JULY 2013
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Carlson Meats marks 100 years in business
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Hutchinson Technology CEO talks candidly
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Lee Miller begins as new director of Hutchinson EDA
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Litchfield Chamber offers scholarships for adult learners
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Contents CROW RIVER
BUSINESS www.crb.mn
JULY 2013 Vol. 4 • No. 5 PUBLISHED BY Litchfield Independent Review P.O. Box 921 Litchfield, MN 55355 320-693-3266
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Cover story: The Carlson family has operated Carlson Meats in Grove City for 100 years
Hutchinson Leader 170 Shady Ridge Road NW Suite 100 Hutchinson, MN 55350 320-587-5000
Business news: Lee Miller takes over as director of Hutchinson EDA
PUBLISHER Brent Schacherer schacherer@hutchinsonleader.com 320-234-4143
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EDITOR Juliana Thill thill@independentreview.net 320-593-4808 Litchfield office 320-234-4172 Hutchinson office CONTRIBUTING WRITERS Andrew Broman,Terry Davis, Doug Hanneman
ADVERTISING REPRESENTATIVE Shari Forsman sales@crowriverpress.com 320-234-5702
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CEO Rick Penn talks about the future of the company
SUBSCRIPTION OR ADDRESS CHANGE Penny Stuber 320-234-4142 stuber@hutchinsonleader.com
PRINTED BY Crow River Press 170 Shady Ridge Road NW Hutchinson, MN 55350 320-587-2062 Crow River Business is published monthly by the Litchfield Independent Review and Hutchinson Leader newspapers. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by means, electronic, mechanical, photocopying, recording or otherwise, without the prior consent of the publisher.
story: 19 Feature Hutchinson Technology
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Business news: Jump-Start Downtown selects a winner
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Business news: Scholarships available for adult learners
10 Litchfield Chamber: Create a great place to work 16 Hutchinson Chamber: Take part in legislative talks 18 Meeker County EDA: Studying transportation concerns 23 Business achievements: Read about Ideal Business Plaza, Nu-Telecom, Jeff Schultz and Andrew Neubarth JULY 2013 | CROW RIVER BUSINESS
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Opening lines
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t takes a special type of organization to stay in business 100 years, according to the website Business Insider, and there is much to be learned from those reaching the centennial mark. Among the traits that these successful organizations have in common, Business Insider says, are a laser-sharp customer focus, a willingness to chart new territory, and a close relationship with the communities in which they operate. A local example is Carlson Meat Processing Inc. of Grove City, which is celebrating its 100th year in business. Located a block off U.S. Highway 12 East, this third-generation business has continued to meet the needs of its customers and successfully navigated its way through a changing business environment. Chuck and Kristin Carlson, who own and operate Carlson Meats, share in this month’s magazine what tactics they — and Chuck’s father and grandfather — employed to create a thriving business. They are to be congratulated for reaching the centennial mark. Congratulations also are in order for: I Lee Miller, who has been hired as Hutchinson’s new Economic Development Authority director, replacing Miles Seppelt. He comes to the job with some familiarity with Hutchinson, having worked as the EDA’s intern five years ago. Read more about him in this month’s magazine. I Elana Volkov, who won the Hutchinson Jump-Start Downtown new business contest. She plans to open Sweet Spot Bakery on Main Street, selling high-quality baked goods. Volkov’s business plan triumphed over seven other
proposals submitted in the contest. As a result, her prize package includes $10,000 in start-up capital, $2,000 for a new sign, free tuition for small business management classes, business coaching and mentoring, Chamber of Commerce membership, a free website, radio and newspaper advertising, and logo design — donated by local businesses, agencies and organizations. What a fabulous way to begin a new business. Running a company — big or small — is not always easy, as many in the business world can attest. When a business goes in the “ditch,” where Rick Penn saw his company, it can take time and effort to steer out of that low point and onto stable ground again. That’s what Penn, president and chief executive officer of Hutchinson Technology, is working toward. Nine months into the job, he is pulling the company out of the ditch, quarter by quarter by quarter. As a result, Hutchinson Technology is in the best shape Penn has seen in years. Read more about Penn’s assessment of the company and his vision for the future inside this magazine. If your vision for the future is to become a better public speaker, consider joining the Hutchinson II Toastmasters club. The group meets weekly and will help you hone your speaking and leadership skills. Read more elsewhere on this page. — Juliana Thill
Coming events Hutchinson II Toastmasters club meets Census Bureau offers free webinars weekly, welcomes new members that teach businesses about exporting The Hutchinson II Toastmasters club is seeking new members. The local club is part of Toastmasters International, a world leader in communication and leadership development. A Toastmasters meeting is a learnby-doing workshop in which participants hone their speaking and leadership skills in a no-pressure atmosphere. The Hutchinson II Toastmasters club meets weekly from 7 to 8 a.m. Thursdays at the Learning Development Center building on the campus of Hutchinson Technology Inc. The local chapter is focused on helping area professionals and individuals build confidence and grow by providing a positive, collaborative, structured environment to improve communication and leadership skills. For more information, contact Vickie Shoutz, vice president of membership, at 320-587-1525 or email her at vshoutz@hutchtel.net.
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Exporting is a way to increase sales and competitiveness, according to the U.S. Census Bureau, especially since 95 percent of potential consumers live outside of the United States. The Census Bureau offers web-based and in-person courses to help people access and use Census Bureau statistics. These free courses can teach people how to use its databases and mapping tools, and find local and national demographic information for a variety of uses, including grant proposals, economic data statistics for business plans, and research papers. The Census Bureau has a network of data specialists who can provide training throughout the nation. To learn more, register for the Go Global webinar series, which provides people the resources necessary to expand into new markets and be a successful exporter. Register free at: http://go.usa.gov./T37A. Upcoming webinars include: I July 16 — Go Global Webinar Series: Finding Buyers and Making Contacts — Foreign Agricultural Service. I July 30 Go Global Webinar Series: Trade Financing— Small Business Administration (SBA) and Export-Import Bank.
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Business news Sweet Spot wins Hutchinson’s Jump-Start Downtown contest Something sweet is coming to Hutchinson’s Main Street. And it will receive a lot of dough and other assistance to make it successful. The winner of Hutchinson’s five-month competition to attract a new business downtown is Elena Volkov, who will soon open Sweet Spot Bakery at 8 Main St. N. Her business aims to make high-quality baked goods available. In addition to pastries and desserts, Sweet Spot Bakery will sell several handmade breads. Volkov’s business plan triumphed over seven other proposals submitted in the Jump Start Downtown Business Plan Competition. The Jump Start prize package included $10,000 in start-up capital, $2,000 for a new sign, free tuition for small business management classes, ongoing business coaching and mentoring, Chamber of Commerce membership, a free website with one year of hosting, radio and newspaper advertising, logo design, business cards, letterhead and envelopes. The competition’s goal was to help promising local entrepreneurs realize their business dreams by connecting them to the best resources available, along with access to the capital. It consisted of three rounds and involved a panel of small business experts who reviewed all proposals and invited the most promising entries to compete. Two finalists were chosen to participate in the final round, where they made an oral presentation to a panel of judges. — Terry Davis, staff writer at the Hutchinson Leader
SWIF offers class where people can learn to start a business Southwest Initiative Foundation offers “Starting a Small Business” class from 9 a.m. to noon on the third Wednesday of each month at the foundation’s office, 15 Third Ave NW, Hutchinson. Entrepreneurs can learn how to research and prepare a business plan to determine whether a business idea is feasible, marketable and profitable and learn about available financing options. There is no charge, but registration is requested. For information or to register, contact Greg Jodzio at 320-587-4848 or 800594-9480 or email gregj@swifoundation.org.
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SUBMITTED PHOTO
Jim Weddle, far left, managing partner for Edward Jones, met with staff from the Edward Jones branch office in Hutchinson during a luncheon in May. Joining him are financial adviser Pat Chapman, senior branch office administrator Heidi Froemming, financial adviser Dean Winter, branch office administrator Shari Dorival, financial adviser Kim Winter and senior branch office administrator Lynn Winslow.
Edward Jones makes Fortune 500 for first time
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inancial services firm Edward Jones broke into the Fortune 500, as published by Fortune magazine, according to local financial advisers Dean Winter, Kim Winter and Pat Chapman. Fortune magazine’s annual listing ranks the largest U.S. companies by revenue. Edward Jones debuts on this year’s list at No. 491, with more than $5 billion in revenue for 2012. Edward Jones provides financial services for individual investors in the United States and, through its affiliate, in Canada. Every aspect of the firm’s business, from the types of investment options offered to the location of branch offices, is designed to cater to individual investors in the communities in which they live and work. The firm’s 12,000-plus financial advisors work directly with nearly 7 million clients to understand their personal goals — from college savings to retirement — and create long-term investment solutions that emphasize a well-balanced portfolio and a buy-and-hold strategy. Edward Jones embraces the importance of building long-term, face-to-face relationships with clients, helping them to understand and make sense of the investment options available today. In January 2013, for the 14th year, Edward Jones was named one of the best companies to work for by Fortune Magazine in its annual listing. The firm ranked No. 8 overall. These 14 Fortune rankings include 10 top-10 finishes, consecutive No. 1 rankings in 2002 and 2003, and consecutive No. 2 rankings in 2009 and 2010.
Business news Litchfield Chamber offers scholarships to adult learners pursuing job skills training Much has been said about local businesses’ need for workers whose skills line up with the jobs available, especially those that require technical or vocational training. To respond to the need, the Litchfield Chamber of Commerce has created a scholarship program targeted to financially assist adult learners as they pursue job skills training. To be eligible applicants must complete an application form and provide a letter of recommendation from a Litchfield Chamber member. Application deadline is Aug. 1. A committee of volunteers will interview applicants and select the scholarship winners. If awarded a scholarship, applicants will be required to provide proof of enrollment in their educational program prior to receiving the award. The Chamber’s Board of Directors has allo-
cated up to four $500 scholarships to be awarded in August. “The Litchfield Area Chamber of Commerce has a history of fulfilling a unique niche with its scholarship programs,” said Dee Schutte, executive director for the Chamber. “As students enroll in technical or vocational training programs, the avenues for scholarship opportunities become somewhat limited. This is particularly true of the adult learner. The new financial assistance program provides an opportunity for these students to receive financial assistance.” The scholarship program is supported by donations from Chamber members. Applications are available at www. litch.com or by calling the Chamber at 320-693-8184.
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The Minnesota unemployment rate fell to a seasonally adjusted 5.3 percent in April, according to the Minnesota Department of Employment and Economic Development. The agency said the jobless rate fell to its lowest point since May 2008 and remains well below the U.S. rate of 7.5 percent in April. State employers shed 11,400 jobs in April, while March figures were revised from 5,200 jobs lost to 3,300 jobs lost. Minnesota has gained 24,400 jobs during the past year, a growth rate of 1 percent, compared with a U.S. growth rate of 1.6 percent during that period.
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Feature story
Lee Miller, Hutchinson’s new Economic Development Authority director, is familiar with the Hutchinson business community. He was the economic development authority’s intern five years ago. He replaces former director Miles Seppelt. PHOTO BY TERRY DAVIS
Miller takes over leadership of Hutchinson EDA By Terry Davis CONTRIBUTING WRITER
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t seems to be a perfect match. Former Hutchinson Economic Development Authority intern Lee Miller has been hired by the city to be its economic development director. Miller replaces Miles Seppelt, who left the position in late January after more than 10 years of heading up Hutchinson economic development efforts. Miller was attending St. Cloud State University in community development when he interned under Seppelt in the spring of 2008. Miller’s office at the time was across the hall from Seppelt’s, one he now occupies. “I have always held Hutchinson close and dear to my heart since then,” Miller said. “I know I have some big
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Lee Miller, a former Hutchinson EDA intern, replaces Miles Seppelt as director shoes to fill. I’m going to try to pick up the many hats Miles had on.” Miller has built up his resume since leaving Hutchinson five years ago. After his internship and graduation from SCSU, he served as director of the Region 5 Development Commission. He served the north-central Minnesota counties of Cass, Crow Wing, Morrison, Todd and Wadena counties. After three years, Miller became a
contract employee of the Minnesota Department of Employment and Economic Development in 2011. He served as an economic development program specialist for 19 counties in central Minnesota. At the end of the six-month contract, he took some time away from economic development before rejoining DEED serving in a 20-county area of northwest Minnesota. He provided technological and financial assistance to manufacturers seeking local and state financing for development projects. “The regional jobs really exposed me to development issues,” Miller said. “And working for DEED gave me a lot of insight into how it operates.” He learned about the opening in Hutchinson from the city website and through contacts Seppelt had with for-
Feature story
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I know I have some big shoes to fill. I’m going to try to pick up the many hats that Miles had on.
mer interns after announcing his decision to take a position with InterVarsity Christian Fellowship, a nationwide college campus ministry. Miller, who grew up on a farm near Lake Crystal, southwest of Mankato, said the move gets him closer to home, where he still helps with spring planting and fall harvest.
He knows Hutch He said the job also is a good fit. He knows many of the key economic development role players in Hutchinson and is familiar with some of the ongoing projects. One of them is the move of the
LEE MILLER, director of Hutchinson’s Economic Development Authority
Farmers Market to the former Dakota Rail depot site. Five years ago, Miller appeared before the City Council to announce a possible resolution to a long-running battle over where to put the market. At that time, the idea was to move the market from the first block of First Avenue Southeast one block east to north of City Center. That option got shot down. The market, a program of the Hutchinson Downtown Association, eventually set up shop in the VFW parking lot. The permanent Farmers Market pavilion should be completed in time for the growers to use it for at least a few weeks this fall.
Miller is settling into his new job, reviewing the status of several initiatives Hutchinson has started to attract companies and jobs such as the industrial park’s “shovel ready” designation and the EDA’s participation in the state-run Angel Network economic development effort. He also is wrapping up the “Jumpstart Downtown” competition, which selected a proposal to open a bakery as the winner of a $25,000 prize of cash and services. “I’m pretty much trying to dive right in,” he said. Terry Davis is a staff writer at the Hutchinson Leader.
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Litchfield Chamber
How to create a great place to work
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hy does one business get a reputation as a great place to work while another is plagued by turnover and low productivity? It’s more than a matter of paying employees more. It comes from employees actively recommending their employer as a great place to work (and do business with). Going behind the scenes in many of our local businesses, I’ve observed several factors that create a work environment that creates a great place to work. >> Confidence in the abilities of senior leadership. Employees who feel that senior leadership is moving their company in the right direction become more willing to put in extra effort. Business owners and top management are the visible face of the business. They set the strategic goals and steer the company in the direction to achieve their vision. >> Employees are able to voice their opinions … and know that their opinions matter. Employers who encourage open and honest communication have more engaged employees. They openly welcome employees to share concerns and work together to find solutions. When employees feel they lack oppor-
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Dee Schutte EXECUTIVE DIRECTOR OF LITCHFIELD CHAMBER OF COMMERCE
>> Positive peer interactions. A spirit of teamwork and cooperation helps employees create long-lasting friendships among their colleagues. Positive peer interaction is related to employees’ looking forward to going to work. These are the employees who feel proud to be working for their company. They are the ambassadors for the organization.
>> Opportunity to grow and develop new skills. Owners, executives and managers provide a clear career path, give employees helpful feedback and provide training programs. Employees need to feel they have an impact on the company’s direction of the company and that they can pursue their own career goals.
>> Hold everyone accountable. Reward positive contributions. Supervisors and managers who hold individual employees responsible for their own actions and interactions with co-workers create a positive workplace. All employees want their contributions to be recognized. Rewards need not always be financial — but need to be meaningful to the employee. Recognition and praise can go a long way.
>> The values of the company and the employee align. Most employees want to feel they belong to a community that shares their values. According to a recent Dale Carnegie Training survey, the engagement level is twice as high among employees who say they are proud of the contributions their organization makes in the community.
Great places to work recruit the right people for the right job, give employees clear goals and responsibilities, and train them throughout their careers. Business owners, executives and managers who demonstrate trust for their employees, communicate with them and recognize and reward their work are building a workforce that gives their organization a competitive edge.
tunities to express how they feel, they tend to become unmotivated.
CROW RIVER BUSINESS | JULY 2013
Business news
Number of businesses without paid employees rises for this important component of our nation’s economy.” Among industry sectors, services that comprise the “other services” (except public administration) sector gained the largest number of establishments, adding 159,163 in 2011, an increase of 4.7 percent. Types of services that fall within this sector include automotive repair and maintenance, barbershops, beauty salons, laundries and dry cleaners. The number of nonemployer businesses declined in only two sectors. The construction sector lost 36,262 establishments (1.5 percent), while the finance and insurance sector lost 3,088 establishments (0.4 percent). Total annual receipts for nonemployer businesses were $989.6 billion in 2011, an increase of $38.8 billion (4.1 percent) from the previous year. Nonemployer Statistics covers businesses with no paid employees, annual business receipts of $1,000 or more ($1 or more in the construction industries) and subject to federal income taxes. Businesses with paid employees were covered in County Business Patterns, which was released in April.
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he number of businesses without paid employees in the United States rose 1.7 percent to 22.5 million in 2011, according to a new report from the U.S. Census Bureau. This marked the second straight increase in nonemployer businesses, with all but two states (Louisiana and New Hampshire) posting gains from 2010 to 2011. The findings come from Nonemployer Statistics: 2011, an annual report on U.S. businesses without paid employees, classified in nearly 450 industries for the nation, states, counties and metropolitan areas. Nonemployer businesses includes 19.4 million sole proprietorships, 1.4 million corporations and 1.6 million partnerships, which together make up the total number of nonemployer businesses. “Approximately 75 percent of all U.S. business locations are nonemployer businesses,” said William Bostic Jr., associate director for economic programs at the U.S. Census Bureau. “These statistics provide the only source of information on the total number of establishments and receipts at the local level
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Cover story Kristin and Chuck Carlson took over Carlson Meats from his father, Willard, who took over the business from his father, William, who bought the business, then known as City Meat Market, in 1913.
Carlson Meats of Grove City has been in the Carlson family for 100 years, processing meat for farmers near and far. Performing quality, custom work and having USDA-inspected label status have been key to the century-old company’s success.
Carlson Meats marks 100th anniversary PHOTOS AND STORY BY PUBLISHER BRENT SCHACHERER
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tanding at one end of the aging room at Carlson Meats, owner-operator Chuck Carlson points out what makes his smalltown meat processing facility successful. Hanging in neat rows are the carcasses of three cattle, four sheep, a couple of pigs and three yaks. Yes, yaks. In a world where bigger has become better, where facilities serving factory farms on one end of the food chain and big box retailers on another slaughter and process thousands of cattle a day, Carlson Meats in Grove City is different. It is that “different” that helps Carlson Meat Processing Inc. and its owners, Chuck and Kristin Carlson, thrive in a vastly changed business environment from the one Chuck’s grandfather started in a century ago. Among Carlson Meats’ customers are buffalo and yak farmers, hobby farmers who bring only a few animals for
Cover story slaughter each year, organic beef farmers and other small job customers. These customers have a variety of specialized requests for the Grove City butcher — requests that might not receive the kind of attention they receive at Carlson Meats, or even be an option, at a larger processor. “Our customer who sells yak, he wants jerky that doesn’t use any nitrates,” Kristin Carlson said. “Or he he’ll make brats, but they have pork in them. There are a lot of different things we do — yak brats, beef brats with pork, and beef brats without pork.” “That’s what custom work is, though,” Chuck Carlson said. “A lot of variations.” Custom work is what helps Carlson Meats stand out. Well, that and the care Chuck and Kristin Carlson — and their staff of 10 full- and part-time employees — put into their work. “We kind of pride ourselves in doing quality work,” Chuck Carlson said, adding that pride and the USDA-
inspected label they’ve held since the mid-1970s have been major selling points for the meat market during the past few decades. It’s a success steeped in history, ranging across three generations of the Carlson family. It all began in 1913 when William Carlson — Chuck’s grandfather — purchased City Meat Market. “Billy Butch” sold fresh cuts of meat, as well as sausages and other specialty items for Scandinavians in the area, according to a description on the Carlson Meats website, www.carlson meats.com, and which was compiled into a book for family and friends just in time for the business’ centennial celebration in mid-June. William Carlson purchased animals from local farmers, and slaughtering was done in a small building in the town pasture, what is now Grove City’s Windmill Park. When slaughtering was complete, the meat was hauled back to the meat market where it was stored in a cooler that was
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chilled by ice taken from local lakes the previous winter. The second generation of the business — Chuck’s father, Willard — grew up in the family business, eventually taking over when his father died in 1954. The business model began to change in the 1950s and 1960s, the Carlsons said, when the focus changed from fresh daily meats to custom processing and frozen meat sales. A new slaughter house was built in 1955 and aging coolers were added to accommodate the increase in custom processing. Then Willard Carlson made one more big move in 1967, relocating the meat market from its main street home to a lot one block off main street, where the business is still located. Since that move, a cutting room and retail sales area were added on, Kristin Carlson said, jokingly adding that after multiple remodels and additions “there are rooms I haven’t even been in yet.” That, of course, is only a joke. Because since the mid-1970s, Chuck
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Cover story and Kristin have put their hearts and souls into the business to continue a family tradition and business that’s had remarkable staying power. It wasn’t exactly part of the plan when Chuck left Grove City for college. “In high school and early college, my dream was to go into wildlife management,” he said, adding that he attended the University of Minnesota because it offered a major in the field. He later moved to Bethel College, where he earned a degree in biology. Chuck and Kristin were in Montana in the fall of 1975, where they hoped he would land a job in his chosen profession, when they received a call from his father. “It was the fall, and it was busy and he needed some help,” Chuck said. “He wanted to know if I’d come and help. And sure, you know, I didn’t have anything, didn’t have a job.” Kristin grins as Chuck tells the story of how they wound up back in Grove City. “What I like to say is, we came because Dad said, ‘Can you come and just help out,’” she said. “And we’ve been helping out ever since. We’re still trying to decide what we’re going to do with our lives. You know, it goes so fast.” So fast, the couple realized recently, that Chuck has logged more years at Carlson Meat Processing Inc. than either his grandfather or father, 38 years in all. Chuck became owner of the business in 1983 when his father died. He credits his father’s tutelage and that of one of his father’s employees for helping him learn the business quickly from the ground up. And he gives a big nod of appreciation to his father for his forward thinking when it came to improvements in the business. Expansion of the physical plant was one thing, but that growth was prompted by a key change in the business approach in the early 1970s when Willard Carlson sought USDAinspected status. “Used to be all the meat markets were the same … you could do whatever,” Chuck Carlson said. But in the early 1970s, under a push by then-Sen. Walter Mondale for better meat inspec-
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SUBMITTED PHOTO
In 1913, William Carlson — Chuck’s grandfather — purchased City Meat Market in Grove City. “Billy Butch” sold fresh cuts of meat, as well as sausages and other specialty items for Scandinavians in the area. tion, the U.S. Department of Agriculture inspection program was made available to butchers in Minnesota and throughout the country. Chuck Carlson said he remembers his dad talking about the change, convinced that it would be a good move for his business, even though it added significant expense and a layer of government oversight that didn’t previously exist. “We had a guy (who) came here and reviewed our plant and he said, ‘If you don’t go federal, you won’t be in business. That’s the wave of the future,’” Chuck Carlson said. “Of course, that never happened, but that’s when we went federal. “Dad had to do a lot of remodeling. There were a lot of requirements you had to go through,” he added. “But right now, I’m glad we are (USDA inspected). It gives us a slice of business we wouldn’t have otherwise.” The USDA-inspected program, which calls for a government inspector to be on-site 40 hours per week, allows products processed at Carlson Meats to be sold to other businesses, such as convenience stores, groceries and bars. Chuck Carlson said that brings customers from as far away as Sauk Centre, Delano, Montevideo and Luverne to have their livestock
processed at Carlson Meats. That’s important, of course, because the number of local customers has shrunk as the number of farms throughout Meeker County has declined. As consumers pay more attention to locally produced foods, and to knowing the farmer from whom they get their vegetables or fresh meat, it might seem like a great opportunity for a small-town meat market like Carlson Meats. But that assumption isn’t as simple as one might think, Chuck Carlson said. “Everybody talks about that,” Carlson said of the local-foods movement. “You’d think there would be people flooding in the doors to get meat from local farmers. But you know, price is still a big thing for people.” Still, small meat markets like the Carlsons’ have their supporters. Kristin said that not a week goes by when a customer doesn’t come in with a story about, ‘Oh, I can’t buy hamburger at the grocery store anymore, because you’ve got me spoiled.’” Products like summer sausage and wieners are big sellers in the Carlson Meats retail area, which provides about 30 percent of the business’ income. Taste is what brings customers back regularly, Kristin Carlson
Cover story said, but there are those who recognize the Carlsons’ approach to “minimally A key change at processed” products is more healthCarlson Meats took place ful than large-scale operations. in the early 1970s, when “You can go into the convenWillard Carlson sought USDAience store and see summer sausage not even refrigerated,” inspected status. This allows prodshe said. “You know that’s ucts processed at Carlson Meats to be loaded with stuff. We use the sold to businesses such as convenience minimum of preservatives, for stores, groceries and bars. That brings meat that’s not overly customers from as far as Delano, processed.” Sauk Centre, Montevideo and Carlson Meats creates those Luverne to have livestock minimally processed products processed at Carlson using recipes Chuck Carlson’s Meats. grandfather created. Through the years, he’s added his own recipes, too. And while those are recipes for meat products, one might also say the that and changed to fit that niche. It’s Carlsons have struck on a recipe for very much a niche. “It’s been a good life for us,” she business success, as well. “I think (Chuck) has done a good job added. “But there is sort of an art to of transitioning to the way the meat keeping it … to having enough busiindustry is going while staying small,” ness that you can pay the bills, but not Kristin said. “There are few our size maybe so large that you lose the perthat do everything, and that are under sonal relationships with your cusUSDA inspection. We’ve grown with tomers.”
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Hutchinson Chamber
Local business leaders contribute to legislative conversation
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o matter if you were in favor of, or against, any particular piece of legislation, most of us can agree, we’re glad that the 2013 state legislative session is finished. I’m impressed by the passion with which businesses understand and champion their causes. The choice to go through the channels, reaching out to legislators and making a case for or against something with statistics and concrete information is not always easy. Our local representatives assure us this is the best avenue for each of them to support you, their constituents. Once in hand, they can take this information to committees and other legislators for discussion and persuasion. Here are a few items we heard about from our Chamber member businesses this spring: I Business to business tax I Omnibus jobs and economic development bill I Bonding bill I Minimum wage hike I Long-term care services I Minnesota Insurance Marketplace No matter where you land on the support spectrum for these, or other pieces of legislation, I encourage you to join the conversation. There are many educational resources available to learn more about business on the state and federal level. Some websites to explore include: I www.freeenterprise.com/enterprisingstates shares information regarding each state’s ranking for several business factors. The U.S. Chamber has a number of resources and information available on the FreeEnterprise website. I www.positivelyminnesota.com is the site for the Department of Employment and Economic Development. Learn about various business topics, and government programs for business growth. I www.leg.state.mn.us includes leg-
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To learn more about legislators, bills, schedules, publications and the legislative process, go online to www.leg.state.mn.us.
Mary Hodson PRESIDENT OF HUTCHINSON AREA CHAMBER OF COMMERCE AND TOURISM
How to contact local legislators I Gov. Mark Dayton 651-201-3400 or 800-657-3717 www.mn.gov/governor I Sen. Scott Newman (District 18) 651-296-4131 sen.scott.newman@senate.mn
islators, bills, schedules, publications and the legislative process. I www.senate.gov and www.house.gov follows the U.S. Senate and House of Representatives, members, their committees, legislation, history and more. We’ve included a list of our local representatives. Their job is to listen to what you have to say, how you feel, and represent your needs at the Capitol. Discussion leads to educated decisions and supports progress, while complaints and attacks stifle our ability to be thoroughly involved in the process. Please consider adding your voice to the conversation.
I Rep. Dean Urdahl (District 18A) 651-296-4344 or 800-920-5861 rep.dean.urdahl@house.mn I Rep. Glenn Gruenhagen (18B) 651-296-4229 or 800-341-0510 rep.glenn.gruenhagen@house.mn I U.S. Sen. Al Franken 202-224-5641 or 651-221-1016 www.franken.senate.gov I U.S. Sen. Amy Klobuchar 202-224-3244 or 888-224-9043 www.klobuchar.senate.gov I U.S. Rep. Collin Peterson 202-225-2165 www.collinpeterson.house.gov
Business news
USDA trade mission to Turkey aims to create opportunities for U.S. agriculture companies The U.S. Department of Agriculture Acting Deputy Secretary of Agriculture Michael Scuse led a trade mission in June to promote U.S. agricultural exports to Turkey. Representatives from Iowa, Minnesota, Missouri, Nebraska, North Dakota, and Pennsylvania, as well as 20 U.S. companies participated. Companies attending the Turkey trade mission represented a wide variety of agricultural products. “People around the world continue to demand U.S. food and agricultural products, boosting American businesses and supporting our rural communities,” Scuse said. With its rapidly developing economy and expanding middle class, Turkey is becoming a key market for U.S. food and agricultural products. U.S. agricultural exports to the country tripled over the last decade. In fiscal year 2012, two-way agricultural trade between the two countries reached more than $2.4 billion, with U.S. exports accounting for more than 75 percent of the total – a significant contribution to the U.S. agricultural trade surplus.
Department of Revenue to offer weekly updates on new tax changes The Minnesota Department of Revenue is reviewing the tax changes recently signed into law. The changes might require some taxpayers to do things differently and the Department of Revenue is working to provide guidance and instruction. To ensure those affected by the tax law changes have the information they need, the Department of Revenue will provide weekly updates, based on when the changes take effect. Starting June 6, the Department of Revenue started posting new or updated law change information at 9 a.m. every Thursday on its website: www.revenue.state.mn.us/Pages/law_changes.aspx.
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Hutchinson l Litchfield l Cosmos l Willmar JULY 2013 | CROW RIVER BUSINESS
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Meeker County EDA
EDA, state agencies study local transportation concerns
D
uring the past two months, Meeker County Economic Development Authority and the University of Minnesota and the Minnesota Department of Transportation District 8 region have been conducting business retention and expansion visits. The purpose of the visits is to sit down with businesses in Meeker County and throughout the MnDOT District 8 region to learn of transportation issues that might exist on Minnesota roads and highways. The study will be completed in July, with the completed report from the University of Minnesota due out late September or early October. One item we discovered during our visits is a lack of understanding about the “511” tool for transportation communication in Minnesota. “511” is a public service provided by the Minnesota Department of Transportation to help travelers and businesses access information about road conditions, traffic incidents, commercial vehicle restrictions and weather information. The information can be accessed via a land line, the web, or from your mobile phone. It is accessible 24 hours a day, 7 days a week. This can be helpful for getting a company’s product out, or receiving materials in, without delay due to unknown road conditions. To access this information via your phone just simply dial 511 or via the web at www.511mn.org What’s happening in Meeker County:
Eden Valley Motel on Minnesota Highway 55 is a 13-unit motel that operates on a 24/7 self-check-in technology. Jim and Kristie Orn purchased and revived Kingston Mini Mart along Minnesota Highway 15. PHOTOS BY JULIANA THILL
Suzanne Hedtke EXECUTIVE DIRECTOR OF MEEKER COUNTY ECONOMIC DEVELOPMENT AUTHORITY
Eden Valley The residents of Eden Valley do not rest in their efforts to grow and improve their business community. But even though they do not rest, visitors to the community now can. Eden Valley Motel, located at 315 Meeker Ave. E., Minnesota Highway 55, on the east end of the community, has opened for business. But this is not
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your typical motel. This 13-unit motel operates on a 24/7 self-check-in technology. Located in the office is a kiosk that guides you through the check-in process and then provides a room number and an access code for the room. More information on this wel-
come new addition can be found on the motel’s website, www.edenvalleymotel.com or by calling 320-453-6835.
Kingston The Kingston Mini Mart is open and ready for business. A social gathering place for many from the community and surrounding area, it was a welcome day when the doors opened for business once again. The inside of the store has been remodeled and updated, but it’s still the same great place to stop and pick up the Sunday paper and maybe a treat or two. Congratulations to Jim and Kristie Orn on purchasing and reviving this community treasure.
Feature story
HTI president sees bright, diverse future for company By Doug Hanneman CONTRIBUTING WRITER
N
ine months into his role as Hutchinson Technology’s president and chief executive officer, Rick Penn is feeling good about his company’s direction. Quarterly earnings posted in early May were the best in three years. The company’s new Thailand assembly plant is helping drive down costs. Within a year, 80 percent of assembly is expected to occur there, while component production continues in the U.S. Its Biomeasurement Division, which produces a medical device that measures tissue and organ oxygenation levels in critical care settings, is finally close to breaking even each quarter after an investment of Hutchinson tens of millions of dollars. Technology’s And a new business development effort offers the promise CEO talks of diversification by using the candidly company’s unique precision manufacturing capabilities. about his The hope is that new products assessment will enable entry into new markets with new customers. of where the The company is in the best shape Penn has seen in years. business is “We’re making really big today and progress,” he said recently. “We’re pounding away at gethis vision for ting this company out of the the future ditch, quarter by quarter by quarter. And it’s working.” The “ditch” describes Hutchinson Technology’s position after plummeting from being the world’s largest-volume producer of suspension assemblies several years ago — when it commanded upward of 50 percent of the market — to 20 percent today. These days, Penn frequently uses the word “turnaround,” and is adamant that the firm will not repeat the missteps that caused it to lose its dominance in the suspension
PHOTO BY DOUG HANNEMAN
Rick Penn, Hutchinson Technology president and chief executive officer, said the company is in the best shape he has seen in years. “We’re making really big progress. We’re pounding away at getting this company out of the ditch, quarter by quarter by quarter. And it’s working.” assembly market. The keys to the turnaround are people and technology. “Through all of this restructuring and all the pain we have been going through the last several years, we’ve held onto our core technology,” he said. “We’ve lost a lot of good people, but we’ve hung onto a lot of good people, too.” In the disk drive industry, Hutchinson Technology’s niche is its ability to meet its customers’ demand for increasingly tighter tolerances. “We’re in an environment now in the industry where the suspension requirements are getting more demanding, where everything is getting a little tougher on many fronts,” Penn said. “The component requirements are getting tighter and tighter to enable the ‘drive guys’ to hit their product requirements, and that’s an environment we do pretty well in. And because we kept our core here, we’re proving, in some cases, that we have a little bit of an edge over the competitors.” That edge, Penn said, will win new opportunities with customers. “We feel better now than we’ve felt in years in the number of programs that we’re qualified and slated to participate for new and upcoming disk drives,” he said. “You’ll see that in the volume as we move forward. You can’t take that to the bank yet, but overall customer confidence in the JULY 2013 | CROW RIVER BUSINESS
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Feature story company is much stronger today than it was two years ago.” Even if suspension assembly sales remain flat, the company will do well, Penn predicted. “All we need is two or three more share points, and we’ve got volume levels that keep us really healthy and start generating some nice cash. We’re very close to being there.” During an interview in his office, Penn, 57, talked about where the company is today and his vision for the future.
Q
uestion: Have your first nine months as president and CEO been what you expected? “Pretty much. Wayne (Fortun, the previous CEO and president) did a really nice job starting about two years ago pulling back. So I have been transitioning into this role in an increasingly strong way starting about two years ago and then more intensively starting a year ago. So it was really natural and there were not any big surprises. It certainly is different now because the buck stops with me and it used to stop with Wayne. So now I’m fully accountable and that’s a big difference, but exciting and good. We’ve been working this turnaround for a good two years plus and I’ve been a big part of that.”
Q
uestion: You have four suspension assembly customers, with Western Digital accounting for more than half your total sales. Is that a good or bad situation to be in? “Well, the market has matured and consolidated, which is what markets will do. I would rather have many, many customers rather than only three or four … and we have four going down to three. I’d love to have more customers and more options for suspension business but it’s the reality of this industry, and you just have to win with all of them.”
Q
uestion: How long will data storage on hard disk drives be the answer for consumer use, as the cost of solid state data storage continues to drop? “That is the multibillion-dollar question. A couple of things. One is, what’s really been happening is that tablets and smart phones are what consumers are spending their money on, and buying fewer PCs. And those devices are quite capable when it comes to surfing the Web and doing all the Internet stuff. Flash (memory) has come down enough in price so it’s useful to put a small amount of flash in those devices and that can handle what needs to be done, and the rest can be stored in the cloud (servers available over the Internet). “The part of that story that most people forget is that the cloud is mostly hard drives. And the main drive segment for the cloud is what’s called capacity-optimized drive. These are large high-capacity drives with an average of eight heads per drive. That’s an increasingly growing part of the drive environment in the cloud with more suspensions per drive than for desktop or notebook PCs.”
Q 20
uestion: But consumers don’t see that. “Consumers are using all their devices and whether they have a drive in their notebook or not, there’s a bunch of data going to the cloud
CROW RIVER BUSINESS | JULY 2013
What does Hutchinson Technology make? >> Its main product is suspension assemblies for disk drives. The company makes millions of them — more than 390 million last year. Suspension assemblies precisely position the recording head above the disk and provide the electrical connection from the recording head to the disk drive’s circuitry. Suspension assemblies are found in virtually every size and type of disk drive, from desktop and notebook PCs to enterprise computing.They also can be found in consumer electronics devices such as digital video recorders, personal storage devices and portable media players.
and being managed up and down into and out of the cloud, and there’s a ton of storage. “Years ago you used to hear the term data warehousing. The buzzword today is ‘big data.’ And maybe even the more important buzzword is ‘big data analytics.’ There’s just a pile of data being stored. There’s more data that’s being stored on you and me than can be imagined. And that is increasingly being analyzed. And this data has to be accessed reasonably quickly. That’s what’s getting stored on these capacity-optimized hard drives. And that’s the big thing in this business that’s growing. “So I think there’s going to be a lot of drives sold for many years in spite of flash and in some ways they’re complementary storage technologies. And there’s going to be a lot of suspensions sold for a lot of years. This is not a dying or declining market. This is really a key marketplace for trends that are occurring today, which is lots of storage in the cloud, and then there will be some storage in our mobile devices. Most of what is being stored in the cloud is active data, and that’s the realm for hard drive. It’s still fast access but much cheaper storage overall than flash or solid state drives. It’s projected even out as far as 2020, 85 percent of the stuff that’s going to be stored is going to be stored on hard drives. “We’re not expecting massive, rapid growth, but it could happen in certain years. But we’re not expecting a cliff as in a decline, either. We’re expecting it to be flat to up as we look at it overall.”
Q
uestion: Is your company right-sized now? “I think so. The model is, keep the critical components in the U.S. because we can very costeffectively make those components here and they
Feature story require process technology that we can control a little better by keeping it in the U.S. But to have the lion’s share of the assembly business in Asia makes sense for a couple of reasons. One, it is cost beneficial to do those assembly process steps in a lower-cost environment. And two, it is really necessary to be close to our customers in that last step of the process. We need to be there. The communication needs to be tighter, the interaction has to be more productive. If there are issues, we can resolve them more quickly together. So if you want a business model that works, you’ve got to be in Asia with assembly, but the component operations will be U.S.-based.”
Q
uestion: Will moving more assembly to Asia impact our work force here and in Eau Claire? “We’re already phasing down the assembly work force in Eau Claire. They know that and it has already started. We’re about 2,000 people overall. We’re about 640 or so in Thailand and that’s going to grow some, yet. We’re about 600 in Hutch. We’re about 700 in Eau Claire. And probably about 80 in Plymouth. And those 80 jobs are coming to Hutch. And we’ll continue some assembly in Hutch, so that will stabilize things here. “Also, this is where new business development is going to be based and to the degree that we’re successful with that, and over time we will be, that will also be a growth pattern for this site. Hutch is going to be a pretty key site for the company. Eau Claire is going to be a key component site, and Asia will be key for the assembly, the last step in the process. And that’s the model. “So Hutch is not going away. Over time, if we’re successful, we’ll even see changing from constantly hunkering down to moving up again in size. That is the plan and those are the facts. Hutchinson will continue to be the headquarters for the company, and none of that is changing.”
Q
uestion: What is your vision for the company, and how far out does it extend? What can you tell me about your new business development effort? “We want to have multiple customers in multiple markets with a lead in supplying critical components for those markets. It’s a lot of work, but right now we have four customers, and that’s going to three, in one market. The vision is to grow this company and leverage our depth and breadth of processes and the technical capabilities. We intend to regain the suspension lead, but also expand into other markets longer term. “So when you look at the company three years from now, and five years from now, we’ll look different. We’ll be in other markets. We already are involved in some opportunities in other markets. We’re not commenting much on that yet. But it is a key thrust in the company. It is going to take some time. And when you’re looking at those opportunities, some of those fizzle and some look like they’ve got some real legs and some real market potential. We want to make sure we build sustainable businesses before we start hyping it and make sure that it’s real. But it’s definitely part of the company’s strategy.”
Q
uestion: What do you like best about your job? “I am honored to be able to get up and walk in this environment every day, take on the challenges of leading HTI’s turnaround, and be surrounded by the caliber of people who are in this company. And that’s in Hutchinson and Plymouth and Eau Claire and Asia. We’ve got just top-notch people, many of whom grew up in the company like I have and some that came here later. I’m surrounded by people who have been here many years and are just sharp, sharp people. So my batteries are charged up every day. It’s neat to be a part of something that is so rock solid. And I would put this team up against, for sure against our competitors, as far as being the strongest team on the planet. It’s been built up for many years, and despite all the pain and agony over the past couple of years, we still have that. And that’s pretty cool. It’s fun to lead and it’s fun to watch people soar. I’m glad I can be in a position where I can help build us back and I can help people soar and have better lives. That’s a pretty enriching thing.” Doug Hanneman is editor of the Hutchinson Leader, where the full version of Rick Penn’s answers were printed on May 12.
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Business achievements The former Ideal Lumber office building in Litchfield was converted to individual offices and renamed Ideal Business Plaza. Owner Brent Nelson has leased 2,400 square feet of the 6,000square-foot plaza, while the largest part of the building, formerly a True Value hardware store, is still available for lease. PHOTO BY ANDREW BROMAN
Nelson creates ‘Ideal’ plaza for businesses By Andrew Broman CONTRIBUTING WRITER
S
everal years after Ideal Lumber’s closing, a piece of the company’s name remains part of Brent Nelson’s two new ventures. The one-time site of a lumberyard and hardware store on South Sibley Avenue in Litchfield today is called Ideal Business Plaza. It is home to a law firm, Edina Realty and a corporate office for pizza maker Papa Murphy’s. The plaza also contains a spot for Nelson’s second business, Ideal Steel Structures. “I kind of try to follow through with that name in honor of my dad,” said Nelson about the Ideal brand. Ideal Steel Structures focuses on constructing wood pole and all-steel buildings and was the one service provided by Ideal Lumber that Nelson decided to preserve through his new venture. Nelson’s father, Al, picked “Ideal” as a name when he bought J.F. Anderson Lumber Co. in 1959. For many years, Ideal Lumber was the area’s dominant lumber yard. “That name has stuck, and everybody knows it,” Brent Nelson said. Nelson, who worked at his father’s
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CROW RIVER BUSINESS | JULY 2013
Brent Nelson converts Ideal Lumber office into Ideal Business Plaza, leasing space to individual businesses business 28 years, took over full-time management in 2003. Nelson described 2003 as Ideal Lumber’s high point in terms of profitability. Staying afloat became more challenging afterward and, in 2007, Ideal Lumber sold its original site on the west side of South Sibley Avenue to First District Association, which used the property to expand its dairy-processing plant. Nelson downsized his lumber operation and moved the main office across the street from First District Association, to the east side of South Sibley Avenue. Despite using the sale to First District Association as an opportunity to pay down debt and become more efficient, Ideal Lumber could not survive the 2008 financial crisis, Nelson said. A bank reduced the company’s
credit line and tough local competition complicated Ideal Lumber’s bid to remain in business, he said. In the end, 16 employees were let go. Today, Ideal Steel Structures has one employee, Nelson, and a part-time bookkeeper. “It’s been painful because it’s very hard to start a business from scratch,” he said. The former Ideal Lumber office building was converted to individual offices and renamed Ideal Business Plaza. Nelson has leased out 2,400 square feet of his 6,000-square-foot plaza, while the largest part of the building, formerly a True Value hardware store, is still available for lease. Before opening the business plaza this year, Nelson said, he attempted to sell the entire property, but he couldn’t strike a deal with prospective buyers. His goal still is to sell the entire property, he said, and he expects a deal to happen once he’s able to lease the former hardware store. “That’s kind of my dream,” he said about selling Ideal Business Plaza. “We’d all stay here and lease from the new owner.” Andrew Broman is editor of the Litchfield Independent Review.
Business achievements NU-Telecom one of state’s largest public companies NU-Telecom was recently ranked No. 80 in the top 100 list of the largest Minnesota-based public companies. This list was published in the March 29, 2013, issue of the Minneapolis St. Paul Business Journal. The three largest companies were United Health Group, Inc., Target Corp. and Best Buy Co., Inc. NU-Telecom is a communications company headquartered in New Ulm that provides voice, digital TV, Internet, managed services, computer sales and computer repair services to customers in New Ulm, Glencoe, Goodhue, Hutchinson, Litchfield, Redwood Falls, Sleepy Eye and Springfield as well as Aurelia, Iowa. New Ulm Telecom is a publicly held corporation. For more information on the company, visit www.utelecom.net.
Schultz named vice president at Bremer Bank
Hutchinson native leads New Ulm project
Jeff Schultz, a graduate of Dassel-Cokato High School, has been promoted to vice president in Bremer Bank’s investment, management and trust business. In his new role, he will assist clients with their investment management, trust administration and financial planning needs, as well as assume management responsibilities in the Willmar, Alexandria and surrounding communities. Schultz joined Bremer Bank in 2007. He has a finance degree from St. Cloud State University.
Construction of the new Pastoral Center by the Catholic Diocese of New Ulm is being headed up by project manager Andrew Neubarth. Neubarth is a 2002 graduate of Hutchinson High School and a 2006 North Dakota State University graduate. He works for Donlar Construction of St. Cloud, Minn., builder of the $7.5 million Pastoral Center. The 28,000-square-foot center will have offices, conference rooms, work rooms and a chapel. It will replace the existing center nearby, which was built in 1960 and has faulty wiring, leaky pipes and other infrastructure issues. The existing center will be demolished after the new center is completed in spring 2014.
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