Manufacturing is not dead in New Jersey.
In fact, John Kennedy, CEO of the New Jersey Manufacturing Extension Program, claims one of the state’s biggest industries is very much alive – and thriving.
“[Our] companies have evolved by taking the reins on automation and moving ahead,” he said. “A company today, which maybe 25 years ago had 100 people, now has 50 and is producing so much more that they need to expand and get back up to 100.”
According to Choose New Jersey, there are nearly 10,000 manufacturing companies in the state today, employing more than 250,000 people and contributing nearly $45 billion to New Jersey’s gross domestic product.
Billion-dollar manufacturers such as Campbell Soup Company, Honeywell and Merck continue to be headquartered here not only because the state is within a two-hour drive of more than 22 million consumers and an airport and sea port away from millions more, but also because the state hosts the highest concentration of scientists and engineers per square mile in the world.
The challenge has been to get that specialized workforce to join the industry, Kennedy said.
“We need to market this industry better,” he said. “Both the state and the manufacturers themselves need to get behind that.”
The manufacturing extension program, known as NJMEP, a nonprofit in Cedar Knolls responsible for assisting manufacturing companies in becoming more competitive and profitable, recently worked with legislators across the state, including Senate President Stephen Sweeney and Senator Bob Gordon, to create a manufacturing caucus that it hopes will lead to the development of legislation and job training initiatives that will continue to grow the industry.
“It’s about making sure that we have real conversations between the industry, the government, and our educators, because one sector simply complaining to another has not worked,” Kennedy said.
NJBIZ spoke with Kennedy to see what developments the manufacturing industry in New Jersey can expect over the next year – and what it is still lacking.
Here’s what he had to say.
NJBIZ: The number one issue in the industry today, and for some time now, has been the lack of a younger workforce. What progress has been made in solving that issue?
John Kennedy: In our annual survey [of manufacturers], NJMEP received 840 responses in 24 hours, leading to [the realization that there are] about 5,000 jobs that could be filled if there were more people to fill them. That’s because even with automation and the ability to make things quicker and more accurately, you still need people – and that has been a problem. … The jobs are changing and becoming more high tech. With CNC [computerized numeric control] machines, for example, you now need someone who is not only a great machinist but also understands how to use a computer. Even the repairperson in your shop needs to understand IT. The jobs have evolved, and that is a good thing. … According to the National Association of Manufacturing, the average wage in New Jersey now [for an industry job] is $90,000. … But while New Jersey has a lot of good vocational technical schools and county colleges in addition to its state and private colleges, and while there is a lot of high-end skills training that goes on outside of school too, the issue is that we don’t tend to work together very well. … Competition between schools exists despite the fact that there is more than enough for everybody to do. I have said for years that NJMEP should be the business organization in the middle to make sure our industry is connected and that we are using all of our assets to their fullest. For example, it makes no sense to me to have a CNC program at [one] community college and another down the street when neither class is filled. I say, let’s instead work together to fill both classes.
NJBIZ: What can the industry do to attract and retain a more diverse workforce, including women and minorities, in the wake of employee shortages?
JK: A lot of people forget that manufacturing is an industry that needs both highly skilled and highly educated people. … While New Jersey has a great education system and we rank number two in high school graduation rates, when you look at areas such as Trenton, Newark and Asbury Park, we’re not quite there. Many of those young people don’t know where their education is going to bring them because they just can’t see the pathway. We have to focus on those individuals and be able to provide that for them. … I’ve also heard that this industry is ‘not one for women.’ Why not? I’ve hired many women engineers and they’re all fantastic. Of course, we need both men and women in the industry. The problem is that we are not getting a flow of people applying. We have to reeducate people so that they understand how it is not just a job, but also a pathway to a career. … We have to work together to provide not only certifications but also make sure we are tying in together with all of the vocational technical schools, the county colleges, and make sure that the resulting package is providing pathways to actual companies. … And we’ve got to continue connecting with people. We work with the Boys and Girls Clubs of New Jersey, for example, and the STEM programs for the Boy and Girl Scouts, because you can’t just take the ear of someone who is 35 years old and say, ‘Hey, you interested in a job?’ Odds are, they won’t be. But if I was 12, and I was excited about STEM, I would go for it. I did. I became interested in engineering because I earned my merit badge in Boy Scouts.
NJBIZ: The industry not only needs to make itself more attractive to potential employees, but also to manufacturers looking to relocate, or to new and innovative manufacturers hoping to expand. How can the state help with that?
JK: I don’t believe the government should bear the cost of everything when it comes to any one industry, but it certainly begins and ends with its support. … We took a huge step, with the New Jersey Business and Industry Association, in initiating the [Senate] manufacturing caucus, when our advisory board of manufacturers wrote a letter asking the Legislature for a conversation, citing workforce development, taxes and fees, environmental protection, and fair investment through [state] programs that are not solely focused on certain geographical regions. … We need our industry to continue speaking up for itself. But a lot of manufacturers in the state have grown quiet because they’ve been pushed to the background for so long. We need to shake them out of it because they need to invest in these programs, too. If we rely too heavily on a government that doesn’t know much about the industry to accomplish things, that isn’t fair to our taxpayers, and we also may not get what we need.
NJBIZ: It appears that many companies in New Jersey want to work with local manufacturers, but costs are simply too high. What is being done to bring costs down so that New Jersey’s manufacturing industry will remain competitive with that of nearby states?
JK: As you bring in more work and are able to get more products out, you can expand your business. So, if we do a better job of marketing the industry in the state that will certainly help drive costs down. … It also has to be less about ‘bringing back’ companies and jobs from overseas and more about the companies that are already here. Let’s support and expand them first. Stanley Black and Decker in Maryland, for example, has been calling [us] because they want to ‘reshore’ some capabilities and give our manufacturers additional work. That sort of thing also will support a lot of good pathways for younger people to have a career in manufacturing.
NJBIZ: Speaking of ‘reshoring,’ how do you believe the Trump administration will impact manufacturing in the United States?
JK: If you look at the charts, the U.S. [manufacturing industry is ranked] number two in the world and we are projected to be number one again by 2020. Trump’s constant conversation and his pushing of the industry are very positive, but its rise was happening anyway. … What I think he and a lot of people have forgotten is that the industry is made up of small businesses. The average manufacturing company in New Jersey, 77 percent of them actually, has just 34 people. That’s the supply chain, supplying parts to Lockheed and Boeing, and that is critical. We cannot forget these companies and we must support them so that when we need to build something, we can.
NJBIZ: Lastly, what are your hopes and concerns for the industry when it comes to potential policies our new elected governor may implement?
JK: I’ve spoken with both Phil Murphy and Kim Guadagno, who already has done a lot to support the industry, as I believe Murphy would. The thing I would ask for more than anything is to fund workforce development that is not always based on a company hiring a person. A lot of grants seem to be geared toward hiring, but that’s not always how business works. You have to keep both the businesses healthy and the people trained to be able to plug them in. … My concern is that we get fired up and then we cool down after election periods without sustaining what we need to. That’s always been a problem in New Jersey in my lifetime.