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Blackfeet pencil factory competes in volatile industry

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BROWNING, Mont. - Maintaining a niche in the volatile pen and pencil market is a constant challenge, but the employee-owned Blackfeet Writing Instruments Inc. is still hanging in after decades in the business.

The Browning firm, which has only nine employees, has undergone lots of changes over the years. Started as a tribally owned enterprise in 1972, the business has traditionally struggled to compete in a market dominated by larger pen and pencil plants on the nations eastern and western seaboards.

After going through two major makeovers, as well as name changes, the firm was transferred to private hands in 1992. Bernadette Trombley, president and general manager, says she and other investors inherited a hefty debt in the transaction, but ongoing changes, including transfer of ownership to employees, should help put the business on firmer financial footing in coming years.

"Were a pioneer," Trombley says. "My employees function as the board of directors, the shareholders. Were a team-managed company. They don't have me as a boss telling everyone what to do."

Part of the problem in the past, Trombley says, is that the company's minority-owned status was challenged because some members of the now-dormant board of directors were non-Indians. Now that the business is entirely controlled by tribal members, she explains, it will be easier to secure minority-preference contracts and other related benefits, especially through the federal government and the U.S. military. Women own 54 percent of the firm, an advantage with other types of contracts.

"The government has really cracked down on minority businesses lately," Trombley says. "It's making it harder. Theres a lot of channels to go through."

The company, which has the capacity to employ about 100 people in its 50,000-square-foot plant, produces about 15 varieties of custom-imprinted pens, pencils, and markers in up to 25 colors.

The writing tools are sold to all forms of office outlets in all 50 states and a number of foreign countries.

But keeping a hold on market shares has proven to be tougher than originally estimated, especially considering that more and more companies are moving their operations overseas, where labor, taxes, and other operating costs are often cheaper. A 1997 study showed, in fact, that the Blackfeet firm was competing with 631 other companies in the pen and pencil market.

"The significant amount of competitors poses the problems of defining a specific market and maintaining a customer base," the study says. "The pen and pencil industry does not offer a lot of opportunities to differentiate products. In other words, to many customers a pencil is a pencil, a pen is a pen, regardless of who it is made by or the features. A complete market study could reveal the customers who buy on loyalty to brand or features."

"Basically, theres a lot of competition out there with writing instruments," Trombley adds. "Some are so big we cant compete with them. We try to sell on quality. We have a finely manufactured pen and pencil."

Trombley says things looked promising for the company after it was purchased from the tribe.

In 1997, for example, the firm had more than $1 million in sales and kept 24 full-time employees and eight contractors working. That $1 million translates to about 400,000 pens, nearly 27,000 pencils and about 20,000 markers being produced, she says. In comparison, the plant cranked out 29 million pens and 150,000 pencils in 1988, which was one of the most profitable years in the company's history.

But the good times simply didn't hold, and Tromble says they're not so great now, either. Unfortunately, 1999 was another year of decline, and the company is still working to tie down new contracts and hire back laid-off employees. Last year's payroll was only $200,000. In recent years it's gone as high as $270,000, she says.

"Theres so much going on out there," Trombley explains. "The fluctuation in sales is so severe you never know what to expect. It's a hard commodity to sell. I don't think in the 22 years I've been here it's really ever been stable. I think the company would really benefit from having a stable market."

One of the problems, Trombley says, is that Browning is far away from major markets and suppliers, which pushes up transportation costs. Most of the pencil stock - little slats of cedar, sugar pine, redwood and other wood - comes from California and Oregon, and graphite must be shipped in from New York or Florida. To Trombley's dismay, few of the company's products are sold in Montana, and only a small fraction of their clients are tribal governments and Indian-owned businesses.

Finding employees is not a problem on the reservation, where the unemployment rate has hit an estimated 69 percent this winter. New workers are paid minimum wage to start, then get "a pretty substantial raise" in a few months, Trombley explains. "We can usually tell who's going to be a "lifer after 90 days," she says with a smile.

Everyone working at the pen and pencil plant now, including Trombley, have tackled every job in the business, from sweeping floors and running the machines that force ink into pens, to handling the phones and painting pencils - and everything else in between.

"Everyone's really versatile," she says. "The ones who run the pencils run the pens, too. Theres no typical day here. Our day does'nt run on eight hours. It runs on how long it takes to get things done."

Trombley says the company is poised to expand again as soon as the market turns.

In the meantime, they're working with the Blackfeet National Bank to build inventories and track down new customers.

"The bank is very supportive of the company," she says. "It deals with us and wants us to succeed. We just have a lot of support in general."

Trombley says despite the current hard times, she and the other owners have unyielding faith in the future.

"It takes dedication and perseverance," she says. "For nine people to be doing what were doing is pretty amazing. These people are dedicated to this place".