Reliable Electricity, Reliable Jobs

How one innovative manufacturer transformed a local economy

By Brad Pearce, writer of “The Wayward Rabbler” substack

Electric power has such an impact on our lives that the lightbulb is itself the symbol of a good idea. But while we may incessantly argue over power sources and “clean energy,” most give little thought to the technology, which makes our electric grid work after the power is generated. 

In the 1970s a doctoral candidate, Edmund O. Schweitzer III, was putting a great deal of thought into applying modern technology to our power systems, particularly the use of microchips in electrical relays. Ultimately, armed with an invention he believed in, he left his stable teaching job and founded Schweitzer Engineering Laboratories in 1982, and began selling the SEL-21, the first computerized power relay. 

From beginning the company in his basement, SEL has now grown into one of the largest employee-owned companies in the United States, while transforming the small city where it was founded, Pullman, Washington.

From beginning the company in his basement, SEL has now grown into one of the largest employee-owned companies in the United States, while transforming the small city where it was founded, Pullman, Washington. At the beginning of this year, Dr. Schweitzer announced that, now age 77, he would be stepping back from his role as company president. The company he built, now the largest private employer in Eastern Washington, has provided a model of a worker-focused American manufacturing company in an era otherwise defined by mergers, layoffs, and outsourcing that has persistently challenged the role of manufacturing in America’s economy. The benefits of manufacturing employment to Pullman and other communities that are home to Schweitzer factories have been immense, while much of the world benefits from the technology they produce.

Schweitzer Engineering Laboratories declined to comment on or agree to interviews for this article, citing a busy corporate schedule.

The Palouse region where Schweitzer Engineering Laboratories is located is best known for its expansive, productive farmland, a leading producer of wheat, barley, peas, lentils, garbanzo beans, and canola. The region has been home to many innovations, such as when the Seventh Day Adventists, who commonly follow a vegetarian diet, introduced lentils as a vegetable protein, which would become so popular that Whitman County ultimately became the nation’s leading producer of the crop. Washington State University in Pullman is the state’s major land-grant agricultural university and the home to much important research, including extensive contributions to the development of semi-dwarf wheat, the main variety that most people alive today recognize. The self-leveling harvester was also invented here, by the great American inventor Raymond Hanson, and has been adopted throughout the world.

Something people don’t associate with Eastern Washington, but should, is electricity. Spokane, Washington, the regional “capital,” was one of the first cities in America to be electrified, with the city’s first dam powering electric streetlights by the mid-1880s. Even my small town had an electric flour mill in the early 20^th century, built by the Potlatch Lumber Company, which got fed up with the water-powered mill getting in the way of their logs floating down the river. 

The Federal Columbia River Power System and its flagship Grand Coulee Dam are among the largest civil engineering projects in human history, making electric power in the region cheap and abundant. In modern times, this electrical generation has taken desert cities in Central Washington that might otherwise be considered undesirable locals and turned them into major hubs for data centers, such as the Bing Search Engine, as well as for crypto “mining,” which uses large amounts of electricity. The importance of electricity to the region’s economy caused Washington State University to maintain a robust electrical engineering program, which drew a young Edmund O. Schweitzer, III to enroll in a doctoral program there in the 1970s.

Edmund Schweitzer III is from a family of inventors. In fact, he is the third Edmund Schweitzer to start his own successful electrical equipment manufacturer. In a 2020 interview at the S4 technology security conference, which bills itself as the world’s largest security and operations technology event, he was asked when he started inventing, and said that we all start inventing around age two when we become old enough for our parents to have to tell us “no.” 

This is a profound way to view man’s natural capacity for innovation, even if the Schweitzers may be a family of unusually talented inventors. He said in a different interview for Pacworld that the greatest influence on him was his father, who was “always building something, fixing something, doing something, and I was always there learning.” After graduating from college he worked for the Department of Defense for five years in the late 1960’s and early ‘70s before going back to school at WSU to get his doctorate, citing the university’s strong interest in power systems and several important professors working there at the time.

Schweitzer’s doctoral research was on how to incorporate microprocessors into power systems. It can be difficult now to remember how recently the country “computerized,” but at the time our power grid relied on mechanical relays, like the ones in an old vehicle, but much larger. In short, a mechanical relay is a coil which can function as an on-off switch when it receives the right voltage but has no other function; such coils commonly fail if they receive the wrong voltage, but don’t record any data indicating if it was a system failure or if the relay itself simply wore out with age.

While he was teaching after receiving his doctorate, Dr. Schweitzer continued to work on his invention in his basement. In the Pacworld interview he says that, he felt compelled to leave his teaching job to start a business because, “I really needed to see if I could make things people would use and like.” After some years of putting a team together on a shoe-string budget he had the SEL-21 ready for market, the world’s first microprocessor power relay.

In layman’s terms, the SEL-21 had two primary benefits over older, mechanical relays. The first is that it can detect the locations of a fault, whereas previously the utility had to send a worker to drive along the line until he saw a downed wire. The second is that it can switch off the relay when a fault is detected, a key safety feature. By being computerized, it is also able to provide a variety of useful information about the functioning of the power system to technicians. Notably, in a sign of Dr. Schweitzer’s forward-thinking nature, the SEL-21 had a two-password system, which is to say a separate password for the user and the administrator. This may seem obvious now, but this was in the era before the first harmful computer virus when many thought little about the importance of computer security. Dr. Schweitzer credits his time working at the Department of Defense for considering malicious actors attempting to access the power system. The company has remained a leader in technology security.

Now, almost every power company in the United States uses SEL products, and they are in around 150 countries.

The SEL-21 revolutionized the power industry, but companies were not quick to adopt it. Any large industry, particularly a public utility, can be resistant to innovation, especially when you’ve always done things a certain way. Further, many were concerned about buying a key component for something as important as the electrical grid from a startup. However, companies’ demand for the product caused them to abandon their misgivings, and Schweitzer began to sell SEL-21s. Now, almost every power company in the United States uses SEL products, and they are in around 150 countries. A 2016 survey showed that SEL is the preferred provider of protective relays of 84% of American power utilities. SEL products are generally covered by a ten-year warranty and come with lifetime support, a business model that only works if one sells consistently high-quality products.

It took SEL ten years to grow to 100 employees. Since then, it has grown to 6,500 employee-owners worldwide, with the majority near the headquarters, though there are other US manufacturing locations and some plants in foreign countries for the purpose of preparing panels for installation in those markets.

The great fertility of the area saved “the family farm,” and little land is corporate-owned, but even so, highly mechanized grain and legume farming does not employ as many people as one might imagine, particularly in permanent in positions with benefits and retirement plans. Now, no one talks about this region as one you should aspire to leave.

The development of SEL into a large company in Pullman has been massive for the surrounding region. When I was growing up in the 1990s, it was a bad time for small town America in general, a time of de-industrialization before the economy adjusted to the internet and other changes. This region, which was not previously particularly industrial, was not hit as hard as former manufacturing centers that now populate “the Rust Belt.” Still, it was taken for granted that anyone growing up here who wasn’t set to inherit a farm would want to “get out.” The great fertility of the area saved “the family farm,” and little land is corporate-owned, but even so, highly mechanized grain and legume farming does not employ as many people as one might imagine, particularly in permanent in positions with benefits and retirement plans. Now, no one talks about this region as one you should aspire to leave.

A 2016 article from The Spokesman Review, the largest regional newspaper, about how SEL transformed Pullman, notes that after the university was founded in 1890, “for most of the following century, WSU’s overwhelming influence made Pullman essentially a one-company town.” Neighboring Moscow, Idaho is also a land-grant university city, with WSU and U of I being the geographically closest land-grant universities in the country, making the region one of the most university-dependent in the nation. 

SEL’s continued growth into a major manufacturer has changed this, as the region has transformed into a desirable place to live, with few locals leaving save for military service. Countless people I know have gotten great jobs at SEL, many without university degrees, and live comfortable middle-class lives. The great majority ultimately move “off the line,” which is to say into a management or office position. Pullman is regularly featured in articles titled things like “Where Small Town America is Thriving.” That 2018 article named Pullman Forbes’s best small city for manufacturing in America.

Being employee-owned also saves the companies from the tribulations of international capital, in an era where the American economy is ever more financialized and corporations are commonly merged or sold for parts with little concern about how it may impact people who rely on them.

SEL offers a real career path, with assemblers earning a base pay of $19 an hour at the Pullman headquarters, with a regular schedule and optional overtime hours. In addition to the employee stock ownership program, the company offers excellent health and dental care, paid time off, which begins accruing on the first day, and paid company days off annually. There is on-site daycare, as well as an on-site doctor, free for employees and their families. 

In an incredible testament to the overly complex nature of the American insurance system, Schweitzer has provided an in-house medical clinic since 2013. While they didn’t cut any other benefits and employees can still go to their regular doctor, this offering saves employees and their families money on health care costs and makes health care access more convenient. SEL also funds university education for employees and other training program, noting on their website: “Current SEL employees in manufacturing leadership, testing, quality assurance, and other roles—including our senior vice president of manufacturing—started as assemblers.” And there are plenty of other smaller benefits to working at SEL, such as the company buying a catered lunch for all employees each Friday, a major boon to local restaurants on the providing end of this large catering job. In short, it provides entry-level employment appropriate for young Americans who hope to start and support a family, something sadly uncommon these days.

And the Schweitzers have been a local boon even beyond SEL. Both Dr. Schweitzer and his wife Beatriz, as well as SEL the company, have fallen naturally into the position of local benefactors, making impressive charitable donations all over the region. In just one indicative donation, in 2022 the Schweitzers donated $2.2 million to the Boys and Girls Club of the Lewiston-Clarkston Valley, while the company donated another $1 million. That same year, the Schweitzers and SEL each made $10 million pledges to WSU towards a “student success” building to be a central hub for students in the Engineering and Architecture program. Dr. Schweitzer has also made many donations to the Republican Party. The Schweitzers are supporters of Catholic Charities, having been the primary donors for a 50 unit shelter for the chronically homeless in Spokane and having helped build the neurology clinic at a local hospital. In 1998, they donated $2.1 million to build a public pool at the local high school, Dr. Schweitzer, himself being a swimming enthusiast, said something he missed when he is in Pullman is access to that kind of nice indoor aquatic center. Throughout its existence, both the company and the Schweitzers have demonstrated a degree of social responsibility and genuine noblesse oblige that is all too often absent in modern American life. Few areas of life are untouched by the wealth SEL brings to the region.

There isn’t a single answer to how SEL has seen such great success in an era where American manufacturing has suffered, though Dr. Schweitzer primarily attributes it to hard work, focusing on fundamentals, and only making quality products. 

In the S4 conference interview, he said the term “beta testing” is banned within the company because any product either works well enough to stand by or doesn’t work and can’t be released. Regarding public policy, though, he is something of an old school Reaganite and a big believer in the economist Milton Friedman, somewhat ironically supporting the policies that many believe have contributed to the decline of American manufacturing. 

It’s worth acknowledging that these political stances sound a lot different coming from someone who uses trade to manufacture in the United States and employs many Americans abroad, as opposed to an intellectual telling you that it won’t impact you if factories shut down, while H-1B holders take what jobs are available in America.

Where today’s politics are concerned, SEL releases an annual Index of Freedom, which ranks states based on their adherence to free market principles. Unsurprisingly, their home state of Washington ranks low, 43rd in 2024, though they note the abundance of affordable energy helps alleviate problems caused by the state government. Idaho, where SEL has greatly expanded in recent years with new manufacturing facilities in the nearby cities of Moscow and Lewiston, ranks third. Dr. Schweitzer has also publicly spoken in favor of free trade, against restrictions on legal immigration, and against President Biden’s 2021 vaccine mandate. As recently as March 1, the company released an editorial written by Dr. Schweitzer titled, “Tariffs Sink All Boats” citing both Adam Smith and Milton Friedman. For a time, he even kept a blog advocating for free market principles. It’s worth acknowledging that these political stances sound a lot different coming from someone who uses trade to manufacture in the United States and employs many Americans abroad, as opposed to an intellectual telling you that it won’t impact you if factories shut down, while H-1B holders take what jobs are available in America. It’s easy enough to agree that there is no good to the government getting in the way of this particular business, though he is perhaps thinking of people like himself and not those who wish to loot the American economy.

Though Dr. Schweitzer has stepped down as president of the company he founded, he still intends to remain heavily involved, “contributing more as a mentor, inventor, collaborator and teacher.” It seems that at age 77 his passion for inventing and electricity remains as strong as ever. Dr. Schweitzer has won countless awards recognizing his success, including being inducted into the Inventor’s Hall of Fame and being made a Fellow of the Institute of Electrical and Electronics Engineers. Despite his incredible success and all the good he has done the world, he remains a fundamentally humble and approachable individual, telling an interviewer that his motto is “do business the way our moms would want us to.” Another one of his sayings is “the best way to predict the future is to invent it and build it yourself.” Schweitzer Engineering Laboratories, now selling a wide range of products all over the world, shows no signs of slowing down at inventing the future. Just this year, they have moved into an entirely new industry, marketing a medical imaging device for the early detection of autism. 

Some people believe we can’t build things in this country any more, but the entire career of Dr. Edmund Schweitzer III shows that American ingenuity is still a serious force as long as one has a good idea, strong values, and the determination to succeed. 

Perhaps the key to what makes SEL different from most other corporations is the employee ownership. In America, it is generally the case that corporations are obligated to maximize shareholder profits, and at any time, the board could be bought out, or the president replaced if they are immediately profitable. This can get in the way of long-term planning and focus on quality.

Ownership by financial interests also creates a culture where employees are less important and can be sold out for a small benefit to the stock, backed by politicians and intellectuals who are happy with a “service economy” where some work in financial services and the rest work in hospitality services. Adopting a perspective like SEL has displayed would correct for this. If more large businesses care about their products, employees, and communities instead of trading stocks like playing cards to accumulate more money every day, unlimited free trade and lax immigration wouldn’t matter so much because the American economy would better serve American workers and their families. Perhaps finance is one of the few aspects of the American economy that is truly underregulated.