When James F. Marquart became president and CEO of the Manufacturing Jewelers
& Suppliers of America, nine years ago, the group had more than 500 members
in the Providence/Attleboro region alone. Today, it’s less than 200.
Of those who remain, very few make what was once Rhode Island’s specialty: costume jewelry and findings. Instead, they tend to focus on precious metals – gold, silver and platinum – and serve a high-end market: B.A. Ballou, Tiffany’s, Birks.
“Costume jewelry, for the major part, has been moved offshore,” Marquart said in an interview. “The vast majority of costume jewelry manufacturing is now done in China and other Asian countries. … This was the jewelry capital of the United States when it came to non-precious manufacturing, and now our records show we have lost 60 to 70 percent of the work force on the non-precious side over the last 20 years.”
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Everyone knows Rhode Island’s manufacturing sector has declined – by more than one-quarter between 1992 and 2002 alone, or 24,550 jobs.
The jewelry industry has shed jobs particularly fast, by the tens of thousands since the 1980s, to about 8,000 now. In September alone, 116 jewelry workers lost their jobs in mass layoffs, not to mention those let go individually or in small groups.
But just as the decline in jewelry manufacturing shows the difficulties Rhode Island faces in a highly competitive, global marketplace, the survivors are proving that with the right strategies, manufacturing can still succeed here, said Saul Kaplan, director of business development for the Rhode Island Economic Development Corporation.
“Innovation is at the heart of strengthening the manufacturing sector in the state … innovation both in creating new products and in creating innovative capabilities to manufacture and distribute those products,” Kaplan said. “The jewelry industry is a great example of both.
“If you look at companies like Tiffany,” Kaplan added, “what you see is a steady stream of innovative new products with significant consumer demand. And when you look under the covers, you see a significant investment in new technologies and innovative processes to make the manufacturing process more efficient, more flexible.”
Here’s what it comes down to, industry insiders say: Labor in China, India, Thailand will always be cheaper. So a U.S. company that wants to stay competitive has to make a choice: move offshore to cut costs, or improve efficiency here while focusing on the most viable product lines.
The Providence Chain Company, for example, shifted its product mix from 90 percent base metals to 90 percent precious metals, and overhauled its entire manufacturing process to eliminate waste, increase productivity, and drive down turnaround times and machine changeover times.
Curtis A. Ley, president and CEO of B.A. Ballou & Co., said his company has invested heavily in technology, especially in the production of findings, which are about two-thirds of Ballou’s output.
“If we’ve got the technology, we can compete with anybody,” Ley said. “And that technology minimizes labor. You still need strong knowledge and talent, but you don’t need as many people. I have reduced the labor force here by a significant amount in the last five years, and that has improved our productivity.”
Five years ago, Ley said, Ballou employed more than 400 people. Now it’s just under 300 – but those jobs are safer because the company is stronger, he said.
That said, Ley is still eyeing China for its findings production, especially the roughly 30 percent made with base metals, to be sold to costume jewelry makers.
“To sell findings in base metal, have to have access to the China market by being there,” Ley said. Ballou isn’t planning to leave Rhode Island, he added, but “that doesn’t prevent me from looking at opportunities to make product elsewhere.”
Similar motivations make China extra appealing for costume jewelry makers, Marquart said. China’s trade barriers, for which Marquart says the U.S. government has shown too much tolerance, mean the only way into the lucrative Chinese retail market is to set up a plant in China, with a local partner.
In the U.S. market, meanwhile, stores such as Wal-Mart have run prices down so low, Lay, Marquart and others said, that many manufacturers have chosen not to even try to sell to them. Ballou sells its jewelry to independent and high-end stores. The Carla Corp., also in East Providence, sells to independents and to niche markets; one of its newest lines, for example, is Toesies, a collection of toe rings and anklets.
It’s on this front, industry insiders say, that being here can be a plus.
“You really have to be fashion-forward, and you really have to be cutting-edge,” said Brian Fleming, senior vice president of the Carla Corp. His company watches the fashion magazines, the TV celebrity shows, all the latest trend reports, and it jumps right in when it sees an opportunity. “That’s one thing we can control as a domestic manufacturer – style, getting that style out to the marketplace immediately.”
The Rhode Island area in particular has another major strength: its skilled jewelry-making work force, which is what Tiffany and Birks both said drew them to the state. But the most valuable part of that work force is declining.
At the Carla Corp., the median age is 42, Fleming said; three workers retired last year, and another is retiring soon. Ballou’s most skilled craftsmen are also aging. Across the industry, Marquart said, the most skilled jewelry makers “are in their 60s and older.”
“We as an industry have to continually work hard to get young people to replace those people who are retiring,” said Ley. “It’s not easy to convince someone to sit and make jewelry at a bench rather than work at a computer.”
Low-skilled immigrant workers, on the other hand, who once made up the bulk of the jewelry industry’s work force, aren’t of much use to the reconfigured industry. New projections from the state Department of Labor and Training show the demand for team assemblers, for example, once key players in the jewelry industry, to drop by almost one-quarter by 2012, to only 3,023 jobs in the entire manufacturing sector.
To attract new workers and upgrade current workers’ skills, the Manufacturing Jewelers & Suppliers of America and the Community College of Rhode Island have teamed up to develop a set of training courses, starting next month, covering everything from electroplating and stone-setting to business skills.
That is yet another example, the EDC’s Kaplan said, of how Rhode Island’s jewelry industry is successfully adapting to the new world.
“What you’re seeing is a tightening up of our work force development efforts,” Kaplan said. “We’re doing much better at creating a connection between the emerging demand and the required skills to be able to take those jobs.”
And the industry’s efforts, Kaplan added, are paying off.
“There’s no question that we’ve come through a very significant process in the jewelry industry, and a lot of jobs were lost,” he said. “But the story within the story is the sector within the jewelry industry that is now growing and producing new jobs. I don’t think we’ve paid enough attention to that.
“That same idea is happening all across traditional manufacturing sectors. Those companies that invested in new technologies to make their manufacturing more efficient, those are the companies that are going to create the better jobs we’re all looking for.”
