Northern Michigan manufacturing is going through some growing pains – in a good way. Business is up, jobs are on the rise, and moods are high. At the same time, a shortage of skilled labor, a retirement bubble and limited training opportunities are challenging the local industry’s leaders. And then there’s the image problem …
Traverse City Business News Editor Lynn Geiger sat down with owners and top management of four local manufacturers to talk shop. Read what they had to say about manufacturing in Michigan, obstacles at their companies, what they have done to form a unified voice locally, how they help each other out, and more.
The roundtable participants:
Jon Dreher is the director of engineering for TentCraft, which specializes in custom outdoor event products. He brought an automotive (high volume, low mix environment) and union background when he first moved north from downstate a couple of years ago. Now, he’s in a custom production environment at TentCraft and sees “explosive growth” and a lot of opportunity for people in this area.
Mike Novik is the CFO of Clark Manufacturing, which produces precision machining components with specialties in the energy and medical sectors – GTE and Medtronic are two of its major clients – and is celebrating its 40th anniversary next month. The company employs 100 people.
Tyler Cerny is the owner of Strata Design, which produces custom commercial cabinets and countertops. Cerny acquired the 27-year-old company seven years. It employs 23.
Corey Geer is the CFO of Shoreline Fruit, started 45 years ago by owner-farmers and has grown into a value-added fruit products company, including dried fruits, concentrates and more.
TCBN: FINISH THIS SENTENCE, “MANUFACTURING IN MICHIGAN IS …”
Dreher: “Competitive, and in TC it is definitely hidden. When I was looking for a career opportunity to move the family, I never dreamed there would be an opportunity up here. But it is different … it is more localized and definitely a smaller market that’s growing. Up here, what I’ve noticed in just working with employees … they are are ultra-competitive. At TentCraft, specifically, the culture there is so competitive because you can’t just walk necessarily walk across the street and find another job tomorrow. In Detroit, you can walk for miles and continue to sell yourself.”
Cerny: “Engrained in the culture. We’re still the automotive manufacturing capital of the world. That inherently produces a lot of engineering and manufacturing here. That benefits us in TC. We have a lot of really high tech, niche companies and a lot of big manufacturers … though we’ve lost a few. People would be amazed.”
Novik: “I’ll say cool. Companies are doing cutting-edge stuff. People say all the time, ‘Wow, you guys do this here? I didn’t realize you did this here?”
Dreher: “Enthusiasm is a deep part of the culture here. Having worked at Delphi, where it’s almost handed to you … I hate to say it that way but you walk in and you’re making great money to begin with, you don’t have to compete. I think that Michigan is headed toward this whole Traverse City mentality to compete on a global scale. Watching the Wisconsin market right now and the supply base … they have an outstanding manufacturing hub in that region, too, that I can see Michigan starting to compete with. As we try to domestically source our products, and I have to choose between a Michigan supplier and a Wisconsin supplier, there’s these fights, battles going on … can see Michigan really wanting to compete … competition is really fueling a lot of the fire here, locally.
TCBN: A FIRST EVER GTA MANUFACTURING COUNCIL LAUNCHED LATE LAST YEAR. WHY, AND WHAT DOES THE COUNCIL HOPE TO ACCOMPLISH?
Geer: “The vision is to work with the community, educators and manufacturers to collaborate and to showcase the fact that we make great things. If the majority of the community could walk into a manufacturing place and not say, ‘Wow, I didn’t know you did this,’ that would be cool. To have a bunch of advocates for northern Michigan manufacturing would be fantastic.”
Novik: “Part of the mission of the group is to share what we do with the younger generation, so kids start to take an interest in making things. Using their hands and minds … not just on a screen, although that’s part of manufacturing today, too.”
Dreher: “Collaboration, going from plant to plant, learning from each other.”
Cerny: “As a larger group we can do a lot more, we can influence, we can help change the image [of manufacturing].”
TCBN: WHAT IS YOUR BIGGEST CHALLENGE FOR EACH OF YOUR COMPANIES?
Dreher: “We get bogged down on how to facilitate the growth for key players on our team. It’s hard to continue to grow them from an education standpoint, particularly an engineering standpoint. If someone is hungry, it’s a real struggle to grow that talent … or risk losing them. That’s the reason I’m on the council … I think we are responsible to that generation to foster growth.”
Novik: “Our career opportunities at Clark are primarily in the CNC machining area and it’s difficult to come by skilled people. It’s one of the challenges we face. We work with NMC and the Career-Tech Center and just donated some new CNC training equipment.”
TCBN: WORKFORCE DEVELOPMENT AND TRAINING IS A BIG ISSUE IN THE STATE RIGHT NOW, PARTICULARLY IN MANUFACTURING. SOLUTIONS?
Dreher: “When I was in Saginaw, Saginaw Valley State University had developed strong programs with local businesses. It’s good that we’ve started that here (via NMC and the Career-Tech Center) but that’s the continued growth we need to expand upon … building the right partnerships.”
Novik: “Part of it is image … so the council is working with schools, counselors, students, showing them what’s happening in our shops. ‘Here’s a day in the life … here’s the money you can make.’ You don’t need $100,000 in student loan debt in some of the industries that have opportunities.”
Dreher: “A lot of the younger generations wants to continue education, a lot of their growth and stability obviously comes through education. But we hit brick walls along the way with what we can do locally. In the past two months, I’ve had four or five guys wondering what they can do from an education standpoint … we can send them away, but will there still be a position when they want to come back? It’s a real struggle once you get them in the door.”
Geer: “I would agree. We have 180 employees at Shoreline. Our challenge is with retention. Employee retention is about having engagement but also about having an employee who sees a light at the end of the tunnel. There is a little bit of, ‘I’m kind of stuck here, or have to move out of town or state … we see a little of that, too.”
“There are some things that are good about southeast Michigan, which is tons of opportunity. The velocity up here is a little slower. We did start engaging NMC and doing some supervisor and team lead education … and do quite a bit of on-the-job training.”
Cerny: “For us it’s also finding craftsmen, the carpenter … the guy who has unique skills. We have to train, and we do a lot of that. We also have low turnover so that has helped us survive.”
TCBN: WHAT WOULD YOU SAY TO A COMPANY LOOKING TO EXPAND TO, OR RELOCATE, TO NORTHERN MICHIGAN?
Geer: “First of all I’d play up the quality of life. It’s just amazing. The engagement with the community, knowing your neighbors, other business leaders … on any given day you could have 40 to 50 percent of manufacturers represented in a meeting. That connection is one thing I’ve noticed in the two and a half years I’ve been here … the local manufacturing ecosystem is very easy to get plugged into.”
“The issues we have are not dissimilar to the issues also found in a big city, they just might be a little more poignant here because you can’t point to, say, a U of M engineering school. But NMC is really dedicated to helping out … they are totally engaged.”
Dreher: “Along with that quality of life point, attitude is everything. When people are happy you can introduce chance a lot differently. That’s an advantage. TentCraft is the best place I’ve worked related to culture.”
Cerny: “One of our issues is getting technicians here to work on specialty equipment and not as quick of access to supplies … with deliveries twice a week instead of every day. Because Traverse City’s economy is so vibrant with low employment compared to other parts of the state it can be tough to hire people.”
Geer: “It does us all good to have more profitable companies up here. That’s one thing that’s unique … I don’t know if companies in Grand Rapids are all working together like that. Strong profits, strong ownership, more business, better pay is going to help us all.”
TCBN: MANUFACTURING IS SEEING A LOT OF SUPPORT FROM LANSING. WHAT DO YOU THINK ABOUT THAT?
Novik: “Most recently I think it was $50 million in skilled trades funding available to community colleges, which NMC was part of. It’s good to see. It’s encouraging.”
Geer: “Any investment in training and education has a positive impact. I’m encouraged by the potential new training dollars. If you’re the governor of Michigan, I think you have to want to support manufacturing … this governor also agriculture, which is good for us and our value-add business.”
Cerny: “We take advantage of training dollars as much as we can. We fully appreciate that. We’ve used it up and would love to have more to make us more competitive. We had a lot of exodus of talent in manufacturing … to other trades and other states … because of jobs lost. The Governor is trying to bolster image of manufacturing, supporting manufacturing and saying, ‘We want you back.’”