Klein Tools promised last year to have more than 100 employees at its new research and development center in Mansfield, and the company doesn’t expect to have any problem meeting that goal. Its U.S. business is getting a little boost from an unexpected source — China.
“We’re ‘insourcing’ some work that was in China,” says President Tom Klein. “When you look internationally, the Chinese pay scale is up and transportation costs are increasing, which helps make U.S. manufacturing very much competitive.”
The Illinois-based maker of pliers, wrenches and other hand tools isn’t alone. American manufacturers have moved an estimated 25,000 overseas jobs back to the United States in the past three years, according to estimates by the Reshoring Initiative, a nonprofit that aims to encourage the trend, which is variously dubbed “reshoring” or “inshoring,” in contrast to “offshoring.”
That’s not much compared to approximately 2.5 million manufacturing jobs that evaporated during the recession. But it’s also just a slice of two years of gains in factory jobs that have been seen across the nation, in Texas and — especially — in the Tarrant area.
From July 2010 to July this year, manufacturers in the four-county Fort Worth-Arlington metropolitan area added 6,400 jobs, according to the Bureau of Labor Statistics. That’s a 7.5 percent gain, double the 3.7 percent gain seen nationally in the same period and stronger than Texas’ 5.8 percent gain. It’s also better than the Fort Worth-Arlington’s overall job gain for all employers of 4.8 percent in that time.
Manufacturing growth is strong enough to create a rarity in today’s stubbornly high unemployment: a shortage of skilled workers.
“You’re seeing more and more help-wanted ads,” said Debboreh Wallace of the Texas Manufacturing Assistance Center at the University of Texas at Arlington. “There’s definitely a surge going on,” she said, but the pipeline of experienced manufacturing personnel is dry as “new graduates don’t realize manufacturing is an option.”
One example of the rebound in factory jobs is the Arlington facility of Iscar Metals, a maker of carbide cutting tools used by other manufacturers. More than 110 people work at the facility, which is the Israeli company’s U.S. headquarters and handles engineering, distribution and custom tool manufacturing. That’s up about 10 percent from a year ago.
“Our business has increased significantly. We can feel it,” says manager Patrick Cline. “We’ve been expanding for a while, and we’ve got some new equipment scheduled to arrive in the next few weeks,” he said. The company’s parent, Iscar Metalworking Cos., was purchased by Warren Buffett’s Berkshire Hathaway in 2006.
What’s driving the growth in local manufacturing jobs?
Detailed breakdowns are only available through 2011 and even then BLS often doesn’t list employment by specific industry. But manufacturing of machinery and valves were two categories showing growth, as did the category that includes aerospace and autos.
Oilfield-related manufacturers have accounted for significant gains during the ongoing crude oil and natural gas push. FTS International and Weir SPM, makers of big pumps used in hydraulic fracturing, have each added hundreds of positions in the area, for example.
The turnaround in construction is helping M&M Manufacturing, which makes ductwork and other sheet metal products. Executive Chairman Rod Stepp said total employment took a tumble in the recession, but is now up to about 581 permanent workers at five locations in Texas and Arkansas, including its main plant in north Fort Worth.
“There is a feeling among people I work with that times are better,” said Stepp. He said the company even picked up some business from an appliance maker in Mexico, which turned to M&M to provide a part the customer simply couldn’t find elsewhere.
And there are at least two more sizable additions in the pipeline as GE Transportation ramps up to build locomotives and heavy mining equipment at new plants in far north Fort Worth and General Motors expands its vehicle assembly plant in Arlington.
The GE facilities are expected to employ more than 600 when they open, perhaps as early as the fourth quarter, and could add more in coming years, the company has said. GM’s expansion, which includes the addition of a third production shift and a new stamping plant, is expected to add about 1,100 positions.
Finally turning around
While recent job gains in manufacturing are welcome, they’re also far short of making up for the sharp losses suffered during the recession, not to mention the relentless, decades-long decline that industry has endured.
For example, since Fort Worth-Arlington manufacturing employment bottomed out at 83,100 jobs in July 2009, the 8,900 positions added since then have only gotten the area back to roughly its level in January 2009. And that’s far from the 100,500 jobs manufacturing offered a decade ago.
And again, that mirrors the national experience. There were nearly 12 million U.S. manufacturing jobs in July, according to BLS, up 424,000 from two years ago. But that compares to 15.25 million a decade earlier.
While U.S. manufacturing has seen occasional gains over the years, those have always given way to the long-term decline. But some experts believe this time could be different.
David Simchi-Levi, professor of engineering at the Massachusetts Institute of Technology, argues that manufacturing is going through “a transformational period.” Among the drivers, he says, are:
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Rising labor costs in China and other developing economies.
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High energy prices that are driving transportation costs higher and thus making long-distance shipping uneconomical.
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A growing preference of manufacturers to be closer to their ultimate customers.
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A weaker U.S. dollar, which tends to make U.S. goods more competitive with foreign goods.
In a survey earlier this year, Simchi-Levi found that 39 percent of the 105 companies he surveyed were considering moving some manufacturing back to the United States.
One recent example is Caterpillar’s opening this month of a $200 million factory making excavators in Victoria, south of Houston. It employs 225 workers and is expected to continue hiring as it adds models. Another is Ford Motor Co.’s agreement last year with the United Auto Workers to move work from Mexico, China and Japan back to the U.S. Those moves, together with new U.S. investment, were expected to create 12,000 new U.S. manufacturing jobs, the company said at the time.
Cline, the Iscar manager, said he agrees that the market is changing.
“The life cycle time from design to manufacture is much shorter than it used to be,” he said. As a result, customers “want their manufacturing to be close by. That’s helped us.”
Finding workers
The manufacturing rebound is strong enough that companies report having difficulty attracting candidates with the skills they need.
“Our biggest obstacle has been getting welders,” said M&M’s Stepp. Oilfield-related companies, he said, have snapped up many with welding skills. GE Transportation is using a Texas Workforce Commission grant to train its own welders in partnership with North Central Texas College in Gainesville.
Amber Gosser, business services director for Workforce Solutions of Tarrant County, said that when her group sponsored a Mansfield job fair in July, nearly all the employers who attended were manufacturers.
“There’s just not enough trained people,” Gosser said. “You’ve got a lot of baby boomers retiring from manufacturing, and there’s not enough marketing going on” to show college students and young workers that the factory floor is a good career.
“It’s not the dirty old job that it used to be,” Gosser said. Manufacturing today is more about programming machines to do the work, which in turn has helped U.S. manufacturing compete with low-wage competitors, she said.
Jim Fuquay, 817-390-7552
Twitter: @jimfuquay
Source Article from http://www.star-telegram.com/2012/09/01/4222484/north-texas-sees-increase-in-manufacturing.html
