Despite the seemingly endless drumbeat suggesting that manufacturing is dead in America, the organizations charged with attracting new business and industry to Michigan's Great Southwest are decidedly upbeat on prospects for continued growth in the industrial sector of our region with the ever-present caveat regarding the skilled labor pool in the market.
The International Economic Development Council has deemed this week as Economic Development Week, a part of their year-long celebration of The Year of the Economic Developer in America. The IEDC is marking its 90th Anniversary this year.
I had the opportunity today to sit down with members of the collaborative engaged in economic development for our region, the Berrien County Economic Development Partnership formalized a little over a month ago between Cornerstone Alliance, Berrien County, the Southwest Michigan Economic Growth Alliance and Kinexus.
Berrien County Community Development Director Dan Fette was the first to come to the defense of the manufacturing community pointing out that "We have a $7 to $8-billion economy locally and manufacturing still plays a major role in that number. With 35 to 40-percent of our economy being driven largely by manufacturing and small commercial developers, manufacturing is decidedly not dead!"
Fette notes that the gross earnings of manufacturing employees in Southwest Michigan are significantly higher than any other business sector on the screen. "In fact," he says, "Of the $600-million in growth over the past 15-years, every bit of that gain can be attributed to the manufacturing sector."
Fette joined Cornerstone President Rob Cleveland, Southwestern Michigan Economic Growth Alliance Executive Director Barkley Garrett, and Alex Grumbine from Team Kinexus in addressing the issues facing economic developers here and across the nation today.
Cleveland says that the food processing and logistics industries continue exhibit extreme interest in Southwest Michigan due to the proximity to farmers, growers. cold storage and processing centers in the region as well as our geographic hot spot along major interstate routes, the Great Lakes waterways and other infrastructure. Combined, those elements have placed a lot of prospect companies onto our radar screen, but as always, there are limitations to keeping the lamp lit when in competition with other communities.
Most people who are convinced that manufacturing is dead or dying typically fail to account for the huge productivity gains that have been made thanks to automation and advanced manufacturing practices. Many companies have actually increased their outputs with a dramatically smaller workforce, while the casual observer sees the reduction in manufacturing jobs and assume they are the result of business failures, closures and similar concerns.
Berrien County's economic development team has focused heavily on support of existing manufacturers, a practice they have employed for the past 60-years or better. Cleveland says that the former paradigm of focusing on incentives has become increasingly less effective, because everybody employs the same methodology, and most manufacturers could care less what a communities unemployment rate is saying, "They simply want us to prove that we have the people to do the jobs they will need filled, they typically don't target unemployed people because they don't have the skill sets necessary to do the work necessary."
At Kinexus, Grumbine says their focus is decidedly on the "talent pipeline." The emphasis on getting people in the pipeline with the skills to handle the work of CNC Machinists, Maintenance Technicians, and other skilled laborers is paramount if they are going to successfully recruit high-tech companies and their attendant high-wage jobs. He notes that "There are companies that want desperately to expand but fail to pull the trigger often times due to restrictions on the labor pool."
Fette says that manufacturing wages are rising faster than the general wage population, and while it's not always fun for the manufacturers, it does bode well if the magnet of increasing wage rates draws talent back to the region who had departed when high-tech jobs disappeared in the first place. He says, "If there's a slight uptick in wage inflation, it could help turn around the out-migration issue and encourage some of those skilled workers to return to the marketplace here."
Grumbine says that Kinexus, meanwhile, continues to focus on training programs for the talent base to get increased skill sets for those prospects who could wend their way back to the skilled trades. He says, "Eight companies have taken advantage of our training programs that can offer up to $1,500 for a new hire or trainee or even double that for a new apprentice." Kinexus also offers on the job training as an incentive for companies to help build up their talent base, and job fairs are finding more selective recruits even as his crew works to stem the brain drain by helping with trailing spouse issues to keep the whole family happy when workers are attracted to the area.
Garrett says Modineer and Vickers Engineering are prime examples of manufacturers in the South County region who continue to expand by directly taking on the challenges of the workforce and getting people trained to do the work necessary for them to take on more and more contracts from their own clients.
Cleveland suggested that with the ever-increasing speed with with deals are being achieved in the world of economic development, they may well need to take a look at acquiring some of the most viable sites in the area, preparing the water, sewer, electrical, roadway and other infrastructure needs required to turn a project prospect around on a dime and potentially even consider spec buildings to encourage some of the myriad prospects that peruse the region to pull the trigger and make the decision to establish new manufacturing, logistics, food processing and other similar businesses in Berrien County.
Garrett points out that for every prospect under consideration, our area faces at least 3,500 other communities of similar size and composition in direct competition for those same prospects, so, "We have to be ready." Fette cautioned however, that "We have to fill up current building inventories first," if we're going to succeed.
Grumbine applauded the new collaborative that has all of these teams working together, and the structure in place to help them formalize the response to any prospect considering a business site here. All the players voiced support for the "Legitimate, productive discussions currently underway to work as a well-oiled machine in response to any and all prospective opportunities" to attract new businesses and the resultant jobs to the area.
The old days of every agency individually responding to the same set of requests for proposals (or RFPs) and actually competing against one another are gone. Fette says that ideally, past activity should have called for less qualified responders in the region to "sit this one out" when it was clear that an agency didn't have the right site and instead "throw collective support behind the strongest possible site." The new collaborative partnership has everyone on the same page working for the best overall option and unified presentations to prospects showing broad-based support from the entire regional community.
One major kink in the hose that slows the overall flow is the issue or public transportation which can severely limit job seekers from expanding their geographical outreach for the right opportunity. Fette strongly urges consolidation among the four wildly diverse transit systems currently serving in sectors of the community that, if unified, could make a dramatic difference for employers and employees alike.
Economic Development Week in Berrien County may never have looked this bright before now that everyone is in the same book, working on the same chapter and aligning their cumulative resources to get them onto the same page. Stay tuned for a potentially brighter future thanks to collaboration, cooperation and partnerships like never before throughout the region.
In the photo accompanying this story are the players in that collaboration including (left to right) Barkley Garrett from Niles, Dan Fette from Berrien County, Rob Cleveland from Cornerstone and Alex Grumbine from Kinexus.
