Making a comeback

Some manufacturers rebound big – but can't find workers

Jim T. Ryan//March 30, 2012

Making a comeback

Some manufacturers rebound big – but can't find workers

Jim T. Ryan//March 30, 2012

Handles for medical equipment, french fry baskets, strange-looking hooks and screens hang everywhere, a testament to the company’s diverse abilities to make parts for other manufacturers around the country and the world.

Step through the doors to the company’s factory, and its 33 employees are busily working multiple lines, bending tubes and welding screens for a workload that is much better than most other companies are seeing right now.

“We will surpass 2008 sales this year,” said Glenn

Jr., president of Eyster’s Machine Shop Inc. and Eyster’s Machine & Wire Products, which does business as Etube & Wire.

That’s an unusual statement for many companies to give these days. Even if 2011 was a spectacular sales year, most companies have said they’re nowhere near 2008 levels and are cautious about the improving economy.

Most indicators show manufacturing is continuing a slow and steady upshot, but that doesn’t necessarily mean it’s rehiring everyone laid off in the recession. Even if companies are hiring, they have difficulty finding and keeping the right people, executives said.

Etube & Wire is seeing plenty of these trends.

In 2008, Etube & Wire had revenue of about $5.2 million, Eyster said. In 2009, the company lost about 40 percent of its business due to the recession, he said. This year, it’s on track to hit revenue of $5.5 million after a significant rebound in 2011.

“(The increase is) predominantly new customers,” Eyster said. “But we’re not seeing older customers return and ordering what they formerly did.”

The upshot

National, state and local indicators have illustrated that manufacturing is in a better position when it comes to business and jobs.

Durable goods manufacturing has led the way on job increases nationally over the past year, according to the U.S. Bureau of Labor Statistics. Manufacturing employment grew from a seasonally adjusted total of nearly

11.7 million jobs in February 2011 to slightly less than 11.9 million last month.

The unemployment rolls in manufacturing decreased by about 200,000 people, resulting in an industry unemployment rate of 8.4 percent in February, less than the national average of

8.8 percent for all private nonagricultural workers, according to the bureau.

Pennsylvania manufacturing jobs in February increased by 5,100, or about 1 percent, since the same time last year, according to the state Department of Labor and Industry.

The Federal Reserve Bank of Philadelphia’s most recent Business Outlook Survey found similar indicators. Its March index of manufacturing activity was up 2.5 points from February. New orders increased 8 points, but shipments declined 12 points. Twenty-two percent of manufacturers reported employment increases, up from 15 percent in February, according to the survey.

The Manufacturers’ Association of South Central Pennsylvaniaf found some interesting information when

34 manufacturers responded to a poll sent to its more than 300 members.

Forty-fouraut percent of those who answered the survey said they’re experiencing a slow recovery and have openings to fill but are being cautious about who and how many people they hire. The same percentage said most people seeking the jobs don’t have the necessary skills.

“It obviously verified what we’ve been seeing in the marketplace. Business is overall good, but it’s not good enough for (manufacturers) to start hiring people,” said Michael Smeltzer, the York-based association’s executive director.

In some cases, manufacturers took the opportunity to invest in their factories and add efficiency measures requiring fewer manual laborers, he said.

Manufacturers that make automation equipment or industrial components for more high-tech factories have seen increased business, have hired workers and are expanding their operations, executives told the Business Journal earlier this month.

Smeltzer pointed to iconic motorcycle manufacturer Harley-Davidson Inc. as an example. The Milwaukee-based company has its largest factory in Springettsbury Township, York County, where greater automation technology is being used today with half as many workers.

“If you have a company that’s cut workers, instead of having six welders, one person is managing six robots doing the work. So that person is now six times as productive,” Smeltzer said.

Catch and release

Etube & Wire added equipment over the years, including more machines to expand the work it can do for its customers, Eyster said. But it still needs people to operate those machines.

The company hired seven people in 2011, three of whom remained with the company, he said. Etube & Wire could hire another three workers immediately if it finds people with the right skills, he said.

However, finding people is the difficult part, General Manager Al Deetz said.

“We’re seeing shortages of skilled people in the area,” he said. “You can find skilled people, but they have to travel to get here.”

Many can’t immediately relocate to Shrewsbury so they end up commuting, Deetz said. With high gas prices, that only works until the employee finds a job closer to home and then you have to release them, even if they were one of your best workers, he said.

“Where do we find (the workers)?” said Cathy Dallas, vice president of Cumberland County-based JFC Temps, a division of JFC Staffing Cos., which helps other companies fill skilled trades jobs. “We’re running into the same problems (manufacturers) have. We just have more time to devote to finding those with the right skills.”

Some people were commuting from Lancaster to Hanover, a 45-minute one-way drive, she said. They can’t sell their house soon enough to move closer to their jobs, so they endure the costly drive until a new job opens closer to home, she said.

For manufacturers such as Etube & Wire, that means they’re constantly looking for employees and have to throttle back post-recession growth spurts. You don’t want to say you can do a job and then disappoint a customer by being late with delivery, Eyster said.

“We turned down a big contract because we didn’t have the workforce,” Deetz said.