Credit woes hit Minnesota brick firm

SPRINGFIELD, MINN. - Freezing fingers and frosty breath were the only signs of life inside the cavernous Ochs Brick plant on Monday as five managers trudged through the silent factory that resembled a long-forgotten icebox.

In normal times, this plant would be humming, workers sweating and bricks baking in 2,050-degree kilns. Long channels of flame would cook clay in an orange-red glow, supporting 60 families from six nearby towns.

But that was before the housing market collapsed and Minnesota's last independent brick factory shut down in October.

Matt Van Hoomissen, the company's shy and boyish CEO, president and co-owner, had hoped to win the contract to supply bricks to the new University of Minnesota football stadium to keep the kiln fires burning. But the contract didn't come through. The stadium's bricks will come from Nebraska instead.

Then the phone rang in December. Van Hoomissen picked up the receiver and heard the voice of Dennis Knautz, president and CEO of the nation's largest brick company, Berkshire Hathaway's Acme Brick Co. in Fort Worth, Texas. Knautz and Van Hoomissen had never met, but Knautz had heard through a customer that Van Hoomissen and his wife, Peggy, might be interested in selling.

The deal closed Feb. 1 for an undisclosed price, giving Berkshire Hathaway another Minnesota operation to go along with Edina-based International Dairy Queen and Edina Realty parent Home Services of America.

"I knew who Dennis was, most definitely. And I was excited to receive that phone call because they have a wonderful, wonderful reputation in the business," Matt Van Hoomissen said. "This was not the greatest time to be selling the company," he acknowledged. Knautz declined to say what brought Ochs to the attention of Berkshire Hathaway's brick, stone and quarry business. But he said it's not unusual to see companies related to home-building that are struggling now.

He added that Ochs fits billionaire investor Warren Buffett's ideal for a long-term investment. "We think there is a market here long-term. This transaction is not about today's economy."

Acme-Ochs Brick Co. is Berkshire's 24th U.S. brick plant and its first in the Upper Midwest. Ochs produces about 58 million bricks a year. Acme, 1.3 billion.

Beyond the brick plant in Springfield, Ochs also brought Acme a sales office in Edina and sister company McFarlane Stone in Bloomington. The brick and stone are staples in hundreds of houses built by Rottlund Homes, Lundgren Brothers and Centex Homes. Commercially, Ochs makes the "tangerine" brick for Walgreens Stores across the Midwest and for years made the copper-colored brick for which Kohl's is known. Ochs also supplies brick for schools, banks, offices and police stations from Minnesota, Illinois and Texas to Maryland and New York.

"Trying to sort that out"

The deal with Acme means Ochs' history will not end at 117 years. But town residents remain uncertain about when and how the business, which had been in the Pieschel/Van Hoomissen family for 44 years, will be reborn.

There still are 15 million bricks of every hue and texture piled high in the snowy yard behind the factory.

"Some are past orders and some will go to future orders. We are trying to sort that out," Knautz said. "There may be a crushing need to get the plant up and running, or there may not be."

When, not if

Van Hoomissen believes that "it's more a question of when, not if" Ochs will reopen.

"I think they have every intention that at some point in time that the brick plant will absolutely be running at full capacity. There is no other way to run a brick company," he said.

"Obviously we are just looking at their systems and our systems, and trying to get up here and see exactly where we stand in terms of the weather and the market. I am hoping by next week that we will possibly have some better idea of when we will be looking at restarting," he said.

Knautz noted that Acme has suspended operations at three other brick plants because of difficult market conditions.

That's cold comfort to Springfield residents.

"Ochs is a major employer here in town. It's a cog, similar to Coleman [compressors] or the nursing home. Losing one is always a concern," said United Prairie banker Alan Fritch. "I am sure, the people who were affected by [the layoffs], that it definitely gave them a hardship over the winter."

Banking on loyalty

Peggy Van Hoomissen took the CEO reins from her dad, Mike Pieschel, in 1993 and bought the brick plant outright in 1999, becoming the only woman in the nation to own a brick company. She went on to win several state small-business awards for overcoming obstacles that included a bad batch of clay that cost her tiny firm $1 million. The company had about 70 employees at the time.

Husband Matt became CEO in 2000. Peggy took over day-to-day operations and accounting. A year later, the couple added a second, block-long kiln and dryer, and installed digital efficiency controls, laser scanners and bar-coding systems to track batches. They also doubled the plant's annual capacity to 60 million bricks. For a time, sales hit about $12 million and employment topped 90.

Outside the plant on Monday, Knautz noted the open massive shed that revealed mounds of gray Minnesota clay. The mounds have not been needed for months, since the housing boom went bust.

Matt Van Hoomissen, who is staying on with Acme as director of Midwestern sales, said he is not worried. Jamming his cold hands deep inside his trench coat as he walked inside the plant, he said it was not uncommon 30 years ago for the plant to be shut for the winter because of the extra cost of keeping kilns going in the cold.

In 2006, the slowing housing market forced him to shut down one of the company's two kilns for the winter.

That loyalty struck Knautz.

Two weeks ago, "We sat down and talked to the individual employees about hiring them and bringing them on the Acme payroll. And some of them asked, 'Well. Are you gong to take care of Matt? Is he going to be part of the long-term solution here or not?' That was pretty cool to hear," Knautz recalled.

"They were not as much concerned about themselves as they were Matt and Peggy. ... That is pretty cool. You don't see that a lot."

Dee DePass • 612-673-7725