Two federal grants totaling $1.8 million to a couple of groups in Union County could help Central Pennsylvania business through manufacturing and workforce development as well as add jobs by bringing more foreign facility investment into the state.
The U.S. Commerce Department recently gave $500,000 to the Susquehanna Economic Development Association Council of Governments, or SEDA-COG. The Labor Department gave $1.3 million to the Central Pennsylvania Workforce Development Corp. The grants, awarded jointly, are part of the Make it in America initiative to bolster manufacturing here.
The Lewisburg-based groups are spearheading the Pennsylvania initiative for economic development in the 52-county region known as the "T," which is essentially every area outside metro Philadelphia and Pittsburgh.
"We're trying to get foreign companies to come here," said Steve Kusheloff, public information manager for SEDA-COG.
If you're looking for an example, think about Swedish truck manufacturer Volvo Construction Equipment's Shippensburg factory, which is expanding production and hiring dozens of people.
Most of the $500,000 grant will be used for marketing Pennsylvania to foreign companies, Kusheloff said. Some of it could be used for reshoring initiatives, too.
"There also will be some focus on companies who've relocated from the U.S. to foreign countries," he said, "to try to get them to locate facilities back here."
State Department of Community and Economic Development Secretary C. Alan Walker mentioned foreign investment as an economy builder when he attended the ribbon-cutting ceremony for Cumberland County-based Tex Visions' new offices and manufacturing facility in Middlesex Township.
Marcel Ruhland, Tex Visions owner and president, is German. In 2004, the company had close ties to similar German companies that print large-scale marketing flags. Tex Visions printed in Germany until it bought its own printers. In 2004, Tex Visions had just two employees. Today, the company employs 55 people.
"I'm from this area, so it's a big deal to me when guys like Marcel come here and invest," said Thom Casey, Tex Visions online marketing manager and a Perry County native. "It means American jobs for people in this area."
Tex Visions isn't exactly the same type of foreign investment the state and other groups are looking for.
"I look at us as an American company with American employees," Ruhland said. "And we don't have direct ties to a company overseas."
That's because Tex Visions reshored its flag printing in 2008 after buying the printing machines, which cut delivery times to customers from two weeks to a couple of days, said Nicole Kaufman, the company's general manager. Business really took off after that, she said.
With the new building, the company continues to expand its printing, cutting and sewing operations, meaning more employees, Kaufman said.
Reshoring will be a smaller part of the Make it in America grants. Five industrial resource centers will split $100,000 to help companies evaluate potential gains from bringing parts production back to Pennsylvania, said John Lloyd, president and CEO of York-based Mantec. It's the resource center for southcentral Pennsylvania, helping manufacturers adapt to changing markets by improving operations.
"The overall theme is to bring jobs back to America," Lloyd said about the grants.
With each center getting less than $20,000, the money will be spread thin, he said. But it should help the centers reach more companies and evaluate their costs of offshore production. Often, bringing production back to the U.S. can save companies time and money lost to delivery delays, excess buying and poor-quality products, he said.
"We're going to work with companies to calculate the total cost of (production) ownership," Lloyd said.
When companies see the calculations of long-term offshoring costs, they understand how owning that production, or contracting it to another Pennsylvania company, is beneficial, he said.
Some midstate companies have reshored. In October, Lancaster County-based Armstrong World Industries Inc. announced it was bringing tile production back from China. The expansion of its Lancaster factory will add nearly 60 jobs there in 2015.
Earlier this year, Lancaster County-based Pequea Machine Inc. brought production of farm equipment gear boxes back after it found a 25 percent failure rate on the boxes made in China. The reshoring didn't immediately create jobs but it could in the future, executives said.
As foreign manufacturers bring production to the U.S. and domestic companies bring it back, they need a highly skilled workforce. Training that workforce is the focus of the grant to Central Pennsylvania Workforce Development Corp.
It will focus on training workers in computerized machining, mechatronics and engineering, said Rachel Smith, CPWDC executive director.
"Over $1 million of the $1.3 million award will be allocated to the participating local workforce investment boards to provide training to address the skill areas," she said.
The money likely will be divided by what percentage of manufacturing employment each local area has, Smith said. The local boards will decide how to use that money for training, she said. Some areas could start training in January.
There are two workforce boards in the midstate: the South Central Workforce Investment Board covering an eight-county region that includes Cumberland, Dauphin, Lebanon and York counties; and the Lancaster County Workforce Investment Board.
"This grant is part of a larger system-building approach to create statewide career pathway opportunities in mechatronics and (machining), ranging from entry-level to high-skill development," Smith said, "by building on best practices and curriculum designed through industry partnerships across the commonwealth."