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EDITORIAL: Manufacturing 2.0 on the horizon

Jacob Owens March 10, 2023

When I was growing up, it was often said that Delaware’s economy depended on the Three Cs – credit cards, chickens and cars. Today, the First State is still very much dependent on financial services and poultry production, but the auto plants under General Motors and Chrysler that used to employ thousands in northern Delaware

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[caption id="attachment_230156" align="aligncenter" width="1200"]

Many of the well-paying manufacturing jobs of the future will look less like an assembly line and more like a lab, such as those working in formulation of AstraZeneca's Newark-area production plant. | PHOTO COURTESY OF ASTRAZENECA[/caption] When I was growing up, it was often said that Delaware’s economy depended on the Three Cs – credit cards, chickens and cars. Today, the First State is still very much dependent on financial services and poultry production, but the auto plants under General Motors and Chrysler that used to employ thousands in northern Delaware are long gone. Although we said “cars” to make for an easy-to-remember acronym, I think we really meant manufacturing in general. [caption id="attachment_222223" align="alignright" width="300"]

Jacob Owens
Editor
Delaware Business Times[/caption] The legacy DuPont company was by far the state’s largest employer, at one time employing about a tenth of all state residents at offices and a patchwork of production plants stretching from Wilmington to Seaford. At the turn of the century, “Uncle Dupie” had shrunk, but was still Delaware’s largest employer with more than 13,000 workers. It also had a secondary impact of thousands more jobs for chemical companies like Hercules and W. L. Gore & Associates that spun out of the company or took its licensed products to innovate. Hundreds more worked at the Delaware City refinery under a rotating cast of owners including Getty, Texaco, Shell and Valero, or in Claymont, where the steel mill employed hundreds under owners like CitiSteel and Evraz. After the Great Recession caused widespread corporate harm though, many of those jobs are long gone and the plants shuttered. While many of the companies, like DuPont, W. L. Gore, Chemours, refinery successor PBF Energy and Hercules successor Ashland do still have sizable presences here, they are a far-cry from the heyday years. According to a Federal Reserve Bank of St. Louis study, manufacturing employment in Delaware has fallen from nearly 48,000 in 1991 to 26,000 at the end of 2022 – representing a 45% industry decline decades in the making. Yet with all that doom and gloom, there is reason to be hopeful that Delaware is at the start of a Manufacturing 2.0 rebound. And this time, it will be spread over a number of unrelated industries, making it stronger in the face of economic headwinds. Light industrial projects are cropping up at sites across the state, employing dozens of employees. The state’s public-private economic development organization, the Delaware Prosperity Partnership, reports that such projects constitute most of the interest in its prospects, driven by a cheaper cost of business, federal investments in key industries and a growing number of shovel-ready sites. One of those federally supported industries is renewable energy, a burgeoning sector from which Delaware is uniquely poised to capitalize, particularly in green hydrogen. Yushan Yan, a leading researcher on anion-exchange membranes that could be a key component to the production of carbon-free hydrogen, has long made the University of Delaware his home. Meanwhile, companies like Chemours, W. L. Gore, Air Liquide and Bloom Energy are innovating in membrane technology and hydrogen production here in Delaware. Those companies and more are a part of a federal application to become a “hydrogen hub,” where upwards of $900 million in federal funding could flow to support the development and innovation of green hydrogen in our state and region. Dora Cheatham, executive director of the Delaware Sustainable Chemistry Alliance, an industry trade group, and one of the experts who is helping to prepare the application, recently told me that she believes hydrogen research and production will be “a substantial economic driver” of the state’s future. For manufacturing, it could be a multi-faceted impact, with Delaware City Refinery owner PBF Energy proposing to create a plant there capable of producing upward of 137 megatons of clean hydrogen a day. Bloom Energy has already rolled out a new assembly line for its electrolysis units that can create hydrogen by mixing water and electricity, and could feasibly add more jobs if demand warranted it. But perhaps the biggest example of the Manufacturing 2.0 movement is WuXi STA, the global contract pharmaceutical producer that is building what will be the state’s largest bioscience factory in a $500 million investment in Middletown. If successful, it has already outlined plans to build a campus that could easily see investment reach $1 billion. It arrives as a handful of companies like AstraZeneca, Adesis, Wilmington PharmaTech, Noramco and more already produce medications or their active ingredients in Delaware. The introduction of WuXi will be a major milestone for Delaware, which has already been a growing hotbed of biopharmaceutical research with companies like Incyte, Prelude Therapeutics and NiKang Therapeutics. The growth of biopharma manufacturing is also a harbinger of the future, with jobs looking more like lab work than the factory floor. Shamus Whyte, the plant manager at AstraZeneca’s major plant near Newark, recently told me that longtime employees are quick to say that when they encounter problems now “they’re more likely to grab their laptop than their toolkit.” High-tech machinery still requires human oversight to ensure proper function, and the importance of those functions relative to their investment value means workers are typically compensated well. According to Delaware Department of Labor data, the average production worker salary in 2021 was about $43,000, but the average salary in the chemical equipment operator subset, which includes the bioscience sector, was about $64,000. That’s higher than the total statewide average salary of nearly $60,000. While Delaware’s automotive manufacturing past seems farther in the rearview mirror every day, there is hope that a new version of the industry can provide life-changing employment for many residents around the state.

EDITORIAL: Manufacturing 2.0 on the horizon

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