The jobs are leaving! The jobs are leaving! Sounds like something Paul Revere might once have uttered, or more likely he was too smart. But that's the battle cry from Massachusetts, at least until they looked at all the facts.
Brian R. Gilmore, executive vice president at Associated Industries of Massachusetts, said more efficient production methods have the state’s manufacturers making the same amount of merchandise as 10 years ago, with 200,000 fewer manufacturing workers.
Massachusetts manufacturing exports exceeded $25 billion in 2007, a 47 percent increase over 2001, led by optical and medical instruments, electrical machinery and parts and pharmaceutical products.
Not too shabby, especially for a state like Massachusetts that isn't exactly the most friendly to business. We've poked at the productivity question for years and came to the same conclusion: improvements in efficiency have led to far more job losses than companies that follow the lemmings to offshore locations in search of cheap labor. That doesn't mean we don't have a responsibility to the employees displaced by productivity improvements. In a perfect world businesses would leverage improved productivity to be more competitive, thereby increasing sales and absorbing displaced workers. In the real world many companies rely on productivity improvements just to remain cost neutral with their competitors, and the top line stays flat.
Some companies are doing an exceptional job of looking inward and improving, as opposed to simply complaining about supposed competitive barriers.
During his talk at WPI, Mr. Healy cited Mar-Lee, Quabaug and Checkerboard Ltd. of West Boylston as manufacturers that have made changes to keep themselves competitive. Each company was a MassMEP client and used state workforce training grants to initiate lean manufacturing and develop strategic growth plans.
Let's take a deeper look at Mar-Lee.
John H. Gravelle, president and owner of Mar-Lee, said his company had many purchase order jobs as a custom molder in the late 1990s, but wasn’t making money. “We were struggling like other molders — lots of work, but no bottom line,” he said.
So they got to work and changed their organization for the new economy.
After analyzing the company’s strengths, he decided to abandon custom molding and get into packing and medical devices, which were not at such a high volume, but paid better. He required customers to contract for a set amount of product. Then, the company invested in technology and automation, and reduced its labor costs.
The changes appear to be working.
Mar-Lee had more than $20 million in sales last year, and revenue growth of 15 to 20 percent over the last few years.
Not too shabby. Hats off to Mar-Lee.