Pennsylvania has a strong heritage of manufacturing, but the world is changing at lightning speed. Technology and globalization are profoundly affecting the way things are made — and also where.
The trends have pushed thousands of jobs to other countries. But the U.S. is not always on the losing end.
Bollman Hat Co. in Adamstown, Lancaster County, sells Kangol hats around the globe. Products had been manufactured by a company in China. But in 2015, Bollman began moving the machinery to Pennsylvania in order to be more responsive to its customers and have better control over intellectual property rights, said Don Rongione, Bollman’s president and CEO. The company pledged to invest about $387,000 in the effort, according to CPBJ reports at the time.
Rongione said the move, known as onshoring or reshoring, makes sense for the company’s North American customer base.
Similar needs drove Armstrong Flooring Inc. to move production of luxury vinyl tile flooring from Asia to Lancaster County.
The company’s CEO, Don Maier, said the move answered the question, “How do we better serve our customers and consumers?”
If a product can be made in the state, rather than spending 13 weeks on the ocean in order to reach the consumer, a company can be more responsive and flexible, while potentially lowering costs, he added.
Armstrong, based in Manor Township, did not reshore all production. It uses the Lancaster facility to manufacture products for the U.S.
Factories in other countries serve those markets. According to Maier, this “gives great pride to workers in those factories,” as they serve local consumers. Bollman Hat does the same.
Rongione and Maier argue that Pennsylvania has a lot going for it in terms of manufacturing. The state is close to the large Northeast market, has a capable workforce, and offers some incentives and regulations that encourage manufacturing.
However, Rongione said the state could do more to provide incentives to businesses and entrepreneurs interested in onshoring or reshoring their manufacturing processes.
Grants, low-interest loans, and job-assistance training could be a big help to manufacturers, particularly employee-owned ones like Bollman Hat. The company received grants and tax credits for creating about 40 jobs in the U.S. and preserving 176.
Tax credits are another option, but according to Rongione, they do not benefit companies like his that are not yet earning sufficient profits. Still, government incentives are important, said Rongione, who also is the founder of American Made Matters, an organization he launched in 2009 to educate consumers on the importance of buying American-made materials.
“A strong heritage of manufacturing creates strong quality of life and a ripple effect for our communities,” he said.
Moving? Here’s some advice
Onshoring or reshoring may not be the right move for every Pennsylvania manufacturer, but examples like the Bollman Hat Co. and Armstrong Flooring Inc. demonstrate that companies with a global presence can bring manufacturing back to the U.S.
Here are some words of advice for manufacturers considering a move:
• Know the marketplace and U.S. labor costs compared to those in other countries. Also think about the reliability of sources in overseas markets.
— Don Rongione, president and CEO of Bollman Hat Co. in Adamstown, Lancaster County
• Understand your mission as an enterprise. If cost is your main driver, reshoring may not work. But creativity and innovation can do great things.
— Don Maier, CEO of Armstrong Flooring Inc., in Manor Township, Lancaster County
• Consider developing training programs that introduce tech-savvy millennials to the world of manufacturing as a way to fill vacancies and build a stronger workforce in central Pennsylvania.
— John Lloyd, president and CEO of MANTEC, a nonprofit that assists manufacturers