Smarter, slimmer and stronger, Northeast Ohio factories are competing in the new economy and creating jobs, a new study concludes. Watch video
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Isaac Knight, top, helps secure a natural gas fueling tank into a steel frame at Trilogy Engineered Solutions, a spin off from Wrayco Industries. The venerable manufacturer earned its first patent for a fueling system for natural gas-powered trucks. High-tech and healthcare companies are key engines in the new economy, but so too are venerable manufacturers with a new spring in their step, Northeast Ohio is finding.
Factory work, with a dash of innovation, has re-emerged as a strong player in the region's economic mix, according to a study being released today.
The 18-county region added manufacturing jobs for the first time in a decade in recent years, the study reveals, and they appear to be good paying jobs with a future. Between 2010 and 2012, researchers found, manufacturing accounted for the largest share of new jobs and did more than any other sector to drive the region out of the Great Recession.
The study by the Center for Economic Development at Cleveland State University adds facts to anecdotal evidence of factories thrumming with new production lines in cities and suburbs. But it also reveals a Darwinian-like transition. A hearty band of manufacturers -- many of them small and mid-sized shops -- survived the trials of the early 2000s to emerge smarter, slimmer and stronger.
Exports are up. So is nostalgia.
"It's back to our traditional driver industries," said Ziona Austrian, the center's director and the study's co-author.
"But these companies that survived, they're more efficient, more competitive and more innovative," she said. "Remember, we lost a lot of companies. Those that remain are the stronger ones, the ones able to compete."
Austrian and colleagues Candi Clouse and Christopher Lohr studied the region's economic indicators of 2010, 2011 and 2012 -- the last year for which complete data is available -- for the Manufacturing Advocacy and Growth Network, or MAGNET. They discovered that:
- Northeast Ohio manufacturers added 20,059 jobs in that two-year span, the first overall gain in manufacturing jobs since 2001.
- Factory jobs represented 42 percent of all new jobs in the region, and nearly 90 percent of the increase in GRP, the gross regional product.
- Those factory jobs paid an average $58,168 a year.
- The largest share of companies providing those jobs employed between 50 and 250 people.
- Manufacturing exports grew by 17 percent to reach a value of $25 billion.
What about those gloomy jobs reports?
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Gary Gibb founded Wrayco Industries with his father-in-law in 1980. The metal fabricator has been adding jobs as it innovates to meet the new economy. The study contrasts sharply with reports that the region has been losing jobs in recent years and in recent months. In fact, federal job estimates for Northeast Ohio have been overly pessimistic, a recent analysis by CSU and Team NEO found.
For example, instead of losing jobs in 2012, as the Bureau of Labor Statistics first surmised, the region actually gained jobs, according to the government's revised figures.
The CSU study shows that most of those jobs came from companies that make things: that stamp auto parts, mix chemicals, forge steel, produce tires and hone machine tools.
"Manufacturing was not only growing, but actually was carrying the region in those two years," Austrian concludes.
Still, no one is heralding an economic renaissance. The job gains were modest and partially offset by job losses, the study shows. While employment grew in manufacturing, healthcare, science and technology across the region, jobs were lost in professional fields like media, insurance and finance.
Tom Waltermire, the chief executive of Team NEO, a regional business attraction agency, notes the manufacturing sector lost much in the recessions of 2000 and 2007 and that a "bounce back" was predictable and overdue.
"It's good to see," he said. "It doesn't mean a manufacturing resurgence."
Preliminary job numbers for 2013 indicated the trend may have flattened out, he said.
Edward "Ned" Hill, dean of the Levin College of Urban Affairs at CSU and a professor of economic development, is more optimistic. He agrees with the study's authors, who argue manufacturing may have turned a corner into a bright new age.
A surging auto industry accounted for many of the job gains, Hill said, but so too did emerging industries like shale gas and wind power. Energy exploration and alternative fuels present new opportunities to companies that historically welded pipes or fabricated metals.
"We've had a bunch of companies regaining their competitiveness," Hill said.
He could have been talking about Wrayco Industries, a 40-year-old metal fabricator that makes diesel tanks for Towmotor and Caterpillar.
A manufacturer's dream come true
Wrayco's modern, 300-job plant is an imposing sight from Seasons Road near Ohio 8 in Stow. But the company's focus these days is a half mile away, in a new, smaller plant that houses an intriguing new product line.
Tall, space-aged looking black tanks are lined up like rocket boosters, ready to be loaded with a suddenly bountiful fuel. Wrayco has its first home-built product -- a fuel system for trucks powered by compressed natural gas.
Company president Gary Gibb, who founded Wrayco with his father-in-law and runs it with his two sons, grows misty-eyed talking about the potential.
"As a contract manufacturer, you're always looking for this kind of opportunity," he said. "For 43 years, I've dreamed of having our own product line."
The eureka moment came in the spring of 2012, at an alternative fuels expo in California. Gibb glimpsed the new trucks designed to run on natural gas and saw a need for a new kind of gas tank; one he suspected his crew could design and build.
Back in Cleveland, Wrayco worked with engineers at MAGNET and with partners like Parker-Hannifin to design a fuel tank and fuel system that would attach to the back of a truck cab.
Wrayco earned its first patent, built a prototype, and sold a few fuel systems to a beverage hauler in Texas.
Recently, the company signed a contract to provide fuel systems to natural gas trucks being built by Kenworth of Chillicothe.
Gibb expects to sell more than 1,500 of the units this year at $30,000 to $60,000 apiece.
"It's green, it's clean, it's quiet and it's our fuel," said Gibb, who named his new company Trilogy, for the three generations of family represented at Wrayco.
"And it's only the beginning," he said.