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Southeast Indiana update.

Consumer confidence may have given business a sharp uppercut in 1991, but most of the major employers in Southeast Indiana continued to fight back--some with surprising success.

Coming back from a definite knockout, for example, was U.S. Shoes in Osgood. The shoe-manufacturing plant, which employed about 300 people, closed in April after more than a year of soft sales sustained by its Cincinnati-based parent company. Displaced workers began writing resumes and finding other jobs. Plant Manager Jack Liles started selling off equipment and by July, had the plant almost empty when he got a call from the Cincinnati office. Liles was told business had picked up and was asked whether he could handle an order to make boots. That led to additional orders. Since then, U.S. Shoes has reinvested more than $2 million in new equipment at the Osgood plant.

"We're back up to about two-thirds of our complement," Liles says. "I've got two additional injection molding machines coming in which will require about 60 people. So by mid-spring, we'll be back to about 250 workers. I would hope by the end of '92 we'll be close to the 300 mark again." Prompting re-expansion is the new Easy Spirit comfort dress shoe, which is advertised on television by Tulane University's women's basketball team.

According to Liles, the plant shortly will be making a men's version of the same shoe, which will be promoted on television by Wilt Chamberlain. "For Osgood, it's really been a lifesaver," he says. "Without this we'd really be lost. However, we've got a good product, and it looks good for '92 and '93. We're still besieged with imports, but we can offer quick turnaround and quick delivery. Retailers don't have to carry the inventories they have to with foreign suppliers," Liles notes. And tighter inventories are a good thing in tough economic times.

Still, the recession has taken its toll.

Every county in the region except Decatur County ranked in the state's highest third in unemployment, according to figures released in December. Hardest-hit was Fayette County, which had the state's second-highest jobless rate in October, and the highest for four of the nine previous months.


Fayette County's largest employer, Ford Electronics & Refrigeration Corp. in Connersville, took a right cross from the national slump in automobile sales. It had its 3,500-person work force on four-day workweeks for much of the year to keep as many people earning a paycheck as possible.

In December, however, company officials announced that about 100 people would receive layoff notices because plant slowdowns at Ford Motor Co. had reduced orders. That was expected to push the number of workers awaiting call-backs to about 200.

The bright spot for the year was early settlement of contract negotiations with the hourly workers' union. Ford Motor Co. spokesman John Emmert in Detroit says the renewal, which wasn't scheduled until this spring, is expected to enhance the plant's position for supplier contracts for the next two years.

In 1991, retooling was the theme at Frigidaire--formerly White Consolidated Industries Dishwasher Division and Fayette County's second-largest employer until 1990, when more than half its 1,200-person staff was cut. On the brink of a plant closing, WCI switched names and began investing heavily to convert production to laundry machines. By December, the plant had two of its four assembly lines converted and producing compact washers and a stacked washer-dryer unit.

Front-loading washers are scheduled to be in production at the other assemblies by the end of this quarter. New equipment installation and continued slow dishwasher sales forced the company to lay off 80 people in September and almost 50 in January. Company officials, however, are hoping the new product line will result in more stability at the plant, and that laid-off workers may be called back and more hired.

Stant Inc., which is based in Connersville and employs 325 people at its Fayette County plant, had both good news and bad news in 1991. On Oct. 8, the radiator- and gas-cap manufacturer announced it was moving its headquarters to Richmond--the bad news for Connersville. The good news was that manufacturing operations were to remain in Connersville. A day later, company President David Paridy added more good news when he announced Stant would double its size with the purchase of Chicago-based Epicor Industries. The buy-out added between 1,400 and 1,600 employees to Stant's payroll and is expected to push annual sales to more than $250 million in 1992.


At the southern end of the region, the expected closing of Jefferson Proving Ground--announced in 1990--and the resulting loss of about 400 jobs continued to grab headlines in Madison. But perhaps the biggest news came from across the Ohio River in Carroll County, Ky., where North American Stainless Steel announced it would build a $272 million plant. Greencastle had been in the competition for the plant.

North American Stainless will employ about 250 people initially, according to Mark Campbell, the Madison Courier's Kentucky reporter. "But if this plant goes the way they say it's going to," he predicts, "within a decade they could have $1 billion invested in it and a lot more jobs than that." Both Campbell and Marie-Christine Pence, executive director of the Madison Industrial Development Corp., think that Indiana workers will get a good portion of the jobs created. That in combination with other expansions in Madison could help balance the loss from JPG.

Expansions in Madison happened at two joint U.S.-Japanese operations--Arvin-Sango Inc. and Madison Precision Products Inc. "Each doubled the size of their plants this year," Pence says. Arvin-Sango, which in 1988 began supplying exhaust systems and other automotive parts primarily to Toyota Motor Co., is spending $18 million on its expansion. When completed, it is expected that 150 new jobs will have been created; by late 1991 some of the new hires had been completed and the work force numbered 213. The plant itself has grown to 200,000 square feet, Pence says.

Madison Precision Products, a joint venture of Shelby Die Casting of Shelby, Miss., and Telsan Industries Corp., does aluminum die castings and precision machining of small engine components. Also launched in 1988, the plant primarily supplies to Honda and employed 151 people in the latter part of 1991. "They announced their recent expansion at the beginning of 1991," Pence says. "It was a $5.8 million expansion and would create 70 new jobs. They haven't hired everybody, but the building's been done."

Other expansions include construction of a $500,000 facility to manufacture steel pulleys by Holset, a division of Cummins Engine Co. Inc., and a $4 million capital improvement program at Rotary Lift. That company, which makes hydraulic automotive lifts, also is moving its headquarters and 30 jobs to Madison from Memphis, Tenn.

U.S. Rep. Lee Hamilton is continuing to work with Pence and Susan Craig of the Southeastern Indiana Planning Commission on the JPG Reuse Committee to find ways to salvage jobs, particularly in the 3,000-acre cantonment area. Ideas include a joint government-private enterprise to discover environmentally safe ways to dispose of spent artillery shells and rounds of ammunition. Hamilton and his staff are working to help the committee get a federal planning grant to develop those ideas further. The U.S. Department of Defense will close the base in 1995.


The largest employer in the region at 3,700 workers, and a Fortune 500 company with 9,600 employees worldwide, is Hillenbrand Industries Inc. It has three companies in Batesville--Batesville Casket Co., Hill-Rom Co. and Forecorp Inc. Unlike many Fortune 500 companies that have cut back in the past year, Hillenbrand continued to expand with two major acquisitions.

Le Couviour SA became Hillenbrand's first international acquisition when Hill-Rom completed purchase of the company in a friendly takeover Oct. 1. Le Couviour, founded in 1946, is the leading producer of hospital beds and patient-room furniture in France and one of the leaders in Europe. Hill-Rom is the global leader in the market. The acquisition's importance is underscored by the imminence of Euro '92. "It essentially provides the platform for Hill-Rom's expansion in Europe," says Mark Craft, Hillenbrand's public affairs director.

On Nov. 21, Hillenbrand also closed on the purchase of its seventh operating company--BLOCK Medical Inc. of Carlsbad, Calif. Founded in 1985, BLOCK employs 250 people. BLOCK has an impressive track record in research and development in the home infusion therapy market, with nine new products introduced in the past 18 months.

The weak economy continues to affect Hillenbrand's durables segment--American Tourister and Medico Security Locks--Craft notes. "But being a diversified conglomerate, those weak spots are offset by the health care and funeral services business," he says. "And if you look at the other Fortune 500 companies that are laying off people at a rate of 1,200 a day and you look at a company like Hillenbrand, we're very well managed and conservatively managed."


Jim Morrison, editor of the Greensburg Daily News, says Decatur County also has maintained growth throughout the past year, despite the recession. "We've not had major layoffs," he says. "Some people are hurting, but not like other places. "In fact, we have just come off five years where we've constructed six new factories, the last of which was completed this year. That's Hi-Temp Inc. They heat and treat stamped parts like those used in the automotive industry."

Other expansions include Blackstone-Valeo Engine Cooling Co., which is transferring manufacturing of a new product line of advanced radiator systems to Greensburg from France. The James River Corp. also added an eight-color printing press to expand its plastic packaging operation.

GECOM Corp., which makes automotive door, hood, trunk and gas latches, has expanded each year since it opened in 1987. This year is no different. "We're in the middle of expanding our stamping plant and we're expanding our office space," says Johnny Gahring, GECOM human resources and general affairs supervisor. "It's a $6.5 million expansion for a total of 81,000 square feet. We've got about 198,000 square feet now."

According to Gahring, GECOM had more than 520 workers as of the end of November. The hiring continued on into the first two weeks in December. The company's main customers are Honda, Chrysler and Nummi, a joint venture of General Motors Corp. and Toyota in California.

Gahring attributes GECOM's success to selectivity. "We were very astute in which models in the automobile industry we selected," he says. "We selected only the best sellers, and then we only took certain portions. So, every time we add a new customer and increase models within our existing customer base, we have to expand," he explains.


In Rush County, stability has been the byword among Rushville's "Big Four" employers--Trane, Copeland, INTAT and Fujitsu Ten. Each provides about 200 jobs. Fujitsu Ten, which makes car radios primarily for Toyota, just completed its third expansion in four years, adding 35,000 square feet to its facility. It now has about 100,000 square feet under roof.

"This one wasn't on the drawing board for them," says Linda Gray, executive director of the Rush County Chamber of Commerce and the Rush County Industrial Development Corp. "But because of the last expansion, they've been able to bring in equipment to do an assembly of a piece of equipment for the radios they produce." The equipment was being shipped into the country at a very large duty price per piece, so the company was able to lower its costs considerably.

An automotive castings producer, INTAT, purchased the old Dana-Perfect Circle plant about a mile north of Rushville. In 1991, it gutted and refitted the plant. The company had a lot of waste early on from new prototype melting furnaces it installed, but apparently the problems have been addressed and it's considering future expansions, Gray says.


Bill Mountsier, executive director of the Dearborn County Chamber of Commerce, says a local group of developers led by John Maxwell and known as SPARK purchased the last remaining portion of the Schenley Distillery in Greendale, and leasing there has gone well. The group has brought in a custom packaging operation, a warehouse operation and a mail-order distribution center and is talking to potential manufacturing tenants, Mountsier says.

Similarly, Wecco Corp. purchased the Alton Box Co. in Aurora and has leased out space it's not using to a trucking company and Indiana Door & Window, an automotive replacement glass company.

Mountsier says a strategic plan completed in 1991 is targeting the Interstate 74 corridor for development of an industrial park in anticipation of future growth along the northern edge of the county. Development of another industrial park in Greendale has been hampered by the area's designation as a flood plain and the resulting insurance restrictions on companies looking at locating there. D&S Machine and Cincinnati Plastic Recycling are two companies already in the park.


Switzerland County is looking at tourism as its major economic draw and the Ogle Foundation as the flame to attract visitors. One of the success stories, says foundation Director Chuck Overbey, was a celebration built around a visit from a traveling riverboat museum that made 21 stops this summer between Pittsburgh and Cairo, Ill. About 10,000 people were attracted to the event in Vevay.

"The major project, which has been financed, is a 30-acre riverfront park development," Overbey says. "We have money in it (and) the state has about $400,000 in it. The total cost is about $900,000." The development centers on the Ogle Haus Inn, a 54-room resort hotel built by Paul Ogle, the late founder of the foundation. It is expected to include a vineyard, condominiums and a golf course. The county instituted a 5 percent room tax, which it started collecting Jan. 1 of this year, to help further its tourism strategy. The Ogle Haus will be the major contributor to that. "It just passed this fall," Overbey says. "And quite frankly, they were behind it and lobbied for its passage."


Medreco Inc., a hospital bed refurbishing business that relocated to Liberty in 1990 after a fire destroyed its Richmond plant, was the big news in Union County. It won a $100,000 loan last fall from the Rural Electrification Administration to build a new warehouse that will provide 15 additional jobs. Bonnie Ross-Keasling, executive secretary of the Union County Development Corp., says ANC Quality Tool this past July became the newest company to locate in the organization's industrial park.

Madison's Pence, summing up the mood of the region, says it's been local businesses, not new ones, that have anchored many of the community economies in Southeastern Indiana. "Generally, like everyone else during slow economic times, we haven't seen much activity by new prospects," she says. "But we've been fortunate enough to have that balanced by existing-industry expansions."
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Title Annotation:Regional Report: Southeast
Author:Mogollon, David
Publication:Indiana Business Magazine
Date:Feb 1, 1992
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