Decimated manufacturing sector showing some rumbles of activity
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As chemical companies cut back and the auto plants are gone, workers at dozens of small high-tech manufacturers, like Pat Billings at Miller Metal Fabrication Inc. are using lean manutacturing techniques to deliver products faster. // Photos by Brian Harvath
Delaware’s makers have some movers and shakers
Delaware boasts 14,088 fewer manufacturing jobs than it did in 2001, but four Delaware manufacturers have expanded their operations, five companies moved production here and two international firms chose to locate here.
Delaware had 39,388 manufacturing jobs in 2001, before the demise of its two auto plants and cutbacks at chemical companies. Currently, there are 25,300.
Those jobs are varied ““ from oil refining to chicken processing to chemical production to building high-tech scientific instruments.
Average salaries are varied, too ““ from $97,713 in electrical-equipment manufacturing to $34,000 in food processing to $28,628 in apparel manufacturing.
Over half the manufacturing in Delaware is now below the canal, said John Stapleford, economist for the Caesar Rodney Institute.
Several companies brought foreign operations back to Delaware recently. Four expanded their local operations, and two international firms chose to locate here. In addition, Delaware’s high-tech manufacturing firms are quietly expanding.
“We have to remember that Delaware lost some really large manufacturers like the automakers, and it’s going to take a lot of growth from these small businesses to make up for those jobs, but, certainly, there’s a lot of interest in Delaware,” said Bernice Whaley, who heads the Delaware Economic Development Office. “There’s a lot happening in Delaware, but we just keep referring to those [employment] numbers from those years when there were very large manufacturers here.”
Here’s the short list of recent manufacturing upticks:
When AB Group, an innovative Irish paper-bag-and-flexible-packaging producer, needed a U.S. location to serve its largest customer, Primark, as it expanded to the East Coast, Delaware seemed centrally located. AB promised to create 87 full-time jobs in Newark. It got a $253,365 grant from the state, and the company will be eligible for another $120,000 once it spends $4 million on plant improvements. Whaley said AB could create double the jobs it promised.
Utz AG, a German flooring company, is opening a 53,000-square-foot dry-mortar plant in Dover’s Garrison Oak Technical Park this month. The company received a $418,369 grant from DEDO. Philipp Utz, president of Uzin Utz Manufacturing North America, said his company selected the state because it is close to their core customers, the cost of doing business is low, skilled workers are available, infrastructure is in place to allow future expansion, DEDO gave them a quick response to their RFI and the state is focusing on bringing manufacturing back.
When Edgewell Personal Care, owner of the Playtex plant in Dover, purchased Johnson & Johnson’s feminine-care business, it acquired a manufacturing plant in Canada. The company opted to invest $42.5 million to bring that production to Dover. It will create 270 new jobs.
Kraft Foods invested $10 million to expand its 1 million-square-foot plant in Dover and move its Kool-Aid production there from Mexico. DEDO offered $465,000 for packaging equipment at the plant. The move resulted in added jobs at one of Kent County’s major employers.
With help from the state totaling $552,360, Grayling Industries, an ILC Dover subsidiary that manufactures safety products and industrial packaging products, moved into a new 90,000-square-foot building in Seaford. Grayling will add up to 115 new jobs.
After 40 years making injection-molded plastics in Milton, Atlantis Industries weighed a move to Maryland. With Delaware incentives, the company agreed to expand in Milton. That retained 36 jobs and added 20 more.
A worker feeds metal sheets into a machine that folds them like loose-leaf paper.
Croda Inc. is constructing a new ethylene oxide plant at its Atlas Point operation near New Castle, with state funding and its own $170 million investment. When the new facility is up and running in 2017, it could create up to 80 jobs.
Zacros America’s Hedwin Division, makers of packaging for cosmetics, food, pharmaceutical and other products, will create 154 new full-time jobs in its new facility in Newark.
Hologic Inc., the Newark maker of diagnostic imaging systems and surgical products, recently acquired Germany-based AEG Elektrofotografie. Hologic received a $1.1 million state grant and brought Elektrofotografie’s coating business and 18 additional jobs to its Newark site.
Solenis LLC, a commercial unit of Ashland Inc. that transitioned to a stand-alone company in 2014, will add up to 122 full-time openings at its new 40,000-square-foot global headquarters off Beaver Valley Road in Wilmington. Well-paid IT, legal, sales and financial positions will be included. Ashland received a $10 million grant in 2013.
Bloom Energy is expected to add up to 900 jobs over the next few years as it makes its solid-oxide fuel cells on UD’s STAR Campus, Whaley said. DEDO awarded the company a $16.5 million grant.
CD Diagnostics, a biomarker-research and immunoassay-development company, moved its Pennsylvania and New Jersey operations to Claymont. Its research and development, product manufacturing and business administration are housed under one roof, along with 170 new jobs. In return, the company receive a $500,000 relocation grant.
GE Aviation in Newark’s Diamond State Industrial Park grew 70 new jobs to support increased production of ceramic matrix composites used to make advanced aircraft engine components. The company received a $1.1 million grant in 2013.
“That’s the type of advanced manufacturing jobs that are really important to the U.S. and to Delaware,” Whaley said.
John Stapleford, economist for the Caesar Rodney Institute, said the state is segueing from labor-intensive manufacturing to capital-intensive manufacturing with fewer jobs but higher salaries.
“The downside of that is you need education. You have to be able to read and write, and the public school system in Delaware doesn’t really prepare people for that,” Stapleford said. “The Achilles heel for us is the quality of labor we have coming out of the public schools.”
Whaley said the state is investing in innovative educational programs such as its Accelerated Career Paths program that has high school students attending classes at Delaware Technical Community College, earning college credits and advanced-manufacturing certificates and working at summer internships in manufacturing companies like Siemens, PPG, Agilent and DuPont.
High-tech machines do the work while employees run the show.
DEDO provides training to businesses and the agency partners with the Delaware Manufacturing Extension Program to coach companies in lean manufacturing techniques.
“There’s a lot happening. There are smaller companies slowly but surely adding jobs, and our goal, as a state, is to make sure we have the advanced work force to fill these jobs as these companies are growing, ” Whaley said.
George Sharpley, chief of the state office of Occupational Labor and Market Information, said the new advanced manufacturing companies growing in Delaware are providing well-paid jobs.
“We’re not talking about low-skill jobs that a high school dropout can do. That kind of manufacturing is now dominated by low-wage countries where the average wage is well below the Delaware wage. Competing with them is pointless,” Sharpley said. “It’s kind of like people pining for a good five-cent cigar. It just isn’t going to happen.”
Delaware’s average manufacturing wage is $59,588, about 12 percent above the state’s average wage of $53,212. In 2001, the overall average was $38,418 and the manufacturing wage was 13.7 percent higher at $43,688.
“There are a large number of jobs out there that pay a wage you can raise a family on, are expected to have good growth and don’t require higher education,” Sharpley said. “What they do require is some training.” He mentioned truck drivers, mechanics, construction trades, electricians, plumbers and technical occupations in the healthcare field.
Delaware’s health-care industry picked up as manufacturing shrank. Christiana Care Health System is now the state’s largest private employer with more than 10,500 employees. However, economists warn health-care jobs could shrink if Medicaid and Medicare funds shrink or if self-pay consumers feel priced out of the market for elective treatment.
Delaware’s promoters say companies will find the state attractive due to its sweet spot on the Boston-D.C. corridor, its rail system, its port, its tax-free status, its quality of life it’s business-friendly environment and its ranking as the state with the fastest internet speeds in the United States.
Critics say its school systems, high industrial electric rates and dominant unions are turnoffs to companies that comparison shop state by state.
Delaware’s Strategic Fund, the state’s primary funding source, has drawn several companies to Delaware and convinced others to stay. Amazon, JP Morgan Chase, Navient and hundreds of small companies received loans or grants. Most agreements require that the companies make a preset number of hires before they receive funds.
“Without the strategic fund, these jobs would have had the potential for going or remaining elsewhere,” Whaley said.
To learn more about the program or learn which companies received grants and what jobs they generated, visit http://inde.delaware.gov/dedo_pdf/NewsEvents_pdf/publications/StrategicFundReportJune2014.pdf.
