God Bless Middle America

The 2020 US presidential election likely will be a rerun of the divisive battle between two Americas – “sophisticated” coastal states and the “hick” middle. Liberal media’s usual suspects – the Washington Post, New York Times, MSNBC, CNN – whip themselves into a frenzy over this “divided” America; especially the bit that scorns their ranting, politically correct, relentless anti Trump agenda – the middle, fly-over states.

What they really resent is the growing kickback against their long-assumed intellectual hegemony. Their right to order affairs of state unhindered – pretty much a given since the First World War – was blown out of the water in 2016.

Their bien pensant reasoning is contemptibly simplistic. “Trump is stupid, so the people who elected him are stupid too.” It’s a de haut en bas, dismissive argument, ill calculated to recover support from the people Hillary deemed “deplorables”.

It echoes the UK Remainer trope – that Brexiteers were too stupid to know what they were doing in 2016, in the biggest democratic exercise in UK history. So, let’s keep asking until the dullards get it right. Isn’t that what the crafty Irish establishment did to force through the 2008 Lisbon Treaty? We always get our way in the end, runs the argument.

Now US progressives shed crocodile tears for the divided America their entitlement attitude has helped create. Is their view of America as two shining shores with a dull middle accurate? Makes sense to find out what life is really like in those “red”, behind-the-times Republican states. Are they teeming with Trumpy Bear dopes? Is it as Hicksville as touted? Toe in the water time.

I spend most US trips in the comfort zone of the cosy east coast corridor, quite a lot of it in the rarified atmosphere of the Metropolitan Opera House, the Acela Express and the not so elite Metro North to Connecticut. Not very representative. High time I headed west – well at least a bit west – to Ohio, the politically divided “Buck Eye”, Auesculus Glabra (Horse Chestnut to me and thee) state, to test that backwater temperature. I did. It was a revelation. Here are my impressions.

In 1919, US “Progressive” journalist Lincoln Joseph Steffens returned from the newly-minted Soviet Union to announce prophetically, and wildly wrongly, “I have seen the future and it works”.

I visited New Bremen, Ohio, population 7000. Turn right at Dayton airport, travel 55 miles on Interstate 75, blink, and you’ve missed it. Now I’m going to boldly go where Mr. Steffens foolishly went before and unabashedly plagiarise: “I have seen the past and it works.”

New Bremen is the America that Donald Trump says is being lost and Democrats wish would get lost. It embodies the popular notion of middle America, full of thrifty, independent-minded folk – who would not look out of place in Grant Woods’ iconic 1930 painting, “American Gothic”, where a worthy farming couple stare you down from the canvas with calm, steely determination.

It’s more Republican than the state’s major conurbations, Columbus, Cleveland and Cincinnati. It’s prosperous, the wider community commonly living on historic19th century 80-acre homesteads. Many homesteaders now combine a bit of farming with a conventional job. But, never, never call them hobby farmers. Especially, audibly, in the bar of Bolly’s Diner, 202 North Main Street.

There is a close sense of community here, pride in what America has achieved, a pervading sense of self-sufficiency and optimism about what lies ahead. This is not an America whose day is done. Why the optimism? After all, deindustrialization has hit Ohio as hard as any other state.

But in New Bremen the unemployment rate is 2.0%, as to the US national rate of 3.7% – already a 50 year low. Any other good stuff? Median household income is $70,122, when the national figure is $55,322. Income per capita is $32,879 – national $29,829; the poverty rate locally is 6.1%, when the national rate is 15.1%. Why?

Explanation time. New Bremen is home to one of America’s endangered species – a company that actually makes “stuff”, creates wealth and spreads the economic benefit across the community. It’s not a unicorn startup, run from some nerd’s suburban garage, trading on valuation multiples of froth, doing something smartypants with apps and algorithms that no one really understands.

It’s Crown Equipment Corporation, a manufacturing company, in single-family ownership for three generations. No KKR & Co, no “Wolves of Wall Street”, no brightly-braced Gordon Gekkos roam New Bremen’s South Washington Street in the never-ending search for that fast buck. Welcome to unassuming  “Crown Town”, where the home company matters to everyone and community life is underpinned by stable corporate ownership.

The company dominates the economy of New Bremen and surrounding satellite communities. It is the polar opposite of what every slick venture capital huckster thinks a successful 21st corporation should be. No Hamptons-based day trader watches its value flicker up on down on their screens by the hour. They can’t. There is no share price. There are no shares traded publicly.

Crown provides not just employment and prosperity, but the glue that holds the community together. It is an exemplar of social responsibility – in a pragmatic, non conscience-salving, breast-beating way. No tick-box “We’ve saved the planet, ain’t we great!”

Crown has rescued New Bremen’s derelict movie theatre, funded local museums, helped reshape street frontages, sponsors art and family owner scion, Jim Dicke II, esoterically, founded The Bicycle Museum of America, based on the Schwinn Collection previously to be found at the Navy Pier, Chicago.

The Schwinn Collection went bust in 1997. He spotted its exhibits featuring in a bankruptcy sale and simply swept it up. New Bremen, an unlikely Mecca for cyclists, now houses the largest collection of historic bicycles in the world. Crown also helps fund numerous local charities and foundations.

Improving community life and infrastructure is the quiet company mantra. When President George Herbert Bush coined the phrase, “I’m a quiet man, but I hear the quiet people others don’t”, it could well have been Crown and the folk of New Bremen he had in mind.

Crown makes old-fashioned equipment – forklift trucks, for goodness sake. How uncool is that? Boring bits of kit, aren’t they? Actually, they’re the boring kit that keeps the aisles of the likes of “cool” Amazon flowing ever more smoothly. Just as boring old Intel makes the chips that keep our branded laptops running ever more quickly. Without the “boring” insides, our super tech economy would quickly grind to a halt.

Time for the numbers. Small town Crown springs a big surprise. It’s the fourth biggest forklift truck company on the planet with turnover north of $3bn a year. The company employs 15,500 people worldwide, has four plants in Ohio – New Bremen, neighbouring Celina, Minster and New Knoxville; two more in Indiana and one in North Carolina.

And from its Ohio hub it extends a global reach – encompassing twelve manufacturing plants in all, and more than 500 retail locations in 84 countries.

Now, this is where you really need to pay attention. Crown is, unfashionably, “vertically integrated”, manufacturing over 80% of its components in house, or pretty much everything that goes into a fork lift truck, including electric motors, drive units, valve bodies, masts, power units, cylinders, electronic modules, circuit boards, wire harnesses, forks, seats. It’s endless; all down to the last carefully chamfered gear wheel.

Lumpy lengths of steel, aluminum, rough castings go in one end of the process and out of the other comes a state of the art, software savvy forklift truck. The word “outsourcing” is taboo in Crown-speak. Paying attention to the detail underpins reliability, ensures full control of “just in time” supply chains and allows old trucks to be remodeled – the “Encore” range – and sold at embarrassingly higher margins than the originals.

Crown must be one of the few companies on earth where the older and more work-scarred its products become, the more dough it makes out of them.

I knew sod all about forklift trucks before my visit – and in a paragraph or two you’ll probably wish it had remained that way. But now I’m almost a goofy fan. May even start a collection.

Some background. The company is owned by the Dicke family – now into the third generation. I declare an interest. Jim Dicke II – yes, the bicycle fan – is a good friend, or at least was until he hijacked me to spend four days experiencing Crown and New Bremen full monty.

Everyone in New Bremen seems to be employed by Crown, have a family member employed by Crown, or know someone else who is. The local economy, from restaurants to launderettes thrives on the wealth Crown creates.

In my short stay, particularly walking the plant floors – “where seldom was heard a discouraging word” – I was introduced to whole families – sometimes generations, whose veins ran with Crown blood.

I was allotted a delightful guide for my trip, Anna, who knew almost everyone we passed. Turns out she features in plant safety videos and posters. Everyone asked how her young daughter was doing. People I spoke to were mustard keen to talk about their particular skills and role in the manufacturing process, which they all understood. Not a production line serf in sight. There are no unions.

Why this works is because privately owned Crown’s board are not slaves to the quarterly results ratchet that drives so many US public corporations to produce flattering figures to buoy the share price – or pay out a dividend that the company can ill afford. Long-term goals are not sacrificed for short-term headlines.

When chasing numbers hollows out the corporate core economic storms can’t be weathered. Unless, that is, like GM you are too big to fail, when the taxpayer, not the market, steps up to the plate with $80.7bn on favourable, non-market terms. Crown does not labour under a pile of debt that some smart buyout kid has lumbered it with to finance a crazily overpriced deal.

It’s almost quaint, perhaps a throwback to the UK’s 19th century Quaker traditions of Cadbury and Rowntree, combining wealth creation with community improvement and social progress. But it’s a sustainable model that Wall Street should seek to encourage, especially as increasingly novel debt funds occupy the territory conventional banks have surrendered, providing long-term asset backed finance for small to medium enterprises.

Was I unwittingly reprising the role of Jim Carrey’s character, Truman Burbank in the 1998 hit movie “The Truman Show”, in which the hero lives in a seemingly ideal community, holding down an ideal job, with a perfect family – and it all turns out just to have been a film set for a weekly show?

I don’t think so. The unreality TV shows are back east. New Bremen is the reality and an exemplar of what capitalist America can still achieve, when it takes care to nurture its community roots alongside its corporate profits.