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The Real Economy

Nebraska manufacturers make dramatic comeback

David Gura Jan 31, 2012

Adriene Hill: Florida Republicans cast their votes today in the presidential primary race. The question a lot of voters have got to be pondering: Who’s the best candidate to fix the economy? And it’s the focus of Marketplace’s Special Election coverage. We’re calling it: The Real Economy.

Our first stop is a state that hasn’t faced the same sort of deep recession states like Florida have. Instead, we’re going to Nebraska. It was spared, in part, because of its dependence on agriculture — I mean, it is the Cornhusker state. But for manufacturers there, these last few years haven’t been easy.

Marketplace’s David Gura reports on one of them in Omaha.

David Gura: Nebraska is farms and feedlots, and home to some big companies, like ConAgra Foods and Berkshire Hathaway.

Phil Teggart: There’s a lot of white-collar business, and there has not been a lot of opportunity for manufacturing.

Phil Teggart owns Omaha Steel Castings. It’s been here since 1906. It’s a foundry — a place that makes big metal parts for construction equipment out of steel, heated up to 3,000 degrees.

Teggart: Think of the toughest job you’ve ever worked in your life, and multiply that times 10.

The place is cold in the winter, hot in the summer. There’s just enough light to see that the air is filled with sparkling flints. Teggart bought this company in 2008. Back then, it was selling $25 million worth of parts every year. A few months later, the recession hit.

Teggart: I kid with a lot of our employees, and certainly my wife, that I used to drive around, looking for a building to jump off of, but there weren’t any buildings tall enough in Omaha, that I was going to die. I was just going to get hurt real bad.

Companies like Caterpillar decided to reduce inventory during the downturn. That meant a lot less work for parts suppliers. All of a sudden, Teggart had the toughest job at Omaha Steel Castings. He had to lay off 165 workers.  Production manager Henry Scissom remembers what those days were like. 

Henry Scissom: Regular employees were working three days a week. Salaried were at four. Just trying to make enough to keep the place open.

Everyone took a pay cut — including Teggart.

Teggart: You know, we all were in it, to fight through the downturn.

Construction and Caterpillar have crawled back, and so has Omaha Steel Castings. Today, the foundry has more business, because there are fewer competitors. And equipment manufacturers are paying more for parts. Teggart re-hired some of the employees he laid off. They’re among 8,600 new jobs Nebraska manufacturers added last year.

In Omaha, I’m David Gura for Marketplace.

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