By 2010, CEO Bob Du Fresne, owner of a Vadnais Heights sheet metal fabricator, was done with the sleepless nights over whether his manufacturing company would fail after a decade of two recessions, low-cost Chinese competitors and cutthroat-pricing at home.
Du Fresne, 62, who began in his dad's St. Paul shop as a kid, started Du Fresne Manufacturing in 1991. The sheet-metal trade always had been mercurial. But this was ridiculous.
Sales slid from $14.2 million in 2001 to $7.3 million in 2009 amid the Great Recession. And Du Fresne employment dropped from 125 to 52.
"I can't go on like this," Du Fresne concluded. "I told God, 'I'll turn the worrying over to you. I'll just work as hard as I can.' I just asked Him for a sign."
Within a few days, a customer check arrived for $20,000, enough for Du Fresne to cover the two-week payroll. And then a purchase order arrived, followed by another that started to give him some hope. But hope and faith alone are not a strategy. And Du Fresne had been chasing business, often with unprofitable bids to try to keep up volume.
In 2010, Du Fresne abandoned top-down management for a strategy focused on employees, shop-floor suggestions and innovation, lean manufacturing and continuous improvement in quest of the highest-quality work. He and another manager joined workers on the floor to complete orders on time and economically. He resolved to price competitively but profitably.
"The employees focused their passion and talent and saved this company," Du Fresne said. "I realized I was not in the 'metal' business but the human 'mettle' business. Human development.
"I was morally and ethically bound to their development. We listened. Employees have made thousands of suggestions and we used 99 percent of them. That led to productivity and quality improvement. I shared financial information with them."
Now sales are growing and workers are earning overtime.
Du Fresne Manufacturing employment has risen to 100. Sales may top a postrecession best of $11 million this year. A few customers have returned work to Du Fresne from China. It has 40 key customers, including 3M and ThyssenKrupp, the elevator manufacturer.
Last month, Du Fresne Manufacturing was one of several recipients of the Minnesota Performance Excellence Awards (formerly the Minnesota Council for Quality) that bases its analysis on the Baldrige Criteria for Performance Excellence in leadership, customer relationships, workforce engagement, operations and more.
"Bob Du Fresne and his team told my site team that did the assessment that this isn't about manufacturing, it is about people and their jobs," said Brian Lassiter, the veteran president of the Performance Excellence Network. "My team didn't buy it at first.
"Bob is all about 'servant leadership.' They care about workers and customers. He has created an environment where the people believe … and work their butts off. They put out a quality product. They are doing things that are sophisticated in operation and that usually only larger manufacturers do. But I think it's really about the people."
Du Fresne knew that the remaining workers five years ago believed, despite fewer hours and reduced wages. They kept making suggestions. The company set up a short-term, no-interest loan fund of $500,000. Employees have repaid all but $50. And donations to employee-chosen charities hit record highs even as worker compensation was down 10 percent or more.
Du Fresne expects to restart the 401(k) retirement match and profit-sharing plans this year. That was delayed, with the agreement of employees for two years, in order to invest $2 million in world-class equipment, such as a $600,000 Amada press brake machine.
Operator Dave Kuehl uses it to rapidly produce extremely precise steel parts for myriad customers. The Amada trainer doubted that Kuehl, who is hearing and speech impaired, could manage the sophisticated machine.
Du Fresne had faith in his veteran floor worker.
"Today, Dave Kuehl is the only worker in North America who operates and also programs this high-tech piece of equipment," Du Fresne said. "Dave doesn't hear it. He feels it with a sixth sense. The Amada trainer never trained anybody that quickly. Two days. Dave broke through that glass ceiling."
Du Fresne Manufacturing has paid out 9 percent in wage increases over the past four years to factory workers who make $14 to $25 an hour, plus what averages to about an extra day a week of overtime at 150 percent of hourly wages.
"Back in 2009-10 we were down to 32 hours a week," recalled veteran manufacturing worker Steve Mosser, who is credited with 179 quality-improvement ideas. "But Bob always kept us in the know [on the sales and financial progress]. That's vital. We ask if we want to know more. The people are comfortable with management."
Du Fresne long knew of the Baldrige quality criteria, named for the late U.S. Commerce secretary who championed American manufacturing quality improvements in the 1980s. It wasn't until his company hit bottom, in 2008-10, that he introduced them.
Du Fresne took the biggest pay cut, signed loans and took action.
He credits the workers for resurrecting the company and making it a much healthier enterprise.
"We developed a new level of trust … which opened doors to a transformation journey for the company," Du Fresne said.