Former Red Wing president gives his take on closing
Since the announced closing of the Dunkirk and Fredonia Carriage House operations by owner ConAgra, speculation as to why and what could have prevented it have become a local pastime of sorts. Politicians and pundits have weighed in with their opinions – and some solutions – as the full effects on the local economy of the closings are starting to be felt.
On Tuesday, the man who had a lot to do with the success of the company when it was known as Red Wing gave his opinion on the situation. Former Red Wing President Doug Manly gave a luncheon meeting of the Dunkirk Rotary Club his take on the situation.
“This was his baby and I know it’s like a child for him,” club President Brian Aldrich said in introducing Manly. ” … Doug’s done a great job, he’ll tell you it was the employees. I won’t disagree with him, but Doug was an employee of Red Wing at the same time. He’s a no-nonsense guy.”
Manly began by saying it was not an easy talk to give. He added he has stayed in touch with personnel at the company he left when he retired in 1989 as president and CEO of RHM Grocery Products. At that time there were four companies reporting to him, including Red Wing and a Carriage House operation in California.
“My job was to find synergies between these widely scattered sites and/or eliminate operations that weren’t economical; we were also to locate other companies that might be acquired,” he stated. ” … It was the beginning of changing Red Wing from a company in charge of its own destiny into being only a manufacturing plant. This change has come to an end with the planned closing of both the Dunkirk and Fredonia factories by the fourth owner since 1976.”
“When I moved from operations to sales in 1957, I discovered that a company without customers fails and the closer they are the better,” Manly stated, adding since 1912 the company had been profitable because of “good products at good prices which came about because we had low costs from a good location, product diversity and maximization of productivity.
“Why then are Dunkirk and Fredonia operations being closed? Because the only constant in life, especially in business, is change; and we all resist it.”
Part of the change hurting the local operations has been the movement of population from the northeast and midwest.
“Red Wing’s location was an asset when almost all of our customers were located within overnight delivery service by truck and we had supply backhauls that gave us low delivery costs. Remember our selling area at that time was Boston on one end, Chicago on the other end and as far south as Richmond, Va.,” Manly explained. “Now that location center is closer to Kentucky.”
Manly said the purchase of a competitor in the peanut butter business with a customer base in the southeast led Ralcorp, the owners of the now Carriage House at the time, to decide to make peanut butter in Kentucky.
“The loss of that volume would make other products less profitable located here, and they could be produced in Kentucky. … When Ralcorp was bought out by ConAgra they had a different idea: manufacture peanut butter in their underutilized Peter Pan factory in Georgia and send part of it to the factory already owned by Ralcorp in Streator, Ill.,” Manly explained. “Why was ConAgra interested in a company that specialized in private label when much of their business was in advertised brands? They own 50 different well-advertised labels, why would they want to get into the private label business? That was what Red Wing was and what Cott Beverage is today.”
Success breeds imitation said Manly, and a growing trend since 2008 of private label purchases by consumers led ConAgra to its decision to purchase Ralcorp.
“Should a company pass up opportunities to increase their competitive edge in order to help a less profitable opportunity? Not likely, not in the school of hard-knocks business I grew up in, and which has not gotten any easier since I retired,” Manly stated before saying he regrets the impact of the closing.
“However, if I were in charge today, the facts would have led me to the same conclusion. We must be more forward thinking about our strengths, and weaknesses, to stay competitive,” he added. “LED and StartUp New York are steps in the right direction, but a bit late in getting out of the gate. It is time to stop whining and start working.”
Eugene Bailen was in Manly’s position at Red Wing and with Bailen’s permission, Manly talked about Bailen’s thoughts and findings since Bailen left the company.
“One of the first things the companies that bought Red Wing did was to look at the costs of distribution and logistics, which is a major reason for the ConAgra decision today. Hauling peanuts to Fredonia from the southwest and southeast to Fredonia and then shipping peanut butter back to those areas really does not make good sense today,” Bailen reported. “The same holds true with frozen fruits from the West coast that are initially shipped to freezers in the Midwest and then reshipped to Fredonia to be made into jams and jellies. That list goes on and on.”
While other companies were investing in and improving operations, the Fredonia plant did not while decisions about location were studied. In his new role as an engineering consultant, Bailen said he has visited companies that are competitors of the Fredonia plant with technology Fredonia didn’t match with its 40-year-old equipment.
What can we do?
Manly had a list that included approaching Con-Agra for a recompense to the community for the losses it faces through no fault of their own.
“They should share some of the anticipated savings,” he stated. “When you buy a company you purchase the liabilities as well as the assets.’
Manly called for help from the state and federal government, adding ConAgra has well-known brand names and would “not welcome bad press.” He added ConAgra should pay for demolition of the 100-year-old portion of the Fredonia plant.
“This would increase the salability of the remaining portion of the facility. They should then give the Dunkirk and Fredonia facilities over to the IDA or similar organization,” he explained. “We have several companies that have shown interest in parts of the building. … In addition, any settlement dealing with union members should include the three Rs; retraining, relocation and retirement.”
Manly also had a thought on local government.
“Combine water and sewage operations for Dunkirk and Fredonia, or consolidate into one if that turns out to be practical. Finally, act to eliminate layers of government in the county as was proposed over 50 years ago by the “Little Hoover Commission,” on which I served,” he stated. “Consolidate school districts in the county on a logical and economical basis created from Albany, not local referendums because they have the power in Albany and it’s the only way it will happen.”
He also called for all-season tourism promotion for the county.
“What do you see when you drive into New York state from the west? A porn shop. What do you see when you drive east and go into Pennsylvania? A welcome center. Boy, are we giving us a good shot,” Manly noted.
Whether one agrees or disagrees with Manly’s take on issues one thing is clear, his experience in the food industry lends credence to his take on the closing of the Dunkirk and Fredonia Carriage House operations.
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