Stop the Progressive Tax Story #2: Nicole Wolter of HM Manufacturing

Nine years ago, Nicole Wolter and her father, Ken, came very close to closing down HM Manufacturing in Wauconda, Illinois.

That year was one of toughest for the power transmission components business since Ken started the company in 1979. HM had only three months of capital left to survive. All the employees had to be let go, except for office staff and the shipping clerk.

The dire situation called for the Wolter father-daughter team to work hard and make deep sacrifices to keep the business alive. They worked side by side from early morning to late at night to fill the few orders that came in.
“My father and I would come in at 5 in the morning and stay until midnight, going through machine manuals, reviewing how to code them to get those jobs we had done. I was tasked with calling customers and getting them back. I was helping my father salvage the company and learning the industry at the same time,” said Nicole, now 34.

Despite the unimaginable pressure, the Wolter’s and their company survived – and thrived. Since that time, HM expanded their customer base from automotive parts to include food processing and beverage packaging industries. Things were looking up. They gradually hired new team members and rebuilt the company to 20 employees.

Then the coronavirus hit America in 2020 and set into motion yet another challenging situation for HM Manufacturing — one that has become more worrisome and concerning as time creeps along.

“Since COVID we’ve been busy because now we’re driven by the food processing and packaging industry, an industry that provided food during the pandemic and via drive-through windows,” Nicole said. “But it has been challenging not knowing what’s ahead for the next few months.”

HM Manufacturing competes globally for customers. The slightest changes in the economy, the manufacturing industry and political policies can make all the difference as to how quickly HM can fill orders and how much those products will cost.

All those things affect the amount of work HM gets, which has a sobering impact on the number of people needed to complete the projects and the job benefits HM can offer their employees.

“We, like other manufacturers, got the federal PPP funds, which really helped, but most of us manufacturers are concerned about our employees and their families and the types of benefits we could possibly not be able to provide for them because of uncertainty.”

Now Illinois politicians want to impose yet another tax on Nicole and her business, the progressive tax.

“Right now businesses are hurting and people are suffering. We need to be more proactive in helping our communities – hard-working families need relief and jobs versus the state government taxing us small business owners,” she said.

Nicole said she thinks of HM employees as family. Her father started the company in 1979 with the whole idea that everyone who worked at HM Manufacturing wasn’t just an employee, but part of a team.

“We’re family. It’s imperative that I know what they’re going through,” she said. “And now with COVID, I wasn’t able to give bonuses, I wasn’t able to give raises because profits and sales are not there to support it. It’s about staying in business and making sure we have orders for the team to run.”

And that’s a real problem for the HM Manufacturing family, she said.

“The more that I am getting taxed, the harder it will be for me to help them grow and help their families. I know everyone needs to be fed, needs a home to live in,” she said. “Before COVID and the idea of higher taxes the progressive tax system would bring, people were buying cars and homes, they were able to grow and expand within the community.”

“The more we get taxed, the harder it is going to be for the average working American to do more. If I can’t provide raises or benefits packages, what is that going to do long term for the American worker? Someone needs to think about that,” she said.

Nicole says that if Illinois were to pass the progressive tax hike, the expected cost would likely result in painful changes for the company and employees.

“I’m afraid we would have to do layoffs. I may not be able to invest in my employees like I do now. I might have to close up shop and go somewhere else to a neighboring state perhaps because we all need to have our entrepreneurial hats on – small businesses like ours provide employment,” she said.

“Isn’t that worth encouraging rather than discouraging with another tax hike?” she asked.