Michigan experiencing a manufacturing boomlet
ROYAL OAK, MI. - Dave Schowalter manufactures solid, sterling silver bead for bracelets, adding college and university logos that his customers request. His Collegiate Bead Co. uses software originally developed for auto and aerospace design in Michigan.
"The deep recession we experienced here worked to our advantage insofar as we were able to tap the talent base that we might not otherwise have been able to do in a good economy," Schowalter said.
His two-year-old, niche business employs twenty people, including eight at a Grand Rapids factory -- jobs, incidentally, that used to be in China. Schowalter says he had rejected 30 percent of the beads made for him in China, but rejects almost none made at home. The timing from concept to finished product also quickens from six months to six weeks.
"If you look at strictly hourly wages, absolutely, it's cheaper in China. But you take the whole package -- the shipping, the time lag, the quality," Schowalter says, "It's actually less expensive to produce it here in the states."
Collegiate Bead Co. is part of a trend in Michigan, where 45,000 manufacturing jobs have been created since 2009. Only a third of those new jobs are in the rebounding auto industry. While the nation added 225,000 manufacturing jobs last year, one of every ten of them were in Michigan.
At the recession's low point, Michigan was down 150-thousand manufacturing jobs, and its unemployment rate was the nation's worst. The jobless rate is now 9.3 percent, still a full point higher than the national average, but its lower than the rate in nine other states.
Jeff Metts laid off 100 people during the recession but has replaced every job eliminated and more. He now has 220 working for him at Dowding Industries and Astraeus Wind, outside Lansing. He's hired thirty people in the past two months.
"If a country's going to grow, if it's going to do well, if an economy is going to pick up and go someplace, it has to come through making things," Metts said.
Dowding Industries makes parts for Caterpillar farm equipment, Cummins truck engines, and Kawasaki rail cars, and Greyhound buses.
Inside his newest manufacturing building, a hugh machine treats 20-ton "hubs" that hold windmill blades. The machine Metts developed and calls the "megaflex" greatly increases efficiency. It completes what used to be a thirty-five hour job in one shift.
"There is none like it in the world. This is the first one there is, where it does every side at once," Mett said of the machine.
Metts calls himself a Republican -- he has pictures of himself with Dick Cheney and Laura Bush in his office -- but he's not sure he'll vote Republican for president. Democratic administration grants, from the Obama administration in Washington to the administration of former Governor Jennifer Granholm in Lansing, provided seed money for his Astraeus Wind
"I want somebody that's going to support manufacturing. I want somebody that's going to support what we're doing in this country and make it great," Metts said. "Whoever is going to do that -- that's who I'm for."
Bead maker Scholwater prefers Rick Santorum in the Republican presidential primary, but he is skeptical of Santorum's promise to eliminate the 35 percent corporate tax on manufacturers.
"It's got to appeal to it, but if you're going to eliminate tax in one area, you're going to have to make up that revenue someplace else. Jury's still out on that for me," Schwowalter said.
To boost manufacturing, Mitt Romney has proposed reducing the corporate tax rate from 35 to 25 percent. Last week, President Obama also proposed lowering the rate, to 28 percent.
More than lowering taxes, Metts says renewing a production tax credit due to run out at the end of the year would be the helping hand he needs from the federal government. Metts says one major wind turbine company just cancelled a large order, because the tax credit is phasing out.
The banks, Metts added, three years after government bailed them out, need to be less stingy with loans.
"We can't get any funding," Metts said of Astraeus. "I would buy five more pieces of equipment that are a million dollars apiece if I could get the money."
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