|
|
|
The Niche Players Get Richer
Economy rewards smaller, nimble firms serving a diversified clientele
By Susan Banfield
|
Business New Haven
5/3/1999
By: Susan Banfield
|
Most area manufacturers report that they are doing at least as well, if not better, than they were at the same time last year. And statewide statistics bear out this general sense of well-being.
In 1998, for the first time in many years, there was no net loss of manufacturing jobs in the state, according to findings of the Manufacturing Alliance of Connecticut (MAC). Most manufacturers are also optimistic about the years immediately ahead. However, they continue to grapple with very real challenges, from cheap foreign competition to a gnawing shortage of skilled labor.
The reasons for most companies' recent success are many, but a few crop up again and again in conversation. One of the most common is finding ways to increase productivity that offset the high cost of doing business in Connecticut.
“You have to work smarter, and offset through innovation and automation,” says Robert Warner, president and CEO of Lacey Manufacturing in Bridgeport.
Lacey, which runs a sophisticated injection-molding operation that produces disposable surgical instruments, components and sub-assemblies, has recently been experimenting - successfully - with alternate ways of organizing production, such as work cells and self-directed work teams.
Lacey has also relocated part of its operation to a building directly across the street from its main plant in order to increase efficiency (as well as provide more space).
Bob Behn, president of Marlin Firearms, echoes Warner's observation: “The key ingredient is productivity. We do live in an expensive area. The only way to overcome that is through productivity, being smart.”
Roger Joyce, vice president of engineering at Bilco in West Haven, points out the multiple advantages to be gleaned from investing in the latest technology. Bilco recently installed a robotic welding line for its basement-door product and switched all its equipment to computer controls.
“This benefits not just productivity [reduced cost], but enables us to move workers into other areas of the company,” Joyce points out. This is a highly tangible advantage given the local shortage of good workers.
A corollary to “thinking smart” in the area of production is applying old-fashioned Yankee ingenuity to the area of product development. Innovation in this area has been another of the most oft-cited reasons for success on the part of local manufacturers.
First of all, the majority of Connecticut manufacturers make highly sophisticated products. Their very reason for being, in many cases, has been the development of something new and unusual.
“Having a market niche helps a lot,” notes Paul Hoffman, president of Orange Research, makers of differential pressure and flow instrumentation.
Many successful companies continue to do well financially because of continuous innovation. Bilco regularly patents new types of specialty doors and hatches. Marlin has come out with a number of new types of guns that exploit the expanding market for target games.
A host of local companies are either completely or in part contract manufacturers, continually developing products to meet the specific needs of customers.
Yet another reason local companies are able to do well in the present economy is the breadth of their customer base. Quite a few local manufacturers sell their products nationwide and even worldwide. “The global nature of a business tends to stabilize it,” says MAC Executive Director Frank Johnson.
“The different markets we deal with tend to complement one another,” says Hoffman of Orange Research, backing up Johnson's observation. Orange Research does business throughout the U.S., as well as some exporting.
Joyce cites “being an international company” as one key reason for the success Bilco currently enjoys.
In fact, most of those companies that reported small or no growth over the past year are those whose customer bases are more limited - in particular those, such as GKN Westland of Wallingford, in the aerospace industry for which defense contracts play such a key role.
(MAC's Johnson however, sees a bright outlook even for these, predicting that events in Yugoslavia may quickly reverse the recent cutbacks in defense spending.)
Perhaps the greatest challenge local manufacturers have faced recently has been the shortage of skilled manufacturing labor.
Most companies are coping any way they can, in many cases by relying on informal on-the-job training to bridge the gap. Bilco, for example, takes unskilled laborers and teaches them welding and other trade skills. Many Bilco managers even started on the shop floor.
A number of manufacturers say they have benefited from retaining good workers as much as possible and training and retraining them to meet the company's changing production needs.
“Low turnover helps any manufacturer,” notes Hoffman of Orange Research, where the average length of employment is in excess of eight years. “It keeps stability in the company and helps quality.”
Some companies, however, have turned to formal, outside programs to help them cope with labor shortages. Most who have done so report being pleased with the results.
Ed Diamond, co-owner of Lance International, a Hamden-based manufacturer of electro-mechanical sub-assemblies, cables and harnesses, says his company has benefited significantly from the welfare-to-work program.
Lacey has developed a training program in conjunction with Central Connecticut State University. Lacey's Warner reports that the program “is working well for us.”
GKN Westland Aerospace also set up a formalized training program last summer. Vice President of Operations Bob Francis says theirs, too “is working out well.” In addition, Francis points out that GKN Westland looks to the local tech schools and community colleges to augment the training the company offers.
“They've been very proactive,” he notes. “It's been a very good partnership.”
Although no longer as serious a problem as it was just a few short years ago, the high cost of doing business in Connecticut is another challenge manufacturers in the area must continue to address. Most companies are pleased with steps the state has taken recently to help manufacturers.
Applause for the reduction in workers compensation premiums is universal. Other state actions have also been greeted with enthusiasm. Diamond and his partner Murray Doscher of Lance cite the enterprise zone program as one they like, and hope to take advantage of it in a few years when they relocate. Lacey's Warner points to utility deregulation as another “step in the right direction.”
Many manufacturers, however, would like to see the state do more - or at least are expressing concern that none of the recent gains be lost.
“The cost of doing business here continues to be high,” says Bilco's Joyce. “The concern we have is that efforts continue every year to go back to what we used to have.”
“We'd like not to have harmful legislation, for example, rolling back the workers compensation reform of '93,” says Johnson.
“If companies feel Connecticut is aggressive and willing to support manufacturers, that's the biggest thing,” says Hoffman. “It will help bring companies in, keep companies here.”
Provided the state does not repeal recent helpful reforms, most companies see the future of manufacturing looking bright. In particular, they predict a rosy future for small and mid-sized companies.
“There are a lot of small high-tech companies that are developing new products,” says Diamond of Lance. “I think the manufacturing base is stabilizing. The growth is coming from high-tech start-ups.”
“What I see in the Bridgeport area is a bit of an upswing - more small entrepreneurial types coming into the area,” says Warner of Lacey.
MAC's Johnson echoes these perceptions. “The trend is that small and mid-size manufacturers will take over as drivers of the economy,” he predicts.
|
Go FirstGo PreviousGo
NextGo LastGo
to Index
|
|
