Unlike other large Berkshire manufacturers, Crane here to stay
DALTON >> It's just the latest in a string of departures by longtime Berkshire manufacturers.
First, Sprague Electric Co. emptied its massive North Adams factory. Then General Electric Co., long Pittsfield's largest employer, sold off its last local division to Sabic Innovative Plastics.
And last month, Sabic announced it will pull up stakes by mid-2016.
Can Crane be far behind? The Dalton company, which has manufactured U.S. currency paper since 1879, already has made a number of moves in recent years that some interpret as warning signs.
Not to worry, executives say.
"Crane is very committed to the Berkshires," said Richard E. Rowe, the president of U.S. Government Products at Crane (the company's stationery division is based in North Adams). "The currency business is a very strong business. It's integral to the overall business. And the know-how and expertise in the Berkshires is second to none. This is the foundation on which we were built."
None of those other employers had roots in the Berkshires that are as deep as Crane's, which date back to 1801.
Still, the last four years have seen major shifts in the company's operations and holdings.
Crane hired a CEO from outside the firm for only the third time in its 214-year history; it moved its global headquarters to Boston; it renovated, then sold, its technical materials division in Pittsfield; and it instituted a voluntary retirement initiative in the currency division.
But that currency division is the lifeblood of the entire company, Rowe said, and it's staying right where it is.
"These are assets that are custom-made for what we do," he said. "To replicate them anywhere else would cost hundreds of millions of dollars. To replace the know-how and the people here would really be impossible."
The changes at Crane, which has been the sole supplier of currency paper to the federal government since 1964, have come about due to the evolving nature of the currency industry.
Currency has become heavily dependent on technology as counterfeiting has gotten more sophisticated. Countries have responded to this problem by embedding increasingly sophisticated, state of the art security features into bank notes.
In the United States, the currency market is now expanding. In October, Crane signed a five-year contract — the longest in company history — to remain the sole supplier of currency paper for the federal government.
In 2013, following a two-year delay due to an unanticipated creasing problem, Crane released the revamped $100 bill, which Rowe said is the most distributed bank note in the world.
According to USA Today, the next generation of American currency bills, which will feature a woman on the $10 bill for the first time since the 19th century, will see the most "complete overhaul" of U.S. currency in almost 100 years. The new bills are expected to include a number of security features, some of them secret, along with additional items like tactile features for the blind.
"Counterfeiters are becoming more and more sophisticated," Rowe said. "That requires more advanced products. So Crane has really moved from a paper maker to a high-tech manufacturer of substrate (the material that currency is printed on) and security features that are generally made in our New Hampshire facility."
Substrate is made of cotton and linen, the traditional foundation of U.S. currency paper, but it is high-tech enough to hold the technology for the security features that are woven into the material.
Crane still manufactures the substrate used for currency paper in Dalton, but the company's security thread production and research and development are done at its plant in Nashua, N.H. Crane conducts fundamental research on micro-optics technology at another company facility in Alpharetta, Ga.
Crane also has a fourth facility in Tumba, Sweden, that manufactures paper, prints bank notes, and houses the company's international sales team and design services.
Crane's currency operations maintain 350 employees in Dalton, the second-highest among that division's four plants (375 are employed in Sweden, with 150 split between Georgia and New Hampshire).
When Stephen P. DeFalco was hired as Crane's CEO in 2011 from a life sciences company in Toronto, more than half the company's revenue came from foreign operations. DeFalco was brought in to help Crane continue to expand globally, company officials said at the time.
Moving Crane's global headquarters from Dalton to Boston in 2012 was also done to make business operations more accessible to the international market.
"From a profile point of view for the international business it's more recognizable," said Craig Conrad, Crane's director of communications, regarding the decision to move the global office to Boston. The Boston office has only 10 to 12 employees.
"It's also easier for customers to come visit us," Conrad said. "We can bring them into Boston, and a lot of them will want to visit Nashua.
"They can get a sense of where we are going," he said. "We can talk a little bit about the extension of our micro-optic security feature technology."
The changes at Crane have not gone unnoticed in Dalton, where the company and the town's history are intertwined. Crane employees have served as volunteers on town boards and committees for many years. The Crane family's generosity to Dalton throughout the years is noticeable.
"The town hall I'm sitting in was originally a gift to the town from the Crane family," said Dalton Town Manager Kenneth E. Walto. "They were very philanthropic."
Walto referred to Rowe's comments on the Crane currency division's commitment to the area as "good news for the town and Berkshire County.
"They're still almost the (top) manufacturer in Berkshire County, I think," Walto said.
From the town's perspective, Crane appears to be "downsizing," Walto said. The company recently sold the Stationery Factory on Flansburg Avenue along with property at Asheulot Park.
Crane also has begun putting large tracts of undeveloped land within Dalton on the market, including The Pines, a 41-acre parcel bordered by High and Pleasant streets that the company has owned since it acquired the Byron Weston Co. in the 1950s.
The town recently voted to purchase that parcel, a favorite local hiking spot casually referred to as "Happy Land," to prevent it from being developed.
The company has also donated a 685-acre undeveloped parcel known as "The Boulders," which is located in Dalton, Lanesborough and Pittsfield, to the Berkshire Natural Resources Council.
Walto said the town has "made some inquiries" into Crane's recent selling spree, but isn't worried about the practice.
"We wish they would increase their operations here," Walto said. "That's what we would like to see."
In response to a reduced paper demand from the U.S. Bureau of Engraving and Printing, Crane in early 2014 instituted a voluntary retirement incentive for 8 percent of its local currency workforce.
"We feel really good that everyone who was downsized was allowed to retire early," Rowe said. "We've added back about 15 to 20. We're probably going to add a few more."
"We are growing," he said, referring to Crane's new currency contract with the U.S. government.
Like many large local employers, Rowe said Crane struggles with finding qualified employees who live in the Berkshires.
"We certainly struggle with some elements of that," he said. "We won't hire under duress. We wait for the right person. Sometimes it takes several months or a year to find the right person."
But he said Crane has been working with Berkshire Community College and McCann Tech to find local employees who fit their qualifications.
"We'll work with our employees to develop their talent," he said.
Rowe also has heard the rumors that Crane is more interested in developments outside of the county than inside of it.
"I grew up in Dalton," he said. "My dad worked for Sprague. I raised a family here. This is a strong business, and I certainly have a great incentive to continue and make sure these jobs stay in the Berkshires.
"That's what helps me get up every morning and drive here."
Crane's currency division has developed state-of-the-art micro-optics technology to embed increasingly sophisticated security features in bank notes.
In micro-optics, a moving image is created with a complex structure utilizing a micro-optic lens array and icon images. These lenses and icons are small enough to be able to show the text of two full bibles in the area the size of a penny. These tiny icons move up and down in the security strips that are embedded in modern bank notes. Users employ these features to determine a bill's authenticity.
Known as motion, the technology was first used in the Swedish $1,000 Kroner note in 2005.
In bank notes with motion, the images move in the opposite direction to the motion of the note — when the note is tipped upside down, the image moves left to right.
It is primarily used in high denomination notes, like the U.S. $100. Motion is now used for 60 denominations in 26 countries.
And the company recently developed a technology called "rapid," which is a more advanced form of motion technology.
Rapid features smaller lenses that move even faster. It was commercialized in 2014, and is intended for high transaction notes like the U.S. $20.