Remixed workforce climbing out of Great Recession
JANESVILLE--Finally, some hopeful numbers about the state of manufacturing in Rock County.
Rock County's labor force was remixed by the Great Recession, but figures from the U.S. Department of Labor show the loss of manufacturing jobs here has bottomed out and has begun a slow rise.
In 2002, Rock County manufacturers employed 16,000—the most of any sector.
Eight years later, the number had plunged by almost half to about 8,000 jobs. The lion's share of the loss, or about 6,000, was the result of General Motors' closing and the departure of companies that went down with it, said Bob Borremans, executive director of the Southwest Wisconsin Workforce Development Board.
But in the last two years, data show, the county gained about 1,000 manufacturing jobs.
Manufacturing is coming back, Borremans said.
“But in a totally different format.”
Manufacturing jobs emerging from the Great Recession are technical jobs in a manufacturing setting, Borremans said.
“When you say 'manufacturing,' the concept of a lot of people is an assembly line, or a foundry worker,” Borremans said. “But gone are the assembly lines, gone are the dark, dingy hot environments.
“Robotics has taken over, and more and more is being done with automation. The skill sets are vastly different than what we saw in the old days of manufacturing.
“Most of the manufacturers here in Rock County have state-of-the-art technology.”
Companies must find ways to reduce expenses to compete with lower labor costs overseas, experts say.
They must offer better customer service and use technology, said Russ Kashian, professor of economics at UW-Whitewater.
“Automating is the only way to go,” Kashian said.
A company cannot compete with manufacturers in countries where workers are paid $2 or $3 an hour, let alone less than that.
“But I can buy machines that will bring it down to a comparable price,” he said.
“And even then, it's a challenge.”
To be competitive in the world market today, a company must automate and review manufacturing processes to reduce waste and cost without compromising quality, said Mitch Benson, vice president of materials management and project engineering at Prent Corp.
“We're fortunate in the fact that a majority of our business is in the medical area that has maintained a steady growth,” Benson said.
Over the last two years, Prent's Janesville employment has grown 20 percent, while the company's global growth has increased 50 percent, said Jackie Demas, human resources director. The packaging manufacturer employs 2,000 worldwide.
Manufacturing is important to a community because manufacturing—along with health care jobs—tend to pay the highest wages and offer some stability, Borremans said.
Average wages paid in Rock County continue to lag behind the United States and Wisconsin but are rising to pre-Great Recession levels, said James Otterstein, economic development manager of the Rock County Development Alliance.
In Rock County, the average annual wage in the manufacturing sector peaked in 2006 at about $57,500 a year. The average wage was $50,000 in 2010 and now has risen slightly to $52,500 in 2012, according to data provided by Otterstein.
But any simple correlation between the growth of manufacturing jobs and rise in pay is too simplistic, Borremans and Otterstein said.
Workers today need skills in science, technology, engineering and math and must be able to work as a team to apply that knowledge, Borremans said.
Otterstein noted that most job openings in the production sector last month were for engineers, followed by general laborers, machine operators, welders and computer numerically controlled machine operators.
In the past, the relationship between manufacturing and high pay was the result of unions that had more influence, Kashian said.
Today, “It's the higher education level that is in fact causing wages to go up,” Borremans said.
“Employers are paying more because they cannot find good quality people with those levels of education they need. The competition for good quality workers is probably as high as it's ever been.”
Benson agreed. His company works with schools and the Rock County Job Center to train workers to run the company's numerically controlled machinery.
Signs are that manufacturing growth here will continue.
Segments within the sector that are hiring include metal fabrication, food processing and plastics, Otterstein said.
Examples include ANGI Energy Systems, Kerry, GOEX, Miniature Precision Components, Prent, Seneca, SSI, Tigre, Universal AET.
ANGI, which relocated to Janesville about 10 months ago, has increased employment during that time from 120 workers to 212.
The company manufactures natural gas refueling equipment, otherwise known as CNG.
ANGI employs welders, electrical and mechanical assemblers, engineers and control programmers, said John Grimmer, ANGI CEO.
“We think the Janesville area has a strong labor pool (with) good workers, so we think this as been a really good time and a good place to be growing,” Grimmer said.
Otterstein said the county's economy would continue to evolve. The health care sector, for example, has swapped places with the automotive segment, he said.
Transition periods can be painful and challenging, but diversification leads to a balanced and growing economy, he said.
Don't expect manufacturing numbers to bounce back to pre-General Motors any time soon, Kashian cautioned.
“But we can certainly get a couple of thousand back,” he said.
“If one looks around the world and at the other economies, you have to ask yourself, 'What economy do you want to be?' You don't want to be Europe. Japan has been in the doldrums for 25 years. And the Chinese, they build trains to nowhere.
“Where Rock County is at, where Wisconsin is at, we're struggling,” Kashian said.
“It's not easy.
“But we're doing better.”