For the second time this year, Omaha is bidding farewell to a foundry. But unlike Omaha Steel Castings Co., which is in the process of moving to a new $12 million plant in Wahoo, Neb., production is not slated to resume anytime soon at Grede Omaha LLC, formerly part of the 115-year-old Paxton-Mitchell Co.
The Grede property and buildings will be sold at an Auction Solutions Inc. auction Oct. 29-30. Grede liquidated machinery, tools and other equipment at auction Sept. 18-19.
Less than two years after purchasing the Omaha-based foundry and machining divisions of Paxton-Mitchell, Michigan-based Grede Holdings LLC has called it quits here, the company confirmed. The shutdown affected 54 employees 46 hourly and eight salaried who were laid off Aug. 23 following the closure of the organization's foundry at 2614 Martha St. and a machine shop at 1039 S. 21st St.
Paxton-Mitchell retained its specialty products division after the November 2011 sale to Grede and still operates its 10-employee operation from Blair, Neb.
Officials at Grede declined to comment on the reason for abandoning its Omaha operations.
Pat Salvatore, president of neighboring Can Pac Recycling, called the closure regrettable.
“I'm a big fan of keeping heavy industry in Omaha,” he said. “These were bread-and-butter jobs that put people to work, and how many people can say anymore they worked with the same company for 30 years?”
Al Campbell, current president of Paxton-Mitchell, said, “Metal casting is an extremely competitive industry, both domestically and internationally, and there's a lot of fluctuation in business.”
Industry statistics show a long trend of domestic foundries either consolodating or shutting entirely.
Just 15 years ago, there were nearly 3,000 metal casting facilities across the United States, according to the American Foundry Society. That number had declined by nearly a third to 2,001 as of January 2013.
The recession only compounded the industry's troubles. Campbell said total sales fell “about 50 percent from the 2007 high to the 2009 low” and had recovered roughly 85 percent of lost ground by November 2011.
By then, Campbell said, “We were just happy to find a buyer.”
Douglas County property records showed the 86,500-square-foot Martha Street property had a taxable value of $1.63 million on Nov. 1, 2011, the date it was sold to Grede. Also included in the purchase was a 21,000-square-foot machine shop on a quiet stretch of 21st Street just south of Leavenworth, as well as two residential properties on Kent Street and a nearby parking lot.
Grede acquired 75 local employees with the foundry and machine divisions in 2011, a year in which the suburban Detroit holding company reported total revenue of $996 million. Through 2012, its revenue grew almost 21 percent to $1.2 billion, according to data compiled by Crain's Detroit Business.
The company employs about 5,000 total.
The sale left Paxton-Mitchell with its specialty products division that continues to produce specialty bridge inspection equipment under the brand name “Snooper.”
The remaining, tiny operation has a rich history begun in the late 19th century.
Thomas Mitchell and James L. Paxton Sr. established the namesake foundry in 1898 to manufacture Mitchell's invention of a metallic component that improved the efficiency of locomotive steam engines.
Lore has it that Paxton-Mitchell received half of its name not from James L. Paxton Sr., but from fellow Omaha capitalist William A. Paxton.
“Interestingly enough, when (Paxton-Mitchell) incorporated in 1901, (William Paxton) was the first president,” said Bob Rodenburg, a Paxton-Mitchell veteran who worked 38 years for the company. “The reason, I'm told, was for name recognition. No one ever knew if he and James Paxton were related, but he did have one share of stock.”
The Nebraska State Historical Society and the Douglas County Historical Society have documented that William Paxton's name was also associated with a number of Omaha businesses: the former Paxton Hotel (now a condo-retail redevelopment), Paxton-Vierling Steel Co., the Union Stock Yards Co. and the Paxton and Gallagher Wholesale Grocery Firm, among others.
Paxton-Mitchell endured struggles early on but survived the Great Depression and both World Wars.
It converted its entire operation to contribute to the war effort during World War II. For those efforts, Paxton-Mitchell was awarded the prestigious Army-Navy “E” Award. A joint press release issued by the Army and Navy on Dec. 5, 1945, indicated just 5 percent of nearly 86,000 wartime plants were honored with the distinction.
The company continued to grow after the war years, employing about 130 employees at its peak. Much of its more recent success was attributed to a sustained focus on the manufacture of hydraulic components during the 1960s.
That's about the time Hiawatha Thompson, now an 81-year-old bus driver for Omaha Public Schools, came on board. He spent 32 years with Paxton-Mitchell as a production worker before retiring in 1997.
Thompson still speaks fondly of the time he spent with Paxton-Mitchell, but he's even more fond of the bonds forged with his colleagues.
“We were a large outfit, but we stuck together like a family,” he said.
In fact, Thompson had three sons who worked alongside him in the plant. He said it wasn't uncommon for three generations of the same family to work side by side.
Rodenburg's son helmed the company at the time of Bob's retirement in 1997. Bob Rodenburg served in various leadership roles before becoming majority stockholder in 1983 after a leveraged buyout by 18 Paxton-Mitchell employees.
“I went to the first auction a couple weeks ago and it was pretty sad to see those things going to liquidation,” Rodenburg said. “It's 115-year-old business ... it's hard to watch.”
Campbell has a similar sentiment. “Grede is a great company and I'm sure it had its reasons for doing what it did,” he said. “But we're greatly disappointed to see it end like this.”
In the end, however, not even an economic recession, flagging industry performance or a wholesale sell-off of assets has kept long-retired Paxton-Mitchell employees apart: Once a month, a group of about a dozen former employees including both Rodenburg and Thompson still gather for coffee and breakfast at a local Golden Corral.
“Most of them (who meet) had worked there as long or longer than I did,” Thompson said. “We really are a close-knit family, and we just hated to see it close down.”
Correction: Some archived newspaper articles describe William A. Paxton and James L. Paxton as distantly related. An earlier version of this story incorrectly said there was no known family relationship.