The news is promising for Clark County manufacturers. Total industrial production in the U.S. is up 5.6 percent year-to-date over 2010 levels, according to March Federal Reserve numbers – a figure that’s also 95.5 percent of 2007’s stats. In addition, business equipment manufacturing logs in at 101.2 percent compared to 2007 figures.
All of that is good news for area manufacturers, after a bitter recession spurred layoffs, production cuts and struck at bottom lines.
“We’re very confident,” said Pat Cotter, vice president of administration and control at Kyocera in Vancouver.
That confidence, spurred by economic forecasts, is tinged with a touch of skittishness as Kyocera and other area manufacturers still reel from painful cuts they had to make in order to stay afloat during the economic downturn. However, things are getting better, manufacturers say.
Kyocera, which manufactures high-tech ceramics, lost about half of its production workforce. But the path to recovery hasn’t been a straight shot. The production facility recently added 16 workers to its rolls, but with economic uncertainty, some of those jobs have come as temporary ones. Even so, the company is recruiting for another five positions, with hopes to hire more – though Cotter says he doesn’t know if and how that will pan out.
While outsourcing has been a wince-inducing trend for both U.S. workers and U.S.-based businesses that compete against companies that outsource, many Southwest Washington manufacturers continue to focus on creating and keeping manufacturing jobs local.
At Kyocera, a Japan-based corporation, some manufacturing may actually shift from Japanese plants to U.S. facilities. Not because of the earthquake and tsunami last month (Kyocera’s Japanese plants were unaffected by the natural disasters), but because of the skill level of labor and the agility of manufacturing plants here, according to Cotter.
Cotter explains it this way: The cost of ceramic powder is a steady constant. Ditto with the machinery needed to manufacture the products. So those variables give the company flexibility to shift production to any geographic region, including the outsourcing hotspots of India, China and Mexico. But what isn’t available for pennies on the dollar is the educated workforce needed to craft the products.
“We have to have highly skilled labor,” Cotter said. “That’s not necessarily something that China, India or Mexico specializes in.”
David Robinson, director for Roadmaster, a Vancouver-based company that manufactures towing rigs and other equipment for the recreational vehicle market, offers similar insights.
Like Kyocera, Roadmaster took painful recessionary blows. The recreational vehicle market, fueled by affluent retirees who saw their stock market-driven nest eggs evaporate, took a pounding during the recession. Roadmaster shed 40 percent of its workforce.
But outsourcing to make high-end tow rigs doesn’t fit into the equation, according to Robinson.
“There are a lot of products that we could very easily make overseas,” Robinson said. “But we want the jobs here and we need to control the quality of goods.”
Still, competition against companies that do outsource and offer less expensive products is a constant factor. To stay competitive, Robinson said his company educates its buyers about the differences between products. But even education only goes so far; some buyers are simply driven by cost.
To stay competitive, Roadmaster has diversified its offerings to include rigs for RV pop-outs. In addition, the company recently got into the volumetric concrete business – industry speak for conveyer belt concrete mixing on the bed of a semi-truck.
“Every country around the world pours concrete,” Robinson said. “It’s always sunny somewhere.”
Originally, the concrete offshoot was designed to buoy Roadmaster during winter months, when RV travels and needs historically decline. And, as something completely different from the RV market, it would help to insulate the company from economic volatility hinged to the RV industry. But the concrete mixing business has proven so successful, Roadmaster opened a production plant in Portland.
“We’ve got a lot of demand for it,” Robinson said. “But we can’t build (volumetric concrete mixers) fast enough to keep up, which is good.”
Like Kyocera, Roadmaster sees optimism on the horizon. Robinson said he’d like to see laid-off workers return to the production floor, but he’s not sure when that will happen.
“In general, we see a slow, gradual rebuild of the market,” he said.