Sponsored by Forest Grove Economic Development
Home Back Issues April 2012 Data dig: Is Oregon manufacturing really in decline?

Data dig: Is Oregon manufacturing really in decline?

| Print |  Email
Articles - April 2012
Thursday, March 22, 2012
Article Index
Data dig: Is Oregon manufacturing really in decline?
Page 2
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

Q&A: David Lively of Organically Grown Co.

News
Tuesday, July 01, 2014
OGCLogoBY HANNAH WALLACE | OB BLOGGER

Demand for organic food continues to soar: Last year, sales of organic food rose to $32.3 billion — up 10% from 2012. In Oregon, organic produce wholesaler Organically Grown Co. has been championing organic growing methods for four decades.


Read more...

The Scott Kveton affair

News
Wednesday, July 09, 2014
ScottKvetonBY LINDA BAKER | OB EDITOR

Scott Kveton, the CEO of Urban Airship is taking a leave of absence from the company. As the story continues to unfold, here’s our perspective on a few of the key players.


Read more...

Risks & rewards of owning triple net investments

Contributed Blogs
Thursday, July 24, 2014
NNNinvestmentBY CLIFF HOCKLEY | OB GUEST CONTRIBUTOR

With the increasing retirements of Baby Boomers, a massive real estate shift has created a significant increase in demand for NNN properties. The result? Increased demand has triggered higher prices and lower yields.


Read more...

Updated: Disrupting innovation

News
Tuesday, July 08, 2014
070814 thumb disputive-innovationBY LINDA BAKER  | OB EDITOR

The New Yorker recently published a sharply worded critique of “disruptive innovation,” one of the most widely cited theories in the business world today. The article raises questions about the descriptive value of disruption and innovation  — whether the terms are mere buzzwords or actually explain today's extraordinarily complex and fast changing business environment. 

Update: We caught up with Portland's Thomas Thurston, who shared his data driven take on the disruption controversy.


Read more...

Register for 100 Best Companies survey

News
Wednesday, August 20, 2014
OBM-100-best-logo-2015 150pxwBy Kim Moore | OB Editor

The 2015 survey launched this week. It is open to for-profit private and public companies that have at least 15 full- or part-time employees in Oregon.


Read more...

Managing family assets: The importance of planning ahead

News
Friday, August 22, 2014
Unknown-1BY CLIFF HOCKLEY |  OB GUEST CONTRIBUTOR

When business intersects with family, a host of  situations can arise. Without a clear vision and careful planning, hard-earned investments can become stressful burdens.


Read more...

Podcast: Interview with Pete Friedes

Contributed Blogs
Wednesday, August 27, 2014

082714-thumb friedesbookTom Cox interviews Pete Friedes, author of "The 2R Manager," about becoming a Best Boss.


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