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First Posted: 4/2/2015

As Mark Twain once quipped about his prematurely reported death, reports of the demise of manufacturing in Northeastern Pennsylvania are greatly exaggerated. From plastic cups to the Gatorade that fills them and the machinery to make them, the region is home to a wide range of businesses that turn raw materials into useful products.

“We have over 600 manufacturing establishments that employ 27,000 people,” said Wico van Genderen, president and CEO of the Greater Wilkes-Barre Chamber of Commerce. “There’s a pretty solid, diverse manufacturing base here.”

Those businesses, located in Luzerne, Lackawanna and Wyoming counties, account for 12.6 percent of all private jobs in the Scranton/Wilkes-Barre metropolitan area. That compares favorably to the 10.6 percent national average. And, unlike in many areas of the United States, after years of decline, manufacturing employment here has been holding steady.

Making the most of the local manufacturing base is high on van Genderen’s agenda for promoting economic growth.

The tools to do that, van Genderen believes, exist in the already impressive assets of the region.

“You have solid academic capital here,” with six colleges and universities, he said. There’s also a strong work ethic and a very competitive labor supply. “People come to work, they do a really good job.”

There’s more, he said: “A network of interstates right at our doorstep” and 50 million potential customers within a 200- mile radius; abundant energy supplies and available industrial sites.

“It’s not just a nice spot to put the manufacturing facility, but there’s also quick access to raw materials,” van Genderen said.

Van Genderen’s perspective, gained over a nearly 20-year management career with a Fortune 500 company in the United States and Asia, fits with what local manufacturers see, said Chris Hackett, chief executive of i2M in Mountain Top.

“I think it’s a great place for manufacturing, from a work force perspective, logistics, access to customers,” Hackett said. “We also have decent rail access which is helpful for bringing in raw materials.”

Also, “we tend to be able to get better pricing for gas because it doesn’t need to go through pipelines” while PPL’s Salem Township nuclear plant helps keep prices low.

Innovation, investment are crucial

In order to stay healthy and relevant, manufacturers must do more than make things, they need to expand their capabilities and even create new products.

I2M is shorthand for “innovation to manufacturing,” Hackett said, reflecting his approach to the business, which opened in the Crestwood Industrial Park site of the former HPG International three months after HPG closed in March 2009.

“Over the past two years, we’ve rolled out 10 new products,” he said. “Our strategy is to continue to drive innovation. We face worldwide competition.”

The company makes a wide range of plastic products, from commercial roofing and pressure-sensitive material for labels, decals and outdoor advertising to wood grain used in laminated furniture and swimming pool liners.

At Belrick Corp. in Swoyersville, founder Frank Yamrick Sr. has steadily added to the metal machining firm’s capabilities over the decades since he set up shop in his Shavertown basement in 1967.

“This is very, very capital intensive,” Yamrick said. “We’re constantly buying machines for the shop, plus maintaining about 50 manual machines.”

The reason is simple competitiveness; Belrick does work for a wide range of customers in industries that include power generation, jet engine makers, medical equipment and oil and gas, where there are high quality standards and intense cost pressures.

He bought his first computer-controlled machine, capable of working in two planes, in 1985. As efficient as that was, complex work had to be transferred to another machine for additional machining, adding time and labor costs. The latest addition can work in eight planes, so, “when it spits it out it’s a finished part.”

That efficiency, along with consistent high quality, has brought in six jobs that four years ago were being produced in China.

Jobs, and pay, vary

Learning to run sophisticated machinery can mean several years of training, although advanced education is not required. That level of skill brings a good wage by the standards of the area.

“My key operators are $20 plus per hour,” Yamrick said, and there’s often overtime available. CNC programmers, who generally have a trade school education, and engineers can earn $55,000 to $85,000, he said.

Those salaries are in the range of national average manufacturing wages, $1,266 weekly in the first quarter of 2014. The weekly average in Luzerne County was $951 and in Lackawanna County it was $843.

One reason for the lag may be the large number of food manufacturers in the region. Pay scales in that industry are among the lowest, with fewer high-skill positions and production and nonsupervisory employees earning less than $16 an hour, or roughly $650 weekly, according to the BLS. Production bakers in this area, for example, earn an average of $11.94 per hour.

At i2M, there’s a mix of skilled and production jobs. “We have many positions that are highly skilled and require years of training,” Hackett said, and there are some entry-level positions, from which employees “advance through training.”

While declining to disclose salaries or the employee count, Hackett said, “I think manufacturing still pays well compared to distribution and service jobs.”

Manufacturing also supports many other local jobs, such as logistics and support services, Hackett pointed out. “We try to use local providers as much as possible,” he said.

The chamber’s van Genderen noted other benefits, such as the location of Mountain Top semiconductor maker Fairchild’s product management and engineering group in downtown Wilkes-Barre, where employees’ spending will support restaurants and shops.

Keeping it going

In 1950, nearly one-third of American jobs were in manufacturing, mostly large factories churning out cars, building products, machinery and other goods that fed booming demand after World War II. Today, only about one in 10 Americans works in manufacturing.

The two main reasons for the decline in jobs are outsourcing to low-cost countries such as China and steadily rising productivity as sophisticated machines and computers allow many tasks to be automated. The increased efficiency has reduced the need for workers, even as manufacturing output has grown seven-fold in 60 years.

But things are changing, and Belrick founder Yamrick thinks the future could be bright for local manufacturing. He gives the example of a customer who asked him to inspect a batch of Chinese-made parts.

“The reject rate … was over 62 percent,” he said. So when waste was taken into account, doing the work locally made financial sense, not to mention less hassle from buyers of the finished product.

There’s more to come, Yamrick said: “We do see a resurgence coming back.”

Already, Belrick has reinstated a third shift that was dropped during the recession, and will need to hire six employees for two new three-year projects.

Available, willing workers give the region an advantage, said Jim Cummings, vice president of marketing at Mericle Commercial Real Estate Services, where 25 percent of property inquiries come from manufacturing firms.

“I think a big factor is their perceived ability to attract skilled employees,” he said, along with the location and total operating costs. As the unemployment rate inches downward, “the overall national shortage of people with manufacturing skills will continue to increase.”

Van Genderan said that even as the chamber works to attract new businesses in e-commerce, health care and other fields, “we need to nurture, retain and expand on (manufacturing).”

“I think we’re making progress and it starts with a strong manufacturing base,” he said.