Industrial Retention Initiatives

Early Warning Network Capacity Building Project & Manufacturing Succession Solutions:  

Proactive Support for Legacy Manufacturing Companies

Manufacturing Succession Solutions

The time is right for good ideas

The Early Warning Network combined with Manufacturing Succession Solutions combines two important ideas to support small and mid-size legacy manufacturing companies with specialized services to keep high-quality companies and jobs in our communities. 

An existential challenge faces small and mid-size manufacturing firms creating an important opportunity for employees, Black, Latinx, Asian, and Indigenous entrepreneurs; women; and communities.  Aging owners and employees of the baby boom generation are leaving their leadership positions in large numbers.  In a 2019 survey performed by the University of Illinois Great Cities Institute, 73% of sampled manufacturing companies in the Chicagoland area have an owner over the age of 55. Over 60% of firms surveyed lack a defined ownership succession plan and have not chosen a successor.  The loss of these companies is a major contributing factor to the growth of poverty, violence, and income inequality.   

A key challenge facing the manufacturing sector is the lack of diversity at the top levels of companies, including Ownership. In Illinois, 99% of manufacturing companies are owned by individuals who racially identify as white, despite nearly 42% of individuals living in the state identifying as some other race or ethnicity—a painful reminder of inequality and exclusion in society.  Women, as well, typically have been excluded from ownership in the manufacturing. 

 This project will directly address the issues of industrial retention, employee engagement, racial equity, diversity, and community development.  This is an opportunity to save hundreds of companies from shutting down due to not having identified an ownership successor. The project will also meet the aspirations of hundreds of Black, Latinx, Asian, and Native American men and women entrepreneurs to assume a new role. This is a unique opportunity—a once in a lifetime situation—to retain and rebuild our manufacturing base in Chicago and to dramatically diversify ownership in our manufacturing sector. 

 Our target communities are those in urban, low-income communities. These communities were disproportionately impacted by deindustrialization. It’s a matter of fairness that these communities disproportionately benefit by programs to re-build our manufacturing sector including this initiative. This approach also applies to all sectors and all communities. 

 This challenge has been confronted on a small scale over the last 40 years in Chicago and around the country.  This project will retain critically important companies in our supply chain and diversify ownership in the manufacturing sector that will tap into the talent of employees as well as entrepreneurs of color.  

Specifically, the Manufacturing Succession Solutions (MSS) will: 

  • Engage the Chicago Early Opportunity Network to establish contact with owners of manufacturing companies including those that face a succession challenge
  • Establish a formal relationship with the owner defined in an MOU to assess the challenges and identify solutions including assistance in securing a successor; 
  • Evaluate the viability of the company and determine a reasonable price,
  • Identify employee and entrepreneurs of color interested in purchasing the   company,
  • Provide assistance in arranging the transfer of ownership, as well as other challenges facing manufacturers;
  • Develop a network of trusted advisors to assist and guide the new owners in all aspects of the transition; and
  • Provide on-going support for the new enterprise.

 

Manufacturing Succession Solutions handout here..

Read more about in this Crain’s Chicago Business article.

This is a program of Manufacturing Renaissance (MR)—a not-for-profit corporation. (www.mfgren.org) MR will be the fiscal sponsor and is joined in the program by leadership of the League of Black Women, Ravinia Capital, Gaebler Ventures, Rubicon Innovative Solutions LLC, Laser Associates, and Meridian Associates.  Our team has extensive experience in arranging acquisitions and community development.

 For additional information, contact Dan Swinney