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Sandie Allen
Friday, May 29, 2009
Inside Product Design & Development
New England’s manufacturing challenges and opportunities
By Mass High Tech staff
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The cost of doing business and taxes are perennial complaints from New England manufacturers, but those aren’t the only factors impacting the success of the region’s manufacturers. A handful of manufacturing sector representatives who were heading to the Eastec 2009 show in Springfield last week shared their thoughts on what it takes for manufacturing to succeed here, and the impact of the federal stimulus bill.
Agree with the comments or disagree? Join the discussion using the comments box after reading the article, and let us know what challenges your company faces and whether the stimulus package can help your sector.
Q. What’s the greatest challenge for a manufacturing company in New England?
It’s taxes and labor cost. Our competition, more and more, is coming from Italy and Spain and China. China is our market, but as they find out what we are doing and try to parallel design it, they can do it with a lower cost of labor. The tax structure is very difficult in Massachusetts. We’ve made great progress on workmen’s comp, but we’ve gone backward a bit.
Howard Gries, president, Kinefac Corp.
Worcester
Manufacturer of parts and threaded components
As with many areas of the country it is the burden that is put on small business with regard to taxes, high cost of insurance, etc. These drive manufacturing out of the state. Additionally I do not see the state government promoting and offering incentives to lure manufacturers to the state.
Jim Cepican, general manager, accessories division, Citizen Machinery America
Agawam
Distributor of machine tools, manufacturer of accessories
The greatest challenge comes from the fact that manufacturing does not attract the interest or attention of government officials that set the agenda for investments in education, research and infrastructure. We have in recent years found it difficult to recruit sufficient numbers of engineers and technicians with the skill sets for laser assembly and test and for industrial laser-related R&D.
Terry L. VanderWert, president, PRIMA North America Inc.
Chicopee
Manufacturer of machinery and lasers
Truly listening and responding to the voice of the customer is the key to surviving and thriving. That means eliminating waste throughout all processes and embracing a lean philosophy to ensure that customers get the products they want, how and when they want them. At VIBCO that has meant dramatically reducing lead times while also reducing inventory, training a flexible workforce to meet customer demand, shipping all products same or next day, and focusing on quality, throughput and innovation.
Karl Wadensten, president, VIBCO Vibrators
Wyoming, R.I.
Manufacturer of industrial and construction vibrators
The biggest challenge is identifying, retooling and retraining for emerging markets and product lines in sectors that will include energy and environmental applications, defense and the evolution of the automotive industry. In this context, new methods to retool that are faster and cheaper are needed in order to support multiple industrial sectors, thereby establishing new models for sustainability. Furthermore, low-cost, lean manufacturing practices will be incorporated into high-value products at an earlier stage to generate increased profits, further sustaining long term real growth.
Jeffrey Morse, managing director, National Nanomanufacturing Network Center for Hierarchical Manufacturing
University of Massachusetts Amherst
Nanomanufacturing/Cross-industry
Availability of specialized goods and services from local sources. We have seen several small companies who provide very specialized items either relocate out of the area or close shop. Massachusetts, in particular, is no longer the technology hub that it once was. Having to procure these items from outside the region adds to logistics and support costs while depriving the area of needed technical resources and innovation.
Rod Kurtz, president, Dawson-Macdonald Co. Inc.
Wilmington
Industrial distributor
Remaining competitive in a global market. New England manufacturers face hurdles not seen in other states or countries. The cost of doing business in New England is becoming rapidly insurmountable: labor, insurances, regulations, taxes, fuel and more. Taken individually, any one of these would damage a company’s competitive capability. Together, they present our manufacturers with challenges not seen by many of their competitors. Failure has become an option. Not too late for change.
Ellen Bemben, president and CEO
Regional Technology Corp., Springfield
Advanced materials and manufacturing, biotechnology, information technology, clean technology, defense
The greatest challenge is how to integrate and grow the existing skills and expertise and prepare the future workforce by leveraging the research and education at UMass towards new precision manufactured, high performance products in the areas of medical devices and alternative energy.
Sundar Krishnamurty, associate professor
University of Massachusetts Amherst
Education
Q. What impact -- direct or indirect -- do you expect your industry sector to see from the federal stimulus/recovery package?
Very indirectly. We haven’t seen it yet, but we believe that the commitment of money to wind power where we have some clients, and public works projects could be useful. Also we make equipment that processes bolts and fasteners that go into concrete. So there are some aspects of public works that should have a good effect for us.
Howard Gries
Kinefac Corp.
I really do not know how this will affect our industry. I do know with the tight credit situation it is difficult for small business to invest in capital equipment. If you tax people making $250,000 or more you are directly affecting the small business owner. This limits their ability to expand and hire new employees.
Jim Cepican
Citizen Machinery America
The impact, if any, will come from the extension of the bonus depreciation that was also in effect in 2008. This program provides an incentive for manufacturers to invest in new manufacturing equipment by allowing them to write off in 2009 an extra 50 percent of the cost of new equipment that is purchased and put into service within 2009.
Terry L. VanderWert
PRIMA North America, Inc.
Many of our vibrators are used in concrete construction applications, so we have an opportunity to positively impact sales via an increase in infrastructure projects, particularly those involving bridges, tunnels and other large concrete structures. Our job is to make sure that the contractors for those projects are educated about our products and understand the time and quality advantages of using our products and technical support to ensure proper concrete vibration.
Karl Wadensten
VIBCO Vibrators
Nanomanufacturing will benefit from government funds invested in research in Nanotechnology, as well as Technology Innovation Programs established by and partnering with industry to focus advanced and emerging nanomanufacturing processes towards new products and application opportunities. Again, this represents a new infrastructure and job base for the emerging industries, as well as high salary positions which will further be self sustaining as the industry evolves.
Jeffrey Morse
UMass Amherst
We are an industrial distribution company involved with surface preparation equipment and supplies, much of which is used to service, recondition and extend the useful life of “infrastructure” items, such as bridges, highways, storage tanks and building structures. One of the items earmarked by the federal government for economic stimulus is “infrastructure,” so we can only assume that this should have a positive impact on our industry sector.
Rod Kurtz
Dawson-Macdonald Co. Inc.
We remain skeptical about the potential effectiveness of the stimulus bill. Only 2 percent of monies appropriated have been released to date under this bill. Further, the distribution approach seems too “shotgun.” Too many targets and a delivery method that has yet to be calibrated. Our members continue to bootstrap (with some success), rather than wait for a bailout that might not be forthcoming or that may be wasted on narrow projects that have little hope for success. We hope we are totally wrong.
Ellen Bemben
Regional Technology Corp.
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