Yes, America, there is a manufacturing renaissance – that’s the opinion of Jeff Oravitz and Bill Adler, both CEOs at Ohio manufacturing companies, who were featured panelists at FABTECH’s State of the Industry — Executive Outlook Roundtable. A highlight of the first day of FABTECH 2013, Oravitz and Adler spoke to a packed house in a discussion moderated by Alan Beaulieu, President of ITR Economics.
Oravitz, President & CEO at MetoKote Corporation in Lima, OH, said that the U.S. manufacturing sector renaissance is being driven by a surge in low cost energy production. He said that many American companies that survived the 2009 downturn ratcheted up productivity and made themselves more competitive. He believes that growth is sustainable as long as the U.S. addresses the skilled labor shortage and this country’s infrastructure needs.
Adler, President of Stripmatic Products in Cleveland, OH and Chairman of the Precision Metalforming Association (PMA), believes that there is certainly a manufacturing renaissance in many areas, thanks in part to the creation of new technologies. However, he is more cautious. Using a baseball analogy, Adler believes that , since the 2009 recession, manufacturing has “hit a single and is at first base. ” However, we need to be careful “not to get picked off trying to go to second.” Manufacturing must still figure out how to be globally competitive.
Beaulieu said that the manufacturing renaissance is helped by companies moving production back to the U.S., not because of patriotism, but because costs are competitive. Oravitz agreed, saying that it bodes well for U.S. manufacturing that supply chains are getting shorter and there is a growing emphasis on quality.
The panel agreed that one factor that can slow the U.S. manufacturing renaissance is the skills shortage. Adler said that Stripmatic is focused on training the next generation of workers. His company has become a good alternative to those students who may have not finished college but possess an aptitude and desire to learn a technical skill. He said that his company provides a great deal of technical training, including on automation and laser parameters, and provides great career opportunities.
Oravtiz agreed that talent acquisition is one of the greatest challenges for the manufacturing sector . He said that MetoKote Corporation has been successful in developing talent within its organization. A key component is that the company has a globally consistent metrics on the shop floor so that they can provide the same technical and skills training to its employees around the world.
Adler added that one obstacle to attracting the younger generation to manufacturing is that parents, teachers and school counselors have an old vision of the sector as “dirty and grimy.” He said that PMA members have been addressing this by inviting students and teachers into their facilities to show them the technologies in use. Once these students and teachers see firsthand 21st century manufacturing, their perceptions change. Oravitz added that the sector must do a better job at promoting manufacturing as a career: “Manufacturing is an exciting field that offers good jobs with good wages and benefits making cutting edge products using new technologies.”
The panelists also had a message for elected officials and policymakers in Washington, DC: Don’t stall the manufacturing renaissance by enacting policies that counteract the U.S. advantage in energy and productivity, or that result in restricting access to capital. The ongoing uncertainty inside the Beltway makes it difficult to make long term investment decisions such as making new capital expenditures.
Adler concluded that he is hopeful that Congress could implement meaningful tax reform that helps small business owners by simplifying the tax code. If done correctly, he believes that companies would be willing to give us some tax deductions in return for a simplified code.
The panel ended with some Q&A that touched on raw material prices (has not been a major problem for the panelists in recent years); health care reform (it’s a worry for them and adds to uncertainty); coal-fired electricity (their companies are using more natural gas and better managing the energy they use); and, the impact of 3D printing impact (a game changer for them on prototyping and tooling but not, at this point, for high volume production).
The session ended with Beaulieu asking the audience for a show of hands of those who are optimistic about the future of manufacturing. To the surprise of no one – more than half raised their hands.