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Cincinnati Focuses on Re-industrialization to Create Prosperity

Thursday, December 8th, 2016

Last week, I spent two and a half days in Cincinnati, Ohio as the guest of Source Cincinnati, an independent, multi-year national social and media relations initiative that works to enhance perceptions of Cincinnati as a world-class Midwestern region. I met with Julie Calvert, Executive Director, during my visit, but my personal guide and host was Paul Fox, VP of Strategic Initiatives at Proctor & Gamble and “Executive on Loan” to Source Cincinnati for a year.

From Mr. Fox, I learned that Cincinnati is the third largest city in Ohio and had such interesting nicknames as “Porkopolis” in the past because it was the largest pork packing center in the world and the “Queen City of the West,” for its ideal location on the Ohio River and its rich culture and heritage of a predominantly German population who settled Cincinnati in the late 1700s.

After arriving late Tuesday afternoon, Mr. Fox and I had dinner with David Linger of TechSolve, and Scott Broughton, Center Director for Advantage Kentucky Alliance at the WKU Center for R&D at Western Kentucky University in Bowling Green, KY. TechSolve is a 30-year old consulting firm that is a State of Ohio Manufacturing Extension Partner (MEP) affiliate, and Advantage Kentucky Alliance (AKA) is the MEP for Kentucky. Mr. Linger just took over the reins as President and CEO on September 1, 2016 after Gary Conley retired from 20 years of service.

Mr. Linger, said “There are about 2,500 manufacturers in the Ohio region of metropolitan Cincinnati, and Cincinnati used to be known as the “Machine Tool Capital of the U. S.”, but very few machine tool companies exist today, including its most well-known machine tool company, Cincinnati Milacron,” after its machine tool line was sold to Unova. TechSolve provides manufacturing and health care consulting. It has a focus and strength in process improvement, machining, and innovation — applying these skills to help businesses find long-term solutions and promote problem-solving cultures.

Mr. Broughton said, “AKA is a not-for-profit partnership that provides assistance and training to help manufacturers of all sizes grow, improve their manufacturing and business strategies and processes, adopt advanced technologies, increase productivity, reduce costs, and improve competitiveness. Manufacturing in Eastern Kentucky was mainly related to the coal mining industry, and two-thirds of the companies have gone out of business. We have focused on helping the remaining manufacturers to understand their core competencies to market to new industries, such as aviation and automotive. Our services include:  business growth services, continuous improvement services, and workforce solution services.”

On Wednesday morning, we had breakfast with Laura Brunner, President/CEO, and Gail Paul Director of Communication Strategy of the Port of Greater Cincinnati Development Authority. She told me that the Port Authority was established by the City of Cincinnati and Hamilton County in 2001 and is the second largest inland port covering 26 miles from the Indiana/Ohio border. In 2008, the Port Authority was reformed and empowered to take a leadership position in regional economic development. It is a quasi-public agency that operates collaboratively with dozens of economic development, community and corporate partners.

Ms. Brunner presented me with a report prepared for me, titled “Manufacturing in the Greater Cincinnati Region. As background, “The Port Authority leverages its infrastructure strengths and development-related expertise to design and execute complex projects to improve property value, catalyze private investment and promote job creation.”

I was astounded when she told me, “The Cincinnati region has lost 67% of its manufacturing jobs.” The report states, “Manufacturing was a primary component of Cincinnati’s economy until its peak in 1969 when 43 percent of the workforce in Hamilton County was employed in manufacturing jobs. Today, lower-wage service-providing jobs far outnumber manufacturing jobs by about 7:1…From 1969-2015, the number of people employed in manufacturing decreased from 146,000 to 48,000.”

She said that the Port Authority Board of Directors has established a vision to transform Cincinnati to prosperity by 2022 through “repositioning undervalued properties and re-building neighborhoods.” The report she gave me states that the strategies for success are:

  • “Industrial Revitalization – redevelopment of 500 acres of underutilized industrial land along key transportation corridors
  • Neighborhood Revitalization – transform ten communities for lasting impact, including residential properties and commercial business districts
  • Public Finance Innovation – cultivate a nationally-recognized public finance program that supports economic and community development efforts

The projected Return on Investment for these strategies is:

500 industrial acres redeveloped 10 revitalized communities
8,000 new jobs 300 quality homes
$565 million in annual payroll 50 commercial acres with 400K SF
$550 million in capital investment 130 new businesses
$8 million in income taxes Increased property & income taxes
$14 million in real estate taxes Improved lives of residents

In June 2015, the PGCDA Board approved establishment of the industrial and neighborhood strategy, development of internal resources, communication strategy, and the financing and fundraising plan to support the strategies.”

The report states, “The proposed redevelopment of approximately 2,000 acres of industrial land through Hamilton County for Manufacturing uses will have a considerable impact on the Greater Cincinnati Region.”

The first sites for the Redevelopment Pilot program have been selected, and the first funds have been obtained for acquisition of land parcels, demolition/remediation of existing buildings, and site preparation. The first site is assembled and is scheduled to open in 2017.

In the meeting with Ms. Brunner and Paul, I was also provided a “Manufacturing Attractiveness Study” by Deloitte Consulting LLP presented on October 3, 2016 to the Greater Cincinnati Port Development Authority, TechSolve, and Cushman and Wakefield.

The study states, “The current lack of easily developable real estate (cleared, access to utilities, free from environmental concerns, etc.) in the Cincinnati area likely puts the city at a significant disadvantage for attracting manufacturing investments.

The Port Authority’s operations focus on transportation, community revitalization, public finance and real estate development makes it especially well-equipped to evaluate and address opportunities to redevelop and reposition sites formerly occupied by industrial operations.”

The Port Authority seeks “to achieve the following objectives:

  • Analyze the last 5 years of manufacturing deployments in the Ohio Region (Ohio and surrounding states)
  • Understand trends in urban manufacturing through case studies
  • Identify demand-side location factors that drive location decisions in the advanced manufacturing, food and flavoring, and Bio-Health (Life Sciences) industries
  • Understand the strengths/ weaknesses of Cincinnati as business location”

In analyzing the Manufacturing Investments for the Ohio Region from 2011-2016, the study revealed:

States # of Project Announcements Capital Investment Jobs Created
Indiana 350~ ~$13.4 ~37,000
Ohio 271 ~$17.6 ~34,000
Kentucky 230 ~$9.0 ~24,000

“Indiana, Ohio and Kentucky saw the most number of project announcements along with largest amounts of capital investment over the past five years.”

“The majority of the manufacturing investments in Ohio over the past 5 years are spread throughout rural areas within commutable distances of large metropolitan areas (Cincinnati, Dayton, Columbus, Akron and Cleveland.) Based on FDI data, 14 manufacturing projects were announced in Cincinnati within the past 5 years.”

The Deloitte study stated “Advanced manufacturers are highly interested in labor quality and availability as well as minimizing risk related to site development and neighboring use concerns.” The two highest factors are: “Labor Quality and Availability (engineers, technicians and operators) and Real Estate (Site readiness, Capacity and availability of utilities, and Neighboring use/pollution). Labor quality, labor availability and supply chain tend to be the key drivers for food industry in making location decisions.

The study showed that “A 1-hr drive time from downtown Cincinnati allows access to a significant labor force, with over 2.5 million in population.” The manufacturing industry represents 14.34% of the Cincinnati Metro economy. Persons with Associate degrees (20.12%), Bachelor degrees (11.97%), and graduate degrees (8.42%) represent 50.51% of the population, and another 45.71% of workers have a high school diploma (26.08%) or some college (19.63%).

Other advantages are: “When compared to the states surrounding Ohio, Ohio has a relatively low average industrial electricity price;” and “Cincinnati is located right in the heart of the most utilized truck routes in the country and has a relatively low percentage of roads requiring significant maintenance when compared to nearby states…”

The summary findings of the report were:

  • “Cincinnati has an advantage in the presence of industrial engineers, machinist and tool/ die makers, as well as a large supply of lower skilled production workers, giving the area a talent proposition to attract manufacturing deployments
  • However, a key driver of the evaluation process for manufacturing deployments is developable sites… Cincinnati currently lacks suitable real estate options to entice most manufacturing operations
  • Given Cincinnati’s availability in key manufacturing skill sets and low/average cost in several talent segments, an investment program to prepare site options would enhance its ability to attract manufacturing investment.”

Our next meeting was with Kimm Coyner, V. P. Business Development & Project Management of REDI Cincinnati, which was spun out of the Cincinnati Chamber in 2014 with the support of Jobs Ohio. REDI Cincinnati covers 15 counties ? five in Southwest Ohio, seven in northern Kentucky, and three in Southeast Indiana, through which the Ohio River runs in the center.

Ms. Coyner said, “REDI is solely focused on new capital investment and attracting and expanding manufacturing to create good paying jobs. We have 165 public and private members. Our team identifies opportunities to attract businesses to the region by developing relationships with companies and new markets – domestically and across the globe. We provide connections to the resources that take startups to the next level and grow existing businesses. We connect companies to the region’s assets, advantages and business leaders to secure Greater Cincinnati’s place as one of the world’s leading business centers.”

She told us that railroads were the key to industrial development of the region in the 19th Century to provide transportation beyond the river. She said, “While Cincinnati arguably stayed too long in the manufacture of carriages and missed out on being a primary automotive manufacturing center like Detroit, we remain a major tier 1 supplier to that industry with hundreds of manufacturers and a significant talent base. We have five key industry clusters:  Advanced Manufacturing, Information Technology, Food and Flavorings, BioHealth, and Shared Services. Advanced Manufacturing is made up of automotive, aerospace, chemicals and plastics and additive manufacturing/3D printing. Our region is the #1 supply state to Boeing and Airbus. We have nine Fortune 500 companies headquartered in Cincinnati, and four of the nine are manufacturers: AK Steel Holding, Ashland, Kroger and Procter & Gamble.”

I was subsequently emailed a list of the top ten employers, nine of which are manufacturers:

  • Kroger 21,646 employees
  • GE Aviation – 7,800 employees
  • AK Steel Holding Corp. – 2,400 employees
  • United Dairy Farmers – 2,029 employees
  • Ford Motor Co. – 1,650 employees
  • Mubea NA – 1,360 employees
  • Bosch Automotive Steering – 1,300 employees
  • Intelligrated Inc. – 1,100 employees
  • Hillenbrand Inc. – 1,080 employees
  • Milacron LLC – 1,020 employees

She added, “We participated with JobsOhio in a booth at the IMTS show in Chicago and focused on promoting Cincinnati as a site destination to companies from Germany.” She noted that Cincinnati has the second largest Oktoberfest outside of Munich, Germany. I told her that we have a strong German-American club in San Diego that puts on a good Oktoberfest featuring a band they bring from Germany.

It is obvious to me that Cincinnati leaders recognize the important role that manufacturing plays in a local and state economy. I had mentioned to everyone I met that manufacturing is the foundation of the middle class, and if we lose manufacturing, we will lose the middle class. Cincinnati learned this lesson the hard way, but I am confident that their new vision to re-industrialize Cincinnati will create good paying jobs for residents and restore prosperity to the Cincinnati region.

I was honored to be invited to give a presentation on “How to solve the skills shortage and attract the next generation of manufacturing workers” that was based on several articles I have written in the past four years (all are available at www.savingusmanufacturing.com under Workforce Development category). If Cincinnati’s leaders achieve their vision, more skilled workers will be needed. Specific recommendations I made were: (1) start to engage youth in middle school through summer camps, and robot contests (2) provide career technical pathways in high schools and community colleges, plan a Maker Faire, promote establishment of a Maker Place, and become more involved in future Manufacturing Day (www.MFGDAY.com).

These meetings provided so much information that I will devote my next article to my visits to local manufacturers:  GE Ceramic Matrix Composite Laboratory at the GE Aviation plant in Cincinnati, Balluff North America in Florence, KY, and TSS Technologies in West Chester, OH, as well as the Center for Intelligent Maintenance Systems at the University of Cincinnati.

 

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Traditional Industries Generate High-tech Spinoffs in Southwest Florida

Tuesday, November 3rd, 2015

My last article featured the stories of two companies that I visited, so this article will feature the four other companies I toured during my brief visit to Lee County earlier this month as the guest of the Lee County Economic Development Office.

Shaw Development is a family-owned company with the third generation now involved and specializes in the design, development and manufacturing of custom fluid management solutions, including Diesel Emissions Fluid (DEF) systems (headers, reservoirs, caps, adapters, strainers, etc.) for heavy-duty vehicles and machinery, such as trucks, buses, construction, mining, military vehicles, as well as agriculture and forestry equipment, power generation, and locomotive equipment.

Stephen Schock, Director of Manufacturing, gave us a plant tour first, and then we met with Lane Morlock, Chief Operations Officer. Lane told me that Frank Shaw founded the first Shaw company, Shaw Metal Products, in 1944 Buffalo, New York as a machine shop to support the military and developing aerospace market.

Shaw Aero Devices, Inc. was founded in 1954 to add engineering to their core capability and develop products with proprietary intellectual property. Frank’s son, Jim Shaw, headed up this company, and it became the industry standard for a variety of fuel, oil, water, and waste components and systems. Shaw Aero Devices moved Naples, Florida (Collier County) in the early 1980s and moved to Fort Myers in Lee County 1993. The company relocated back to Naples in 2001 after it outgrew its Lee County location.

Lane, said, “Shaw Development, LLC was formed in 1959 to transfer Shaw Aero Devices technology to ground vehicle markets particularly the lift and turn technology for fuel caps. We moved into our current 50,000 sq. ft. plant in Bonita Springs in 2008. Shaw entered into the DEF system business early on, and business has grown dramatically in the last 6 to 7 years.”

When I asked how much they outsource, he said, “We have a fair amount of capability in-house ? machining, stamping, forming, welding, paint, assembly and test capabilities. In 2009, we vertically integrated plastic injection molding by acquiring Gulf Coast Mold to bring back our molding from China. We bought a robot for welding that saves us a great deal of time. We buy some machining and sensors outside. In 2014, we added 17,000 sq. ft. to our production space in the plant and expanded our injection molding operation by 6,500 sq. ft. We added 75 employees over the past 3 years and our revenue has been increasing +25% YOY in this time period. We are now up to about 200 employees, so we are the second largest manufacturer in the region.”

In response to my question about their challenges, Lane said, “Our biggest challenge is to get the right talent. We work with Florida Gulf Coast University (FGCU) and more recently, we have engaged with the University of Miami to find the right talent. We work with local schools and the Southwest Regional Manufacturers Association to develop curriculum and manufacturing industry awareness to the local area. We are heavily involved with STEM and bring in students as interns and offer them the opportunity to work on private projects. One of our welders took a job with the local technical college to train welders, and this has provided us with an opportunity to work with this program and provide them with industry experience.”

With regard to my inquiry about being a lean company, he said that he had spent two years at NUMMI (Toyota Joint Venture) gaining an in-depth understanding of the Toyota Production System prior to spending seven years in a leadership role at General Motor’s corporate Lean Office. He added, “We have a full time Lean black belt to train our employees. We have gone from 43-day material turnaround to an average of 27 days in the past two years. Our model for business planning is Hoshin Kanri, and we have a five-year business plan and an annual business plan tied into it. Our on-time delivery is 98.8% year to date, and our quality PPM has improved by 60% in the past two years. We use a two-bin Kan Ban system and one-piece flow for our assembly line operations. Our employees are cross trained, and we review our manufacturing cell metrics at weekly meetings.”

With this emphasis on lean and the fact Shaw Development is both ISO 9000 and 14000 Certified, I could see why the company has been recognized as the Manufacturer of the Year for the State of Florida and Southwest Regional Manufacturer of the year.

My next visit was to American Traction Systems (ATS), a privately owned company formed in 2008 by Bonne Posma, as an affiliate of his other company, Saminco, Inc. ATS specializes in the design and manufacturing of electric propulsion systems for on and off road electric vehicles such the Ford Fusion, fuel cell buses, Hybrid trucks and buses, streetcars, trolleys, trams, GenSet Locomotives, Hybrid Diesel-Electric marine vessels, airline ground support vehicles. ATS has manufactured electric traction drives for Fuel Cell Buses designed by Ballard and Georgetown University, Hybrid-Electric systems for Allison Electric Drive division of General Motors as well as over 3,500 AC/DC and DC/DC controllers for underground mining vehicles. All design and manufacturing is performed in the Fort Myers, Florida facility with the capacity to deliver production of several hundred units per month.

General Manager Lem Vongpathoum led the plant tour at ATS and then we met with Mr. Bonne Posma and his niece, Cari Posma Wilcox, Vice President of Saminco, Inc. In a phone interview with Cari after returning home to clarify some details, she told me that Bonne was born in Indonesia of Dutch parents just as WWII erupted in Asia and spent the war years in a prison camp with his parents. His family returned to the Netherlands after the war and then immigrated to Canada. Mr. Posma founded Saftronics in 1968 in Johannesburg, South Africa and then opened a second facility in Ontario, Canada in 1976, which is still in operation as Saft Drives. He opened a Saftronics plant in Buffalo, New York in 1986, which he moved to Ft. Myers, Florida a year later. He left Saftronics and founded Saminco in 1992. Saftronics was sold to Emerson in 2005. After founding American Traction Systems in 2008, he opened a Saminco service office in China in 2009 and a service office in South Africa in 2011. He also opened an ATS facility in South Africa in 2013. Bonne’s energy and excitement about his companies was that of someone half his age when he showed us around Saminco and gave us a demonstration of some of the mining equipment at their testing yard.

Bonne clarified the difference between the three companies he has founded, saying “Saftronics made variable speed drives. Saminco makes solid-state electric vehicle traction controllers powered by batteries, diesel-hybrid, fuel cells and power systems, mainly for underground mining equipment. American Traction Systems makes electric and hybrid-electric propulsion systems for a variety of vehicles and equipment. I am the sole owner of both Saminco and ATS, and we have about 120 employees at the Ft. Myers Saminco and ATS plants. We also have a repair facility in Huntington, West Virginia that has 35-40 employees.”

Bonne explained, “We are competing with major corporations like Siemens, ABB and GE. We have to be more nimble to compete successfully. We competed against these companies for a Navy contract for a propulsion system for the USNS Waters operated by the Military Sealift Command and won the contract. We are getting into solar and working on a new diesel electric propulsion system for a Load Haul Dump (LHD) vehicle that is like a large Bobcat. We are also working on a new induction motor for ‘Mag lev’ trains.”

When I asked him about his suppliers, he said, “We use all American suppliers for what we can’t do in-house. We buy machining and sheet metal fabrication and use a contract manufacturer for our PCBs. We do full power testing in our lab.”

He added, “American workers are some of the highest paid workers in the world. There are three things that have destroyed American manufacturing: litigation, regulation, and taxes. If we want to level the playing field, we need to get rid of these three things.”

On my last morning in southwest Florida, we visited JRL Ventures, Inc. dba Marine Concepts headquartered in Cape Coral, Florida. The facility contains 42,000 sq. ft. of manufacturing and office space, equipped with state of the art CNC robotic machining centers and other technologies. Marine Concepts opened its doors in 1976 under the leadership of Augusto “Kiko” Villalon to be able to go from design to production of boats. Marine industry veterans, J. Robert and Karen Long, purchased Marine Concepts in 1994. As a leading manufacturer for nearly 40 years, Marine Concepts is now the largest manufacturer of tooling and molds for the marine industry in the United States. They make CNC plugs, composite molds (open and closed silicone/LRTM), CNC molds, CNC parts, limited production composite parts, scale models, and CNC cold mold kits. In 2012 Marine Concepts opened a facility in Sarasota, Florida with over 260,000 sq. ft. of manufacturing and office space. The two plants provide 300,000 sq. ft. of manufacturing space and seven 3 – 5-axis CNC milling machines.

Mac Spencer, CFO, gave us the plant tour where we watched a boat mold being machined by their very large machining robot. We met with Dan Locke, Design Manager and Senior Designer, who has been designing boats since the 1980s, using Unigraphix software that provides more free style for designing surfaces than Solid Works. Mr. Spencer said that normally their business was 80% marine vs. 20% non-marine, but during the recession, it was reverse. They diversified into making composite figures and structures for resort parks, such as Disneyland, Universal Studios, and Six Flags. They also make composite parts for trams and electric buses. Design work for other marine companies is also a growing part of their business. We briefly met with President Matt Chambers before departing.

My last visit was to Nor-Tech Boats where we met with Cindy Trombley, Director of Administration. She said the company was founded in 1980 by Trond Schon, who had moved with his family from Norway to Cape Coral, Florida. Nor-Tech manufactures high performance powerboats using advanced technologies, unique manufacturing processes, and stylish designs. The main manufacturing facility in North Fort Myers encompasses over 45,000 sq. ft. complete with a 20’ x 60’ downdraft paint booth. Within the main building a state of the art rig shop and in house upholstery departments are climate controlled year round to insure a clean and work friendly environment. The in-house engine development and production division is housed in a secondary facility along with the service department and a rigging facility. We could see three boats in various stages of production in the main plant, but we did not have time to go visit the secondary facility.

Cindy said they currently have 107 employees, but survived the recession by dropping down to only 35 and going into debt. She said they can make boats up to 80 ft. long, and most of the larger sized boats go overseas or to Canada. They make every style of powerboats except for “T-tops.” Cindy said, “Our biggest challenge outside of heat and humidity in Florida is finding skilled labor. There are no vocational schools teaching how to build boats. We have low turnover, but an aging workforce. One of the advantages of Florida is that there are no corporate or personal income taxes.”

A common thread for most of these companies is the concern about finding the right workers now and in the future. As I have discussed in past articles, this is a nationwide problem, not just in southwest Florida. During discussions with the management of the Lee County Economic Development office and members of the Southwest Regional Manufacturers Association at breakfast, lunch, and dinner meetings during my visit, I shared what is being done to address this problem in other parts of the country and by organizations such as SME’s PRIME schools, ToolingU, and Project Lead the Way that I have written about in previous articles. The more manufacturers and trade associations that get involved in solving this problem, the more successful we will be in attracting and developing the next generation of manufacturing workers.

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Southwest Florida Attracts Manufacturers, not just Retirees

Tuesday, November 3rd, 2015

During my recent trip to southwest Florida as the guest of the Lee County Economic Development agency, I learned that in recent years, there has been an increasing number of business owners that have been regularly vacationing in the area who have decided to either move their business or set up a business where they like to play.

Lee County is on the Gulf of Mexico side of Florida about 125 miles south of Tampa and about 50 miles north of the Everglades National Park. There are five incorporated cities in the country: Cape Coral, Ft. Myers, Bonita Springs, Ft. Myers Beach, and Sanibel. The county population grew 63% from 1994 to 2014, but 55% live in the unincorporated area.

My tour host, Shane Farnsworth, Manager of Business Development for the Lee County EDO, told me that Cape Coral was a planned “bedroom” community, but many people never built homes on the lots. So, Cape Coral offers the greatest area of growth for industrial development through the purchase and combining of these parcels into industrial sites. Ft. Myers is the oldest of the five cities, so there is very little undeveloped land and new industrial sites will occur through redevelopment. During my visit, I met with executives of several manufacturing companies in three of five and the city of Naples to the south in Collier County (most of Collier County is taken up by the Big Cypress National Park.).

My first interview was with Bill Daubmann, founder and Senior V. P. of KDD, Inc. dba My Shower Door and a member of D3 Glass LLC. Bill originally had  established a closet organization business in Springfield, MA in 1986 and obtained a license agreement with Mr. Shower Door in 1989. After visiting the Lee County region for several years on vacation, he decided to move to Naples in 2001 and opened a showroom in 2003. His son, Doug, moved also and joined the company. He took the Fast track entrepreneur course by the Kaufman Foundation with one son in 2007 to “hone” their management skills, and took it again in 2011 with his other son.

Bill said, “It was a tough struggle from 2008 – 2010 due to the Great Recession, as southwest Florida was “ground zero” for the decline in the new home building market. We survived by mostly doing home remodeling.”

In 2011, they were informed that their Mr. Shower Door license would not be renewed for 2012, so they explored setting up their own manufacturing plant to make the tempered and glazed needed for shower doors. After analyzing how much glass they were buying out of the state and the problems they had with breakage and defective glass, they set up D3 Glass LLC in 2012 when new home building started coming back in a building they had bought during the recession. Bill’s oldest son, Keith, became President of KDD, Inc. dba My Shower Door. Bill said that the ovens for tempering the glass cost one million and everything else cost another million. They had to buy two custom-outfitted trucks to deliver the glass to their showrooms and customers.

Since Florida requires a license for the glass and glazing business, Bill and his sons took the test and got their licenses. Bill said, “We hired a consultant to do a “SWOT” analysis for our shower door business to make sure that our business model worked in all parts of the country. We wrote a business plan and did a beta test site. We are now selling our business model to others and running an academy on how to run a shower door business. We have four affiliate stores: Oklahoma City, OK, Grand Rapids, MI, St. Paul, MN, and York, PA. We also sell the specialized hardware for shower doors to our affiliates and other shower door companies.”

In the last two years, they expanded from just doing shower doors into other markets for tempered glass and recently finished providing all of the tempered glass for the new Hertz headquarters building that will open next month. Bill said, “We went from 22 to 50 employees in 18 months and are now up to 64 employees. We just made the INC magazine list of 5,000 companies at #2,085 and will be going to the big event next month.”

After I told him that I am part of the Reshoring Initiative to promote bringing back manufacturing to America, he said, “We were buying aluminum extrusions from China, but just switched to a vendor in the United States.”

In answer to my question about the advantages of being located in the region, he responded, “It is easy to deal with the people in the local government agencies, there is good transportation available on I-75 and Rt. 41, the new airport has flights going to our markets, and there are good local colleges for preparing the future workers we will need.”

My second interview was with Brian Rist, President and CEO of Smart Companies, of which Storm Smart is the largest subsidiary. Storm Smart is Florida’s largest manufacturer & installer of hurricane protection products and is the ninth largest manufacturer across all industries in Lee County. Brian is the inventor of the innovative Storm Catcher Wind Abatement Screens. He also moved from the northeast to southwest Florida to run his business. Brian said, “I started out with a couple of partners in a general contracting business and wound up as the sole owner. The first three years were a struggle to find a niche. The building codes were changing and I became the expert in the new codes, even teaching architects. After Hurricane Ambrose came in 1994, I tried to find a fabric that would replace plywood for covering windows. We talked with people in energy management and got everyone’s opinion. I founded Storm Smart in 1996 to manufacture fabric window protection. We became known as who to talk to about window protection. If you fail to plan, then you plan to fail. We did a CD on what businesses could do for emergency planning because 83% of businesses that have a disaster never recover.”

Brian explained that the building codes changed in Florida for developing sites in 1997 requiring window protection to be part of building a home. In 2001 new codes came out and insurance regulations changed also. Everyone has to have separate hurricane insurance. Insurance companies offered special rates for homes that had protection, and the State of Florida offered a rebate program.

“We started making polypropylene window protection by hand cutting the material, but we needed to ramp up to higher production. Getting a sales tax credit helped us to be able to buy a laser cutting machine in 2013, and it eliminated the bottleneck in our business helping us develop new products.”

They work with the biggest companies in the world that use fabric for hurricane protection. While their products protect homes from hurricanes, they also reduce energy costs. Brian said, “You can build a business based on a known market of saving energy and not just protection from hurricanes. Impact-rated windows are a fast growing part of our business. Most new homes come with impact rated windows.”

He added, “The building codes changed again and they are much more about retaining heat rather than saving heat. International codes are also changing. We watch what percentage of our business is with builders. We went to Cancun and set up small operation during recession in Mexico. We are currently doing work in Los Cabos, Mexico also. We sell to Caribbean countries like Bermuda, Jamaica, and wherever else there are resorts.

We have experienced fast growth and have been picked by Inc. magazine four times as one of the 5,000 fastest growing companies. We went from 26 employees to 100 employees after Hurricane Charlie. We went from five to six jobs per month to about 100 jobs per month.

We looked at all of their jobs and decided to really go back into the customer service business to be a sustainable business. We started to invest in our people and getting to know who they were. We had to make sure they were doing things right. We have to ‘walk the talk.'”

After we discussed some of the articles I have written on developing and recruiting the next generation of manufacturing workers and my involvement with the Coalition for a Prosperous America, he added, “‘ Walking the talk” also involves working with students and getting involved with the Southwest Regional Manufacturers Association [for which he is in the current Vice-President.] He said, “We won the manufacturer of the year for the local region last year. We work with five different academies related to construction. Only about 20% of kids go to college and only about 20% of them graduate from college. We had a tour of our plant during Manufacturing Day and had about 13-14 students come on the tour. Florida is too reliant on tourism and construction. Manufacturing creates more different opportunities for good-paying jobs. Our Governor was at our plant three weeks ago, and he understands manufacturing. By partnering with government and education, we can be more effective in growing manufacturing in Florida. In order to grow, we have to develop the next generation of manufacturing workers. Team building, time management, and ethics are the same regardless of the industry.”

In answer to my inquiry about Lean training, he said, “We have been very involved with lean manufacturing and are working with the Florida Manufacturing Program. We are going through a program for an ERP system in order to continue to grow. We have a plan to develop the company over the next three years. Part of it will involve having licensed dealers.”

The outlook for business in Lee County is very good according to the Lee County Business Climate Survey Report, Third Quarter, 2015 prepared by The Regional Economic Research Institute, Lutgert College of Business, Florida Gulf Coast University, released on August 27th, 2015. The key findings were:

  • 74 percent of executives stated that the current economic conditions have improved over last year
  • 66 percent of the executives stated that the current economic conditions for their industry have improved over last year
  • 67 percent of executives expect economic conditions for their industry to improve over the next year
  • 68 percent of companies expect to increase investment next year and none expect to reduce investment levels
  • 61 percent of executives reported increasing employment over the last year, while four percent reported reducing employment
  • 57 percent of executives expect to increase employment at their companies during the next year

While manufacturing represents only 2% of the economy of Lee County today, the staff of the Lee County Development agency is working with the economic development offices of the five cities and members of the Southwest Regional Manufacturers Association to grow the manufacturing industry and expand that percentage. Their work will be aided by the fact that Florida ranks 5th in the 2015 State Business Tax Climate Index with a score of 6.91. The corporate income tax rate is only 5.5% for C corporations only. There is no inventory tax for businesses, and there is no personal income tax. There are nine universities and colleges, and the two largest, Florida South Western State College and Florida Gulf Coast University have a combined enrollment of over 30,000 students. There is good technical training at the two-year community college level as well as at the Fort Myers Institute of Technology, Cape Coral Institute of Technology, and at the ITT Technical Institute. The Ft. Myers airport (RSW) is served by 15 air carriers offering nonstop flights to 46 destinations, most of which are east of the Mississippi.

The stories of these two companies are good examples of innovation to develop new products, becoming a lean company, creating a new business model, and expanding into new markets. These are some of the recommendations I made in the chapter “What manufacturers can do to save themselves” in my book, Can American Manufacturing be Saved? Why we should and how we can.

Having no corporate and personal income taxes and providing a friendly business climate are ideas I discuss in the chapter on what government can do to save manufacturing in my book. My next article will tell the stories of other companies I visited in Florida.

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Posted in Economic Development, Education, Innovation, Lean, Manufacturing, Reshoring, Technology, Workforce Development | No Comments »

SME Education Foundation Works to Grow Next Generation of Manufacturing Workers

Wednesday, September 30th, 2015

The 2015 ManpowerGroup annual Talent Shortage Survey reveals that 32% or 1 in 3 of “U.S. employers report difficulties filling job vacancies due to talent shortages,” down 8% from 40% in 2014. This 10th survey shows that “skilled trades remain the hardest to fill for six consecutive years.” Among U.S. employers, 48% acknowledge that talent shortages have a medium to high impact on their business, but few are putting talent strategies in place to address the problem…despite the negative impact on their business.”

One reason for the shortage is that public misperceptions of advanced manufacturing has led young people entering the workforce to choose other career paths. In an article titled, “What the shortage in skilled manufacturing workers means to a hungry industry” of the e-newsletter Smart Business, Kika Young, human resources director at Forest City Gear Co. Inc. of Rockford, IL, said “Most people in Gen Y out of high school don’t think of manufacturing as a career or as a good option. They don’t think of it as glamorous; they think of it as dark and dingy and dirty and aren’t interested in going into that.”

If we want to attract today’s youth to manufacturing careers, we need to change their perceptions about what the manufacturing industry is like and show them what great career opportunities exist in the industry. We need to expose them to the variety of career opportunities in manufacturing and help them realize that manufacturing careers pay 25-50 percent higher than non-manufacturing jobs, so they will choose to be part of modern manufacturing. The spotlight needs to be on the high-tech environment of modern manufacturing. New technologies such as 3D printing, robotics, and advanced analytics underscore the reality that a career in manufacturing does not entail working in a dirty, dangerous place that requires no skills.

SME Education Foundation is working to change the image of manufacturing and prepare youth for careers in advanced manufacturing through its Partnership Response In Manufacturing Education (PRIME®) initiative.

PRIME® is a collaborative model that engages regional manufacturers, local schools and other community representatives to establish a tailored advanced manufacturing / STEM education that provides high school students with relevant, hands-on knowledge and skills. PRIME® gives manufacturers a voice in education, builds student awareness of manufacturing career pathways, and provides youth with 21st century manufacturing skills, which can lead to industry credentials. Students graduating from the PRIME® program are often capable of successfully transitioning to the manufacturing workforce immediately upon high school graduation.

Established in 2011, PRIME® has grown to 36 schools in 21 states, impacting more than 6,500 students annually with 70 percent of graduating PRIME® seniors pursuing a post secondary education in manufacturing or engineering. SME Education Foundation has also supported 144 PRIME® students with nearly $400,000 in scholarship awards.

In my home state of California, there are six PRIME® schools: Esperanza High School, Hawthorne High School, John Glenn High School, Petaluma High School, Rocklin High School, and San Pasqual High School.

SME Education Foundation is working to expand its network by working with corporate partners to sponsor the development of new PRIME® sites at high schools throughout the country. “PRIME® is forging a path to revitalize manufacturing education and fostering the development of a highly skilled, STEM-capable workforce,” said Brian Glowiak, director of the SME Education Foundation. “Through the support of visionary corporate partners, like Alcoa and Honda, we are helping to create the next generation of manufacturing engineers and technologists and championing one of the most critical elements for innovation success.”

SME Education Foundation and PRIME® provide a winning solution for students by offering them opportunities to:

  • Collaborate with local SME Chapters and industry partners to co-host events
  • Engage with other students and educators in the PRIME® network to share their experiences and creative lesson plans as well as participate in student competitions
  • Participate in Advanced Manufacturing/STEM camps with younger students and other extracurricular activities
  • Receive post-secondary educational scholarships
  • Engage with SME members who can share their technical knowledge and experience by mentoring PRIME students, offering internships and providing job-shadowing opportunities.
  • Attend student summits at SME’s national manufacturing events. These summits allow students, parents and educators to interact face-to-face with representatives of companies that provide revolutionary technologies and business-changing innovations.
  • Implement training materials and curriculum from Tooling U-SME, the industry leader in manufacturing learning and development.
  • Receive SME’s Advanced Manufacturing Media, which produces digital and print publications that cover relevant manufacturing news, technology and advances.

PRIME® Success Story:

In 2014, Denbigh Aviation Academy in Newport News, Virginia was selected for PRIME® designation through the SME Education Foundation.Students at the Aviation Academy, are building a full-sized, 750-pound, two-seat aircraft. At the culmination of the project, they are planning to take this student-built aircraft to the skies! The Aviation Academy is a four-year, high school program in Newport News Public Schools, located behind the Newport News-Williamsburg International Airport. Learners focus on careers in aviation, electronics, engineering and technology. “We are able to get real world experience and it ties in with aerospace manufacturing /engineering. It’s a good thing because the fields are lucrative and growing,” says Laura Prox, a junior at the Denbigh Aviation Academy.

As one of the first sites on the East Coast to partner with Eagle’s Nest Projects (an organization that donates the plane kits to schools to build these aircrafts), students can immerse themselves into the manufacturing and aviation sector. An elite team of 30 students have completed the fuselage and tail sections. These students demonstrate an authentic example of manufacturing brought to life in the classroom. Students are assigned roles from management to labor based upon their coursework and experience. They are learning and employing fastening systems and procedures that can be found at any aviation assembly facility. Using the materials, reading the blueprints and drawings, and understanding principles in assembly outline some of the talents students gain. Throughout the process, some of the “soft skills” also emerge such as teamwork, communication and problem solving.”

Manufacturing Day 2015 will occur on Friday, Oct. 2, and throughout the month of October, SME will be supporting Manufacturing Day through chapter activities and events, the SME Education Foundation’s PRIME® school network and Tooling U-SME. Here’s what PRIME® schools are doing for Manufacturing Day!

PRIME® exposes our youth to the modern manufacturing environment and changes the image of manufacturing to one that is “cool” and full of exciting career opportunities for our youth. This will enable us to recruit the next generation of manufacturing workers to fill the skilled worker positions now going unfilled.

The question is: Will you be the corporate executive who joins the PRIME® program to sponsor more schools to expand the program to hundreds of schools in all 50 states? If so, go to this link. Or, will you be the corporate executive that will have to admit to his children or grandchildren that you are partly responsible for reducing their career opportunities for good paying jobs in manufacturing because you offshored manufacturing and/or imported foreign workers to replace American workers at your U. S. plant?

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Posted in Jobs, Manufacturing, Training, Workforce Development | No Comments »

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