Manufacturing roundtable officials prepare report
By EILEEN KENNEDY, Telegraph Staff
MERRIMACK - Skyrocketing health care costs, high electricity bills and difficulty in filling certain types of jobs are some of the problems manufacturers in New Hampshire have in common, according to manufacturers taking part in a roundtable discussion Thursday at GT Equipment Technologies Inc.
The roundtable was the sixth in a series since January, during which state government and business association officials talk to manufacturers about difficulties those companies face. The information gathered during these events will become part of a report detailing the problems to be issued on Sept. 22, along with recommendations to improve conditions for manufacturers.
"These have been trying times," said Jack Metzemaekers, head of Salem-based Scott Electronics and JDSJ Fiber Optics. "Everyone has to be creative, and that's what we've done."
The company has instituted lean manufacturing, which is a way of streamlining the manufacturing process, and supply management techniques which have brought significant savings, he said, but problems such as rising health care insurance costs continue to eat into the company's bottom line.
One problem that did not come up in other roundtables was the need manufacturers have for working capital, and the reluctance by bankers to loan to companies.
"There has been a huge rise in the demand for working capital as things start picking up," said Ron Covey, with Ocean National Bank, based in Portsmouth. "The demand is there, but many times, manufacturers now have their orders in hand, but that's all they have."
Covey said if there were some type of partial guarantee for loans of these types, perhaps through state or federal government backing, more loans could be made.
Both Metzemaekers and Kedar Gupta, a founder of GT Equipment, expressed frustration with their former banks during the last few years. Metzemaekers said although the company never missed a payment of any kind, the bank began applying pressure tactics because the company no longer fell within a particular formula. Gupta said tough economic times brought his bankers to the door, whom he claimed were more interested in shutting the company down than helping the company survive. Both have since found new bankers.
Don Peterson, senior project manager with the New Hampshire Manufacturing Extension Partnership and who has facilitated the roundtable discussions, said while the topic hasn't come up before, he thinks that's because it's such a difficult one to discuss and one that should be addressed.
Manufacturing, and the loss of it across the country as well as in New Hampshire, has become a renewed focus for state officials, manufacturers, business association members and more recently, politicians.
Between 1984 and 2002, manufacturing jobs in the state declined from 116,000 to 85,000, more than 25 percent. While some jobs have come back, the majority of new jobs are not in the manufacturing sector.
Manufacturing is also important to the economy because it has what is called a "multiplier effect," in terms of job creation. For example, 16 million manufacturing jobs creates another 9 million jobs in retail, wholesale, finance and other sectors, according to the National Association of Manufacturers.
Last year, the Business and Industry Association, along with the New Hampshire Department of Resources and Economic Development, the New Hampshire High Technology Council, the Workforce Opportunity Council as well as other state and federal partners and manufacturers have been working to outline problems facing manufacturers and develop solutions.