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Rebuilding mode

It's no longer the jobs powerhouse it was, but high-tech techniques have kept manufacturers on the cutting edge.

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Cliff Lindholm on the floor at Falstrom, which traces its roots to 1870. The company employs a quarter of the work force it did in years past, but turns out more high-value goods today. 'We don't make thousands of things that you buy for a dollar,' he says. – AARON HOUSTON
Cliff Lindholm on the floor at Falstrom, which traces its roots to 1870. The company employs a quarter of the work force it did in years past, but turns out more high-value goods today. 'We don't make thousands of things that you buy for a dollar,' he says. – AARON HOUSTON

New Jersey's manufacturing work force fell nearly in half over the past quarter century, to 246,500, in part because production moved to lower-cost places in the United States and overseas. Yet the value of the output from New Jersey factories is now nearly $38 billion, up from $33 billion in 1987, reflecting both increased productivity — making more things with fewer workers — and the relatively high value of much of what gets made here. Throughout the state, skilled workers use advanced technology to create components for industries like aerospace, electronics and medical devices.

But recruiting and training the next generation of skilled manufacturing workers for the high-tech factory floor is a major challenge.

Cliff Lindholm III heads Falstrom Co., in Passaic, founded in 1870 by his great-uncle. The company started out making architectural metalwork for Victorian homes; now, it makes metal housings for electronics on Navy submarines, and customers include Lockheed Martin and Rockwell. Falstrom employs 50 workers, compared with 200 years ago, "but the unit value of our products has increased significantly," Lindholm said. "We don't make thousands of things that you buy for a dollar. We make 20 or 30 units that cost tens of thousands of dollars."

Lindholm heads the New Jersey Business & Industry Association Manufacturing Network, which launched in 2004 as a way to advocate in Trenton for policies that preserve and grow manufacturing in the state, and he pointed to recent legislation that allows firms to carry losses forward for 20 years, so losses in bad years reduce taxes on profits in good years. The network's members "share best practices and help each other run their businesses in a more efficient and effective way," he said.

In recent years he's seen a warmer policy climate in Trenton: "People realize that manufacturing is an important part of the economy." But he's also watched many manufacturers shut down or leave New Jersey in the past quarter century, which "has made it difficult for the manufacturers that are still here to find employees. The time we spend bringing a new employee up to speed has increased significantly from 25 years ago."

When the state created talent networks a year ago to spur job growth, "advanced manufacturing" that relies heavily on technology was one of the targeted sectors. The ManufactureNJ Talent Network is based at the New Jersey Institute of Technology and headed by Meredith Aronson, who is building new training programs. She spearheaded a program last summer at Passaic County Technical Institute that trained 15 people in computer numerical control production, and is working with South Jersey glassmakers. And she's trying to overcome "a perception about manufacturing from a generation ago that it is repetitive, semi-skilled work that does not require much training."

Bob Loderstedt heads the New Jersey Manufacturing Extension Program, which helps companies make their operations more efficient and profitable. He said New Jersey has more than 10,000 manufacturers, with 83 percent employing fewer than 50 workers. While the state has lost many firms over the past 25 years, most of the ones that remain are now far more productive. He said the state has become a "supply chain destination" for a diverse list of industries, including aircraft, automotive, chemical, medical devices and plastics.

And many jobs go begging in New Jersey for the lack of skilled workers: "You might have 300 companies that each needs one worker who is critical to grow and sustain their business."

Over the past 25 years, it often seemed policymakers had written off manufacturing, and were betting instead on service jobs like finance, Loderstedt said; "there is now a recognition that we need manufacturing."

Rutgers economist Jim Hughes said New Jersey manufacturing employment peaked around 1970 at about 900,000 jobs. Then the state started losing jobs to the less unionized, lower-cost South, and when the globalization movement arrived in the 1990s, jobs moved offshore.

"Manufacturing is very competitive globally, and we are a high-cost place to do business." To clean up the pollution legacy from decades of manufacturing, in the 1970s New Jersey began to adopt "very significant environmental regulations," prompting some producers to move "to other parts of the country where regulations were more lax."

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Beth Fitzgerald

Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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