Manufacturing proposals spotlight obstacles to growth
Manufacturers and their support groups around the midstate are energized by the proposals to bolster their industry that came from the Governor's Manufacturing Advisory Council last week.
However, while some people in the manufacturing community welcome the government backing, they also warn that it's not the definitive solution and change isn't going to come overnight.
The council — comprising company executives, state officials and trade group representatives — put out its report Aug. 21 promoting tax credits, education reforms, energy policy and capital access, as well as innovation and new market support, as key ways the state could help manufacturing grow in Pennsylvania.
Despite the firm backing of Gov. Tom Corbett's administration for the proposals drawn up in the report, some manufacturers want their peers to remember that they shouldn't hold out for a government solution.
"We don't look for the government to solve our problems. We look to consumers to understand the importance of buying American and supporting American manufacturing," said Don Rongione, president and CEO of Lancaster County-based Bollman Hat Co.
Overall, Rongione said he was enthusiastic about the council's proposals because they illustrate the importance of manufacturing to the economy and the state's future. Government support is welcome, particularly if the council's proposals come to fruition, but manufacturers need to take the initiative to do some of these things on their own, he said.
"Business should find its own solutions, educate its consumers," he said.
The purse holders
When the report was published, it included a section in the back referencing bills that are already before the Legislature that could help manufacturing competitiveness significantly. They include:
• House Bill 2022: The Business Permitting Portal Act, providing a single online access point to help business owners complete the permitting process to operate businesses.
• House Bill 1539: Keystone Works I Program Act, which establishes a six-week workforce training program where employers consider that person for a job.
• Senate Bill 1460: Providing $7.5 million in tax credits for cash contributions by businesses to industry partnerships.
"We did that to send a signal to the Legislature, to say some of these things have already been drawn up and just need to be moved forward to help," said David Taylor, executive director of the Harrisburg-based Pennsylvania Manufacturers Association and a member of the council.
The governor vowed last week to put weight behind the council's suggestions and make manufacturing a key point in his administration's policies going forward, with the aim of improving Pennsylvania's overall economy.
Because many of the support proposals don't require a lot of extra money from the state budget, such as education initiatives that would require improved standards, workforce readiness programs and partnerships with manufacturers, it's possible the state could move some of it forward fairly quickly, Taylor said.
A lingering issue is funding for the state's industrial resource centers, which help small manufacturers innovate and modernize for new products and markets.
"We like to say our mission is greater than our resources," said John Lloyd, president of Mantec Inc., the York-based industrial resource center for southcentral Pennsylvania. "We've been cut dramatically from our public support over the last three to four years. And it's impeded our ability to perform the outreach and provide the services to companies that they need to grow their top line, improve their bottom line and put more people to work."
Although the report mentions improving the outreach to companies and having more of them use the resource centers, it does not mention additional funding for the centers or workforce initiatives.
The educated worker
Education partnerships to increase the number of young people going into manufacturing fields as well as improve their general workforce preparedness are favorite ideas of Todd Kennedy, president and CEO of York County-based McClarin Plastics Inc.
Through the years, his company has worked closely with local schools to illustrate the promise of high-tech, clean manufacturing that can provide high-paying jobs to motivated people. Kennedy has worked heavily with the midstate's manufacturing industry partnership on workforce development issues.
McClarin's factory in Penn Township was the setting for the education component of the council report's unveiling.
"You find the kids that are not ready for college — after all, it's not for everyone — who lack motivation, yet are very bright," Kennedy said. "Motivate these young people."
But to do that, it's becoming more important to improve the problem-solving abilities of young people by raising the educational bar so the bright and unmotivated don't slip through the cracks, state Education Secretary Ron Tomalis said during the presentation.
Funneling young people into manufacturing apprenticeships could be one way to replace the workers who will retire in the next 10 years, Rongione said. But companies need to connect with schools to do that.
"It's a significant concern, but because we're so strapped to be as lean as we can and stay in business, there's no money to create apprenticeship programs. So we welcome that (initiative from the state)," he said.
Dirty jobs and stereotypes
Selling manufacturing to young people is a perennial problem for the industry, which still deals with stereotypes that paint all manufacturing as dirty, noisy and without a future.
There's a stark contrast to that image when you look at the spotless, mostly quiet facilities of McClarin, where they're using state-of-the-art technology to make plastics for construction equipment and fiberglass parts for modern wind turbines.
Many national reports have manufacturing work coming back to the U.S. in some industries, and it's still the largest single industry in Pennsylvania. Manufacturing produces $71 billion worth of goods, or 12 percent of the gross state product; employs 574,000 people, or 10 percent of the state workforce; and accounts for 90 percent of all exports, according to the state.
There are thousands of manufacturers in the state, they're all different and in various phases of modernization, Taylor said. It will take time for all to change.
"Small industries like ours will not have the luxury of robotics and the latest software and technology-heavy environments," Rongione said about hat manufacturing.
That means everyone has to set realistic expectations about manufacturing, he said. Some industries are still manual, dirty and loud, but producing a popular style of hat is no less rewarding than plastics.
The evident part of the council's report was that it will take a lot of initiative by manufacturers themselves, with support from government in key areas.
"It is incumbent on manufacturing employers to take up that change, because if they're not innovating, they're eventually going out of business," Taylor said.
McClarin working on plastic for Chinese electric car
How often do you hear about plastic manufacturing coming back to the U.S. from China? Or car parts being insourced, rather than contracted to a foreign maker?
Not often. But York County-based McClarin Plastics Inc. is doing both. The company has a deal with an undisclosed Chinese company to make colored, plastic body panels and other parts for an electric car, according to McClarin and others familiar with the deal.
On Aug. 21, McClarin managers showed off the car’s lightweight frame and the brightly colored panels they’ve been affixing to it for testing. The company that day hosted reporters, industry groups and state officials for the Governor’s Manufacturing Advisory Council’s release of proposals to improve manufacturing in the state.
Morrell Myers, McClarin’s special projects coordinator, said the company had received the electric car work through Panoz Auto Development Co., a Georgia company that builds high-end sports cars and race cars.
The contract for the work comes from a Chinese car company, Panoz spokesman John A. Leverett said. He declined to comment further due to Panoz’s nondisclosure agreement with the Chinese company, only saying that Panoz’s work is done on the contract.