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Manufacturing
The Delta looks for new ways to attract
manufacturers and keep existing firms competitive
BY Mark Bird,
DBJ Contributing Writer
Manufacturing
accounts for a significant part of the Delta’s work
force, even with the loss of thousands of those jobs in
recent years. Numerous established companies continue to
produce high-quality goods in the Delta, even with increasing
threats to their future success posed by overseas competition
(and cheaper labor which is driving more and more country
out of the U.S.), rising medical and energy costs, and the
continuing negative legal climate.
On a brighter note, many existing companies continue to
thrive and even expand, and strong efforts are being made
by communities, associations, and the state legislature
to bring new industry to the area.
All in all, as the Delta evolves from an agriculture-dependent
economy to a more diversified one, the health of the manufacturing
sector (or the lack thereof) becomes increasingly important
to the region’s future growth.
At The Panola Partnership, in Batesville, Paul Alexander
offers some statistics which illustrate the effects of the
manufacturing slowdown of recent years. “In 2001,
we lost 73 firms and 9,100 jobs. In 2002, we lost 117 firms,
and over 11,000 jobs. Through February of this year, we
had already lost 11 firms and 1,843 jobs. Foreign competition,
health care costs that have risen fifteen to twenty percent
a year, tort reform issues—these are all big factors.
And NAFTA has been bad for Mississippi, since labor has
been available more cheaply in Mexico.”
Alexander sees potential for a revitalization of the manufacturing
sector, however, but says that new approaches must be taken.
“We have to take a harder look at labor costs, as
well as education and training, for one thing,” he
says. “And we have to get more creative. There is
value in recruiting several smaller firms, rather than just
focusing on one really large business.
“Certainly, we need to stay on top of the automotive
industry potential. The state and developers are doing that.
We need to keep working with our existing companies to pick
up some Tier 2 and Tier 3 suppliers to Nissan.”
“I’ve noticed a funny trend,” says Jimmy
Heidel of the Vicksburg & Warren County Chamber of Commerce.
“A lot of U.S. manufacturers are going overseas with
their plants, while foreign companies want to come to this
country to build facilities.”
The Vicksburg area has seen its share of plant shutdowns
and loss of jobs in recent years, he reports, some due to
consolidation and at least one bankruptcy. At the same time,
several existing companies have completed expansions. “The
good news is that we’ve had a net gain of about 1,500
jobs coming on line this year. Two major Nissan suppliers—Calsonic
Kensei North America and Yorozu Automotive Mississippi—have
located here. And we have two other commitments from industries
who say they will build in Vicksburg if they build in the
United States at all, after the economy picks up.”
Overall, Heidel feels that prospects are good for manufacturing
growth in the community. He cites Interstate 20, which passes
through Vicksburg, as a major factor, predicting it will
continue to grow as an automotive manufacturing corridor—with
facilities already stretching from Alabama through Mississippi
to Shreveport, LA and on to San Antonio, TX.
For the manufacturing sector to realize real and continuing
growth in the Delta, Heidel feels several things need to
happen. “Education is very important,” he comments.
“I think we’re starting to get away from the
mindset that every child have to go through four years of
college. We need to do a better job of recommending that
people go into labor fields. Some of the work force training
efforts and Vo-Tech programs are addressing that.
“There’s also a false impression that people
in the Delta don’t want to work, and we have to continue
striving to change that.”
Heidel says that the days when U.S. companies had the edge
on technology are over, and that domestic firms now need
to catch up with others. “Most of the technology is
now being used by the overseas competition as well.
“Management and the unions need to work together to
keep U.S. operations efficient and profitable. Use of technology
must increase, and there will have to be some hard choices.
New technological processes may mean the elimination of
some jobs, but may also result in efficiencies that will
keep the entire operation strong.”
Mark Jackson is the new plant manager at Baxter Healthcare
in Cleveland. While only in this position for several weeks,
he has been with Baxter for sixteen years, and at the Cleveland
facility for five years—having served as Director
of Quality before taking the plant manager job. He says
that major expansions to the existing facility are not in
current plans. Rather, the primary focus is on better utilization
of the square footage and existing products to facilitate
expected growth. Several new product lines are in development,
and another proprietary product line is in the early stages,
Jackson reports—all of which will be coming to the
Cleveland facility.
“We are hiring, but not to expand our workforce,”
he comments. “We have from forty to sixty retirements
each years, and we are hiring to address that attrition.
We are looking to maintain our current staffing levels.”
Asked about the availability of qualified workers, Jackson
says that filling manual assembly operations jobs has not
caused major problems. The challenge will come instead as
Baxter installs more technical pieces of equipment. To address
this, the company is emphasizing internal training and development
of skills, he reports.
Sounding a common theme, Jackson comments that while legislative
efforts to attract new business are welcome, there needs
to be a balance between efforts to recruit new companies
and continued strong support of existing manufacturers.
He also agrees with the assessment that a turnaround in
the manufacturing climate will require more technical and
automated processes, even if those changes require some
reduction in the overall labor force.
Viking Range Corporation in Greenwood is a “home-grown”
manufacturer which has experienced dramatic growth with
its lines of premium professional and commercial-type kitchen
products for the home. Public Relations Manager Jane Crump
reports continued physical expansion and new product additions
in recent months.
“We expanded our Design Center in 2002, and recently
enlarged our Distribution Center—in response to our
introduction of Viking cookware and cutlery and the start-up
of our online store,” she says.
At its own Viking Training Center, the company has trained
over 3,700 Viking dealers and distributors since 1998, she
adds.
“We can’t get enough labor, and are having to
contract from elsewhere,” comments Donald Cross at
LeTourneau, Inc. in Vicksburg. “We do a lot of training
ourselves, especially welders, paying them to go through
training for four to six weeks. There are certainly some
good workforce training programs in place at area colleges,
but they’re just not sufficient to meet our needs.
We have been able to pick up some of the people displaced
by the plant closings in the area, but most don’t
really have the skills we need.”
LeTourneau constructs offshore drilling platforms, and also
supports rigs around the world from the Vicksburg location.
Cross reports they have work lined up through the second
quarter of 2006, and have recently shipped the world’s
largest jack-up rig.
He also serves with Warren County’s Economic Development
Foundation, and believes the government is doing all they
can do to attract new industry. However, he echoes the comment
that a balance needs to be struck between recruiting new
business and maintaining existing firms.
Recycler Greenville Iron and Metal, LLC buys scrap metal
for processing and sale to mills and foundries who re-use
the material. The Greenville facility is the largest of
several Mississippi locations the firm operates.
Phil Morris says that his company has gone through three
difficult years, during which prices hit 30-year lows and
many of their customers moved their operations out of the
country—not only because of cheaper labor, but also
due to regulatory and environmental concerns.
“Mississippi has lost so many manufacturing facilities
in recent years, and we certainly lost our share,”
he comments. “Business has started coming back fairly
well, especially in steel. But the biggest threat to our
business is losing the people who generate scrap.”
Morris says that, as a whole, he has been disappointed in
legislative efforts at tort reform. “The legal climate
is very damaging to manufacturers, especially smaller ones,”
he says. “I feel the state was very slow in addressing
the issue, and while they’ve made some progress with
the medical industry, they still have a long way to go for
manufacturers.”
Comments Jay Moon with the Mississippi Manufacturers Association,
“Over the last two years, manufacturing in the U.
S. as a whole has taken a turn for the worse. Many things
have contributed to that—concern over the economy,
an international economy that isn’t doing that well,
competitive pressures, especially from China. And the free
trade climate isn’t really providing a fair playing
field for our manufacturers.
Mounting costs for health care and energy also work against
U. S. companies, he adds.
“Having said that,” Moon continues, “both
the state as a whole and the Delta region have some real
opportunities. There are a lot of great manufacturers in
the Delta, U.S. based, international-based, and ones that
grew up there. And they are producing on a world-class scale.
There is a good transportation network in the Delta; the
overall infrastructure is one which can certainly support
business.
“What we need right now is a sustained period of strong
consumer confidence. This would have a very positive effect,
both on businesses looking to locate in the Delta, and existing
area firms considering expansion,” Moon says. DBJ
