Alexander Coolidge reports:
This is what happens when manufacturing regains its stride:
• Intelligrated in Mason hires 300 new workers to design and build conveyer systems, and Mazak in Elsmere hires 75 new workers to make industrial cutting machines.
• Total Quality Logistics in Union Township, Clermont County, adds 200 jobs to move truckloads of manufacturing supplies and finished products.
• The University of Cincinnati Clermont College gets a $250,000 grant to train 100 new workers in advanced manufacturing skills.
Manufacturing employment in Greater Cincinnati and Northern Kentucky hasn’t been this robust since December 2008 – before the recession whacked 13,300 jobs from the sector. Today, manufacturing is leading the jobs recovery in Ohio, Kentucky and the region.
Latest state data show that 114,700 people are employed in manufacturing in the 15-county region. That’s one of every nine workers directly employed at companies making everything from airplane parts to electrical connectors to specialty trailers.
Add in the ripple effect, and the local impact grows. Economists estimate that every new manufacturing job creates roughly two more in trucking, banking, sales and other businesses – all needed to support the manufacturing surge.
“The multiplier effect is huge – the input is so great and so diverse that it reaches other sectors,” says LaVaughn Henry, vice president of the Cincinnati branch of the Federal Reserve Bank of Cleveland. “Those dollars roll over because as the sector grows, it touches other parts of the economy.”
A combination of factors is driving manufacturing’s rebound: The rising cost of making goods overseas is sending American jobs back home. U.S. labor is less costly and more productive than ever. And the quality of American-made goods has never been higher.
But the need for more workers also is exposing a manufacturing talent gap. Technology is doing the stamping, bolt-tightening and assembly-line work that manufacturing workers used to do. Today, employers need workers who can tell the high-tech machinery exactly what to do.
Until more workers are trained in those skills, the recovery won’t be as strong as it could be.
“Doing the same, repetitive task over and over is on its way out,” says Dennis Ulrich, director of Cincinnati State Technical and Community College’s Workforce Development Center in Evendale. “There are still machine operators, but those require more skills.”
Specific niches can lead to riches
Morris Technologies Inc. is on the front end of high-tech, precision manufacturing that’s changing with the times.
At the company’s Sharonville facility, a mechanical arm sweeps a thin layer of metal dust inside a box that looks like a microwave sitting on top of a computer.
Sparks fly as a laser inside fuses the dust in a circular pattern to the cured stainless steel of the previous layer. The naked eye doesn’t see the laser at work, only the afterburn as the surface glows from the heat.
The part is now a fraction of a hair’s width thicker. The automated process repeats over and over, adding shape to what will become a jet engine part. It will be complete in five days.
Morris Technologies makes prototype components for private customers in the aerospace and medical industries. It also does work for the U.S. Department of Defense and Department of Energy. The parts are not mass-produced. They are painstakingly manufactured because they must be perfect.
Chief executive officer Greg Morris says his specialized business has grown without fear of being undercut by cheaper foreign competitors. The work is so precise, and the individual orders are so small, that it doesn’t make economic sense to fill a barge with parts and send it around the world.
Morris Technologies is hiring because sales are rapidly growing. The company employs 125 workers, many of them programmers and machinists. More than 15 workers were added this year.
“Success may require more people,” says Jim Brock, an economist with Miami University. He notes that automation cannot make judgment calls; only highly trained humans can do that.
“There’s no substitute for skilled eyes, hands, intuition and judgment,” he says.
Jobs coming back from overseas
Intelligrated and Mazak are adding hundreds of jobs that show the resilience and renewal taking place in the sector. Both businesses also show the strength of manufacturing durable goods – typically large items that continue to be useful for years.
Intelligrated chief executive Chris Cole says his company has benefited from the desire of retailers and other companies to emerge from the economic downturn with more efficient conveyer systems.
“We provide productivity solutions for our customers,” he said. “The economy is flat, and they’re looking for tools to better service and efficiency.”
And Mazak vice president Mike Vogt says his business is seeing growing demand from other manufacturers in the Midwest. The company builds large machines for cutting metal.
Other local manufacturers are benefiting as clients turn away from foreign production to seek higher quality at home.
Dan Cunningham, chief executive officer of Long-Stanton Manufacturing Co. in West Chester Township, gained a new customer last year after the client had problems with an overseas supplier. Long-Stanton makes metal products and assemblies, ranging from airline and auto parts to brackets for window treatments.
Cunningham’s new client designs specialty, high-end kitchen appliances. But when it received a big shipment from its factory in China as the holiday season approached, the client got an unwelcome surprise: The appliances didn’t work very well.
While overseas manufacturers produce tons of quality goods, Cunningham notes that complications can be magnified by long distances. If there are problems, a reorder can be costly, time-consuming and disruptive.
Cunningham is not bashing China – Long-Stanton owns or partially owns two Asian factories in addition to its local plant that employs 75 workers, up about 10 this year. But having a local operation can make a manufacturer more nimble when the need arises.
“If you make something domestically, you can make it right in a couple weeks,” he says. “Whereas if you make it in China, it may take 120 days – and the customer may not be willing to wait that long.”
The work isn’t just limited to factories
A thriving manufacturing business also requires supplies, financing, transportation, storage and a distribution network for selling finished products.
That means jobs outside the factory as well.
Lytle Thomas, president of Burlington-based Heritage Bank, says the growing manufacturing sector is helping grow his company, too. In the past three weeks, the bank has added a commercial lender to keep up with the volume. About 10 percent of the bank’s loans are to area manufacturers, covering their real estate, equipment and inventory costs.
Heritage Bank also benefits when factories add workers because those employees often bank with the company’s lender.
“When people have a steady income, they go out and buy cars and houses – that’s the lift to the whole community,” Thomas says.
Kerry Byrne, executive vice president at Total Quality Logistics, says more manufacturing jobs mean more business for his company that brokers freight space on trucks.
“Obviously, a boost in manufacturing is good for our industry because there is more freight to haul,” Byrne says. “We have seen marked improvement in truck tonnage and load volumes since the worst part of the recession, but there is room for improvement across the industry.”
Byrne says his company will continue to add new hires as it expands.
“This opportunity is certainly related, but not limited to, what is happening in manufacturing,” he says.
Technology is a key reason manufacturing is growing, but it also presents an ironic challenge: Finding the right workers following a recession that shed thousands of jobs. The new technology requires higher-trained and -educated workers who can operate heavy equipment – as well as program it.
Cincinnati State’s Workforce Development Center works closely with more than 100 local employers to design training programs. Among the students are newly hired GE Aviation engineers with no manufacturing background. The center conducts a 32-hour training program where participants take apart and reconstruct an aircraft engine.
Cincinnati State’s Ulrich says he sees the strain.
Manufacturers are struggling to find workers with the right skills, while idled workers’ skills fall behind. Even entry-level positions are sometimes difficult to fill because applicants lack basic high school math or reading skills.
“Demand for workers has been robust for the last six months,” Ulrich says.
“But sometimes there’s a huge disconnect between skill sets and what’s needed.”