Program aims to help Chicago manufacturers find successors
CHICAGO -- A Chicago nonprofit is leading an effort to match retiring manufacturers whose families aren't interested in continuing the business with entrepreneurs who want to keep the companies running locally.
Manufacturing Renaissance is reviving a program from the 1980s known as the Ownership Conversion Project, The Chicago Tribune reported. The project is currently fundraising and aims to launch this summer.
The program will provide business analysis, vet potential buyers and train new owners, said Dan Swinney, CEO of Manufacturing Renaissance.
Experts say Chicago's manufacturing industry is preparing for a slew of baby boomer retirements. Some industry leaders worry that companies that don't have a succession plan will close or get purchased by a private equity firm that will move the business out of the region.
The Great Cities Institute at the University of Illinois at Chicago surveyed more than 360 family-owned manufacturing companies about how they were planning for the future. About 75 percent of respondents had owners older than 55, and half of those businesses didn't have succession plans. Nearly 62 percent hadn't picked a specific successor, up from 38 percent in 1989.
"This is a crisis for the manufacturing sector," Swinney said, noting that the state has a $104 billion manufacturing industry. "This whole sector of the economy is left up to the whims and the contradictions inside individual families."
The Chicago Federation of Labor will take part in the program by helping identify businesses that may be having succession issues and finding businesses that may be interested in taking over, said Bob Reiter, the federation's president.
"We don't want to lose a generation of small business that went away for no other reason than that it was time to retire," Reiter said.
Information from: Chicago Tribune, http://www.chicagotribune.com