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

Downtime with the director of Barley's Angels

May 2015
Monday, April 27, 2015
BY JACOB PALMER

Live, Work, Play with Christine Jump.


Read more...

Photo Diary: Forest Grove Farmers Market

The Latest
Thursday, May 14, 2015
IMG 8469BY JASON E. KAPLAN | STAFF PHOTOGRAPHER

There are more than 160 farmers markets in Oregon, contributing an estimated $50 million in sales, according to the Oregon Farmers Markets Association. We checked in on the Forest Grove market, which for several years has brought local produce and food vendors to Main Street in the center of town.


Read more...

Banking Perspective

April 2015
Thursday, March 26, 2015
BY KIM MOORE

A conversation with Craig Wanichek, president and CEO of Summit Bank.


Read more...

Car Talk

April 2015
Thursday, March 26, 2015
BY LINDA BAKER

Everyone knows cell phones and driving are a lethal combination. The risk is especially high for teenage drivers, whose delusions of immortality pose such a threat to us all. Enforcement alas, remains feeble; more promising are pedagogical approaches aimed at getting people to focus on the road, not their devices.


Read more...

Letting Go

April 2015
Friday, March 27, 2015
BY AMY MILSHTEIN

As baby boomers sell their businesses, too many forget the all-important succession plan.


Read more...

Downtime with the executive director of Greater Portland Inc.

April 2015
Thursday, March 26, 2015

Janet LaBar, Executive director, Greater Portland Inc.


Read more...

On the Road

April 2015
Friday, March 27, 2015
BY LINDA BAKER

My daughter turned 18 last week, and for her birthday I got her a Car2Go membership. Not to label myself a disruptor or anything, but it felt like a groundbreaking moment. The two of us, mother and child, were participating in a new teen rite of passage: Instead of handing over the car keys, I handed over a car-sharing card — with the caveat that she not use the gift as her own personal car service.


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