GALESBURG — Pegasus Manufacturing Inc. has received some financial assistance from the city of Galesburg over the years, but the CNC manufacturing company continues to pay it forward in the community.
Since moving to Galesburg from California in 2013, Pegasus received approximately $1.1 million through the city’s revolving loan program and in city grants. The company used the money to help with moving costs and buying buildings and equipment; it is required to pay back the loans.
To receive the initial loans in 2014, the city required Pegasus to hire 30 employees as part of Phase I of its expansion. Pegasus hired 32, and it is projected to hire 25 more — more than the city’s required number of 23 — as it continues its Phase II expansion into the forging die business. So far it has hired 11 of the 25, co-owner Ray Whitehead said.
The company’s growth has continued over the past five years, enabling it to hire more employees and offer both raises and mid- to high-wage starting salaries. Pegasus grew 11 percent in 2015 and 14 percent in 2016. After a steady 2017, it is projected to grow by another 14 percent in 2018, with employee salaries ranging from $40,000 to $100,000 based on experience. The median household income in Galesburg is $32,962, according to Data USA.
“There’s a better return on investment by investing in small companies, companies from 30 to 500 employees, than there is constantly trying to recruit the companies that move in with 5,000 or 10,000 employees,” Whitehead said. “(Cities) could spend a lot of time and money trying to recruit those big companies, and often it doesn’t happen. On the other hand, there’s the proverbial example of when you have all your eggs in one basket, and they close. By investing in a small business that can grow much more rapidly, and in a more lean setting, it proves to be a better return on investment.”
Whitehead said Pegasus would not have been able to move to Galesburg and expand if not for financial assistance from the city. He estimated it cost the company between $4 million and $5 million to move to Galesburg total.
“It looked a little easier on paper than it proved to be,” Whitehead recalled of the move. “It takes a little while to build a good infrastructure and a good management team, and that was probably one of the things that was most challenging for us was that very aspect.”
To help create the skilled workforce Pegasus needs to continue operating long-term, the company donated $221,000 thus far to start and continue a career education program — Pathway — in cooperation with the city, Galesburg School District 205 and Carl Sandburg College. The program allows students to take CNC classes at Galesburg High School that count for dual credit at Sandburg to receive certification as either a CNC operator or programmer. Students also can take a summer internship with Pegasus to start their workforce training.
A total of 16 Sandburg students enrolled in the CNC operator program after it started in spring 2017, and 16 are enrolled for this semester. Two students already graduated from the program, including Austin Tracy, who obtained a job as a CNC mill operator at Pegasus just two weeks after starting a summer internship at the company. The CNC programmer track started in fall 2017 and has not been offered long enough to have any graduates.
Tracy said he did not consider advanced manufacturing as a career option until he took a Machine Tool Fundamentals class at Sandburg. He liked the hands-on work involved in the class, and the Pegasus internship helped him take his skills to the next level.
“The internship prepared me for the job by putting me on a machine and actually giving me instruction from people who had been doing it for 10, 20, 30 years,” Tracy said. “It helped a lot.”
Pegasus hired another one of its interns besides Tracy, while a third went to work for Midstate Manufacturing. GHS Principal Jeff Houston said he would like to connect the Pathway students even more with area manufacturers — such as by taking them on field trips to other companies besides Pegasus — to ensure more students will be able to obtain jobs through the program in the future.
The first official class for the Pathway program at the high school’s Galesburg Area Vocational Center — Computer Numeric Control Operator — kicked off in September last year. Houston hopes to grow the initial class size of nine to about 15 to 20 in fall 2018, and hire more instructors to be able to add more CNC classes. About 30 students applied for the first class initially, but the school could not accept them all due to the lack of available staff to take on additional classes.
If GHS finds more instructors, the high school could add another CNC class as early as fall 2018. Sandburg recently hired a new Career & Technical Education dean, Chris Anchor, who will help the high school search for new staff members.
Houston and Aaron Frey, public relations specialist at Sandburg, saw the Pathway program as a way to help schools understand and meet the employment needs of local manufacturers.
“There’s a need for skilled workers, not just in this area but around the country, so the Pathway program is something that sets students up to succeed no matter where they go after they graduate,” Frey said.
Whitehead would like to grow his staff to about 115 employees in five years. As part of its Phase II expansion, Pegasus acquired a die-sinking company called Frizzelle & Parsons, and it recently started building automotive parts for Bosch Electric Vehicle Solutions, which will allow for increased employment opportunities.
“Traditionally there are tool and die companies that make a die, and there are companies that machine the parts — we do both,” Whitehead said. “So we’re a turnkey, forging-die parts company whose customers are Caterpillar, Moline Forge, John Deere, as well as some of the automotive companies. We’re in effect bringing the business back to the area by first being able to machine the production quantities, but then employing the forging companies.”
Frey said Sandburg is pleased with the partnership it has maintained with Pegasus thus far, a sentiment Houston echoed for GHS.
“They’ve been believing in this from the beginning and they’re still invested 100 percent in it, and we appreciate it,” Houston said.
Rebecca Susmarski: (309) 343-7181, ext. 261; rsusmarski@register-mail.com; @RSusmarski