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Eager to create blue-collar jobs, a small firm struggles

To own a small manufacturing business is to shoulder so many worries you hope your children find an easier career

Image Credit: Reuters
US President Donald Trump tours a Carrier factory with Vice-President Mike Pence in Indianapolis. With the president’s economic agenda stalled in Congress, a more complicated reality was taking hold, especially in Quillen’s industry.
Gulf News

JACKSON, Michigan: Anita-Maria Quillen blended a strawberry-banana shake, tucked high heels into a Louis Vuitton bag and fired off last-minute requests at her little boys and their sitter.

She stepped out her door in flip-flops, where a waiting Chevy Tahoe would take her to a business fair near Detroit. The auto parts company Quillen has owned and run for six years, Diversified Engineering & Plastics, was profitable, but only because she had aggressively cut costs. She had whittled the payroll to 78 employees from 130. Now, the most important thing was to bring in new orders — what she called “working on the business, instead of in the business.”

Quillen, 35, belongs to a much-mythologised class in American life and politics: small-business owners. Politicians heap praise on them, campaigning in their factories and extolling their enterprises as engines of good jobs and good wages. President Donald Trump’s election lifted their hopes for a resurgence.

But with the president’s economic agenda stalled in Congress, a more complicated reality was taking hold, especially in Quillen’s industry. After several door-busting years, auto sales had dropped every month in 2017. The slowdown had caught up to Quillen’s company, crimping her ability to contribute to the blue-collar revival that Michiganders had hoped for when they backed a Republican president for the first time in 28 years.

To own a small manufacturing business is to shoulder so many worries you hope your children find an easier career, and to realise how little the airy pronouncements of politicians describe your reality. Quillen, who voted for Trump, complies with the Affordable Care Act, but finds that employees who live paycheck to paycheck refuse to buy insurance at $150 a month. When her congressman visited DEP and assumed government regulations must be a burden, she assured him, no, that wasn’t her problem.

What is a problem — what threatened her profitability and the nearly 80 paychecks she signs — was maintaining her niche in the auto industry, the backbone of Midwest manufacturing.

Carmakers are “constantly pushing costs down, costs down, costs down,” Quillen said from the passenger seat of the Tahoe. “But meanwhile people want $15 an hour for minimum wage.”

Her 160,000-square-foot plant is filled with hulking machines that inject 500-degree molten plastic into steel molds. The resulting products — items like mirror brackets and window frames — go into Fords, Chevrolets and Harley-Davidson motorcycles.

But lately some of those machines have been idle. Her company had lost $3 million of work orders as of June this year. With unsold cars and trucks piling up on dealers’ lots, the big carmakers were getting ready to shut down their assembly lines for a few weeks over the summer. In a chain reaction, Quillen’s plant, too, scheduled a weeklong furlough in July.

The business fair she was attending, at a hotel in Dearborn, Michigan, promised her the vital chance to meet buyers from Toyota and Fiat Chrysler, in the hopes of bringing new business in the door.

As a young female entrepreneur, Quillen prided herself on having the toughness to make a factory run efficiently. “I have a more challenging time with the more social aspect of things,” she acknowledged.

But she could not avoid putting herself out there forever. “I need to be out meeting people, establishing those relationships, getting those potential work opportunities in the door,” she said, as if giving herself a pep talk.

Turning to her administrative assistant, who was driving, she confided that a big DEP customer seemed to be preparing to shift its injection moulding work to China. “I’ve asked them point-blank, ‘Have you guys decided to source this somewhere else?’” Quillen said. “They told me no.”

She didn’t believe it. She had sources in the company. “If that’s their choice, I understand,” she said. “It’s a business decision. But don’t lie to my face. Man up. It’s not like I’m 12 and I told you I don’t want to be your girlfriend anymore.”

Quillen, who employs 57 people on her factory floor, would like to create more jobs at higher pay in her hometown, where she went to high school and met her husband, Nick Quillen, a former teacher who now oversees the factory floor.

But an opening for a machine operator, paying $9.50 to $11.50 an hour, can create a near crisis.

“Everyone jokes about millennials,” Quillen says, “but the generation younger than me, I’ve noticed their sense of responsibility to come to work is nonexistent.”

After two days of orientation, new hires are sent for a drug test. Sixty per cent never show up.

The opioid epidemic has breached the factory’s walls anyway. Two DEP workers were fired after overdosing in the past year, one in a company rest room.

Quillen has her father to thank for her place in life — and to blame.

Travis W. Pearse Jr. was a salesman: a manufacturer’s rep, like the men his daughter now employs. The son of a banker, he built relationships and won contracts over rounds of golf with buyers for the carmakers. He was so good at it that he was able to buy a controlling interest in DEP’s predecessor company, Mid-American Products, in 2001.

Those were boom years. The company had 300 employees.

His daughter was at Michigan State, pursuing a childhood dream to become a doctor. One summer, she took a clerical job at the plant and fell in love with manufacturing.

It was controlled chaos, like on TV shows about hospitals, but with machines instead of patients. She left Michigan State and entered the business full time, first in personnel, then in purchasing.

Her father’s brand of relationship-driven deal-making was already on the decline when General Motors, Mid-American’s largest customer, sought bankruptcy protection in 2009 during the financial crisis. GM yanked away Mid-American’s largest line of business, a valve lifter guide, a part used deep inside an engine block, that provided 80 per cent of its revenues.

Mid-American was soon forced into bankruptcy.

Quillen was 28. Her mother, Armida Flores, a retired high-school Spanish teacher, had joined Pearse in the business. Quillen watched as her parents, who had personally guaranteed company loans, nearly crumbled under the pressure.

Their daughter came to the rescue. Cashing in her 401(k) and mortgaging her home, Quillen and three partners bought Mid-American’s injection moulding machines and other assets, and reopened as DEP.

In hindsight, she blames her father’s people-pleasing ways, in part, for the bankruptcy. He was too trusting of his executives, too trusting of the automakers. “There is a huge difference between a salesman and a CEO,” she tells him now.

On the last morning in June, a Friday, there was good news: The company controller reported that DEP had its most profitable month in years.

Quillen invited her executives to a toast at the end of the day, which was also the last day before the one-week shutdown.

“Just a brief story,” Quillen told executives as she uncorked a bottle of Jack Daniel’s Tennessee Honey. “I made a commitment that if we hit a certain monthly profit I would do whiskey shots. And we’re celebrating for this June that ended today, which is the best we’ve had in years.’’

Quillen walked the factory floor, hushed after the presses had been shut down and the shift workers had clocked out.

A message board on a wall silently cycled through announcements: the names of workers with perfect attendance in June; employee of the month.

She reached up for the power switch. She fumbled for it, searching the sides and the back of the monitor. Then she found it, and the screen went dark.

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