is no secret . . . we take personal pride in our products and the relationship with our customers and employees.

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T.O. Plastics, Inc.

Viking Log Furniture

CLEARWATER, MN

ST. JOSEPH, MN

Founded: 1948 Team: 175 full-time employees Leadership: Mike Vallafskey, President Contact: 320-558-2407, www.toplastics.com

Founded: 1979 Team: 19 employees Leadership: Mike Legatt/President Contact: 320-259-0909, www.vikinglogfurniture.com

NUTS & BOLTS: T.O. Plastics is a stand alone, wholly owned subsidiary of Otter Tail Corporation. In business for over 60 years employing 175 people, T.O. manufactures thousands of thermoformed plastic parts, ranging in size from a thimble to a 48” pallet.

NUTS & BOLTS: Viking Log Furniture is a manufacturer of the finest pine log furniture in the area. We make everything for the lake home or cabin, including bedroom sets, pool tables and kitchen cabinets. We take pride in every piece we build.

PRIDE & JOY: T.O. is known for producing top quality packaging for medical devices, electronic components and consumer goods. T.O. also manufactures a proprietary line of horticultural containers. CUSTOMERS: 3M, major medical device manufacturers and a nationwide network of distributors serving the horticultural industry. INDUSTRY SECRETS: In annual sales, T.O. Plastics ranks 40th in the top 100 thermoformers in North America. The only secret at T.O. Plastics is the company itself. We need to market ourselves more effectively, as there should be no humility when it comes to touting excellent customer service, quality products and on-time delivery.

PRIDE & JOY: Log beds, log chests, log dressers, log futons, log dining tables, log pool tables, log kitchen cabinets and anything log for inside the home. CUSTOMERS: Viking Retail Showroom, furniture retail stores, billiard retail stores and Internet retail stores. INDUSTRY SECRETS: We are a family owned business that takes great pride in making American-made furniture locally. Most of our employees have been with us for over 15 years. BLUEPRINT FOR SUCCESS: “Bringing the outdoors in.”

BLUEPRINT FOR SUCCESS: “Excellence is not achieved overnight, rather it is the result of a sustained team effort over many years.”—Mike Vallafskey

SPECIAL ADVERTISING SECTION

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A New Brand of Science ‘Project Lead the Way’ Lures Students to In-Demand Careers By Sarah Colburn | Photo by John Linn

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ichael Baumann sat behind his desk and debated his latest engineering challenge—designing a wallmounted system for a set of stereo speakers.

His boss gave him the requirements. It had to hold at least 20 pounds, be easily disassembled, move in four directions, and fit into a particular box for easy packaging. Baumann used 3D modeling software to create his first prototype. New engineering challenges have become part of Michael Baumann’s life, and they usually come sometime between French and U.S. History. Baumann is a 17-year-old student at Apollo High School in St. Cloud. His “boss” is Mark Weimer, a teacher that pushes his students beyond the chalkboard in his popular Intro to Engineering Design class. Each year, Weimer’s class focuses on applying math, science and technology skills through real-world design assignments. The class is based on a national curriculum called Project Lead the Way, which has earned the approval of manufacturing leaders as they struggle to fill key jobs that require innovation and critical thinking. “We use all the disciplines to solve those (design) problems,” Weimer said. Project Lead the Way teachers enroll in special training and partner with local businesses to give students a glimpse into high-tech careers. In St. Cloud, Weimer has partnered with such manufacturers as Engel Metallurgical, Grede Foundries, Park Industries and New Flyer. Students hear speakers and tour at least one business during the school year. “I think it’s good for students to see a real product being built, see the technology in action. Anytime we can get their hands on something, they remember it, they talk about it and they’re excited about it.” Niel Tebbano is the vice president of Project Lead the Way in Washington, D.C. He said the program was created to lure students to the future manufacturing and technology workforce. The program was formed after heads of automobile and aerospace companies expressed concerns about the lack of skilled workers graduating from high school and college. “Something drastic had to happen,” Tebbano said.

CLASS ACT: Apollo High School teacher, Mark Weimer, uses real-world engineering assignments to make math and science concepts more fun and relevant to students.

The national Business Roundtable, an association of leading CEOs, estimates that the U.S. needs 400,000 post-secondary graduates each year in science, technology, engineering and math to remain competitive in the global marketplace. In 2006, there were only 225,000. “Students who come through our program are better critical thinkers and problem-solvers,” Tebbano said. “That’s what American manufacturing needs to remain competitive.” In 2009, more than 3,400 middle schools and high schools were participating in PLTW. Central Minnesota programs include those in the cities of Brainerd, Baxter, Cass Lake, Elk River, Long Lake, Pequot Lakes, Perham, Pine River, Princeton, Sartell, St. Cloud, Waite Park, St. Michael, and Albertville. The goal is to involve one million students from 10,000 schools by 2013. According to Tebbano, such growth in participation would begin to shore up the projected shortage of skilled labor, hopefully spurring about 175,000 new students per year into related fields of study. Karen Klinzing, Assistant Commissioner, Academic Excellence for the Minnesota Department of Education, said that Minnesota schools are now prioritizing math, science and technology education because that’s what the workforce demands. “In 1950, 80 percent of the jobs were unskilled,” she said. “Now, 85 percent of jobs are required to have some sort of education beyond high school. We’re preparing students for jobs that don’t exist yet.” For Michael Baumann, PLTW has been a creative outlet where he can see math and science in action. He’s always had an interest in building things and recently focused on rims for cars – sketching them out on paper. “When I got into the class,” Baumann said, “I started thinking about how much more I could do and what it could lead to.” When he began his junior year, he didn’t know what he wanted to study at college. His PLTW experience eventually led him to sign admission papers to St. Cloud State University, where he plans to pursue a career in aerospace engineering. And that’s just what the class is designed to do. IQ

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The Perfectionists A High-Tolerance Look at Precision Manufacturing By Mary MacDonell Belisle | Photo by John Linn

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isplayed on the ridges of a human fingerprint, it may look like a piece of silvery glitter. Magnify it more than 300 times, however, and you can admire its ingenious dimple that forms the programming contact for a high-tech hearing aid. The precision craftsmanship of this tiny dimple could easily determine whether Uncle Henry will hear the approaching train or Aunt Ellen will understand the pharmacist’s answer to her question. Here’s one more—imagine a high-density connector, measuring a half-inch square, which holds a hundred gold-plated pins. Each pin must line up exactly with a corresponding part in order to make the proper electrical connections, or the airplane falls from the sky! Such is the high-tech, high-stakes world of precision manufacturing, the world in which Bob Guck lives. “It doesn’t take much for your part to be rejected,” said Bob Guck, CEO of Central Minnesota Tool (CMT) in Little Falls. “Once you go outside the clients’s specs, that’s it.” In simple terms, precision manufacturing involves producing small machine parts or components that operate with very little room for error, with tolerances (the allowable range of variation) registered as plus (+) or minus (-) increments of an inch. A certain part might require a tolerance within 20 millionths of an inch. “(Precision manufacturing) busts the myth that manufacturing is a low-tech industry that employs a bunch of unskilled, unmotivated workers,” said Sandy Voigt, Initiative Foundation program manager for technology finance. “The experts that work at these have to be 50percent artist, 50-percent scientist and 100-percent perfectionist.”

HEAR IT IS: CMT precision-manufactures this tiny programming contact for hearing aids.

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NO ROOM FOR ERROR: The high-tech clean-room at Central Minnesota Tool in Little Falls.

With a goal to make Minnesota a world manufacturing leader, the Minnesota Precision Manufacturing Association recently reported recordbreaking membership numbers. In 2008 they welcomed over 300 members. In Little Falls, CMT’s 50 employees design and produce connectors, plastic-injection molding and metal-stamped parts for the military/aerospace, automotive, medical, consumer electronics, and telecommunications industries. Its end products are communication devices, hearing aids, automobiles, and military/aerospace components. CMT’s parent company, AirBorn Interconnect, uses its nano-connectors on NASA’s Mars Phoenix Lander. In order to assure that level of reliability, Guck guarantees tolerances as small as one or two ten-thousandths of an inch for products no larger than a whopping three inches. “There are people who are cut out to do this, and there are people who aren’t,” said Guck. “It takes patience and ability to deal with that high tolerance. Just because you’re a tool-maker doesn’t mean you’re capable of working on the types of products we build.” As Guck attests, precision doesn’t happen by chance. Many of CMT’s components are painstakingly assembled in “clean rooms,” which look like glass houses as they sit on pristine manufacturing floors. Human technicians wear white coats, caps and facemasks. Since a dust particle or hair strand can foul up an intricate manufacturing process, the facility controls air pressure, direction, temperature, and humidity to reduce contamination. Humans are all thumbs in some aspects of controlled manufacturing. So, computer numerically controlled (CNC) operations and robotics are also used in the production of tiny parts. Through its business financing programs, the Initiative Foundation invests in high-tech manufacturing companies in order to create quality jobs and infuse local economies with outside revenue. The foundation helped finance CMT expansions in 2004 and 2006. “These aren’t your grandfather’s manufacturing operations,” Voigt said. “These are amazing companies that don’t get the credit they deserve, but they’re the people who support our economy with their own innovation.” IQ


I joined the Concert Choir and performed a Holocaust memorial oratorio at a concentration camp in France. I wrote the lyrics for a choral work published in California. I visited the homes and haunts of the great English poets while studying in England. I learned television production and now direct the audio portion of hockey telecasts heard throughout Central Minnesota. Singing, writing and directing have taken me to worlds I never imagined, growing up in Cold Spring, Minnesota.

My world is television production. My passion is music. Ethan Wittrock ’09 English and Mass Communications Cold Spring, Minnesota

My craft is television production, but making music is my passion.

Visit us at www.stcloudstate.edu or call 877.654.SCSU

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Initiative Foundation Summer 09 Newsletter

Decade of Depth Healthy Lakes & Rivers Partnership Celebrates 10 Years of Cleaner Water >After ten years, the Healthy Lakes & Rivers Partnership (HLRP) Program continues to thrive, but challenges for central Minnesota waters remain. More than 200 lake and river associations have participated in the leadership program that guides volunteer associations to improve the water quality of central Minnesota lakes and rivers. Groups come away with a better understanding of human impacts, as well as grant funds to launch effective programs. Projects include restoring shorelands, conducting septic system inspections, and managing invasive species. Don Hickman

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Although it can take years to see the results with the naked eye, HLRP has helped improve the clarity of dozens of area lakes and has restored miles of natural shoreland, which provides wildlife habitat and acts as a filter for harmful nutrients. Economically, these successes also help to sustain tourism and improve property values. Most of all, they preserve Minnesota’s lakes and rivers for future generations. “It’s essential for everyone to remember that their decisions can have huge consequences on the water we all love,” said Don Hickman, Initiative Foundation senior program manager for planning and preservation. “The top three things people can do for their lakes and rivers are to maintain natural vegetation along their shoreline, prevent the spread of invasive species, and get involved in their local association.” For more tips and resources, visit www.iqmag.org and browse through the Fall 2006 issue of IQ Magazine, which was dedicated to water quality.


www.ifound.org | 877.632.9255

Safer Safety Nets HOP Program Helps Vital Nonprofits Work Smarter > Job-securing loans to local businesses aren’t the only way the foundation is helping central Minnesota recover from the economic recession. Strengthening safety-net programs is just as important. In 2007, months before the recession hit hard, about 60,000 central Minnesotans were living in poverty. As that number spiked, so did the demand for nonprofit services as families sought help for basic needs like food, housing and energy assistance. In the St. Cloud area, Tri-CAP saw its number of home foreclosure distress calls increase from three or four per week to three or four per day. Responding to such increased burdens on nonprofits, the Initiative Foundation designed a special round of nonprofit leadership training for the region’s six Community Action Programs like Tri-CAP, who help individuals and families make ends meet. The 2008 Healthy Organizations Partnership program delivered training in strategic planning, financial management, governance, volunteer recruitment and internal operations. The program helped leaders

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get connected and brainstorm ways to become even more effective with their limited resources. “Helping our nonprofits be as effective as they can be is key to weathering this recession,” said Cathy Hartle, Senior Program Manager for Organizational Effectiveness. “Organizations that take the tools we offer, add their own hard work and mix in a focus on the outcomes are in a much better position to succeed in these times.” HOP recently received a grant from the Blue Cross Blue Shield Foundation to continue its work.

A new direction for life. Accelerated Degree Evening Program in St. Cloud and Brainerd We’re here to help—every step of the way—with direction, support and accelerated degree programs that will teach you everything you need to know to move forward–advance–soar. Now accepting applications for our St. Cloud and Brainerd campuses. Call today for more information. St. Cloud Campus: 320-529-6663 Brainerd Campus: 218-855-8006 For more information on our programs direct to your mobile device text: CSS6 to: 38681

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St. Cloud Campus: 320-529-6663 Brainerd Campus: 218-855-8006

SUMMER 09

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Manufacturing CONTINUED FROM PAGE 16

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

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44 Initiative Quarterly Magazine

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Today, area economic development agencies and the Initiative Foundation are focusing efforts to attract and grow manufacturing companies in the region. “We’re looking for higher paying jobs and creating more wealth in the community, and that’s the sector that has done it,� Moore said. Through its business financing programs, the foundation has invested heavily in manufacturing. Manufacturers represent about a third of the Initiative Foundation’s lending portfolio and half of its $12 million in total loans. “Historically, the manufacturing sector has been a very important component to sustaining economic development in our region,� said Randy Olson, vice president for economic opportunity for the Initiative Foundation. “Manufacturing jobs are usually well-paying jobs in central Minnesota. We look at investing in companies with the best-paid employees and best benefit packages in the region.� Despite the decline in manufacturing nationwide, central Minnesota has remained strong. Several manufacturing industries posted double-digit job growth over the five-year period from 2003-2007. Fabricated metal products, transportation equipment, and


Building Partnerships. Designing Solutions. Enhancing Communities.

COMPANIES

JOBS

299 127 94 163 46 117 96 72 109 65

6,435 5,216 3,843 3,677 2,981 2,649 2,558 2,222 1,485 1,469

Source: Minnesota Department of Employment and Economic Development

Watkins Aircraft Support Products—Glenwood, MN

www.wsn.us.com Engineering Architecture Land Surveying Environmental Services Alexandria Baxter Bemidji Crookston Grand Forks Red Wing Rochester Sioux Falls

machinery have led the gains, delivering a combined 1,710 additional jobs to the region. Growth has slowed in the past 18 months, but about 44 percent of manufacturers surveyed in 2008 expected their gross revenues to stay the same or increase in 2009, according to the State of Manufacturing Survey, released in February by Enterprise Minnesota. But misconceptions continue to weaken manufacturing’s stronghold in communities throughout central Minnesota. Negative stereotypes paint the industry as backbreaking, unrewarding and mundane, which discourages youth from pursuing in-demand manufacturing careers. Conventional wisdom that the industry is antiquated and in a tailspin may also contribute to indifference by some local governments. “The concern I have is that there is no public interest in (manufacturing),” said Fred Zimmerman, a retired St. Thomas University professor and author of Manufacturing Works, a 2002 book on the status of manufacturing. “It isn’t that manufacturing is the only thing (that drives an economy), but in the final analysis, each community has to do something productive.” IQ

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JOHN LINN

PLANT food, CONTINUED FROM PAGE 27

MANUFACTURERS WANTED: Joel Newman, Newmans Industries in Royalton.

“We needed a place to go, and these people were going to make something happen,” he added. Not only did the city, the county and the bank come together to help Newman settle in the city, they’ve come together each time he’s expanded operations. “We’ve been supported,” he said. This confluence of support represents the four primary factors that manufacturers need to take root—a desirable location, financial resources, connected leaders and a skilled workforce. As cities and counties compete for manufacturers to help grow their economy and create quality jobs, the incentives they dangle to business are a huge bargaining chip. “Manufacturers build products, and those 46 Initiative Quarterly Magazine

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products need to be shipped across the country,” said Randy Olson, Initiative Foundation vice president for economic opportunity. “Communities with industrial infrastructure and transportation routes in place often have the upper hand.” Nobody has to tell that to Jim Thares, Big Lake’s economic development director. In 1999, he was tasked with filling a new 68-acre industrial park. He accomplished his goal by 2005, and the park’s companies employ about 290 people today. “We listened to each company’s needs, and we were open to all kinds of creative solutions,” Thares said. “Having the location visible along U.S. Hwy. 10 was a huge plus.” The park has good trucking access and is just a few miles from Interstate 94. The city and township worked together to bring roads, water and sewer to the site, with no tax assessments to the incoming businesses. Big Lake now has plans to create a separate park that caters to much larger companies. Though the details are still under discussion, the 200-acre park could be built with a modern railway spur. The spur would allow businesses to easily load, unload and transport products. “This could become a regional hub for moving imports and exports,” Thares said. “That’s pretty exciting.” “But cities need to remember that if you build it, they don’t always come,” Olson added. “There are lots of vacant industrial park sites in central Minnesota. It must be part of a comprehensive strategy, and you have to build momentum by considering the needs of your existing manufacturers first.” Workforce Growing manufacturing companies have an insatiable need for skilled workers, which often means partnering with schools and selling career opportunities to local high school and college students. To meet workforce needs, central Minnesota communities are working to bridge gaps between industrial education and the in-demand jobs of local manufacturers. CONTINUED ON PAGE 48

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PLANT food, CONTINUED FROM PAGE 47

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THE RECRUITER: Twyla Flaws engages students by visiting high-school classrooms and giving tours of Clow Stamping in Merrifield.

Launched by the Brainerd Lakes Chamber with help from the Initiative Foundation, Bridges Career Academies and Workplace Connection is now open to high school students in 22 central Minnesota school districts. It works like this: Local businesses identify high-demand careers and skills. They offer tours, job-shadowing, internships and classroom presentations. High schools provide career counseling, teacher “internships” and relevant coursework. Central Lakes College customizes programs and brings courses to the high school for dual-credit opportunities. The Chamber and economic development leaders keep everyone talking and working together. Students simply work hard, ask questions and choose a career—hopefully, a hometown career. Similar programs in Morrison County have helped Newmans Industries develop workers, and Bridges has given exposure to in48 Initiative Quarterly Magazine

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demand manufacturing jobs like those at Clow Stamping in Merrifield. “(We need) our employees to look at what we do and how we do it and say ‘Could we do it better and faster and safer if we did it this way?” said Twyla Flaws, personnel manager at Clow Stamping. “That’s what gives us our competitive advantage—their knowledge, their abilities.” Creativity reigns when it comes to financing packages for businesses. In today’s economy, fast financing can be the final barrier to a manufacturing expansion or relocation. Collaboration among banks, loan programs and gap lenders is crucial. Creative, local lenders—those that have a vested interest in a community’s growth— are often the key to making projects happen. Jon Vetter, vice president of lending for Pine Country Bank in Royalton, said most banks are limited in their lending power and require a significant down-payment on a loan. CONTINUED ON PAGE 50

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PLANT food, CONTINUED FROM PAGE 49

When Vetter works with a new company, he often considers options through the Small Business Administration loan program, lessening the down-payment requirements. He also works with Morrison County Economic Development, Region Five Economic Development Commission and the Initiative Foundation to create loan packages for business clients. Gap financers like the Initiative Foundation make supplementary loans to help alleviate risk or equity issues that prevent banks from participating in deals. The foundation has a charitable purpose with its lending—to support local business ownership and secure quality jobs. In 2009, Pine Country Bank again pulled together with the Initiative Foundation, City of Royalton, DEED, Region Five Development, and Community Development of Morrison County to restructure financing for Newmans Industries. “Many times, our job is to be the final piece of the puzzle,” Olson said. According to the Initiative Foundation, the most important factor in economic development success is whether or not a community has an identified “go-to” person, or better yet, a paid economic development professional on staff. These leaders help manufacturers navigate government processes and connect the dots between resources. The foundation estimates that 9 of 14 central Minnesota counties and only a handful of cities employ paid professionals, but it offers grants to help pay for professional certification. Several communities depend on city clerks to fill the “go-to” role. “There are hundreds of cities out there competing for companies, but the successful ones understand that economic development is a long-term investment that’s based on relationships,” said Sandy Voigt, foundation program manager for technology finance. “I compare it to sales. When sales are down, it doesn’t make sense to cut your salespeople.” In Morrison County, Carol Anderson is a salesperson, but she’s also an ambassador, taxpayer guardian, financing professional, cheer50 Initiative Quarterly Magazine

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JIM ALTOBELL

Grow Your Business in Wright County www.wrightpartnership.org Carol Anderson, Morrison County Community Development.

leader and tour guide. As the executive director of Morrison County Community Development, she’s responsible for coordinating the county’s effort to attract businesses. “It’s absolutely crucial that you have someone out there working with them,” Anderson said. “They’ll pass you by and move on to the next city if it’s too hard.” She’s there to answer questions from the business, ensure they’ve seen all the available land, coordinate resources for financing, talk tax incentives, explain infrastructure capabilities and help solve workforce issues. In 20 years, Anderson estimates that she has worked with as many as 400 potential businesses and helped about 20 stay in business. She has also helped several manufacturers start-up or expand in Morrison County. Joel Newman still remembers her work well. He met with leaders of other communities, but only in Morrison County did he receive Anderson’s red-carpet treatment, where all the players were present and eager to attract Newmans Industries. “They didn’t come together like they did here,” he said. “You just felt really welcomed. That was pretty impressive.” IQ

Call us so we can work with you to make a positive economic impact on your printing budget. phone: 218/829-7790 fax: 218/829-0977 www.lakesprinting.com

WHATEVER IT TAKES

SUMMER 09

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An

IQ&A with Matt Kilian, Executive Editor

IQ Spins the Gears with Randy Olson, the Initiative Foundation’s New Vice President for Economic Opportunity

IQ: Right off the bat, why is there such a negative stereotype IQ: If it’s struggling, why do you believe manufacturing is the

around manufacturing?

RO: Well, there isn’t one in economic development circles. A lot of towns

region’s economic engine?

bend over backwards to recruit these companies, because they know what they bring to the table as far as quality jobs and new revenue. I think a lot of people imagine the old Ford assembly lines, and that’s not the way it is anymore. They don’t get a chance to tour the plants and see the technology and innovation that’s happening there. It’s incredible.

RO: Because it is. Everyone is struggling in this economy, but we’re talking about an industry that still employs 14 percent of all people in central Minnesota. In the state, manufacturing exports brought in over $17 billion last year.

IQ: When people read the news that manufacturers are either opening or closing their doors, why should they care? RO: We are all connected to manufacturing, whether we know it or not. In our economy, we’re all exchanging dollars with each other. Manufacturers are unlike many other businesses in that they’re bringing in new money from outside the region, and then their employees buy things at other local businesses. When things are going well, we all benefit. If that goes away, it shrinks the pie for all of us. And it doesn’t take long to feel the pain. IQ: What about all of those dead-end jobs? RO: That’s just an old wives’ tale that we’re trying to set straight. I think if young people knew that they could make about $40,000 a year with benefits, that they would have a chance to invent and create with the latest technology, that they could work in their hometowns and do big business with the world, well, I think that would change their thought processes a little bit. The problem is, they don’t understand that yet. That’s why some manufacturers are having problems with attracting workers.

IQ: How do you change that? RO: Like anything, it’ll probably take time and exposure to the industry. We have several partnerships happening that connect students and teachers with local companies. The thing is, we have to blow up the roadblocks and make sure these companies can grow. That’s important to the future of our region. We hope this magazine will help with that.

IQ: Finish this sentence. In central Minnesota, manufacturing is . . . RO: Three thoughts come to mind. It’s bigger than people realize; it’s out of sight and maybe out of mind, because of that; and there’s no doubt that industry is struggling right now. 52 Initiative Quarterly Magazine

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IQ: Did you bring your crystal ball? RO: Shoot, I forgot it at home. Right now, all the signs are pointing to economic recovery, but not without more bumps in the road. That’s the way it typically happens. At the foundation, we’re working together with lots of smart people to predict which industries are emerging in central Minnesota. Manufacturing is a mainstay, but we see opportunities around renewable energy, bioscience, technology and healthcare, and they all relate to manufacturing. We’ll continue to invest in those businesses that create quality jobs for our communities.

Randy Olson is the Initiative Foundation’s newest vice president for economic opportunity. He served as state director of Minnesota’s Small Business Development Centers and general manager of University Enterprise Laboratories (UEL), where he consulted emerging biotechnology companies in the Twin Cities.


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Northern Pines Mental Health Center, Inc., is a private nonprofit corporation that serves the people of Aitkin, Cass, Crow Wing, Morrison, Todd, and Wadena counties in Central Minnesota.


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IQ Magazine - Summer 2009  

Published by the Initiative Foundation in Little Falls, Minnesota, IQ Magazine boils down regional leadership issues to their very essence....

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