Site Visit: Family Business Puts the Pedal to the Metal on Reducing Regulations
By Nick Ivory, Regional Legislative and Regulatory Manager
A fourth-generation, family-owned business proves that car manufacturing in the greater Detroit area is not entirely running on empty.
Advocacy staff visited E&E Manufacturing Co., Inc. in Plymouth, Mich., which designs and manufactures structural and chassis component assemblies, seating components, hood panels, rear tail light panels, and many other component parts for wheeled vehicles in the automotive, military, commercial, and industrial markets. Some of their major customers include BMW, GM, Mercedes Benz, Volkswagen, Lear Corporation, Fisher Dynamics, and Oshkosh Defense.
A true fourth generation family-owned business, E&E was founded in 1962 in a 5,000-square-foot building by the grandfather of current E&E President Wallace (Wes) Smith, who eventually handed the helm over to Wes’s father. The company, which has now grown into a large campus with metal stamping presses that weigh up to 300 tons, and has expanded into Tennessee, is now being run by Wes himself. We sat down with him, his daughter and Chief Cultural Officer Jeanne Swanson, his son-in-law (and Jeanne’s husband) Chief Financial Officer Brian Swanson, and Wes’s other son-in-law Chief Growth Officer Matthew Menchinger, to learn about federal regulatory issues and trade issues affecting their small business.
Regarding regulatory issues that they face as a company, the Occupational Safety and Health Administration compliance process was described by company President Wes Smith as being too punitive rather than more assistive, which is a concern that Advocacy has heard from many small businesses as we have traveled the country holding Regional Regulatory Reform Roundtables. Additionally, he touched on the agency unnecessarily halting production for extended periods of time with little to no notice while they conduct inspections, noting that in one instance they had to stop working for roughly two weeks. However, despite the obstacles and hurdles, E&E excels in safety compliance, and even received the MIOSHA Star Award for their employee safety program.
When the conversation reached the topic of the effects of the Affordable Care Act, Smith described the law as a nightmare for the average small business as he highlighted the out-of-control health care costs, which the company is inevitably forced to pass on to their employees. Unlike some small businesses, E&E is in a position not to have to pass on as much of the cost to their employees and this helps them stay competitive in the labor market. The increased cost of health care as a result of ACA is a regular concern for small businesses across all industries, and Advocacy has been working to address the issue by working with federal agencies and members of congress to encourage them to lessen the burden.
Trade policy is another area of concern for E&E. Because there is so much uncertainty in regards to NAFTA, the company is getting substantial pressure from some of their customers to start producing in Mexico, which Smith does not want to do. He emphasized that once there is certainty on U.S. trade policy within North America, E&E will be on a better footing to assess the effects of any changes and plan accordingly. (In light of President Donald J. Trump’s plan to renegotiate the North American Free Trade Agreement, Advocacy has been conducting outreach across the country to hear from small businesses affected by international trade policy with Canada and Mexico.)
An interesting and significant hurdle expressed by CCO Jeanne Swanson is the skills gap affecting their industry, and how young people graduating from high school don’t even consider manufacturing as a career because they have a general assumption of the industry as assembly line based and labor intensive. She described a recent, on-site visit from a group of students from a high school STEM program and how stunned the kids were about how much of the manufacturing process is now computer based, and they were surprised to learn that they can make a six figure salary in this field. E&E has an apprenticeship program within the company, but they still can’t get enough young people entering the job market who are interested in honing these skills and embarking on this type of career path. Swanson emphasized that if more high school students become exposed to these types of skilled trade programs in the manufacturing industry as they near end of their high school years, it would provide more options for those individuals looking for a great career with which they can support a family that doesn’t involve getting a college degree, as well as satisfy the automobile manufacturing industry’s demand for these workers.
Advocacy was in Detroit for a Regional Regulatory Reform Roundtable and NAFTA Modernization Outreach Meeting on March 13.
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Nick Ivory is the Regional Legislative and Regulatory Manager. Ivory can be reached at nicholas.ivory@sba.gov.