Analysis: Local manufacturing on decline?

Experts: Ingersoll Rand closure not indicative of current industry

Mike Baggerman
January 24, 2019 - 3:00 am

Northland Workforce Training Center. September 10, 2018 (WBEN Photo/Mike Baggerman)


BUFFALO, N.Y. (WBEN) - Is the manufacturing industry on the decline?

Tuesday's announcement that Ingersoll Rand plans to shut down its operations in July is casting a spotlight on the local manufacturing industry. Up to 300 jobs in the local manufacturing field will be affected with the plant's shut down.

Ingersoll Rand isn't the only manufacturing plant to see a downfall. Bak USA announced in November that it shutdown, resulting in 77 people losing their jobs abruptly. Additionally, Tonawanda Coke shut down last October and New Era Cap announced in November that it's closing its Derby plant by March.

The Buffalo Niagara Manufacturing Alliance lists hundreds of area manufacturing companies and its executive director said that the local manufacturing sector is the strongest it's been in the last decade.

"We have not seen a true decline at all in our sector since 2008," Peter Coleman said. "We've maintained our employment level. At the same time, we've seen significant increases in productivity coming through our sector."

The BNMA currently has about 200 members organizations. Many of those companies feature a workforce of around 40 people.

"We're the highest paying sector in Western New York," Coleman said. "The average wage in manufacturing is between $63,000 and $65,000 a year. The only other sector that beats us out is energy but there's only about 3,000 jobs in that sector and 65,000 in the manufacturing sector."

Coleman said the industry has a "gray tsunami" in the making and that there's no pipeline of young people to replace retiring baby boomers. 

"(Manufacturers are wondering) why young people are coming out of high school and not considering high skill jobs as an alternative or a pathway," Coleman said. "You can get into this sector with little-to-no debt and be working within a year, making at a minimum $30,000 to $40,000 by the time you're 20. By the time you're 25, you should be in that $65,000 field if you really push yourself."

Nallan Suresh, a UB Distinguished Professor of Operations Management and Strategy in the School of Management, told WBEN that manufacturing at the national level is still "alive and well", though he noted the industry faces the challenges of being financially competitive with Asian countries and that there's a lot of current uncertainty.

"All the trade deals are being renegotiated," Suresh told WBEN. "By the end of this year, I think much of the trade-related uncertainty will go away because, by the end of the summer, (United States-Mexico-Canada Agreement) will hopefully become law and we are almost getting closure on the US-China trade deal."

He said the financial challenges with the industries are forcing many companies to consolidate, such as New Era Cap's decision last year to eliminate the Derby plant. 

"What Ingersoll Rand is trying to do is to reduce manufacturing costs by consolidating costs at one place: their North Carolina headquarters," he said. "And also shipping some production to China...and so on."

Stephen Tucker, the President and CEO of the Northland Workforce Training Center, told WBEN that while there are 65,000 manufacturing jobs in the area there is always a steady flow of opportunities due to retirements. 

"The industry is not adding jobs, it's actually shedding a few hundred jobs," Tucker said. "We still need a group of talented young people to back up those positions."

Evolving technology has long been a factor for manufacturing workers, many of whom fear their job will ultimately be replaced by automation. Tucker said that fear is real but noted that there will a need for individuals with high skills who can troubleshoot any issues with the technology. 

"What we're training individuals for are the jobs of the future," Tucker said. "Jobs that demand highly and technically-skilled individuals. We're very confident that folks coming through our program will not only get placed but placed in careers that pay family-sustaining wages."

"We have companies like Moog and Delphi and lots of manufacturing activities here and in Rochester," Suresh said. "Western New York, on the whole, is definitely coming to thrive as a manufacturing location. Especially in advance manufacturing skills."

Tucker said you can't outsource electricians and that Buffalo is similar to rust belt cities like Cincinnati and Cleveland. However, he did note that the days of an able-bodied person who will learn on the job is coming to an end.

"You still have some shops who need people and provide basic production work but you have a growing sector of individuals or shops and companies that need technically competent people," Tucker said.


Comments ()