Sharing Success Secrets
Sharing success secrets
Buffalo Niagara lost 42% of its manufacturing jobs over 25 years - yet many factories thrive here, and are willing to tell how.

Jack Bertsch sees a tough climate out there for manufacturers.
"Manufacturing in general in this country is poor and getting worse," said Bertsch, the founder and president of Polymer Conversions. "In our area, it's worse and getting terrible."

But rather than pull up stakes, his Orchard Park company has adapted. The injection-molded plastics firm is heavily into robots, and switched to around-the-clock operations a few months ago to make the most of its equipment. It's also receiving discounted power from the New York State Power Authority.

Polymer Conversions has also taken on some of the more difficult technical jobs that other companies were unable to handle. "The gravy jobs are gone," he said.

The company will share its experiences Thursday at a conference focusing on some of the same issues it faces every day: how manufacturers are managing to survive and compete here, and how the region's manufacturing sector compares with the rest of the nation.

The Buffalo Branch of the Federal Reserve Bank of New York is presenting the conference at the Buffalo Convention Center, to delve into a sector whose job count has fallen over the past two decades but which remains a critical part of the economy.

"The last thing we can do is afford to become a service economy based on lower wage rates," said Robert Martin, president of the Western New York Technology Development Center and one of the event's speakers.

State labor figures show that Buffalo Niagara's manufacturing job count has plunged since the 1970s. Last year, the region averaged 82,900 manufacturing jobs, down 42 percent from 1976. The state's average manufacturing employment fell 41 percent during the same span.

Still, it's a high-wage sector with a healthy ripple effect in the rest of the local economy. Witness the lengths that state and local officials went to secure the $500 million expansion of General Motors' Town of Tonawanda engine plant, or the ongoing worries about the status of Delphi Harrison Thermal Systems' Lockport site.

Meanwhile, some longtime local manufacturers have scaled back or have vanished. Bethlehem Steel closed its Lackawanna coke ovens last year, and a Triscuit plant in Niagara Falls shut down.

While the larger employers attract most of the attention, the region is sprinkled with many more smaller plants on the scale of Polymer Conversions, which has 80 employees.

Richard Deitz, a Federal Reserve Bank economist in Buffalo, said the region's manufacturing trends raise questions worth exploring, such as which types of manufacturers are declining and which are growing, and what companies are doing to remain competitive.

"In general, the Northeast has not done so well," Deitz said of the manufacturing sector. "It's not clear that Buffalo has done worse than other mid-Atlantic regions."

Martin said tactics, strategy and leadership are all important factors for manufacturers, but that companies are succeeding in those areas to varying degrees.

Most firms, he said, have a good handle on tactics, like responding quickly to customer demands. "You need to do those things just to survive in today's environment," he said.


Need unique strategies

Since manufacturers in this region can't compete on a commodity basis, they need to separate themselves from the pack, Martin said. But fewer companies have created a strategy to do so, he said.

Martin considers company leadership to be the key issue. "As an owner and manager, you can't rely on your labor to do that for you," he said.

The local business climate doesn't affect all manufacturers the same way: some of them, like AirSep Corp. in Amherst, go outside the region for most of their customers and suppliers, leaving them less vulnerable to swings in the local economy.

AirSep has also built up a strong global customer base, selling its products in more than 100 countries. About 30 percent of its business comes from the international market.

Still, AirSep is influenced by local factors such as the quality of the available work force and the cost of doing business in New York state.

Joseph Priest, AirSep's president and chief operating officer, said he believes the state and the region could be more aggressive in offering incentive packages to lure manufacturers here.

"I think people have the perception that giving businesses a break is a bad thing," he said.

Instead, he said, other states offering those breaks have ended up bolstering their tax base, through collecting more property taxes and bringing in more people to fill jobs.


Staying competitive

Despite the manufacturing sector's struggles here, one local executive says it's important for the region not to forget its strengths.

Buffalo Niagara boasts a productive work force and is an ideal setting for distributing to Canada and elsewhere, said Kevin Clarke, vice president and general manager of Quebecor World Buffalo in Depew. The printing company bucked the trend when it chose the Buffalo area over Tennessee for a major expansion.

Clarke believes that manufacturers can benefit from talking to each other, even if they're from different industries. When he was chairman of the Buffalo Niagara Partnership's Manufacturers Council, he encouraged non-competing companies to open their doors to each other, to share ideas for technology and running their businesses efficiently.

His successor as the council's chairman, Marty Berardi, Moog's vice president of industrial controls, said he'll focus on competitiveness this year. He wants to build on what Clarke emphasized, by spotlighting companies and working in cooperation with the Western New York Technology Development Center for technical expertise.

The region's manufacturers have a strong work force to draw upon, Berardi said, but they need to "put some layers on that," such as managing their supply chain and inventory to stay competitive.

Thursday's conference will include remarks by Robert W. Crandall, a senior fellow in the Economic Studies Program of the Brookings Institution.

Crandall has written books related to manufacturing, including "Manufacturing on the Move," about the causes and impact of industry moving from the Northeast and Midwest to the South and the West.

Another speaker will be Michael Straney, an American Axle and Manufacturing executive in Detroit who has a local connection.

Straney, now the director of capital and capacity planning for American Axle, used to run forge and axle operations in the Town of Tonawanda and Buffalo when they were General Motors properties.


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