RSSA manufacturing meltdown
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YAKIMA, Wash. -- Metal Benders is looking into government contracts in Guam.
Everyone from the chief financial officer down to the office worker at Wilbert Precast is learning to do multiple jobs.
Canam Steel in Sunnyside has bought new equipment to develop product lines and secured certification to do more government contracts.
Yakima Valley manufacturers have tried every way possible to endure the economic downturn.
The industry, however, has still dealt with a massive loss of jobs this year.
Out of about 2,100 jobs that Yakima County has lost year-over-year in 2009, about 1,300 were in manufacturing, according to the state Employment Security Department.
In 2008, while the county had a gain of 400 jobs from the previous year, manufacturing lost 300 jobs.
The losses come from manufacturing companies that have been forced to layoff workers with business and revenue dwindling.
Some companies are tied to industries, such as real estate and retail, that have shown major weaknesses over the past year.
"I've met with at least half a dozen companies that have significantly lower employment today then they did a year or two ago," said Dave McFadden, president of New Vision-Yakima County Development Association, the county's economic development arm. "They're affected by changes in the supply pipeline. There's no order backlog. With no order backlog, they have no choice."
Canam Steel saw employment levels reach more than 200 workers a few years ago.
But the company saw a drastic drop in business in the last year. Retailers, a major source of the company's business, experienced declining sales and scaled back new store construction activity, resulting in less work for the Sunnyside facility.
The company is down to 89 workers, with about one-third of the workers on reduced hours.
"The recession has hit us hard, it really has," general manager Roger Roudebush said.
The loss of manufacturing jobs started well before the national recession officially began in December 2007.
Looking at the past 15 years, manufacturing employment in Yakima County peaked in 2000, when it had about 11,300 jobs, according to the state Employment Security Department.
As of September, the county had about 7,300 jobs, a 35.4 percent drop.
Much of that decline came with the closure of several major Yakima Valley manufacturers in the last few years.
In 2005, Yakima Resources closed its sawmill, leaving 116 people out of work. A year later it closed its plywood mill, leaving another 225 people jobless.
The area dealt with huge job losses after the closure of two major recreational vehicle companies, which at their best employed hundreds of employees in total.
Trail Wagons/Chinook RV employed as many as 162 workers before it closed late in 2005. Western Recreational Vehicles closed in April 2008 and left 220 out of work. At its peak, Western RV had almost 600 employees.
While manufacturing is not the only industry dealing with job losses, manufacturing has taken the greatest hit. The sector with the second greatest loss was construction and mining, at 700 jobs.
And the loss of manufacturing positions may be more significant to the economy.
"It's an industry that pays well with good benefits," said Doug Tweedy, a regional economist for the state Employment Security Department.
Industry officials say that while losing jobs is not good, it may help companies better secure long-term survival.
"A lot of it is driven by need," McFadden said. Companies think, "'If I don't do this and get lean and efficient and modern and continually work to improve, I'm not going to be around.'"
Wilbert Precast, a Spokane-based company with a plant in Yakima, saw employee counts drop from 36 employees to 18 between February and August and saw its underground utility business and retaining wall business drop, a result of the housing market slowdown.
Employee counts increased back to 27 in the last few months when it secured business with the state Department of Transportation and Hanford.
But these workers are doing more than they did before, said Mike Dooley, Yakima branch manager.
A worker who may manufacture concrete boxes to store coffins may also help out in building underground utility spaces.
"I don't (layoff) by going by seniority," he said. "You have to do it by who gives the most bang for your buck and can get you through. It's definitely the guys who are more willing to learn new things."
Metal Benders, which has built its business on providing services for government and industrial projects, had to let go about 10 percent of its staff earlier this year as business activity slowed down.
It rehired most of those workers, but president Steve Menard isn't taking any chances.
His company flew to Guam a few weeks ago to look at doing work for a military base seeking about 12,000 construction workers. The company will fly back in December for a second look.
"We go wherever we can find work," he said.
Such moves are necessary.
"More and more for your companies to be successful, they have to understand their industry and be better than their industry," said Patric Sazama, regional project manager for Washington Manufacturing Services, a statewide organization that helps manufacturers boost efficiency and productivity.
While greater efficiency could result in a better bottom line for the industry, it's hard to say whether lost jobs will return.
In some cases, companies who cut back or change their process to be more lean may choose not to hire more employees, Sazama said.
Others believe the jobs will return, but not in the same areas.
While New Vision will continue to recruit larger-scale manufacturers to come to the Yakima Valley to create new jobs, such opportunities are getting slim, making it necessary to pursue other possibilities.
The organization is looking to provide more resources to emerging entrepreneurial ventures and encouraging innovation from existing companies.
"(Large companies) are not a big source of new jobs," McFadden said. "They pale in comparison to the smaller companies that have formed and have grown, adding more employment overall to the economy."
Local companies remain hopeful that the jobs lost during the recession will return in the next year as existing businesses return to normal levels and they see the fruit of investment in improving efficiency and seeking new business opportunities.
Canam Steel hopes to return to 2007 levels, though general manager Roudebush believes the recovery may take a while.
"There are people who want to build, but they can't get the money. I hear that over and over again," he said.
Wilbert Precast opened a new facility in Yakima early in 2008. The facility has the capacity for nearly triple that of current employee levels. Dooley believes those levels are possible.
That's why the company is still looking for good talent.
"If the right person walks through the door, we'll try to find a position," Dooley said. "We don't like to pass up on good talent."
* Mai Hoang can be reached at 509-577-7685 or mhoang@yakimaherald.com.
Where did the "Made in the U.S.A." label go??
It went to China.
Did the price to you go down with the cheaper labor cost??
Oh well,,it is what it is
More Change! I love Obama, hope he legalizes 20 million illegal aliens so that the jobs that don't go overseas are taken by some pardened borderjumpers. Being "Political Correct" is for only the employed. When real Americans are starving in the streets then "Real Change" will happen. It will be ugly for some.
Report Violation"(Large companies) are not a big source of new jobs," McFadden said. "They pale in comparison to the smaller companies that have formed and have grown, adding more employment overall to the economy." -- This is probably the most important paragraph in this article.
In any community the long-term strength comes from the local owners and investors that have a dream and go about making it happen. These are the people who build or produce “real things” that can then be sold to others.
Yakima, as with the rest of the country, has a long history of these people building strong businesses, large and small, who live in and support the community through thick or thin. Their employees often become "part of the family" and work much of their careers for that one company. They also become the glue for the community by supporting and providing company connections and financial support to the schools, churches, clubs, boards, sports programs, etc.
Unfortunately, this company strength tends to fall apart when the subsequent generations lack the skills, interest or commitment to continue doing the things that made the company in the first place. Others are lost when they merge or are acquired by outside organization - often as a part of estate planning. A branch of any business is never anything more than capacity - that can be culled or eliminated when things get tough, protecting the owner's (investor's) home communities.
The list of these community builders is beyond my skills, but a few that I met include John Noel, Gene Shields, Floyd Paxton, Bill and Suzanne Doyle, Ken Whitmire, Al DeAtley and Ted Robertson. Others I only know by last names like Decoto, Dwinell, Moen, Schultz, Lynch, Sheppard, Dolson and too many others I have forgotten. We can't overlook the builders in the Ag world, the Larsons in Selah, Buck Charron and Gordon Meachum in Moxee (two of my heroes), and too many that I only remember by last names like Gilbert, Roche, Sundquist, Roy and Congdon.
While cities can grow around a Wal-Mart or a branch of some chain, the community only grows and thrives around the local owner/investor and the people they draw to them.
Because of Congressional deficit fiscal and anti-business policies over the past few decades, the loss of American manufacturing will increase. Foreign companies are buying American companies, then often closing the factories, shipping the equipment overseas, and putting Americans out of work. They are flush with US cash from our borrowing. Their environmental and work rules are less stringent. Their workforce is eager for employment. We have lost our way and our chidren will pay the price. To illustrate, in a new article out of Automotive News magazine comes this:
Chinese likely to be buyers of U.S. auto suppliers
By David Barkholz
Chinese automotive suppliers are likely to be buyers of North American auto parts companies as the industry faces 12 to 18 more months of depressed volumes and tight credit, says Dietmar Ostermann, a director with the management consultancy PRTM in Addison, Texas.
Chinese suppliers such as Guangzhou Automobile Group Component Co. and Fawer, the parts-making affiliate of China FAW Group Corp., will see opportunities to buy North American and European companies, Ostermann says.
China’s government is urging large suppliers to buy smaller rivals at home and to expand abroad, he says.
Guangzhou is a major player in interiors, a segment in North America that is ripe for consolidation, Ostermann says.
Already this year, BeijingWest Industries Co. Ltd. bought assets of Troy-based Delphi Corp.’s brake and suspension businesses for about $100 million. The sale occurred before Delphi left Chapter 11 this month.
PRTM recently studied 357 suppliers worldwide to predict which will be buyers and which sellers, based on financial wherewithal, management’s history as buyers or sellers and other factors.
Of the 10 suppliers seen as best positioned to be buyers, two are Chinese, four are European, two are Japanese and one is Indian.
Just one is American: PPG Industries Inc.
German and North American suppliers were expected to be especially active buyers in the powertrain parts segment, the study found.
On the other hand, U.S. companies were well-represented among the global companies likely to be sold or have major pieces divested, Ostermann says.
The sectors facing the greatest likelihood of mergers, acquisitions or bankruptcies are chassis and electronics parts makers.
- From Automotive News
So when you vote in 2010, remember that unless you're willing to roll up your sleeves and do what's necessary to keep jobs in America, you can forget about social spending, your retirement investments, and taking care of others. We no longer will be in control of our own destinies.
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