By Dana Hedgpeth
Washington Post Staff Writer
Wednesday, July 15, 2009
JACKSON, Mich. -- When business was at its best, auto-parts supplier Bill Miller had 225 employees. Now he's got three, and two of them are breaking down hulking parts-making machines to sell as scrap metal.
Miller has got work lined up -- an order for 7,000 parts from General Motors -- but he's so deeply in debt that he can't pay for the raw materials or the workers he needs to fire up his production line and start making parts at his plant, which sits 70 miles west of Detroit. While some of America's biggest companies are getting a bailout from Washington, Miller has been rejected by two banks for a loan that could keep his business afloat and keep jobs in this town of 34,000.
"They don't want to help small businesses," Miller said of the banks. "But I gotta get some iron castings in here so I can get my orders going and get some cash flow in. It's going to be hand-to-mouth."
Miller is emblematic, industry trade groups say, of the struggles facing the 5,000 auto-parts suppliers across the country as they struggle to survive in the aftermath of the massive downturn in the auto industry and the GM and Chrysler bankruptcies. Analysts predict that 600 suppliers could go under over the next two years.
For four decades, Miller's company, Miller Industrial Products, has been churning out brake rotors, hubs, drums and pads for the auto industry. He thought he might get a break recently when GM ordered about $250,000 worth of new parts and the automaker sent word that it would pay him $150,000 for work already rendered.
But then the reality of the lending market settled in. Miller, who is best known as "Billy" to friends and locals, went to Citizens Bank, where his uncle and cousin once served on the board of directors. The bank rebuffed his request for a $35,000 loan.
He called another local bank for the same amount, but was told that with his debts, he is pretty much "unbankable." He owes $5,000 to a company that sells cutting tools, another $5,000 to a steel company, and $6,000 to a guy who paints the parts. And he is three months behind on the $8,300-a-month mortgage on his plant.
Sure, the money coming in looked promising. But as one banker said, "It's like getting a bite of steak when you haven't eaten in three weeks."
"It's good, but it's not going to go very far," said John Waldron, the vice president who handles commercial lending at County National in Jackson. "You're still starving."
Instead, Miller on Monday took out a $20,000 line of credit on a personal credit card. Using that and a small payment from GM, he paid two foundries $28,000 he owed. But he said one foundry is demanding prepayment for any future materials.
Things, of course, weren't always this way.
Miller's father -- the son of a German immigrant who once repaired wooden wheels for buggies -- began making auto parts in the late 1960s. Miller started working for his father at the age of 10, sweeping floors and picking up scraps. A clean-cut teenager with brown hair, Miller spent evenings rebuilding a red 1931 Model-A Ford. He graduated from a local Catholic high school and studied engineering at a community college before joining the Air Force. After a stint in the service, including time in Vietnam, he came home to work at the plant.
By the time he took over in the late 1980s, the company was producing 10,000 parts a day for GM, Ford and Chrysler. He often worked 10 to 12 hours a day and at times cut short family vacations with his wife and four daughters when the job demanded.
When times were good, Miller put on a $900,000 addition with a locker room, lunchroom and offices for supervisors. He added staff members, including an accountant and bookkeeper.
But about five years ago, he said he noticed his orders start to slow. In the past six years, he said, he's lost $2 million. When Delphi filed for Chapter 11 protection in 2005, Miller was owed $550,000 from the GM parts company, he said, adding that he received only about $100,000 of it.
Miller, 65, is now balding and rides around the plant on a yellow motorized scooter because of pain from a hip replacement.
He admits that adding supervisors and office workers left the company top-heavy. He says he didn't always invest in the latest, automated equipment. He stuck with older, manual machines. Called "bullards," the machines are vertical lathes that require a worker to pull levers and handles in order to cut cast iron. Miller once had 100 of them, so many he hung a sign outside his plant nicknaming it Bullard City.
But these days, row after row of the machines sit idle in his darkened plant. "I miss the music," he said of the once-roaring machinery. In the locker room, a thin layer of dust lies atop the gray metal lockers. Next door, in the lunchroom, the candy and soda machines are empty. Faded paperwork, dated 11/25/08, sits on a nearby work bench. It was from one of the last orders Miller got for truck brake drums.
He has laid off three brothers, two daughters and two sons-in-law. In December, he laid off his last batch of 36 men on the plant floor -- some of whom were longtime friends and workers hired by his father. Every day at 3:25 p.m., an electronic horn still sounds over the intercom, signaling time to clean up. Five minutes later, it sounds again for quitting time. Miller hasn't turned it off, saying it reminds him of better times.
To keep the business alive, he has sold a Florida vacation house and a 36-foot boat and depleted most of his 401(k). His wife of 45 years worries that the plant has a hopeless pit.
"Sell the damn thing," Camille told him one recent Friday night over fried walleye, baked potatoes and coleslaw at Yukon Jack, a restaurant where the Millers are regulars. "It is too up and down and more often down these days," she said. She'd rather he travel and relax more, and focus on his health.
Miller, however, is worried about keeping his father's legacy going and bringing back his men. Asked how many he could rehire if cash started flowing again, Miller looked over a list by his secretary's desk. "There would be Lance, Ross, Troy and Orley," he said, naming workers by seniority. "And, oh, Richard," who's known as Pickle.
Troy is Troy Jordan, 60. Miller's father hired Jordan 23 years ago to cut grass in the now-overgrown employee parking lot. Eventually, as a drill-press and lift operator, Jordan made $12 an hour. He was a hard worker, and he keeps two perfect attendance awards from the company in his cramped one-bedroom apartment.
In December, he was laid off.
Since then, Jordan has cut weeds and painted houses to supplement his $500-a-month unemployment check. His son Joshua, 23, one of 13 children, left Jackson for a job delivering mail in a government office building in Denver that pays $15 an hour. He tries to persuade his father to move to the West. But Jordan is reluctant to leave, saying, "I want to first see what's going on at the plant."
One recent morning, Jordan walked into Miller's office, just as his boss hung up the phone after being turned down for a bank loan.
"You hear anything?" Jordan asked. Miller swiveled in his chair and shook his head no. Jordan, who says he worries about the stress on Miller, placed a white plastic bag on his desk. Inside was a small Bible.
Leave a cellphone number with the secretary, Miller told Jordan. "If something comes up we'll call you," he said.
"How could I get rid of him?" Miller said as he watched Jordan leave. "My dad hired him. He always did his job."