The Ledger

Making sense of money, 2010

Once a Manufacturing Giant

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Once a Manufacturing Giant by jwarrior71789
(Audio version of this story above)

Manufacturing saw some of its best years when the Naugatuck Valley was the brass and copper capital of the world; this isn’t the story today.

ITW (Illinois Tool Works) Highland is a manufacturing company in Waterbury.  The company produces high precision, deep drawn, metal stampings to sell to the rest of the world.  The company has such highly skilled toolmakers, which is the value that separates them from other companies in the manufacturing industry.  However, the manufacturing industry that was at the height of its peak about 30 years ago has rapidly fallen from the top since then.

Everything has a value to it.  If you don’t have anything to sell, how are you going to raise money, what are you going to be worth to the rest of the world?  Nothing.  Once manufacturing leaves the U.S., goods will cost ten times what they cost today.  For example, the U.S. used to have one of the biggest garment industries in the world; soon, a pair of pants will cost almost $100, like they do in Canada, because everything will have to be imported in, at a high cost.  There will be no bargaining.

One of the biggest causes for manufacturing leaving the U.S. is that goods can be made cheaper overseas.  Labor is cheaper and they don’t have the environmental restraints that our country has here.  Company owners benefit with higher profits from having most of their product being made overseas.  U.S. manufacturing companies are rapidly selling out their skills and technology to the rest of the world.  As a result of this, Americans are losing jobs, financial security, and “buying-power” as a nation.  Generations to come will be the innocent victims of industrial conspiracy.

Tom Zabo is the Chief Engineer at ITW Highland.  He has been working there for 31 years now.  Zabo started out at ITW Highland by accident when his father got him a job doing painting and maintenance one summer.  He had no intentions of staying and didn’t even know what eyelet toolmaking was.  All he knew was that he wanted to be an engineer.  So, he went to school for computer drafting and found himself working at ITW Highland.

A typical day for Zabo consists of coming in at 7 a.m. and leaving around anywhere from 5-6 p.m., depending on what he is working on.  His day usually starts out with checking to see what was going on during the night shift and see if there were any problems that arose from any of the cell leaders.  Then, he would move on to making sure that his designers are where they need to be with their projects, taking on the task of project management, making sure they get what they need.  After that, he’ll move onto the emails and any crisis that happens throughout the day.  And if he has a little time left, he’ll do some design work as well.

75 percent of what ITW Highland makes are automotive components, deep-drawn.  The company makes a lot of airbag components, antilock brake systems, and fuel injection parts.  Some of the major companies ITW Highland is a supplier to includes Bocsh, Magneti Marelli, Auto Leave, and Continental; mostly big players in the automotive industry.  If ITW Highland doesn’t make the components, there won’t be any cars for the public.

Zabo says that cost is the main cause of manufacturing leaving the U.S.

“It probably would be cost, the value of a dollar, that’s typically what we see,” Zabo said.  “It comes in cycles… I’ve been here for 31 years.  And I‘ve seen this… this is probably about the third time and it happens as an industrial country that’s not as developed as the U.S. starts to become developed… then they realize the resources are there like the United States and people that are buying in the United States realize that hey the labor force is there… they’re willing to work and learn for a lot less wages than what we would have over here.

“So therefore, it’s cheaper to make the part somewhere else and have it shipped back here, which is probably the biggest factor driving the whole thing.  It comes from the top… it’s all cost-based.  I had an example where it was actually cheaper for a company to buy a part from China… the buyer was from the United States… buy the part in China, have it shipped, packaged, transported back for cheaper than we could buy the raw material alone in the U.S.  So, they got a finished product versus raw material.”

Zabo says with Connecticut being a big industrial state is probably the biggest factor why there is a big loss of jobs in Connecticut.

“When it started out I think a lot of it has to do with the people that have changed the industry a lot,” Zabo said. “Naturally the technology, and the new advancements, and all the computerated design, and drafting, and manufacturing and all that… because that obviously has changed it quite a bit and made it very technical… and I think by doing that it required a lot more technical expertise from the people working either out on the floor, in the engineering offices… they needed to become more technically educated instead of more hands-on… the old school lathes, bridge ports, mills…. typical tool room equipment.  It was what you needed way back when I started.  Now, you need a background in computers, you need to know how to do some programming… things of that nature.  So, I think what happens is that as the younger crowd starts to develop their skills, they want to look in and instead of getting their hands dirty, so to speak, out in the shop, they’d rather be sitting in an office.

“That’s what I’ve seen over 30 years… people had no problems going in and fixing their own equipment, building their own little pieces, jury-rigging something to make it work.  Now, you can’t do anything without a print, it’s got to be computer-generated, it can’t have… everything is kind of… very formalized now and it’s not as go-get-it-done kind of thing, and that’s costing a lot of money in the long run.”

Manufacturing about 30 years ago was thriving, healthy, innovative, and top-of-the-line in the world.  Quality was not compromised.  When you bought something in the U.S., you thought of quality, because it was held at its highest standard.  Today, when you buy product from overseas, you think of price, not quality.  A product from overseas is not made under the same skill levels, nor is it made under the same quality standards.  For example, overseas, if they have 50 good parts out of 100 parts they made, they are satisfied.  But here, 100 parts made means 100 good parts.

Zabo also expressed how apprenticeships have almost vanished through ITW Highland.

“We used to have one of the top apprenticeship programs in the state of Connecticut,” Zabo said.  “And when it started, there were about 30 apprentices going through here… that has long since been abandoned.  Again, it boils down to money… when the economy goes sour, the first places they’re going to cut is the non-value added people, and those are the apprentices because they are just learning… which is unfortunate because now our workforce is getting older… and I’m going to be 50 next year… and

“I’m one of the younger in the next wave of people going through, and when I leave, I don’t know who’s going to be behind me.”

The forecast for manufacturing in the U.S. is overshadowed with dark, rainy clouds for years to come.  The cost to produce goods is too high today, especially with labor laws, EPA restrictions, and medical costs.  Unless, the field levels out with the rest of the world, you will no longer see manufacturing in the U.S.  Overseas, there is no minimum wage, EPA restrictions, or high medical costs.  They have the power to pay their employees whatever they feel.  There are no unions.  The U.S. can’t compete with that.  It’s almost like the U.S. has become teachers to the rest of the world.  With that said, the average age of a toolmaker at ITW Highland is 45.  So, in about 20 years, it’s hard to say if there will even be any toolmakers once those toolmakers retire.  There will be no one left to carry the manufacturing torch, so to speak.

Chris Topazio is a cell leader at ITW Highland and has been working there for 22 years.  Topazio sees manufacturing getting worse and finds it hard for manufacturing to make a comeback in the U.S.

“I’m hoping that it stays the same, Topazio said, “but as the other countries become more technologically advanced and their skill levels raise that in conjunction with the lower salaries… I don’t foresee it getting any better here… again, I still have twenty something more years before I can retire.

“So, I’m hoping that it maintains well past that, but I’m not that optimistic.”

He believes manufacturing in Connecticut will never be restored to what it used to be.

Most people don’t realize that it takes about ten years to develop a fully skilled toolmaker.  An apprenticeship takes four years, or in other words, 8,000 hours.  Then, it takes them another five to six years working in the field, in order to become a fully skilled toolmaker.  In the long run, the outlook on toolmaking for the future of the U.S. is dim, at best.  Most of what we use and touch in our daily lives, is somehow tied to toolmaking.  Now think about this:  what will happen to national security in the U.S. once toolmaking has died out.  Toolmaking has a huge impact on national security in the U.S.  Who’s going to make our weapons?  Our ships?  Our Submarines?  Our radar?  And even our satellites?  Manufacturers in the U.S. make most of the parts that serve our national defense.  Which is why, it is making manufacturers in the U.S. sick and disgusted to see manufacturing walk right out the door.

In order for the U.S. to be more competitive and help bring back and restore manufacturing, the U.S. has to start by leveling the field.  The U.S. needs to raise taxes on imports that come into the country.  Foreign goods are barely taxed when shipped to the U.S., but when they are sent overseas, the U.S. is limited to how much they can send, as well as being taxed very high.  The U.S. needs to give tax breaks to companies that produce product in this country.  The U.S. is giving tax breaks to businesses that are shipping their work overseas.  There is no incentive to keep work or jobs in the U.S., just from that.  The U.S. needs to control medical costs.  Medical costs are rising at an alarming rate, which in turn, costs companies more money to supply medical benefits to their employees.  As a result, this raises the cost to produce product in the U.S.

Rich Newsome couldn’t agree more with Topazio.  Newsome is a supervisor of department 23 in the tool room at ITW Highland as well as an expeditor.  He has been working there for 28 years.

Does Newsome think manufacturing will ever be restored here in Connecticut to what it used to be?

“No… never,” he says, “it’s gonna be smaller businesses… you’ll never see the big, big places ever I don’t think.”

Newsome thinks that the U.S. needs to help out businesses and give them a reason to want to stay in this country.

“They gotta help the businesses out and somehow relieve the tax burdening and make it easier for them to want to do business here,” Newsome said. “Give them more breaks to buy equipment, give them more breaks to buy land, building, whatever they need to do… to set them up because once they’re there, they’re going to stay there… they’re not gonna leave.  Once they make a big commitment they’re probably gonna stick it out… but if you make it too hard, then there’s not enough money available and it’s not gonna work… I think.

“There’s a lot of very, very talented people in the United States.  It’s hard for a small guy to start out and become bigger… it’s very difficult”

The U.S. also needs to invest in their future by providing government paid training programs for apprentices.  If you don’t have enough people to do the job, it doesn’t matter how much work you have.  Companies used to bear the burden of cost to train people through their apprenticeship programs, which years ago, were booming when toolmaking was one of the better trades to go into.  Today, apprenticeship programs have slowly disappeared.  There is no desire for a young kid coming out of high school to go into a trade that may not have a future.  What kid wants to invest all of their time into that?

Michael Parian is a toolmaker at ITW Highland and has been working there for 27 years.  Parian does not see manufacturing coming back any time soon to the U.S.

“They sold us out, the politicians, I guess,” Parian said.  “I don’t know how it’s going to come back… I do not know.  They say Waterbury was the brass capital of the world… look at Meriden, they were the silver capital of the world.  They manufactured spoons and forks and all that stuff… gone… they’re all gone.”

Parian does not know where manufacturing will be ten years from now.

Where does Parian ssee manufacturing in the U.S. ten years from now?

“I do not know… I do not know,” he says.  “I hope the economy gets better… I know people that don’t have jobs and I know people that are losing their homes… personally, I know people that are losing their homes because of what’s going on.”

The popular response to where toolmaking is seen ten years from now has been that it will grow and thrive, just not in the U.S.  No, the outlook on a trade that was once part of the brass and copper capital of the world in the Naugatuck Valley has not been good.  And if this isn’t a wake-up call to the U.S., what is?

– Brian Jennings


Written by ccsu236

December 15, 2010 at 12:41 am

Posted in Uncategorized

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