In part 2 of New Jersey Makes, NJ Today’s David Cruz reports on how a public-private partnership is helping New Jersey companies compete in the international market place.
By David Cruz
Newark is another city where manufacturing has almost disappeared, the jobs exported primarily overseas. But that doesn’t mean that manufacturing in the city is dead. In a former tool dye factory on Third Avenue, UnionWear makes caps and bags and other items for corporate and government clients. Mitch Cahn moved the shop to Newark 12 years ago. He says expansion wouldn’t have been possible without some help.
“We definitely have relied on a lot of subsidies and tax incentives that we got from the federal government just for being in Newark,” he said. “There are a lot of tax programs available for companies that are in Newark.”
But today’s tight state budgets have made competition for those dollars tougher. “I think [the state] understands that the grant money really helps, that any grant money that can help companies improve their productivity will help those companies hire more people.”
That’s where a group like the New Jersey Manufacturing Extension Program comes in. The NJMEP is a federally-funded nonprofit that works with small manufacturers to boost efficiencies in their operations, as it did with UnionWear, where workers were spending hours just finding the right color thread for a job. as Cahn explains:
“The embroidery manager would give our workers instructions and say ‘go look for gray, yellow and green thread and put them on the machine,’ and they would come and look for green and yellow and gray thread and they would see these boxes that say willow and celery and cement, and nobody was born in this country,” explained Cahn. “I mean, they speak English but there was nothing there that sounded even remotely like green or yellow, so they would take bundles of different threads and bring it back to the manager to approve it. It might be right; it might be wrong. The threads were all over the place.”
NJMEP’s fix was to have the company use numbers instead of names to identify thread colors. The result? Workers went from sewing 20 percent of the day to sewing 60 percent of the day, cutting labor costs by a third.
“That’s one of the things we do. It’s called lean manufacturing. Lean manufacturing is not about reducing head count,” said NJMEP Executive Director Bob Loderstedt, “but it’s about figuring out where there’s waste in your manufacturing process.”
Cahn says those efficiencies help him to compete against companies in China and India. If he can get to within 25 percent of the cost of overseas producers, he says the “Made in the USA” label can often make up the difference.
“I see our business increasing between now and 2015 by about 40 percent,” said Cahn. “That’s really optimistic, but I see it happening. We’re laying the groundwork for it now. We’re just seeing whole new classes of industries being interested in getting goods made domestically, not for patriotic reasons but because it makes economic sense.”
While New Jersey’s industrial heyday is long gone, those who are involved in manufacturing, from the factory floor to the boardroom, agreed that in the new leaner, meaner manufacturing world, New Jersey is poised not only to compete, but to win.