Name: Ronald Auger
Age: 57
Background: Founded American Industrial Casting in 1983 and has been in the casting industry since 1962. Auger is chairman of the board for the Rhode Island Manufacturing Extension Services. RIMES is an independent, non-profit corporate entity that provides assistance and extension services to Rhode Island firms. Auger was named the 1999 Small Business Person of the Year for Rhode Island by the Small Business Administration. The honor was based on American Industrial Casting’s longevity, workforce and sales growth, innovation, response to adversity and contribution to the community.
Education: La Salle Academy, Providence
Residence: Cranston
Family: Divorced, four children
RONALD AUGER: ‘I feel a loyalty to the people who helped us grow.’
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PBN: We often hear that manufacturing is less important in Rhode Island now or that the state’s economy is no longer manufacturing-based. Is that true?
AUGER: I guess that depends on whom you hear it from. I think that state agencies like the Economic Development Corp. and also the governor’s office no longer put an emphasis on manufacturing like they probably did 20 years ago or whenever.
Why do you think that is?
Well, I am the chairman of the board for the Rhode Island Manufacturing Extension Services (RIMES), which in the past year has helped over 200 manufacturers better themselves. When we look for funding which enables us to get a $2 match for every dollar from the government, we cannot find a state agency that is willing to either put this in as a line item in a budget from the legislature or anyone at the governor’s office offering us assistance.
What has enabled American Industrial Casting to stay in Rhode Island while other manufacturers have said they’ve been forced to go south or overseas for various reasons?
I guess it’s because I’m a native of Rhode Island. That would be one reason. I have family here. Second is because I feel a loyalty to the people that have helped us grow this company. This company has grown tremendously over the past 10 years. It’s my employees that have really contributed to this. So there’s a certain loyalty to making sure they have a viable future in the company.
Have you ever been recruited by other states trying to lure manufacturers such as American Industrial Casting?
Yes we have.
How often are you contacted by economic development departments in other states?
It happens probably not on a weekly basis, but several times a month we do see invitations to come down and look at some other area that is trying to induce businesses to move.
What sort of incentives do they typically offer?
You know, I’ve never really pursued it, so I couldn’t tell you about all the incentives, but they brag that they have lower tax rates and better workers’ compensation rates. If we are going to stay in Rhode Island, or even in the Northeast probably, we have to understand that we are in an environment that is mature. And what I mean by that is that we have in the community, and in the state and the municipalities, a percentage of people that are already retired, and we have to cover that cost. We have an infrastructure of roads that are getting old and need replacing. If you look at that same environment and compare it with an arena that’s down in the South or in the Carolinas, there it’s brand new. And they don’t have this mature population. It’s hard to compare apples to apples. I think it’s baggage that we have locally that, if we decide to stay here, we just have to say somehow or other has to be covered.
What can the state and the economic development agencies do to help companies like yours that have roots in Rhode Island and want to stay here?
I don’t know how much can be done about it. There are things I would like to see. I think that, being a small business, there are a lot of issues that we face on a day-to-day basis where we are treated the same as large businesses are–whether it’s a licensing fee or some kind of record that we have to keep that’s mandated by the Occupational Safety and Health Administration or some state labor agency. In the licensing, for example, there probably should be tiers for small business. We shouldn’t have to pay the same fee as a General Electric or a Raytheon or a General Dynamics pays. And the other area that could be addressed would be less reporting for a small business because we don’t have the facilities nor the help to do all this record keeping like the large companies do.
Along those lines, what about the Sunday work rules? Explain how they affect your business and how you’d like to see them changed.
The Sunday work rule doesn’t bother us too much because we’re not a seven-day-a-week business. Holidays that fall in the middle of the week, including some of them that are unique to Rhode Island, do bother us. We are a global company, and we have to stay open and at least man the phones. The holiday pay does create a hardship for us. So, we’d like to see something done about that.
We’ve seen health care insurance premiums going through the roof in the last year, and now Harvard Pilgrim Healthcare of New England is on the ropes. How is it affecting your company and also the companies you work with through RIMES?
To me, it’s a big problem. Whether I pay for my employees’ health care 100 percent or I pay a portion of it or I pay none of it, I still have to provide adequate money for my employees to have health care for their families. At the present time, for us to supply a health maintenance organization program and also to provide a dental program, it costs us somewhere in the neighborhood of $600 per employee per month. I think the problem is that we’re heading at 100 miles per hour toward a bridge abutment. The costs now are spiraling. I hear increase figures of 10 percent or 20 percent per year. But even if you just take 10 percent increases for, let’s say, the next seven years. That will double our health care costs to $1,200 per employee per month. If you divide that by the number of hours worked, that comes to $7.50 an hour that a person would have to make to just cover their health care costs. That’s after taxes, and they have not put food on their table. They haven’t paid their rent, and they don’t even have gas money to go back and forth to work. It’s going to be cost prohibitive to have health insurance. I don’t know what the answer is other than that someone has to look at containing the costs, where this money is going.
The jobless rate is very low in Rhode Island now–under 4 percent. Are you having any difficulty finding good employees?
Yes, that’s something that comes up all the time. We are talking about doing a joint venture with other local companies here to have a job fair. We’re all in the same boat. It’s difficult for us to find people to work on the floor as well as its difficult for us to find engineering and management people.
Are you paying higher salaries now to attract those people in this low unemployment environment?
Yes, it’s amazing. We are paying more for people that are coming in the door, and what it has done over the last year or so is forced us to upgrade our whole pay scale to compensate for people coming in the door now.
Given the issues you’ve raised, what do you see as the future of manufacturing in Rhode Island?
I guess that has to be segregated between small businesses and big businesses. There is a tendency for the large manufacturing firms in the area to somehow or another relocate for whatever reasons they have. That may continue to happen. Whereas, I think, in the small business environment the trends are very, very healthy and it’s going in a very positive direction.
How do you expect area manufacturers to fare when the clock rolls over from 1999 to 2000 not long from now?
In the arena I’m in, I expect to have no problems as far as my utilities in this area. I expect not to have any problems with my suppliers. I think it’s going to be business as usual as the clock rolls over.
