Tortilla Machine Maker Is Starving For Credit In California's San Gabriel Valley, Chip Masters, a company that assembles tortilla-making machines, has reduced its employees from 55 to nine to make ends meet. The company has also changed its business model and now repairs machines in addition to building new ones.
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Tortilla Machine Maker Is Starving For Credit

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Tortilla Machine Maker Is Starving For Credit

Tortilla Machine Maker Is Starving For Credit

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From big corporations, we turn now to small companies. MORNING EDITION has been talking to small business owners around the country to see how they're faring.

Today, we meet Albert Ceja. Ceja's shop east of Los Angeles makes the machines that make tortillas. Like many small business owners, Ceja has been hit by the downturn, but he can't get credit to keep his company going.

Rob Schmitz of member station KQED has this report.

ROB SCHMITZ: Al Ceja and his father own Chip Masters, a shop that assembles tortilla-making machines. Last year at this time, they managed 55 full-time employees.

(Soundbite of clanking)

SCHMITZ: Today, there are nine left. They're trying to keep busy inside this lonely machine shop in a gritty corner of the San Gabriel Valley.

Mr. ALBERT CEJA (Owner, Chip Masters): We're a high-profit, low-output operation here, and people just stopped purchasing stuff, and that really hit us hard.

SCHMITZ: Ceja's tortilla machines cost a lot, up to $3 million. So far this year, he only made one. Not too long ago, his crew made 17 a year. His orders dropped off last year when credit ground to a halt. His clients couldn't get loans, so he couldn't, either.

In what seemed like an instant, his cash flow was gone, and his employees were left with nothing to do. At first, Ceja asked them to paint the building, move around machinery, anything to keep busy. But after a month or so, it was clear: He had to lay off guys who were as close to him as family. And for those who remained´┐Ż

Mr. CEJA: We told them: You know what? We're going to - there's going to be days where the checks might come in a couple of days late, or if we give it to you on Friday, you might have to wait until Monday for it to clear. And these guys understood. They were the troupers. They're the guys that really stood in, the guys that really look out for the company.

(Soundbite of banging, rattling)

SCHMITZ: Carlos Chavez is one of those guys. Chavez cuts sheet metal for a repair job. This represents a new business strategy for Chip Masters: Instead of making tortilla machines, the skeleton crew here is fixing them. Chavez agreed to cut back his hours so he could hold onto his job. With an unemployed wife and three children, he said he had no choice.

Mr. CARLOS CHAVEZ (Employee, Chip Masters): (Through Translator) Many of my friends and family don't have any work at all. I've got a little work here, but at least I've got something. I'm lucky compared to most.

(Soundbite of phone ringing)

Mr. CEJA: Hello?

SCHMITZ: Back in his office, Ceja says he's approached eight different lenders to try to secure a line of credit. They all turned him down. His credit score, damaged from Chip Master's lack of cash flow, was too low. He approached the Small Business Administration - nothing there, either. Behind his desk, a framed photo of a younger Ceja hangs on the wall. It's a portrait of him in a crisp military uniform.

Mr. CEJA: I was a damn good Marine. I'm an American. I love being American, and I had a lot of faith in my country. And I thought, well, the government has to have prepared for this, you know, for something like this. And it was just like a weird, deluded dream that I had.

SCHMITZ: Ceja wrote letters to the city, state, members of Congress and even President Obama asking for help. Other than a form letter or two, hardly anyone responded. Not too long ago, Ceja contacted LA County for help. They sent someone who could help him secure a loan. He told her he still had faith in his country.

Mr. CEJA: She laughed. She laughed. She laughed. And she works for the government. She laughed. She was sitting right there and she laughed. And I said, wow. Well, that's a reality check for me.

SCHMITZ: Ceja says when the economy does pick up, he's going to be ready. Lately, he's been reading books about Kaizen, the Japanese strategy for lean manufacturing.

For NPR News, I'm Rob Schmitz in Los Angeles.

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