HUTCHINSON, Minn. (WCCO) — Step into any store front along Hutchinson’s Main Street and you’re bound to hear the talk of tough times ahead. At one time, the hometown company, Hutchinson Technology, was the world’s leading maker of suspension assemblies for computer disc drives. But the 46-year-old company is now navigating the tough seas of global competition.
Inside the Urban Hair Studio, stylist Rachel Hoffmann says, “I think they start cutting people on Monday.”
From behind her styling chair, Hoffmann hears all the economic worries and woes from her clients. In this town of 13,000 people, it seems everyone knows someone who is employed or has worked at HTI through the years.
A week ago, the company announced the news many had feared. Production of the suspension assemblies will be moved to other plants in Eau Claire, Wis. and Thailand, leaving 600 workers without steady jobs.
But the effects of the unemployment will soon be felt by everyone, including Hoffman.
“I have an aunt that’s been working there for over 20 years and it’s all that she knows. I feel horrible for her, you know,” explains Hoffmann.
Back in 1985, the company was among 34 manufacturers of disk suspension assemblies scattered throughout the world. Today HTI is just one of four, with the others headquartered in Asia.
Because Hutchinson Technology is a major economic force in west-central Minnesota, Gov. Mark Dayton made a trip to Hutchinson to see what the state can do to soften the blow.
He was told that in 2010, prices for the company’s products declined 1 percent each week. And since 95 percent of its customers are in Asia, it will move production to help cut costs.
“They said they have terrific workers here, very dedicated and hard working,” said Dayton. “But unfortunately, there’s people willing to work in Thailand for a fraction of the cost as workers here in Minnesota or anywhere else you can find in the United States.”
Dayton promised local officials state help with worker retraining. The Department of Employment and Economic Development (DEED) will dispatch “rapid response teams” to help the unemployed with retraining and job placement.
Already, the company says it has fielded calls from 35 other companies seeking skilled workers for their businesses.
Still, the loss of hundreds of higher paid, skilled jobs to this area won’t help a still ailing economy. Unemployment remains high and the real estate market is still suffering.
To small business owners like Sherry Rasco, many here are bracing for rougher times ahead.
“It affects all the small business owners and it just keeps trickling down. We’re a small plumbing and heating business and as soon as HTI made the announcement that they were laying off, the phone quit ringing,” said Rasco.