VALPARAISO — Robert Christopher, a Valparaiso resident who worked on a punch press making helicopter bearings for McGill Manufacturing for eight years, was stunned by the news that now-owner Regal Beloit planned to shutter the 109-year-old factory, laying off 160 to 170 workers.
"I can't even fathom what these people are going to do," he said. "You work there for 15 to 20 years and all of a sudden you're out of a job. It's a shame. It's a big loss to Valparaiso. It really is."
His father worked there for 33 years as a supervisor, and he remembers when it was more family-oriented.
"My dad was actually my first boss," he said. "He made me work harder than anybody. I learned a lot. It used to be a factory where if your dad worked there or an uncle worked there then you could get a job there. So many people from Valparaiso worked there at one time or another. This is a low blow in my opinion."
Workers at the Regal Beloit plant at 2300 Evans Ave. voted 99-5 to go on strike June 30 for better pay and more affordable health insurance. They have picketed outside the plant ever since. As a steady stream of passing motorists honked their support, more than a half-dozen workers picketed Wednesday with signs like "High-tech, low pay, Regal, end the strike today," "We deserve more" and "Parts for military and civilian airplanes and helicopters now being made by unqualified temporary workers. Do you fly?"
“While the Machinists Union is disappointed in Regal Beloit’s decision to close the Valparaiso, Indiana, plant without warning and in the midst of an ongoing strike for fair wages and better health care, we will continue to work on behalf of the more than 110 workers affected by this abrupt decision," The International Association of Machinists and Aerospace Workers said in a statement. "We are currently in talks with the company to discuss next steps and the union’s next course of action."
James McGill started the manufacturing company in 1905. It grew to become one of Porter County's largest employers with more than 1,500 workers, making a variety of products over the years like golf clubs, Venetian blinds, sockets and levolier switches. In recent decades, its focus narrowed to the aerospace industry as it provided bearings to companies like Sikorsky Aircraft and Bell Helicopter that make civilian and military helicopters.
"It's a shame the government couldn't do anything about it when these are bearings for the rotors of military helicopters," Christopher said. "It's a loss to the community. It's a horrible shame for these people. They're going to move it to a non-union plant down at Monticello. Why didn't they do this two months ago instead of stringing them along? I'm not against big business, but most big businesses don't operate like this. Things have gone to the worse in this country. It's just money, money, money, and you know they are making money. It's just greed. I can't even imagine what a lot of the older guys would have thought."
Beloit, Wisconsin-based electric motors manufacturer Regal Beloit pulled in net sales of $873.7 million and $96 million in income from operations in the second quarter. It spent $55.9 million on buying back shares from its investors.
Workers went on strike over wages as low as $15 an hour and health insurance out-of-pocket maximums of up to $20,000 for a family. Lead negotiator David Gault said the union asked for 75-cent-per-hour raises and an out-of-pocket maximum of $15,000 for health care coverage as a starting point in negotiations, expecting to ultimately compromise on less, but said the company would not budge at all.
Striking workers have depended on community support over the past two months. Valparaiso Moose Lodge Administrator Robert Hall, who worked at McGill for four years, recently had a spaghetti dinner for the workers and donated $1,100 in Strack & Van Til gift certificates.
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"It's terrible what they're doing," he said. "People have worked there 30 to 40 years, worked their whole lives there. Generations have worked there. We were making bearings for 747s 10 to 12 years before they came out, before anyone even knew what they were."
Emerson Electric Co. acquired McGill Manufacturing in 1989 and sold it to Regal Beloit in 2014.
"Regal Beloit has never requested, nor received, any financial incentives from the city," Valparaiso Economic Development Director Patrick Lyp said. "As to Emerson, there was a tax abatement approved in 2013/2014; however, that project never materialized and no benefits were realized by the company. The time to complete the project has long passed."
Donald Herz, who had previously worked as a supervisor there, said Regal Beloit was a bad fit from the start.
"Regal Beloit's corporate culture didn't fit very well," he said. "They stress employee involvement, continuous improvement and team effort. There were a lot of entrenched people there, both the union and the supervisors. There were people working there for 40 years who were a roadblock to what they wanted to do. They wanted people to own parts of their job, but it's tough to sell to entrenched supervisors to give up some control or have employees take ownership of their job and meet metrics."
Herz said relations between the union and management were strained.
"It would be a great plant to study for labor relations for a PhD or a doctoral thesis," he said. "The union would fight management tooth and nail on a grievance that management considered a waste of time. I don't have a ton of union experience, but it definitely did not seem like the way of the future for management-labor relations."
The union made concessions during the last round of collective bargaining during 2016 and agreed to mandatory overtime so workers could be called in to work on weekends or work six or seven days a week if the company dictated, Herz said. With the economy doing better, the union expected the company would reciprocate with a better deal this time, he said.
Herz said he saw the writing on the wall, such as when Regal Beloit did not bring in a maintenance supervisor at a plant with a lot of grinding equipment that requires frequent maintenance. Regal Beloit will keep open McGill's old Lafayette Street location, but that's just offices, a product return location and research and development center, he said.
"There's no manufacturing there," he said. "Valparaiso already lost Urschel. I think it just sucks. That plant's been there for 100 years. I was management and know a lot of hourly workers. I can see it from both sides. It's just a bad outcome."