Manufacturing and the Economy
Aired May 27, 2004

The recent recession hit Northeast Ohio’s manufacturing industry particularly hard - more than 200,000 jobs have been lost and the Ohio Department of Labor doesn’t have a particularly optimistic outlook on manufacturing’s future. It’s predicting at least 33,000 more people will lose their jobs by 2010. Even though analysts are saying that the recovery will spread to manufacturing, Northeast Ohio may not have the luxury of waiting to see how things turn out. In this installment of the Quiet Crisis, ideastream’s Shula Neuman explores way to reconsider what role manufacturing will play in the region’s economy.

  

The economic difficulties Northeast Ohio has endured haven’t exactly been quiet news. Manufacturing was the foundation of the region’s economy for much of the 20th century. But today Northeast Ohio is at a crossroads and the statistics are grim: the state lost 17% of its manufacturing jobs according to the national association of manufacturers. 30,000 jobs lost in just the last year, according to the Ohio Department of Labor. But Fatima Weathers, executive Vice President of the consulting company CAMP, says the numbers are just part of a natural evolution.

Fatima Weathers: Adapt or die… it’s true in nature and it’s true in business.

Adapting could mean finding new markets for old products, Weathers says, or developing new products with existing resources - witness the recent resurrection of the Ford plant in Parma, or ISG’s new production methods. She says sometimes adaptation isn’t feasible but as some companies and industries wane, others start to emerge.

Fatima Weathers: I think that what we’re looking at is new manufacturing companies, smaller, smarter, using new technology and new processes. Some of the behemoths we’re used to thinking about will probably never come back.

E.C. Kitzel and Sons, a 77-year-old company on Cleveland’s west side, is one of those manufacturers that’s surviving - and thriving - by adding new technology to improve its production of industrial cutting tools. General Manager Tom Schumann says demand for such tools is expanding. Because Kitzel has remained nimble and has incorporated new technology into the manufacturing process, the company has grown too, adding five employees to the 25-person shop in the past six months.

Tom Schumann: The big thing now is there’s a lot of computers as you see in our shop. A lot of “c and c” controlled equipment. So you have to have those math and science skills that a lot of schools aren’t teaching anymore.

Schumann says hiring qualified employees isn’t a problem now because the region has been focused on heavy manufacturing for so long. But he says in a few more years finding new employees could prove difficult.

Tom Schumann: A lot of those people are getting older and retiring and we need to replace them with younger, newer people and I think that’s where the problem is. We’ve had a hard time finding younger people with the right kinds of skills that we need.

There are some schools - both high school and post-secondary - that are building programs to respond to those needs. Karen Kittle, executive director of the Northeast Ohio Manufacturing Awareness Council, says education programs alone may not be enough, since many people don’t even consider manufacturing when planning their careers.

Karen Kittle: Ninety percent of our young people today go to college. Fifty percent of those folks drop out. So what do we do with the remaining percentage of folks when they drop out. They may find that college isn’t where they wanted to be… and now they’re looking for a career. Manufacturing is a very good, viable career.

Kittle cites a three-year-old survey which found the average income for someone working in manufacturing to be $48,000 a year. That salary could be even higher for people who are trained in what Fred Lyze hopes will be Northeast Ohio’s next manufacturing stronghold: microdevices.

Fred Lyze: The new face of manufacturing is working underneath a microscope.

Lyze is president of Orbital Research - a company on Cleveland’s east side that manufactures products for the military and transportation industries from micro-devices, or MEMS - the same technology used to make Pentium computer chips. These micro-devices are the diameter of a human hair, Lyze says, and without proper packaging, they can’t do anything on their own.

Fred Lyze: They come in a silicone wafer and that wafer can’t be implemented onto the vehicle. The packaging aspect will create the jobs. It’s the missing link; it’s the new face of manufacturing so that we can package these devices to create new products.

As with traditional manufacturing, Lyze worries that growth of the microdevice industry will be hindered by an under-prepared workforce.

Fred Lyze: We’re taking people from John Carroll and Case Western Reserve University and having them work in a lab and that’s very inefficient. This way if we could have the technicians that have the proper skill set our technicians could make the devices and our PhDs can do their PhD work - develop new products.

Orbital, along with a network of companies involved in MEMS research and development, is working with area community colleges to train potential technicians. With a strong workforce in place, Lyze says, Northeast Ohio could become a hot-spot for micro-device development. That’s a vision that matches that of Fatima Weather’s from CAMP. She says people will always need products and the development of those ideas has to happen somewhere… why not Northeast Ohio?

Fatima Weathers: We might be the center of innovation; the place where products get designed, where new applications get tested before they’re manufactured, wherever they’re manufactured.

In Cleveland, Shula Neuman, 90.3.