Data dig: Is Oregon manufacturing really in decline?

| Print |  Email
Articles - April 2012
Thursday, March 22, 2012
Click on any graph to view larger.
0412_DataDig_Manufacturing
0412_DataDig_Machinery
0412_DataDig_Paper
0412_DataDig_PrimaryMetal
0412_DataDig_FabricatedMetal

 

In light of these obstacles, how can Oregon maintain its upward trajectory? Paradoxically, job-killing automation may reduce the need for off-shoring, says Beleiciks. “As labor becomes a smaller portion of the output then it makes for less of a need to go after cheaper labor by off-shoring. There has been a lot of talk recently about on-shoring.”

Two case studies spotlight this phenomenon — as well as a growing emphasis on workforce training to keep local manufacturers competitive. In 2010, Portland-based KEEN Footwear opened a footwear factory in the Rose City. CEO James Curleigh — who has been in Oregon’s spotlight after meeting with President Obama in January –— cites three reasons: First, duty and transportation rates; labor and material costs in Asia have escalated, so “the economics of building in America start to make a lot more sense.” Second, digital-age “supply chain acceleration” has prompted the company to want tighter control over capacity, sourcing and quality standards. And third, KEEN used the factory to launch the higher-priced Utility line of steel-toed boots for American workers, which incorporated innovations they wanted to protect. Initially, the factory employed about 15 workers, but since then, as Utility became KEEN’s fastest growing brand, employment has doubled and Curleigh expects to hire more.

Earth2o, bottler of natural spring water in Culver, is another growing Oregon manufacturer. Last summer, demand was so strong for its product that it had to pull back from sales in Japan and reinvest to expand capacity, says CEO Steve Emery. And now it’s opened sales in China. Emery has seen “an expansion of marketplace” for Oregon products. “My friends in the beverage or the food industries all have been expanding their geography whether it’s outside the region or outside the country.”

One way Earth2o made its product stand out was by training its workforce in the highest level of NSF Safe Quality Food certification. Earth2o isn’t alone in using workforce training to raise its profile. Agnes Balassa, a workforce policy adviser to the governor, points to groups of small manufacturers that have banded together in consortia in recent years for high-performance trainings such as lean manufacturing, which not only reduces waste and spurs efficiency, she says, but also trains “a workforce to be more focused on problem-solving, quality management, being actively engaged with the work.”

“One of the challenges for our entire education system,” says Balassa, “is this dialog that says ‘manufacturing is dying.’”  So students don’t tend to select into these programs … which will make it hard to sustain them.”

Why is it important to maintain skilled labor for manufacturers? These made-in-Oregon and exported out-of-state products bring “new money as opposed to circulating existing money,” says Balassa.  State economist Beleiciks agrees, adding, “even if they’re not exporting, if they’re off-setting imports, it will have a similar effect.”

So aside from creating jobs, in-state manufacturing boosts tax revenues, provides income to Oregon stakeholders and induces development of necessary infrastructure.

Bringing actual manufacturing jobs back to Oregon will be an uphill battle. KEEN and Earth2o are only two examples of Oregon companies at the leading edge that may bring domestic manufacturing back from the brink.

Brandon Sawyer is research editor for Oregon Business. He can be reached at brandons@oregonbusiness.com.

CORRECTION: This story was corrected on April 30, 2012, to change "outsouring mania" to "off-shoring mania" in the first paragraph. THE EDITORS.



 

Comments   

 
Mel White
0 #1 VP of Marketing and Business DevelopmentMel White 2012-04-16 11:53:06
I couldn't agree more. I co-manage a trade show design/manufact uring company in Portland, Classic Exhibits, with distribution throughout North America. Yes, it's tough being a manufacturer in the USA, but not impossible. You find niches that importers ignore or can't respond to fast enough, you source raw materials domestically and internationally , you look for strong partners, and you nurture a "can-do" culture. Mostly, you treat your customers as "customers" and not adversaries. No one is getting rich, but keeping folks employed has its spiritual rewards.
Quote | Report to administrator
 
 
Scott R Schroeder
0 #2 Offshoring vs OutsourcingScott R Schroeder 2012-04-16 14:17:38
@Brandon, your leading paragraph uses the term "OUTSOURCING". If you were only refering to the migration of jobs outside of the States, your use of that term creates confusion. The more accurate term is "OFFSHORING". "OUTSOURCING" can be both onshore and/or offshore.

Good article otherwise.

I own a Contract Manufacturing company in Corvallis,Orego n that relys on outsourcing. So I am biased and sensitive to the all too often confusion caused by the misuse of these terms.
Quote | Report to administrator
 
 
Brandon Sawyer
+1 #3 UPDATEBrandon Sawyer 2012-04-30 21:31:48
The word “out-sourcing” has been replaced by the more accurate term, “off-shoring,” in the opening paragraph of this article.
Quote | Report to administrator
 

More Articles

Fighting Fire With Fire

May 2015
Friday, April 24, 2015
BY BEN DEJARNETTE | INVESTIGATEWEST

Timber companies and environmental groups take a stab at collaboration to boost logging and restoration in Oregon fires.


Read more...

The Health Guru

May 2015
Monday, April 27, 2015
BY LINDA BAKER

Mohan Nair channels a visionary.


Read more...

Opening soon: 3 of the coolest new breweries in Oregon

The Latest
Thursday, March 19, 2015
brewthumbBY JACOB PALMER | DIGITAL NEWS EDITOR

There are 278 companies licensed to operate as brewery, according to the Oregon Liquor Control Commission. Here are three new beer-making hubs slated to open soon.


Read more...

Short Shrift:The threat of just-in-time scheduling

May 2015
Monday, April 27, 2015
BY AMY MILSHTEIN

Companies can benefit when they use software to meet staffing requirements and address employees' family and life commitments.


Read more...

Picture This

May 2015
Monday, April 27, 2015
BY JACOB PALMER

As a general rule, the more people with autism can be provided with visual cues, the better they will be able to understand and manage their environment. It’s a lesson Tom Keating learned well. The 61-year-old Eugene grant writer spent 31 years taking care of his autistic brother James, and in the late 1980s developed a spreadsheet that created a series of nonsense characters that grew or shrank depending on how much money James had in his account. 


Read more...

Beyond Bodegas

April 2015
Friday, March 27, 2015
BY JACOB PALMER

Five years in the making, the Portland Mercado — the city’s first Latino public market — will celebrate its grand opening April 11. A $3.5 million public-private partnership spearheaded by Hacienda CDC, the market will house 15 to 20 businesses in the food, retail and service sectors. It has some big-name funders, including the Paul G. Allen Family Foundation and JPMorgan Chase. The project goals are equally ambitious: to improve cross-cultural understanding, alleviate poverty and spur community economic development. 


Read more...

The best crisis is the one you avoid

Contributed Blogs
Wednesday, April 15, 2015
crisisthumbBY GARY CONKLING | GUEST BLOGGER

Avoiding a crisis is a great way to burnish your reputation, increase brand loyalty and become a market leader.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS