The State of Manufacturing?


Renaissance. If there was a central theme to Friday’s Connecticut Creates! manufacturing summit in Trumbull, it’s this: while the timeline remains elusive, there will be a resurgence in the sector, nationally and statewide.
“Being a manufacturer in the US is still a great opportunity,” said Brian DiBella, president and general manager for Legrand’s Wiremold division. “We continue to see a renaissance in manufacturing and there’s a bright, bright future.”
That vision is built around four goals, the first seizing on the United States retaining its position as the world’s leading manufacturing nation and the ability to attract foreign investment.
The second goal demands US manufacturers expand access to global markets, as keynote speaker Steven Menaker, East Region Manufacturing Leader for the consulting firm McGladrey, explained.
“The manufacturers in this country that are thriving and growing right now are the ones that are pursuing both US and global sales,” he told a crowd of 225 people.
Workforce development – attracting and retaining the skilled workers demanded by the 21st-century economy – and the ability to innovate are goals three and four.
Major challenges
Major challenges stand between the manufacturing sector and the successful realization of these goals, not the least being the fiscal cliff, in temporary remission until April.
“If Congress doesn’t resolve the fiscal cliff, there will be a recession in 2013,” Menaker said, adding that defense sequestration alone would cut one percent off GDP and cost 130,000 manufacturing jobs.
Along with what Menaker called ‘taxmagdeddon,’ lurk proposed Environmental Protection Agency rules and other regulatory hurdles, workforce development investment, the uncertainty of federal healthcare reform, and energy prices.
Menaker says there’s plenty of optimism that the sector can navigate these challenges, noting that the percentage of thriving or growing manufacturing companies remained steady over the past two years.
“The path of our recovery is dictated by the special type of recession we endured – but it is a recovery,” said Menaker (pictured above moderating a panel discussion between Bigelow Tea’s Don Janezic, Wiremold’s Brian DiBella, and Susan Lesser from nPlusOne Consulting).
Job creators
From December 2009 through last July, Michigan, Ohio, Texas, Indiana, and Illiniois lead the nation in creating manufacturing jobs.
Connecticut, which added just 800 manufacturing jobs in that time, was not in the top 20 states. (And, over the subsequent five months, Connecticut lost 2,600 manufacturing jobs.)
“Workforce development, infrastructure, federal and state regulations, the high cost of doing business here,” said CBIA economist Pete Gioia, listing the negative factors impacting Connecticut manufacturers.
“Among the biggest concerns are the state’s fiscal policies and the lack of awareness among lawmakers about manufacturing.”
Staying competitive
Nonetheless, Connecticut manufacturers are competitive nationally, says Gioia, citing productivity, R&D, exports, and workforce quality.
Connecticut manufacturers are addressing many of the issues over which they have some control, particularly in becoming more efficient, better managing healthcare and other labor costs, and rolling out sustainability (or green) programs and processes.
“You will be at a significant disadvantage if you’re not implementing sustainability programs,” said Wiremold’s DiBella. “The ROI for energy efficiency systems is worth the effort.”
Don Janezic, CEO for Fairfield-based Bigelow Tea, said energy efficiency efforts, including investments in solar technology and new equipment, managing demand times, and membership in a buying consortium, played a major role in controlling the company’s production costs.
As for labor costs, Janezic said Bigelow’s experience showed broad-based wellness programs were the best solution for managing healthcare costs.
Wiremold emphasizes employee management through health savings accounts, wellness programs, and 100% reimbursement for preventitive care costs.
“For every dollar invested in wellness programs, expect $2.31 to $2.71 in return,” said nPlusOne consulting’s Susan Lesser.
Workforce development
Where are the next generation of skilled manufacturing workers? Connecticut manufacturers are losing skilled labor to retirement, with a multitude of efforts and programs in play to develop a new workforce.
“There are pockets of people in the state doing things very well,” said New Britain-based Okay Industries president Jason Howey. “What we really need is a comprehensive approach, driven from the governor’s office down.”
Doug Johnson, vice president of operations for Marion Manufacturing in Cheshire, said manufacturing has “an identity crisis,” with high school students and parents not always understanding that the sector is very different today.
“Manufacturing jobs are among the hottest in Connecticut right now,” he said. “And we don’t have enough skilled applicants to fill those positions.”
Howey said the very nature of manufacturing today demands major investments in time, resources, and money, noting it “takes five years or more before a new hire becomes productive.”
“We’ve got 16-year-olds running $50,000 machines,” said David Tuttle, who manages the manufacturing program at Platt Technical High School. “They’re not afraid of technology.”


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