When Lindsay Myers, director of the Oregon Economic Development Foundation, tries to sell a piece of land for industrial use, she welcomes a foreign company.
“I have a love for international business,” Myers said. “I learned a lot about it in my prior position and I really respect the communities that say, ‘Hey, we’re here, we’re open for business. We’ve got a story to tell and we’ve got a community that can help you thrive. We want you to come here.’ I think that’s a good message and a good thought and good mindset to have.
“What I’ve learned is you can compete in a global market, but still appreciate and value things made in America. I think as long as its a vision of what you want to accomplish in a global market, I think you can be successful,” Myers continued.
“What I always was taught at my prior job, my boss did a great job of saying, ‘We want to get manufacturing and those kinds of jobs back in America.’ We were looking for direct foreign investment as well. That’s different when you want to compete in that global market. I think it’s good to get foreign investment in a community.”
Steve Harmon of Spartan Logistics, a distribution and warehousing company, says if foreign companies want to come to Toledo, this is the place to be.
“Toledo is still a good place for distribution, but it depends on the industry. For certain products, no, but for automotive, Toledo is awesome,” Harmon said.
State Representative Barbara Sears (R-Monclova) serves on the Ohio House’s 21st Century Manufacturing Task Force, which is designed to facilitate discussion and interaction between Ohio’s manufacturing communities. The task force will hold a hearing September 27 at Owens-Illinois in Perrysburg.
An Ohio Global Cities Initiative task force this year found that it is important to not just consider the future of manufacturing, but also geography. The Brookings Institution in Columbus released the Global Cities report while hosting a conference in May.
During a webcast, General Electric CEO Jeffrey Immelt stated, “Today at GE we are outsourcing less and producing more in the U.S. When we are deciding where to manufacture, we ask, ‘Will our people and technology in the U.S. provide us with a competitive advantage?”
The task force, answering Immelt’s question, said, “Increasingly, the answer is yes.
“The people and technology that Immelt sees as crucial to his company’s decisions to increase manufacturing in the United States are place-specific,” the task force report continued. “Those locations — especially metropolitan areas — help create the conditions that give firms such as GE a competitive advantage from manufacturing in the United States…When firms locate near each other, they gain a number of advantages.”
A lesson from WWII
It’s a global economy, but will it remain so if there is another world war?
Paul Faykosh, whose family is from Pemberville and owns Centaur Tool & Die in Bowling Green, believes such an event could create problems for the United States.
“Some people might not like to hear this, but my contention is if we farm everything out and we lost manufacturing in the United States — if we go to a big war, I mean like World War I or World War II, do you think China and some of these Asian companies are going to ship us parts and help us fight? That’s my concern — if we shut down all the machine shops, the die shops, everything.
“During World War II, most of the wives and women ran the tool shops, die shops, and machine shops to make military parts for the war. Well, if we don’t have any shops here, what would we do?”
While attending church, Faykosh knew a woman, who has since passed away, who worked in one of those WW II factories.
“She knew I owned a tool and die shop and she talked to me quite a bit about how she ran a surface grinder and lathe — and she knew all the stuff. We could talk back and forth, and she knew what I was talking about because during World War II she worked in a machine shop and ran all those different machines,” Faykosh said.
How are small machine shops performing against competition from foreign companies? Faykosh says business is starting to return, but the foreign competition from China remains strong.
“We’ve been struggling ever since before 9/11, and then when 9/11 hit everything dropped out,” Faykosh said.
“To give an example, we had three dies we were going to build and a total program for a company in Grand Rapids, Michigan. We had the job about three days and our contact called us and said, ‘Their higher-ups decided they were going to pull those dies, and if we had any work in there to let us know how much we had invested and they would reimburse us.’
“They were pulling the dies because the whole program was worth $1.2 million, and they were sending it over to China and China was going to build and do that whole program for $600,000. So the company in Grand Rapids was going to collect $1.2 million from their customer, send China $600,000, and then our customer in Grand Rapids was going to just pocket $600,000 without doing a thing,” Faykosh explained.
“We pay our die-makers somewhere around $20 an hour. My understanding is that they were paying the Chinese toolmakers 12 cents an hour. How do you compete against that? We’ve quoted other jobs that we found out China was going to build, and their price was less than our materials would cost us before we even turn even one minute into the job. You can’t compete with that,” he continued.
“I think things are slowly changing. I think some of the companies we’ve found are really dissatisfied with the Chinese quality and the delivery — of course they have to wait for it to be shipped over. During our hard times here the last few years, the only jobs we were getting were jobs that we had to turn around in like, two, three, or four weeks, because they couldn’t wait for it to be turned around from China.
“But things are slowly changing because I think the lifestyle in China is slowly catching up. They are getting more and more money, and of course quality of life is changing there — those things are helping us now. We’re really busy right now and things are picking up, so hopefully it still stays the same because we’ve really struggled the last five or six years.”