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A handle on a new opportunity

By Jamison Cocklin

Sunday, June 24, 2012

East Liverpool company lands Starbucks’ line



The football rivalry between the East Liver- pool Potters and the Salem Quakers is something residents look forward to each fall.

It’s remained one of the highlights for a community that’s been hard-hit by economic turmoil.

But fortunes changed last October when a California-based company, Hausenware, contacted Clyde McClellan, the owner of American Mug and Stein Co. in East Liverpool, about an opportunity to fill orders for a new product line from Starbucks Coffee Co.

“It was dumb luck; it was just the luck of the draw that we got the business,” McClellan said as he sat in his office above the factory floor, explaining how the process unfolded.

“I thought to myself, ‘Why are you talking to me?’ I’m just a grain of sand in the Starbucks scope of things.”

Turns out, American Mug and Stein was just what the coffee company was looking for. Although it has more than 17,000 stores worldwide, Starbucks’ CEO, Howard Schultz, had hoped to aid the American manufacturing industry by searching for development opportunities in the U.S.

Hausenware’s owner, Ulrich Honighausen, heard about Schultz’s plan. He began to make calls within the industry and was told to contact McClellan.

“A couple of minutes into our phone conversation, I knew he was the kind of owner I could build a relationship with,” Honighausen said of his initial conversation with McClellan. “He was willing to be very flexible to meet the needs of the customer.”

Honighausen’s company already was supplying products to Starbucks from manufacturers overseas, and he convinced the coffee company that American Mug and Stein was right for the job.

What followed was a flood of national media attention as the East Liverpool pottery prepared to roll out its first order of coffee mugs stamped with a label reading, “indivisible.” Money from the sale of each mug will go toward the Opportunity Finance Network and the Create Jobs for USA Fund, which both help to spur job creation and get start-up businesses off the ground.

For McClellan, however, the new business meant he was able to hire an additional eight workers at his East Liverpool pottery company.

“We’re going to go from making around 200 of these mugs a year, to making around 70,000,” McClellan said. “This is where the employees are really stepping it up and that’s what this is about, our employees. The focus should be on the people of this town and this area.”

To keep up with production, Honighausen and McClellan are refurbishing an abandoned factory in New Waterford that will house high-tech equipment and put an additional 13 employees to work by early next year.

Like much of Northeast Ohio, East Liverpool was sacked by a loss of manufacturing in the steel industry. To make matters worse, the area had also long relied on myriad potteries for employment. But improved technology overseas, coupled with rapid productivity in places such as China and Japan, meant staunch competition that resulted in an “evaporation” of the ceramic industry, said McClellan.

George Zeller, an independent economic analyst in Cleveland, said that unlike parts of Mahoning and Trumbull counties, where manufacturing has seen a resurgence in recent years, Columbiana County, and especially East Liverpool, have been slow to regain the jobs that were lost during the 2000 and 2008 recessions.

For instance, between 2010 and 2011, Mahoning and Trumbull counties combined to add 843 jobs in manufacturing. During the same period, Columbiana County lost 61 jobs, he said.

“It’s been a very serious struggle in East Liverpool for some time now,” Zeller said. “So this is very big news for the area that will hopefully improve those job numbers.”

That sentiment was on display at a local sandwich shop in downtown East Liverpool on Wednesday.

“Pottery is everything here; of course everyone in town has heard about it,” said Dana Malette, a cook at Doc C’s Place, which sits amid a series of vacant storefronts that wind through the downtown. “This means hope to a lot of people here. This is a trade that goes back generations in this city.”

McClellan said the mugs have sold rapidly. His company packed and shipped the first orders in May and most of the initial supply has sold out. The company has been busy preparing its second order, to be shipped Monday, to stores in Seattle.

Another added benefit, McClellan said, is the local distribution process. After the mugs are prepared in East Liverpool, they are sent to a company in Unity, where the labels are glued on and the mugs are packaged for shipping. After packaging, the product is then transported to points across the country by Ohio trucking companies.

“It’s a process that comes full circle,” McClellan said.

American Mug’s new business has often meant six-day weeks for many of its employees.

Diane DiPasquale, 42, of Chester, W.Va., earned a promotion as a result of all the new work on hand.

“It’s been very busy here, I don’t know how long it’ll last, but it gave me a pay raise and I hope things continue to get better,” she said. “For now, it means security.”

As a result of all the attention East Liverpool has received in recent weeks, other cities and towns in the area are betting on a small boom in tourism and business.

Harold Taylor, 72, who owns a bed and breakfast in Calcutta, said he anticipates more guests.

“This is all very important, we’re certainly hoping it’ll bring more business to the area,” he said.

“This might not be the end all, be all,” he said, “but we’re betting this will be the beginning of a turnaround for this area.”