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A year after bankruptcy, RiteWay in LP is making a comeback
Jan. 6, 2014
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By Starrla Cray
Staff Writer

LESTER PRAIRIE, MN – Valentine’s Day of 2012 was a tough day for RiteWay Manufacturing owner Denise Johnson.

That morning, a bankruptcy judge had formally rejected Johnson’s final proposal to hoist her Lester Prairie company out of Chapter 11 bankruptcy, leaving her with the prospect of liquidation.

She was stunned, and thought, “That’s it? I have to go back and tell 38 people we’re done?”

One of those 38 employees, director of operations Mark Zimprich, wasn’t about to let Johnson stop fighting, however.

“Her dad wouldn’t have given up,” Zimprich said, referring to Bob Green, who founded the conveyor system installation and manufacturing business in 1999.

“He played his little trump card on me,” Johnson recalled.

Johnson and her father had been extremely close before he passed away from cancer in late 2010. When Johnson thought about his legacy – and about her employees – she knew she had to keep fighting.

A bad break
RiteWay’s downward spiral had begun in 2008, when a newer customer told RiteWay it intended to spend $30 million with the company over three years. To accommodate the anticipated growth, RiteWay built a 24,000-square-foot addition.

Months later, the customer backed out of its plans due to the shaky economy – leaving RiteWay with no need for its expensive expansion.

RiteWay was soon hit by more bad news, when FedEx (one of its major customers) announced 60 percent cuts.

Looking for a way to recover, Green purchased a company called Sebeka Tool and Engineering in the spring of 2009. Unfortunately, the acquisition ended up being another financial burden.

To make matters worse, Green’s cancer (first diagnosed in 2003) came back in January 2010. That fall, on Johnson's way back from a FedEx site in Milwaukee, she got the call that her father only had a few weeks to live.

“It’s like your world stops on the freeway,” Johnson said, adding that, thankfully, her two sisters had been along for the trip, so they didn’t have to hear the news alone.

No regrets
Johnson and Green worked at RiteWay together for about eight years, building a successful company with fast turnaround times and unwavering reliability.

“When things got tight and started to go south, he [my dad] apologized for bringing me out here and ‘ruining’ my life,” she recalled.

Johnson never saw it that way, though, and remembers telling her dad, “Everything has been wonderful the past eight years. Whatever happens, I’ll be OK.”

About a month after her father’s funeral, Johnson filed for Chapter 11 bankruptcy, and began the process of attempting to stabilize the company.

A turning point came when Heritage Bank in Willmar helped RiteWay fund loan guarantees through the Southwest Initiative Fund in Hutchinson, the United States Department of Agriculture, and the Small Business Administration.

“Those two years in Chapter 11 taught me a lot,” she said.

Strength and hope
Afterward, Johnson gave each of her employees a water bottle printed with Philippians 4:13, her favorite Bible verse: “I can do all things through Christ who strengthens me.”

RiteWay’s recovery has been better than Johnson expected, with double the revenue she anticipated in 2013.

Profit margins still aren’t where they need to be, though, Johnson said, adding that she’s determined to make enough to reimburse her vendors someday.

“I won’t take a dime from this company until I pay them back,” she said, adding that her vendors understand the situation, and they have faith in the company.

The RiteWay team
Johnson’s employees have faith in the company, too.

“I shared every minute of every second of everything that was going on with my employees,” Johnson recalled. “I wasn’t going to hide anything from them.”

She remembers sharing many tears with quality manager Lynn Siegle, who has been with the company just over five years.

“She never thought of leaving during the difficult times,” Johnson said.

“I trusted her,” Siegle said.

Zimprich, who served as a consultant before joining RiteWay, has that same confidence.

“I was never really worried,” he said. “I know FedEx well enough to know that they’d keep us going.”

Zimprich also recalled words Green had spoken to him: “Keep your head up high and don’t worry.”

“I took that to heart,” Zimprich said.

Johnson considers her employees part of her family, and recognizes their unique contributions.

Mark Marshall, for instance, began working as a material handler at RiteWay in 2011.

“One thing we really like about Mark is his organization skills,” Johnson said. “Before, there was steel all over, but he organized it all.”

Fabrication lead/laser operator Dan Niemczycki has been with RiteWay since February, and Johnson said he’s very efficient and willing to learn.

“I definitely enjoy working with the people here,” Niemczycki said.

Jeff Fiecke (nicknamed “Beef”) has 21 years of experience in steel fabrication. For the past 11 months, he’s been RiteWay’s assembly shipping manager.

“I like the challenge of doing my job successfully,” Fiecke said. “I’m learning something new – I have more responsibility and control, and I have to make the right decisions.”

Jobs in manufacturing
Johnson often conducts tours of RiteWay’s facility, and wants job seekers to know that a college degree isn’t necessary for a high-paying career.

“We do on-the-job training,” she said, adding that the company hires people who are driven, motivated, and willing to learn.

In the months to come, Johnson is looking forward to continued service through custom metal fabrication, and manufacturing of conveyor systems/material handling equipment. The company is also planning to diversify its offerings.

“I’m excited for the future,” Johnson said.

(RiteWay Manufacturing was featured in the Nov. 2013 edition of Enterprise Minnesota magazine. Click here to see the story.)

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