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Published: Sunday, 12/4/2005

Area factories hum but with fewer jobs

BY JULIE M. McKINNON
BLADE BUSINESS WRITER

In three years, Crikey's Original Australian Pies has progressed from hawking hot meat pies to Woodville Mall shoppers to supplying frozen ones made in its new Toledo bakery to Kroger, The Andersons, Kazmaier's 5-Star Market, and other grocery stores.

Crikey's remains far from needing all of its factory's capacity of 1 million pies a month, but business for the 15-employee company definitely is on the rise. Crikey's services 150 stores all together, but Kroger is adding the microwaveable meat pies in more locations starting next month, and sales to distributors is taking off, said Purri Gould, vice president.

"It's a big step for us now," he said.

Other companies in northwest Ohio have been taking similar steps the last few years as manufacturing has picked up steam - at least according to one measure.

The Regional Growth Partnership's monthly manufacturing index for northwest Ohio has registered growth in factory activity for 25 straight months now through October.

Among the local index's six components, employment, production, and new orders typically are the key categories showing upticks when compared to the month before. The survey is based on answers provided by about 26 businesses.

But despite those positive readings, the Toledo area in fact lost 400 manufacturing jobs between October and September, state statistics show.

Further, it had 1,400 fewer manufacturing jobs in October compared to the same month a year ago; 4,000 fewer jobs than the average for 2003; and 10,100 fewer jobs than the average in 2001 - the year the recession started, according to the Ohio Department of Job and Family Services.

Eileen Granata, vice president for strategic resources at the Regional Growth Partnership, explained that the local manufacturing index is accurate at determining whether any growth occurs, but it cannot determine how much growth is occurring.

For example, many participating companies may be increasing production, but perhaps only by a small amount, Ms. Granata said.

Plus, the index is just one measure to determine the local economy's strength, and it does provides more current data on, for example, production, than other sources, she said.

However, Paul Kozlowski, a finance and business economics professor at the University of Toledo, said the local index's sample size is far too small to represent the area. "It's one measure, but it's one very defective measure," he said. "I'm not sure that it represents anything."

Ms. Granata said the index would be more reliable if more businesses were surveyed, but finding companies willing to answer questions consistently is problematic. "The more people the better, but we think we got a pretty good mix of different businesses in the area," she said.

Still, Mr. Kozlowski and some economists agree that area manufacturing activity has increased, though factories are producing more goods with fewer workers.

Toledo's 60-employee Rea Polishing Inc. is among those looking to increase production - but not increase its payroll - by investing in more robotics and boosting efficiency.

Rea primarily prepares head lamps and other steel parts for chrome plating. Once chromed, the parts are used on Harley-Davidson motorcycles.

Sales at Rea are down slightly this year for the first time since opening a decade ago, said Jay Rea Jr., vice president. "This is the first year we haven't had double digit growth," he said. "We are starting to look for new customers."

On the Regional Growth Partnership's monthly manufacturing index, new orders have hovered below the growth line of 50 percent during four of the last six months. Ms. Granata said the last two months especially may indicate manufacturing is slowing again.

"It's not been a big drop," she said. "We've got kind of a holding pattern."

Some experts note that local and statewide manufacturing activity has lagged the nation, something the Regional Growth Partnership's index often indicates for northwest Ohio.

"Ohio's turning the corner but at a pace that remains lackluster," said Richard DeKaser, chief economist at National City Corp. in Cleveland.

The recession hit Ohio's factory employment harder than the nation as a whole, though some parts of the state are doing better than others, said Mark Schweitzer, assistant vice president and economist at the Federal Reserve Bank of Cleveland.

Northern Ohio has both older factories and is a heavy producer of durable goods - a troubled sector that includes autos. For cities like Toledo, that means twice the adverse effects, Mr. Schweitzer said.

Since 2001, the area's biggest factories - DaimlerChrysler AG's Toledo Jeep Assembly and General Motors Corp.'s Toledo Powertrain - have suffered job losses as operations were streamlined.

At about 3,600 hourly positions, Toledo Jeep has about 1,000 fewer permanent factory jobs since it replaced the now-demolished Jeep Parkway buildings with the more efficient Toledo North Assembly Plant, and scaled back Jeep Wrangler production in 2001. Attrition has trimmed 500 of 4,000 jobs at Toledo Powertrain since 2001.

However, there are some bright spots.

A factory complex Chrysler is building in concert with suppliers to help produce two-door and four-door Wranglers next year will add about 200 jobs. Other firms are expanding or opening local factories to supply Toledo Jeep, creating about 700 jobs.

For its part, Crikey's expects to add about 10 factory and sales employees next year if more customers embrace its frozen meat pies, Mr. Gould said. The company, headed by Mr. Gould's Australian mother, Lynne Gould, who followed her American-born husband here a few years ago, estimates it will have 55 employees within three years.

But, on the downside, other factories have cut back the last few years. More than 250 suburban Toledo jobs were lost, for example, after Alcoa Inc., Reichert Stamping Co., and Delafoil Inc. closed.

Additionally, 100 area manufacturing businesses closed between 2000 and the start of this year, said Chi Nguyen, economist for the National Association of Manufacturers.

Overall, business conditions in the Toledo area are improving after declining during the first six months of 2005. But they remain below last year's height, according to a quarterly index done by Mr. Kozlowski.

Contact Julie M. McKinnon at: jmckinnon@theblade.com or 419-724-6087.



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