Editors Note: This roundtable took place in January 2020, before social distancing was put into effect.
Roundtable participants, from left: Jen Cusick, director of sales operations, Trividia Manufacturing Solutions; Andrew Curland, CEO, Vitex Extrusion; Kim Cadorette, vice president of operations, BAE Systems; John Tippett, CEO, Textiles Coated International; Michael LaFleur, director of operations, Data Electronic Devices; Joe Shean, president, RP Abrasives; and
Mark Bonta, plant manager, Genfoot America. Photo by Christine Carignan.
Manufacturers have a lot on their plate. They are prepping for a possible downturn, grappling with trade volatility and pondering what the coming elections will bring. And their biggest challenge continues to be the workforce shortage. Even if demand slows, NH manufacturers say they have to keep hiring just to level out the retirement of boomers.
According to the Center for Economic and Policy Research (CEPR) in Washington, D.C., manufacturing lost 12,000 jobs in December. Despite those losses nationwide, NH manufacturers still have jobs to fill. There were 5,593 jobs posted in NH by manufacturers between July and December 2019, says Brian Gottlob, principal of PolEcon in Dover and director of the NH Economic and Labor Market Information Bureau. He says a number of those openings are replacing retiring workers, as well as a backlog of unfilled new jobs.
In January, Business NH Magazine invited seven NH manufacturers to participate in a roundtable discussion about their industry. Those panelists alone are looking to fill more than 200 positions. Kim Cadorette, vice president of operations at BAE Systems in Nashua, says the defense and aerospace sectors have seen significant growth, especially in NH. The Nashua plant produces commercial and defense electronics for flight and engine control, electronic warfare, and energy management and has hired more than 2,000 people over the past three years and is seeking to fill 150 manufacturing positions alone (and more in administrative and other positions).
“The challenge we face is the skill set and the workforce,” says Cadorette. “The baby boomers are starting to retire, [and] that knowledge and experience is going with them.”
Michael LaFleur, director of operations for Data Electronic Devices, says his firm has about a dozen openings right now at its primary facility in Salem, which is a prototype and low-to-mid-volume manufacturing plant. “We are constantly looking to replace our aging workforce that is marching toward retirement. The one thing I am always cognizant of is figuring out how to get that next generation of the workforce to look at manufacturing as a viable option,” he says.
An employee works on a machine at Data Electronic Devices. Courtesy photo.
Andrew Curland, CEO of Vitex Extrusion in Franklin, says they are looking to increase their workforce by about 10%. While that is down from about 20% in the spring of 2019, it is still a challenge to fill those slots. “In business you can work around the economy, but when you have a fixed base of a labor pool that is insufficient for the growth in the economy, it is a real quagmire.”
Curland says trying to outbid other companies for staff has proved unsuccessful. “There is simply not a large enough workforce in this state. We have people in our plant who are north of 70, but the actual pool is insufficient to meet growth plans,” he says.
Vitex, which provides aluminum extrusion, machining and fabrication services, was acquired in January by Vermont-based NSA Industries, allowing Vitex to expand its offerings. “This merger transforms our business into one of the largest, fully integrated aluminum extrusion manufacturers in the U.S.,” Curland says.
Jen Cusick, director of sales operations for Trividia Manufacturing Solutions in Lancaster, says the ability to attract young people is even harder in the North Country. The company is a contract manufacturer of over-the-counter drugs, dietary supplements, animal feed and other products. “We recently made capital improvements using cameras to help with inspection, which allowed us to re-deploy the skilled workers elsewhere,” she says.
Mark Bonta, plant manager of Genfoot America in Littleton, says to find workers in a good economy one has to steal them from another company. However, this manufacturer of outdoor footwear is finding other ways to grow and retain its workforce. While subject to seasonal swings in business, the company chooses to use the downtime to upskill its existing workforce rather than lay them off.
A Genfoot America employee in Littleton. Courtesy photo.
“During our slow periods we use our [experienced] workers, who are experts, as trainers,” he says. “Instead of laying people off, I keep them on and train them. I get a payback in increased skills now and in the future.” The two-year-old program includes leadership, technical and administrative training, and he says it has improved retention rates. “Because we are seasonal it had always been a revolving door,” he says.
For those seasonal workers the company cannot afford to keep on full time, Genfoot is working with a staffing firm to place those workers in temporary jobs with other businesses until Genfoot’s seasonal volume returns, and the company can call them back.
John Tippett, CEO of Textiles Coated International in Amherst, says for the past three years the company, which specializes in corrosion resistant plastic parts for industrial markets, couldn’t hire enough people and eventually had to go outside the U.S. to find workers.
Textiles Coated International’s melt extrusion cast film line. Courtesy photo.
The NextGen Challenge
Feeding into that labor shortage is a misconception that younger workers have about manufacturing environments, LaFleur says. The perception is often of a dirty, low-tech factory instead of the clean, bright and high-tech environments found in many plants. “They have an expectation, then they come in and see that it is very advanced and high tech,” he says. “Our biggest recruiting tool is word of mouth. Once we get people in, we get three or four resumes from their family and friends. I think just getting the word out that manufacturing is moving into an advanced category is the best thing we can do.”
In addition to overcoming stereotypes around manufacturing careers, the panelists says they must overcome the state’s quaint, rural image as well. Joe Shean, president of RP Abrasives, a metal finishing services company in Rochester, says the state needs an image makeover. “I picture Colorado as a high-tech state simply because they developed and sold that image. We haven’t. I don’t know that Colorado has any actual definable claim [to that high-tech image] but they’re making it work,” he says.
Curland agrees, adding NH is a beautiful state with great outdoor activity, which is important to millennials and should be a selling point. “Where are you going to get better? So why is Colorado attracting so many millennials from the east coast?” Curland asks. “Housing costs are high but still lower than neighboring states. A young family working in manufacturing can have a very nice life and enjoy all we have to offer. That is something the state needs to market and position New Hampshire as the Colorado of the east coast.”
Cusick says the North Country suffers from a lack of population, and sometimes the best hires are so-called boomerangs, young people who move out of state, often for school, then return. “We retain them longer. Otherwise, it’s just not a lifestyle a young person wants unless they love the outdoors,” she says.
Although the unemployment rate for college graduates fell to 1.9% in December, according to CEPR, it remains the only educational group with an unemployment rate above prerecession levels. Even though manufacturing pays well and college debt continues to rise to record levels, companies still struggle to attract younger workers who’ve been taught that manufacturing is not a good career choice. “Parents don’t know what advanced manufacturing is,” Shean says. “I fear they have a mental picture of a blacksmith under a fluorescent light, and they won’t encourage kids to go into manufacturing.”
Curland says secondary education is not focused on manufacturing, and some of the curriculum offerings at the college and university level are in degrees that have no direct job prospects. “We did a program at a local high school where we had managers and staff talk to the parents about the life they have. They own cars, vacation campsites, snowmobiles…they’re making very nice incomes,” he says.
Cadorette says the industry is continuing to break down those barriers, but guidance counselors are often overworked and overwhelmed. “I think they are so steeped in what they’ve always done. Here’s your path if you go to college, and here’s the path if you don’t,” she says. Those not on a college path have typically been pushed toward cosmetology or auto repair, Cadorette says. “That message hasn’t changed in 20 years,” she says.
According to Tippet, even as demand for new and innovative products grows, the state’s manufacturers may always be playing catch-up when it comes to workforce. “It is clear that demand is outstripping supply because we are innovating and needing more employees. That is not going change, and New Hampshire’s population is not going to double overnight,” says Tippet. “I don’t see it changing soon. By the time we add five to 10 employees, we will have a new product and need another five to 10.”
He says maybe the state could make it easier for commuters to get here or make living more affordable in NH’s cities.
Strategic Partnerships
Cadorette says filling the pipeline will require broader cooperation between manufacturers, state agencies and schools to teach the skills manufacturers need in employees. “In advanced manufacturing you need more than a high school education, but not all companies can afford to train on those skills,” she says. Companies need to partner “with community colleges and the technical schools and then work with agencies that can help fund those programs,” she explains.
Cadorette says BAE partners with Nashua Community College for a 10-week micro-electronics bootcamp, which has produced 110 graduates over the past three years, she says, adding other manufacturers also participated in the program and gained new employees as well. “It wasn’t just to support hiring that one company needed. It was working with the community on all sides to create those skills,” she says.
Employees in BAE’s manufacturing facility. Courtesy photo.
Genfoot in Littleton formed a similar partnership. Bonta says through an arrangement with White Mountains Community College, workers can earn a certificate that can help them advance. “We’re not just here to make boots, we’re not just here to make money, we are here to help you improve your career and your life. That is where you are going to build bridges of loyalty.”
Cusick says Trividia also invested in people during the slow times, and with the workforce issue they face today, she says those investments really matter.
Fostering Relationships with Workers
Along with recruiting strategies, firms recognize the inherent value of keeping the workforce they already have and are focusing on culture, communication and employee support, from providing educational opportunities to sharing profit and loss statements.
Genfoot joined the Recovery Friendly Workplace Initiative launched in 2018 by Gov. Chris Sununu, which helps businesses find the resources and support they need to create workplaces that can support employees in recovery. Bonta says it has made the company a hub to direct people to resources. “We’re investing in our people,” says Bonta. “We’re not just supporting business goals but our workers’ goals as well.”
Diversity matters, says Cadorette. Workers must be able to see there are advancement possibilities for all and feel at home. “For people coming into manufacturing, they want to feel a part of the family and they need to see that they are being included, and feel like part of the team,” she says. “The more you can create a culture of being inclusive, where everybody has a voice, the more people can see themselves in growth and management,” she says.
BAE has employee-led resource groups including those aimed at supporting African Americans, Hispanics, and LGBTQ employees, who can take part in local site councils to raise issues. “It gives you a voice and a seat at the table where folks are like you,” says Cadorette.
Organizations are also striving to be more transparent. LaFleur says he spends the first hour of each day, walking around the plant talking to people. “Coupled with a record of promoting from within, the transparency creates that team environment.
They can see why decisions are being made, and it really helps with credibility,” he says. “When you are working toward a common goal, that is when you will see critical mass.”
“If you are transparent, you get their buy in for wanting to do better,” says Tippett. “The moment your employee feels like you want to pay them more money, you want to give them more responsibility, you want the company to grow so that they can grow and have better lives, the moment they buy into that then you really start to move along.”
Navigating Uncertainty Ahead
Nationally, manufacturing is in a recession resulting in declining investment. That’s bad news for NH’s manufacturing sector as it chiefly produces capital goods (products used by other companies in manufacturing). Recent trade friction is adding to manufacturer’s woes. Overall, the number of manufacturing jobs in NH declined significantly between 2018 and 2019.
LaFleur says a company has to constantly evaluate the situation and be ready to pivot and retrain. “It is being cognizant of where you are in the industry and taking a more long-term view,” he says, adding it no longer makes sense to simply cut 25% of staff in the slow times since companies can’t backfill when the economy picks up. He says businesses were looking at things from one quarter to the next, and that no longer works. “Are you a day trader, or are you in it for the long haul?” he says.
Curland of Vitex says the key to riding out economic cycles is being nimble. “It can get you through a downturn. An important part of that is to look at the outside numbers, see what is going on in the industry and try to see ahead. If we go back to 2009, all the indications were there: bubbles, over-growth, housing markets, financial markets all showed that we were going to see a major downturn.”
Curland says the same conditions do not exist now, but tariffs are causing considerable disruption in the supply chain, and despite several positive economic indicators, the expected growth in Q4 2019 didn’t happen. “If you read the signs, you can be nimble” he says.
The supply chain is also under pressure from new technology. LaFleur of Data Electronic Devices says the growth of the Internet of Things (IoT) is increasing demand for chips resulting in the electronic industry experiencing up to a one-trillion chip deficit or about a 20% shortage.
With the labor shortage adding pressure, more raw materials are coming in damaged. “Freight carriers are a real challenge.” Cusick says. “Sometimes it takes three or four days to get a truck to come and pick up a customer order.”
Recent trade developments are a mixed bag for manufacturers. The United States-Mexico-Canada Agreement (USMCA) that recently replaced NAFTA is expected to bring long-term stability to global trade, says Tippett. “Having that stability makes all the difference in the world…without it, we didn’t know what to do. It grinds on the company and the leaders mentally as well.
It seems to be widely accepted and hopefully this type of agreement can be used with other countries to bring more stability,” he says. Bonta says Genfoot, a Canadian company, expects to benefit from the agreement.
Tariffs have helped companies in some areas and hurt them in others. Genfoot imports a sub-assembly from China and was hit with tariffs last September. However, its sewing operation competes directly with Pacific Rim countries that pay their workers less than one U.S. dollar per hour, he says. “So, without the China tariff, we would not even have the sewing operation,” Bonta says.
Shean of RP Abrasives says tariffs create more risk in sourcing materials from other countries and has manufacturers rethinking whether they can reduce their risk by “near shoring” or “reshoring” production back into or closer to the United States.
Curland says Vitex was affected by the aluminum tariffs, and while he agrees something needed to be done to address trade issues with China, the constant uncertainty and the President’s tweets negatively affect businesses. “Policies need to be thought through. I believe it’s the uncertainty with the trade situation that drove manufacturing downward in the second half of the year. Some stability would be very positive,” he says.
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