MTPR

Trump Tariffs Mean Uncertainty For Bonner Manufacturers

Mar 13, 2018

Bonner's former Stimson plywood mill east of Missoula shuttered its doors back in 2008. To the casual observer, the site’s drab exterior along Highway 200 suggests very little has happened there since. It turns out just the opposite is true.

Inside, 17 businesses are thriving on the 170-acre site, and several could be directly affected by the Trump administration’s new tariffs on aluminum and steel.

Among them is Alcom which produces high-end aluminum trailers in its 100,000 square foot facility. 

"Yeah, business is really good," says Ron Neibauer, Alcom’s plant manager. "The economy is really strong and we're definitely feeling the benefits of that. A lot of people want to get out and have a great time; go to car shows, go snowmobiling, go dirt biking. We definitely feel it when the economy is good." 

The company's customizable trailers don't come cheap. The high-end configurations can easily top out north of $20,000. And Neibauer says they're selling like hotcakes.

"We use about 80,000 pounds of aluminum per week. We're probably the second biggest aluminum trailer manufacturer in the U.S. Our parent plant's the number one."

The Trump administration's new tariffs are 25 percent on steel and 10 percent on aluminum imports. Canada and Mexico are exempt for now. Other countries may eventually get similar treatment.

Edward O'Brien: "Do you think it's good for your business, these tariffs, or no?

"I honestly don't know whether it's going to be really bad for us, or it's going to be more or less a wash," Neibauer says.

A few minutes away is perhaps the Bonner Mill site’s most public face. Nestled along the banks of the Blackfoot River is Kettlehouse Amphitheater and brewery. It's only a couple of years old but it’s getting lots of attention. Over 20,000 concert tickets were sold there last summer, and 65,000 tickets are expected to be sold this season.

The KettleHouse Amphitheater sits along the bank of the Big Blackfoot River, just north of the new KettleHouse Brewing facility and the old lumber mill in Bonner, MT.
Credit Josh Burnham

The beer’s a big draw. Kettlehouse sells it in aluminum cans. President Zeb Harrison says metal cans do a better job of preserving the beer's flavor than glass.

Harrison says the tariffs will not change that practice, but adds, "Those costs do affect us. We did about 3 million cans out here last year. The unfortunate part about an increase in aluminum prices is, it gets bigger as it gets passed down the line. We try and absorb as much of those costs as we can because we want to find that good price point, that balance,  and have a great quality product in a great package at a price that the consumer likes. So, it'll be a balancing act for us for sure."  

Coaster Pedicabs is another business on the Bonner mill site that is dependent on aluminum and steel. Coaster uses both metals to fabricate custom pedicabs. They come in several pedal-powered configurations. Some are designed to haul people, others cargo.

United Parcel Service, for example, predicts parts of the country will eventually be designated as emission-free zones. UPS has purchased a couple of Coaster pedicab prototypes that one day might lead to creation of an emission-free delivery vehicle for the company.

Closer to home, Coaster just finished a pedicab for Missoula's Big Dipper ice cream, complete with cold-cases.

A pedicab custom made for Big Dipper ice cream. Coaster Pedicabs makes custom pedicabs at their factory in Bonner, MT.
Credit Edward O'Brien

Chief Operating Officer, Justin Bruce, expects the tariffs will have mixed impacts on the company.
 
"I think for aluminum, it's actually going to make it better because we already get it milled to our specs, so it will hopefully bring down costs of American-made aluminum, ideally. As for the steel, it is something that we are facing, that the prices could go up. It is unfortunate to our business when it's a big part of our builds."

Bruce says any additional tariff-related expenses would eventually have to be passed on to customers.