Economic DEVELOPMENT

RE/CAST: Advisors in Manufacturing Ownership Succession

RE/CAST

Advisors in Manufacturing Ownership Succession

Fact: 

  • 99% of Illinois privately-owned manufacturing companies are owned by people who identify as white. MBDA Fact Sheet  

  • 60% of these companies have less than 100 employees and a principle who is 55 years or older.

  • The vast majority of these principals don’t have a successor or even a plan which puts these companies at risk of closing.

This represents a fantastic opportunity for Black, Latinx and other people of color entrepreneurs and employees to purchase the company as a way to retain jobs and diversify the ownership of our manufacturing sector. 

Based on survey research commissioned for this project and performed by the UIC Great Cities Institute: 

  • 73% of the sampled manufacturing companies in the Chicagoland area have an owner over the age of 55.
  • 61% of the firms surveyed are at immediate risk due to lacking a defined ownership succession plan and have not chosen a suitable successor. 

In a report by the Ohio Employee Ownership Center, it was noted that, “The failure to plan for business succession in small and medium-sized companies is the leading preventable cause of job loss in the United States.”  This is a long-standing problem in Chicago and around the country. Small, privately-held companies are hidden in plain sight, and there is relatively little information about the companies.  Issues of succession of ownership are viewed as a private family concern, and often not addressed until it’s too late.

That is what RE/CAST is all about.  RE/CAST is a program of Manufacturing Renaissance (MR). Re/Cast’s mission is to retain manufacturing companies and to diversify ownership in the manufacturing sector.  Re/Cast identifies companies facing a succession challenge through our Early Warning Network that gathers public data on companies as well as tapping into the knowledge of employees, unions, financial advisors, business associations, local government and others who have direct contact with the owners of companies.

We are looking for healthy manufacturing companies that have an aging owner, employ between 15 and 50 people, have the potential for growth, and have $2 million to $15 million in sales. We evaluate the company to ensure it’s viability.  We then identify prospective purchasers of the company from its employees; Black, Latinx, Indigenous, and people of color entrepreneurs; and High Road entrepreneurs committed to keeping the company in the local area and developing it over the long-term.  We assist in the acquisition, including financing the acquisition.     

MR has a long history in identifying this challenge/opportunity; and has arranged the acquisition of companies by employees and BIPOC entrepreneurs.  We are also inspired by a similar project in Barcelona, Spain that has the same features of Re/Cast and that arranged 600 acquisitions last year alone.  Our work has been supported by the Chicago Community Trust, LISC Chicago, and the Cook County Bureau of Economic Development.

We believe that this is a program that can be replicated and scaled throughout the country with government support. 

For more information, contact Dan Swinney

Thanks to our relationship with Manufacturing Renaissance, we are confident in our ability to address a growing national issue of succession-challenged companies, with a solution that helps to narrow the wealth gap” -Ernest Strickland, President, Black Business Association, Memphis, TN 
We at the Advanced Manufacturing Center have recognized your capabilities of assisting, growing, and educating MBE’s and find your scope and focus is consistent with our vision…We enthusiastically look forward to our collaborat[ion]”  -Dr. Steven L. Mondragon, Minority Business Development Agency, U.S. Department of Commerce 
Bill Vogel (right), retired owner of DeCardy DieCasting was a career coach to many young people like Neopatra Hawkins (left). Bill saw the value of exposing and encouraging young people to pursue careers in manufacturing and hoped one day one of the youth he served would some day own their own manufacturing company.
MR staff supported the young leaders of Mech Creations, a group of Austin Polytech students who wanted to start their own manufacturing company.