NJ manufacturing doing better than you think, making these things you'd never imagine

NJ manufacturing doing better than you think, making these things you’d never imagine

Posted by Admin October 10, 2024 Jobs

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LAKEWOOD – Each month, Unex Manufacturing Inc. executives get a phone call or email from an economic development group in another state — Florida, Texas, South Carolina, Michigan, Indiana, Ohio — asking if they are ready to move out of New Jersey to a cheaper location.

A move would no doubt help Unex lower its taxes and labor costs and keep up with its competitors. But after 60 years in New Jersey, the executives have stood their ground. They are staying.

“We have a good group of people here,” said Howard McIlvanie, vice president of operations and one of the company’s owners. “If we picked up and moved, we might lose a majority of them, and I don’t think we’d want to do that.”

New Jersey’s manufacturing industry, written off not long ago as a relic, is staging a modest comeback. New companies, aided by advances in technology, are starting from their homes. Policymakers are devoting more resources to manufacturers and training programs. And companies in the state have more job openings than they can fill.

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A return to the state’s manufacturing heyday seems unlikely. New Jersey remains expensive and has recently lost high-profile manufacturers.

But New Jersey government and industry officials aren’t conceding defeat, noting that the state’s biggest economic development selling points — an educated work force and location in the heart of the Northeast — are coming in handy for “advanced” manufacturing firms that require high-tech skills.

New Jersey’s manufacturing sector has increased from 241,300 jobs in December 2013 to 255,000 jobs in December 2023, stemming what was a decades-long decline.

“Not declaring victory, but we’d characterize that as a good start,” Tim Sullivan, chief executive officer of the New Jersey Economic Development Authority (EDA), said last week at a Freehold Township conference sponsored by New Jersey Manufacturing Extension Program, an industry trade group.

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Peter Brewster of Lacey has launched Brewster Universal Fixture System, a mount that allows people to install ceiling fans and light fixtures by snapping them in place like a smoke detector.

He started the project six years ago when his wife, Melanie, wondered why changing light fixtures wasn’t easier. He made the prototype at home using a 3D printer and computer design programs. He got a patent. And he attended the conference in Freehold Township, searching for a manufacturing partner to help bring it to market.

Can it be done in New Jersey?

“Sure,” Brewster said. “Why not?”

A vibrant manufacturing industry would classify as an unlikely comeback story for a state with an industrial history that dates to 1791, when Alexander Hamilton came to Paterson to launch the Society for Useful Manufacturers, powered by the Great Falls.

New Jersey over the years has been home to companies like Singer Sewing Machine, Western Electric Co., Johnson & Johnson, RCA, Nestle, General Motors and Ford, becoming a manufacturing powerhouse that around 1970 employed 860,000 people and accounted for a third of all jobs, Rutgers University economist James W. Hughes said.

But technology made some of the products made in New Jersey obsolete. And industrial companies moved to less-expensive locations in the south and overseas. In 2013, the manufacturing sector employed about 240,000 people and accounted for about 6% of all jobs, according to state figures.

“It’s really been a long-term slide,” Hughes said. “We are one of the most expensive places to live, one of the most expensive places of doing business, and we have a highly unionized labor force, so we have to overcome all those costs to be successful.”

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From long-term slide to unfilled jobs

Gov. Phil Murphy’s administration and industry groups, however, say the industry has turned high-tech, giving the state another chance. While manufacturers once could depend on workers to perform repetitive tasks, they now need workers who can program computers and operate lasers.

It has prompted New Jersey officials to tout not only the state’s prime location but also its educated work force, honing in on food; chemical; computers and electronics; fabricated metals; and medical devices.

The New Jersey EDA the past two years has approved a total of $50 million in grants to more than 325 manufacturers to help them purchase new equipment, noting interest in the program was so high that it ran out of money. The EDA plans to make another $10 million available early next year.

And lawmakers, industry groups and community colleges are collaborating to provide apprenticeships to students, giving them a pathway to the work force that doesn’t require a four-year college degree.

“There’s about 35,000 open manufacturing jobs in New Jersey,” said Peter Connolly, director and chief executive officer of the New Jersey Manufacturers Extension Program. “Our goal is to not take them from one company to another, but how do we train up so there’s more people (seeking manufacturing jobs) in the work force.”

The sector continues to face an uphill climb. The state also has seen New Jersey manufacturers close and other manufacturers opt for other states.

Notably, Nestlé closed its freeze-dried coffee plant in Freehold last year after 75 years. And New Brunswick-based Johnson & Johnson recently said it would invest $2 billion in a new biologics manufacturing plant in Wilson, North Carolina, in a move that could provide the company with millions of dollars in state incentives.

The J&J plant is expected to create 420 jobs with an average annual wage of $108,823, North Carolina Gov. Roy Cooper said in a press release.

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They are signs that New Jersey continues to struggle to compete with lower-cost states, said Michele Siekerka, president and chief executive officer of the New Jersey Business and Industry Association, a lobby group.

“I give hats off to the EDA and their attention on manufacturing, but at the same time you have to balance that in the moment with the cost of doing business here,” Siekerka said, pointing to a 2.5% transit fee for corporations with more than $10 million in taxable income.

Still, New Jersey’s renewed focus on manufacturing seems to be paying off at Unex, where executives continue to be able to rebuff offers from other states.

The company makes components for conveyor belts used by manufacturers, retailers and warehouses. It has about 95 employees and annual sales of $35 million, and it has capitalized on the shift to online shopping; during the busy retail season, customers like UPS wear down their conveyor belts and need new parts, McIlvane said.

Unex’s competitors often have lower labor and transportation costs. But the company has invested in new equipment, including a new laser with the help of an EDA grant. And Brian Johnson, who has worked there for nine years, said he recently returned to Ocean County Vocational School, taking classes each evening to learn how to operate computerized machinery and pick up new skills.

“We’ve been in business since ’64, so we’ve obviously had a lot of old equipment and a lot of old processes,” McIlvane said. “But then we’ve slowly pecked away from them, making them better, making them more advanced just to stay competitive. And you have to do that.”

Michael L. Diamond is a business reporter for the Asbury Park Press. He has been writing about the New Jersey economy and health care industry since 1999. He can be reached at mdiamond@gannettnj.com.