KEOKUK, Iowa (AP) - The fate of Keokuk Steel Castings seemed to follow a familiar story line: Iowa factory changes hands, finds its way into the portfolio of a multinational corporation and eventually gets shuttered in favor of cheaper foreign labor.
But that trajectory is being reversed by a small group of Iowans working to reopen what was once one of southeast Iowa’s largest employers.
In December 2015, Matrix Metals blamed slumping demand when it announced it would close the Keokuk plant, move its work to Mexico and lay off the 200 remaining workers in southeast Iowa.
It was a deep blow for a community with higher-than-average unemployment. The foundry had been a major employer, with nearly a century of history in Keokuk.
But where many saw the further erosion of Iowa’s manufacturing economy, Brad and Annie Mills of nearby Houghton sensed an opportunity.
The family purchased the plant, believing the military, agricultural industries and even the struggling energy sector would still have a need for parts cast in Keokuk.
The Des Moines Register (https://dmreg.co/2icAF3q ) reports Brad Mills already owned four manufacturing companies and had years of experience turning around struggling firms.
Since closing on the purchase Nov. 30, the family and about a dozen employees have been busily putting the factory back together.
“This just means the world to me,” said Heather McCarron, an 18-year veteran who has been rehired, “because it’s all I know.”
As it sat idle for months, the dirt-covered floor of the foundry became home to deer, raccoons and snakes. Previous workers had begun dismantling equipment piece by piece, readying the giant metal pouring supplies to be shipped south of the border.
Now those scattered parts must be reassembled before the plant begins delivering parts in January.
“This is more than a turnaround. It’s a full restart,” Brad Mills said. “This business and foundry is dead - or was dead - completely and has been idled for a number of months. So that adds to the challenge.”
The foundry’s roots date back to a 1918 plant on the banks of the Mississippi River that produced cannon and gun barrels. Over the years, it was shuttered, changed hands several times and moved around town. By its 2015 closure, it was owned by Matrix Metals, a division of Sanmar Group, an India-based conglomerate with interests in chemicals, engineering and shipping.
Over the years, the factory grew into a southeast Iowa institution. Some families sent four generations of workers to the foundry. Already, two father-and-son duos have been brought back on board.
“There’s a lot of history here,” said Rob Barton, a maintenance manager who has been rehired by the new owners “… Just about everybody in Keokuk’s worked here at one time or another.”
Work in the foundry was hard and dirty, but it provided decent pay and good benefits, Barton said. Starting wages on the foundry floor previously ranged between $14 and $22 per hour, he said. Pay rates are not expected to significantly change under the new regime. Workers were previously represented by the United Steel Workers, though the plant is now non-union.
Usually, winter months are the most comfortable inside the 100,000-square-foot foundry building. The giant furnaces were miserable in the summertime, but provided welcome heat in the cold months.
Now, the men buzzing around on forklifts and hauling equipment inside remain bundled up under several layers while the giant furnaces sit idle.
All around the cavernous foundry are signs of the work that remains - Giant ladles and a 20-ton overhead crane need to be moved back into position. Pieces of slag, the byproduct of the casting process, litter the floor. And a thick layer of dust covers everything from a hydraulic control stand to the employee refrigerator.
But the work doesn’t seem daunting.
“We can’t wait. We’re wanting to go just as fast as we possibly can,” said Rich Huber, the plant’s former and current technical director. “Everybody is really excited to open things back up again.”
Joe Steil, CEO of the Lee County Economic Development Group, said the rebound of the foundry is “very rare.” Throughout Iowa and across the country, companies have shuttered thousands of factories amid increased consolidation and globalization.
The U.S. hit an all-time high for manufacturing jobs in 1979, federal data show. Since then, millions of positions have disappeared. Iowa manufacturers employed about 216,000 workers in 2015, according to Iowa Workforce Development. That was down about 6 percent from the 229,000 workers employed in factories in 2005.
“The last thing that any community needs is a facility that is chained up, closed up and sitting there just dilapidating every day,” Steil said. “A factory is much like a house: If it’s not cared for, if there’s not activity, it only goes one direction. And that’s not a good direction.”
At the time of its 2015 closure, Keokuk Steel Castings employed about 200 workers. But the foundry had employed as many as 500 workers during its heyday, ranking it among Lee County’s largest employers.
“The loss of those jobs in the first place was critical for our area,” said Lee County Supervisor Gary Fulluo. “Manufacturing jobs are few and far between anymore.”
Lee County’s higher-than-average unemployment rate made the loss especially crushing. In October, the county was home to Iowa’s second-highest unemployment rate at 5.6 percent. The state average for the month was 4.1 percent, while the national average was 4.9 percent.
“Manufacturing jobs have been leaving this country for quite some time,” Fulluo said. “It’s always nice when you can turn a facility around.”
The revival of Keokuk Steel Castings was aided by a $1.63 million package of incentives from the Iowa Economic Development Authority board in July. The city of Keokuk also contributed a $200,000 forgivable loan.
In exchange for the incentives, the foundry has committed to hiring 200 people within the first three years of operation, though the Mills family hopes to eventually employ as many as 500 at the site. All of the 200 jobs must pay at least $14.39 per hour, and 74 must pay at least $21.49 per hour, per the company’s agreement with the state.
The foundry previously made steel, nickel and stainless steel parts using a combination of 100 different alloys blended in-house. The castings were used for agricultural equipment, military uses, and gas and oil exploration.
Brad Mills said the sales staff will target many of the same customers. Customers knew the Keokuk plant for making high-quality parts - a reputation he hopes to maintain.
“They’re happy to hear we’re coming back,” he said. “We’ll get a fair chance at the business, but it’s a competitive marketplace so we’ll have to earn that business back.”
The couple has invested countless time getting the plant up and running. Brad Mills stays busy in meetings with the staff while Annie Mills, who oversees human resources, handles the hundreds of job applications streaming in through the lobby.
Brad Mills said he hopes to eventually back away from the day-to-day management of the plant. While he plans to hold on to the foundry for the long term, it’s unclear whether the family will look to further expand its empire. His four other Iowa firms mainly manufacture agricultural equipment like manure spreaders and bale feeders.
“Every time we do a deal, we say ’that was harder than we thought’ and ’that will be the last one,’” Brad Mills said. “But there’s always one more.”
Owners Brad and Annie Mills will welcome the public to an open house at Keokuk Steel Castings from 3 p.m. to 6 p.m. Friday. The plant is located at 3972 Main St. in Keokuk.
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Information from: The Des Moines Register, https://www.desmoinesregister.com
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