Enterprise Minnesota magazine - Fall 2023

Value Added

‘It’s a Whole New Day’

Manufacturers need to understand how the onslaught of legislative action enacted by the 2023 Minnesota legislature will affect them.

Generational Divide

Metal fabricator LimPro improves its productivity and morale through communication and leadership training.

VALUE ADDED

How Minnesota’s manufacturers contribute more than economic value to the state and their communities.

The Roads Best Traveled

ISO certifications can help manufacturers address a variety of strategic aspirations.

Time to Double Down

Manufacturers need to show state lawmakers how they provide great jobs, boost economic growth, and strengthen communities.

A New Package

A new approach to presenting the results of this year’s State of Manufacturing® survey.

The 2023 version of our annual State of Manufacturing (SOM) survey promises the same insightful data that manufacturers and those who support them have come to crave each year.

At the same time, in this 15th year of conducting the survey, we’re making some changes to the way we present the findings to make the results even more useful to manufacturers. You’ll also see a surge in the number of post-secondary institutions sponsoring this year’s survey — an indication of a healthy and growing relationship with community and technical colleges across the state.

Our pollster is conducting the survey as this issue of Enterprise Minnesota® magazine is going to print, and soon we’ll have another trove of data revealing manufacturer sentiment surrounding the economy, inflation, supply chains, the labor market, and any sleeper issues on the minds of executives who participate in the poll.

This year’s survey will again be conducted by Rob Autry, founder of Meeting Street Insights and one of the top pollsters in America. Rob and his team will contact 400-500 small- and medium-sized manufacturing executives around the state, with an over-sample in Greater Minnesota in each of the Initiative Foundation regions to provide specific data for those areas.

As always, we will supplement the survey findings with focus groups — a key component of the SOM. While the survey shows what is happening in manufacturing, the focus groups offer insight on why.

About the only thing that can match the excitement of that first look at the SOM

data is gathering at the annual survey release event to share it with hundreds of Minnesota manufacturers and their supporters. And that’s where you’ll see some changes. In previous years, we asked Rob to go through the findings question by question. This year, we’ll break the results into the top themes that emerge from the survey and clients and our consultants will offer insights on how they are addressing challenges surrounding those concerns. Rob will still be on hand at the event to share and comment on the data. We’re confident that this panel format will enhance the value of the information gathered in the survey.

Readers and event participants will also see some notable additions to our sponsor list. Since the first survey in 2008, which had just a couple of sponsors, we’ve added steadily to our list of financial supporters, with law firms, banks, accounting firms, investment companies, marketing agencies and human resource consultants backing the project over the years.

This year we have seven of Minnesota’s M State technical and community colleges joining us as sponsors. These sponsorships indicate more than financial support. They are a tangible demonstration of the growing relationship between manufacturing and community and technical colleges around the state, which work tirelessly to assess and meet the workforce needs of the future. It’s great to have them on board.

Publisher

Lynn K. Shelton

Editorial Director

Tom Mason

Creative Director

Scott Buchschacher

Managing Editor

Chip Tangen

Copy Editor

Catrin Wigfall Writers

Sue Bruns

R.C. Drews

Suzy Frisch

Tom Mason

Robb Murray

Peter Passi

Photographers

Amy Jeanchaiyaphum

Robert Lodge

Elizabeth Peak

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Bob Kill is president and CEO of Enterprise Minnesota.

The Rocky Balboas of Machining

Minnesota State College Southeast students win national machining competition. The prize: $100,000.

You’ve heard of Cinderella stories in sports — the kind where a team isn’t supposed to win the championship but through grit, determination, and a sheer will to win, they’re victorious in the end.

Meet Austyn Warren, Ivey Wadman Vehrenkamp, Joe Schultz, Ellery Kiesel and Brad Bishop, the students from Rick Hengel’s machining program at Minnesota State College Southeast in Winona. These students entered a national competition they’d never attempted before and emerged national champs, taking home the $100,000 prize and enough smiles to fill a college cafeteria.

And while they were at nationals besting teams that had been winning machining competitions for years, the MSC team’s classmates were back home in Winona going through commencement.

“The day we were supposed to be graduating, we’d already got the news that we won,” says Wadman Vehrenkamp. “So missing commencement didn’t really seem like a big deal.”

The Cinderella story began months before when instructors Rick Hengel and Todd Ives noticed a promotional booth at an educators’ conference identified as Project MFG’s National Advanced Manufacturing Championships.

They’d walked by the booth several times without engaging its occupants, Hengel says, because they assumed Project MFG was selling something. When they finally did, they were intrigued. The competition was free, they were told, and if they continue to win, they can keep moving up and, eventually, make it all the way to nationals.

Project MFG’s competition is a problem-solving game based on real-world scenarios. Each phase works the same way: Teams are given specifications for a part and must then use their machining skills to execute it. They are judged on how well the machining equipment is programmed, how well parts are welded, how long it takes to get it done, and overall quality.

There was just one problem: At the higher levels of competition, the work would require a five-axis CNC machine, in which a cutting tool moves in five directions, and neither Hengel, Ives or his students had much experience with one — and the college didn’t have one in its shop.

Hengel says they decided that they’d worry about the intricacies of a five-axis machine when they got that far in the competition. It was more important, he

Austyn Warren being interviewed on Project MFG’s national competition.

says, to have fun in an event that allowed them to use the skills they were learning in the classroom. So, it was on to the competition.

For the initial phase of competition, teams compete at their schools and send the finished parts to Project MFG. And then they wait.

“In January I got an email saying, ‘Congratulations, you are in the Top 16,’” Hengel says. “But those regional finals were in Wichita, Kan., and on a five-axis machine. So, we had to scramble to figure out how to program and run a five-axis machine.”

Following a lead from a local salesman, Hengel contacted Rushford Manufacturing to see if his students might start learning on one of their three five-axis machines.

“One of their workers worked with us all day and stayed late into the night so we could run what we had programmed and try to prove things out,” Hengel says.

For regional finals, teams were sent models for the actual pieces they would be producing when they got to the competition. This gives teams

a chance to practice programming on a five-axis machine. But then, at the actual competition, the instructions and specifications for that piece will have changed. This requires students to reprogram the machine. It’s not starting from scratch, but it does require students to think on the fly, make quick decisions, and work as a team.

Student Austyn Warren says Rushford’s help was invaluable.

“Being able to prove out a program on a machine like that is a huge advantage going into these competitions. A lot of it is just trial and error. You have to be able to

run the program to see what it’s actually going to do and then make your adjustments on the fly. Being able to use Rushford’s machine was a big difference maker for us.”

After a dazzling finish at the Wichita regionals, the team advanced to nationals. There, the competition was tough, even intimidating.

“There was this team from Calhoun Community College, located in Alabama, that took first place in every category in regionals,” Hengel says. “So going into nationals, I was thinking there’s no way we can beat them.”

But you don’t win championships because you’re supposed to win. You have to play the game. And the team from MSC wasn’t about to quit.

Warren says there was a moment after they’d heard they won a trip to nationals where team members felt like just getting there was good enough. Then that feeling transitioned to “let’s at least do better than fourth.” And then that feeling transitioned again.

Austyn Warren, Ivey Wadman Vehrenkamp, Brad Bishop, and Ellery Kiesel

“We’re thinking, we’ve gotten this close — shouldn’t we go all in and make a leap at trying to win this thing?” Warren says.

They knew it was a long shot, and they knew it was going to require a ton of prep work, especially for Warren who was the lead on programming the fiveaxis machine. And all team members had external forces adding more stress to the mix — classes, exams, and capstone projects.

After another trip to Rushford, the team headed east to North Carolina.

Wadman Vehrenkamp says machining parts takes on a new dimension when you’re being watched by competitors and

camera crews, not to mention teammates who are relying on you.

“It was like a fishbowl,” she says. “I would look up and see what the time is and there are random people staring at me.”

At the end of the medical manufacturing showdown, the MSC team — after making hip replacement parts — emerged the winner. Each student who participated received a $12,500 check, with the remainder of the $100,000 going to Hengel’s program at MSC.

Hengel says he hopes the team’s success will shine a bright light on his program. He also hopes people remember that the team couldn’t have been successful without each individual team members’ work ethic and talent.

“It takes hard work, but it also takes talent,” he adds. “You can work your butt off and never get to the level that these students are at. So, what they have accomplished is pretty impressive.”

Robb Murray

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PRODUCTIVITY

Nice Work If You Can Fix It

In 1996, a teen-aged Steve Pachel decided to set up shop refinishing and building furniture in his family’s old pig barn near Osage, Minn. Fast forward to 2023 and Steve’s Woodworking, Inc. — now SWI Interiors — employs a crew of 80, producing 80-90 custom and semi-custom cabinets each day.

A building boom in the Fargo/Moorhead area, where about 60-65% of SWI’s cabinets end up, has contributed to the company’s evolution and expansion. With consistent growth in the past two to three years, SWI operations manager Kenny May says the company started a serious self-evaluation that has opened up opportunities for improvements in efficiency and operations.

Growth spurts

Pachel quickly outgrew the old pig barn

and converted a dairy barn on the family farm into his second shop. By 2007, he had outgrown that plant, too, and had purchased a sawmill in Osage for the operation. A fire in the dairy barn — before he could relocate — destroyed all the work in progress and most of his machinery, tools and materials. With the support and encouragement of suppliers, Pachel and his team spent the next two days gearing back up and were building cabinets at the old sawmill on the third day.

Pachel’s goal has always been to grow his business. “I’m not about sustaining; I’m about controlled growth,” he says. Within the past several years, additions to the 11,400-square-foot facility have increased the plant size to 65,000 square feet. He’s also expanded his market to Montana, acquiring two cabinet manufacturing companies in Billings. Each week, a

semi delivers products from Osage to warehouses and showrooms in Montana where cabinets, closet systems, wood flooring, countertops, doors, and other wood products created in Pachel’s shops end up in multi-million-dollar homes and condos in Big Sky. Each week, the semi returns to Minnesota with products built in Pachel’s Billings facilities.

Addressing issues of workflow

Pachel now divides his time between Minnesota and Montana and entrusts his managers to carry out his plans and maintain his standards. May says Pachel had been “chewing on this idea of workflow and equipment layout for some time.”

Pachel mentioned it to Kurt Landwehr, SWI’s vice president, who took the initiative. “He started presenting me with ideas,” Pachel says.

At the Osage shop, May says, “We see areas where we’re not efficient and

Fast-growing SWI Interiors uses an operational self-evaluation to improve efficiency.

Face frames are placed on the cabinets in the “Facing Line,” one of the last steps before they reach Checkpoint #1.

The current SWI facility in Osage is located at the site of a former sawmill operation.

reworking is needed, but we weren’t sure where to go. There were different perspectives among the leaders of the operation, and we felt we needed an outside perspective. Kurt is analytical and asks lots of good questions, opening up dialogue. He was the springboard to Enterprise Minnesota.”

May says SWI’s leadership team sat down with Enterprise Minnesota business consultants Bill Martinson and Eric Blaha and discussed the plant’s layout. “Eric had us select a team — about 10 people — to go through a facilities layout project. He led the charge and took us through a paper doll exercise.” May admits he wasn’t sold on the exercise at first but that it helped the team to turn the tide on some things and brought questions and possible solutions to light.

Blaha invested many hours in the door department, a typical source of bottlenecking, according to May. He says the exercise allowed them to come up with ways for the product and workflow to become more efficient.

One improvement removed a wall that was hindering flow in production, according to Blaha. “We started with a blank layout and cutouts that represented different machines and areas in the facility,” he says. Blaha split the team into two groups and instructed them to construct seven layouts each in just 2.5 hours. “This forced them to think outside the box and not strive for the perfect layout,” he says. The group then reviewed all the ideas, and no one had included the wall.

May says, “The timing worked well, and a large storage wall was finally removed between the door department, its sanding tables, and our initial check point.”

“In our long-term vision,” Blaha says, “we rearranged all the equipment in that space to support better flow and optimize our equipment and employee utilization. Short term, we moved some smaller pieces of equipment to improve the flow more quickly.” May says long-term plans will be addressed later this year and follow-up projects are helping managers and their teams learn the best ways to work within the new layouts.

Using data to solve problems

Examining hard data from the operators’ perspective was also eye-opening for the team, Blaha says. Staff from every area were involved in the project. “Part

of the process was to identify how many steps they were taking to process raw materials to finished goods. The subject matter experts for each area physically simulated the steps they would take to process material. This led to some shocking data about how much wasted motion and transportation we had, which contributed significantly to our long-term layout, optimizing flow, and reducing

transportation between workstations.” The team also identified another problem area in the assembly/shipping room where the assembly flow sends everything the full length of the building; then the assembled cabinets are transported back to the shipping door. Better flow for shipping will involve relocating the shipping door to the end of the building where assembly is completed.

Start to finish for building cabinets, May says, they “want 12-14 days once the order has hit production control.” Cabinets are “just in time” products in construction: Contractors don’t want them early because they’re not ready to install them; manufacturers don’t want to warehouse cabinets unnecessarily either. An optimum flow of assembly and shipping helps both the contractor and the manufacturer complete and deliver/receive the products just in time.

Sue Bruns

“I’m about controlled growth,” says SWI Interiors owner Steve Pachel.

A worker in the production area crafts a cabinet drawer at the SWI plant in Osage, Minn.

INNOVATION

Pipe Dreams

Akkerman’s new state-of-the-art training facility.

From its 78,000-square-foot manufacturing facility in Brownsdale, Akkerman, Inc. produces high-grade tunneling and boring equipment capable of delivering underground water and sewer lines across distances of hundreds of feet and through complex, developed urban areas.

Akkerman’s customers are construction firms — including big industry names — that specialize in trenchless underground construction. Most of the work is in sewer installation, often for municipalities demanding tight tolerances while navigating existing gas and water lines, through pressurized ground and under rivers, and beneath functioning roads and railways.

Company president Justin Akkerman says his company prides itself on precision, based on decades of research and development. That product, however, depends on skilled operators, and the industry it supports is facing increased turnover and a need for faster and more effective equipment training at greater scale.

For a company with a history of innovation, it’s just another opportunity knocking.

Pipe jacking

Akkerman, Inc. today got its start in the late 1950s as D.H. Akkerman Construction. Don (D.H.) Akkerman and his small team dug out trenches, laid pipe, and backfilled it all with soil. It was exhausting and time consuming. Where construction needed to take place under existing roadways, pits were excavated on either side of the road. Below ground level, one man would work to shovel out soil while others used mechanical jacks to push pipe farther into the excavated space.

Push the pipe forward, retract the jacks, set a new pipe, weld, push, repeat: They call it pipe jacking.

By 1963 the company developed its first tunnel boring machine (TBM) to increase both safety and efficiency. D.H.’s accountant suggested selling the innovative TBMs to other construction firms, and in 1973

Akkerman, Inc. was born.

Decades of research and development have refined those early machines through improved materials and processes and the addition of high-tech solutions, like laser guidance systems. Akkerman now handles three main product lines, which include the more traditional manned TBM machines for larger applications, smaller remote systems for pipes with a diameter under four feet, and specialized machines for working in pressurized ground, such as under rivers.

Justin Akkerman, grandson of D.H., acknowledges that it’s a niche market, but one where the company stands out by standing behind its product.

That begins at the point of delivery. New customers receive on-site training from Akkerman’s traveling technicians before their operators handle new equipment. The model has worked well enough, but an active work location in the middle of a contract has never been the ideal space to hold class — idling construction sites bleed money.

“A lot of this is labor,” Akkerman explains, saying that the costs add up for his company and his clients. They needed a new way to train.

Experience at hand

The solution was to create a roughly quarter-million-dollar training facility at Akkerman, Inc.’s 83-person headquarters. In

Akkerman’s tunnel boring machines are deployed to any location and in any weather.

Justin Akkerman, president

early July, the company began construction of a 140-foot-wide above-ground training center. Built in a fashion not unlike a raised garden bed, the structure will be divided into three 40-foot-long channels that stand approximately six feet tall and are filled with materials ranging from soil to rocks.

Customers will send their teams to Akkerman to train upon hiring or during down time, reducing losses to delayed work. Akkerman will still send its technicians out on site to help with new equipment as needed, but much of the training can be handled in Brownsdale.

“You’re at our facility, you have a lot of resources. You’re not under the gun, on the schedule,” Akkerman explains.

The facility will also enable Akkerman to train its new technicians at home and greatly reduce costs for research and development. In the past, the company has collaborated with clients to schedule time to test out new and prototype equipment at active project sites. The real-world testing is informative, but having to impede on a client’s work can strain relationships and mean that failed prototypes fail publicly rather than privately.

“It will be huge for us to do any type of research and development at our facility prior to getting with our customers,” Akkerman says, noting that the new facility will allow analyzing a broader range of products in more realistic circumstances

without leaving home.

As one final benefit, clients visiting the Akkerman HQ to view products in person will now be able to see a broad assortment of equipment in use after minimal setup — something Akkerman believes will raise his customers’ product awareness.

“I think there’s a better value if we can get our customers to our facility — see our people, see our equipment, interact with everyone,” Akkerman says. “That is money well spent.” He explains that in the past few years the company has diminished its presence at trade shows, due largely to the costly nature of setup and transporting heavy equipment.

The Akkerman, Inc. training center is expected to open in September.

“The concept as a whole is really quite innovative,” says Enterprise Minnesota’s Business Growth Consultant Abbey Hellickson. “It’s such a great way for them to interact with their customers and bring their customers into their facility and engage on a very different level than what they’ve done before.”

R.C. Drews

from the University of South Dakota, Marquardt spent eight years as economic development director for the city of Montevideo. From there he moved on to SWIF.

Marquardt says he hopes to continue a tradition of building trust between SWIF as a lending and economic development organization and the community.

“We are a relationship-based organization — relationships with our borrowers, with our businesses, with our fellow lenders and partners,” he says. “It’s important to reach new people who we can invest in, but also be by their side during the ups and the downs. Relationships are critical to everything that we do.”

If you’re unfamiliar with the initiative foundations around the state, it’s quite simple: They loan money. And manufacturers are one of the biggest beneficiaries of such loans. In SWIF’s

The Hometown Advocate

If you’re a small- to medium-sized manufacturer in southwestern Minnesota, you might want to get to know Scott Marquardt.

“If your business has a capital need, call us,” says Marquardt, the relatively new president of the Southwest Initiative Foundation (SWIF). “I don’t want to put the burden on the entrepreneur to figure out if we’re a fit or not.”

Marquardt is the new — and optimistic — president, having been installed in February. He’s new to the job, but not new to SWIF. A resident of Montevideo, he has led SWIF’s economic development work for the past 15 years, most recently as senior vice president. Marquardt succeeds Diana Anderson, who oversaw SWIF as president and CEO for 21 years. After earning bachelor’s and master’s degrees

more than 40 years of existence, nearly 35% of all loans have gone to small- and medium-sized manufacturers.

Marquardt hopes to continue that trend. Loans to manufacturers have the highest limit; such loans, which typically cover the high equipment costs manufacturers face, can be up to $300,000. He also concedes that a SWIF loan may not be best. It depends on the manufacturer’s needs, and that’s why Marquardt urges anyone interested to call him.

Marquardt cites a study conducted 10 years ago by SWIF and the Southern Minnesota Initiative Foundation (which together cover all of southern Minnesota) that found manufacturing comprises 20% of all jobs in their areas combined.

“That is statistically significant and very different than if you took a similar region in any other part of the country,” he says. “Because of that report, our loan limit for manufacturing is double what it is for other sectors.”

Marquardt says SWIF’s loans aren’t

Scott Marquardt, president, Southwest Initiative Foundation

SWIF’s new president emphasizes the importance of manufacturing to southern Minnesota.

“Call us, share the dream, share the need. It’s my job and my team’s job to figure out if we’re a good fit or not.”

–Scott Marquardt, president, Southwest Initiative Foundation

necessarily the most or least expensive, but somewhere in the middle. An interest rate for an equipment loan drawn up today will probably be 5-6%. They don’t grant credit lines and all loans are fixed-term.

Marquardt points to a few case studies to illustrate the diversity of clients they’ve worked with.

● Millennials Mark Eiden and Tobias Flood founded Metal Trade Solutions LLC, a metalworking job shop in Winsted. SWIF’s Microenterprise Loan Program got them started with a loan to purchase a CNC plasma cutter. Five years later, the business is thriving.

● Keith and Ashley Fredrickson opened K&A Sheetmetal Fabrication in Hutchinson with help from SWIF’s Microenterprise Loan Program. The new business produces HVAC duct, architectural flashing and custom enclosures as well as providing general sheet metal fabrication. A SWIF loan provided capital to purchase the equipment.

● Midwest Fire Equipment & Repair

Company in Luverne manufactures fire tankers and pumpers. Last year, SWIF helped Sarah and Dean Atchison purchase the business. This involved collaborative financing assistance from SWIF’s Business Finance Program, The First National Bank in Sioux Falls, Prairieland EDC, and the Southwest Regional Development Commission.

Assessing the state of manufacturing, Marquardt says the diversity of industry types is healthy for the region.

“We have a very diverse manufacturing base with a significant number of sectors, from agriculture to electronics to everything in between,” he says. “We’ve engaged with a lot of food manufacturing, construction, manufacturing of construction materials, a geothermal heat pump company, to name a few. That’s very different than if we were dominated by one sector.”

A big part of Marquardt’s job is to make communities attractive to businesses.

This means advocating for affordable

housing and childcare. Both represent significant costs to families, and both are increasingly scarce. Such a priority, Marquardt says, helps all manufacturers, not just small- and medium-sized ones.

“A major focus for me has been

working with communities on childcare projects. We think that impacts manufacturing,” he says. “We also support housing studies in communities, which are obviously informed by the entire manufacturing sector.”

“We believe the manufacturing sector in southwest Minnesota brings hope for the future of our region,” he adds. “And a lot of that investment is in manufacturing right now.”

Robb Murray

A big part of Marquardt’s job is to make communities attractive to businesses.

STAFF PROFILE

The New Kid No More

Business Developer Dave Kvasager learned how to break into a corps of Enterprise Minnesota’s most trusted advisors (including his own dad).

In early 2018 Dave Kvasager was in Monticello, sitting in on his first Peer Council, which is a group of monthly meetings that Enterprise Minnesota organizes to enable manufacturing to have a half-day’s worth of confidential conversations with other senior executives. It was very early in his tenure as a business development consultant for Enterprise Minnesota.

As he remembers it, Enterprise Minnesota’s president and CEO Bob Kill began the meeting by making a conversational reference to some staff turnover among his ranks.

“I don’t even know who my business

developer is,” said Matt Hanson, president of Hanson Silos, a prominent member of the Council and a current member on Enterprise Minnesota’s board of directors. Kvasager shifted in his chair like a bridegroom whose father-in-law had forgotten his name. Hanson was his customer — not a great way for Kvasager to show his new boss how well he’d been polishing the apples of his most prominent new customers.

Kvasager doesn’t know to this day whether the good-humored Hanson was saying this at his expense. But he did know this: “I knew I had to learn to speak up more. It’s not always easy for me. I

had to get more outgoing and talkative. Other people are much better at getting up and speaking in public. I’m still terrible at that.”

Most people might describe Kvasager’s workstyle as “quietly effective,” the kind of person who is happier to absorb a room by listening before offering consultative advice, not the type of dynamic demeanor that always leaves a memorable Name ID. “Dave gets the job done,” says Kill now. “People love to answer questions if you ask the right ones.”

The Monticello Peer Council also illustrated that he was trying to fill enormous shoes.

Kvasager was breaking into a cadre of deeply respected consultants. Bill Martinson, Sam Gould, and Rick Kvasager had been driving the highways and back roads of northwest Minnesota, advising small- to medium-sized manufacturers on behalf of Enterprise Minnesota for nearly 100 years between them. All engineers by training, whose friendly demeanors, deep experience, and results-oriented advice had created lasting relationships with manufacturers. Only Martinson has not surrendered to the

Dave Kvasager, business development consultant, Enterprise Minnesota

Inside Enterprise Minnesota An ongoing series.

temptations of retirement.

Joining Enterprise Minnesota as a 32-year-old, the younger Kvasager knew what he was getting into. He grew up in Alexandria with his dad’s long career at Enterprise Minnesota, but it wasn’t until he was grown and out of the house that he knew what his dad did for a living. “He didn’t talk a lot about what he did. My friends all thought he was in the CIA or something like that,” he recalls. Dave got a better sense of his dad’s occupation after he moved to Bloomington, where he first worked as a salesman for Patton Industrial Products after graduating from University of North Dakota’s business school in 2007. At his dad’s invitation, he attended the 2007 version of the State of Manufacturing® (SOM) survey rollout at the Minneapolis Convention Center.

“I went mostly for the food,” he admits today, but was introduced to Bob Kill for the first time and came away intrigued by the statewide prestige that Enterprise Minnesota consultants brought to their manufacturing clientele statewide.

After moving back to Alexandria to work a few years for a local manufacturer, Kvasager snuck in a couple of golf games with Kill, and, with his father’s encouragement, became more intrigued about the possibility of taking over for the senior Kvasager at Enterprise Minnesota. “My dad mentioned it to Bob, who liked the idea.” He says the transaction went quickly.

Along the way, the younger Kvasager let his style work for him, enjoying time to get to know customers and potential customers in a low-key personal way. “I like driving,” he says. “I like getting in front of people every day.”

“He’s a big believer that face-to-face contact beats everything,” Kill says. “And so am I.”

Tom Mason

“I like getting in front of people every day.”

–Dave Kvasager, business development consultant, Enterprise Minnesota

STATE OF MANUFACTURING

Closer Scrutiny

The upcoming release of the State of Manufacturing® will integrate poll data with the real-world experience of manufacturers.

Followers of Enterprise Minnesota’s State of Manufacturing (SOM) annual survey will find the data from this year’s 15th version released with an innovative new wrinkle, according to Lynn Shelton, the organization’s vice president of marketing and organizational development. Shelton told a recent luncheon gathering of the poll’s platinum sponsors that the release will introduce the poll’s findings by theme and include video commentary from prominent manufacturers.

The SOM annually interviews a statistically valid sample of 535 manufacturing executives statewide to identify challenges and opportunities they see in growth, workforce, supply chain, economic confidence, and more. The surveyed executives represent a broad mix of manufacturers by region, employee count, and annual

revenue.

The data will be released on November 9 at the Minneapolis Marriott Northwest.

Pollster Rob Autry, founder of Charleston-based Meeting Street Insights, will again personally present the data publicly as he has for every SOM survey since its founding. But instead of a question-by-question account of the data, he will organize his analysis into a deeper dive by relevant themes.

Shelton says the idea occurred to her when she realized that SOM’s significant innate strength has always been understood by integrating the poll data with how manufacturers reacted to it during the focus groups. “The poll data can tell us what they think,” she says. “The focus groups tell us why.”

She says she initially hesitated to adjust the format of Autry’s presentation because

of the “pin drop” attention it receives from attendees each year. “It has always been a captivating presentation,” she says. But Shelton made the final decision after pollster Autry voiced strong enthusiasm for how the new approach would make the poll findings even more relevant. “He’s more excited than I am,” she adds.

Focus groups will take place from Sept. 6-Oct. 12. See sidebar for details.

Enterprise Minnesota conceived the SOM 16 years ago as an annual survey research project to enable manufacturers to voice their thoughts and concerns

before a broad public audience, notably policymakers and government regulators. It became immediately evident that other thought leaders were attracted to the exclusive information. They include community and civic organizations, the professions (accountants, lawyers, etc.), educators (from elementary through postsecondary, particularly trade schools), and other manufacturers.

Kurt Bear, Enterprise Minnesota; Elizabeth Juhnke, True North Mergers & Acquisitions; Jenifer Odette, DAYTA; Jim Schottmuller, Enterprise Minnesota

“The State of Manufacturing has exceeded all expectations,” Lynn Shelton says.

PHOTOGRAPHS BY ROBERT LODGE

To accomplish this with unassailable credibility, Enterprise Minnesota retained Autry, one of America’s top pollsters, who has conducted every SOM survey. The project includes augmenting the objective polling data research with subjective details gathered from a dozen or more focus groups convened throughout the state each year.

Enterprise Minnesota publishes the results in its quarterly magazine along with a generously-circulated book (now published digitally) that contains a complete analysis of the results and full transcripts of each focus group.

Enterprise Minnesota hosts a large public release event during which Autry personally shares the results. Bob Kill, Enterprise Minnesota’s president and CEO, follows this with a dozen or more regional “rollout” events. He then frequently is asked to share the results in testimony to the state legislature, even the U.S. Congress, and through speeches at business and community civic organizations throughout the year.

“The State of Manufacturing has exceeded all expectations,” Shelton says. “It now connects the entirety of

2023 State of Manufacturing Focus Groups

Wednesday, September 6 Statewide Virtual

Tuesday, September 12 Montevideo, MN Table Two Twelve Chophouse

Thursday, September 14 Duluth, MN Fairfield Inn & Suites

Friday, September 15 Statewide Virtual

Friday, September 15 Pine City, MN Pine Technical & Community College

Tuesday, September 19 Alexandria, MN Alexandria Technical & Community College

Thursday, September 21 Brooklyn Park, MN Hennepin Technical College

Monday, September 25 Winona, MN Minnesota State College Southeast

Tuesday, September 26 North Mankato, MN South Central College

Thursday, September 28 Minneapolis, MN Dunwoody College of Technology

Friday, September 29 St. Cloud, MN St. Cloud Technical & Community College

Wednesday, October 11 Thief River Falls, MN Northern Municipal Power Agency

Thursday, October 12 Roseau, MN Location TBD

Minnesota’s small- and medium-sized manufacturers.” Daily newspapers typically report the results in above-thefold detail in their print business sections

and throughout digital media. The rollouts are attended annually by more than 1,000 people (the Twin Cities event once exceeded 600 people).

A diverse assortment of sponsors has offset the cost of the project and spreads the results and mission among their own exclusive constituencies.

Bob Kill attributes much credit for the ongoing — and increasing — success of the State of Manufacturing to the project’s sponsors, many of whom have supported the project since its inception. They help underwrite the enormous costs related to the project, he says, but more than that have evolved into true stakeholders. Sponsors, who are granted exclusive rights within their own market niche, play a role in publicizing the data to their individualized communities.

“They’re not looking to get broadbased recognition as sponsors as much as find the opportunity to build relationships with manufacturing executives all across the state,” he says.

He added that the poll has helped communities recognize the value that manufacturers bring to their local economies, “including that they provide the best-paying jobs within driving distance.”

Bob Kill, Enterprise Minnesota and Joe Mayer, Olsen Thielen

Lori Kloos, president of St. Cloud Technical & Community College and Joy Bodin, president of Hennepin Technical College

Four Questions

John Connelly looks back on the role of Enterprise Minnesota and the Manufacturing Extension Partnership (MEP).

Is it fair to say that many people — even your customers — don’t have a strong sense of what MEP does and how it works alongside Enterprise Minnesota?

Many people still describe it as a best-kept secret. The MEP Initiative is housed in NIST — the National Institute of Standards and Technology — which is part of the Department of Commerce.

Back in the late ’80s, when we (as Minnesota Technology, the original name of Enterprise Minnesota) pursued our application to become part of the MEP, the state of Minnesota’s vision for supporting manufacturing overlapped very tightly with MEP’s language to improve the competitiveness exclusively of small- and mediumsized manufacturers of manufacturing. We were in the second cluster of MEP’s first seven regional centers, the Upper Mississippi Manufacturing Technology Center.

The challenge was that they were trying to cover multiple states, but the funding formula supporting them required the states to be part of the funding. They ran into states that were happy to support manufacturers in their state, not other states. That led to the evolution that every state would have an MEP center.

What was the origin of the MEP?

The MEP model grew from the ag extension services decades ago. The ag extension was put together when most farms were family farms that were insulated from each other because everything revolved around the work they did on their farm. The ag extension agents brought them science, technology, and college advice to strengthen them. So, that’s a little bit of what we do. We reach out to individual manufacturers to try and bring them experience and advice.

What has given you the greatest surprise as you’ve worked with Minnesota’s manufacturers for 30 years?

I don’t think I would call it a surprise as much an enlightenment. In the early stages, there was the belief that every-

thing was about advanced manufacturing. Our focus was almost exclusively on productivity, as manufacturers looked at significant emerging competition from Japan.

Each MEP center was dedicated to helping manufacturers understand and

John Connelly, Enterprise Minnesota’s vice president of consulting, recently celebrated his 30th year with the company. An essential part of his responsibilities has been to manage Enterprise Minnesota’s connection to the Manufacturing Extension Partnership (MEP) national system and its nationwide network of industry resources.

MEP’s national system provides U.S. manufacturers access to resources to develop new products and customers, expand and diversify markets, adopt new technology, and enhance value within supply chains. Through his connection with MEP’s national system of 51 independent centers and 1,450 field staff, Connelly is well-positioned to understand manufacturers’ challenges and opportunities. After graduating with a degree in business administration from Penn State, Connelly started his career as a regional sales manager and sales/marketing manager for a manufacturer of automotive wheel service equipment. He has served as a regional sales manager and customer service manager for a manufacturer of engineered motion controls, as a director of program management for a gear systems manufacturer serving the aerospace industry, and as a general manager for a tooling and machining company.

Connelly is a frequent speaker at industry events and a published writer on manufacturing trends and best practices.

utilize the basic elements of lean and continuous improvement. We were all talking about machining centers, tooling, and speed rates. Over the years we started to recognize how leadership teams are either the single biggest lever to help a business forward, or the single biggest obstacle to growth.

What I find enlightening is all that emphasis on hardware and software process really subordinates itself to leadership, vision, commitment, and skill to communicate. We progressed from lean to quality management systems, and from there, we moved to strategy and marketing and then to leadership.

What gives you the greatest source of satisfaction working with manufacturers?

It’s every time I get a chance to walk into a manufacturing facility or talk to a consultant about what they’re going to do to help a manufacturer. I was in

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Two Harbors recently and had a chance to talk to one of our new customers. We talked about the things the business is going through and looked at their product line. While the new product is huge, it doesn’t generate the kind of margins we’re after. So, we talked about how we might efficiently improve that. I still love those conversations.

Yesterday I was in Staples and Detroit Lakes with a couple of our new consultants, really expert, skilled people. We were talking about how they can propose ideas to clients who might say, “we know better” and “we’re unique.”

I really enjoy those conversations with individual consultants. What should I say? How could I say it? How could I do it? I love helping consultants find ways to help their clients understand what they’re facing, and what they’re thinking about.

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“I love helping consultants find ways to help their clients understand what they’re facing, and what they’re thinking about.”

Making

By Peter Passi

Value Added

How Minnesota’s manufacturers contribute more than economic value to the state and their communities.

HAPPY EMPLOYEES Aagard’s culture of mentoring

For the past two years, manufacturers have told Enterprise Minnesota’s annual State of Manufacturing® (SOM) survey that their top aspiration has been “to be considered a great place to work.”

Many observers consider the Aagard Group in Alexandria an exemplary employer for the way it brings new hires into the fold and makes them feel valued with the help of a mentoring program.

“They invest back in their people,” says Michele Neale, a business growth consultant for Enterprise Minnesota. Aagard designs and manufactures automated packaging systems, custom-built for a wide variety of businesses.

Sharlo Meyer, director of human resources and organizational development, says the business has seen demand for its services grow through the pandemic, largely as a response to a tight labor market and the push to automate.

“That’s what we do,” she says. “We automate those processes to help clients deal with labor constraints.”

Aagard has enjoyed steady growth. The company employed 90 people when Meyer joined the company about 15 years ago. That number had doubled by 2016, and today the business has just shy of 300 people on its payroll.

Aagard hired 26 people in the past year, all of whom were paired with mentors.

Neale praises the practice, saying it

helps new hires feel “that there’s somebody they can talk to and ask questions of.”

Meyer says the approach makes a difference and helps build a sense of camaraderie.

“We want new people to have a welcoming experience,” she says. “We have found that if they have at least one person who they feel a connection with — kind of a go-to person — they just feel so much more comfortable.”

Mentors and mentees go to lunch on the company’s dime once a week during the first month of employment.

“It’s really all about building relationships,” Meyer explains.

She says employees who have benefited from mentorships are eager to serve as mentors themselves, as they gain greater

experience.

Aagard also strives to create an inviting environment by welcoming table tennis, foosball, and cornhole games into its lunchroom.

“There’s just a lot of fun that happens during breaks,” Meyer says, explaining that the friendships can lead to better teamwork and worker retention.

The upbeat culture of the company is palpable, even for casual visitors, as evidenced by the number of smiling faces Neale says she regularly encounters around

Aagard’s installation team

Table tennis in Aagard’s lunchroom

Aagard’s headquarters in Alexandria, Minn.

Making a Difference AN ONGOING SERIES

its two facilities.

“There’s an energy in the building,” Neale says. “You just can’t help but know that’s a great place to work.”

Meyer says smiles are to be expected at Aagard.

“One of our values is positivity. We’re looking for people who do smile and bring that positive energy. We look for those types of attributes when we interview people, because those are the values we want to bring in. A lot of it goes back to hiring to our values and being very true to that,” she explains.

Aagard prides itself on maintaining a bright, clean, inviting workspace, Meyer adds.

in Neale’s eyes. “I think it’s all about collaboration. They want to make sure opinions are shared and heard.”

Aagard recruits new talent from colleges and technical schools throughout the Upper Midwest.

The company typically has about 20 summer interns and around a dozen internships that run through the academic year.

“It’s a great pipeline for us. And the goal is to convert our interns into full-time hires. We’re very transparent about that,” Meyer says. “We hire the best people we can, and we grow them.”

DEEPENING THE TALENT POOL Winona’s local employers underwrite college

With the knowledge that a deeper local talent pool benefits all employers, many manufacturers are removing barriers to higher education.

This fall, for example, individuals and organizations in the Winona area — including five manufacturers — underwrote the “College Opportunity Program,” a scholarship that covers tuition and other materials at Minnesota State College Southeast.

A subsequent meeting with thenRiverland President Adenuga Atewologun introduced Danielson to the Austin Assurance Program, which was born out of the college’s partnership with The Hormel Foundation.

“I just thought it was such a wonderful idea, because employers are having such a hard time finding the talent that they need,” she says.

Nationally, about 40% of high school students graduating today do not receive

“That stigma of manufacturing being dirty and dingy is just not the case. It’s a very technical career, and we provide a very nice environment for our people,” she says.

Aagard doesn’t refer to staff as employees, Meyer says, but rather as team members, “because we are.”

“Our values are winning together honorably, passionately, and positively,” she says.

“With the very complex equipment that we are building and designing, it takes a lot of brainstorming and people’s minds coming together to come up with the concepts and build these systems,” Meyer says.

Working as a team is just critical, she adds. “We’re always bouncing ideas off one another.”

“They’re part of an elite group of employers in that they have their values and they really try to live out those values every day,” Neale says. “They’re not just words on a page or words on a wall.”

That commitment to maintaining open lines of communication sets Aagard apart

“I was honestly blown away by the response from our local business community,” says Marsha Danielson, the college’s president. “They were amazingly generous,” she says of business support for the three-year, multi-million-dollar pilot program.

When Danielson began her leadership position in July 2021, she recalls reviewing reports that showed slipping enrollment numbers for Minnesota colleges, with one exception: Riverland Community College in Austin and Albert Lea.

“There’s an energy in the building,” says Enterprise Minnesota’s Michele Neale. “You just can’t help but know that’s a great place to work.”

Minnesota State College Southeast – Winona campus

Dan Florness, CEO, Fastenal

any additional training or formal education.

“And our local high schools are in that same ballpark,” Danielson says, noting that the largest barrier is typically financial rather than academic. That holds for reasons why people say they choose to drop out of college, too.

Fastenal, the Winona-based distributor of industrial and construction products, became an early supporter of the local initiative.

Company CEO Dan Florness says Fastenal has long been a strong supporter of education, and it’s a firm believer in worker development.

Florness was quite willing to hear Danielson’s pitch.

“Generally speaking, we hire folks early in their career when they don’t have a lot of experience with doing business. We go out and find great people. We ask them to join, and we give them a reason to stay,” he says. “One reason is how we treat each other, and another is how we challenge each other and develop each other.”

He says it doesn’t matter whether students who enroll in the program get a two- or four-year degree. “They’re going to be a better employee in the community. They’re going to be a stronger member of the community, and quite frankly, for a bunch of these kids, we might change their outlook for life.”

“All of a sudden it opens up the opportunity for this person to have a more meaningful career. And that’s better for everybody,” Florness adds.

The Winona program is one of about 350 similar “promise programs” across the nation that come in “many different flavors,” according to Danielson. But Southeast’s program stands out for its sheer simplicity.

The sponsors didn’t limit the program to certain fields of study applicable to their labor needs.

“They didn’t want people to decide to go into an occupation in order to get the free tuition and fees. What they wanted students to do is know they have the opportunity to go to college and improve themselves, wherever their passion lies,” Danielson says.

Danielson initially wanted to require participants to maintain a minimum grade-point average of 2.0, until she ran into a CEO who said, “I run a world-wide company, and I was a D or worse student. I think we’re eliminating people and their potential if we do that.”

“Everyone in the room agreed,” Danielson recalls.

So far, almost 130 students have expressed interest in the program. Of those, 116 were admitted, and 81 had registered at Southeast as of late July. The college’s total annual enrollment has been running at about 2,500.

Danielson says the program could yield benefits on multiple fronts.

“There are companies that move to communities with promise programs because they’re investing in their youth, and they know there’s a pipeline into that local workforce,” she says.

“I feel that with increased automation and increased IT and AI, that our manufacturers realize their employees are going to need to have higher skill levels and knowledge beyond what a high school education provides,” Danielson says.

She cites anecdotal evidence that families in the Austin/Albert Lea area were relocating to gain access to the educational benefits.

Danielson says Southeast is looking to

provide wrap-around support, including help with admissions and financial aid paperwork, too.

The perceived financial barriers to higher education are often less formidable than people might suspect, given the various forms of support that are available, Florness says.

But he notes the College Opportunity Program encourages young people to consider a path they might otherwise have ruled out by providing what Florness calls “a financial backstop” of sorts, should other aid sources prove inadequate.

Danielson describes the offering as a “last-dollar program” that kicks in to fill

any financial gaps that may emerge.

Florness says the program is intended to “demystify” funding for higher education.

“Sometimes you have bright kids who don’t feel motivated. Then all of a sudden, they see: Here’s an opportunity in my life that maybe I didn’t see before,” Florness says.

That can lead to an important “light-bulb moment,” he suggests.

Fastenal does business in 26 countries. The company employs around 1,700 in Winona and 23,000 world-wide.

Florness believes local employers’ support for the College Opportunity Program sends a message.

Florness suggests other communities could follow suit.

“Things like this can gain traction. And I don’t think Winona is unique or Austin is unique in that regard. A lot of communities have people who would get behind something like this,” he says.

The Winona program is one of about 350 similar “promise programs” across the nation that come in “many different flavors,” according to college president Marsha Danielson. But Southeast’s program stands out for its sheer simplicity.

Marsha Danielson, president of Minnesota State College Southeast, in a mechatronics lab.

Making a Difference AN ONGOING SERIES

EVOLVING WITH THE TIMES

Hot and dirty work?

Not at Dotson.

In more than a century of business, Dotson Iron Castings of Mankato has seen tremendous change, and its modern-day foundry operations are a far cry from what

people might conjure up when they think of an industry notorious for hot and dirty work.

Dotson prides itself on operating a hightech, automated facility that has made its production more precise, less laborintensive and considerably cleaner.

Tyson Twait, who directs operations at Dotson, says the company hosts tours and regularly receives comments about the surprising cleanliness of its operations.

“From a foundry standpoint, we’re pretty proud of the upkeep and the automation that’s been put in to try to reduce some of the physical burdens placed on people in

the past,” he says.

Dotson also constructed a 7,800-squarefoot employee center last year, offering staff private shower facilities, locker rooms, break space and a top-of-building patio terrace where folks can unwind.

“You try to pencil in an ROI on adding a multi-million-dollar employee center,” Twait says. “Well, there’s honestly no payback. But there were things the group wanted to have. We wanted a nice outdoor space. We wanted quiet spaces. We wanted clean spaces.”

Twait says the ultimate benefits include happier employees and a better community image. The company has a workforce of about 140 people.

Dotson also installed a new lunchroom with a wide selection of food in partnership with an open-vending company.

“It’s just open coolers and shelves, where you can grab food and self-checkout,” Twait says. The food is much better than the old sandwich dispenser, which Twait says they called “the wheel of death.”

Dotson has seen its share of adversity. In 2017, the foundry endured a fire that caused about $5 million in damage, though thankfully no one was hurt.

The facility had to pause production as the company regrouped. But Dotson didn’t want to lose its most precious asset: its workers.

Even while operations were on hold, Dotson kept its workers on the payroll and paid them to engage in community service, helping others and building civic pride, plus a greater sense of staff cohesion.

“We do a ton of outreach in our local community,” says Twait, who also chairs the local United Way.

To build awareness of opportunities in its industry, Dotson works with local schools, providing “a foundry in a box” with quickcooling nickel and sand molds.

The company also reimburses tuition for employees interested in further study in any field. One employee famously used the benefit to study artisanal breadmaking, Twait says.

Twait envisions future demand for employees who understand PLCs, robotics, and electronics. “Those are just the facts of life,” he says. “But do they necessarily need a four-year degree? No.”

Dotson hires some people straight out of high school at starting wages upwards of $24 per hour.

“From a foundry standpoint, we’re pretty proud of the upkeep and the automation that’s been put in to try to reduce some of the physical burdens placed on people in the past,” says Dotson’s Tyson Twait.

Dotson’s patio terrace

Dotson’s lunchroom and self-checkout mini market

The company pays keen attention to the welfare of its workers. Twait says Denny Dotson, the foundry’s former owner, was known to buy cigarette packages from employees for $100 a pop, in order to encourage them to quit smoking. Staff also have ready access to visiting mental health professionals and occupational therapists.

“We’ve tried to be a good employer first, for a very long time,” Twait says.

Earlier this year, Dotson was purchased by its largest single customer, MacLean Power Systems, a leader in the power transmission industry.

Twait, Dotson’s former president and CEO, has stayed on with a title change to vice president and general manager of Mankato operations for MacLean.

The foundry has stayed extremely busy through the pandemic.

“From our standpoint, we saw historic orders placed. Some months we had orders for three times what we could produce,” Twait says.

“Instead of taking on more water, we decided to let go of some customers to make sure the ship didn’t sink along the way,” he recalls.

“We’ve tried really hard to be diversified. So, we’re about a third agriculture, a third heavy commercial truck, and then the other third is kind of a combination between pumps, compressors, and industrial stuff, including valves,” Twait says.

FAMILY VALUES

JDM Machining locks pandemic-era growth

Jeremiah Miller, founder of JDM Machining, today employs 33 people at his 25,000-square-foot precision machining shop near Staples. He began his career as a machinist in high school and built JDM from the ground up after the company that employed him in Baxter went under in 2000. He started alone in a 1,200-square-foot shop with a single vertical mill but quickly began attracting orders from positive word-of-mouth about his abilities. The business grew, enabling Miller to steadily add people and machines. The facility has been upgraded repeatedly in 2004, 2012, and 2021.

Miller works alongside his wife, Sara,

a co-owner and office manager in a clean modern shop, and the couple has built an experienced team of valued employees capable of building to exacting standards with quick turnaround times. He says each day begins with a huddle “to give the guys time to organize, clean areas, and review why we do what we do.”

During the pandemic, JDM saw business surge as customers like Polaris and Arctic Cat were willing to pay top dollar for parts within severe supply shortages, Miller says.

He believes the pandemic shortages emphasized the value of having a domestic supply chain, a realization that could have a lasting impact on business.

Miller says JDM had to turn some work away during the pandemic, but the company has been able to shorten its lead times in recent months.

JDM operates with two shifts, day and night, producing all manner of molded, tooled and turned parts for applications ranging from recreational equipment to medical devices.

“We don’t have such a hard time finding people, because we pay well,” Miller says. “You can’t live on $12 per hour. And I think it helps that our shop is all AC, and

we have a full-time janitor who keeps it clean.”

Miller says precision machining is comfortable work that doesn’t involve much menial labor. “You could come to work in a dress shirt, because you sit at a computer half the day, programming. And you don’t get real dirty doing that.”

JDM offers its employees flexible schedules, too, to accommodate single parents as well as folks stepping up to coach area youth sports.

“About half our business is tool-and-die onesies and twosies. Then, the other 50% is higher-volume production,” he says.

The company is currently working on its AS9100 certification to qualify for more work in aerospace and with the military, as their customers in the recreation industry are experiencing a decline. High sales of recreational vehicles during the pandemic oversaturated the market, he says. That, combined with the

During the pandemic, JDM saw business surge as customers like Polaris and Arctic Cat were willing to pay top dollar for parts within severe supply shortages, says Jeremiah Miller, founder of JDM Machining.

Left to right: Jeremiah Miller, founder, JDM Machining; Ross Rychner and Jason Ostendorf, JDM designers and project managers

JDM employee Dominic Strom

Making a Difference

cost of the machines and higher interest rates, have caused sales to taper.

“Being diversified helps us a lot,” Miller says.

JDM continues to grow, but Miller has no immediate new facility plans.

A 10,000-square-foot addition added two years ago is about 80% full, he says.

LOYAL TO ITS ROOTS Mattracks brings jobs and music to its tiny community.

Mattracks Inc., based in Karlstad, a town of about 700 people in northwest Minnesota, sells its rubber-tracked propulsion assemblies to customers in more than 140 countries.

But Glen Brazier, the company’s founder, considers the business’ remote location to be more of a blessing than a curse.

The manufacturer employs about 65 people, and Brazier feels fortunate to have

such a stable team. At 71, he says, “I’ve got people who have worked for me for going on 30 years.”

He doubts that degree of workforce longevity could be expected in a large metro area, saying: “We don’t have the kind of turnover you’d see in larger cities.”

Brazier doesn’t take that loyalty for granted, however, and has placed a stake in making sure Karlstad is one small town that never fades off the map.

He’s supporting efforts to construct a local airport to replace the small, grass landing strip that currently serves the community. After procuring land and funding, a new airport with a proper tarmac

could be operating in Karlstad next year, making it the first Minnesota airport to open in two decades.

Brazier expects the airport to open new doors for Mattracks and other area businesses that are currently more than an hour removed from modern air service.

“It’s a huge deal for Mattracks, because we have million-dollar deals to close, and we need to close them right now,” he says. “We have a bright future, and it’s only going to get better.”

Brazier says that about one-third of Mattracks’ total sales are to military customers, another third come from the agricultural sector and the final third is

channeled into other markets, including recreation and emergency response applications.

Having grown up in Greenbush, another small town 19 miles to the northeast of Karlstad, Brazier has honed his appreciation for rural communities and all they have to offer.

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“Karlstad welcomed us with open arms,” he says, recalling Mattracks’ purchase of an abandoned local potato warehouse to begin production in 1994.

Brazier says he remains a firm believer in reciprocity.

Toward that end, he signed on as an original sponsor of a music festival called Kick’n Up Kountry in nearby Hallock, later moving the event to Karlstad, where he also purchased 360 acres to accommodate guests. Now on its 20th year, the four-day festival boasts gate sales of about 30,000.

Brazier says he can barely keep a beat but nevertheless has recognized the profound ability of music to bring people together.

A business can’t just take from its community, Brazier says. “That’s no good. You have to give back.”

Kick’n Up Kountry music festival’s main stage, 2023

A Polaris Alpha featuring Mattracks ZRXm rubber track conversions, one of the many special models made for the United States military.

Manufacturers need to understand how the onslaught of legislative action enacted by the 2023 Minnesota legislature will affect them.

Bob Kill, Enterprise Minnesota’s president and CEO, recently sat down with Jim Seifert and Natolie Hochhausen, two prominent legal experts, to get insights about new legislation and what manufacturers can do to prepare. Both are shareholders at Fafinski Mark & Johnson (FMJ), an Eden Prairie-based law firm.

KILL: Minnesota businesses are grappling with how to navigate a number of new laws that address paid leave, legal cannabis, and non-compete agreements — all significant changes to the way they currently do business. Let’s start with a thumbnail description of the paid leave requirements. Employers need to understand that they are dealing with two different laws here, right?

Hochhausen: Yes. There’s the paid family and medical leave insurance program that will be set up and administered by the state. The payments will typically cover between 55% and 90% of an employee’s wages during a leave of absence for a qualifying reason. The reasons that qualify under the program largely mirror the federal Family and Medical Leave Act (FMLA). Eligible employees can take up to 20 total weeks of leave in a 12-month period under this program. This includes up to 12 weeks for the employee’s own serious health condition and up to 12 weeks for either bonding leave with a new child or to care for a family member under certain circumstances. The program will be funded through a new payroll tax that can be split equally between the employer and the employee. Employees will apply for benefits through the state, and the state will approve or deny applications and make benefit payments to eligible workers.

Separately, there’s the new paid sick and safe time law that will require businesses to provide paid time off to employees for certain qualifying absences. That includes part-time and temporary employees, but independent contractors are excluded. Employees must be provided at least 1 hour of sick and safe time for every 30 hours worked. The time can be banked as it accrues throughout the year, or the full annual balance can be frontloaded at the start of the year. If the as-accrued method is used, employees can accrue up to 48 hours of sick and safe time each year and must be allowed to carry over any unused accrued time from year to year. However, the overall balance can be capped at 80 hours,

meaning that accrual would stop once the cap is reached and would not resume again until some of the time is used. With the frontloading method, there is no carryover requirement. Employers can either frontload 48 or 80 hours. The difference is that if 48 hours are frontloaded, the employer would be required to pay out

manufacturers that may not have internal payroll and human resource departments, figuring out what policy changes are needed and when to implement those can be daunting. For example, businesses need to consider whether to integrate the paid sick and safe time requirements into existing PTO policies, or if it makes more sense to have separate policies. There is no single best solution, so employers will need to think through what is best for their business.

Manufacturers are talking about the enormous new state bureaucracy being created to administer the paid family and medical leave program. What will that entail?

Jim Seifert leads FMJ’s manufacturing practice group. A former legislator, Seifert’s experience includes serving as an in-house attorney with five public companies. He attended the University of Notre Dame as an undergraduate and received his Juris Doctor from Creighton University. He also has a Master of Science degree from the University of St. Thomas School of Engineering in Manufacturing Systems.

Natolie Hochhausen practices in the HR & Employment practice group at FMJ. She provides clients with guidance on employment law issues and offers practical advice to help navigate the complexities of day-today employee relations issues. She received her bachelor of arts from the University of Wisconsin-Madison and her Juris Doctor from the University of St. Thomas School of Law.

Seifert: It will be a shockingly expensive new agency. You will have roughly 500 people, with a cost — in round numbers — of about $100,000 per employee in wages and benefits. That’s $50 million of permanent incremental costs, maybe more. And anybody who pays attention knows that the state needs a better track record of information technology systems. Gov. Mark Dayton had to deal with something like a $400 million effort to try to fix the IT systems in health and human services. Whether this will require a completely separate IT system remains to be seen. But in any event, it will be a significant cost for taxpayers.

the unused balance at the end of the year. There is no payout requirement if 80 hours are frontloaded. Unlike the paid family and medical leave program, sick and safe time is paid by the employer, similar to PTO or paid vacation time.

The manufacturers I’ve been speaking with have real concerns about these new laws, from both financial and administrative standpoints. For smaller

Hochhausen: The new sub-agency is being set up under the Minnesota Department of Employment and Economic Development (DEED) and will administer this program similarly to how unemployment insurance is managed. The sub-agency will be implementing the benefit system and setting up accounts for employers, and some aspects of that process will start next year. Once the paid leave benefits become available to employees in 2026, the agency will process all applications for that compensation, determine eligibility, and pay the benefits for approved claims, so employees will apply directly through the agency’s system. The state will also collect and review any required medical certifications or other documentation. So,

employers will not be making eligibility determinations or paying out of pocket for the actual benefit. They’re just responsible for paying the tax that funds the program. There is some flexibility for employers to opt out of the new state program and avoid the tax, but it would require the employer to implement a private plan that provides benefits and rights that are at least as generous as those required under the new law. For example, if a company already has a short-term disability policy, it can potentially continue with that policy as long as the carrier is willing to modify the policy and benefits to be as generous as those provided under the state-administered program. However, any private plan needs to be approved by the State of Minnesota, and the employer would still pay an oversight fee.

This represents a significant new law for manufacturers, especially considering how it will affect some small manufacturers

Seifert: Yes. There’s no small-business exception. This applies to every employer, whether you’re talking about a fiveperson welding shop, a dental office, or a department at the University of Minnesota. Strategically, this means you can no longer have a single point of failure, particularly in the manufacturing environment; every critical job has to be cross-trained. There was a great debate about whether small businesses would be exempted, but none of that was accepted in the final bill.

You’ve been talking to our peer councils about all this. How have they reacted?

Hochhausen: I’ll say quite candidly

that at least once in each of these peer council meetings, someone has said, “Time to look at South Dakota” or other neighboring states. These new laws are requiring businesses to implement multiple significant policy and practice changes in a fairly short period of time. Having to spend the money and dedicate the resources necessary to put all these changes into place simultaneously makes the overall impact feel particularly hardhitting. This is especially true for small manufacturers, which will be subject to the same requirements and will have to provide the same benefits as large corporations. However, I will also say that the reactions have not been exclusively negative. For example, some business owners hope that the changes will make Minnesota an attractive state for workers.

The implementation of the paid family and medical leave program is two and a half years away. What do you advise manufacturers do in the meantime?

Seifert: The timeframe until implementation will allow manufacturers to plan. The possibility that workers could have up to 20 paid weeks off per year makes it imperative for manufacturers to incorporate cross-training strategies into their business priorities. Not every employee is going to be off work for 20 weeks each year, though, because the benefits will not cover 100% of people’s salaries. For example, somebody making minimum wage will get 90% if they go out on paid family and medical leave. Somebody who makes $50,000 a year will get 82%. Somebody who makes $100,000 will get 67%. This percentage continues to diminish for higher earners,

and the weekly benefit is capped at the state’s average weekly wage. So for many workers, there will not be a huge financial incentive to use or abuse this new right. But it will be difficult for small manufacturers to have coverage for every critical job when someone does take leave under this program.

Is there still a chance that some parts of the program might get reworked?

Hochhausen: It’s honestly hard to say. There are still more than two years until full implementation, which does leave open the possibility that changes could be made during the legislative sessions between now and January 2026. We’re going to have to wait and see how that plays out.

That said, employers don’t necessarily have the option of waiting until the very end to plan, because some of the reporting requirements start in 2024 and certain notice requirements take effect in 2025, well before the payroll tax and benefits go into effect. Any manufacturer thinking about implementing a private paid leave program instead of participating in the state’s program should talk to carriers soon because negotiating those contracts will take time. Employers that already have private plans in place — like a shortterm disability plan — will also have to start thinking about what they will do and find out whether their carrier will even offer plan options that meet all of

the requirements under the new law. If it makes sense to use the state’s program, it will be important to start looking at their current contracts in order to understand any required steps and timing considerations for ending those.

CANNABIS

There’s some confusion about how the recently enacted cannabis law might affect manufacturing workplaces. Some want to compare it to alcohol policies. Are they right?

Hochhausen: To say, “Just treat it like alcohol” would be an oversimplification for multiple reasons, but a big one is because a cannabis test cannot detect current use or impairment in the same way that alcohol testing can detect an individual’s current intoxication level — cannabis can remain detectable in a person’s system for weeks. And since Minnesota’s law prohibits penalizing an employee for their legal use of lawful consumable products outside the workplace when they are off the clock, a positive test for cannabis cannot be used as the sole basis for adverse employment decisions, unlike situations where an employee tests positive for alcohol while working.

This new law essentially requires employers to treat cannabis like a separate substance from other drugs and alcohol entirely. Testing for cannabis at the preemployment stage or during employment is limited and can only be conducted in certain circumstances. For example, employers can test job applicants for cannabis if they are applying for a safetysensitive position or a few other specific types of jobs.

At the same time, employers are still

allowed to have policies that prohibit workers from using, possessing, transferring, selling, or being impaired by cannabis on company premises or while working. The complicated part is that the ability to test for cannabis is restricted, and even when it is allowed, a positive test alone does not prove that such a policy has been violated.

Who defines safety-sensitive positions?

Hochhausen: Statute defines this, essentially when being impaired by intoxicating substances like marijuana or alcohol would jeopardize the health or safety of a person, whether it’s the person in the role or another person in the workplace, etc.

What can employers do if they sense a person is impaired while on the job?

Hochhausen: If you have reasonable suspicion that somebody is actually impaired at work or has used, possessed, sold, or transferred marijuana in the workplace, you can conduct reasonable suspicion testing. If there’s an accident in the workplace — if somebody violates a safety policy and wrecks a forklift or something like that — you can still conduct post-incident testing.

Again, though, this gets tricky because of Minnesota’s law regarding the use of lawful consumable products. Now that cannabis is considered one of those products, employees are generally able to use it outside of work during non-working hours without being penalized by their employer, unless an exception applies. And again, drug tests cannot detect current impairment by cannabis. A positive test could mean that an employee used cannabis on his or her own time last weekend. Employers are in this completely new territory where they can’t base adverse decisions solely on a drug test that comes back positive for cannabis. It will become important for employers to get very good at reasonable suspicion determinations. It will require supervisor training and a solid understanding of what the symptoms and characteristics look like of cannabis impairment.

Seifert: It will require a lot of common sense. Obviously, recreational use, generally speaking, is socially accepted, and now it’s the law in Minnesota with some exceptions. So employers will have to look at whether employees are acting differently, is their job performance dramatically less over several days, has their demeanor changed, etc.

Manufacturers will have to get smarter with more common-sense policies surrounding this issue. People will come in having just used marijuana. You will have to figure out whether they create a safety hazard for your workplace and have a plan when they say, “Yes, I’ve just used it.”

Owners and managers — the people in charge of safety — will have to have a very different orientation about how to manage heightened risk related to cannabis usage. State law now says regular cannabis usage is okay, and we can expect that this will spike overall usage to some extent. This is just part of the fabric of our society, and it’s going to be very difficult to prevent it from impacting the workplace entirely.

Some manufacturers have embraced workforce chaplains because they know there are outside issues that sometimes get carried into the workplace.

Seifert: Our culture has turned the page. We’ve gone from marijuana being considered a gateway, pariah drug in the ’60s to total acceptance in 2023. Employers are going to be forced to make that mindshift.

Hochhausen: Many manufacturers have been afraid of how this law will impact their workplace, but it’s important to emphasize that as a general matter, this law doesn’t require employers to abandon their performance and productivity expectations or overlook safety violations.

NON-COMPETES

Let’s move on to the non-compete issue. How does Minnesota’s new law compare to other states?

Hochhausen: Minnesota is only the fourth state to have a categorical ban on non-compete provisions. California is no surprise, and the other two are North Dakota and Oklahoma.

Seifert: The prohibition against noncompetes should encourage manufacturers with significant R&D functions to rethink this issue strategically. I’m not saying they should fold their tents and go somewhere else. But whether you’re making chemicals, whether you’re making medical devices, whether you’re making new drugs — anything where you’re fighting it out with your competitors based on innovation — you have to think about whether this is the right place for that function.

This doesn’t affect trade-secret law or confidentiality agreements, but if you can hire a mid-level researcher or a mid-level scientist directly from your competitor, those people can often tell you enough

about where to look and where to research without necessarily violating those obligations. If you think about research and development as turning over rocks to find the next big thing, this new law doesn’t allow one of your company’s scientists to go to a competitor and say, “Look under this specific rock.” But that scientist might be able to say, “Look at this group of rocks,” without breaching confidential and proprietary information agreements as they have traditionally been drafted. That is huge in terms of employees being able to come up to speed and abscond with some critical aspects of your company’s research.

How can manufacturers protect themselves against this vulnerability?

Seifert: I would take a fresh look at how you protect your trade secrets and other information about your business that is not publicly known or easily discoverable, etc. I would be very intentional about protecting anything related to the source of R&D. Now, that’s not going to prohibit your direct competitor from hiring the scientists or even your head of R&D. However, it will

give you something to argue about if, 18 months later, the exact product you were working on shows up in the marketplace created by your direct competitor. I would look hard at what you consider trade secrets and claim those as broadly as possible while preserving enforceability.

Hochhausen: That’s absolutely right. Companies should be very particular about defining trade secrets and confidential information. While it is smart to cast the net wide enough to effectively protect anything that actually constitutes proprietary information and trade secrets, getting to the right balance of specificity is important. Trying to simplify things by just stating that everything an employee learns during their employment is

confidential and proprietary is not totally without risk. In fact, it can actually undermine the ability to protect that information. Courts are not as fond of enforcing overly vague provisions that define confidential information to include all sorts of things that the company can’t possibly consider to be confidential. It will be essential to frame those protections carefully.

Does this new law protect manufacturers from competitors snatching salespeople who have relationships with key customers?

Hochhausen: This does not prevent companies from having non-solicitation agreements. You can still prevent a salesperson from taking a customer list, or from diverting your customers away from your company, or from interfering with the contractual relationships you have with customers or vendors. But again, as with any agreement, the provisions have to be drafted thoughtfully so that they’re enforceable, and they can’t be so broad as to prohibit an employee from working for a particular company entirely or from competing with your business in general.

The issues we’ve discussed here can seem very complicated, especially for small companies. Who should they turn to for advice?

Hochhausen: Consulting with experienced HR advisors or an employment attorney is probably the most efficient way to ensure that you’re getting accurate advice. But in any event, I would

start now getting policies and employee handbooks updated to comply with certain aspects of the new laws that require specific language to be included in those documents.

Seifert: Whether you start with a trade association for available resources or go directly to legal counsel, make sure you are informed and understand how to comply with the new changes. Do your best to educate yourself in terms of the free information that’s out there. But you will have the difficult questions on the margins that you will have to be ready for.

Also consider that some background issues may need to be addressed...let’s call them cultural issues. How will you handle cannabis use at Christmas parties, summer picnics, employee gatherings, employee trips, or recognition dinners? There are no easy answers, but they need to be talked through.

And then what about out-of-state considerations? What if you have a mixture of employees, some from surrounding states, who all come here? Which laws apply to them? So there are issues that still need to be worked out.

You’ll want to have reasonably wellthought-out answers when each of these situations comes up.

Let’s step back and look at the big picture. What prompted the legislature to pass some of these hugely consequential laws?

Seifert: As a former legislator, I have a heightened sense of the dynamics of this particular legislative session. We have a one-party rule now in this state. What the DFL passed in the last session reflects the core sensibility that they needed to correct an imbalance between employer and employee rights. They have been very clear about this perspective going back to the time of Paul Wellstone. And if people want a different balance, they’re going to have to change the course of elections. But this is how it is and will be for a while.

Regarding the paid family and medical leave law, we have two legislative sessions left, two more bites at the apple for the Minnesota Business Partnership and the Minnesota Chamber to get a smallemployer exception built into this, which I would favor.

By Suzy Frisch

BRIDGING THE GENERATIONAL DIVIDE

Metal fabricator LimPro improves its productivity and morale through communication and leadership training.

Mike Babb and Andrew Krasaway, press brake operators at LimPro

Working at precision sheet metal fabricator LimPro, Andrew Krasaway often had questions about the press brake he was operating and ideas for making improvements. He thought it reflected his eagerness to learn and master the skills needed to serve.

But those questions didn’t always come off the way Krasaway intended. That was especially true among some co-workers who are industry veterans and long-time employees at LimPro, a limited production rapid manufacturer of quick-turnaround parts and components in Fridley. Sometimes, they interpreted it as someone who was coming for their expertise — and then their jobs.

As is often the case with manufacturers lately, it became a generational divide. The 22-person company has a group of younger, newer employees and a contingent that has been with LimPro for decades. The two groups didn’t always see eye-to-eye, says company President Nick Bolin. Some veterans weren’t especially eager to download their hard-earned knowledge to the newbies, and some younger folks weren’t terribly open to their guidance.

“LimPro is a very tenured group. We have a lot of employees who have been here for 25- to 30-plus years, and they had their methods developed and thought processes locked in,” Bolin says. “The communication of the next generation of younger workers didn’t align with the communication style of the older group. We had to change the mentality of, ‘If it’s working, why change it?’”

Problem was, LimPro was busier than ever, with new customers and a more engaged existing book of business. All systems needed to be a go, with a solid foundation that would hold steady as the older generation began retiring in the coming years. To bridge communication gaps and encourage the different generations to work more seamlessly together, LimPro turned to Enterprise Minnesota for employee skill development.

Four employees from LimPro and eight people from its sister companies, machining outfits QualiMac and UniMatic, attended the Leadership Essentials training program through Enterprise Minnesota in late 2022 and early 2023.

“There were some ‘aha’ moments for the people we sent to the Enterprise Minnesota program,”

Bolin says. “One of the most enlightening things for them was the surveys that their peers did on their communication styles and working styles. It was an eye-opener because they started thinking about why they were viewed a certain way. Then they started working on listening better or being more confident.”

Through this training, Krasaway and other participants learned new ways to communicate with co-workers that have fostered better working relationships and a more productive work environment. “Leadership Essentials taught me a few ways to go about things a little bit differently. At first,

I wanted to know everything right away and I didn’t have a lot of patience,” he says. “There are different ways to phrase the same question, and I learned how to approach people differently.”

Communication is key

Providing employee skills building at LimPro was a continuation of the changes that already were underway. A 45-year-old company, LimPro experienced a transition after TJ Bonnett acquired it in 2015 from second-generation owners. Bolin had joined LimPro in 2014 as a press brake operator, eventually moving into sales and production management. LimPro had 27 employees then, but jobs weren’t very well defined, and the right people weren’t necessarily in the right seats.

As Bolin assumed more responsibility on his path to becoming president in 2019, he and other leaders went through skills building sessions in leadership, communication, and management. They formalized LimPro’s roles and responsibilities, slotting people into different positions. Then, the company identified

Chris Morris, a LimPro fabricator, and Nick Bolin, LimPro’s president

PHOTOGRAPHS BY ROBERT LODGE

its core values: top-level customer service, positive attitudes, accountability to the numbers, and contagious teamwork — plus the informal value to celebrate, Bolin says. Some staff didn’t buy into those values or had bad attitudes that threatened morale. They were moved along.

LimPro kept getting better at its work and growing revenue, from $3 million when Bolin arrived to $5.5 million today, but with five fewer employees. With an understanding that LimPro needs to work smarter, Bolin and team knew they needed to improve communication among the staff and train the company’s future leaders.

Bolin got connected to Enterprise Minnesota previously through fellow leaders at Bonnett Partners, who praised their experiences with its peer councils. Bolin joined and benefited from his peer council’s networking, mentoring, and idea sharing. When a fellow Bonnett Partners executive suggested that they send

team member has seniority and expertise, so how could they be that person’s leader? We built up their skills in coaching and giving feedback to help people with their performance and improve their efficiency.”

A key aspect of Leadership Essentials is engaging with Tracom’s Social Styles assessment. Participants do a selfassessment, while five to eight co-workers rate them in measures like communication styles and versatility, such as listening and accepting criticism. They receive a report that details their style — driving, expressive, amiable, or analytical. It includes detailed information about individuals’ strengths and weaknesses, as well as how they affect the person and others around them.

Hinsch makes a point of having casual conversations with co-workers to build rapport, and he takes more time to sit down with people to go over a project and ask questions.

“Before, people kept to themselves. A big part is keeping communication open and working together as a team — whatever we can do to make things better and run smoother,” Hinsch says. “I personally think that having people communicate more boosts morale. It shows people you are interested in what they’ve got going on.”

staff from the three sister companies for leadership development, Bolin was all in.

Michele Neale, a business growth consultant who specializes in leadership and talent development, led the Leadership Essentials program for 12 employees. She was tasked with helping younger staff develop the skills and confidence to begin more actively leading at their locations. Meeting for four hours at a time during six sessions, Neale delved into employee engagement, effective communication, employee coaching, change leadership, and accountability.

“Some of the people were pretty new to the work environment, so we were looking to build their confidence in knowing what to do and how to approach people,” Neale says. “They were learning how to get things done through people and feel okay being able to lead them, especially when the people they are leading are older than them. Some people came in feeling that an older

“We spend two sessions on communication styles and effective communication models,” Neale says. “I saw all of them make a shift, increasing their self-awareness and awareness of others and better communicating to get successful interpersonal interactions. They better understand the four styles of communication, what their style is, and how they can adapt to others.”

Participants learn the traits of the different Social Styles and how they play out in the workforce. “We talk about what happens when we get opposites in a room together, and that it can cause a bit more conflict. Or if the team is more alike than different, it can cause teams not to elevate to the level you need them to,” Neale says. “You need all four styles, and you really need to know how to adapt to one another to be most effective.”

Learning into action

For Eddy Hinsch, a welder who has been with LimPro for seven years, learning more about his personality traits and Social Style as well as his co-workers’ has given him a better understanding of why people act or respond in certain ways. Post-training,

After each session, Neale asks participants to make an action plan with one thing to work on before the next meeting in two weeks. It helps people think about how to activate their new insights at work and start making behavioral changes. An action to work on might be stopping and asking more questions versus telling people what to do. “We talk about what they experienced, what went well, what was challenging, and what they would do differently,” Neale says.

Kari Rusing, an Enterprise Minnesota business development consultant, joined the sessions and observed some of the participants’ transformations. The group evolved from being strangers and a bit withdrawn to openly sharing situations at work and deconstructing them. “Everyone is really standoffish in the first session — they don’t know each other,” she says. “This ended up being an unusually close group.”

Fabricator Chris Morris brought 15 years of heavy metal manufacturing experience to LimPro when he joined the company about a year ago. In his career, he hadn’t been given many opportunities to gain leadership training or experience. So, he was pleased when Bolin offered him the chance to participate in Leadership Essentials.

Morris says he learned many new

“The generation gap gets bridged because people begin to look at themselves introspectively as a communicator.”

Nick Bolin at the SQDC board.

skills, such as how to have coaching conversations, provide reviews, and communicate with people with various Social Styles. Previously, if Morris knew he needed to have a difficult conversation with someone, he would spend a lot of time overthinking what to say and have trouble responding on the fly to someone’s comments.

“Now I have some of the tools to implement leadership practices, and I have the confidence I need to go and have a hard conversation with someone,” Morris says. “I have the tools to frame the conversation and be able to respond when someone has a remark or clarifying questions. It makes it much less overwhelming for me.”

manufacturers’ existing talent pool, offering Leadership Essentials also establishes a culture of continuous people improvement.

“People are a long-term investment, and when you have good people who work for you, you want them to be happy. When they are happy, they are more engaged, and when they are engaged their goal is to be productive,” Rusing says. “As a company, you want to provide the opportunity to have as many great days as possible. If an employee is not happy, they will move on and find a new place to have a great day.”

Helping people refine their communication style so that they can bridge generational gaps is an important way for companies to ease transitions

younger worker completed Leadership Essentials. They’ve been able to recognize each other’s expertise — Babb’s on the traditional brake and Krasaway’s on the computerized one — and learn from each other. Now Krasaway is more willing to tap into Babb’s experience, and Babb is more open to Krasaway’s questions and ideas.

“He really mellowed out after the leadership sessions. He wants to work and he wants to learn. I think he realized he doesn’t know everything,” Babb says. “If we have a problem, we work together to figure it out. He’s willing to work with me and learn. I think he will be a good leader down the road.”

Babb is approaching retirement in the next few years, and he wants to pass on the knowledge he’s gained during his decades in manufacturing. After Krasaway went through Leadership Essentials, Babb noticed he is more eager to take advantage of Babb’s expertise. This shift will set Krasaway and LimPro up for a strong future. “I think the new guys will be able to lead this company in a good direction,” Babb says. “Eventually he will take my spot and someone will take his, and I hope everything will be set up for him so he doesn’t have to struggle.”

It’s not uncommon for people who have been around the shop for years to feel that younger employees are coming for their jobs, Bolin says. He often tells them that the company is not trying to push them out. In the case of Babb and Krasaway, he emphasized that Krasaway was identified as an emerging leader and did training to prepare him for the future, Bolin says.

After the sessions ended, Bolin could see a clear impact on most of the participants. “They came back super fired up and ready to go every day. You could see the attitude shift — they felt empowered and felt like they could make a difference,” he says. “It’s really rewarding for a manager to see employees get that sparkle in their eye again.”

Investing in people

The timing was right for LimPro to embark on this employee leadership coaching. Bolin recognized that the company must help staff build skills to guide others now, prior to them stepping into leadership roles.

Minnesota’s labor shortage in the next decade makes it critical for employers to invest in their current workers, Rusing says. On top of adding new skills to

from one cohort of leaders to another. The coaching “helps a ton with self-awareness and communication. When one person reaches across the aisle, it breaks down barriers, and then it becomes a little easier to work together and communicate,” Rusing says.

“The generation gap gets bridged because people begin to look at themselves introspectively as a communicator. They’re more naturally self-aware of who they are and how they communicate, and then they begin to look at the others around them and naturally begin to look at things differently.”

This was the case with co-workers Krasaway and Mike Babb. The department lead at LimPro, Babb has been working as a press brake operator his whole career. He noticed a big difference after the

“Everyone in the organization needs someone who can cover for them if they are gone and fill their shoes when they want to retire,” Bolin says. “It’s their legacy to pass on their acquired skills so that the next generation can take the company and make it bigger and better.”

With Enterprise Minnesota’s guidance and improved communication among employees, Hinsch sees LimPro and his future moving in a positive direction. “It made us feel good that company leadership sees us as the future of LimPro. We have 80% of the shop who’s going to retire in the next seven years,” he says.

“When some of the older guys leave, we will have to take on those leadership roles. We want to see the company grow, and for a company to grow you need to have good leaders.

We are building a team that fits our values.”

Eddy Hinsch, welder at LimPro

THE ROADS BEST TRAVELED

ISO certifications can help manufacturers address a variety of strategic aspirations.

Savillex, the Eden Prairie makers of fluoropolymer-based products since the mid-1970s, wanted to expand its reach to new markets.

New owners at Stanchfield-based Reliable Bronze were ready to upgrade the processes that made the company successful and build for the future.

And the executives at General Label in Minneapolis hoped to strengthen an already solid history of quality management by implementing a better industry standard system.

Among many differences, these manufacturers share one important priority: They all see pursuit of an ISO certification as crucial to their future success and profitability.

The kinds of challenges all manufacturers face — labor shortages, supply chain issues, etc. — aren’t going anywhere, and in most cases there’s not a whole lot a manufacturer can do in the short term to solve those problems.

But implementing an internationally recognized quality

By Robb Murray

management system such as ISO — whether you’re working in life sciences or labels — is a proactive step any manufacturer can take to improve operational efficiencies and increase profitability.

Taking the steps to implement such a system — and doing so with intention and vision — is a cost that will more than pay for itself.

“For most of our clients, return on investment tends to be in that 10-to-1 to 50-to-1 range,” says Keith Gadacz, an Enterprise Minnesota business growth consultant. “Looking forward in growth, profitability improvement, employee engagement — that all shows up in that double-digit to one ratio.”

Savillex

Savillex is a life sciences company that has been around for nearly 50 years, manufacturing some of the most advanced products in the industry.

“The company really traces its origins to the invention of

fluoropolymers,” says Steve Harding, president of Savillex.

Fluoropolymers, first developed in the 1930s, are high-performance plastics made up of strong carbonfluorine bonds. Their unique molecular structure makes them highly durable and resistant to high temperatures, harsh chemicals, and electrical currents. The first fluoropolymer was Teflon, discovered by accident by a scientist working in the DuPont laboratories. Fluoropolymers are used in a variety of industries such as aerospace, automotive, electronics, and medical applications. At the same time, fluoropolymers can be expensive; products made with fluoropolymers tend to be highly niche in nature.

As fluoropolymers developed, a Florida-based company called Fluoroware was launched to cash in on the new phenomenon of fluoropolymer processing. Among the individuals who launched that company was Russ Saville, who upon seeing some unmet needs in the burgeoning fluoropolymer market, broke away from Fluoroware and started his own company, Savillex.

“He took his last name and put an ‘x’ on the end of it to make it sound a little more ‘sciencey’ or a little more techie,” says Harding. “And I think he was successful. It kind of does. And that really is where our journey began.”

For nearly 50 years, the product line at Savillex remained the same. Chief among the company’s manufacturing priorities are its Savillex Purillex® containers, including bottles, vials, and jars. Harding says they are the only fluoropolymer containers specifically designed for lifescience applications such as autologous cell therapy, bulk drug storage and transport, and formulation stability testing and storage. They are produced in an ISO Class 7 cleanroom.

Savillex also offers custom services such as injection molding which, when dealing with fluoropolymers, can be tricky. Given fluoropolymers’ high melt temperatures, and because of the corrosive gases emitted during molding, injection molding with fluoropolymers presents a challenge few manufacturers attempt to meet. Additionally, the company offers stretch blow molding and claims to be the only manufacturer in the world to stretch blow mold fluoropolymers.

“We have deep expertise in materialhandling solutions, and our goal is really to find ways that we can bring that expertise to bear,” Harding says. “How can we help people do what they do better?”

Savillex’s managers have big dreams. They’re experts at providing high-end products that serve a niche clientele, but they desire to branch out.

Users tend to avoid fluoropolymer products because they are exotic material and quite expensive, Harding says. “So, we can’t compete on cost or price compared to commodity materials that you might find in a retail setting. If you go to Target or the grocery store you see plastic everywhere. You’re never going to see fluoropolymer there, though, because those use cases just don’t call for that.”

Savillex is about to bring a third

manufacturing facility online that represents its attempt to reach a wider customer base that doesn’t require bottles or vials made with fluoropolymers. “We are aggressively pursuing life sciences business opportunities,” Harding says. “Users have needs, and we can’t fully address those needs with fluoropolymers alone. How do we offer other containers out of other materials that address a wider band on that use case? We’re relative newcomers to it compared to our 50-year history, and that’s one of the reasons why ISO certification was important.”

Harding adds that an ISO certification would keep them in the mindset of doing things the right and smart way.

The man who took the lead on guiding Savillex through the process was John Beauchamp, Savillex’s quality assurance

John Beauchamp, Savillex quality assurance manager, speaking to Mike Reich, the company’s inventory manager.

“We have deep expertise in material-handling solutions, and our goal is really to find ways that we can bring that expertise to bear.”

–Steve Harding, president, Savillex

PHOTOGRAPHS BY ROBERT LODGE

manager. He says that as the company aspired to penetrate medical device and pharmaceutical companies, it needed to “up their game,” as many of those customers either overtly require certification or look more favorably upon manufacturers that have it.

“A lot of those businesses — because of the nature of their product applications — are highly regulated by the FDA, USDA or EPA and so on, and they’re looking for suppliers that meet a high standard of product manufacturing,” he says.

Savillex began its ISO process in March 2022 — with guidance from Enterprise Minnesota — by examining its quality management system for gaps and shortcomings that wouldn’t pass muster in an ISO audit.

Among the changes it needed to make was implementing more robust documentation and nonconformance monitoring systems.

“One of the critical pieces of ISO 9001 for today is a required management review, which we put into place, and a continual improvement program, which is one of the pieces that was not formally in place when I came here,” Beauchamp says. “A lot of good, solid foundational elements were in place. We just needed to add a few of those pieces and then bolster the others to fulfill the standard.”

Before coming to Savillex, Beauchamp worked for a manufacturer that went through an ISO certification process. That

experience made him the perfect choice to help Savillex navigate things smoothly.

“I was already aware of the benefits of those standards and operating in such a way to meet those standards,” he says.

Reliable Bronze

At Reliable Bronze, a Stanchfield, Minn. manufacturer of bronze sleeves, bearings, and made-to-order components, a sea of change has been taking place recently. The previous owners, Charles and Linda Olson, ran the company from 1968 until August 2022. With a desire to retire, they sold the company to the Temple Hall Group, a Chicago-based, family-owned private company that invests in “bestin-class North American manufacturing businesses.”

The Reliable Bronze website says: “It is a competitive world out there and we know everyone is vying for your business. We feel the difference between Reliable Bronze and our competition is that our philosophy is based on good old-fashioned values.”

Old-fashioned values and work ethic helped Reliable Bronze survive and thrive for decades. Reliable Bronze CEO Kevin Herkner, who was hired by the Temple Hall Group to take the helm, says the company has hopes to double its output over the next three to four years. Herkner has set about improving the business with an infusion of capital, refining processes, and adding key

roles and personnel to take it to the next level of performance envisioned by the Temple Hall Group.

“The business was absent of written processes, goals, objectives, and performance metrics,” Herkner says. The previous owners built a very successful company doing things their way, but to make a leap in efficiency and profitability gains, investment and improvements would be necessary.

In prior roles, Herkner has brought Lean Manufacturing principles, quality management systems, and behavioral-based safety programs to portfolio companies to drive needed improvements. Reliable Bronze is currently going through the process of deploying an ISO 9001 quality management system and Lean Manufacturing programs. Herkner says the two methodologies, while distinctly different, complement each other. The Lean Manufacturing methodology helps reduce waste and elevate efficiency, and the ISO process, he says, is bringing a whole new level of purpose and consistency to Reliable Bronze.

To that end, Enterprise Minnesota has partnered with Reliable Bronze to help develop the ISO 9001 certification process. Keith Gadacz is the Enterprise Minnesota consultant helping Reliable Bronze through the ISO process.

Stanchfield-based Reliable Bronze manufactures bronze sleeves, bearings, and made-to-order components.

“Every manager and employee here is like a sponge: wanting to learn, change, improve, and adapt.”

–Kevin Herkner, CEO, Reliable Bronze

“He’s very energetic. I love the way he presents the material, and he’s very passionate about it,” Herkner says about Gadacz. “This works very well with our team, and you just feed off his energy.”

Herkner says he had a goal of being ISO compliant by the end of the year and then have third-party certification early next year. But because Reliable Bronze has moved so quickly and has implemented Gadacz’s recommendations, the company is now on pace to have everything completed by the end of the year. “I’m very, very pleased with the progress,” Herkner says.

Herkner also attributes the speed of cultural adoption to the employees. It is both essential and common for a company’s leaders to be engaged. However, having highly engaged employees makes this process that much more exciting. He says most companies in his experience are resistant to change. “It’s just normal for humans to resist change. Typical responses are, ‘I’ve always done it this way, why do I need to change?’ That is not the case with Reliable Bronze.” Herkner adds: “Every manager and employee here is like a sponge: wanting to learn, change, improve, and adapt. It is eye-opening, and it is refreshing. This is one of the most impressive organizations I have ever been in. The people make all the difference in the world. We are grateful to have the support of the team.”

General Label

“Our name is very deceptive,” says Mike Baskfield, president of General Label. It’s a funny thing to say, but he isn’t joking, he says. “We do everything except print labels.”

General Label started out doing labels, of course. But as technology evolved and advanced and it became more profitable

to print fewer labels and more, say, printed electronics and tactile membrane switches, the company followed the tech. And the money.

“We’re in the permanent graphic business,” Baskfield says. “If you have a piece of equipment that goes outside or is meant to last for a long time, we do things like compliance labels and warning labels, overlays like what you see on your copiers.”

When you feed a dollar bill into a soda machine and punch the Dr. Pepper

to pursue an ISO certification. First, customers were asking for it. Second, while the company already had a decent quality management system in place, the system wasn’t as robust, thorough, or complete as ISO. It was modeled after ISO, but company leadership decided it was time for the real thing.

“For years everybody was asking, ‘Are you ISO approved?’ And we would say, ‘Our quality program was built off ISO, but we’re not approved,’” Baskfield says. “And that worked for a long time. But as we continue to modify our customer base and go after more difficult jobs and difficult customers, their requirements are higher also.”

Sumit Mahajan led General Label’s efforts to secure ISO certification. He says going through the process spurred the company to adopt business intelligence tools that can produce important data quickly, allowing them to adjust staffing levels on the fly or analyze customer satisfaction scores.

That quick access to data also helps improve employee morale, he says.

rectangle, there’s a tiny push button behind it, electronically helping the machine dispense the soft drink of your choice. If you purchase a Graco spray paint machine, there’s a good chance the membrane switch inside is a General Label product, as are the product name and safety warnings and instructions. In a medical incubator, where all components require sterilization, General Label printed electronics will be in the control panel. The company is also developing a backlit LED product to make the instructions on automatic electronic defibrillators easy to follow regardless of language.

Several factors pushed General Label

“Getting that transparency in the system — in the shop as well as in the front office and with leadership so that they have a dashboard view where they can understand what’s going on — is one of our first projects. And that initiative came from the ISO process.”

And General Label is already seeing benefits. The company reduced scrap material by analyzing training, process, and material usage.

“We started working on the processes for that area, and we realized that either it’s a process issue or it’s a training issue,” Mahajan says. “We saw our scrap rate on our monthly KPI report go from $25,000$30,000 down to $8,000-$5,000.”

Mike Baskfield, president of General Label and Sumit Mahajan, General Label’s manufacturing engineer

“But as we continue to modify our customer base by going after more difficult jobs and difficult customers, their requirements are higher also.”

–Mike Baskfield, president, General Label

Anibal Soares, Zund machine operator, General Label

Time to Double Down

Manufacturers need to show state lawmakers how they provide great jobs, boost economic growth, and strengthen communities.

After a flurry of activity in the last session of the state legislature, Minnesota manufacturers are justified in feeling a kick in the gut. A host of new laws and initiatives have created dozens of complex new requirements, imposing a significant burden on employers — particularly smaller manufacturers.

It would be easy to throw up our hands in frustration and insist policymakers just don’t understand our world. An understandable response, but I think we need to take a different approach. We need to double down on our efforts to reach out to lawmakers to give them an inside look at manufacturing.

Instead of just telling legislators what manufacturing does for their communities, we have to show them. Years ago, we started inviting elected officials to tour our

client companies because many of them had not yet met their own manufacturing constituencies, and manufacturers hadn’t met their legislators.

To date, we’ve helped arrange more than 480 manufacturing tours for legislators, Congressional members and their staff, and local mayors, fellow manufacturers, and other business and economic development leaders. We continue conducting tours to this day. It’s particularly important to reach out to legislators who might seem like the least likely supporters. It’s most often the

case that legislators have not yet had the opportunity to meet manufacturers and learn how valuable their companies are to the state’s economy and especially to local communities. These companies are often the best — and highest paying — employers in town.

Often, company owners and policymakers know each other from Rotary, or from church, or by attending the occasional chamber of commerce meeting. But many elected officials don’t fully understand how these same people, operating out in the industrial parks on the fringe of town, have transformed their manufacturing companies into sophisticated global players, working in modern, clean plants, and generating an increasing number of high-tech, well-paid jobs. And they often don’t understand how their votes in the legislature could create a cascade of consequences for those employers.

The point: Your elected officials should know who you are, what you produce, and your impact on the community. They need to know about the great jobs you create and the charities you support.

I’m reminded of an Enterprise Minnesota® magazine interview with attorney and former legislator Jim Seifert a couple of years ago. Asked about how manufacturers could ensure their voices are heard at the legislature, Jim replied:

“It’s absolutely critical that manufacturers establish relationships with legislators. They should know who they are. They should know what their interests and policy priorities are. And they should ideally have at least one face-to-face meeting with a legislator or senior staff member. It’s the people who show up who have the power.”

It can be time consuming to connect with elected officials, but they have the power. A critical aspect of our mission to help manufacturers grow profitably is to work with policymakers to limit obstacles to robust growth.

When we help arrange factory tours with legislators, we come along, so we’ve seen the impact of these visits. It’s rare when policymakers don’t express surprise at the great things manufacturers in their own districts are doing. Sometimes they are unaware of their size and scope — even for fairly large companies.

And a note to those who’ve already hosted an elected official: Do it again! Invite them back for an employee recognition event, an ISO certification celebration, or the ribbon cutting on a new addition to your company. Or, just to take another tour. Each connection with policymakers and their staff enhances the relationship and makes it easier to reach out and work together on specific legislation.

We’re delighted to help. If you receive a phone call from Enterprise Minnesota about a tour, we hope you’ll engage in the opportunity.

Lynn Shelton is vice president of marketing and organizational development.

The point: Your elected officials should know who you are, what you produce, and your impact on the community. They need to know about the great jobs you create and the charities you support.

GROWING COMPANIES ENHANCING COMMUNITIES

Inspiring and celebrating Granite talent. Granite Partners is a private investment and holding company founded in 2002 in St. Cloud, Minnesota, with a mission to grow companies and create value for all stakeholders. As trusted partners, innovative leaders, and responsible stewards, we are committed to 100-year sustainability, and we aspire to world-class wellbeing for all people in and around the Granite community.