Saving a sinking factory; Investors in Springfield, Vt., hope to put plant back in local hands, boost economy

It's 4:40 p.m. and stillness is creeping into the Jones & Lamson machine-tool plant. A dozen workers are scattered about, still tinkering away. A few cluster around the hulking, half-finished metal lathes that take shape here. By and large though, the daily clang of heavy industry has temporarily conceded to quiet.

Many people in this old factory town wonder if this silence will become permanent. Most of the plant is always quiet now - a result of layoffs that shriveled the work force from nearly 1,200 to fewer than 250 in three years.

Indeed, American machine-tool manufacturers have fallen on hard times lately, and Jones & Lamson (J&L), perhaps the grande dame of them all, has felt the squeeze as much as anybody.

Maybe more. Textron, the Providence, R.I.-based conglomerate that has owned J&L since 1964, has been exercising its company-wide policy to focus the operation of its plants on one line, rather than many. Such a policy has been successful from a corporate point of view, but company officials acknowledge it has not been all that good for Springfield.

Three years ago, Textron's machine-tool division decided to move J&L's highly successful line of inspection equipment (known as optical comparators) to a sister plant down in South Carolina. That cost 70 people their jobs. Later, J&L's grinder-manufacturing operation went down to a Connecticut plant. Last September, Textron announced that Springfield's manufacturing operations would be moved to plants in Connecticut and Belgium; the Vermont plant would now only assemble the parts to be shipped from the remote plants. And tomorrow,cq J&L's lensmaking operation will close.

''It's gotten to the point where it seems obvious that Textron will pull out at some time,'' says Robert Jones, a former general manager at the J&L plant and a Springfield town selectman. By focusing the plant's attention on one line, it becomes more vulnerable to swings in the marketplace, industry analysts say. If demand for the product dwindles, so will the factory.

It is a story that has been told before. Dun & Bradstreet, the financial ratings service, estimates that between 1968 and 1976 absentee parent companies like Textron were responsible for more than half of all manufacturing jobs lost in New England due to plant closings and ''runaway'' shops.

But Springfield, a town of fewer than 10,000 with the highest unemployment rate in Vermont, is not about to let its oldest and most illustrious plant go under without a struggle. So at a time when machine-tool orders nationwide are stuck at about half their 1979 levels, Mr. Jones and 23 other investors are plotting to buy the company.

Textron has not been looking for someone to buy the Springfield factory, although the J&L division (which also includes plants in Connecticut, South Carolina, and Belgium) lost about $16 million last year. And when Jones first traveled to Providence last November, his plan was skeptically received by Textron officials. After all, if a $3.3 billion company had trouble battling the inertia of the marketplace, what hope had 24 investors from Springfield?

''I was as puzzled as anybody,'' recalls J&L division president Hanspeter F. Schwartz.

But the Springfield Group, as the 24 investors are called, seems to have rallied the town in a swell of civic enthusiasm. Many townspeople think the needs peculiar to a local operation like J&L and a town like Springfield have been overlooked by Textron since it purchased the operation from local owners.

Some say a local ownership will help reestablish a feeling of camaraderie that the factory work force may have lost. And as the negotiative dance develops between Textron, the local branch of the United Electrical, Radio, and Machine Workers of America (UE), and the Springfield Group, daily dispatches in the local papers keep close tabs on the latest steps.

''No doubt about it. This is the big event in Springfield,'' says Lee Madriand, publisher and editor of the 100-year-old Springfield Reporter, as he reclines on a sofa in the second-floor newsroom of his barn here. ''If (the Springfield Group) can swing this deal, it will be a major boost to the town. Everyone is counting on it.''

They are counting on it to boost morale, however, rather than to be a panacea for the town's sagging economy. Even though Jones has vowed to bring the manufacturing operations back from Connecticut and Belgium, he does not foresee employment streching past 350 workers any time soon. And those who do actually work, the UE membership has agreed, will accept a 25 percent reduction in wages and adopt a profit-sharing plan. But the Springfield investors don't believe their plan will turn a profit for at least two years, so workers probably won't have much disposable income to help stimulate the Springfield economy.

And Springfield could use it soon. A stroll down the picture-book main street reveals a bargain-hunter's paradise where most shop windows feature banners blaring storewide discounts of 25, 50, even 75 percent. ''The retail establishment is in a depression,'' notes Mr. Madriand. Indeed, business in some places has slumped to half its 1981 levels.

Even those who haven't been affected by the misfortunes of the machine-tool industry and the retail establishments are groaning under the weight of the stiffest property taxes in Vermont, and perhaps in New England.

''I keep hearing that half a loaf is better than no loaf,'' says Emmet Gavin, the business agent for UE Local 218, Spring-field's bargaining unit. ''But I just don't know.''

Most others do, however. The union membership forced a vote on Jones's plan - after the union leadership rejected its consideration - and passed it by a 2-to- 1 margin.

''Machine tools are this town,'' insists Raymond Streeter, who joined Jones & Lamson as a teen-age apprentice in 1926 and stayed on until his retirement 50 years later. About 25 percent of the people in Springfield are actually employed by one of several machine-tool manufacturers in the area, and the rest are indirectly affected by the industry's fortunes.

It's been that way as long as anyone here can remember. Richard Jones and Silas Lamson came here in 1888 to start their company and manufacture their newfangled turret lathe. By the 1930s, there were more than 50 companies making one or another type of machine-tool device in several nearby towns. Most of them could trace their lineage directly to Springfield and J&L - ''the Cadillac of the industry,'' as one worker of 31 years puts it. And ever since, Springfield has been the core of a cluster of towns comprising the machine-tool industry's ''Precision Valley.''

Many of the tools that enabled the automotive and aircraft industries to grow were made here. As those industries prospered, so did those in Precision Valley. Inventor-entrepreneurs at the helms of these companies became institutions in towns like Springfield, and often these business leaders had the last say on civic matters.

''We didn't have fluoride in this town water for years - you know why?'' Mr. Madriand asks rhetorically. ''Because Ted Miller, the guy who started Fellows Gear Shaper Company, didn't like the idea of it.''

Eventually, however, crusty pioneers like Ted Miller left the picture and the companies became attractive targets for conglomerate takeover. After Textron purchased J&L, other takeovers soon followed. Today, only a handful of the machine-tool manufacturers in Precision Valley are locally owned.

Textron's aquisition of J&L was received with genuine, if reserved, enthusiasm. The product line was aging at the time. More innovative companies had been nibbling at J&L's loyal customer base for years. Some were sorry to see the enterprise fall out of local hands, but most thought a fresh infusion of capital and some new ideas were just what J&L needed. ''We knew it was the best thing at the time,'' says Dorothy Grover, a 33-year vereran at J&L. ''They brought money and ideas.''

Indeed, Textron whipped things into shape. They directed J&L to develop a line of computer-controlled lathes that soon became the industry standard. Sales exploded. J&L sold $84 million worth of the lathes in 1980.

Then the bottom fell out of the machine-tool market. The '82 recession squashed heavy industry's demand for the sorts of machines J&L produces. At the same time, cheap but sophisticated Japanese lathes - capable of performing tasks previously the exclusive domain of J&L's big, custom-built machines - were flooding the market. Sales plummeted.

Last year, J&L in Springfield managed to move only about $18 million worth of lathes off the showroom floor. And from a 1980 high of more than 1,200, employment at the J&L plant in Springfield sank to its current level of less than 250. ''It's been a two-front battle,'' says J&L's Schwartz.

Some relief is in sight, though. Imports, particularly from Japan, are still battering away at US products. But the economy is recovering, so the market pie is getting a bit bigger. General Motors Corporation has put in a major order for J&L lathes - but only if Textron still owns the company that makes them. Otherwise, GM has said it will look elsewhere.

Such threats don't fluster the Springfield investors. ''We need to do R&D (research and development) to make our products competitive, and we know it,'' says John Hubbard, a likely candidate for president of the new company. ''We're going into this clear-eyed and are prepared to make a genuine go of it.''