During the worst of the recession, an executive at Hannibal Industries Inc. had a simple way of figuring out whether his employer was still in business.
The Vernon steel fabricator had lost half its pre-downturn annual revenue of $100 million and laid off half its nearly 300 workers. So Steve Rogers, the manufacturer's vice president of sales, watched for the Hannibal factory as intently as for the traffic on his morning commute.
"I would drive to work, and I'd see the lights on. I'd say, 'OK, we're good for another day,'" Rogers said.
Hannibal, once part of Kaiser Steel Corp., bills itself as the largest maker of steel storage racks west of the Mississippi, used by retailers and others in their stores and warehouses. Customers include Costco Wholesale Corp. and Home Depot Inc.
Hannibal also makes tubing for products such as fencing, fitness equipment and mufflers for Harley-Davidson motorcycles.
The company has held on to its leading position despite tough times for manufacturers and the steel industry caused by a sluggish recovery and stiff foreign competition.
Owned by its employees since 2008, Hannibal has, in Rogers' words, "scratched and clawed" its way back from the brink through efficiency and innovation, including the development of products designed to improve safety and withstand earthquakes.
The recession's effect on U.S. manufacturers can be seen in the 16.5% decline in employment from January 2008 to January 2010, ending the two-year period at 11.5 million jobs.
The modest recovery since then added 694,000 manufacturing jobs nationwide through September, said economist John Husing, vice president of Economics & Politics Inc. But California accounted for only about 7,200 of those.
"If you want a statistic about California being a difficult place for manufacturing to survive, there it is," Husing said. The Redlands-based economist attributed the scant increase in manufacturing jobs to California's tough regulatory environment and its expensive electricity.
The U.S. steel industry has faced additional challenges caused by inexpensive foreign imports, said Robert E. Scott, director of trade and manufacturing policy research at the Economic Policy Institute.
About 52,300 steel industry jobs in California are at risk because of the dumping of cheap steel and steel products into the U.S. at below-market prices, Scott said.
"Surging imports of unfairly traded steel are threatening U.S. steel production, which supports more than a half-million U.S. jobs across every state of the nation," he said.
Cheap foreign products are "a constant concern," Rogers said.
A look at some of Hannibal's biggest customers shows the stresses.
Riverside recreational vehicle maker Fleetwood Enterprises, once one of Hannibal's biggest customers, filed for bankruptcy protection in 2009. Its assets were sold. Now based in Indiana, the company doesn't buy steel from Hannibal.
Office furniture manufacturer Steelcase Inc. retrenched after closing some factories and is no longer a Hannibal customer.
Hannibal also lost business from California's multibillion-dollar auto aftermarket industry, which manufactures parts and accessories.
"All of the automotive aftermarket we used to do has been lost to China," Rogers said.
"We used to sell to Scott's for their lawn fertilizer spreaders. Our steel went into the handles. That was a great business for us. They took that whole thing to China too," he said.
Despite those hits, Hannibal is on pace to exceed its pre-recession sales of $100 million this year. But it will do so with about 185 employees, nearly 40% fewer than what the company had before the recession.
New products have helped Hannibal grow, and increased efficiency has kept it lean, Rogers said.
Hannibal turned its sales force into independent representatives who aren't on the payroll. Workers have taken on new duties, Rogers said, noting that the vice president for procurement now also handles shipping, logistics and scheduling. Two robotic welding machines took over work done by laid-off employees.
Inside the factory, the machinery that cuts rolls of steel coils is shared with another company. Hannibal revamped the way it changes paint colors, which happens as many as eight times a day, so that the switch takes 33 minutes instead of the 55 minutes it formerly took.
The Hannibal factory is filled with the hiss and clang of steel being unwound, shaped, cut and cooled. Antifreeze flows through the works like an artificial river. It is filtered after each run and used again.
International sales have grown to 8% of the company's business, with the addition of rack sales in new markets including Saudi Arabia and Thailand.
That's in part because of a patent-pending storage rack — called TubeRack — that absorbs the energy of an earthquake or a collision with something like a forklift without breaking or falling. The system, introduced in 2012, also saves money by requiring less heavy anchoring to the floor.
The Southland's extensive warehousing industry makes for plenty of potential customers.
"Our location is perfect because Southern California is the single biggest storage rack market," Rogers said, noting that much of the nation's import cargo moves through the ports of Los Angeles and Long Beach.
"People have to eat. People have to drink. They have to buy diapers. And that all has to come in and sit in a warehouse somewhere before it's sold."
Rogers thinks Hannibal has an edge because it is owned by its workers, making them even more invested in the company's success. The employees beat out six other bidders to buy the company from Mitsui Steel Development in 2008.
"Incredibly bad timing — the peak of the bubble," Rogers said. "At that time we had 298 employees."
Then the bottom fell out.
"Needless to say," Rogers said, "2009 was a nightmare. We lost a ton of money."
Rogers said that 2009 was the only year the company fell into the red, but its memory keeps executives from returning to old staffing levels.
"Pre-recession it was, 'Get the orders out. Throw people at it.' We can't do that anymore," Rogers said. "We let almost 150 people go over a two-year period. A lot of them were very close friends. You just never want to go through that again."