Newton, Iowa — It’s a story familiar to many small cities and towns across the Northeast and Midwest: The major employer in town, facing intense foreign competition, is bought by a competitor whose first move is to close down the headquarters, shutter the factory and move the work to other facilities, or to cheaper plants overseas.
In 2007 it happened in this once-comfortable prairie town when Whirlpool snapped up Maytag, its rival in the business of making washers, dryers, dishwashers, stoves and refrigerators. For more than a century, ever since Fred Maytag came out with his first hand-cranked washer, Newton was Maytag and Maytag was Newton. Then, suddenly, it wasn’t, and in one cruel stroke, 1,500 jobs were eliminated.
Steven Pearlstein is a Pulitzer Prize-winning business and economics columnist at The Washington Post.
(BRIAN SNYDER/REUTERS) - A worker walks out of the Whirlpool plant at the end of his shift in Evansville, Ind. In Newton, Iowa in 2007, Whirlpool snapped up Maytag, its rival in the business of making washers, dryers, dishwashers, stoves and refrigerators, and 1,500 jobs were eliminated.
We all know how this story usually plays out. Older workers slip into an embittered early retirement, young people start to move away, retail stores fail, housing prices decline, funding for schools begins to dry up. From the politicians and local chamber of commerce come brave talk about green jobs and biotech, but in the end all they muster is a new call center.
Jordan Bruntz was determined that wasn’t going to happen to Newton, at least not without putting up a fight. With two engineering degrees and an MBA, he was offered the opportunity to transfer to a good job with Whirlpool. But unlike so many business executives these days, Bruntz is burdened with a strong feeling of responsibility to the people who worked for him and the community they lived in. So, with seven of his colleagues, he began to see what any smart entrepreneurs would see — a bunch of experienced and committed workers who were anxious for a job, along with vacant facilities and unused machinery that could probably be acquired for a song. In other words, he and his colleagues saw a good business opportunity, and they took it.
Today, Springboard Engineering employs about 65 engineers and support staff in what used to be an old Kmart and an old Wal-Mart across from each other on Highway 6. They are helping nearly all of the world’s major appliance makers to develop, prototype and test new products. And they are branching out into home furnishings and consumer electronics. The company was profitable and promising enough last year that it was bought by Underwriters Laboratories, whose Good Housekeeping seal of approval sets the industry standards for reliability and safety. With UL’s reputation, capital and client list, Springboard is about to go global in a serious way. Today there are openings for eight employees.
Success was hardly guaranteed. Although Whirlpool was willing to give Bruntz a running start by selling him equipment and sending work his way, it took a lot of looking to find even one local bank willing to provide the needed start-up capital. The town of Newton offered some tax relief, and the state of Iowa stepped in with a low-cost loan.
But perhaps the greatest hurdle was getting a bunch of engineers comfortable with the risks associated with going out on their own.