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Health Care and Business: The Chickens Come Home to Roost

September 22, 2009 By Lee Egerstrom, Economic Development Fellow
As creative small business operators in rural Minnesota, the Schweiss brothers can make everything from chicken plucking machines to fold-up doors, but they can't make sense of the nation's health care mess.

Leo Schweiss, who has Schweiss Welding at Fairfax, usually works alone. He does hire part-time welders from time to time on big projects, he said, although he remains "pretty much a one-man show."

This he does while providing regional welding services, making Schweiss Chicken Pluckers, Schweiss Mini-Backhoes for Kids, selling and servicing other industrial products, and making ornamental wrought iron products for homes, business and communities.

"I suppose you could say I've held back - haven't grown the business like I could," he said. The reason is simple, he said. He can't commit to hiring skilled labor and offer health insurance benefits without having a steady, predictable stream of income.

His brother Mike, however, has gone "big time," by small town standards. He has 50 employees working at his Schweiss Bi-Fold Doors company at nearby Hector, making him one of the largest employers in his southern Minnesota area.  The factory is out on the Schweiss family farm "home place," which has a Fairfax telephone number but a Hector mail address.

So how does he provide health insurance coverage for his skilled work force?

"I can't," he said. His company's insurance costs were rising from $30,000 to $60,000 a year. "So what I do is I make a contribution to the employees' health insurance costs, and they have to find their own.

"That's not a health care system. That's no system at all. It's crazy."

Studies show this discourages would-be entrepreneurs from starting new businesses, holding back Minnesota's and the nation's economy.

A closer look at the Schweiss brothers' businesses show what's at risk.

Leo Schweiss developed the Schweiss Chicken Pluckers machine in 1972 as an FFA (Future Farmers of America) project while in high school. It had an immediate market success, and he turned it over to his brother Mike, who had started a fabrication business when Leo went off to Hutchinson Technical College after high school.

A few years later, after Leo started his welding business, Mike turned the Chicken Pluckers back to his brother while Mike specialized in doors for farm and industrial buildings. That grew out of Mike attending a wedding dance in 1980 where a friend asked him, "Mike, you build a lot of things. Why not a door that folds up?"

The bi-fold doors were off and running. They are especially popular with aviation hangers for the general aviation industry. Twin Cities area residents who don't fly airplanes can admire Mike's work at the new Guthrie Theater where the glass overhead door above the ticket counter is an ingenious Schweiss Bi-Fold Doors product.

But that's not the only tie this entrepreneurial family has with the entertainment industry. Leo Schweiss recently shipped three Schweiss Chicken Pluckers machines to a major Hollywood movie studio for use in an upcoming film.

In retrospect, Leo said, that's a little scary. He's not sure he wants his bird de-feathering machine given the same treatment as the wood chipper machine in Minnesota's-own Coen brothers' movie Fargo. "I should call out there (the studio) and find out what they're up to," he said.

Going Forward
It is impossible to forecast what shape health insurance reform legislation may yet take in Congress. But states that want to encourage entrepreneurship should be on guard.

If the interests of small business and start-up enterprises are compromised away, states like Minnesota should consider expanding state insurance programs like MinnesotaCare to help businesses secure coverage for employees and encourage job creation.

Knowing what he does now, Mike Schweiss said he doubts he would start his business again. "You have to be young and dumb," he said

That description doesn't apply to the Schweiss brothers. It shouldn't be a requisite for entrepreneurship, either.

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