— Manufacturing is slowly coming back to Iowa. And it has farming, in part, to thank for it.
“Anyone making machinery, parts or virtually anything for agriculture is doing really well right now,” said Michael Ralston, president of the Iowa Association of Business and Industry.
Strong export demand and other factors are driving that rebound, he noted.
“Companies let inventories get really low, not making a part or a product until they had an order. Now, they’re trying to rebuild their inventories and meet pent-up demand.”
“We had 20 manufacturers in the room at our March board meeting and 19 of them indicated they were hiring.”
Manufacturing employment still has a ways to go.
In February 2008, Iowa manufacturing employment reached 230,900 jobs. But the state’s manufacturing work force skidded to a low of 197,500 jobs in late 2009, as durable and non-durable goods suppliers saw orders decline sharply and unsold inventory climb.
Although the housing sector in Iowa did not take the devastating hit that states such as Arizona, California, Florida and Michigan sustained, companies such as Pella Corp. and Whirlpool felt the impact of a national slump in new home construction.
Machinery producers have contributed heavily to the employment gains recorded in recent months in Iowa durable goods manufacturing. Companies such as McLanahan/Universal in Cedar Rapids, International Automotive Components in Iowa City and John Deere in Waterloo have hired additional employees or recalled workers to meet demand for their products.
“We’re going to be starting a second shift as soon as we have enough qualified people to move to it,” said Dan Ferguson, general manager of McLanahan/Universal, 800 First Ave. NW, which makes rock crushers and other equipment for the aggregate and mining industries.
“Right now, we’re close to 40 people in the shop, and we were at 22” in January when McLanahan Corp. bought the company.
“We’re not proud of it, but we’ve had to work the last three weekends in a row to get production done. We’re very busy,” he said.
“McLanahan is just as busy in Pennsylvania and pretty much a three-shift operation already in certain critical areas. Once we get fully staffed here, the plan is to offload some of the work in Pennsylvania to bring more work in here and use this as an expansion facility.”
Hollidaysburg, Pa.-based McLanahan, a sixth-generation, family-owned business that traces its history to 1835, designs and manufactures processing and sampling equipment for the mineral and aggregate industries and manure management systems for dairy farmers.
Universal, founded in 1906 as Universal Engineering, was acquired by Ferguson and Thomas Werning in 2002. Ferguson and Werning rebuilt the company’s customer base and grew employment by developing new products and supplying components to other companies in the industry.
Ferguson said Universal’s and McLanahan’s product lines are complementary.
“McLanahan builds the wet side of the quarry in one of its divisions, and we do the dry side,” he said. “We can do an entire turnkey operation, which neither company could do independently.
“The sum of this is going to be greater than its parts. We will have so many more capabilities to develop new products and markets.”
New product lines have helped International Automotive Components in Iowa City recover from a sharp drop in car and truck sales that took its toll on the auto industry.
“In 2009, we went down to about 144 employees,” said Julie Noyes, senior manager of marketing and communications at IAC Group in Detroit. “By 2010, we were back up to 626 and currently we’re at 748.”
Noyes said employment has rebounded at the Iowa City plant, which makes molded interior parts such as instrument panels, as automakers ramped up production of existing models and introduced new products.
“We’re launching the new 2013 Dodge Dart instrument panel,” Noyes said. “That certainly adds to our employment figures as we go through the process of launching a new product.”
At the northern end of Interstate 380, Deere & Co. in March announced plans for a $70 million expansion its Waterloo Works.
The agricultural equipment maker, which employs 4,000 in Waterloo, will boost the number of large farm tractors it produces at its Donald Street plant by the middle of 2013.
“The market demand John Deere has experienced for large agricultural equipment has remained strong for several years,” said David Everitt, president of the Deere’s Worldwide Agricultural and Turf Equipment division. “We believe the time is right to invest in our facilities to meet future demand.”
Cedar Rapids was deemed a “resurgent” industrial city earlier this year at a Federal Reserve Bank of Chicago conference that examined the effect of manufacturing job losses in the Midwest.
Resurgent cities are those that have experienced relatively small losses in factory employment with relatively large increases in measures of well-being.
(c)2012 The Gazette (Cedar Rapids, Iowa)
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