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Published: Sunday, 2/19/2012 - Updated: 2 years ago

Manufacturing strengthens, but has way to go

Metro area gains 7,200 jobs

BY TYREL LINKHORN
BLADE BUSINESS WRITER
Workers attach the rear axle with the help of a machine at Chrysler's Toledo North Assembly. Employers will seek more workers with higher skills than just having a strong back, and that includes working with computers. Workers attach the rear axle with the help of a machine at Chrysler's Toledo North Assembly. Employers will seek more workers with higher skills than just having a strong back, and that includes working with computers.
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Manufacturing in the United States may not be poised to roar back to where it was 40 years ago, but right now the business of building things is coming back strong.

That renaissance is especially true in Toledo, where it's difficult to overstate the impact manufacturing has had on our economic recovery.

From June, 2009 -- the low point of the recession that marked the start of the recovery -- to November, 2011, the Toledo Metropolitan Area gained about 7,200 manufacturing jobs. According to the Urban Institute, a Washington think tank, that 22.2 percent gain was the second best in the nation.

Only the Lansing metro area had a higher percentage gain in those 29 months.

Over that period, the Toledo metro area -- which encompasses Lucas, Fulton, Wood, and Ottawa counties -- added a net total across all private sectors of 10,100 jobs.

"We think U.S. manufacturing is the comeback kid, and the data is starting to bear that out," said Eric Burkland, president of the Ohio Manufacturer's Association, which represents about 1,600 manufacturers throughout Ohio.

Still, manufacturing has a long climb back to get where it was before the recession, let alone to Ohio's industrial heyday.

Metro Toledo's current manufacturing employment is down more than 19 percent from five years ago, the Urban Institute said.

Going back 10 years before the recession, the decrease is even more striking. In 1998, there were 62,300 manufacturing jobs in Toledo, according to the state's Ohio Labor Market Information. In December, 2011, the most recent month with data available, the metro area had 39,500 manufacturing jobs. That's a decrease of more than 36 percent.

So is there really a bright future for manufacturing, or is this flash in the pan just a reflection of how far we've fallen?

Though the number of jobs coming back represents a trickle compared to the jobs that were lost over the last 10 years, economists can see the gains continuing.

"We think it has potential to last," said Howard Wial, an economist and fellow with the Brookings Institution in Washington "It has potential to last because production in China is getting more expensive. Wages in China are going up faster than productivity."

Mr. Burkland and Mr. Wial said companies are re-examining offshore production, looking beyond wages to encompass all the costs including quality, transportation, and the hassle of operating a global supply chain.

"This doesn't mean all the off-shore jobs are going to come back, but it does mean some of them will," Mr. Wial said. "The environment is right for these manufacturing job gains to continue."

Metro Toledo added about 1,800 manufacturing jobs last year, and more are coming this year and next as General Motors Co. and Chrysler Group LLC have committed to hiring a total of at least 1,600 people by 2013.

Lucas County Commissioner Pete Gerken believes the area is well-positioned to continue bringing in manufacturing jobs.

"I'm excited about manufacturing. The next four or five years it can really carry us back to economic stability," he said. "The truth of the message is learn how to ride the cycle of manufacturing up and down."

Statewide, the rebound in manufacturing jobs hasn't been as robust as it has in Toledo and other northern Ohio cities. Since June, 2009, Ohio has added 24,600 manufacturing jobs for an increase of about 4 percent.

"I don't want to minimize [the effect of manufacturing jobs on the recovery] because it's been big, but there have been some other industries that certainly have rivaled it," said Lewis Horner, the chief of work force research with the Ohio Department of Job and Family Services. "But then again, you have that role of manufacturing in the economy, how everything is linked together. If manufacturing dies off in an area, it's probably going to take some other industries with it. Hopefully the same thing is true in reverse."

Officials within Ohio Labor Market Information are working on a new 10-year job outlook forecast that will include projections for manufacturing. The last projections showed an anticipated 16 percent drop for metro Toledo between 2008 and 2018.

Mr. Horner said it's difficult to say what the new projections will show.

"If you look at this over time, you have this enormous dip with the recession," he said. "What that does is throws off the trend line, so we have to figure out how to account for that in the trend line. I would be happy if we stayed flat. More probably we will have some sort of decline because we have been declining over time."

In Ohio, the most rapid growth coming out of the recession has been in the northern part of the state. By the Urban Institute's statistics, metropolitan Youngstown was third in percentage gain and metropolitan Akron was fifth. Cleveland was 18th.

"I think on the one hand, it's very encouraging news for many of the metros that suffered quite a bit during the recession around manufacturing jobs. But I think the new reality is that this is a new manufacturing sector," said Margaret Simms, a senior fellow at the Urban Institute. "It's not the manufacturing sector of your father's day."

Employers want workers who are better trained, more skilled, and more flexible. It's no longer enough to perform one task and pass it on down the line.

"The jobs in these new factories [and] mills are high-tech, high value-adding jobs," Mr. Burkland said. "It takes some real skills to work in those facilities. That's the biggest challenge facing us right now to capture the benefits of the manufacturing resurgence."

That's a message Michael Veh is trying to get out to job-seekers in Toledo.

Mr. Veh, the work force development manager at The Source, a Lucas County agency providing employment services, said many people who come through the county's workforce development agency looking for jobs at places like Chrysler or GM, but don't realize the qualifications for those jobs and others like them go beyond just having a strong back. Employers want people who have training, can work together to problem-solve, and understand computer-controlled equipment.

He encourages everyone to build those skills, and sees being successful at that as a way to attract more jobs.

"If that message hits the community hard enough and enough people go out and find the workshops like we offer here … that means the next company that comes in gets a better pool of workers to pick from, and that will help bring in the next company," Mr. Veh said.

Mr. Wial, the economist, said he would argue that if employers are having trouble finding the skill level they need, they might consider increasing wages. However, he admits the United States doesn't have a good system for training people for the new frontier of labor.

"Community colleges are underfunded. Apprenticeships have declined, unfortunately, and neither workers nor employers can navigate the system very well. Workers don't know what kind of training they need, they don't know how to get it, and employers don't know where to get workers with the training they need," he said.

And while no one argues it's a bad thing that manufacturing is leading Toledo's recovery, there's also not anyone predicting sustained growth rates like those seen in the last couple of years. Even if jobs keep coming, it will be at a slower rate. When that happens, there will need to be other sectors hiring to reduce the risk of a worse stagnation of the area's job market.

"You'd really need to have a stronger, more broad-based national recovery in order for that not to be true in northern Ohio," Mr. Wial said about the possibility of a manufacturing slowdown dragging on Toledo's recovery.

"Otherwise that is a real concern."

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.



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