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Skilled metal workers measure, stamp out and weld
together restaurant kitchen fryers, griddles, boilers, warmers, cabinets,
tables, ice machines and steamers. When the second shift gets off at With 10 percent of the population working abroad and half
the population living on less than $2 a day, many Filipinos hope jobs like
these at Elgin-based Middleby will revitalize the economy. One need only visit Philippine rice and sugar cane fields
to see the chasm between the old world and the globalization at work in
The country’s economy is a patchwork of contrasts.
Yuppies drive through neighborhoods of abject poverty to get to the malls.
UPS and FedEx fly out of former Bridging the chasm between the old and new economies,
foreign investors such as Middleby employ workers and import technology . Since bottoming out after the Asian financial crisis in
2000, Middleby’s The 100,000-square-foot factory employs about 200 full-
and part-time workers and is considering more hires. Overall, The Middleby Corp. sales rose 12 percent in
2004, to $271 million. Profits rose 26 percent, to $23.5 million. However, it took some creative thinking in Jobs home or abroad The An Asia Development Bank survey of 102 countries ranked
the Nevertheless, almost half its 86.2 million people are
under 20 years old and are proving eager to adapt to non-traditional ways of
making a living.
Already they are crowding into malls and working nights
at call centers in Still, a deep divide exists between middle class and
wealthy urban youth and those mired in poverty, working the rice fields or
fishing for a living. Whether this emerging generation will be able to stem the
tide of migration with good jobs at home is the critical question asked by
Philippine economists. The sales force at Middleby in However, manufacturing engineer Ricky Malaca,
27, has been working for Middleby for four years. He says an above-average
wage won’t stop him from leaving the “Most of my friends want to go abroad,” Malaca says on the factory floor. “The Middleby improvises The Philippine version of Ronald McDonald is Jollibee’s mascot, a rotund cartoon bee with a chef’s
hat. In the Jollibee, along with its
Chinese and pizza fast-food affiliates, is doing something no other major
chain has been able to do: beat McDonald’s at its own fast-food game. And Middleby is Jollibee’s
biggest supplier of kitchen equipment. “Their strategy was, for every McDonald’s, they would
open two Jollibees nearby,” said Sam Sidani, general manager of international operations for
Middleby in The popularity of Jollibee
sometimes seems to border on the nationalistic. Their prices, food and
promotions are similar to McDonald’s, but Jollibees
appear more packed. Jollibee has Kids Meals,
Value Meals and toy giveaways. When Jollibee started
to take off, McDonald’s modified its menu to include Jollibee
favorites, including McSpaghetti, fried chicken and
rice. And “American Idol” finalist and Filipino-American Jasmine Trias is seen more often on McDonald’s commercials these
days than Ronald McDonald. Sticking to what made it successful, Jollibee
has built more than 1,000 restaurants and its chief executive Tony Tan Caktiong was named Ernst & Young 2004 World
Entrepreneur of the Year. Jollibee is taking aim
now at China and Middleby is scouting factories there, too. Still, the Jollibee phenomenon
was not the whole reason for Middleby’s comeback in
the Philippines.
Oak Brook-based McDonald’s once generated 70 percent of Middleby’s sales. But when it slowed new restaurant
construction to a trickle after the Asian financial crisis of 2000, Middleby’s managers had to brainstorm for solutions. Middleby was able to fill the gap in Asian demand with
U.S. orders — until Jollibee came charging into the
fast-food void.
“We found ways of creating capacity for that plant,
not taking capacity away from U.S. plants,” said Sidani,
who quarterly makes the 22-hour journey from Elgin to Santa Rosa to check on
operations. It also helps that Middleby is in an “economic zone,” in
Santa Rosa along with other U.S. companies such as Northfield-based Kraft
Foods. Foreign companies pay no tax on imports if 70 percent of their product
is for export. Consequently, Middleby can afford to pay its average
worker about double the national minimum wage, paying about $1 an hour. As an example of what that buys, consider this: A
fast-food lunch in the Philippines costs about as much as it does in the
United States, about $3.50. That’s nearly a half-day’s work there. In Elgin, union factory workers make about $16 an hour. Despite the lower wages paid in the Philippines,
executives are quick to say employment in the factories there has not cut
U.S. employment. In the meantime, the fast-food market is good for the
Elgin company as a wide range of fast-food restaurants are appearing in the
Philippines. They are quickly overtaking the lower-fat, traditional
Philippine rice-based diet. Filipinos are developing an American-style taste for fast
food. And a quick glance around the average Jollibee often reveals what their newly developed taste
is doing to their waistlines. |
