A matter of growth: Largest 100 employers

Our largest 100 employers helped bring Dane County's unemployment rate back toward historic lows.

From the pages of In Business magazine.

When it comes to weathering economic downturns, the Dane County business community takes a back seat to no one. As the long, slow climb back was underway, the number of people unemployed here peaked in January of 2010 at 24,809, but there are now 12,300 fewer idle people, according to the Bureau of Labor Statistics.

Health care software developer Epic alone added another 700 employees in the past year, bringing the size of its workforce to 8,100, and roughly 1,600 over the past two years. While that kind of growth has become par for the course for Dane County’s largest employer, the continuing workforce growth for Dane County’s other Largest 100 Employers combined has helped take Dane County’s unemployment rate from 4.2% at this time last year to 3.3%.

The local jobless rate is now inching back to the historic lows seen at the height of the dotcom boom of the late 1990s, when it dipped below 3%, and it offers more testimony to the power of our job-creating engine.

As part of this year’s Largest 100, we welcome (or welcome back) 10 members to the Largest 100 Employer’s list, including: Covance, Sub-Zero, QBE North America, Woodman’s Markets, Community Living Alliance, JP Cullen, Symphony Corp., Pizza Hut of Southern Wisconsin, Environment Control of Wisconsin, and Team Soft Inc.

We also indicate where companies ranked on the 2014 list, and we profile four of the companies who have become perennial members of the Largest 100, which is based on workforce size: Madison Gas & Electric (#20), Summit Credit Union (#49), Smart Motors (#68), and Wisconsin Built Inc. (#88).

Madison Gas & Electric: Energizing conversations

As the Environmental Protection Agency’s new carbon-reduction rules for power plants suggest, Madison Gas & Electric and other utilities are undergoing transformational change, and that has inspired a series of community energy conversations to help MG&E plot its next move. According to President and CEO Gary Wolter, the conversations are unrelated to the blistering criticism directed at the utility because of its controversial rate restructuring plan, they are about shaping a new, long-term energy strategy.

MG&E’s Gary Wolter and other company officials are meeting with area residents to help shape the company’s next long-term energy plan. For details, visit www.mge.com/conversations.

Energy 2015, the utility’s most recent long-term plan, was shaped by a similar dialogue that took place 10 years ago. As a result of that community input, Wolter notes the utility eliminated coal in its downtown Madison power plant, increased its renewable energy production to 137 megawatts, and reduced carbon emissions by at least 15%.

“We have changing technology and a changing industry, and this is across the country — it’s not just unique to us,” Wolter says. “What is unique to us is that we think we’re the only utility in the country actually going out and engaging customers in the manner we are.”

As a regulated public utility providing electricity and natural gas, MG&E’s public utility business model requires it to provide a return on investment to shareholders who have invested in its facilities, distribution system, and pollution-control technology. The company is seeing signs that Madison residents are willing to voluntarily pay more for renewable energy, and the community conversation will seek to verify that.

“The other dynamic that’s happening is the cost of renewables is coming down and coming down substantially,” Wolter notes. “As the cost comes down, we find that customers are talking more in terms of renewables.”

Their heightened appetite comes as energy technology is changing in profound ways. MG&E has established a network of 26 electric vehicle-charging stations in parking ramps, at libraries, and other locations, and it’s working with the City of Middleton on a 500-kilowatt solar array, which would enable customers to purchase clean energy.

Metering technology continues to improve, and customers are adopting smarter technology — appliances and thermostats — in their homes. In the future, utilities might have the ability to work with customers on how their appliances run, reducing peak demand and perhaps the need for additional power plants.

Of all sources of energy, Wolter believes natural gas holds the most future promise. With the advent of hydraulic fracturing, the cost of natural gas today is extremely low, which makes it ideal for both heating homes and powering vehicles. Both wind and solar technology are becoming cheaper and more efficient, and more improvements are anticipated in battery and storage technology.

The industry will have to decide the extent to which it builds natural gas power plants, the extent to which it builds renewables such as wind and solar, and how it charges consumers — some of whom are actually producing electricity themselves — for the shared resource known as the electrical grid.

“We actually have an opportunity to think about the world differently,” Wolter states. “That’s exciting for us.”

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Smart Motors: Hanging its hat on hybrids

Smart Motors President J.R. Smart has experienced some of the ups and downs that his predecessors went through. When an automobile dealership has been in business since 1908 and has experienced multiple recessions, a couple of world wars, and a few oil price shocks, it takes a great deal of adaptability to remain in operation.

Smart Motors’ John Dolan, affectionately known as “Mr. Prius,” travels around the area to talk about the benefits of owning the hybrid vehicle. More than 40% of all new vehicles sold at the dealership are hybrids.

Business is good at the state’s top-selling Toyota dealer in part because of more recent adaptations — the decisions to build a new facility on Odana Road and to emphasize hybrid vehicles, which are powered by both a conventional internal combustion engine and a high-voltage electric motor. Forty-three percent of all new vehicles sold are hybrids, up from 25% in 2008.

J.R. Smart is hardly surprised that hybrid vehicles like the Prius are still selling, even with some downward pressure on the price of gasoline. True, there is some consumer interest in alternatives like plug-in cars, but in eco-conscious Madison, hybrid models remain popular with consumers. Chalk that up to fuel efficiency in excess of 50 miles per gallon, or the increasing number of technological features inside auto interiors — Wi-Fi anyone? — but when a company nearly triples its workforce over the past eight years, especially these past eight years, it’s doing something right.

The first Prius was introduced to the United States market in 2000. Smart Motors was so confident that Madison would take to this technology that it brought on a hybrid specialist, John Dolan, who is affectionately known as “Mr. Prius.” Dolan travels to area communities to educate consumers and show off new Prius models. He also trains consumers on how to get the best out of their Prius.

“We knew that our market, Madison and Dane County, would be an early adopter for that, so we purchased some of the first Prius models from dealers in California, and sold our first one in August 2000,” Smart recalls. “That was before they really were introduced in our market, and they’ve really taken off.”

At some point, another fuel-saving technology, hydrogen fuel cells, might be an option for consumers. Toyota is testing hydrogen fuel cells, which operate differently than batteries, but it might be at least a decade before the company hangs its hat on this technology. “Hydrogen is kind of a tricky substance,” Smart notes. “It’s pressurized to about 10,000 pounds per square inch, so they’ve got their work cut out for them. I think we’ll see that down the road.”

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Summit Credit Union: Branching out for literacy

For Kim Sponem, president and CEO of Summit Credit Union, 315 full-time and 53 part-time employees only tells part of the story — the Dane County part. The member-owned financial cooperative now has more than 30 locations, with plans to add more, which means that its recent workforce growth will continue despite, and in some cases because of, industry challenges that bedevil financial service firms.

Summit Credit Unions’s financial literacy programs have helped local couples like Becca Reisdorf and Joel Wallschlaeger, pictured here with Becca’s daughter Taytum, who are determined to improve their financial situations. The couple works with Summit Credit Union coach Sarah Campagna.

At the moment, business is strong in both lending and deposits, especially auto and mortgage lending. As the largest mortgage lender among Dane County financial institutions, Summit Credit Union is taking full advantage of 2015’s higher home sales, including a healthy influx of first-time homebuyers.

However, Summit’s workforce growth is a direct result of recent expansion. By this time in 2016, it will have a total of 33 branches including its local school locations and a new site in metro Milwaukee to serve the suburban communities of Muskego and Franklin. That includes the recent merger of Summit Credit Union and the Janesville-based Educational Employees Credit Union, which brought Summit’s total assets to $2.3 billion and its overall Wisconsin membership base to 147,000.

Due to growth at the branches, Summit has also added some back- office support, and some positions have been added due to increasing regulations and compliance costs. Of particular concern is the impact of new rules and regulations associated with the Dodd-Frank Act, the financial reform measure enacted in 2010. Community banks have been critical of the law because it lumps them in with the Wall Street investment banks that are widely blamed for the housing collapse of 2008 and the resulting financial crisis.

If Sponem’s views are typical of most credit union executives, they aren’t thrilled with the law, either. Citing media reports that credit unions are merging because the law’s rules are “so onerous,” Sponem points to added paperwork for real estate lending. While the law is well intentioned, she contends that consumers are annoyed with its confusing disclosure requirements. One year ago, there were 3,000 pages of new mortgage regulations coming out of the Consumer Financial Protection Bureau, which was established under Dodd-Frank, and this year the bureau followed that up with more disclosure requirements.

“The idea of these disclosures is supposed to make things better for the consumer, but in many cases it makes things more complicated for the consumer,” she says. “That worries me because if things get too complicated for consumers, many times they just won’t read disclosures at all. We want them to read the disclosures, and we want them to understand what the entire process is about.”

Another disappointment is the lack of progress on federal legislation to increase the capacity of credit unions to make business loans. One bill introduced in the U.S. Senate would raise the credit union member business lending cap from the Congressionally mandated 12.25% of assets to 27.5% of assets for eligible credit unions. “Raising the cap would allow us to help our members with their small businesses,” Sponem notes.

Amid legislative frustrations, philanthropy, and education are part of Summit’s community outreach, particularly financial literacy. Its STAR Credit Union and Project Teen Money are among several programming thrusts aimed at promoting financial education. “We believe the stronger our communities are, the better off our members will be,” she states.

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Wisconsin Built Inc.: Milling about the market

Over the years, the workforce of Wisconsin Built has toiled for some prominent clients, but for President Dan Petersen, the most memorable projects were done closer to home. The Deerfield-based manufacturer of store fixtures and architectural millwork has made building fixtures, casework, and commercial interiors for leading retail designers and commercial architects.

Wisconsin Built has manufactured store fixtures and architectural millwork on projects such as Duluth Trading Co.’s retail outlet in Mount Horeb (above) and a sleep products store in Colorado.

Its customers have included financial institutions, hospitality businesses like the Concourse Hotel in Madison, and high-end retailers, specifically Elizabeth Arden and Bloomingdales in New York City. What Petersen most remembers, however, are the Wisconsin projects that proved to be “nicely challenging.” From the scope and variety of the Epic campus, to the architectural quality of enhancements at the Dane County Regional Airport — “What they accomplished with that budget is incredible,” Petersen says — to Duluth Trading Co.’s retail outlet in Mount Horeb, you can find the reasons why Wisconsin Built concentrates on architectural woodwork.

“They are community points of pride,” Petersen notes. “Our workers can say, ‘Yes, we did those three restaurants in Dubai,’ but they’re never going to be able to point to that work with members of their family around them. Saying we did the airport and having done the airport, we’re very proud of that project.”

For Wisconsin Built, the difference between economic stability and worry is the difference between 80 employees and 200-plus employees. The company workforce peaked at about 145 before the 2008 decline, and then it was pared back to about 80 employees. By 2011, a tremendous growth year, its existing clientele and a number of new prospects grew the workforce back to 145, and activity has steadily grown to the point where its employee count now stands at about 220.

“The level of activity of the two markets we work in are quite active,” Petersen notes. “About 15% to 20% of our work is what we call architectural woodwork, and the other 80% or 85% is restaurant and retail environments. People are building stores and restaurants, and in the architectural woodwork field, there’s a lot of hotels, financial institutions, and hospitals.”

Petersen attributes that growth to products that result in great referrals. As hard as this is to believe, Wisconsin Built has no salespeople, so its growth is organic. The people who use its products make referrals to others. “As our client personnel change companies, they remember us as having delivered good products,” Petersen explains. “They will bring us into their new organization just like that.”

One reason Wisconsin Built never fell below 80 employees was that because of its mix of architectural and retail, it was fortunate to have customers who were still finding geographic markets to build in. The recession still took a toll, however. To Petersen, the deteriorating state of the economy sunk in the day he announced to employees that the company had bid on about $16 million worth of public business, but was awarded only $400,000 of it.

“We still had our baseline business, but that’s how competitive the public bidding was,” Peterson recounts. “I told them we would not be driven by the desperation of other companies. The balance there is you can’t go on forever without some business, but the business we did have was at least funding ongoing operations, and we’re here as a testament that we did the right thing.”

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