March 12, 2019
In rural Bluegrass country, where rolling hills meet winding country highways, stark contrast is everywhere.
On one side, lush countryside juts up to the fresh white fences that hold Kentucky’s iconic thoroughbreds. On the other, modest homes stand proud, while others are weather-worn, cars dotting the yards.
This is rural America.
In Kentucky, like nearly every other state in the nation, beauty is pockmarked by reminders that – 10 years later – plenty of places still haven’t recovered from the financial crisis.
Private investment dollars – critical to commercial and business activity, jobs and economic growth – are pitifully absent, and traditional bank financing for businesses has gotten harder to find. In many rural areas across Kentucky, a good job with strong wages can be hard to find. In others, while jobs may be plentiful, a skilled labor force to fill those jobs is not.
Opportunity exists
Despite the bleak picture, many bright spots exist. An hour from Cincinnati, some 60 miles south, lies Cynthiana, KY, population 6,400.
A few blocks from our destination – garbage truck manufacturer E-Z Pack – the local Walmart is busy. Down the road a new Dairy Queen has just gone up, plus plenty of other development – a clear signal that the local economy is purring along.
This, too, is rural America.
What’s different in Cynthiana? It’s access to capital that has made the difference, says E-Z Pack CEO Frank Busicchia. In 2014, Busicchia and his partners brought E-Z Pack and another truck manufacturer, Continental Mixers, under one roof in Cynthiana, KY. The previous owners were slated to move the E-Z Pack operation out of state, taking dozens of good jobs with it.
An investment in connection with the New Markets Tax Credit program enabled the company to stabilize the two operations and begin critical turnaround efforts – bringing business expansion, jobs and opportunity to Cynthiana.
E-Z Pack now has just under 250 employees – and they’ll soon be adding 100 more. They come from 26 different zip codes and as far as an hour-and-a-half away. But in all our conversations with employees, one thing is constant: the job is a good one.
What higher wages, benefits and workforce training can bring
Sadie learned to weld in high school at the Campbell County Area Technical Center, while working most nights and weekends at a local restaurant. After graduation, she moved to Harrison County and got her foot in the door at E-Z Pack.
She always knew she wanted to be a welder. Not only did they make good money, it was something different to do – as a woman – and it appealed to her artistic side.
The work at E-Z Pack was much different than what she’d learned to do in school, welding pieces of metal no longer than a pencil. And though she earned her welding certification in vocational school, on-the-job training was necessary for the specialized work.
With the new job, Sadie has more than doubled her restaurant wages. She’s proud of the specialized, skilled work she does, and she should be.
In fact, the term “skilled workforce” isn’t lost on anyone at E-Z Pack.
Ahmad is one of the company’s more experienced welders. Though he hasn’t been there long, he’s most certainly skilled.
A welder for 17 years in Syria, Ahmad worked as a landscaper after arriving in Kentucky. He’s now found a job that offers a good working wage and full benefits – something not available in his home country.
Rural challenges persist
Cynthiana is part of the same rural America that a Wall Street Journal article equated to the new “inner city.” Another article, from the New York Times, wondered if rural America could be saved. More pieces hit the news every day, highlighting the business investment and job market challenges in rural America. Some of these issues aren’t unlike those in urban areas. But in rural communities, one-stoplight towns far from epicenters of trade and commerce, they can be exacerbated.
From broadband to transportation, the infrastructure neglect in rural America is real. Family-owned farms have gone bust. Populations have decreased for the first time in history, whether by choice or necessity.
Historically, just 1% of all private equity investment has gone to rural communities. This is changing as we see new players finding opportunity between the coasts. But it’s a slow go.
For companies like ours that look at opportunity and impact from every angle, investing in middle America, including rural, makes sense. It’s something we’ve done for the past quarter of a century. And investing in growing companies that can create good jobs makes perfect sense.
With E-Z Pack (and parent company Commercial Specialty Truck Holdings, CSTH) we saw an opportunity to work with economic development programs, like the New Markets Tax Credit or similar rural jobs programs, to invest in a company that needed a lift – and had strong prospects for all the above.
For eight years, company employees went without wage increases. As the company turnaround continued – the result of finding the right capital at the right time – all hourly employees received a $1 raise. In 2017, every employee received a bonus for the first time in company history.
The company invests in its people – who in turn help train and invest in new employees, readying them for the specialized work they were hired to do.
Boosting local families and communities
Cynthiana falls within the Harrison County lines, where times have been tough for some. It’s companies like E-Z Pack that are making the difference.
This is where hard-working people are finding not just their livelihoods, but meaningful opportunity. We first met Jennifer just outside the break room. Dressed in jeans and work boots, with safety goggles and a hard hat close by, she’d come in from the plant floor to share her story.
Jennifer had been working nights as a quality auditor at a nearby manufacturing plant when she heard about an opening at E-Z Pack. The job at E-Z Pack was a day job, with regular hours, good benefits and competitive pay. Though the role was different, Jennifer rose quickly – just two months into the job she was promoted to Quality Team Lead.
Career progression like this means a lot: lifting wages and helping create a better environment for local communities and families to grow and prosper.
For Busicchia, this is key. “The hardest thing for small businesses is finding access to capital. We doubled in size and revenue thanks, in part, to finding the capital that we needed to grow our business and hire more people. For us, it’s not only the 200-plus people we employ, it’s their families as well.”
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