Coronavirus: Clark, Champaign manufacturers used federal loans to retain, rebuild workforce

Josh Studebaker, an employee of Pentaflex, operates a press on the manufacturing floor Friday. BILL LACKEY/STAFF
Josh Studebaker, an employee of Pentaflex, operates a press on the manufacturing floor Friday. BILL LACKEY/STAFF

Credit: Bill Lackey

Credit: Bill Lackey

Several manufacturers with facilities in the area applied for loans in the $2 million to $5 million range to retain staff

A number of area manufacturers were among the more than 1,000 Clark and Champaign county businesses to receive special loans designed to help retain workers during the coronavirus pandemic.

In total, businesses in the area that were approved for the federal loan program that was first rolled out in April say that they were either able to keep or expecting to retain over 15,000 workers as a result.

The goal of the Paycheck Protection Program (PPP) established by the U.S. Small Business Administration (SBA) is to help businesses with 500 or less employees retain their staff or bring back those that were laid off as a result of the economic impact of the coronavirus pandemic.

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The loans are designed to be forgiven to the extent that businesses can show that they were able to stay open, if deemed essential, and retain their workers as a result during the loan period. The largest amount that an applicant can apply for is $10 million.

While no area businesses applied for that amount, several manufacturers with facilities in Clark and Champaign counties applied for loans in the second largest loan category of $2 million to $5 million.

Those included the Benjamin Steel Company in Springfield, JM Consolidated Industries LLC that has a facility in Springfield, Johnson Welded Products that has a location in Urbana, SEEPEX out of Enon and Tech II that has a facility in Urbana.

Those companies reported they would retain a total of about 1,000 jobs with the loan money, according to data released by the U.S. Department of the Treasury earlier this month. Only companies that received more than $150,000 were named by that agency.

In Clark and Champaign counties, 215 employers received $150,000 or more in PPP loans with 11 receiving between $2 million to $5 million.

Local manufacturers that received the next largest batch of loans in the area, which was between $1 million and $2 million, included MEVA Formwork Systems in Springfield, Pentaflex in Springfield, TAC Industries in Springfield, the Champion Company that has its corporate office in Springfield, The Ultra-Met Company in Urbana as well as two businesses associated with McGregor Metalworking Companies in Springfield such as Morgal Machine Tool Co., and Ohio Stamping & Machine LLC.

Those manufacturers reported that their PPP loans would be used to retain a total of 755 workers.

However, for some of those employers, they are still in the process of retaining employees as sales are down due to the impact of the coronavirus.

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Pentaflex in Springfield, which makes safety parts for the heavy truck market, has reported that sales are down by 50% when compared to the same period last year. Its president Dave Arnt said his company applied for a PPP loan in April and has used it to retain workers during a period when sales were falling off.

Arnt said that Pentaflex was able to retain 70 workers but are still down about 15 since the start of the coronavirus pandemic. There had been a lull in sales earlier in the pandemic due to other manufacturers in the truck industry temporarily suspending production.

Arnt said the plan now is to start bringing back some of those workers that have yet to be retained as sales began to pick back up, including some last week. The period of the PPP loan has been extended from an initial eight week period to 24 weeks. The goal is to continue to retain staffing levels so the loan can be forgiven, he added.

“Now as things start to ramp up again. The issue now is with our cash flow and having enough cash on hand to secure the materials that we need,” Arnt said.

Another Springfield manufacturer was able to use its PPP loan to retain workers during a period of change brought on by the pandemic. They were able to retain 90% of its employees. However, it had to to go back to 70% of its workforce after the loan period ended.

TAC Industries, a nonprofit that provides training and jobs to those with disabilities, was able to use the loan, which it applied for in April, to build its workforce back up to over 130 after having to dip down to 98 employees.

The nonprofit has contracts with several Clark County manufacturers as well as with the federal government to produce cargo nets for the U.S. Air Force. It serviced about 180 people in its vocational program before the pandemic.

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Due to state guidelines implemented as a result of the pandemic, TAC had to suspend its program serving those with disabilities who were doing vocational work at its facilities.

In the meantime, TAC applied for the loan to retain its workers not serviced by the nonprofit to continue with its manufacturing work. In addition, employees that serve those with disabilities were able to provide some of those services virtually, said its CEO Jim Zahora.

TAC opted to stay within the initial loan period of eight weeks, Zahora said. The nonprofit was eventually able to bring back small groups of those with disabilities that receive vocational training, he added.

Zahora said they applied for a loan in the vicinity of $1 million but did not use the full loan amount. He said TAC is in the process of applying for loan forgiveness.

However, TAC is still operating with far fewer of the people it serves in its vocational program when compared to before the coronavirus pandemic. In June the nonprofit had to go back to 70% of its workforce.

Zahora said they are in the process of bringing back more of the people the nonprofit serves and provides vocational training to.

Manufacturers in Clark and Champaign Counties that received $2 to $5 million from the federal Paycheck Protection Program, and the jobs they retained.

Jobs retained:

Benjamin Steel Company, Inc. 221

JM Consolidated Industries LLC 167

Johnson Welded Products, Inc. 403

Seepex Inc. Unavailable

Tech II, Inc. 210