Stoughton Trailers’ Wahlin takes the high road through economic challenges

For most area businesses, the Great Recession was nothing less than devastating. For Stoughton Trailers, however, it was just one terrifying part of a ferocious three-headed monster.

The company was already experiencing a brutal downturn before the recession hit its frightening heights in late 2008, having seen a slackening in demand for its signature dry-van trailers starting in 2006.

Add to that the hollowing out of another once-profitable sector — intermodal equipment — because of Chinese competition, and you had a recipe for disaster.

You could say that’s just what befell Stoughton Trailers as the family-run company approached its 50^th anniversary near the close of the last decade, but it has stormed back in the past few years, going from around 1,400 employees before the downturn began, to around 250 when the recession was doing its worst damage, to approximately 1,000 today.

At IB’s next Icons in Business presentation on Dec. 3, Stoughton Trailers President Robert Wahlin will discuss the company’s survival strategies in the wake of the Great Recession and the challenges the company faced in both ramping up and ramping down production in response to global economic forces.

According to Wahlin, it wasn’t just the loss of business that hurt Stoughton Trailers, it was also the hemorrhaging of considerable human capital, which threatened the long-term success of his company.

“When we dropped from around 1,400 to around 250 in basically about a three-year period, at that point, you’re not just cutting to the bone, you’re cutting into the bone,” said Wahlin. “So it was during that time period we lost a lot of good people, a lot of our core talented manufacturing personnel.”

In an era when it’s already difficult to recruit and retain skilled manufacturing workers, losing all that accumulated talent poses a significant problem. Part of Stoughton Trailers’ response was to refocus its remaining workforce on continuing education.

“The people we were able to continue with, we did significant investment in, and what I mean by that is educational investment,” said Wahlin. “So we had shop floor people, we had administrative people, the whole group. … We took people off the floor and put them in the classroom, and we had classes in quality certification, Lean Six Sigma, ergonomics, and just kind of general business classes as well. And we were able to build up and improve our core base of personnel and improve those jobs while pursuing educational opportunities as well.

“We did this through MATC, and it got to the point where some of the classes were so dominated by Stoughton Trailers employees that they actually came and held the classes at our facilities.”

But while the company’s remaining workforce no doubt felt fortunate to be in the factory or in the classroom — anywhere but on the unemployment line — according to Wahlin, keeping them motivated in the face of so much grim news was one of his biggest challenges.

“Yeah, it’s a big challenge to keep them excited about coming to work every day when they see people that they’ve worked with for so many years have to leave or sit on the sidelines,” said Wahlin. “You can easily fall into an, ‘oh, what’s the point?’ type of atmosphere, and especially when you’re taking on improvement projects and educational opportunities, it’s hard for people to see the advantage of that because it’s not an immediate payback. So when you’re doing those types of investments, there’s a sense of urgency to put that education and that investment to good use and to see that payback, but you just have to be very patient and wait for the right time.”

Moving forward

The right time eventually came, but not before the company was forced to retool and allow plenty of good people to move on to other jobs. While much of the company’s resurgence can be attributed to a rebound in demand for its core products and a rosier economic picture overall, Stoughton Trailers also re-evaluated its product line and redoubled its efforts to address the manufacturing skills gap.

In addition to ramping up production to address the pent-up demand for replacement trailers, the company began to diversify.

“During the downturn, we were just into dry-vans,” said Wahlin. “Into the downturn and coming out of it, we started building a grain trailer, so we got into agricultural equipment. … We also have been scratching and clawing to find our way back into intermodal containers and chassis. It went to China, but we redid [our] Evansville plant and significantly changed the product design, trying to find a way where we can be efficient enough to get back into that market.

“We had been, for the last few years, the only North American supplier that’s been trying to get back in, but we’ve been building containers and chassis again, and right now we’re looking and have been doing research into other products such as flatbeds and refrigerated equipment and other things. So yeah, the dry-van market started to increase primarily through equipment replacement demand, and we also diversified our products so we weren’t as susceptible to the downturn and the swings that go with a single product line.”

While slaying the Chinese competition dragon requires a novel, up-to-the-moment strategy — one that Wahlin promises to share at the Icons in Business presentation — an even greater problem for the company, and other U.S. manufacturers, may be the lingering manufacturing skills gap.

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While laying off hundreds of employees is devastating on both a personal and professional level, finding enough skilled people to meet new demand can be almost as challenging as winding down production.

Wahlin says the company was able to recall between 300 and 350 of its former employees when it started hiring again, but many had moved on, and the available pool of skilled labor simply isn’t what it used to be.

“We’re in somewhat of a unique situation,” said Wahlin. “Our plants are in Stoughton — so Southern Dane — as well as Rock County in Evansville and Green County in Brodhead. And when GM left Janesville, the whole manufacturing infrastructure just kind of disappeared from the area. There’s not the base of welders and industrial painters and machine operators and press operators. There’s not nearly as much of that skill in the area as there used to be, so you get to a point where you can’t go and rely on hiring those skills.

“We have an in-house welding department where, I would say over 95% of our welders we promote from within and train in-house, and they’ll spend a week or more in our welding training center. … We’ve taken a much different approach and investment to training and education than we had to in the past, when some of those manufacturing skills were more readily available in the market.”

Wahlin says the company has also opened up the company’s facilities to high school kids to show them what manufacturing has to offer and prove to them it’s not the hard, dirty, physical work it was in the old days. Beyond that, however, the urgency of the moment demands that his company act now. It’s a good problem to have — particularly considering the dark days Stoughton Trailers recently emerged from — but that doesn’t make the problem any less real.

“The whole skills gap issue is kind of a nationwide phenomenon, and yeah, I think a lot of programs are getting in place and a greater emphasis is being made in the tech schools to start to rebuild that,” said Wahlin, “but manufacturers today can’t wait for that to happen. They need people today or tomorrow, and they’re left with no other choice but to get them in and train them internally.”

If you would like to see Wahlin speak at the Dec. 3 Icons in Business event, click here for information on registration and event details.

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