By By JOHN EBY / Niles Daily Star
DOWAGIAC – Dowagiac received official notification from National Copper Products Thursday it is in the process of closing by Nov. 11.
The News contacted the company for comment on Wednesday – the day employees learned of their fate – but has not received any response about a closure which costs the community 175 jobs and came about suddenly, according to a soon-to-be-former employee.
A news release issued from City Hall said the company indicated attempts to sell the plant proved unsuccessful.
"Changing global market conditions necessitated this difficult decision," the city statement said.
"The city will not sit idly by," vowed Dowagiac Mayor Donald Lyons.
Lyons reported that City Manager Kevin Anderson and a team of local, regional and state economic development officials has already begun efforts to seek out new opportunities for this facility at 415 E. Prairie Ronde St.
"The city has successfully responded to other recent plant closings by aggressively pursuing new business opportunities for companies such as Ameriwood and Premier Tool and Die," Lyons said. "Our staff and council are committed to turning over every rock as we work towards developing business and job opportunities in our city.
"We've worked closely with National Copper over the years and have appreciated their investments into our local economy," the mayor said. "We are disappointed that this mill is closing at this time."
National Copper Products arrived in Dowagiac in 1995. Rudy furnace company operated at this same site from 1915 through the early 1970s.
Two other manufacturers, Sundstrand Heat Transfer and Modine, used the location before National Copper Products.
John Katlun, 58, of Dowagiac, who came to National Copper Products in 1996 after Garden City Fan folded in Niles, described himself Thursday night as "personally upset" because the intent of the $700 billion bailout was to free up capital for banks to loan to businesses, and Wachovia, acquired by Wells Fargo in the September meltdown, blocked further borrowing against inventory because the plummeting copper market decreased the value of that inventory.
"The bank shut us down. The suddenness has the people in the shop upset," said Katlun, a machinist in the tool room.
Employees did not receive 60 days notice, so some contacted U.S. Fred Upton's office to complain.
"it's quite a jolt with no warning," Katlun said. "Ameriwood and ICG had warning. It seems like it should be illegal. The guy I worked for is done (today). He's 62 and wasn't ready to retire. I'm one of the lucky ones because I'm supposed to work until next week."
"This is a big hit for Dowagiac," Katlun said, noting the ripple effect from National Copper Products' tenants also having to leave.
"Our people are out period," he said. "A lot of them are unskilled factory workers who have put in 40 years since high school. They're going to be out on the street. What took us down is the bank. The bank is the culprit, in my opinion.
"We were almost sold about a month ago, but the crash in copper prices" caused the deal to fall through. "We had copper ordered and we had customers for it when Wachovia pulled the trigger on us. It's pretty stressful and a total surprise. This came up suddenly."
Katlun said Menard's is one of National Copper Products' largest customers.
"We're nimble and we fill a niche market for different sizes of tubing. Doing a good job is not enough anymore. National Copper has been good to me."
National Copper Products consumed the 100-percent recyclable raw material that feeds its continuous casting process by the 200,000-pound trainload.
The mill it acquired had a capacity of 18 million to 19 million pounds of copper a year.
By investing millions of dollars in new equipment and furnaces, National Copper boosted its capacity to 35 million to 36 million pounds.
Copper melted in a casting furnace that was a three-story operation.
It's hauled to the upper level by elevator, placed in a 1,700-degree furnace and flowed out at the bottom "like water" – red, molten water, General Manager Ken Harrington told the Dowagiac Rotary Club during a presentation in the past.
"We've had an interesting time of growing since the acquisition was made, but we're glad to be here in Dowagiac," said Harrington, dressed casually to reinforce his belief that "suits and ties don't make copper tubing. People do. I'm a believer in being out on the floor, talking to people, seeing what's going on and understanding the process."
The 20,000-pound holding furnace molds logs he likens to "copper telephone poles. As it solidifies out of this mold, we then trigger a billet by a micro-switch system we've created."
Billets were fed into a 21-ton extrusion press which spreads copper not unlike squeezing toothpaste from a tube.
"Every tube starts out the same size in diameter," Harrington said.
National Copper Products in Dowagiac was primarily a "fully-integrated copper tube mill."
Big sheets of raw material came in from all over the world.
"Most of ours right now we get out of Utah," Harrington said in 2004. "To give you an example of how big this mine is, the diameter of this open pit is two miles across. It's over half a mile deep. They're using trucks and equipment that can haul 20 tons to 30 tons of dirt. They look like Tinkertoys and Matchbox toys.
"We get copper from Russia, South America, all over the world. There's not a shortage at this point," he said. "The thing that impacts copper a great deal is the plumbing industry – a 740-million pound industry that is deteriorating every year because of plastic."
National Copper Products' main markets are air conditioners, refrigeration and appliances. A new market launched to diversify in 2003 was water tubes.
National Copper Products four years ago employed 220 people who worked on three shifts five days a week, although demand could mean running six days, 24 hours a day.
"If I had another day in the week, we'd probably be running that right now, too," Harrington said. "The market is going through a big spurt right now. Back in January, February and March (2004) there was a significant increase in the copper market. We price our products based on the daily copper. We are truly commodity-driven. Our pricing is commodity-driven. If copper goes up 10 cents a pound, that's what we have to pay for it and, hopefully, that's what we can sell it for. Our profits are basically based on our ability to fabricate."
Harrington, of Granger, Ind., had more than 40 years in manufacturing, starting as a tool-and-die-maker. From there, he went into tool engineering, plant management, sales and marketing. He belonged to three professional organizations which pertain to his business.
"We're pumping probably a million gallons of water a day out of the ground," Harrington said in 2004. "We work closely with the state and the DEQ (Department of Environmental Quality) to continue cleaning up a site that wasn't our responsibility."
Harrington said National Copper Products formed in 1997 in Dallas, Texas. "We had to set this up so we could have a distribution center. We had to do some warehousing," he said.
"In 2000, we formed another wholly-owned subsidiary of National Copper Products in Dowagiac. NCP Trading Co. is a worldwide trading company that purchases stuff from Korea, Japan," from a Boston office.
Fox's folksy arrival:
'Here for the long haul'
"National Copper here for the long haul" said a Daily News headline over a December 1995 story about its arrival.
President Tom Fox of Birmingham, Ala., did the neighborly thing, inviting in scores of people who live around his plant and city officials for a briefing over punch and cookies.
Fox affably explained why a company might be interested in a 600,000-square-foot hulk of a plant so vast that a van awaited anyone interested in in a tour and a reputation so linked with groundwater contamination that it seemed an odd sight to see some old combatants from the TCE era of the early 1980s ushered warmly inside.
"We're all going to get along better if we can maintain as open a relationship as possible," he said. "Please ask us if you have questions on what we're doing over here."
Fox assured his audience National Copper, which had three shifts running 100,000 pounds of product a day by melting pure cathodes at 2,160 degrees Fahrenheit and pouring the molten copper, is "here for the long haul" in Dowagiac.
He used an overhead projector to explain everything from the origins of his business to where he thought they could grow focusing on copper tubing, where Sundstrand and Modine concentrated on coil.
Fox joked that he, two brothers and a daughter attended the University of Notre Dame, so "our stockholders think we bought it so I can get up here in the fall and go to football games. I suppose there's some truth in all of that, but the real reason we bought it is that we were attracted by the fact that the product lines fit what we already did and brought us new products we could sell in the copper tubing line.
"I visited this mill in 1987 and again in 1989 and thought it was a great-looking mill, very focused and could be made into an efficient, money-making outfit. It has capacity available if we can make it grow and it has a very experienced, highly-trained workforce."
Given that Sundstrand's employment peaked at 1,200, "The people who have survived here are in many respects the cream of the crop," Fox noted. "It has a very good reputation around the country for quality."
"Let me tell you who the 'we' is who bought this place," Fox elaborated.
"I represent a group of investors, of which there are about 30, which include my two brothers, my first cousin, some golfing buddies, my insurance agent and people like that. In 1985 we put together a company and bought the assets of a copper tube mill in Huntsville, Ala., called National Copper and Smelting Co. It was organized in Cleveland, Ohio, in 1916," about the time Sundstrand's forerunner, Rudy Manufacturing, started in the stove and heating business.
As a copper tube redraw mill, National Copper and Smelting buys large diameters and reduces them to special sizes. It moved to Huntsville in 1982 and Fox's group acquired it in 1985. It had about 150 employees.
"In 1990 we bought another company out in Arkansas that was a customer of ours for copper tubing called American Tubing. More recently we bought the mill here" from Modine Manufacturing Co. of Racine, Wis., and organized it into two separate companies, National Copper Products, which is the operating company, and Prairie Ronde Realty, which owns the building, the land and the environmental remediation equipment.
American Tubing fabricates copper tube it buys into air conditioning and refrigeration coil. "It is a potential customer of this mill and it also buys tubing from our Huntsville mill. We bought it from its founder in 1990 and it has about 125 employees," said Fox.
"As it stands now," he said, "we have a holding company, of which I am the only employee, located in Birmingham, and we have four operating subsidiaries. We bought this place in two stages. We bought the operating facility from Modine and the real estate from Sundstrand. Sundstrand had leased the real estate to Modine since 1990, when Modine bought the operation."
Fox recalled Rudy's evolution from stoves to munitions during World War II and air conditioning coil production after the fighting stopped.
In the 1950s Rudy's added a copper redraw mill. About 1965 the plant added the casting and extrusion process to become a fully-integrated copper tube mill.
Sundstrand bought out Rudy's in 1968 and sold out to Modine in 1990.
Under Sundstrand in the 1980s the plant exported manufacturing jobs to Missouri and to Mexico until the workforce dwindled down from 1,200 to two mills and a skeleton crew of about 60 employees.
"It's built back up to about 200 employees, which is where we are now (in 1995)" Fox said. "The hourly workforce is represented by the United Auto Workers union (Local 1218)."
Of the 175 employees, about 35 are salaried and 140 are hourly union members.
National Copper's management team in 1995 included Vice President and Operations Manager Jim Huwaldt; Personnel Manager Joanne Adkins; Manufacturing Manager Jim Casey; Sheila Davis, telephone customer service; Ron First, engineering manager; Sandy Jackson, controller and purchasing; Bil Keefe, marketing; and Rick Smith, quality manager.
"Selling tubing is all we do and our sales force is geared to that," Fox said. "We presently buy larger-diameter tubing and resell it so we can't be very competitive and we hope to expand the capabilities of the mill. There is the potential here, too, to expand the capacity of this huge building and 30 acres of land. We're using about 250,000 square feet of the building and we're renting out another 150,000 square feet, so we still have plenty of building space left over to rent" – even with five tenants.
Elkhart, Ind.-based Paramount Plastics at that time was "mothballing" its share of the plant during the slow winter months
Ameriwood stored finished goods there. A company based there for three years sold vacuum cleaners. A newer arrival was a deburring cleaning operation.
Turning to water woes, Fox offered the "environmental update you may not have had in the last decade or so. This place from 1916 up until I don't know when had a variety of metalworking operations in here which, like many others all over the country and the world, resulted in a lot of damage to the environment. Stuff spilled on the ground, settling ponds that dried out and were paved over, that went on for 60 or 70 years. About 1982 Sundstrand, which was operating the plant at that time, came to realize that they particularly had a serious problem with TCE, trichlorethylene," a degreasing solvent.
The Michigan Department of Natural Resources sued Sundstrand and some of the people seated before Fox became embroiled in litigation after pollution from the plant contaminated their well water.
"About 1984," Fox related, "Sundstrand signed a consent order with the court in which they agreed to clean up the (TCE) contamination in soil and groundwater. Since then Sundstrand has been pumping water out of the ground, treating it and releasing it. They, now we, are pumping something like 1,100 to 1,300 gallons a minute to a very large plant out back which treats this water. Contamination in the groundwater declined and by the early '90s the reduction in concentrations of contamination had leveled out. In 1994 they activated a soil vapor extraction system which, in essence, amounted to drawing air up out of the soil from a series of wells and passing it through a stripping tower and passed through carbon filters that collect these contaminants.
"SInce that started in 1994," Fox reported, "the collections of solvent in soil and groundwater have dramatically increased again. Contamination in the groundwater is down to maybe on the average a tenth or so of what they were 10 years ago. There's been a fairly dramatic improvement in that."
Fox stated that in the year and a half prior to NCP's acquisition, 3,100 gallons of solvent had been removed.
"That's a huge amount. After 10 years of treatment they put in this soil vapor extraction system and collected a huge amount of solvent. There's no question the cleanup is working. The good news is the collection of 3,100 gallons out of the soil. The bad news is that there's a lot down there."
National Copper decided that to enjoy the use of the property over the long haul and not worry about leases or Sundstrand's compliance.
"We worked a deal out with Sundstrand," Fox said, "where they would deed the property over to us and we assumed the environmental cleanup. We've spent a large amount of money doing a very thorough study on the environmental situation and believe we've got a pretty good handle on it. In essence, we're here for the long haul and we plan to finish the cleanup and to sell some tubes."
Fox added that as part of that study his company drilled "extensive" soil borings "to be certain we weren't getting into something we didn't understand. We found that the other contaminants that had been deposited here over 60 or 70 years, basically they had done a pretty good job of cleaning them up. We found almost no other elements in excess of allowed amounts. They used to have chromium plating operations here and a lot of other metalworking and we're in very good shape on lead.
"The only problem we found that over about 40 or 50 years they'd dumped furnace brick out back that had copper on it. Copper is not a hazardous material for federal purposes or in any state other than Michigan and California. As I understand it, it became a hazardous material in Michigan, not because it's hazardous to human, but because it can be hazardous to aquatic life. That's why you paint the bottom of your boat with copper-based paint. It kills barnacles. We're going to remove the bricks and haul them to a landfill in another state where copper is not a hazardous material. Then we'll just be faced with TCE remediation."
Fox responded to a question about the disposition of chemicals collected by saying it's removed to somewhere where they are incinerated in cement kilns for fuel value.
While National Copper continued the cleanup, innovative processes continued to be developed.
He mentioned "bioremediation," such as injecting methane gas to promote bacteria that "eats this stuff. We're going to take a look at some of these relatively new technologies once we get our feet on the ground," Fox said 13 years ago.