Survivors Do More With Less
GRAND RAPIDS — There are fewer manufacturing jobs and fewer manufacturers in West Michigan now, compared to 2000 — about 21 percent fewer jobs and 12 percent fewer companies, to be precise, according to Bureau of Labor Statistics data provided by The Right Place Inc.
But that does not spell economic doom and gloom to the president/CEO of the economic development organization.
"The demise of the manufacturing sector in West Michigan is truly highly exaggerated," according to Birgit Klohs.
Some West Michigan manufacturers are "doing very, very well," she said, because they have greatly improved their productivity and efficiency and found niches in which to succeed.
Manufacturing companies "are here to stay — but clearly changed," she said, adding that the change over the last 25 years has been from low tech to high tech.
Klohs compares the evolving state of manufacturing to American agriculture, which generations ago employed about 90 percent of the work force. Today, the mechanized U.S. ag sector feeds half the world but only employs about 4 percent of the American work force.
West Michigan (Kent, Muskegon, Ottawa, Allegan, Barry, Ionia and Newaygo counties) had 167,252 manufacturing jobs in 2000. In 2007, the BLS counted 131,469.
Still, the rate of jobs lost in West Michigan is lower than in Michigan as a whole, which had 886,659 manufacturing jobs in 2000 and 619,771 in 2007, a 30 percent reduction.
Will the lost factory jobs come back some day?
"No," said Klohs. "That is the thing that people will have to get used to. The era of high-paying, low-skill jobs in any kind of manufacturing sector are over. They're gone. The jobs that are here are generally much higher skilled — ergo, better paid. The companies are doing way more with way less."
Klohs said many people assume it is the outsourcing of American manufacturing overseas that is causing the shrinkage in American factory employment, but she said that is not the whole story. She points to productivity improvement, which means that far fewer low-skilled workers are required.
"These companies are lean," said Klohs. "They have to be to compete globally. And that means less numbers (of employees) but more output. There are companies in the area that have a third less staff and put out double the product."
Meanwhile, The Right Place and other economic development organizations in Michigan are pushing to attract and build new markets in manufacturing, such as medical devices and alternative energy equipment.
"That incredible competency of advanced manufacturing in West Michigan will hold us in good stead in the future, as well," she said.
"On a per capita basis, we are still the largest manufacturing region in the country," she said. "So the numbers (of factory employees) are never going to be back there, but the productivity and diversity of product and the (manufacturing) sophistication are going to be."