Will manufacturing work out this time?
The Exploitation of Ontonagon, Final
By Bruce Johanson
So far, we have discussed the rate and exploitation of the natural resources of the region. Where once we had vast stands of pine and mixed hardwoods, we often see tracts of denuded woodlands. Oh yes, the woods will grow back but not as they were before, with the rich variety of trees. The mines come and go. It is understood that mines have a life span, and though there is still a seemingly endless supply of the red mineral still in the ground, world economic conditions determine whether to mine or just leave it. Profitability is the key factor, of course.
Smaller-scale enterprises have come and gone. The Ontonagon Brick-Krete plant made ceramic building blocks — a good product but with limited distribution. There was Mary Todd Candies that set up shop in the former Jilbert Dairy building (now site of the village offices). The candy factory was set up to make filled chocolate candies. Financed by outside people and using local help to run the plant, the candy factory was closed due to a lack of orders.
There was the Flo-Wall Corporation at White Pine that produced a foam wafer insulated building panel using an EDC loan to get started. They ended production mid-order and the EDC had to dispose of the plant equipment.
The Deluxe Case Company set up shop in a new building at Ewen, and put out high-quality stereo cabinets and musical instrument cases, but could not compete with cheaper imports and closed their shop after only two years.
More recently was Global Wood Sticks located at White Pine which lasted two years and ended production due to a combination of management and financial problems. All of the previous enterprises used local labor during their brief years of business.
A small local manufacturer, Koski Log Homes, was highly successful and operated from 1975 continuously until 2020. Using logs purchased within the local region, the homes were pre-assembled in Ontonagon and then disassembled and taken to the customer, often out of state and at great distances. The homes were then reassembled by the local crew that traveled to the building site. Several of the Koski-built homes are located in the local area and within the village. This was hometown manufacturing at its best, employing a limited labor force earning good wages, and ended only because the owner decided to retire. But here was proof that local manufacturing could work, given the right conditions.
Never before had large-scale manufacturing been tried in the local area until 1979 when the Upper Peninsula Shipbuilding Company began construction of a totally new enterprise, a shipyard! The plant was built; a state-of-the-art metal fabricating operation with the potential to eventually employ 600 people. Property values soared, and several new families moved to the community. An impressive administration building was erected on Lake Street and in less than a year, two vessels were being built; a modern tugboat (actually a pusher) and a large barge, which together, would constitute an Integrated Tug-Barge system. The original plan was for one tug, actually a floating engine room, and 4 barges, to be utilized to transport rail cars across Lake Michigan.
Upper Peninsula Shipbuilding Co. had obtained the contract for building the ITB without the State having awarded the contract through competitive bidding which was the first fatal flaw in the arrangement. For additional reasons that are too complex to delve into here, the shipyard was closed in 1984 and went into receivership with the State of Michigan, the original contractee, holding the paper. Immediately, the 300 employees at the shipyard were out of work, mortgages were foreclosed, and local banks were left holding the bag.
Again, a form of exploitation, this time of human resources as well as taxpayer dollars had taken place, creating local unemployment and financial stress to the families affected.
The shipyard was sold for pennies on the dollar, then resold again, and also operated for a time under private ownership as a metal fabricator. Finally, Lakeshore of the Oldenburg Group purchased the facility and operated it for a decade and all seemed well, though not at the level of employment as previously. Suddenly, and quite without warning, Oldenburg closed the facility and it stood vacant for a number of years, though ownership was maintained and taxes were paid.
Currently, a new firm, Lake Shore Systems, has purchased the yard, and as a defense contractor, has installed much new equipment and is offering employment to qualified individuals. Lake Shore has also reached out to the local community and made overtures of a new period of cooperation and civic support.
To this area, employment opportunities are always welcome, and perhaps this time— with enlightened management—manufacturing will be a lasting thing. Lake Shore is not using local natural resources, other than the very desirable proximity to a deep water port, the Ontonagon Harbor. Most new equipment has arrived via motor freight, and delivery of the very large maritime components being built could be executed by water.
Is there now hope that Ontonagon can turn the corner into a manufacturing base instead of being a simple source of material for use in other places?
It has indeed been a wild ride for the last three centuries; from the time of the fur traders, miners, lumbermen, and refined exploitation of pulp and paper, and a short-lived attempt at shipbuilding. Now we watch and wait, with the fondest wish that at last, Ontonagon may finally achieve some stability with the river and the harbor serving industry.