2/15/2006 2:14:00 PM Guest Column Industries need help adjusting to world economy
By BOB BERTY For The Daily News
October 2005 noted a sad passing for Hutsonville and Crawford County when Lexel was laid to rest after a long, difficult, painful struggle. More than 40,000 square feet of what was once a bustling industry is now silent as a tomb.
The factory came to Hutsonville in January of 1972 when Queen City Electric was looking for a downstate location, away from Chicago. Later that year, as the plant struggled to stay open, Mervin Stillwell of Tempco came to the rescue and bought the plant. Tempco expanded the business and in 1975 it was sold to Mamco Corporation of Wisconsin and the name was changed to Lexel.
In 1991, Lexel was turning out more than 10,000 small electric motors a day, and they were so busy that "we almost hated to answer the phone and have to tell a customer they would have to wait because we were operating at full capacity," according to Richard Machtley, plant manager. With two shifts and 150-plus workers, they were sending their electric motors to such brand names as Black and Decker, Maytag and Wal-Mart.
This past summer, before they closed, they had cut their workforce down to less than 85 employees.
Lexel was hit by the same economic force that has slammed into every American manufacturer. Labor costs, insurance and other benefits have increased each year, and some raw materials have doubled in price. Foreign manufacturers, unencumbered by regulation, respect for patents and customary business practices, became ruthless competitors, and at labor rates that were sometimes one-tenth of what we pay in the U.S.
Like lemmings, we consumers and retailers, always looking for a better deal, leaped to buy cheaper products that were imported from factories all over the world.
In the past, U.S. industries have always used their superior technology to keep productivity and quality high and prices down, but new modern machinery upgrades are expensive, so our local industries have not always been able to make all the new capital improvements needed. All American manufacturers are feeling the same cost and pricing pressures that closed the Lexel plant in Hutsonville. Some industries are fighting back by buying some parts overseas, and asking for wage and pension concessions, and some are completely changing their operations. Like it or not, we are in a world-wide market and it is tough to compete.
Most of the jobs at Lexel paid a minimum wage, and the last round of increases in the Illinois minimum-wage law put the plant at an extreme disadvantage with foreign competitors. When China joined the World Trade Organization, and got "preferred nation" status, it was the "coup de grace" for Lexel.
There will always be a place in our society for minimum wage jobs. Where else can someone who is untrained get their first job? Many workers learned their industrial skills at Lexel and moved on to higher-paying jobs or college after they gained experience. The flexible work schedule made it ideal work for those who needed extra money to raise a family or supplement pensions. As one long-time employee asked Richard when the final days came, "I can't live on my social security; what am I going to do?"
I don't believe that this is the death knell for our great industrial society, or that all of the manufacturers in the U.S. will be destroyed by foreign competition. Just remember that we "vote" with each dollar we spend, and if we continually pursue the lowest possible price, regardless of quality or the conditions under which the products were made, we will have more "Lexels."
This should be a "wake-up call" for Crawford County and the rest of our country. Every single job is vital and precious, not just to the unfortunate unemployed workers, but to all of us. Our industries need temporary protection and help as we adjust to a worldwide free-trade economy. We, as consumers, and our elected officials, need to carefully consider our options to preserve our industry and help us all steer away from a destructive path. As Pogo, the wise old swamp possum, once said in a cartoon, "We have met the enemy and they is us!"
Bob Berty is Executive Director of Crawford County Development Association. This column originally appeared in the CCDA e-newsletter; it is reprinted by permission.