iq magazine - summer 2009

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Contents

F E AT U R E S

Cover Story: ManufacturingPart of This Complete Economy

Industrial RevolutionManufacturers Defy Century-Old Workforce Stereotypes

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

Plant FoodFour Community Ingredients to Recruit & Retain Manufacturers

Red SenseThe Manufacturing Mythology of Chinese Competition

SPECIAL SECTION

CMMAAdventures in Manufacturing

D E PA R T M E N T S

OUR MISSION:

Unlock the power of central Minnesota people to build and sustain healthy communities.

INITIATIVE FOUNDATION GOALS:

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

ABOUT THE COVER:

In central Minnesota, the economic impact of manufacturing is grrrrrreat.

IQ Magazine S U M M E R 0 9

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4 Kathy’s NoteFor Crying out Loud

6 IQ PointsYour Two-Minute Digest

8 Innovators WantedImagination, Competition DriveManufacturing Success

10 The Lime LightPublic Interest Illuminates Outlook for Green Manufacturing

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

40 The PerfectionistsA High-Tolerance Look at Precision Manufacturing

42 KeynotesThe Initiative Foundation Newsletter

52 BrainiacAn IQ&A with Randy Olson

A W E L L N E S S O F F E R I N G O F L A K E W O O D H E A L T H S Y S T E M

GRIZZLY CENTER IN BAXTER I 218-824-6666 I 1-866-624-0666

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Embrace your spirit

SoulstisMed Spa

For Cryingout Loud

Dear Friends,

Okay, I admit it. I cried.And not because I had to accept the title

of Uncommonly Young Grandmother inJune. There was just something overwhelm-ing about hearing my new grandson’s voicefor the first time. My tears were filled withrelief, joy, hope, anticipation, and excitement.Somehow, our son, Mark, and his wife,Melissa, created this perfect little personnamed Jackson Peter Gaalswyk.

Talk about value-added manufacturing.Of course, Jackson is entering our world

at a most uncertain time. In centralMinnesota, families and businesses are stilldusting themselves off as they recover from therecession. To help readers understand and navigate our regional economy a little bet-ter, 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 ofour region’s largest and most important industries. Regardless of where you live orwork, you are inextricably connected to manufacturing. And as manufacturing goes, sogoes our economy.

Joining forces with the Central Minnesota Manufacturers Association (see page31), 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!

Kathy Gaalswyk, PresidentInitiative Foundation

Kathy’s Note

4 Initiative Quarterly Magazine IQmag.org

www.BrainerdSavings.com

218.829.5183

BRAINERD • BAXTER

Printed with Soy-Based Ink on Recycled Paperat Continental Press, Inc.

www.EvergreenPress.net

SUMMER 09 5

Volume 7, Summer 2009

Initiative Quarterly Magazine

INITIATIVE FOUNDATIONExecutive Editor & Director of Communications | Matt KilianGrants & Communications Specialist | Anita Hollenhorst

PUBLISHERSEvergreen Press | Chip & Jean Borkenhagen

EDITORIALEditorial Director | Jodi Schwen Managing Editor | Tenlee LundStaff Writer | Dawn Zimmerman Staff Writer | Sarah Colburn

ARTArt Director | Andrea BaumannSenior Graphic Designer | Bob WalleniusGraphic Designer | Brad Raymond Design Intern | Nate SchimelpfenigProduction Manager | Bryan PetersenLead Photographer | John Linn

ADVERTISING / SUBSCRIPTIONSBusiness & Advertising Director | Brian LehmanAdvertising Manager | Kristin RothsteinAdvertising Manager | Lois HeadAdvertiser Services | Mary SavageSubscriber Services | Anita Hollenhorst

IQ EDITORIAL BOARD Initiative Foundation President | Kathy GaalswykCommunity Development of Morrison County | Carol AndersonVenture Allies | Rick BauerlyKomo Machine, Inc. | Linda BesseClose-Converse | Chris Close (Trustee)St. Cloud Technical College | Sandy FabianPequot Tool & Manufacturing, Inc. | Karlo GoergesLINDAR Corporation | Tom HaglinBrainerd Lakes Chamber of Commerce | Sheila HaverkampEnterprise Minnesota | Robert KillInitiative Foundation | Paul KleinwachterSt. Cloud Area Economic Development Partnership | Tom MooreLandmark Community Bank | Connie NelsonPine Country Bank | Rob RonningWilkie Sanderson | Marc SandersonMINPACK, INC. | Robert ThompsonInitiative Foundation | Sandy VoigtRemmele Engineering | Dan WhalenCentral Minnesota Jobs & Training Services | Tim Zipoy

405 First Street SE Little Falls, MN 56345320.632.9255 | www.ifound.org

Published in partnership with Evergreen Press, IQ Magazine unlocks the power of central Minnesota leaders to understand and take action on regional issues.


m Manufacturing accounts for 1 in every 7 jobs in Minnesota.Manufacturers employ more than36,000, or about 14 percent of allworkers in central Minnesota.

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

m While other industries facilitate the region-al exchange of dollars, manufacturers often dobusiness with national and internationalclients. That brings in new money and gener-ates economic growth.

m Although manufacturers face stiffinternational competition, Minnesotais the eighth-largest U.S. exporter ofmanufactured goods to China.

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

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

Intelligence

—Commissioner Dan McElroyMinnesota Department of Employment & Economic Development

m Every $1 in manufacturing product sales infusesan additional $1.37 in other sectors of the economy.

“It’s not your granddaddy’s work.Manufacturing is clean. It’s high-tech. It’sexciting. It’s constantly changing andchallenging.”

–Dr. Robert Musgrove,Pine Technical College

“The concern I have is that there is no publicinterest in (manufacturing). It isn’t that man-ufacturing is the only thing (that drives aneconomy), but in the final analysis, each com-munity has to do something productive.”

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

“(Precision manufacturing) busts the myththat manufacturing is a low-tech industrythat employs a bunch of unskilled, unmoti-vated workers. The experts that work at theseplants have to be 50-percent artist, 50-percentscientist, and 100-percent perfectionist.”

–Sandy Voigt, Initiative Foundation

“We do a disservice when we tell youngpeople that manufacturing isn’t a presti-gious career. Our employees are highly-skilled and well-compensated. Weneed top-notch people with critical think-ing skills to grow our business.”

–Jim Shear, Cambridge Metals & Plastics

Quotations “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.”

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Innovators Wanted

By Tenlee Lund | Photo by John Linn

Their plastic containers hold strawberries, herbs,cakes, muffins, and medical devices, so why not eggs? It’sthe kind of question Tom Haglin asks himself often. Hehas 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 manufac-turing employer. He credits his success to hard work and somethingcalled innovation.

How well can you invent new products? How well can you imaginenew uses for existing products or machinery? How well can you improveyour organizational structure or processes in order to make productsfaster, cheaper and better than your competition?

Such an innocent, vague little buzzword like “innovation” can sep-arate the expansions from the bankruptcies in the world of manufactur-ing. If you let up in the innovation department, chances are your daysare numbered.

Haglin is looking to patent a clear egg carton. “We know exactlywhat the price needs to be, who the competitors are, and the faults of theircontainers,” Haglin said. “The clear package continues to gain marketshare, 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 aregenerally brought forth through the sales team because, “they’re in tunewith what’s going on in the marketplace.” Then, the sales and designteams brainstorm.

“Companies that are really innovative are companies that empowertheir employees to be original and analytical thinkers,” said Dr. RobertMusgrove, 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 aneed,” said Deb Hess, executive director of the Minnesota InventorsCongress in Redwood Falls, Minnesota. She mentioned the Minnesotainventor of the “quad cane,” which has four legs for improved stability.Hess helps educate inventors in the process of bringing such creative ideasto the marketplace.

PLASTIC MAN: Tom Haglin’s constant experimentation with new materialsand new products has led LINDAR to become the Brainerd area’s largestmanufacturing employer.

Imagination, Competition DriveManufacturing Success

“The bottom line is, jobs and revenue are essential for the economyto 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 materialdeveloped by Cargill to make biodegradable plastic from a renewableresource. “Our large competition has a more difficult time bringing in analternative material, but we continue to get momentum from it and it’sopened up doors for us.”

“Innovation is critical, particularly for shops here in centralMinnesota,” said Sheila Haverkamp, executive director of the BrainerdLakes Area Development Corporation. “Most of our companies tend to besmaller, in the vicinity of 100 to 200 employees. They have to constantlyinnovate in a number of different ways to stay competitive.”

Dr. David DeGroote, dean of the College of Science andEngineering at St. Cloud State University, and his faculty work closelywith area businesses. “What we do is bring the talent of our faculty tothose businesses who have ideas but haven’t necessarily been able to getthem out.”

Another side of the education equation—preparing students to fillskilled manufacturing positions—requires the schools themselves to inno-vate. Pine Technical College now offers certification in rapid prototyping,a time-slashing process that uses CAD systems to produce prototype partsin thermoplastic. They also offer instruction through a virtual reality lab.

According to Haglin, innovation is the key to staying one step aheadof the competition.

“We’re definitely willing to step out of the box and challenge thingsthat, in the past, haven’t been done,” he added. “It’s part of our nature. Wespecialize in figuring out ways to make things happen.” IQ

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Initiative Quarterly Magazine IQmag.org10

TheLime Light

By Kayleen Larson | Photo by Jim Altobell

John Herou, owner/partner of E-Ride Industries inPrinceton, said America’s interest in everything green has givenhis manufacturing company a whole new life. He started in1989 by building luxury golf carts. When business slowed in

2001, he retooled to manufacture electric utility and transportationvehicles. Skyrocketing oil prices didn’t hurt the cause.

Today, his electric cars can be found in cities, universities, airportsand major industrial sites worldwide. Sales for the first six months of2009 are double what they were for all of 2008, and the company’sworkforce has increased by 25 percent.

“We’re a true American company. All of our vehicles are assem-bled here in Princeton,” he said. “We use as many local vendors as pos-sible, and we hire local labor.”

Opportunistic manufacturers like E-Ride may be in line for apublic boost through state and federal stimulus funding. In 2008,Minnesota Governor Tim Pawlenty unveiled the Green JobsInvestment Initiative, proposing tax and financing incentives toencourage business growth in the “green” sector.

Created by the state legislature, the Minnesota Green Jobs TaskForce conducted a market analysis to provide elected leaders withinformation on how to grow the state’s green economy. According tothe analysis by GSP Consulting Group, Minnesota currently has anestimated 52,827 jobs that can be considered green. By 2020, thenumber of green jobs is expected to increase to 55,025. CentralMinnesota may see increases as high as 37 percent.

If proposed government initiatives are enacted, however, the analy-sis suggests that Minnesota may gain more than 72,467 green jobs.Such growth might even benefit rural manufacturers that don’t neces-sarily fit the trendy concept of greenness, like Crow Wing Recycling.

The company’s 20 employees recycle consumer and industrialwaste materials like steel, copper, and aluminum. Vice President GrantVanWyngeeren said increased interest in energy efficiency and recycledbuilding is causing an uptick in business. That uptick could become afull-blown upswing if state and federal initiatives materialize.

Columbia Gear of Avon has profited from the renewable energyboom. In 2002, the second largest U.S. gear manufacturer began man-

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

Public Interest Illuminates Outlook for Green Manufacturing

ufacturing gears and shafts for wind turbines. Wind gears now com-prise about twenty percent of the company’s business.

Vice President Kenneth Schaufelberger said state and nationalsupport for wind energy along with other trade initiatives would go along way toward helping increase that figure. “Most of the wind com-panies are located outside of the U.S.,” he said. “The stronger the U.S.commitment to alternative energy, the more likely they are to dobusiness here.”

Launched with Initiative Foundation financing, Isanti-basedEver Cat Fuels is hoping changes in the transportation industry cre-ate a greater market for biodiesel. Ever Cat’s newly patented processquickly converts pond algae, waste oils, and non-edible crops intodiesel fuel. The company opened a pilot plant in June and anticipatesproducing four million gallons of diesel fuel annually.

Along with helping small companies secure financing, the greeninitiatives are meant to raise Minnesota’s profile among those look-ing to relocate or expand. According to Mark Lofthus, director ofbusiness development at the Minnesota Department ofEmployment and Economic Development, more than 50 potentialwind, biomass, and solar power projects now have Minnesota ontheir list of possible locations. IQ

A Greener Future?Minnesota Central Minnesota

2008 Green Jobs 52,827 4,117

2020 Projected Jobs 55,025 5,648

2020 Projected Growth 4.2% 37.2%

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

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Tucked away just outside of town, manufacturersform an unseen economic engine for central Minnesotacommunities. According to the Minnesota Department ofEmployment and Economic Development (DEED), themanufacturing industry accounts for 1 in every 7 jobs inMinnesota and 17.3 percent of the state’s total wages, pro-viding the largest share of the gross state product.

While other industries facilitate the regionalexchange of dollars, manufacturers often do business withnational and international clients. That brings in newmoney and generates economic growth. The MinnesotaTrade 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 ourcommunity and our economy,” said Les Engel, owner ofEngel Metallurgical in Sauk Rapids. “You just can’t sellenough shoes to each other.”

The health of the manufacturing sector helps financeschools, city services and overall infrastructure, said Tim

Zipoy, training and development coordinator at theMonticello Workforce Center. “If we would become aservice-oriented community, we would have significantlyless tax-base,” he said.

In central Minnesota, the impact is even greater.Manufacturing wages are 25.6 percent higher than theaverage of all other industries in the region, said CameronMacht, regional analyst for DEED. More than 38,000regional manufacturing jobs represent about 14 percent oftotal employment in the region.

For that reason, some enterprising communities seemanufacturing as the magic bullet that can revive a dyingtown or fuel the economy of a metropolitan area. No mat-ter the size, cities throughout central Minnesota haverolled out the red carpet and entertained wild deals to landthe manufacturer that will not only make headlines, butgive their community an economic boost.

A Tale of Two CitiesFREEPORTWith a population of about 500, the City of Freeport sold18 prime acres in its industrial park for $1 in 2006. It alsofacilitated a $500,000 state loan and named a nearby streetafter its prized new tenant, Whirlwind Building

We often measure economic vitalityby the bustle of downtown, the averagelength of checkout lines, and thenumber of vacant parking spaces onMain Street. In central Minnesota’srecovering economy, however, it’s theunheralded residents of industrialparks who are quietly setting thetable. Feast or famine, our maincourse is manufacturing.

Components, a Houston-based producer of metal buildingproducts and solar energy systems.

Besides adding 60 jobs, the deal allowed Freeport tobenefit immediately from the company’s tax payments andin the end, saved the town almost $34,000 compared to thetax-exempt JOBZ program, City Clerk Paul Hetland said.

Whirlwind’s new 58,000-square-foot facility infusedFreeport with $2.4 million of taxable value and now represents 11 per-cent of the city’s total tax revenue. That has allowed the town to investmillions into the city while maintaining local taxes.

Freeport has almost been untouched by the national housing melt-down, facing only three foreclosures last year and selling three newhomes during the spring. Its small Catholic parochial school, on thebrink of closing in 2003, is now preparing to add at least two new teach-ers and another classroom.

From a spreadsheet on his computer screen, Hetland illustrates theeconomic impact of Whirlwind’s employees. Conservatively, he figuresthat each employee spends at least $25 in local purchases each week—$15for gas and goods and $10 in meals. Multiply that by 50 employees, andover 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 amaz-ing. Not all of (the employees) move to town, but the impact is still there.”

Hetland said city leaders recognized that they needed to get seriousabout growth. Freeport established an Economic Development Authorityand hired a full-time city clerk—uncommon for a town of its size.

The city negotiated an agreement with a local farmer that gave wayto a new industrial park. Seeing the need for

more housing, Freeport also turned itsattention to residential developments.From 2003 to 2009, the town’s popu-lation grew 13 percent and its valua-tion nearly doubled to $48 million.

“Very little of it has happened byaccident,” Hetland said. “Our fruits are

the culmination of very hard work.”

GREY EAGLEWhat happens when a key manufacturer departs? Drive less than 15miles 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 manu-facturer of watersports safety equipment, was the town’s largestemployer. Economic challenges and a merger with Kansas-basedColeman caused the shutdown of its Grey Eagle facility in 2008. Asecond blow came when Grey Eagle’s elementary school closed itsdoors in 2009.

The for-sale signs have yet to speckle the town of just over 300people. The retailers have yet to close their doors. Residents fear itwill come with time.

“Definitely, there are a lot of fears,” said City Clerk LoriHellman. “I think it has impacted our businesses. They were frequentcustomers of our gas station, our grocery store and our restaurant andbar in town. All of these businesses are being impacted.”

Industrial Development Corporation owns the former Stearnsbuilding, so Grey Eagle has not felt the immediate loss in tax-base.Leaders of IDC are scrambling to attract a new tenant once Stearnsterminates its lease – a tall order during the current recession.

“There are psychological effects with people worrying about thefuture of the town without that employer,” said Gene Waldorf, GreyEagle resident, former legislator and chair of the InitiativeFoundation’s board of trustees. “When you have a small town and youlose a major component, people get depressed and concerned aboutthe town’s future, because everything can start col-lapsing. Almost everything becomes threatenedby it.”

SIGNING BONUS: Whirlwind Building Components was such a coup forFreeport that it named a street after the company.

EMPTY NEST: City Clerk Lori Hellman hopes a new tenant will land in theformer Stearns, Inc. plant in Grey Eagle.


SUMMER 09 15

Every $1 in manufacturing sales generates $1.37 in other sectors of a localeconomy, but does the industry support your job? A St. Cloud State

University study of a company in jeopardy of closing its doors showed thepotential impact on its employees as well as those from other industries.

(Example: Suppliersto the Manufacturer)

(Example: Acme makesmachines that external man-ufacturers use to producetheir goods.)

(Example: Attorneys,Accountants, etc.)

(Example: Garbage andrecycling collectors)


One Step Back, Two Steps ForwardMetro areas can also experience the booms and busts of man-ufacturing. Tom Moore remembers the 1999 hysteria that sur-faced when catalog-retailer Fingerhut announced it wouldcease its St. Cloud operations. After leaders worked tirelesslyto attract the company to its industrial park, Fingerhut grew toemploy more than 4,000 workers.

“People were waiting for the shoe to drop. People thoughtit was going to have a much larger impact than it did,” saidTom Moore, president of the St. Cloud Area EconomicDevelopment Partnership. “We, as a community, have contin-ued to grow even after the significant closures of companies.Central Minnesota is projected to create an even larger portionof the state’s manufacturing jobs in the next 20 years.”

The “multiplier effect” is one of the tools used by econ-omists to describe what happens when a manufacturerarrives or leaves. On the positive side, every $1 in manufac-turing product sales infuses an additional $1.37 in other sec-tors of the economy, according to the National Associationof Manufacturers.

Applying a similar formula, the Fingerhut closing couldhave jeopardized two to four other jobs per position eliminat-ed, according to some economic models. In St. Cloud, theseripple-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. Successescan be seen in the addition of companies like Arctic Cat,which built an $8 million start-of-the-art ATV engine assem-bly plant in the I-94 Business Park. The plant brought 50 newjobs to the area. The facility extends 56,000 square feet and hasroom to expand in the future to 200,000 square feet.

“It showed we could play with the big boys,” Moore saidof landing the sought-after publicly traded company. “It gaveus credibility and confidence that we can attract operations ofthat size to our mid-size community.”

Tom Moore, St. Cloud Area Economic Development Partnership

CentralMinnesota Minnesota

Manufacturers 9,134 1,324

Jobs 341,617 38,026

Percent of Total Employment 12.7% 14.1%

2003-2007 Employment Growth -5.60% 7.60%

Average Annual Wage $52,260 $40,133

CONTINUED ON PAGE 44

Source: Minnesota Department of Employment and Economic Development, 2007

SUMMER 09 17


That’s because the region may be facing apost-recession workforce shortage, as 381,000of Minnesota’s Baby Boomers reach theretirement age of 65 by 2015. The MinnesotaState Demographic Center estimates thattheir entry-level replacements (ages 16-24)will only number about 330,000. That ’s51,000 workers short, and manufacturing isn’tyet on the youth radar screen.

“A lot of kids think that accepting a jobin manufacturing means that they failed,”said Kathy Gaalswyk, president of theInitiative Foundation. “Their parents passdown the stereotype, and sadly, they’rebypassing some very exciting and lucrative

career opportunities that would helpstrengthen our regional economy.”

“It’s not your granddaddy’s work,” addedRobert Musgrove, president of PineTechnical College. “Manufacturing is clean.It’s high-tech. It’s exciting. It’s constantlychanging and challenging.”

Today, manufacturers are looking fororiginal thinkers who have a multitude ofskills in math, science and technology.Manufacturers say an ability to learn multiplejobs—not just turning one screw on an old-fashioned assembly line—will become evenmore important in the next 20 years.

Dark, dirty, dull, destitute and danger-

ous—those often are the adjectives used todescribe manufacturing jobs.

“There is a misconception about whatmanufacturing is,” said Sandy Fabian, direc-tor of educational partnerships at St. CloudTechnical College. “It dates back to theIndustrial Revolution—back more than 50years—when manufacturing was an assem-bly line.”

Those misconceptions are what are mosthurting the local manufacturing sector—notChina or Mexico or even the economic down-turn. Central Minnesota manufacturers fearthe future will only increase their struggle tofind qualified workers.

A merica’s image of manufacturing jobs is painted in sepia tones, where hot, overworked assembly-

line 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.

SUMMER 09 19

Median Salar y

Computer-Controlled Machine Tool Operators $32,926 – $40,227Machinists $37,086 – $45,656Sales Representatives $44,554 – $50,315Customer Service Representatives $31,262 – $33,717General & Operations Managers $74,381 – $77,938Industrial Machinery Mechanics $40,560 – $50,294Cutting, Punching & Press Machine Setters $27,934 – $37,190Purchasing Agents $46,488 – $49,379Computer Software Engineers, Applications $67,226 – $94,037Engineers (Industrial, Mechanical, Electrical) $60,195 – $83,762

Source: Minnesota Department of Employment and Economic Development

More than half of manufacturers sur-veyed at the end of last year reported troubleattracting talent to fill job vacancies, accordingthe State of Manufacturing Survey, releasedby Enterprise Minnesota in early 2009.

This is in spite of the fact that centralMinnesota’s manufacturing jobs pay an aver-age of $40,133 a year, which is higher thanthe salaries of real estate agents, licensedpractical nurses, radio announcers, and somecommercial airline pilots, according to theMinnesota Department of Employment &Economic Development (DEED). High-demand jobs such as industrial and mechan-ical 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 theycome here.” Pine Technical College hasgraduated 64 students with associatedegrees in manufacturing in the past threeyears. Those graduates earn an average of$35,400 to $72,800 per year.

The loss of U.S. manufacturing jobs inthe past several years has also fueled the per-ception that opportunities don’t exist, today orin the future. News of layoffs led to sharpdeclines in manufacturing programs at areatechnical colleges.

While lower skilled jobs may havebecome automated or shifted overseas, high-tech skills are in demand and produce a siz-able paycheck.

“Manufacturing is not dead, but man,has it changed,” said Linda Besse, humanresources director at Komo Machine inSauk Rapids and vice president of theCentral Minnesota ManufacturersAssociation.. “(Manufacturers are) trying toadd value in the process through automa-tion, and people need to learn new skills tosupport new processes.”

Technology advancements are drivingthe industry and making future job opportu-

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


nities virtually unpredictable. Even the worldof creating prototypes has changed dramatical-ly in the past decade.

When engineers developed a new productin the past, they would send their drawing to acustom shop to transform it into a prototype.Perfecting the design required severalexchanges between the engineer and crafts-man, taking weeks or months to finalize a newproduct design.

Today, rapid prototyping allows engineersto send their drawing to a 3D printer that pro-duces a resin replica in a fraction of the time.

“A process that once took weeks, now canbe done in minutes,” Musgrove said. “That’sjust one example.” Pine Technical Collegestarted offering advanced certifications in rapidprototyping during its spring 2009 semester.

Manufacturers say they’re looking forworkers with an interest in mechanical con-cepts, an aptitude for math and science, and

good communication skills. “I don’t care ifyou’re Einstein,” said Les Engel, president ofEngel Metallurgical. “If you can’t explain it toanybody, it’s useless.”

Central Minnesota manufacturers havebeen partnering with local high schools andcolleges to reverse the old mindset and debunkthe negative stereotypes. By hosting companytours for high school students, companies aimto show the clean, professional work environ-ment and the vast job opportunities in thegrowing industry.

In late April, a dozen members of theCentral Minnesota Manufacturers Associationopened their doors to hundreds of students,families and interested community members.

During insider tours of high-profile com-panies like Cold Spring Granite and NewFlyer, Besse said that many participants saidthey had no idea of manufacturing’s careeropportunities, sophisticated machinery, and

extensive international clientele. And such aparadigm shift was the intended result.

In Pine City, Pine Technical College tooka similar approach, hosting the Gold-CollarCareer Day for juniors and seniors from sever-al area high schools. The students spent the dayin a series of breakout sessions designed toshow them the opportunities in manufacturing.

Before the event, 65 percent of the stu-dents said they had little to no knowledge ofmanufacturing jobs. By the end of the day, asurvey revealed that 72 percent of studentswould consider a career in manufacturing. “Wemoved the needle in a significant fashion withthat event,” Musgrove said.

Manufacturers hope these educationalprograms translate into a wider hiring pool inthe future as baby boomers retire and the econ-omy rebounds. “It’s all about the pool—creat-ing a better pool for manufacturers to choosefrom,” Besse said. IQ

21

The DetectiveJames Brusso, Senior Metallurgical EngineerEngel 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 proto-type be durable and safe enough for commercial use? As asenior metallurgical engineer, Brusso uses innovative laborato-ry equipment to analyze and test materials of all sizes and con-ditions. He discovers what causes components to fail and thenprovides recommendations for redesigning and improving prod-ucts. Attorneys and insurance companies often summon himto give expert testimony on his findings.

The Power BrokerJonah Lidberg, Lead MachinistOrluck Industries, Elk River

Jonah Lidberg commands power. As a lead machinist, he usesindustrial machining equipment to produce intricate parts foraviation, military and medical devices. He works alongsidedesign engineers at companies like Boeing, Boston Scientificand Medtronic to understand and replicate their prototypes.Lidberg’s machine creates parts that do everything from help-ing jets fly to helping military vehicles protect soldiers. He alsoworked on a titanium medical device that uses ultrasonic vibra-tion to clean wounds without direct contact.

The PerfectionistNate Warzetha, Quality Assurance ManagerUltra Machining Corp., Monticello

Nate Warzetha cannot tolerate imperfection. As a quality assur-ance manager for high-tech medical devices, he is among thefirst to see the latest medical technologies and ensure their high-est quality. Warzetha is responsible for establishing standardsand inspection procedures for precision parts that are implantedin human bodies, so there is no margin for error. He works withengineers, inspectors, regulatory affairs personnel and medicaldevice companies to ensure that every new part manufacturedand shipped from the Monticello facility is flawless.


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.

SUMMER 09 23

It stands to reason that a manu-facturing business that got itsstart during the Great Depressionwould be one of a few thrivingbusinesses in today’s economy.

DeZurik Corporation got itsname from founder, Matt DeZurik,who invented a valve in the late1920’s to solve the paper millingproblem of pine pitch building upduring the manufacturing process.The concept for his invention, theeccentric valve, is still part ofDeZurik’s product line today.

A World of ValvesDeZurik is the market leader invalve manufacturing. Its valves canbe found at nearly every water andwastewater treatment facility acrossthe nation. They are also used in themining, oil, chemical, and foodindustries, as well as in many heat-ing and ventilation systems. Withinthe walls of its 400,000-square-footmanufacturing facility, DeZurikmakes nearly every kind of valveimaginable, from one that would fitin a person’s hand to another thatfills an entire flatbed trailer.

Over the years, some ofDeZurik’s products were sold off toother companies and the local fam-

ily-based company became part of amuch larger corporation. But, thatall began to change in 2004 whenGranite Equity Partners, a localinvestment firm based in St. Cloud,purchased majority-ownership ofthe company.

“There’s great advantage inbeing locally owned and operated,”said Larry Korf, president andCEO. “We employ 370 people, andmany have been with us for morethan 20 years.”

Family ReunionIn 2009, the DeZurik brands andpeople were reunited when GraniteEquity and its partners bought backthe DeZurik products that had beenseparated from the company. “Now

all of our products are back togeth-er, and the majority are being man-ufactured here in centralMinnesota,” said Duane Gasser,vice president of sales and market-ing. “We are refocused and re-strategized with a common goal,and that’s a very good thing.”

The reunion of Dezurik prod-ucts added 50 new jobs at theSartell plant, and Gasser said thecompany is on track to maintain thelevel of growth it attained in 2008.

“The federal stimulus pack-age helps our business because ofthe investment in municipal infra-structure,” said Korf. “Thedemand for water and wastewatertreatment in the next ten years isalso expected to be strong, which

puts us in a good position.”DeZurik has expanded its

customer base and raw materialsourcing to countries around theglobe. Its valves can be found inpaper mills in Canada, mines inSouth America and Africa, powerplants in China, and water andwastewater treatment plans in theMiddle East.

Korf believes the manufactur-ing industry doesn’t get the credit itdeserves. “It seems like the publicperception of manufacturing is neg-ative, but I think that’s inaccurate.U.S. businesses can compete withthe rest of the world, and DeZurikis a good example. We enjoy astrong workforce, a good work ethicand community support.”

Headquarters:Sartell, Minnesota

Employees: 370

Products: Engineered valvesand controls for water, waste-water, and process industriesworldwide.

Growth: Installed global base ofover 3.5 million valves. Marketleader in valve manufacturing bysales volume.


Wilkie Sanderson is a wood-working company that’s far fromrun-of-the mill. In 1997, WalterWilkie and Marc Sanderson pur-chased Ron’s Cabinets in SaukRapids, but the real story beganin 1993 when Sanderson was agraduate student at HarvardBusiness School.

“I had a paper to write, and Iinterviewed Walter. I was fascinat-ed by his success as an entrepre-neur, having owned 13 successfulbusinesses,” said Sanderson. “As Ilook back now, I realize Walter wasinterviewing me instead of theother way around.”

Four years later, Sanderson gota surprise phone call from Wilkie.“He said, ‘Marc, I’m 55 and I prom-ised myself I’d cash out when I was55. I have two options—I can eitherinvest in people or in stocks and

bonds. Now, let’s go find you a com-pany to run,’” Sanderson recalled.

Branching OutWilkie Sanderson is more than agroup of employees. It’s a group of90 owners, who each have a per-sonal stake in the business, thanksto the firm’s employee stock own-ership program. Their motto: “Wework like we own the place,because we do.”

The company’s architecturalwoodwork adorns many familiarcommercial spaces including theMinnesota Children’s Theatre, theQVC Store at the Mall of America,the Mill City Museum inMinneapolis, and the new St. CloudLibrary. “We don’t do the stuff thatholds the building together,” saidSanderson. “We do the sexy stuff onthe walls, ceilings, and floors that

makes the building beautiful.”The project that helped cata-

pult Wilkie Sanderson to industryprominence was the BigelowChapel at United TheologicalSeminary in New Hope,Minnesota. The chapel’s architectwanted translucent veneer—or see-through wood panels. “We createdsomething everyone said wasimpossible, and it put us on thenational map,” said Sanderson.

The Hardest CutsWilkie Sanderson has not beenunscathed by the brutal economicrecession. In January the companylaid off 18 employees andSanderson, who calls himself thechief environmental officer, the per-son responsible for creating an envi-ronment for employees’ success, isquick to take the blame.

“We brought our employeestogether. Everyone got sealedenvelopes,” he said. “I told them toopen them and the letter wouldeither say: ‘I’m sorry, you are beinglaid off ’ or ‘We have a lot of work todo to bring these people back.’”

Despite the layoff, WilkieSanderson seems poised to not onlywithstand the recession, but grow.They recently acquired a companycalled Woodcraft in Des Moinesand are now concentrating on howto market their unique goals, whichSanderson says is the ability to beon-time in an industry that isknown for delays.

“I’m proud that we’ve created abusiness that will not only survive,but thrive without me,” saidSanderson. “Collectively, we havethe raw talent to take this businessto the next level.”

Headquarters: Sauk Rapids, Minnesota Employees: 87

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

SUMMER 09 25

In spring 2007, about 100 workersin Cambridge, Minnesota, werecollectively holding their breath.Sixty days until CambridgeMetals & Plastics (CMP) wouldclose its doors, leaving a gapinghole in the industrial park anddozens without jobs.

Jim Shear and his partners atWater Works Manufacturing hadtheir pens poised to sign a lease toexpand their business in a differentcommunity when they learnedabout the pending CMP closure.“We knew we wanted to (acquireCambridge Metals & Plastics), butno one had ever heard of putting acomplex deal together so fast. Weonly had 60 days until the plantwould be closed down, and theopportunity to buy the intact busi-ness would be gone,” Shear said

Telephones rang, papers flew,

and computers hummed as commu-nity leaders, the InitiativeFoundation, and state and local gov-ernments worked together to com-plete the sale. Sixty days later, thedeal was made and more than 80jobs were saved.

Beyond PlasticToday, CMP products are known bymotorcyclists, snowmobilers, andATV enthusiasts. Brush guards,winch mount kits, snowplows, sportracks—if it can be added to amotorsport vehicle, it’s found atFuse Powersports, CMP’s aftermar-ket division.

That’s one aspect of CMP’sdiverse products and services. Thecompany supplies parts for brandslike Honda, Polaris, Kawasaki andArctic Cat. Plumbing and telecom-munications industries also look to

CMP for parts manufacturing.“We’re 98 percent vertically

integrated, so about the only thingwe don’t do in-house is lathing andpolishing,” said Shear. “If it’s madeof metal or plastic, chances are wecan make it.” Many of CMP’s com-petitors offer only fabrication orwelding, but CMP’s capabilitiesinclude tube bending, packaging,powder coating, component assem-bly and even engineering anddesign services.

CMP is one of a few compa-nies in the U.S. that uses a high-pressure water system called hydro-forming to fabricate parts. Thesystem utilizes fewer welds, makingthe finished product more durable.

Staying FlexibleShear says he and his partners antic-ipated the economic recession when

they purchased the business in 2007,and began to prepare by investing inhigh-tech equipment and diversify-ing their customer base.

“We had to make some budgetreductions and laid off about 15people in January, but the outlookfor Cambridge Metals & Plastics isgood,” said Shear. “The economicrecession is tough for everyone, butit’s also an opportunity to really lis-ten to customers and turn theirproblems into your solutions.”

Shear is optimistic about thefuture of the manufacturing indus-try, saying it creates the U.S. middleclass. “We do a disservice when wetell young people that manufactur-ing isn’t a prestigious career. Ouremployees are highly-skilled andwell-compensated. We need top-notch people with critical thinkingskills to grow our business.” IQ

Headquarters: Cambridge, Minnesota Employees: 75

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

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


By Sarah ColburnIllustration by Chris McAllister

SUMMER 09 27

As communities seek to attract and grow manufacturing “plants” that enrich their localeconomies, they can follow the formula of central Minnesota leaders who have discovered thekey ingredients of an industrial-strength fertilizer.

After a fire destroyed his Detroit Lakes opera-tions in 1989, Joel Newman visited sevenMidwestern cities in search of a new home for hisexpanding business.

He was looking for the right location, the rightfinancing and the right people to grow NewmansIndustries, a manufacturer of recreational aluminumtrailers, docks and lifts. He set foot in Royalton andnever 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 bythe executive director of Morrison County EconomicDevelopment, the Royalton mayor and representa-tives of the local bank. He toured the city, sized upthe location a block from U.S. Hwy. 10, and was soldeven before hammering out the numbers.



Rising up from rapid industrialization, Chinesemanufacturers have burst onto the scene ofinternational competition. Facing aggressivemarketing and rock-bottom price points, centralMinnesota companies have been forced toinnovate and compete like never before.Despite the headlines, manufacturing is stillalive, but are those China rumors true?

SUMMER 09 29

MYTH: Chinese products are cheap junk.

REALITY: Many Minnesota companies rely on Chinese quality to stay competitive, but central Minnesota may stillhold an edge in precision manufacturing.

“Americans complain about cheap junk pouring out of China’smills, but they rely on China for a lot that is not junk, and whose cheapprice is important to American industrial and domestic life,” said TheAtlantic 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 LandscapeSupply in St. Cloud. He first visited Hong Kong seven years ago andbegan 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 qual-ity issues with the stone and sculpted products it has imported since2001. “You give them the computer file, and they follow it exactly,” saidPeter Kollmann, who also noted the Chinese excel at sculpting.

Randy Olson, the Initiative Foundation’s vice president for eco-nomic opportunity, said that precision manufacturing still defines cen-tral Minnesota’s niche in the marketplace. “We’ve heard from somehigh-tech manufacturers who initially lost business to China, only toget it back after their precision was not up to par,” he said. “To avoidcostly delays, the industry may be coming back around to local compa-nies 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 cen-ter of a self-fulfilling prophecy.

1.2 billion lower-wage workers have entered the global economyvia China and India, putting downward pressure on wages of similarly-skilled workers outside the U.S., according to Wing Thye Woo,Brookings Institution senior fellow and professor of economics at theUniversity 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 averageunemployment rate over this period was actually lower than the previ-ous eight years (1993-2000). Also, U.S. wages have risen over the past30 years, most rapidly in these past eight years, Woo said.

He suggested that fear of China and globalization, not an influx ofnew 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 centralMinnesota business, according to Orn Bodvarsson, chair of theEconomics Department at St. Cloud State University and organizer ofthe 2009 Economic Education Winter Institute on Chinese relations.When one adds up gains and losses in central Minnesota, “you get apositive number, a net plus,” he said.

Today, Minnesota is the eighth-largest U.S. exporter of manufac-tured 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 benefitingfrom the increase in exports. President Bob Guck believes that his inter-national sales should increase significantly over the next five years as hiscompany 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 crestedand entered a new phase, said Hank Cox, vice president of media rela-tions for the National Association of Manufacturers. He noted thatincreased oil, shipping, and labor costs have recently caused someAmerican manufacturing companies to announce their relocation backto the U.S.

According to Woo, non-Chinese firms and joint-ventures produceabout half of China’s exports. Larger central Minnesota manufacturerslike Stearns, Inc. and DeZurik all have significant relationships or oper-ations in China.

However, there are good-paying manufacturing jobs waiting forskilled workers and engineers in central Minnesota, said Les Engel,owner of Engel Metallurgical and president of the Central MinnesotaManufacturing Association. The central region has become the eco-nomic engine for manufacturing in the state, and Engel expectsMinnesota 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 CommissionerDan McElroy, Minnesota Department of Employment and EconomicDevelopment, “but with uncertainty comes change and opportunity.Manufacturing is alive and well, especially right here in Minnesota.” IQ

By Mary MacDonell Belisle | Photography by John Linn

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entral Minnesota is the epicenter of manufacturing forour entire state. Every day, more than 1,300 companiesand 38,000 men and women transform raw materialinto innovative products that drive our economy andchange our world. By 2014, more than 90 percent ofnew manufacturing jobs will be located right here.

The face of manufacturing has changed. Aglobal marketplace has emerged, bringing with it anew world of technology and innovation. From themachinist to the CEO, today’s manufacturing pro-fessional 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 areworking together to build a regional advantage, solveshared problems and compete at a world-class level.

In this special section, we invite you into ourworld. Twelve cutting-edge companies wherepride meets ingenuity and family legacies are builtwith advanced technology. Let the tour begin . . .

SPECIAL ADVERTISING SECTION 31

All Pro Powder CoatingWAITE PARK, MNFounded: 2003Team: 7 full-time / 1 part-time employeesLeadership: Al and Michele HausContact: 320-258-3860, www.allpropowdercoating.com

NUTS & BOLTS: We are a custom powder coating and sandblasting facilityin Central MN. Powder coating is a way to paint metal or aluminum, suchas car rims, fencing or retail store racking. Whether it is a new part justbeing 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 customersand, if necessary, to try something that has never been tried before inorder to exceed the customers’ expectations.

CUSTOMERS: Do-it-yourself homeowner, motorcycle/car hobbyist,industrial manufacturers.

INDUSTRY SECRETS: Powder coating is an inexpensive way to restoresomething to its factory finish in an environmentally friendly way. Thereare 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, MNFounded: 1980Team: 78 employeesLeadership: Jeff Baumgartner, Founder and CEOContact: 320-275-2101, www.atsclock.com

NUTS & BOLTS: We design and manufacture synchronized clocks. Whenit comes to clocks, we do it all—complete systems, replacements andrepairs. But the new wireless technology is where we really shine. Ourengineers developed a wireless clock system that can be installed andprogrammed in 5 minutes!

PRIDE & JOY: We’re the clock experts. No matter what kind of systemclock they already have or want to purchase, we provide customers abudget-friendly solution.

CUSTOMERS: Schools, manufacturing plants and government.

INDUSTRY SECRETS: Fitting well into a stable niche market has kept usgoing strong for 29 years. People are often surprised that we have a thriving business making clocks. I guess they think clocks come fromChina, not Dassel. We make thousands of clocks every year for customersthroughout the USA.

BLUEPRINT FOR SUCCESS: We believe in working with good, solid people. This is true with employees, suppliers and customers. And wehave the best of all three.


Avicenna Technology Inc.MONTEVIDEO, MNFounded: 2000Team: 100 employeesLeadership: Chad Carson, PresidentContact: 320-269-5588, www.avicennatech.com

NUTS & BOLTS: Avicenna makes components and assem-blies for life-changing products and devices. Avicennacontinually strives to deliver the best technical and orga-nizational solutions to its customers, thereby enhancingthe customers’ ability to succeed in their marketplace.

PRIDE & JOY: Avicenna is best known for laser machiningplastic components and for laser welding metal compo-nents. Avicenna also excels at mechanically machiningplastic tubing.

CUSTOMERS: Medical device manufacturers, catheter-based devices, stimulation and pacing leads.

INDUSTRY SECRETS: Avicenna’s products are compo-nents in some of the world’s most advanced medicaldevices. Avicenna’s products help save people’s lives, anda few of Avicenna’s employees have directly benefitedfrom the devices that our products support.

BLUEPRINT FOR SUCCESS: Our customers’ success is oursuccess. Avicenna offers solutions that relieve operationalconstraints and facilitate customer growth.

Kendeco Tool CribST. CLOUD, MNFounded: 1969Team: 50 employeesLeadership: Robert Miller, PresidentContact: 800-892-8579, www.kendeco.com

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

PRIDE & JOY: Kendeco provides innovative manufacturingand procurement solutions to our customers, which helpsthem to maintain optimal efficiency in all aspects of their man-ufacturing process.

CUSTOMERS: Our core customers are in manufacturing, com-mercial and industrial sectors.

INDUSTRY SECRETS: Established in 1969, Kendeco has beenin business for 40 years. We earned our ISO certification in1991 and have upheld that certification to the current standardof ISO 9001:2000. We pride ourselves on our commitment toquality and the service we provide to our customers.

BLUEPRINT FOR SUCCESS: “Commitment to Excellence” isachieved by executing our customers’ objectives with quali-ty products and value-added services that exceed theirexpectations.


Millerbernd LaserWINSTED, MNFounded: 1933Team: 86 employeesLeadership: Brad Millerbernd, PresidentContact: 320-485-2685, www.millerbernd.com

NUTS & BOLTS: Laser Systems is a job shop supporting the food anddairy industry, wind energy market as well as OEMs in construction, utility and agricultural industries.

PRIDE & JOY: Designing and building cheese equipment and producingweldments for wind towers.

CUSTOMERS: Dairy, wind energy and construction.

INDUSTRY SECRETS: Our 6000-watt laser cutting equipment with thelarge cutting bed 84” X 240” can cut up to 1.25” carbon steel and 1” ofstainless steel.

BLUEPRINT FOR SUCCESS: Treat the customer with respect and providequality parts and services on time at a competitive price.

Pace IndustriesMAPLE LAKE, MNFounded: 1985Team: 90 full-time / 3 part-time employeesLeadership: Jeff Rivers, Vice President-Operations / Jim Hegland, Director of SalesContact: 320-963-3200, www.paceind.com

NUTS & BOLTS: Pace Industries is an experienced magnesiumresource serving leading OEMs worldwide. We offer turnkey solu-tions from product development and prototyping through full pro-duction, finishing and assembly. Let us work with you to transformyour vision into a lightweight quality part.

PRIDE & JOY: Magnesium die castings and precision machinedcastings to provide an OEM manufacturer with completed partsready for assembly.

CUSTOMERS: Hand-held electronics, electrical power tools, medical& much more.

BLUEPRINT FOR SUCCESS: Magnesium specialists from concept tocomplete: If you dream it, we make it come to life. Integrated full serv-ice customer satisfaction.


Palmer Printing CompanyST. CLOUD, MNFounded: 1966Team: 46 employeesLeadership: Steven Palmer, CEOContact: 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 customerchallenges and find creative solutions. My reward is customerrelationships averaging 15 years! It is very rewarding to bethanked 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 indus-tries: local, regional, and national markets.

INDUSTRY SECRETS: Palmer is an environmentally friendlyprinter. Manufacturing processes use CIP4 technologyenabling machines to “speak” and share information: boost-ing efficiencies and reducing waste. Use of vegetable inks,recycled and FSC papers, along with certifications as a“Minnesota Great Printer” and FSC provider, establishesPalmer Printing as a “green” printer.

BLUEPRINT FOR SUCCESS: Listen to your customers, under-stand their business, always provide more than is expectedand strive to build long-term relationships.

RiteWay Manufacturing, Inc. & RiteWay Machining, LLCLESTER PRAIRIE, MN & SEBEKA, MNFounded: 1999 & 2009Team: 49 & 20 employeesLeadership: Bob Green, Owner & President Denise Johnson, Owner & PresidentContact: 320-395-0142, www.ritewaymech.com

NUTS & BOLTS: RiteWay Manufacturing was founded in 1999when we began installing conveyor material handling equip-ment. Over the years we have expanded to machining and fabrication as well as prototyping and fixture building. We haveone 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 inven-tory 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—makingit easier to do business, guaranteed quality.

BLUEPRINT FOR SUCCESS: Your Preferred Manufacturing Partner

Your Outsource Source | $Guaranteed Lead Time$

REDUCE YOUR OVERHEAD & BURDEN, YOUR EXPEDITINGAND PREMIUM FREIGHT. INCREASE YOUR NET PROFIT ANDYOUR MARGINS.


RTEWAITE PARK, MNFounded: 1986Team: 12 employeesLeadership: Bruce Hagberg, PresidentContact: 320-252-6830, www.rte-inc.com; www.rite-soft.com

NUTS & BOLTS: RTE was founded in 1986 to assist manufacturing anddistribution companies in combining information and technology tomake better and faster business decisions. RTE solutions help compa-nies have the “rite” information to make the “rite” decisions at the “rite”time.

PRIDE & JOY: Software and consulting for accounting, inventory man-agement, HR and shop floor production.

CUSTOMERS: Small and medium-sized manufacturing and distributioncompanies.

INDUSTRY SECRETS: riteSOFT, a division of RTE, is the developer ofriteTIME Touchscreen Labor Data Collection and riteSCAN MobileWarehouse 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, MNFounded: 1968Team: 40 employeesLeadership: Barney Rieck, PresidentContact: 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 ofmolded fiberglass components, structures and assemblies servingcustomers in a variety of industries worldwide.

PRIDE & JOY: The U.S. Winter Olympic team’s luge, Rainforest Cafégiant mushrooms, onion domes atop the Mitchell, SD, Corn Palace,and Universal Studios theme park rides.

CUSTOMERS: Industrial / heavy equipment, agricultural, architectur-al, 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 WinterOlympics Luge team. The sleds were customized for each individualathlete 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.


T.O. Plastics, Inc.CLEARWATER, MNFounded: 1948Team: 175 full-time employeesLeadership: Mike Vallafskey, PresidentContact: 320-558-2407, www.toplastics.com

NUTS & BOLTS: T.O. Plastics is a stand alone, wholly ownedsubsidiary of Otter Tail Corporation. In business for over 60years employing 175 people, T.O. manufactures thousands ofthermoformed plastic parts, ranging in size from a thimble to a48” pallet.

PRIDE & JOY: T.O. is known for producing top quality packagingfor medical devices, electronic components and consumergoods. T.O. also manufactures a proprietary line of horticulturalcontainers.

CUSTOMERS: 3M, major medical device manufacturers and anationwide network of distributors serving the horticulturalindustry.

INDUSTRY SECRETS: In annual sales, T.O. Plastics ranks 40th inthe top 100 thermoformers in North America. The only secret atT.O. Plastics is the company itself. We need to market ourselvesmore effectively, as there should be no humility when it comesto touting excellent customer service, quality products and on-time delivery.

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

Viking Log FurnitureST. JOSEPH, MNFounded: 1979Team: 19 employeesLeadership: Mike Legatt/PresidentContact: 320-259-0909, www.vikinglogfurniture.com

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

PRIDE & JOY: Log beds, log chests, log dressers, log futons, logdining tables, log pool tables, log kitchen cabinets and anythinglog 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 thattakes 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.”


SUMMER 09 39

A New Brand of Science

By Sarah Colburn | Photo by John Linn

Michael Baumann sat behind his desk and debatedhis latest engineering challenge—designing a wall-mounted system for a set of stereo speakers.

His boss gave him the requirements. It had to hold at least 20pounds, be easily disassembled, move in four directions, and fit into a par-ticular box for easy packaging. Baumann used 3D modeling software tocreate his first prototype.

New engineering challenges have become part of MichaelBaumann’s life, and they usually come sometime between French andU.S. History. Baumann is a 17-year-old student at Apollo High School inSt. Cloud.

His “boss” is Mark Weimer, a teacher that pushes his studentsbeyond the chalkboard in his popular Intro to Engineering Design class.

Each year, Weimer’s class focuses on applying math, science andtechnology skills through real-world design assignments. The class isbased on a national curriculum called Project Lead the Way, which hasearned the approval of manufacturing leaders as they struggle to fill keyjobs 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 partnerwith local businesses to give students a glimpse into high-tech careers. InSt. Cloud, Weimer has partnered with such manufacturers as EngelMetallurgical, Grede Foundries, Park Industries and New Flyer. Studentshear 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, seethe 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 inWashington, D.C. He said the program was created to lure students tothe future manufacturing and technology workforce. The program wasformed after heads of automobile and aerospace companies expressedconcerns about the lack of skilled workers graduating from high schooland college.

“Something drastic had to happen,” Tebbano said.

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

‘Project Lead the Way’ LuresStudents to In-Demand Careers

The national Business Roundtable, an association of leadingCEOs, estimates that the U.S. needs 400,000 post-secondary grad-uates each year in science, technology, engineering and math toremain competitive in the global marketplace. In 2006, there wereonly 225,000.

“Students who come through our program are better criticalthinkers and problem-solvers,” Tebbano said. “That ’s whatAmerican manufacturing needs to remain competitive.”

In 2009, more than 3,400 middle schools and high schools wereparticipating in PLTW. Central Minnesota programs include thosein 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 onemillion students from 10,000 schools by 2013.

According to Tebbano, such growth in participation would beginto shore up the projected shortage of skilled labor, hopefully spurringabout 175,000 new students per year into related fields of study.

Karen Klinzing, Assistant Commissioner, Academic Excellencefor the Minnesota Department of Education, said that Minnesotaschools are now prioritizing math, science and technology educationbecause 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 educationbeyond high school. We’re preparing students for jobs that don’texist yet.”

For Michael Baumann, PLTW has been a creative outlet wherehe can see math and science in action. He’s always had an interest inbuilding things and recently focused on rims for cars – sketchingthem out on paper.

“When I got into the class,” Baumann said, “I started thinkingabout how much more I could do and what it could lead to.”

When he began his junior year, he didn’t know what he wantedto study at college. His PLTW experience eventually led him to signadmission papers to St. Cloud State University, where he plans topursue a career in aerospace engineering.

And that’s just what the class is designed to do. IQ


The Perfectionists

By Mary MacDonell Belisle | Photo by John Linn

Displayed on the ridges of a human fingerprint, itmay look like a piece of silvery glitter. Magnify it morethan 300 times, however, and you can admire its ingen-ious 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 willunderstand the pharmacist’s answer to her question.

Here’s one more—imagine a high-density connector, measuring ahalf-inch square, which holds a hundred gold-plated pins. Each pin mustline up exactly with a corresponding part in order to make the proper elec-trical 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 out-side the clients’s specs, that’s it.”

In simple terms, precision manufacturing involves producing smallmachine parts or components that operate with very little room for error,with tolerances (the allowable range of variation) registered as plus (+) orminus (-) increments of an inch. A certain part might require a tolerancewithin 20 millionths of an inch.

“(Precision manufacturing) busts the myth that manufacturing is alow-tech industry that employs a bunch of unskilled, unmotivated work-

ers,” said Sandy Voigt, InitiativeFoundation program manager fortechnology finance. “The expertsthat work at these have to be 50-percent artist, 50-percent scientistand 100-percent perfectionist.”

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

A High-Tolerance Look at Precision Manufacturing

With a goal to make Minnesota a world manufacturing leader, theMinnesota Precision Manufacturing Association recently reported record-breaking membership numbers. In 2008 they welcomed over 300 members.

In Little Falls, CMT’s 50 employees design and produce connec-tors, plastic-injection molding and metal-stamped parts for the mili-tary/aerospace, automotive, medical, consumer electronics, and telecom-munications industries.

Its end products are communication devices, hearing aids, automo-biles, and military/aerospace components. CMT’s parent company,AirBorn Interconnect, uses its nano-connectors on NASA’s MarsPhoenix Lander.

In order to assure that level of reliability, Guck guarantees tolerancesas small as one or two ten-thousandths of an inch for products no largerthan a whopping three inches.

“There are people who are cut out to do this, and there are people whoaren’t,” said Guck. “It takes patience and ability to deal with that high tol-erance. Just because you’re a tool-maker doesn’t mean you’re capable ofworking on the types of products we build.”

As Guck attests, precision doesn’t happen by chance. Many ofCMT’s components are painstakingly assembled in “clean rooms,” whichlook like glass houses as they sit on pristine manufacturing floors.Human technicians wear white coats, caps and facemasks. Since a dustparticle or hair strand can foul up an intricate manufacturing process, thefacility controls air pressure, direction, temperature, and humidity toreduce contamination.

Humans are all thumbs in some aspects of controlled manufacturing.So, computer numerically controlled (CNC) operations and robotics arealso used in the production of tiny parts.

Through its business financing programs, the Initiative Foundationinvests in high-tech manufacturing companies in order to create qualityjobs and infuse local economies with outside revenue. The foundationhelped finance CMT expansions in 2004 and 2006.

“These aren’t your grandfather’s manufacturing operations,” Voigtsaid. “These are amazing companies that don’t get the credit theydeserve, but they’re the people who support our economy with their owninnovation.” IQ

HEAR IT IS: CMT precision-manufac-tures this tiny programming contactfor hearing aids.

SUMMER 09 41

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.

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

My world istelevision production.My passion is music.

Ethan Wittrock ’09English and Mass CommunicationsCold Spring, Minnesota

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

Initiative Foundation Summer 09 Newsletter

>After ten years, the Healthy Lakes& Rivers Partnership (HLRP) Programcontinues to thrive, but challenges forcentral Minnesota waters remain.

More than 200 lake and river asso-ciations have participated in the leader-ship program that guides volunteerassociations to improve the water quali-ty of central Minnesota lakes and rivers.

Groups come away with a betterunderstanding of human impacts, as wellas grant funds to launch effective pro-grams. Projects include restoring shore-lands, conducting septic system inspec-tions, and managing invasive species.

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 hasrestored miles of natural shoreland, which provides wildlife habitat and actsas a filter for harmful nutrients.

Economically, these successes also help to sustain tourism and improveproperty values. Most of all, they preserve Minnesota’s lakes and rivers forfuture generations.

“It’s essential for everyone to remember that their decisions can havehuge consequences on the water we all love,” said Don Hickman, InitiativeFoundation senior program manager for planning and preservation. “Thetop three things people can do for their lakes and rivers are to maintain nat-ural 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 throughthe Fall 2006 issue of IQ Magazine, which was dedicated to water quality.

Decade of DepthHealthy Lakes & Rivers Partnership Celebrates 10 Years of Cleaner Water


Don Hickman

www.ifound.org | 877.632.9255

>Job-securing loans to local businesses aren’t the only waythe foundation is helping central Minnesota recover from the econom-ic recession. Strengthening safety-net programs is just as important.

In 2007, months before the recession hit hard, about 60,000 cen-tral Minnesotans were living in poverty. As that number spiked, so didthe demand for nonprofit services as families sought help for basicneeds like food, housing and energy assistance. In the St. Cloud area,Tri-CAP saw its number of home foreclosure distress calls increasefrom three or four per week to three or four per day.

Responding to such increased burdens on nonprofits, the InitiativeFoundation designed a special round of nonprofit leadership trainingfor the region’s six Community Action Programs like Tri-CAP, whohelp individuals and families make ends meet.

The 2008 Healthy Organizations Partnership program deliveredtraining in strategic planning, financial management, governance, vol-unteer recruitment and internal operations. The program helped leaders

get connected and brainstorm waysto become even more effective withtheir limited resources.

“Helping our nonprofits be aseffective as they can be is key toweathering this recession,” saidCathy Hartle, Senior ProgramManager for OrganizationalEffectiveness. “Organizations thattake the tools we offer, add their ownhard work and mix in a focus on theoutcomes are in a much better posi-tion to succeed in these times.”

HOP recently received a grantfrom the Blue Cross Blue ShieldFoundation to continue its work.

Safer Safety NetsHOP Program Helps Vital Nonprofits Work Smarter

SUMMER 09 43

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Down, But Not OutToday, area economic development agen-

cies and the Initiative Foundation are focusingefforts to attract and grow manufacturing com-panies in the region. “We’re looking for higherpaying jobs and creating more wealth in thecommunity, and that’s the sector that has doneit,” Moore said.

Through its business financing programs,the foundation has invested heavily in manufac-turing. Manufacturers represent about a third ofthe Initiative Foundation’s lending portfolio andhalf of its $12 million in total loans.

“Historically, the manufacturing sector hasbeen a very important component to sustainingeconomic development in our region,” saidRandy Olson, vice president for economicopportunity for the Initiative Foundation.“Manufacturing jobs are usually well-payingjobs in central Minnesota. We look at investingin companies with the best-paid employees andbest benefit packages in the region.”

Despite the decline in manufacturingnationwide, central Minnesota has remainedstrong. Several manufacturing industries post-ed double-digit job growth over the five-yearperiod from 2003-2007. Fabricated metalproducts, transportation equipment, and

ManufacturingCONTINUED FROM PAGE 16

1. Fabricated Metal Products 299 6,4352. Food 127 5,2163. Printing & Related Activities 94 3,8434. Furniture & Related Products 163 3,6775. Transportation Equipment 46 2,9816. Machinery 117 2,6497. Nonmetallic Mineral Products 96 2,5588. Plastics & Rubber Products 72 2,2229. Miscellaneous Manufacturing 109 1,48510. Wood Products 65 1,469

320.251.5875 www.cpionline.com/pages/IQ

PROUDLYPRINTING

SUMMER 09 45

machinery have led the gains, delivering acombined 1,710 additional jobs to the region.

Growth has slowed in the past 18 months,but about 44 percent of manufacturers surveyedin 2008 expected their gross revenues to stay thesame or increase in 2009, according to the Stateof Manufacturing Survey, released in Februaryby Enterprise Minnesota.

But misconceptions continue to weakenmanufacturing’s stronghold in communitiesthroughout central Minnesota. Negativestereotypes paint the industry as backbreak-ing, unrewarding and mundane, which dis-courages youth from pursuing in-demandmanufacturing careers. Conventional wisdomthat the industry is antiquated and in a tail-spin may also contribute to indifference bysome local governments.

“The concern I have is that there is nopublic interest in (manufacturing),” said FredZimmerman, a retired St. Thomas Universityprofessor and author of ManufacturingWorks, a 2002 book on the status of manufac-turing. “It isn’t that manufacturing is the onlything (that drives an economy), but in thefinal analysis, each community has to dosomething productive.” IQ

Source: Minnesota Department of Employment and Economic Development

COMPANIES JOBS

299 6,435127 5,21694 3,843163 3,67746 2,981117 2,64996 2,55872 2,222109 1,48565 1,469

Building Partnerships. Designing Solutions. Enhancing Communities.

Engineering Architecture Land Surveying Environmental Services

www.wsn.us.com

Alexandria Baxter Bemidji Crookston Grand Forks Red Wing Rochester Sioux Falls

Watkins Aircra� Support Products—Glenwood, MN


“We needed a place to go, and thesepeople were going to make something hap-pen,” he added.

Not only did the city, the county and thebank come together to help Newman settlein the city, they’ve come together each timehe’s expanded operations. “We’ve been sup-ported,” he said.

This confluence of support representsthe four primary factors that manufacturersneed to take root—a desirable location,financial resources, connected leaders and askilled workforce.

As cities and counties compete for manufac-turers to help grow their economy and createquality jobs, the incentives they dangle tobusiness are a huge bargaining chip.

“Manufacturers build products, and those

PLANT food, CONTINUED FROM PAGE 27

MANUFACTURERS WANTED: Joel Newman,Newmans Industries in Royalton.

JOH

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SUMMER 09 47

products need to be shipped across the coun-try,” said Randy Olson, Initiative Foundationvice president for economic opportunity.“Communities with industrial infrastructureand transportation routes in place often havethe upper hand.”

Nobody has to tell that to Jim Thares,Big Lake’s economic development director. In1999, he was tasked with filling a new 68-acreindustrial park. He accomplished his goal by2005, and the park’s companies employ about290 people today.

“We listened to each company’s needs,and we were open to all kinds of creative solu-tions,” Thares said. “Having the location visi-ble along U.S. Hwy. 10 was a huge plus.”

The park has good trucking access and isjust a few miles from Interstate 94. The cityand township worked together to bring roads,water and sewer to the site, with no tax assess-ments to the incoming businesses.

Big Lake now has plans to create a sep-arate park that caters to much larger compa-nies. Though the details are still under dis-cussion, the 200-acre park could be builtwith a modern railway spur. The spur wouldallow businesses to easily load, unload andtransport products.

“This could become a regional hub formoving imports and exports,” Thares said.“That’s pretty exciting.”

“But cities need to remember that if youbuild it, they don’t always come,” Olsonadded. “There are lots of vacant industrialpark sites in central Minnesota. It must bepart of a comprehensive strategy, and you haveto build momentum by considering the needsof your existing manufacturers first.”

Workforce Growing manufacturing companies have aninsatiable need for skilled workers, whichoften means partnering with schools and sell-ing career opportunities to local high schooland college students.

To meet workforce needs, centralMinnesota communities are working tobridge gaps between industrial education andthe in-demand jobs of local manufacturers.



Launched by the Brainerd LakesChamber with help from the InitiativeFoundation, Bridges Career Academies andWorkplace Connection is now open to highschool students in 22 central Minnesotaschool districts.

It works like this: Local businesses iden-tify high-demand careers and skills. Theyoffer tours, job-shadowing, internships andclassroom presentations. High schools providecareer counseling, teacher “internships” andrelevant coursework. Central Lakes Collegecustomizes programs and brings courses tothe high school for dual-credit opportunities.The Chamber and economic developmentleaders keep everyone talking and workingtogether. Students simply work hard, askquestions and choose a career—hopefully, ahometown career.

Similar programs in Morrison Countyhave helped Newmans Industries developworkers, and Bridges has given exposure to in-


THE RECRUITER: Twyla Flaws engages stu-dents by visiting high-school classrooms and giv-ing tours of Clow Stamping in Merrifield.

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SUMMER 09 49

demand manufacturing jobs like those atClow Stamping in Merrifield.

“(We need) our employees to look atwhat we do and how we do it and say ‘Couldwe do it better and faster and safer if we did itthis way?” said Twyla Flaws, personnel man-ager at Clow Stamping. “That’s what gives usour competitive advantage—their knowledge,their abilities.”

Creativity reigns when it comes to financingpackages for businesses. In today’s economy,fast financing can be the final barrier to amanufacturing expansion or relocation.Collaboration among banks, loan programsand gap lenders is crucial.

Creative, local lenders—those that havea vested interest in a community’s growth—are often the key to making projects happen.

Jon Vetter, vice president of lending forPine Country Bank in Royalton, said mostbanks are limited in their lending power andrequire a significant down-payment on a loan.



When Vetter works with a new compa-ny, he often considers options through theSmall Business Administration loan pro-gram, lessening the down-payment require-ments. He also works with Morrison CountyEconomic Development, Region FiveEconomic Development Commission andthe Initiative Foundation to create loan pack-ages for business clients.

Gap financers like the InitiativeFoundation make supplementary loans to helpalleviate risk or equity issues that preventbanks from participating in deals. The foun-dation has a charitable purpose with its lend-ing—to support local business ownership andsecure quality jobs.

In 2009, Pine Country Bank again pulledtogether with the Initiative Foundation, Cityof Royalton, DEED, Region FiveDevelopment, and Community Developmentof Morrison County to restructure financingfor Newmans Industries.

“Many times, our job is to be the finalpiece of the puzzle,” Olson said.

According to the Initiative Foundation, themost important factor in economic develop-ment success is whether or not a communityhas an identified “go-to” person, or better yet,a paid economic development professional onstaff. These leaders help manufacturers navi-gate government processes and connect thedots between resources.

The foundation estimates that 9 of 14central Minnesota counties and only a hand-ful of cities employ paid professionals, but itoffers grants to help pay for professional certi-fication. Several communities depend on cityclerks to fill the “go-to” role.

“There are hundreds of cities out therecompeting for companies, but the successfulones understand that economic developmentis a long-term investment that’s based on rela-tionships,” said Sandy Voigt, foundation pro-gram manager for technology finance. “I com-pare it to sales. When sales are down, itdoesn’t make sense to cut your salespeople.”

In Morrison County, Carol Anderson is asalesperson, but she’s also an ambassador, tax-payer guardian, financing professional, cheer-


SUMMER 09 51

leader and tour guide. As the executive direc-tor of Morrison County CommunityDevelopment, she’s responsible for coordinat-ing the county’s effort to attract businesses.

“It’s absolutely crucial that you havesomeone out there working with them,”Anderson said. “They’ll pass you by and moveon to the next city if it’s too hard.”

She’s there to answer questions from thebusiness, ensure they’ve seen all the availableland, coordinate resources for financing, talktax incentives, explain infrastructure capabili-ties and help solve workforce issues.

In 20 years, Anderson estimates that shehas worked with as many as 400 potentialbusinesses and helped about 20 stay in busi-ness. She has also helped several manufactur-ers start-up or expand in Morrison County.

Joel Newman still remembers her workwell. He met with leaders of other communi-ties, but only in Morrison County did hereceive Anderson’s red-carpet treatment,where all the players were present and eager toattract Newmans Industries.

“They didn’t come together like they didhere,” he said. “You just felt really welcomed.That was pretty impressive.” IQ

Carol Anderson, Morrison County CommunityDevelopment.

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WHATEVER IT TAKES

IQ: If it’s struggling, why do you believe manufacturing is theregion’s economic engine? RO: Because it is. Everyone is struggling in this economy, but we’re talk-ing about an industry that still employs 14 percent of all people in centralMinnesota. In the state, manufacturing exports brought in over $17 bil-lion last year.

IQ: When people read the news that manufacturers are eitheropening 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 bringingin new money from outside the region, and then their employees buythings at other local businesses. When things are going well, we all ben-efit. If that goes away, it shrinks the pie for all of us. And it doesn’t takelong to feel the pain.

IQ: Did you bring your crystal ball?RO: Shoot, I forgot it at home. Right now,all the signs are pointing to economicrecovery, but not without more bumpsin the road. That’s the way it typicallyhappens. At the foundation, we’reworking together with lots of smartpeople to predict which industriesare emerging in central Minnesota.Manufacturing is a mainstay, butwe see opportunities around renew-able energy, bioscience, technologyand healthcare, and they all relate tomanufacturing. We’ll continue toinvest in those businesses that createquality jobs for our communities.

IQ: Right off the bat, why is there such a negative stereotypearound manufacturing?RO: Well, there isn’t one in economic development circles. A lot of townsbend over backwards to recruit these companies, because they know whatthey bring to the table as far as quality jobs and new revenue. I think a lotof people imagine the old Ford assembly lines, and that’s not theway it is anymore. They don’t get a chance to tour the plants and see thetechnology and innovation that’s happening there. It’s incredible.

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 thinkif young people knew that they could make about $40,000 a year withbenefits, that they would have a chance to invent and create with the lat-est technology, that they could work in their hometowns and do big busi-ness with the world, well, I think that would change their thoughtprocesses a little bit.The problem is, they don’t understand that yet.That’swhy some manufacturers are having problems with attracting workers.

IQ: How do you change that?RO: Like anything, it’ll probably take timeand exposure to the industry. We have sev-eral partnerships happening that connectstudents and teachers with local companies.The thing is, we have to blow up theroadblocks and make sure these compa-nies can grow. That’s important to thefuture of our region. We hope this maga-zine will help with that.

IQ: Finish this sentence. In centralMinnesota, manufacturing is . . .

RO: Three thoughts come to mind. It’s bigger than people realize; it’s outof sight and maybe out of mind, because of that; and there’s no doubt thatindustry is struggling right now.

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


An IQ&A with Matt Kilian, Executive Editor

Randy Olson is the Initiative Foundation’s newestvice president for economic opportunity. He servedas state director of Minnesota’s Small BusinessDevelopment Centers and general manager ofUniversity Enterprise Laboratories (UEL), where heconsulted emerging biotechnology companies in theTwin Cities.

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