April 08--Haeger Potteries of East Dundee produced bricks used to rebuild Chicago after the Great Fire of 1871. Ferrara Candy of Oakbrook Terrace traces its history to the opening of a bakery on Chicago's Taylor Street in 1908.
Two companies with great Chicago histories. How about their futures?
Haeger said this week it plans to close its factory. The company shifted long ago to making glazed artware and accessories, but its products can no longer compete with cheaper foreign-made goods. Tastes change, and so do distribution systems. "Gift shops and independent furniture stores are almost nonexistent, and the larger stores that have survived are purchasing goods from abroad," said Alexandra Haeger Estes, the fourth-generation president.
Ferrara Candy also morphed and grew through the years. Now owned by a Connecticut private equity firm, Ferrara brands include Lemonhead, Brach's, Trolli and Jujyfruits. Worried about this company too? Don't choke on your Chuckles, but things look good at Ferrara: The company's invested more than $165 million in the past three years, added more than 300 jobs in Illinois, and sees significant growth potential in organic gummies (think: red beets and carrots instead of artificial color). Ferrara told Crain's Chicago Business recently it wants to double annual sales to $2 billion by 2020.
The point of contrasting Haeger and Ferrara isn't so much to say goodbye to one and cheer the other as to take note of the remarkable dynamism of the American economy. Companies thrive or die based on their ability to serve customers and generate a return on investment. They have to compete, often globally.
The closing of a factory, especially when it involves cutting jobs, is traumatic for the employees and community involved, so it's reason for reflection. No one wants to see Haeger go. On Chicago's Southwest Side, there are hard feelings over the decision by food conglomerate Mondelez to cut half of the 1,200 jobs and move production of Oreo cookies and other snacks to Mexico.
Sometimes it's hard to see the positive side of the ledger because companies don't make a Mondelez-style splash as they grow and add jobs over time. Though if you want to match up winners and losers, you can do it: Last month Sports Authority filed for bankruptcy protection and said it would close 11 Illinois stores, while Amazon said it was adding 500 full-time jobs at its Joliet fulfillment center. March was good overall for hiring: Employers added 215,000 jobs nationally, while more people got off the sidelines and started looking for work. The jobless rate stands at a healthy 5 percent.
The future of factory jobs, American competitiveness and trade all are at the center of the presidential election race, though you can hardly call it a debate, since none of the candidates wants to defend America's participation in the global economy. They're all focused on job losses at specific factories, not on U.S. competitiveness. It's a short-sighted and damaging perspective, because American companies clean up when they can sell to customers abroad. Many do great at home, too, of course, where American consumers also benefit from choice and competitive prices.
That's why it's helpful to pause for a minute and contemplate the success of a company like Ferrara, which has candy factories in Forest Park, Bellwood and Mexico. The company won't stand still, and shouldn't. Expect Ferrara's owner, Catterton Partners, to acquire other companies over time and look for opportunities to sell more of its candies abroad. And because private equity firms eventually want to cash out on their investments, expect Catterton to take the company public or sell to someone else.
As with every company's fate, Ferrara's depends on performance. Success is sweet but must be earned.
