Manufacturing’s comeback should stick in 2007.
Next year is expected to see manufacturing jobs hold steady or post a slight gain. That’s good news for the sector after two years of similar gains and the downturn earlier this decade.
The county is set to gain about 400 manufacturing jobs in 2007 for a total of some 183,400, according to a forecast by the Institute for Economic and Environmental Studies at California State University, Fullerton.
Chapman University in Orange forecasts a tighter 60-job gain.
“Jobs will be pretty stable,” said Wallace Walrod, vice president of research for the Orange County Business Council in Irvine. “We’ve actually retained our manufacturing jobs better than most other places in California. Our companies are pretty competitive.”
Aerospace manufacturers again should lead the hiring, followed by medical device makers.
Jobs could grow another 2% in 2008, according to economists.
Manufacturing’s ebb and flow stands to continue as well. For all who add jobs here, there’s been a steady stream of companies closing up shop or moving elsewhere.
Earlier this month, two Anaheim manufacturers,computer cabinets maker APW Enclosure Systems Inc., and parachute release maker H. Koch & Sons Co.,said they’re closing local operations, laying off about 260 people.
Orange County has lost about 26,000 manufacturing jobs since 2000.
Yet the challenge for those still here next year is finding workers.
Alcoa Inc.’s fastening systems unit in Fullerton has been trying to fill about a hundred high-skill machinist jobs for more than a year now.
“As an industry, we’ve always been able to gain people, because there’s been a base of manufacturing people in California,” said Craig Brown, plant operator.
That’s not the case anymore as fewer young workers enter the trade and the aging work force retires.
“The average worker is 54 or 55, pretty old for an average age in any kind of business,” the Business Council’s Walrod said. “They are looking at a big turnover in three to five years as those people retire.”
Manufacturers are set to see more of recent trends: high workers’ compensation insurance costs and tighter environmental regulations.
“Costs are still significantly above most other places in the U.S.,” Walrod said. “There still needs to be reform.”
It’s tough to recruit and keep workers here because of high housing costs. Home prices are predicted to fall next year, though to a level still out of reach for many manufacturing workers.
“You don’t get as many people to relocate here,” Brown said.
Manufacturers were hit hard the past few years with skyrocketing materials and energy costs.
“It’s been a tremendous hit,” Brown said.
Alcoa makes fasteners,bolts that hold together the aluminum bodies of airplanes.
The good news is that commodities prices have come down.
Alcoa and other manufacturers are looking to get more efficient.
Productivity increased about 5% in California in 2006 and is likely to continue improving.
Machines are getting “smarter” and more efficient.
Automated manufacturing boosts productivity and cuts the need for some workers, who may be in short supply.
It also opens doors for workers from other industries.
The biggest misconception in manufacturing is that “it’s just old-fashioned metal working,” Brown said. “It’s really not any more. There are a lot of new technologies that people didn’t deal with 15 or 20 years ago.”
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COMPANY TO WATCH: Kimberly-Clark
Kimberly-Clark Corp. is a Fullerton institution. The company even has a street named after it there.
Its 50-year-old paper mill churns out Kleenex tissues for the area west of the Rocky Mountains.
It’s also a major distributor of other Kimberly-Clark products, such as Huggies and Kotex.
Since Dallas-based Kimberly-Clark announced a 2005 cost-cutting program, company watchers in Fullerton say its exit from Orange County could be a matter of when, not if.
Some marvel that the company has stayed on its 66-acre campus, despite the high cost of energy, raw materials and do-ing business in OC.
“The reason the name keeps coming up is the fact that they do occupy a large campus, and any of the larger-scale industrial operations are kind of perennial candidates for conjecture,” said Rob Zur Schmiede, head of the economic development and redevelopment committee for Fullerton.
“We have no knowledge of plans to exit our facial tissue market here,” said Fullerton’s mill manager Stewart Van Horn. “We are a strategic site for Kimberly-Clark.”
The company’s corporate consolidation is “a fear,” Van Horn said. “It’s put pressure on every site to be competitive.”
Kimberly-Clark’s departure would be a big loss.
“They are one of the largest customers of our water utility, and they also do a lot of recycling, and they are one of the largest sewer users,” Zur Schmiede said.
Kimberly-Clark is Fullerton’s fifth-largest employer with about 330 workers.
The Fullerton tissue business is on the upswing, Van Horn said. The mill is hiring to keep up with demand, he said.
Still, the rumor persists.
In response, Van Horn offers, “Can you imagine a world without Kleenex here?”
,Sarah Tolkoff
