Tribe Ventures Into Business Success Story : Enterprise: Leaders explored opportunities and started company after mine shutdown left hundreds unemployed.
Ron Solimon remembers well that day in early 1982 when the Jackpile uranium mine on his native Laguna Pueblo shut down, leaving 600 people jobless.
“It was like getting slugged in the stomach,” he said.
It also was the beginning of a painful, years-long journey that took the Lagunas from the disaster of 76% unemployment to the successful formation of Laguna Industries Inc., an industrial products supplier and defense contractor.
“This company gave our people the opportunity to be productive,” said pueblo Gov. Harry Early. “It built their morale by increasing their skills and their ability to compete.”
The company, incorporated eight years this summer, is Indian owned and operated and employs 270 people, most of whom are from the Laguna reservation about 40 miles west of Albuquerque.
Laguna Industries--which had $15.2 million in revenue in the fiscal year ended in February--produces sheet metal components, metal fabrication and finishing, electrical cables and harnesses, medical instruments and other industrial products. The company also provides field engineering and training, technical writing and technical publications.
Its customers include the government and many big companies like Martin Marietta Corp., GTE Corp., General Dynamics Corp. and Digital Equipment Corp. “We have a very exciting story here,” said David Lee, the company’s acting president. Lee is on personal leave of absence from Honeywell Inc.’s Defense Avionics Systems Division in Albuquerque as a loaned executive.
Laguna Industries’ story actually began about two years before the Jackpile uranium mine’s Feb. 28, 1982, shutdown. The mine, one of the world’s largest and leased by Atlantic Richfield Co., had closed after 30 years of operation following a collapse in prices for uranium, which is sold to utilities for use in nuclear power plants.
Sensing the mine’s days were numbered, tribal leaders had sought the help of defense contractor Raytheon Co. during the summer of 1980 in exploring other business ventures. Raytheon eventually sent James Sloan, a vice president, and other company employees to train workers and management under a $650,000 grant from the Administration for Native Americans.
Support also came from New Mexico’s congressional delegation and the Small Business Administration’s set-aside program that helps secure contracts for fledgling minority-owned companies.
But getting started wasn’t easy.
“We came up against a lack of knowledge” about the tribe, said Solimon, Laguna Industries’ vice president for marketing. “There were a lot of misconceptions and stereotypes about absenteeism, alcohol and work ethic.
“People put us into one large group and called us Indians. I found myself doing a lot of educating.”
Money also was a problem.
“We couldn’t get commercial lines of credit or loans because of our lack of experience and questions about our ability to perform,” Solimon said. “So the tribe decided to do it on its own.”
The Tribal Council provided a $1.5 million line of credit to the company, which was used to leverage a $500,000 grant from the Bureau of Indian Affairs.
Laguna Industries’ big break came in August, 1985, when it was awarded a $10.4-million Army contract to assemble 14 communications shelters.
Business quickly flourished, so much so that the company eventually had to cut back on contracts. Facilities expanded, but the company was forced to lay off 52 workers last year following some losses stemming from its rapid growth. Lee, the acting president, says the company was profitable again in the 1992 fiscal year.
Laguna Industries also was able to pay off the tribe’s initial investment and today has multimillion dollar lines of credit with several banks.
In 1989 it paid its shareholders--the Pueblo of Laguna--its first dividends from a profitable year.
