Muskegon-area industries lead the economic recovery that's expected to continue in 2012

Published: Saturday, December 31, 2011, 6:09 AM

By Dave Alexander | Muskegon Chronicle

Chronicle file photo

Mark Fitzgerald, 51, of New Era, works on a part for the M777 Howitzer, a marine artillery, at Alcoa Howmet Ti-Cast earlier this year. Alcoa Howmet is Muskegon County's largest industrial employer with 2,100 employees.

MUSKEGON — Even before the Great Recession rippled across the country in 2008, Muskegon County's manufacturing sector had experienced a decade of decline in tandem with the slumping automotive industry.

Now, with all signs pointing to a slow recovery stretching into 2012, advanced manufacturing is driving the local economic bus.

Go figure.

Just a few years ago, manufacturing was dead in many people's minds. Now it is the sector leading the Muskegon area out of the worst economic slump since the Great Depression.

Several key surviving companies of the recent economic downturn are now looking at double-digit growth in revenues for 2012. A number of the Muskegon-area industrial companies are in expansion mode or will be next year, local economic developers said.

However, manufacturing job growth remains modest as Muskegon County has gained back through late 2011 only 600 industrial jobs of the 2,400 lostsince the beginning of the Great Recession.

Larry Hines

“Part of this is the normal economic cycle where the weak players fall along the way and the remaining do well in the recovery,” said Larry Hines, president and owner of the Hines Corp. — a group of six industrial companies, including Bennett Pump in Norton Shores, Johnston Boiler in Ferrysburg, Michigan Spring and Stamping in Norton Shores and Pacific Floor Care in Muskegon.

Hines said his industrial companies are projecting double-digit growth in 2012. Those projections would bring the industrial group back to revenue levels above where they were prior to the recession, Hines said.

“We're optimistic,” Hines said of 2012.

Some Muskegon-area industries didn't survive the last decade, including Sappi Fine Paper in Muskegonand Lift Tech International in Muskegon Heights— both companies more than 100 years old that ended local operations during the recession.

On the other hand, another group of local industries have recast themselves in light of new global realities. Surviving the downturn, they now are poised to take advantage of the upturn to Muskegon's benefit, said Cindy Larsen, president of the Muskegon Lakeshore Chamber of Commerce.

Cindy Larsen

“We've never abandoned manufacturing, as has been the case in other communities,” Larsen said, pointing to Muskegon's storied manufacturing history stretching back to the end of the Lumber Era at the dawn of the 20th century. “We are successful today because of a talented group of business leaders.”

Among those who have led the surviving companies are Hines, Amy Heisser and Mike Pepper at Alcoa Howmet, John Workman and Mark Fazakerley at Eagle Alloy, Dave Yacavone at GE Aviation, Bruce and John Essex at the Port City Group, Jim Teets at ADAC Plastics, Wes Eklund atFleet Engineers, John and Betsy McIntyre at Anderson Global, Scott Erdman at Erdman Machine and Steve Olsen of Northern Machine.

Larsen said these and other industrial leaders of the past decade have faced tough decisions, including pay cuts, layoffs and reorganization of staff. At the same time, they have developed innovative new products and processes and discovered new markets, she said.

“These are the superstars of our manufacturing community that have pulled us through one of the worst economic environments in our history,” Larsen said. “They provided leadership, innovation, sacrifice and perseverance. These people had the talent and skill to move their companies forward.”

Chronicle file photo

Janice Boss works on making Honda CR-V door handles at ADAC Automotive Inc. in Muskegon. The company announced a $20 million expansion at the end of year that will create 130 new jobs in Muskegon.

One of the foundations of Muskegon County's industrial resurgence has been the strong support local employers are receiving from Muskegon Community College and Baker College of Muskegon, according to Olsen of Northern Machine, a 34-employee tooling company in Muskegon that supplies Tier II automotive parts makers along with the office furniture and aerospace sectors.

Productivity is key to industrial success, Olsen said, as companies need new workers with cutting-edge skills and the ability to retrain current workers.

“Both institutions have kept pace with our needs for employees,” Olsen said. The new challenge will be to have local high school graduates prepared to take advantage of the two colleges' training, he said.

“Manufacturing is the engine driving the economic turnaround in Michigan,” Olsen said. “The downside is that we do not need as many workers as before.”

The surge in manufacturing activity seen in the recent announcements of expansions at companies such as ADAC Plastics, Eagle Alloy and Fleet Engineers has brought more large-scale investment in buildings and equipment than large increases in jobs. Technology is reducing the number of workers needed, even as industrial output increases.

The revolution on the modern industrial shop floor, with robotics and computer-controlled equipment, is not unlike what happened in the agricultural sector at the beginning of the Industrial Revolution. Farm workers moved to the cities to work in factories while automation and modern farming practices increased productivity.

Ed Garner

While recent increases in manufacturing aren't always reflected in employment numbers, the spinoff effect of a healthy industrial economy can be seen in supply companies. Both Webb Chemical in Muskegon Heights and Lake Weldingin Muskegon are expanding as they serve the West Michigan manufacturing companies.

“The key driver of our local economy, even above job gains in health care, is now manufacturing,” said Ed Garner, president of Muskegon Area First, the local economic development agency. “And in many ways, it's about the comeback of the domestic auto industry. We think this will continue into 2012, with projects that we have in the loop for the coming year.”

“Re-shoring” is a termthat has replaced “outsourcing.” It refers to American companies moving production back here from China. The term is applicable in West Michigan, which has lost industrial production to Mexico and China.

Eagle Alloy President and co-owner Fazakerley said the flow of manufacturing contracts to China has ebbed and some of those industrial orders are being filled in the United States. China is not as competitive on cost as in the past. Transportation costs, product quality issues and reliability have resulted in certain products being manufactured in the U.S. again.

Mark Fazakerley

Business is exploding for the Eagle Alloy steel foundry in Egleston Township, Fazakerley said. The Eagle group of companies is projecting a 25 percent increase in sales as construction continues on a 70,000-square-foot building expansion in Egleston Township. The company had a job fair in November looking for up to 100 new production workers.

Holland SAF in Muskegon, makers of truck trailer equipment, is bringing the production of casted parts back to Eagle Alloy from China, Fazakerley said.

The oil and gas exploration and metal mining industries are generating much of Eagle Alloy's new business. New customers like Caterpillar, the maker of heavy mining equipment, and John Deere, the manufacturer of agricultural machinery, are behind a lot of the new work, Fazakerley said.

“It's going to be a good year for manufacturing.”

Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it