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Factories here are transitioning into advanced manufacturing
Western New York has a proud manufacturing heritage, but the region is hardly stuck in the past in that sector. Consider a few developments:
• The state will pour $225 million
into creating RiverBend, turning a former industrial site in South Buffalo into
a clean-energy manufacturing complex. Two California-based companies plan
to invest $1.5 billion of their own money in the venture.
• A planned Institute for Advanced
Manufacturing Competitiveness will help local manufacturers develop new
products by providing them with access to state-owned resources they might not
have.
• A large business park - known as
the Science, Technology and Advanced Manufacturing Park, or STAMP - is in the
works for Genesee County. It would cater to big, high-tech employers such as
semiconductor manufacturers, while drawing workers from the Buffalo and
Rochester regions alike.
• Manufacturing employment
stabilized in 2013 after several years of declines.
The individual efforts speak
collectively to a larger point: The region, with a big financial lift from the
state, is determined to make manufacturing an important piece of its economic
growth. While low-skill manufacturing jobs have migrated overseas, economic
development and government leaders are bullish on advanced manufacturing, the
kind of production that is higher-tech in nature and not easily duplicated by
competitors in low-cost countries.
Ben Rand, president of Insyte
Consulting, which works with area manufacturers, said the Buffalo Niagara
region is in a good position to attract more manufacturing jobs and investment.
"We're a manufacturing community,"
he said. "They can see there's this commitment that's really coming through
loud and clear from the state government and other partners."
The Western New York Regional
Economic Development Council, which leads the state's economic development work
here, has made advanced manufacturing one of its priorities.
"No region in decline has ever
reversed its fortunes without growth in the advanced manufacturing sector," the
council said in a recent progress report. The council notes that the region has
strengths to build on, from medical devices and precision instruments to
advanced materials and energy storage. But, the council cautions, "the time to
take advantage of these assets is passing."
Christina P. Orsi, Empire State
Development's regional director, said she sees a "lot of momentum" in
manufacturing, with companies investing in and expanding their operations.
State labor statistics show
manufacturing employment in the Buffalo Niagara region is nowhere near what it
once was. In 2013, the sector averaged 50,636 jobs through November. The region
averaged 83,000 manufacturing jobs in 2000, and 92,600 in 1990 - 45 percent
higher than last year's number. Plants can run with far fewer workers due to
technological advancements, and the rise of manufacturing options overseas in
lower-wage countries has eliminated other jobs in U.S. plants.
But Richard Deitz, regional
economist for the Federal Reserve Bank of New York, noted that while the
Buffalo Niagara region's manufacturing employment fell for years, the 2013
average was virtually unchanged from the year before.
"The fact that manufacturing
employment has stabilized is actually a very big deal for the region," he said.
The factory jobs that have endured
tend to require higher skills, such as more education for the workers who fill
them, Deitz said. "It's definitely an important sector for the economy."
Even if the head count is
dramatically smaller, advanced manufacturing operations attract large-scale
investments, such as the $825 million that General Motors poured into two new engine lines in the
Town of Tonawanda and the $150 million that Ford Motor Co. is putting into its Town of
Hamburg facility.
Both investments led to additional
jobs.
Smaller manufacturers such as
Eastman Machine in Buffalo, which produces cutting machines and cutting
equipment, have found a way to survive and compete by focusing on higher-end
products.
While increased automation is a fact
of life in manufacturing, it is not the whole story, said Robert Stevenson,
Eastman's chief executive officer. "We always need people to do certain jobs,"
including higher-skilled jobs such as programming the computer system on a
production unit, he said.
Stevenson said local manufacturing
took a hit in the 1990s when a lot of work migrated overseas, lured by lower
costs. "China was a the major beneficiary of that, but their wages are rising,"
he said.
Stevenson sees other reasons
overseas manufacturing has lost some luster. Shipping costs are going up, and
smaller customers might not be able to schedule deliveries as quickly as they
like. Those factors have brought some manufacturing work back to the U.S., he
said.
Still, the Buffalo Niagara region is
not angling to bring back low-wage, low-skilled production. The focus instead
is on higher-end, specialized work that cannot be easily moved to another
country or performed in a low-cost setting by inexpensive workers.
Nadine Powell, a senior director
with the Buffalo Niagara Partnership who works with the organization's
Manufacturers Council, said many area manufacturers had a strong 2013,
evidenced by their expansion projects and investments.
Some of their growth is driven by
exporting to markets such as Brazil, the Middle East and Asia.
"Our manufacturers really do have a
global presence," she said.
Some of the biggest splashes in
advanced manufacturing - such as the RiverBend clean-energy complex and the
STAMP project - won't happen immediately. But advocates say those projects will
pay large dividends in the long run by getting in on cutting-edge technology
and, ideally, drawing other companies here.