July 26, 2016 Tribal Enterprise

Volume 6 | Issue 2

Mark Devaney reports on a revolution begun by Chahta Enterprise which has spread into a remarkable socioeconomic story.

Perhaps mightier than any weapon brought to this continent by the Europeans was the concept of self-determination. Many Native American tribes held fast to beliefs rooted in predestination, which, in general, helped little to win battles and did not help at all with cultural assimilation. Centuries have passed and still many Native Americans are on the outside looking in on mainstream society, as if they are waiting for a long gone way of life to somehow return. In the process, a cycle of poverty, poor health, and disenfranchisement continues to keep Native American people down with little hope for success.

So it is with wonder bordering on awe to see the accomplishments of the Mississippi Band of Choctaw Indians. Its visionary leader, Chief Phillip Martin, has transformed his tribe through an unrelenting commitment to the very concept that has, by and large, failed to take hold of other Native American tribes – self-determination.

Whether speaking to the people who work with Chief Martin or visiting the Choctaw Web site, “self-determination,” the words and the true meaning of the words come to the fore. And by preaching the power of self-determination, the tribe has experienced the economic success that has eluded so many other tribes.

Consider the following statistics: In the early 1980s, unemployment among the Mississippi Choctaw tribal members was an astonishing 80 percent. Today the entire tribe is employed (and each tribe member has at least one back-up job). In 1982, there were 31 tribal members that reported “having some college.” In the fall of 2002, 452 tribal members were in college. And the percentage of income from welfare among tribal leaders has dropped 67 percent since 1981.

Harnessing the future
Like other Native American tribes, the Mississippi Choctaw derive a great deal of revenue from a casino/hotel operation. Unlike other tribes, gambling was not the primary way that the Mississippi Choctaw climbed out of their economic depression. The ascent began in manufacturing with a company called Chahta Enterprise, which began making automobile electrical system wire harnesses for Packard Electric, a division of General Motors, in the early 1980s.

According to Director of Marketing Communications Creda Stewart, one of the main reasons why the Mississippi Choctaw were able to enter into industrial manufacturing, a decidedly non-Indian business, was that the Choctaw were not as averse as other tribes to the ways of industrial capitalism. While so many other Native American people suffered through the pain and hardship of relocation, the Mississippi Band of Choctaw have remained where they are throughout the founding and settling of the United States.

“We have always been here, in part because this is Mississippi, which was not considered desirable land by the government,” said Stewart. “But that did not mean that the tribe thrived. In fact, we simply became a minority in one of the poorest areas of one the poorest states in the nation, until Chahta Enterprise was launched and our people switched from being primarily sharecroppers to manufacturing employees.”

Chahta Enterprise President and CEO Lester Dalme, who joined the company 23 years ago, recalled how determined the tribe was to prove itself in the manufacturing arena. “We knocked on a lot of doors, but we would not give up, because our mission was too important – people’s lives depended on it,” said Dalme. That sense of mission was no doubt imparted to Dalme by Chief Martin who handpicked him to run Chahta Enterprise.

Initially, the plant was not showing a profit, which prompted Chief Martin to recruit Dalme, a non-Indian, from Packard Electric. “I’d been in middle management for eight years, and it was a great experience,” said Dalme. “But how many times do you go through the aches and pains of the business world and see nothing but a positive report and financial statement? Very few people can say they were part of something like this.”

Within a month Dalme turned Chahta Enterprise around through some straightforward operational decisions that eliminated waste, reduced cost and focused on producing a quality product, through what Dalme humbly calls “CSM,” common sense management. By 1998, Chahta Enterprise was a 190,000-square-foot facility with 1,200 employees, a total annual payroll of $12 million and annual sales of $43 million. The company’s customer base includes: Ford Motor Company, Delphi Automotive, Hella Lighting, Sumitomo, Schefenacker, Lear Seat, Visteon Systems and ADAC.

Then, what Dalme learned from Chief Martin was that self-determination required a will to change, and fortunately Chahta Enterprise made an incredibly wise change in April of 1998.

Anticipating NAFTA
Credit the Choctaw with reading the economic warning signs ahead of time. In the post-NAFTA world, it was clear that labor costs (even on an Indian reservation in Mississippi) could not compete with Mexico. So Chahta Enterprise management made the bold move to move the wire harness manufacturing business to a plant in Sonora, Mexico, where today 1,300 employees work for the company.

In addition to sensing the competitive pricing of the global economy, Chief Martin also recognized the lucrative profits to be had in gaming. Today, the Silver Star Resort and the Dancing Rabbit Golf Club are world class resort destinations. Projects currently under construction include a sports complex, Hard Rock Café Beach Club and Hotel and the Fitness and Wellness Center. Yet according to Dalme, building these resorts and staffing them with Choctaw non-Indians is a significant part of the economic recovery but the tribe’s ongoing success will depend on continuously sensing business opportunities and seizing upon it.

Putting laundry on the list
It was Dalme who saw the potential in building a laundry business that would first service the hotel and casino industries, but eventually establish a non-Indian client base. “I remember saying at the time that we don’t know anything about the laundry business, but we were getting ready to learn,” said Dalme, who managed a $2 million investment in the latest laundry technology and equipment in the vacated wire harness facility in Mississippi. “We applied what had learned in manufacturing, things like lean manufacturing principles, statistical process control, and continuous process improvement to the laundry business.”

In one year Chahta Enterprise’s laundry business had 15 customers, including several restaurants and hospitals. With an initial goal of having 20 percent of business from beyond the reservation the first year of operations, 40 percent the second year and 60 percent the third year, after 14 months, Chahta’s laundry operation garnered 60 percent of its business from outside the reservation.

In addition to laundry services, Chahta Enterprise has diversified its holdings to include a high-tech remote sensing and satellite imagery company. Operations are located in Mississippi, Michigan, Arizona, Florida, South Carolina, Illinois and Mexico.

The tribe is currently the sole owner of 18 companies and the majority owner in three joint ventures. There are 8,900 tribal members with approximately 4,000 in the workforce. The positive economic impact the tribe has had on the Mississippi is nothing short of miraculous: $40 million in tax revenues and 15,274 jobs, a $387.7 million annual payroll, 65 percent of which consists of non-Indians.

Dalme, who has experienced firsthand what must be considered one of this country’s most remarkable reversals of fortune, explained how the Mississippi Choctaw have not only changed the way their people live, but also how they and all people think. “When I first came here and told people in town I worked at Chahta, they would say, ‘Why on earth would you work with those Indians?’ Now, when I tell people I work at Chahta, they ask me if I can help get them a job on the reservation.”

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