There is a new word in the local manufacturing industry and it’s a far cry from the smoke-stack stereotype that most Rhode Islanders associate with one of the state’s oldest employment sectors.
The word is progressive.
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For a small portion of the state’s manufacturers, that means successfully riding the wave of technology into the next century, while for others it will mean being washed out of an industry that today has become more about investment than returns.
The term, adopted last year by a handful of local manufactures along with industry groups and statewide organizations, has come to mean a way of operating that includes investing in people, equipment and systems.
Unfortunately, according to the Rhode Island Economic Policy Council (EPC), a non-profit organization charged with providing in-depth analysis of the strengths and weaknesses in the Rhode Island economy, the success of progressive manufacturers is often buried beneath the idea that manufacturing in the state is either dead or dying.
To the contrary, the most recent EPC Study, “A Rhode Island Economic Strategy: 10 Ways to Succeed Without Losing Our Soul,” found that middle-wage industries like manufacturing – account for 25 percent of private employment in the state. Employees in these industries earn between $30,000 and $50,000 annually.
“The place where the new economy is most visible is on the floor of a progressive manufacturer,” said Christopher “Kip” Bergstrom, executive director of EPC. “These are the people that are using technology. Manufacturers have been thinking about productivity improvement for decades. In a progressive manufacturer there are as many machines as people.”
It’s a sentiment echoed by many in the local manufacturing industry.
“In this business you survive through technology and capital investment,” Robert Batting, president and chief executive officer of Kenney Manufacturing in Warwick, manufacturer primarily of window and bathroom hardware, said in a recent interview with the Providence Business News. “It’s not fashionable to have technology in this business, it’s essential. Those who have not transitioned can’t compete.”
No one knows that better than Steven Fielding, president of Fielding Manufacturing in Cranston. Over the past few years his company has spent millions of dollars investing in new equipment, and training for its employees. It’s a choice Fielding said, that has, and will continue, to set them apart.
“I tend to think that over time those not making investments in their systems, in their people, and in new technology, are going to be out of business,” he said. “Twenty percent of manufacturers are progressive and are doing things to thrive and survive. Old line manufacturers tend to be losing business. And then there is a quiet sector of much more high tech manufacturers that are thriving.”
And while Bergstrom is reluctant to measure the success of manufacturing in terms of employment gains, he notes the EPC survey found that there are a greater number of gazelles, or fast-growing firms, in manufacturing than any other major sector in the state. According to the study eight percent of manufacturers doubled their employment and wages as the industry grew by close to 27 percent.
“In spite of the fact that the employment rate isn’t a good indicator, manufacturing firms are still performing at double the rate of the average firm in the state,” he said. “That says to me that some of the most healthy, vibrant companies are in the manufacturing industry.”
Fielding agreed that the health of the state’s manufacturing industry should not be based on its employment.
“A progressive manufacturing is one that is growing in revenues, not necessarily in people,” he said. “If our politicians continue to measure manufacturing by the number of employees they will be making a drastic mistake. The production of capital and goods is where the bulk of wealth is created and that’s how it should be measured.”
Progressive manufacturers not hiring new employees are certainly training them. According to Lisa Medeiros, executive director of the Manufacturers Partnership, a non-profit aimed a providing opportunities for the state’s manufacturers more than 4,000 local manufacturing employees have been trained through her organization in the last four yeas.
“Education for the manufacturing industry isn’t about going to a class once or getting a degree,” she said. “A lot of our partner companies have adopted the motto of life-long learning.”
Fielding used one of his company’s recent purchases — a $200,000 CNC Electrical Discharge Machine — as an example of the importance of training.
“It’s like buying a formula one race car and putting someone who’s used to driving a Chevrolet behind the wheel,” he said. “You have to put the right kind of driver with the technology to get the most out of it.”
And while 30 years ago, there would have been one machine operator per machine, today Fielding said there can be one operator for up to three machines.
What’s more, running factory machines is no longer a low-paying job. According to statistics released by the Rhode Island Department of Labor, the average salary in manufacturing is around $37,000 – 27 percent higher than in tourism, the state’s leading industry.
“If we want to maintain our quality of life in Rhode Island, we need these kinds of middle manufacturing jobs,” Fielding said. “They are stepping stones that allow people in the lower end to get to the middle and high skilled jobs.”
It’s a sentiment echoed by the EPC study.
“Rhode Island’s manufacturing legacy has given us a strong base of middle-wage jobs and less economic polarization than our neighboring states,” the study stated. “As manufacturing and logistics transition to the knowledge economy, substituting technology and brainpower for large workforces, they continue to represent Rhode Island’s best opportunity for strong, middle-wage job growth.”
