Traverse City Record-Eagle

November 17, 2013

Manufacturing makes a comeback


---- — TRAVERSE CITY — What a difference a few years makes for Michigan manufacturers.

Five years ago the state’s economy was in a death spiral; it led the nation in job losses for nearly a decade straight.

These days the economic climate in Michigan is far different, said Mitchell Stapley, chief investment officer at Fifth Third Bank. Michigan now leads the nation in jobs creation in the manufacturing sector, Stapley said, although few people know it.

“Think about what the state has suffered through from the manufacturing standpoint alone,” Stapley said in an address to more than 500 northern Michigan business leaders at the Traverse City Area Chamber of Commerce’s 2014 Economic Outlook gathering on Nov. 12.

“We literally went through our own black plague (in) manufacturing,” he said. “We lost almost half of our jobs in the manufacturing sector over that decade, basically bottoming in 2009.

“What is exciting is how we’ve responded to that downturn,” he said. “The manufacturing sector in the state is now leaner and meaner than it has ever been, and one of the really good news stories that has not been shared enough since 2009 is that Michigan leads the nation in manufacturing job creation.” Stapley said. “We are leading the nation. That has tremendous implications for investment from a market perspective. Its been a long time since you’ve been able to point to Michigan as a leader in a sector of economic growth.”

The improvement in the manufacturing sector is happening not just at retoooled auto plants in southern Michigan, but also in the Grand Traverse region. At Clark Manufacturing in Traverse City the machining and lathe company added approximately 10 new workers to its manufacturing work force this year.

Cameron Fuller, a Clark vice president, said the turnaround is noticeable, especially considering the economic doldrums of 2008 and 2009, when the company was forced to make cutbacks.

He said demand for the company’s manufacturing is strong, particularly in the fields of energy and medical devices.

“We’ve got a solid market in the energy sector and the medical field is a pretty consistent performer for us, too,” Fuller said. “As those particular long-term customers grow, we’ve made a commitment to grow with them. I’m optimistic.”

Stapley and Penny Lewandowski — an expert in creating business climates that promote job growth -- said the Grand Traverse region is an economic hot spot in Michigan. Lewandowski said one key to generating more local jobs is to devote more resources and attention to what she calls “stage two companies.”

Stage two companies have between 10 and 99 employees and generate $1 million to $50 million in revenue. They are privately held and have the intent and capacity to grow.

Lewandowski, of the Edward Lowe Foundation in downstate Cassopolis, said stage two companies in the Grand Traverse region are the “powerhouses” for job growth.

“When you look at Grand Traverse County between 2002 through 2012, of all the businesses in the county, 7.4 percent of them were second stage,” Lewandowski said. “Those companies, though, represent 33.6 percent of the jobs.”

Lewandowski said promoting regional job growth requires economic development officials to pay close attention to stage two companies, and make sure they have access to capital for growth.

“We are proponents of giving them whatever they need to grow and provide a nurturing environment for them, giving them support and attention,” Lewandowski said. “They are incredible powerhouses when it comes to shaping your economy.”