Just about everybody had given up on Saunders Brothers, a dowel manufacturing plant in tiny Locke Mills, Me. The factory had gone dark. The assets were on the auction block. But a woman who grew up in nearby Rumford, Me., decided the plant represented a good business opportunity.
“It was just worth saving,” says Louise Jonaitis, and today she is general manager of a revived and thriving plant with 21 employees and growing. And she’s even set her sights on bringing back to life another Maine woodworking operation that shut down, Moosehead Furniture, applying an unorthodox social work business model that has made her employees enthusiastic allies in the revival.
To the rescue
Saunders Brothers’ history as a woodworking mill dates back more than 100 years to when Harry and Arthur Saunders started the operation. As recently as three years ago, the business was doing $12 million in sales annually, and it had some 55 employees at work making dowels, turnings, buttons, plugs, and customized wood products. But all of that seemed to come to an end when the plant closed in April 2010 and was put on the auction block. Although there were interested buyers for the equipment, a problem with a small toxic waste site on the property scared most away from making an offer on the whole facility.
Jonaitis was confident that she could bring the plant back to life. After 20 years as a social worker, she wanted to see if she could apply a social work model to business and make money, too. “It was a chance to buy a $9 million mill for $400,000,” she says.
But bankers weren’t going to lend anything in this economy for such a project. Jonaitis sought private backing, bringing in as financial partner, Steve LaFreniere of Howland, Me. It all came down to auction day last August when several Saunders competitors tried to buy the mill’s equipment piecemeal. But Jonaitis and LaFreniere’s offer of $450,000 for the entire plant won out. According to one newspaper account, the purchase price was about one-third of what the town valued the property.
Avoiding poison pill
Buying a plant and breathing life into it are two different things. The first challenge Jonaitis had was dealing with the toxic waste issue. The plant would not be allowed to start up again without that taken care of. Luckily, she came up with a creative solution.
The small waste dump in question was located at one end of the property. Jonaitis convinced the town to divide the parcel and separate the mill from the contaminated land. That allowed her to get the mill up and running immediately. She formed a second corporation just for the contaminated land and is working with the town to obtain grant funding to hire people and proceed with the cleanup. Once that is done, she plans to deed the land to the town for use as a park.
Back to work
With no woodworking background herself, Jonaitis knew she needed skilled help to get the plant operating again. “I didn’t know anything about the machines,” she freely admits. “But most guys in Maine have worked in a mill. It’s a transition. I knew I just needed to get those people back. And they had the belief.”
Jonaitis’ plan to use a social work model in managing the plant first showed up in her hiring process. She contacted the former employees and invited them to interview, but they couldn’t just go back to their same jobs. She asked what they did before and if there were other jobs they might want to do. She asked if they would be willing to be flexible and do different jobs. She hired everyone for what she calls “flex positions,” giving her maximum versatility in staffing.
She also surprised the returning employees with the compensation package. “I looked at it from a human point of view. I wanted to give everybody a living wage,” she says. That meant a significant raise for many employees. On top of that she gave everyone three weeks’ vacation, insisting that everyone needs a break like that from work, including herself.
With employees coming back to work, the next question was where the orders would come from. When they started to rebuild the front office, they found there were a pile of orders still sitting on the fax machine. They started by calling those customers and seeing if they still wanted the products. In most cases they did, and many of the orders could be filled from existing inventory.
“The plant floated itself on inventory and the reputation of the plant, and on the quality of the dowels,” says Jonaitis.
One other thing Saunders had going for itself was the number of products for which it had set up dedicated machinery. Customers couldn’t easily get the same products in the same quality elsewhere.
“Also we have a really good paint shop,” she says. Using dip processes and tumbling, Saunders was always known for its paint finishes and attracted customers for that with products such as croquet sets.
Mining the old customer lists going back to the 1980s, the company is reviving old business while also attracting some new accounts. Once the company made rolling pins for Wal-Mart, but the mass merchandiser went to a cheaper product from Taiwan with plastic handles. Jonaitis thinks she can get that business back with a reasonably priced, higher quality, made in America, all-wood product.
“We’re going to be the rolling pin capital of New England,” said Jonaitis in one local newspaper report. The company recently put up a 21-foot-long rolling pin out in front of the plant as a talisman.
No to naysayers
Jonaitis is not worried about all the people who have told her she doesn’t have what it takes to run this plant. She freely admits she doesn’t have the technical expertise in woodworking, but she is confident that her employees do.
Some of those employees expressed concerns that she would try to institute lean manufacturing methods that were not well received under the previous ownership. Because there are so many dedicated machines turning out unique products, the plant doesn’t fit into the usual model of assembly line construction that lean manufacturing consultants are used to. Jonaitis calmed the employees with this response: “I told them we weren’t going to do lean; we’re going to do Yankee.”
The reference to traditional New England principals of creative, no-nonsense efficiency appealed to the employees, and walking through the plant, you can see they genuinely like their new boss, trading jokes and smiles as they get to work.
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