Companies eye local job growth

RIGHT FIT: Herb Bouchard, left, senior tool designer for Quick Fitting Inc. in Warwick, with company owner David Crompton. / PBN PHOTO/MICHAEL SALERNO
RIGHT FIT: Herb Bouchard, left, senior tool designer for Quick Fitting Inc. in Warwick, with company owner David Crompton. / PBN PHOTO/MICHAEL SALERNO

For more than a decade beginning in 2001, manufacturing jobs left the state and country in droves. But as Rhode Island’s economy slowly creeps back and the cost of doing business overseas increases, some of those jobs may be returning.
Rhode Island ranked eighth in the nation for jobs displaced due to the growing trade deficit with China from 2001-2013. The time period began when China entered the World Trade Organization, according to an Economic Policy Institute report released in December.
Three-fourths, or 2.4 million, of the 3.2 million U.S. jobs eliminated or displaced due to the trade deficit came from the manufacturing industry, according to the institute, based in Washington, D.C.
Locally, the state watched as 13,200 jobs, about 2.6 percent of the total state employment, left the Ocean State over that time period, according to the report. The cost of doing business in Rhode Island was no longer seen as viable, with a much cheaper option across the Pacific Ocean.
Today, however, there are some manufacturing companies – such as Warwick-based Quick Fitting Inc. – looking to expand locally or move operations back to the United States.
John Cronin, Quick Fitting’s U.S. manufacturing director, is working on a $40 million project that aims to create 686 direct and indirect jobs in Rhode Island over the next two years. About 230 of the positions will be directly related to manufacturing and, as a result, the rest will be created indirectly within other industries.
Quick Fitting is a producer of fittings for plumbing, heating and irrigation applications. It has manufacturing facilities in China but is looking to expand its 100,000-square-foot Warwick factory, which employs about 85 people. Plans include the purchasing of new injection modeling equipment.
“The labor costs overseas have gotten higher, and more importantly, the [entire] supply chain has added costs,” Cronin said. “The whole speed of customer-service expectations has made it more important to have local production capacity.”
In its 1960s manufacturing heyday, Rhode Island was home to more than 125,000 jobs in the sector. But by 2013 that number dropped to approximately 40,000, according to Rhode Island Manufacturing Association Executive Director Bill McCourt. But the slide ended, at least temporarily, in 2013 when Rhode Island gained 1,045 manufacturing jobs, the state’s first year-over-year increase in manufacturing employment in 13 years, according to a report released last year by the Rhode Island Manufacturers Register. Raymond W. Fogarty, director of the John H. Chafee Center for International Business at Bryant University, says that besides the recent uptick in Rhode Island manufacturing jobs, he’s heard anecdotally from other manufacturing companies that are planning to expand operations locally. He says a study is being done slated for release in the spring that will corroborate the talk with quantitative data.
“Where we were losing jobs, that has stopped and we’re gaining jobs – not in droves – but companies are growing,” Fogarty said. “I know, from my own experiences with talking with companies every day, there [is] more manufacturing coming here.”
Oversea costs are increasing, which makes the U.S. market once again feasible, he added.
“It always has to make economic sense. [Companies] can’t lose money,” Fogarty said.
McCourt says there are a number of reasons why manufacturers might consider coming back to the U.S., especially from China.
“The problem with dealing with China is three things. One, the wage base is increasing dramatically, for China standards. Two, the quality has been an ongoing problem – the quality is going down – and [three], it’s taking too long for products to get here,” McCourt said. “I think it’s a combination of those three things that are bringing

back.”
McCourt is cautiously optimistic about the numbers, but says Rhode Island has a long way to go before the trickle of jobs that may be returning becomes a surge.
“Geographically, in between Boston and New York with all the beaches, we’ve got a lot. But if we don’t reduce the cost of doing business and solve our energy-access concerns, growing these jobs is going to be extremely hard to do,” McCourt said. “Upward growth, and how fast it happens, is up to our new governor and our legislature. It really comes down to how serious they really want to get with allowing businesses to compete.”
Gov. Gina M. Raimondo has put manufacturing jobs at the top of her list of how to strengthen the state’s fragile economy, which is slowly creeping back from a devastating recession. In her Jobs Plan created during her campaign last year, Raimondo said she would establish the “Rhode Island Innovation Institute,” a center dedicated to cultivating ideas coming out of Rhode Island colleges and universities and keeping them in-state.
She also said she would put more focus in building marine science, food technology and medical-device manufacturing, while creating a “Manufacturers’ Toolkit,” to help existing manufacturers grow.
Cronin is the chief operating officer of a new Rhode Island EB-5 Regional Center, which participates in a federal program that provides green cards for foreign nationals who are willing to invest at least $500,000 in local commercial or job-generating enterprises. The investment must also create at least 10 new jobs, and the center is responsible for creating them.
Last year, the U.S. met its quota of 10,692 visas issued by August, and Cronin expects the number to be matched by May.
Through the program Quick Fitting is trying to secure 40 investors willing to put up a combined $20 million, which Quick Fitting would match.
The two-year project includes the plans to expand the Warwick factory. Quick Fitting’s participation in the program received approval from U.S. Citizenship and Immigration Services in December. Cronin says the project already has sparked some interest from potential investors, who must get federal approval.
Cronin is hoping to line up investors before the annual quota is reached. He couldn’t say last week how much of the project the company is willing to fund on its own, should it be unable to line up enough investors.
“We will get investors, it’s only a matter of time,” Cronin said.
Rhode Island isn’t the most attractive place to do business when looking at the numbers, Cronin admits, but it is where Quick Fitting CEO David Crompton is from. Cronin says loyalty is important to the company.
“If you look just at the bottom line, Rhode Island isn’t the best place to be, but it’s a great place to live and work,” Cronin said. “We’re hoping we can grow the regional center and help other manufacturers grow too.” •

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