The story is a familiar one to Sauk Valley residents, or any other rural region in the Midwest. A large, global corporation swallows up an important local business. While the implications of such acquisitions are all-consuming for the families whose livelihoods depend on those jobs, it is oftentimes just a tiny piece of a much larger strategic plan for the buyer.
It isn’t long before words like “overlap,” “synergies” and “restructuring” are heard often from the new owners. Unfortunately, those strategic maneuvers include layoffs and other cost-cutting measures, until one day the local business is closed and its operations integrated somewhere else.
Sometimes, however, these types of buyouts can be good news for the little fish in the small pond. Actions speak louder than words, but at first glance, it appears that will be the case in Dixon. SPX, a large global corporation based in Charlotte, North Carolina, announced Monday that it had completed the acquisition of SGS Refrigeration, a local manufacturer and distributor of industrial refrigeration products.
SGS was born in Maryland, but its manufacturing operations began 6 years ago in Dixon. Its founders, Peter Spellar and Ed Schinner, were Johnson Controls retirees. An interesting chain of events, ironically punctuated by the closing of Johnson Controls’ Dixon operations, brought SGS here.
The Johnson Controls shutdown, announced in 2009, was painful, costing Dixon more than 200 jobs. The IMECO industrial refrigeration line was a profitable brand made at the closing plant, and while Schinner had been an IMECO manager, he became friends with former Mayor Jim Burke.
After an acquisition of its own, SGS took the leap from consulting to manufacturing and the founders decided to bring the sellers’ Mexico operations back home. The founders were familiar with Dixon, and the city’s able workforce and logistics advantages won them over.
SPX is early in its integration process, but the company has made it clear that they are willing to invest in Dixon. They envision it as a hub for its HVAC Cooling business unit and plan to bring additional equipment here. No specifics have been revealed yet, but the infusion of capital should eventually bring additional jobs.
SGS has already been on an impressive growth trajectory since starting production in Dixon. Launching operations with a handful of workers, that number grew to 45 in 3 years, and now sits at 60. In 2016, the rapid growth led the company to buy the former Anchor Coupling building at 1100 Anchor Road.
We suspect that the longtime ties the SGS owners had with Dixon might have played a role in negotiators looking out for the best interests of the city. Eager sellers don’t always make that a point of emphasis during the deal-making process.
It’s also encouraging that a publicly traded company with 4,000 employees in 17 countries appreciates what Dixon brings to the table – a skilled workforce and a geographic location that offers excellent transportation and warehousing opportunities for growth in a desirable market.
It’s nice to flip the script on this story – it looks as if this is the kind of acquisition that brings excitement instead of fear to the Sauk Valley.