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Deindustrialization In The Granite State

Written by MARIE DUGGAN. 
This article first appeared in Dollars and Sense

The central room is 65,000 square feet with a high ceiling. This room is noisy, with large machines emitting loud hums and whirrs. The machinists are dwarfed within the canyons between the rows of equipment. Many of the machines have plastic housings, so that each looks like a giant photocopier, a rectangular plastic box taller than a person, and perhaps the length of two or three people. There is a window on the side of each one. Inside, the drilling/lathing/milling operation is performed on the metal. However, someone peering in through the window doesn’t actually see a metal tool hitting the material. The surprising sight of water gushing furiously meets the eye. The tools themselves operate at tremendously high speeds (2,000 inches per minute, or 20,000-50,000 rpm). The water pushes metal debris away, as human hands or air flow did on the previous generation of machines. But water also acts as a coolant to put out sparks and to counteract the tremendous heat created by the friction of metal tool on metal part.

This scene is not from Germany or South Korea, but rather from the southwest corner of New Hampshire, only fifteen miles from the borders with Massachusetts and Vermont. The high-tech machine shop described was Knappe and Koester—in 2011, before it was sold to GS Precision, which has since expanded the operation. Manufacturing industry in Keene specializes in the production of capital-goods—products used as parts or machines at other businesses in other production processes: ball-bearings, diamond turning machines, lens producers, lubricants for machinery, and inks and date-stamp printers for food and pharmaceutical plants around the globe. These factories are so clean and relatively small (employing about a hundred, not hundreds or thousands) that newcomers to New Hampshire, like myself, tend to notice the cows at the dairy farms and the fresh ice cream stands, not the manufacturing plants tucked behind real estate offices or next to hardware stores.

In an effort to repair the connection between economic theory and industrial activity, I picked up the phone and contacted some local managing owners to ask if my undergraduates could tour the plants. The industrialists were excited that someone at “the college” showed interest in what they did. We saw a high-tech machine shop unloading the latest computerized five-axis machines from Japan in 2011. We watched young computer-savvy machinists assemble diamond turning machines by hand, and saw a demonstration of how the machines drill plastic molds for producing touchscreens in factories around the globe.

Keene lies in the Connecticut River Valley, which in the mid-19th century witnessed the birth of the machines that make replaceable metal parts. Machinists from Hartford, C.T., to Lebanon, N.H., drove up global productivity during the industrial revolution, and since that time the machinists’ skills had been passed down from father to son (and occasionally to daughter). This chain was damaged with the layoffs and plant closings between 1980 and 1990. In those years, few fathers told their eighteen-year-old children to become machinists. As a result, there is now a shortage of computer-savvy machinists, so local firms donated funds to build a computerized machine tools laboratory at Keene State and have offered a $1,000 scholarship to train at the local community college, which shares the lab. Many of Keene State’s staff and students are from Connecticut, Vermont, and New Hampshire, and come from families with connections to machining.

The economic forces impacting the machining jobs that continue to sustain local families are hard to see using standard economic datasets. Most databases provide information only on publicly held firms—those that issue shares that are traded on the stock exchange. Ownership transitions between 1998 and 2012 shifted some of the local plants into the hands of large, publicly-held corporations. Yet some of the local manufacturing firms, including some of the most dynamic in the United States, remain smaller in scale and independently owned, and so are absent from standard databases. My students and I began conducting oral histories of owners and workers in order to learn more about the private firms that do not appear in the data.

The Elephant in the Room

In November 2016, Trump started to pick up a surprising amount of support in many parts of the nation. As it turned out, even though Clinton won the popular vote, 2,026 counties went for Trump, while 447 went for Clinton. As I began to pull together my research about deindustrialization in my new hometown, the Trump phenomenon was getting hard to ignore. It suddenly dawned on me: Keene, N.H., wasn’t the only place to have experienced an attack on its export-competitive industrial base between 2000 and 2012. Was it all of New Hampshire? Or was it just about everywhere but San Francisco, Boston, and New York City?

Manufacturing Jobs in the United States

Figure 1 is what I found in five minutes. The crushing loss of manufacturing jobs between 1980 and 1985 is a vivid memory for me, because I graduated from California’s Berkeley High School in 1981, where 90% of my peers were not going on to four-year college. When I arrived at Tufts University in Medford, Mass., I saw storefronts boarded up and watched people in line at the convenience store pay with food stamps. The baleful glares at us privileged college students only got worse as the unemployment rate reached 10.9% in November 1982. When I moved to Brooklyn in 1990, I often drove by the empty industrial buildings along the waterfront.

So, when I saw on this graph that the manufacturing job loss of 2001-2009 was triple that of 1979-1985, my jaw dropped. And why didn’t I know this? I read the New York Times, the New Yorker, the Financial Times. I hang out with heterodox economists, for goodness sake! I now suspect that industry left our intellectual centers between 1979 and 1985—out of sight, and so out of mind—but remained a powerhouse in so-called “rural” areas until 2001, only to suddenly and precipitously decline. I realized how lucky I was to be living in a place that is like a good bit of the United States.

Many economists have been focusing on macroeconomics—the ups and downs of the entire national economy, measured in “aggregate” data—for the past twenty-five years. The instability of the financial sector and rising income inequality could both be analyzed through economy-wide data, so we all rightly got our heads in that game by 2007. If one takes manufacturing jobs as a percent of total employment, there has been a continuous decline since the late 1960s, and one would therefore see little new between 2001 and 2009. Some people point to China’s accession to the WTO in 2001 as the cause of the U.S. decline in manufacturing. However, my own research inside firms suggests that competition from China is not the main story

Keene’s capital goods producers do not compete with producers in low-wage nations, but rather with firms in Europe and Japan, and unit labor costs have generally been higher in those places than in the United States since 1990. The decline in U.S. jobs has less to do with external forces than Americans seem to think, and more to do with the policies taken (or not taken) inside the United States itself. If a firm was going to collapse in the face of cheap labor overseas, that happened in 1982 (as in shoes and textiles). The manufacturers who survived until 2000 were made of sterner stuff. Monetary policy that promoted financial bubbles turns out to be another ingredient in the decline of manufacturing jobs between 1978 and 2012. I will analyze this in a three part-series by exploring three different moments in recent U.S. economic experience: 1980 to 1990, 1990 to 2000, and 2001 to 2012. I use case studies from Keene to illustrate the arguments.

Deindustrialization Part I:

Jim Koontz, CEO of Kingsbury, 1983– 1998, in white shirt presenting an award, 1987.
Photo courtesy of the Historical Society of Cheshire County, N.H.

The Connecticut River Valley Machine Tool Sector, 1980-90 Hank Frechette purchased Kingsbury Machine Tool from his father-in-law, E.J. Kingsbury, in 1963. That year, Frechette also hired the entire graduating class of Wentworth Tech in Boston. “I had never heard of Keene,” relates Donegan, an electrical engineer in that class. But it would become his home and his life for the next forty- odd years. Machinists from Vermont and New Hampshire considered Kingsbury to be one of the most exciting places to work in New England. Their work ethic and skills, plus the innovations of the young electrical and mechanical engineers, plus the management by Hank Frechette and Charlie Hanrahan—a co-owner who was also a member of the founding family—grew the company threefold between 1963 and 1976, so that it employed around 1,000 people. Many machinists commented that, in those days, Kingsbury was like a family. Charlie Hanrahan worked hard to keep it that way. He had a notebook in which he wrote down every man’s name and the names of his wife and children, with their ages. (Yes, all the workers at Kingsbury—indeed, all the machinists in Keene—were men. That is no longer the case, but it was in those days.) He trained new supervisors to make similar efforts to know each member of the shop personally. Once a man got a job at Kingsbury, he was set for life—until 1984.

Hank Frechette made a name for himself nationally and became a leader in the National Association of Manufacturers. There he met another rising executive, Jim Koontz, who was based in Detroit. When Frechette died suddenly in 1976, his astute widow Sally Kingsbury asked Koontz to come to Keene and take the helm of the business. Koontz’ wife had doubts about leaving the community of executives in Ann Arbor for remote Keene, N.H., but the couple made the move with their four children. Between 1978 and 1982, Kingsbury was employing three shifts of workers to keep up with continuous orders as Detroit auto companies tried to re-tool to compete with small cars from Japan. Koontz became CEO in 1983.

Profits in Machine Tool Sector, United States, in Millions of Dollars

In 1984, Kingsbury had its first layoff: over 200 people. This was a shock to the community and many blamed Koontz as an outsider with no local ties—compared to Charlie Hanrahan, for example, who had gone to grade school with many of the men. But this wasn’t just a personality issue—there were larger economic forces at work. In 2012, Jim Koontz related to me that it felt in 1983 as if the company had gone off a cliff, one minute producing three shifts a day with paychecks chock full of overtime and bonuses—to suddenly a period of six months with no orders. It was only in early 2017 that I actually saw in Figure 2 that machine tool industry profits for the nation as a whole dropped in 1983 from nearly $4 billion to $1.5 billion—a drop which does indeed look very much like a fall off a cliff. What was causing that massive decline in industry-wide profits in U.S. machine tools? One factor was a dramatic technological shift from mass production to flexible production, precisely in the 1980s. Jim Koontz explained it:

Kingsbury made machines that could produce one million to two million parts for the Big Three auto manufacturers. After a while, volumes went down. At one point, those three auto makers produced all the autos in the world. By 1980, there were thirty companies producing for the world, but by now [2012], there are three hundred auto companies worldwide. Each automobile has 30,000 parts, and 80% of them today are produced by suppliers, so there must be tens of thousands of suppliers, globally. Because of this, the volumes that auto makers needed their machines to produce went down from one million to 100,000. This changed the style of the technology that the manufacturers needed.

Few businesses today need a machine that can produce millions of identical parts, like Kingsbury produced back in the 1970s. Instead, they need machines that can be reprogrammed to produce different parts. The name for such machines is “CNC”—computer numerical control, which means that the computerized machines are run by software. The modern machinist enters the dimensions of the parts to be produced, and then listens as the machine chooses the tools and goes about making the parts. Kingsbury had purchased such a machine by 1987. Machinist Phil Hilliker thought it was the finest piece of equipment he had ever worked with. The gossip among owners of plants in and around Keene is that Jim Koontz never adopted CNC technology—Kingsbury never adapted to changing technology in changing times—and this is why Kingsbury failed to make profits after 1983. As one financial wizard told me, the reason U.S. machine tool makers did not survive until the 21st century is that they were, “Fat, lazy, and stupid.” But there is evidence that this judgement is far too hasty.

Over time, a couple of reasons—more solid than gut instinct—emerged to challenge the conventional argument that U.S. machine tool firms just didn’t adapt. For one thing, Kingsbury acquired the machine tool firm Hillyer, and Hillyer did make CNC machines. Secondly, the CNC machine Phil Hilliker stands in front of was made by Jones and Lamson (J&L). (One day, a student in my class magnified a photo of the machine and found the company’s name.) J&L was a machine tool maker in Springfield, Vt., a town about fifteen miles from Keene. The company filed for bankruptcy in 1986, so the “can’t adapt” argument had been applied to them, too. But there in front of us was clear evidence that J&L had produced a computerized lathe by 1986, and machinist Phil Hilliker said he was using it by 1987, and it was the finest machine he had ever worked with. Thirdly, the machine shop next door to J&L in Springfield was Bryant Grinding, and it was in decline by 1990. Yet at a recent lecture a computer scientist told me he had applied for a job as a computer programmer at Bryant in 1981, and they were using what he considered a “nifty” program for machine tools. These are three hints that the Connecticut River Valley machine tool sector was adapting. Financial changes were a second factor exacerbating the pressure inherent in a period of technological change and low profits. It was not until 1983 that Jim Koontz became managing owner of the company. He did so by means of an internal leveraged buyout (LBO). That is, Koontz did not have the personal wealth necessary to purchase the company. However, Sally Kingsbury and the rest of the board felt that he had demonstrated the managerial skill in 1978-1982 to take over, and they wanted the manager of the firm to have an ownership stake to tie him to the community. In an LBO, a consortium of banks puts the money up to purchase the company. Specifically, they put the money into a fund, and the fund purchases the company. The profits that the firm makes are then earmarked to pay off the banks. Once the bank loan has been paid off, the fund is owned by management. In this case, Koontz was not the only one “in on” the fund. Some of the engineers wound up being part-owners of the fund, as did members of the Kingsbury family.

Charlie Hanrahan (far right) with other Kingsbury executives. His management philosophy: “Treat people as you would want to be treated.”
He retired as CEO in 1982.
Photo courtesy of the Historical Society of Cheshire County, N.H.

The use of an “inside LBO” to transfer ownership of Kingsbury from one generation/owner to the next was not new. Hank Frechette had done the same thing when he purchased Kingsbury from his father-in-law E.J. Kingsbury. Yet it seems that something went wrong with this second LBO. LBOs were more common by the 1980s, and it is likely that the leverage was higher—meaning a smaller down payment, and a larger amount lent. Everyone who was in on the LBO considers Jim Koontz to have been an outstanding executive who did his best in difficult times. The workers on the shop floor and the supervisors who were not part of the LBO, however, consider Koontz to have been their worst nightmare. As an educated guess, I would say there were two problems: First, paying off an LBO with profits from the firm would be difficult when the profits of the entire industry suddenly fell by 60%. That, in itself, may have increased pressure to cut costs in 1984.

And the second problem was that the stock market rose continuously from 1987 to 1999. Between 1969 and 1982, an investor in the stock market would not have made capital gains, but only dividends. Those ambitious for more dramatic returns (such as the Kingsbury family and Hank Frechette) put their money into physical plant and talented labor, and made profits by expanding market share through quality products. After 1982, industrial profits were hard to come by, while Alan Greenspan kept interest rates relatively low between 1987 to 1999, which made capital gains in the stock market the new normal. At Kingsbury, managers “in on” the fund initially used to pay off the LBO received profits out of production, and invested them into the rising stock market where they must have reaped consistent capital gains—while workers on the shop floor lost their bonuses because the profits made from producing and selling machine tools were meager in the 1980s and the 1990s. At the time, gains made in shares of other companies on the stock market may not have seemed to come at the expense of the workers inside Kingsbury. But a wedge had emerged between the interests of owners and the workers on the shop floor. Supervisor Kenny Johnson described “a change in how [Jim Koontz] handles his people.”

It was his way and no other way. There was a period of time where he managed by fear, in the sense that if people didn’t go along with his idea he would put fear into them and he wanted to make them into a ‘yes’ person. That’s one of the ways he changed and didn’t listen to people. For instance, when the union was being introduced at Kingsbury’s, he’d come up to me and he’d ask me some questions, he thought I was being too easy on some of my employees but my philosophy hasn’t changed then, hasn’t changed today, you treat people how you like to be treated. I’m not a ‘yes’ person. So I told him how I felt. I felt like he had really loyal employees and he thought I was treating the employees—he said I had too much compassion for my employees, ok? I had too much compassion for my employees, that’s not the way management was going to go in a sense of compassion, and I told him the truth, told him how I felt, I know it wasn’t the way he felt and we got in a discussion and he almost fired me on the spot, ok?

Putting his job on the line to stand up to Jim Koontz for the employees in the late 1980s was a turning point in Kenny Johnson’s life, a moment that took great courage and won him the respect of the workers—to this day nearly thirty years later. He had been trained by Charlie Hanrahan to know and care for his employees and their families, as the way to motivate the highest effort from the machinists. But now Koontz was pressuring him to lay off good machinists because they supported a union. Kenny Johnson was not a fan of unions on the grounds that “you don’t need a union if you treat your people right, ok?” However, Koontz was not, in Johnson’s opinion, treating the shop floor right. Koontz hired Jeff Toner as vice president, and the general view was that Toner was a hatchet man to get pro-union workers fired. With considerable struggle, soul searching, difficult conversations, courage and solidarity, the machinists voted for a union in 1991.

What did the union get for the workers? Largely it was access to the gains from the stock market by means of the pension. As one retired machinist put it recently, “I have been retired for eight years, I am getting a pension from that place, and it’s going to keep on going. I mean, the guy who set up the 401k plan or whatever you want to call it, the guys knew what they were doing with this thing.” The trick was to keep your job. The industry’s profits were down, so only half kept those jobs into the 21st century. But that’s 300 or 400 workers gainfully employed for forty years. Many machinists from Kingsbury still meet for breakfast every Thursday, driving from 45 minutes away even when it is ten below and icy road conditions, to gather outside the restaurant at 6:45—similar to their old commute for the 7am day shift.

The layoffs at places like Kingsbury in 1984 broke a social compact between owners and workers, and from 1983 to 1991, the Connecticut River Valley felt like a war zone. Workers lost confidence in management’s intention to look out for product quality and the labor force, and that loss of confidence broke some unspoken taboo. The ratio of owner compensation to worker compensation at the firm was much lower in 1983 than it is today. One form of compensation to the owner was the respect (tinged with fear) of the community and the workers on the shop floor. Kingsbury was also a major philanthropic giver, cementing the owner’s sense of responsibility for and ownership of the entire community.

When the workers at Kingsbury mobilized for a union, they were publicly demonstrating that they had lost confidence in Jim Koontz. At stake was really who owned the plant: the legal owners, or the men whose skill gave the machines their reputation? Machinist Phil Hilliker was one of the first to wear a union shirt. He related to my students in 2015 the pressure he was under:

They would send my work out to have it done somewhere else. ‘I’ve got no work for you Hilly, got to lay you off.’ They didn’t have to lay me off, I had so many things I could do around there. I was their whipping boy. They wanted to break me down because I was an older one. But it couldn’t be done. I said, If B-52s didn’t kill me during the Korean thing, when they bombed me, you sure as hell ain’t gonna be able to do it.

Most of the male workers had served in war, either World War II, Korea, or Vietnam, so a comparison of the tensions on the shop floor to war was not made lightly.

Divisions That Wore People Down

The 1980s were an intense time of technological change, as Kingsbury began to use computerized machine tools to make products, and then also acquired Hillyer Machine Tool to have their own line of computerized products. The loyalty that supervisors like Kenny Johnson exhibited to older workers meant the young were fired first, even though they might have young children to support at home. One of the men laid off in 1984 had lost a finger at Kingsbury’s. Yet, as a young man, he had never favored the union, because unions supported seniority rights. He felt that the younger cohort to which he belonged was better able than the old timers to learn new technology and turn the firm’s prospects around. This younger man hates unions, and blames Kingsbury management for acting like a unionized shop in 1984, though no union was voted in until 1991.

The toll the decade took was not only on the shop floor. Charlie Hanrahan was the managing owner who had gone to elementary school with the men and knew every man’s family members by name. Hanrahan had been Hank Frechette’s right-hand man, and ran the company from 1978 to 1982, teaching Jim Koontz the ropes, before retiring. He gave the speech of his life trying to prevent the vote for a union. He had a heart attack during this period, and his children believe it was caused by his divided loyalties. He respected Jim Koontz, and he developed close ties to the shop-floor workers. That was his way of inspiring people to give their best effort. Though Hanrahan passionately believed a union was the wrong way to go, every machinist I have spoken to goes out of his way to explain the confidence, affection, and appreciation they had for him. Hanrahan may have been caught between a manufacturing world that viewed the workers’ skills as the source of profits (1958–1982) and the new era (1983–2012, at Kingsbury) when the source of wealth was capital gains on the stock market, which could be harvested best by laying workers off from time to time.

The tragedy of the tensions in the 1980s is that both managing owners and machinists cared deeply about the future of the firm. For all the flaws that the workers saw in Koontz, he had virtues also, especially compared with his successor. Koontz was a man who was trained to work with machines—he did not have an MBA—and most machinists prefer working for someone who knows technology. He lived in Keene, rather than the distant corporate ownership of a conglomerate. The pension contributions papers demonstrate that he maintained the workers’ pension with utmost regularity. As auto production went global, he traveled the world from South Africa to Brazil to sell Kingsbury Machine Tools. He used Kingsbury retained earnings to acquire Hillyer to keep up with technological change.

The Volcker Shock Makes Imports Cheap

U.S. Federal Funds Interest Rate

Technological change does not seem adequate to explain the number of firms that closed in the Connecticut River Valley between 1980 and 1990, given that they had weathered so many changes during the previous one-hundred years. What else was going on between 1979 and 1984 that could explain the massive drop in U.S. machine tool profits of 1983? I have taught macroeconomics four times a week for seventeen years, so of course, the hike in the U.S. interest rate between 1979 and 1983 came to mind. Figure 3 is shown with the pink area to indicate that time period.

During the 1979 to 1983 time period, this base nominal rate of interest rose from 9 to 19%. The Federal Funds Rate is what banks pay to borrow from each other for overnight loans, and banks pop a markup on top of that before they lend to consumers, so the interest rate for a credit card to a person of sound credit was probably 29% when the Federal Funds Rate was 19%. The reason Fed Chair Paul Volcker raised the interest rate so high was in order to kill off inflation, which was about 10% per year in the late seventies. He did reduce inflation, but using the interest rate to fight inflation is like using chemo to fight cancer: it killed off a lot more than inflation.

Everyone knew that a high rate of interest would reduce business investment in fixed capital equipment like machine tools. The logic by which high interest rates reduce new capital spending is based on the idea that such spending is financed largely by debt. When interest rates are high, the cost of borrowing rises. U.S. firms probably made the rational decision to delay new capital spending in the hope that the interest rate would come down.

Index of Unit Labor Costs in the U.S., Germany, and Japan

Figure 4 illustrates unit labor costs—the cost of wages and benefits employers incurred in the making a hypothetical widget in various countries. While U.S. unit labor costs (the black line) had long been higher than German (light gray) or Japanese (medium gray), that gap widened precisely between 1979 and 1984. This was due to two factors:

First, U.S. manufacturers may have delayed purchasing new equipment until after interest rates came down, while their Japanese and German counterparts did not. Instead, they invested in new machinery that meant workers could produce more units in the same amount of time.

Second, what U.S. policymakers may not have realized is how much the exchange rate for the U.S. dollar would appreciate in response to the rising rate of interest. Exchange rates had been flexible only since 1971. A rising interest rate pulled wealth from around the globe into U.S. bank accounts and this drove up the value of the U.S. dollar relative to every other currency in the world. The dollar appreciated relative to the German deutsche mark and the Japanese yen, and competitors using those currencies were the ones that the machine tool sector faced. Suddenly, the prices of U.S.-made products went up when converted to deutsche marks or yen, and the prices of German and Japanese products went down when converted to dollars.

This drop in relative unit labor costs gave the Germans and the newly industrializing Japanese an opening they needed into the U.S. market for machine tools. To see how this worked, consider a hypothetical tool such a CNC lathe, produced by a U.S. company. It is 1979, and the tool costs, say, $100,000 in the United States. Let’s say that in 1979, a customer is considering buying a CNC lathe. They have been buying from the U.S. company for fifty years, so they stick with the U.S.-made machine, even though the Japanese or German import costs the same.

Hypthetical Competition Between U.S. and Imported Machine Tool, 1979–1984

However, by December 1984, U.S. machine tools experience inflation of 36%, so the US machine costs $136,000. Meanwhile back in Japan, rising productivity reduces costs by 12%. If productivity rises more slowly in United States than Japan, then the U.S. dollar should depreciate, which would hold steady the price that U.S. buyers pay for a Japanese machine. However, Fed Chair Volcker tries to control inflation by raising U.S. interest rates to 19% in 1981, and the high interest rate drives up the value of the dollar, and the import is now “on sale” for only $85,500. That is a $51,000 savings! Under these circumstances some firms decide to try out the import. In short, the U.S. Federal Reserve gave imports an opening into the U.S. market by creating a 38% discount on the price of an import relative to a U.S.-made machine tool in 1984.

By 1986, Volcker had realized his mistake and did depreciate the dollar by around 38%, so that the Japanese import would cost the same as the American machine. By then 400 people had already been laid off from Kingsbury in Keene, N.H., and Jones & Lamson in Springfield, Vt., sold out in 1986.

Financial Engineers Finished the Job

By 1988, the Goldman Industrial Group had purchased J&L out of bankruptcy, and began applying “financial engineering” techniques to extract value from the firm. “Financial engineering” is used to make profits from dying companies by taking them apart. Of course, many times it’s not clear that the firm was going to die if the financial predator had not attacked. By 1990, Goldman had purchased another once-fine firm, next door to J&L, Bryant Grinding. And in 1998, Goldman protégé Iris Mitropoulis purchased Keene’s Kingsbury from Jim Koontz, where Phil Hilliker still had his job. Mitropoulis owned Ventura Industries, a separate company which owned only one thing, Kingsbury Machine Tool. By 2001, it was clear that she was not investing the retained earnings she had acquired along with the plant into new equipment. “Ah, she took the retained earnings!” erupted one retired executive in sadness and frustration.

By 2007, half of the pension fund was missing as well. Indeed in 1983, the IRS had ruled that a firm facing bankruptcy had the right to use the workers’ pensions to try to keep the company open. In 2016, I submitted a Freedom of Information Act (FOIA) request to the Federal Pension Benefit Guarantee Corporation, and there was a very fat file on Kingsbury. Up to 1998, Jim Koontz ran the company and the accountant Tom Cookson filed nice neat forms verifying the financial health of the workers’ pension fund. He made it through ups and downs of the stock market with only a few bumps, so that $45 million dollars was in the fund by 1998 when Koontz sold it. Mitropoulis, on the other hand, filed messy and incomplete pension documents, and by 2007, the fund had only $26 million in it. Maybe it was all the 2001 decline in the stock market, but maybe not. In addition, she went out tirelessly asking the federal government to lend the company money earmarked for woman-owned businesses. It appears that all the money that was ever granted to Kingsbury by its previous owners, its employees, or lenders was transferred to Ventura Industries, so that Kingsbury declared bankruptcy in 2012. Financial engineering should not be legal. But it is.

When Keene looks at Mitropoulis’ actions 1999-2012, the reign of Jim Koontz at Kingsbury appears in a more nuanced light. Mitropoulis was easy to get along with, and so friendly to the union men, that she disarmed them while she probably transferred value to Ventura Industries. She never traveled overseas to find any customers, she did not invest the retained earnings in the company, half the pension fund vanished on her watch, and she borrowed money at subsidized interest rates and then declared bankruptcy so she wouldn’t have to pay it back. If we step back to see what Kingsbury’s story tells us about U.S. deindustrialization, it’s not only that Volcker’s high interest rates tilted the scale toward imports. There is a second more insidious aspect: it appears that the easy money provided by new Fed Chair Alan Greenspan after 1987 created a rising stock market that rewarded people who took value out of industrial production. Koontz and people of his era stumbled upon those capital gains, while financial engineers such as Mitropoulis actively extracted value from industry to shift the wealth into other assets. Class struggle was nothing new to factories, but between 1980 and 1990, unstable monetary policy was a new pressure hard for either owners or workers to see. They wound up turning on each other. Indeed, the influence of changing monetary policy has been hard for left economists to see, and we are only now, thirty-five years later, beginning to understand what a sea change in the institutional context for industry was taking place.

 is a professor of economics at Keene State College in Keene, N.H. You can follow her and her students’ work on these issues at: industrialsurvival.wordpress.com.


  • On the machine tool firms of the Connecticut River Valley, see Robert Forrant, Metal Fatigue: The Rise and Precipitous Decline of the Connecticut River Valley Industrial Corridor, Baywood Publishers, 2009.
  • On financial engineering, see Eileen Applebaum and Rosemary Batt, Private Equity at Work, Russell Sage (2014).
  • On how an independent firm is affected by rise of stock market, see John Hacket, Race to the Bottom. Author House, 2004. This is a novel, but the author was a PhD economist and chief financial officer at Cummins Engine for decades, so his insights are worth reading.
  • On pensions, the following is still a good overview: Theresa Ghilarducci, Labor’s Capital, MIT Press (1992).
  • Part II of this series will take a closer look at how U.S. industry was damaged by monetary policy in the 1990s.

Republished with permission from Dollars and Sense

Congresswoman Shea-Porter Works To Address NH’s Manufacturing Woes

Shea-Porter Announces UNH Project to Address State’s Advanced Manufacturing Workforce Needs

Rep Shea-Porter at the 2016 NH AFL-CIO Labor Day Breakfast showing her support for working families.

WASHINGTON, DC – Congresswoman Carol Shea-Porter (NH-01) today announced that the University of New Hampshire has been awarded a $300,000 National Science Foundation (NSF) grant to launch a pilot project in collaboration with the state’s community colleges and advanced manufacturing partners. The partnership will work to address the workforce needs of New Hampshire’s advanced manufacturing sector.

“This innovative project will leverage New Hampshire’s strengths to address the pressing need for in-state advanced manufacturing workers,” said Shea-Porter. “I congratulate UNH on launching this unique partnership, which will also support low-income students in science, technology, engineering and mathematics (STEM) programs at our community colleges.”

UNH’s pilot project will be a collaborative effort with the Community College System of New Hampshire, local advanced manufacturing businesses, and the New Hampshire Department of Business and Economic Affairs to address workforce development in the advanced manufacturing sector in the state. The grant will provide mentorship, paid internships and job placement for students as well as work with businesses throughout the state. Advanced manufacturing is the use of innovative technology to improve manufacturing products or processes. It’s a leading industry in the Granite State and a $1.7 trillion industry nationwide.

“We are grateful for the support we have received from NSF and Congresswoman Shea-Porter,” said P.T. Vasudevan, senior vice provost for academic affairs at UNH and the principal investigator on the $300,000 grant. “We believe working to support and retain low-income students currently in the degree programs that will help us to grow the pipeline of advance manufacturing workers will benefit not only students and industry leaders in the state, but the state as a whole.”

UNH received one of 27 new awards through NSF’s INCLUDES program, aimed at enhancing U.S. leadership in science, technology, engineering and mathematics (STEM) discoveries and innovations through a commitment to diversity and inclusion.

In 2009, Shea-Porter helped initiate New Hampshire’s Advanced Manufacturing Partnership in Education (AMPEd), which was funded by the American Recovery and Reinvestment Act and has successfully helped New Hampshire businesses and colleges partner to invest in the state’s manufacturing workforce.

Leo W Gerard: Speak Loudly And Carry A Big Aluminum Bat

During this very month last year, aluminum smelters across the United States were closing, one after another. It was as if they produced something useless, not a commodity crucial to everything from beverage cans to fighter jets.

In January of 2016, Alcoa closed its Wenatchee Works in Washington State, costing 428 workers their jobs, sending 428 families into panic, slashing tax revenue counted on by the town of Wenatchee and the school district and devastating local businesses that no longer saw customers from the region’s highest-paying manufacturer.

That same month, Alcoa announced it would permanently close its Warrick Operations in Evansville, Ind., then the largest smelter in the country, employing 600 workers, within three months.

2017-01-15-1484522908-8150456-Alumphoto1.JPG

Worker at Alcoa’s Warrick smelter in Evansville, Ind., before it closed in 2016. Photo by Steven Dietz, Sharp Image Studios, Pittsburgh.

Then, Noranda Aluminum fell. It laid off more than half of the 850 workers at its New Madrid, Mo., smelter in January, filed for bankruptcy in February and closed in March. The smelter was a family-supporting employer in a low-income region, and when it stopped operating, the New Madrid County School District didn’t get tax payments it was expecting.

This devastation to workers, families, communities and corporations occurred even after Ormet had shuttered a smelter in Ohio in 2013, destroying 700 jobs and Century closed its Hawesville, Ky., smelter, killing 600 jobs, in August of 2015.

It all happened as demand for aluminum in the United States increased.

That doesn’t make sense until China’s role in this disaster is explained.

That role is the reason the Obama administration filed a complaint against China with the World Trade Organization (WTO) last week. In this case, the president must ignore the old adage about speaking softly. To preserve a vital American manufacturing capability against predatory conduct by a foreign power, the administration must speak loudly and carry a big aluminum bat.

The bottom line is this: American corporations and American workers can compete with any counterpart in the world and win. But when the contest is with a country itself, defeat is virtually assured.

In the case of aluminum, U.S. companies and workers are up against the entire country of China. That is because China is providing its aluminum industry with cheap loans from state-controlled banks and artificially low prices for critical manufacturing components and materials such as electricity, coal and alumina.

By doing that, China is subsidizing its aluminum industry. And that is fine if China wants to use its revenues to support its aluminum manufacturing or sustain employment – as long as all of the aluminum is sold within China. When state-subsidized products are sold overseas, they distort free market pricing. And that’s why they’re banned.

China agreed not to subsidize exports in order to get access to the WTO. But it has routinely and unabashedly flouted the rules on products ranging from tires to paper to steel to aluminum that it dumps on the American market, resulting in closed U.S. factories, killed U.S. jobs and bleak U.S. communities.

2017-01-15-1484523553-9234624-Alumphoto3.JPG

Worker at Alcoa’s Warrick Operations in Evansville, Ind., before the smelter closed in 2016. Photo by Steven Dietz, Sharp Image Studios, Pittsburgh.

In 2000, China produced about 11 percent of the aluminum on the global market. That figure is now 50 percent. A big part of the reason is that China quadrupled its capacity to produce aluminum from 2007 to 2015, and increased its production by 154 percent.

When China threw all of that extra, cheap, state-subsidized aluminum on the global market, it depressed prices. In that eight-year period, the price sank approximately 46 percent.

To compete, American smelters tried cutting costs and getting better deals on electricity. But even as U.S. demand increased, U.S. production declined 37 percent. And capacity decreased 46 percent.

What capacity decrease means is closed plants. The number of smelters dropped from 14 in 2011 to five last year, with only one operating at full volume.

Many of these manufacturing workers, thrown out of their jobs by what is clearly unfair trade, saw President-elect Donald Trump as a champion. Donald Trump said he would hold China to account on trade. He promised he would impose massive tariffs on goods imported from China. He said he would confront Beijing on currency manipulation, a practice that makes Chinese goods artificially cheap.

Many of those manufacturing workers voted for Donald Trump. Monroe County, Ohio, is a good example. That was the home of the Ormet smelter. The workers, who belonged to my union, the United Steelworkers, and the company asked Ohio Gov. John Kasich in 2012 and 2013 to intervene with the utility to get lower rates to help Ormet survive.

Kasich refused. The smelter closed. Monroe County’s unemployment rate now is the highest in Ohio at 9 percent, nearly twice the national rate.

Monroe County voters didn’t forget. Theirs was among the counties in Ohio that went for Donald Trump in the Republican primary. Though Trump didn’t win the Ohio primary, he got 35.9 percent in the crowded GOP field, and he took virtually all of the places in Ohio that, like Monroe, would say Kasich and other politicians turned their backs on them.

President-elect Trump carried 29 of Ohio’s Appalachian counties in the primary, those described as “geographically isolated and economically depressed.” These are counties that, like Monroe, lost family-supporting jobs in steel, manufacturing or mining. For the workers who haven’t left, the jobs that remain, in retail and fast food, don’t pay much, don’t provide benefits and aren’t secure.

When Donald Trump came to town talking tough about China, that sounded a hell of a lot better to those workers than their governor telling them he wouldn’t help with electrical rates – especially after they watched the governor in New York work a deal to save an Alcoa smelter and 600 jobs for 3 years in Massena.

And, of course, Donald Trump won Ohio in the General Election.

Workers across America, from Sebree, Ky., and Mt. Holly, S.C., where Century smelters are threatened to Wenatchee, Wash., where Alcoa has held out the possibility that the smelter could be restarted, were galvanized to support Donald Trump by his promises to confront China on its predatory trade practices.  If he fulfills those pledges, he will have the back of the blue-collar workers who had his.

2017-01-15-1484524153-8303675-Alumphoto2.JPG

Worker at Alcoa’s Warrick smelter in Evansville, Ind., before it closed last year. Photo by Steven Dietz, Sharp Image Studios, Pittsburgh.

Local Massachusetts Union Shirt Manufacturer Featured In New Clinton Campaign Ad

New England Shirt Company ShirtIn New Ad, U.S. Shirtmaker Criticizes
Trump for Outsourcing Jobs, Making Products Overseas

Small Business Owner: ‘Trump Says He’ll Make America Great Again
While He’s Taking the Shirts Right Off Our Backs’

new Hillary for America television ad set to air this week features a Massachusetts shirt manufacturer who employs more than 60 people criticizing Donald Trump for outsourcing jobs to make his products, including shirts, abroad. In the ad, Robert Kidder, the owner of New England Shirt Company in Fall River, says, “This factory has been here since 1883. We have over 60 people here making shirts labeled ‘Made in America,’ but Donald Trump’s brand of shirts come from China, his suits from Mexico, his coats from India.”

Going back to the colonial era, Fall River, Mass., has been central to America’s textile industry, and the New England Shirt Company remains the oldest operating ready-to-wear shirt manufacturer in America. Not only has New England Shirt Company been making shirts in Fall River for over 130 years, but they are also proudly union. Workers are represented by The New England Joint Board, a region group of UNITE HERE locals and “is one of the largest unions in the region representing manufacturing workers.”

Textile manufacturing unions in New England were some of the first and strongest unions in the country in the late 1800 and early 1900s.  Women and children slaved in the mills from Manchester, New Hampshire, through Lawrence, Massachusetts, through Lowell, Massachusetts, and all the way down to New York City.

Unions like the The International Ladies’ Garment Workers’ Union (ILGWU) and the Amalgamated Clothing Workers of America (ACWA) fought for workplace safety, shorter workdays, and for two full days of rest a week.  Workers banded together and pushed the Massachusetts legislature to pass strong labor like and to be the first to pass child labor laws that prevented children from working in the mills.  Laws that were later passed nationally as part of the National Labor Relations Act.

In 1976,  The International Ladies’ Garment Workers’ Union and the Amalgamated Clothing Workers of America merged to form UNITE who in 1996 merged with HERE, the Hotel Employees and Restaurant Employees Union, becoming UNITE HERE.

The ad, ‘Shirts,’ joins a previously released ad, “Some Place,” in spotlighting Trump’s long history of making Trump-branded products outside of America as part of a concerted effort over the past month to contrast Trump’s hypocritical business record with Hillary Clinton’s agenda to make the economy work for everyone, not just those at the top. The new ad follows Clinton’s announcement Tuesday of new plans to jumpstart small business startups and strengthen small business growthKidder, the small business owner, closes the new ad, “Donald Trump says he’ll ‘make America great again’ while he’s taking the shirts right off our backs.”

Watch ‘Shirts’

The 30-second ad is a part of and ad buy in Florida, Iowa, Nevada, New Hampshire, North Carolina, Ohio and Pennsylvania. 

Clinton has pledged make the largest investment in job creation since World War II in her first 100 days in office and has proposed a comprehensive “Make It In America” strategy to boost U.S. manufacturing and crack down on corporations that ship jobs overseas.

New AFL-CIO Trade Video Warns That TPP Would Double Down on NAFTA’s Economic Devastation

“We can’t have another NAFTA. There’s too much at risk. It’s too important. What happens if TPP passes? There will be another generation of people that can’t find work.”

(Washington, DC) – Today, the AFL-CIO released a video showing first-hand the devastating economic impact the Trans-Pacific Partnership (TPP) could have on communities across the country.

Last week United Steelworkers President Leo Gerard testified at a USTR hearing examining overcapacity in the global steel market and its impact on U.S. steelmakers. There is evidence that foreign governments are subsidizing cheap steel and selling it in the U.S. at unfairly low prices. Countries are able to dump their cheap steel in U.S. markets because they are undervaluing their currency when setting prices.

“Currency manipulation is at the heart of this issue, and the passage of the TPP – which doesn’t address this global problem – could kill American manufacturing for good,” said Gerard. Like NAFTA, it offers no protection for American manufacturing or American workers. U.S. trade policy has not worked for working people or our communities which has led to broad opposition to the TPP. It must be defeated.”

“We know the TPP is a job killer.” said AFL-CIO President Richard Trumka. “Our trade agreements should help to create good jobs in America, and enable regular working people to succeed by working hard to get ahead. The TPP fails this goal miserably.”

“I’ve seen too many people have their lives destroyed because the jobs went away,” said Allegheny County, Pennsylvania, Council Member Dewitt Walton. “We can’t have another NAFTA. There’s too much at risk. It’s too important. What happens if TPP passes? There will be another generation of people that can’t find work.”

Allegheny County which is featured in the video is one of hundreds of local and state governments that have passed or introduced resolutions opposing TPP.

This video is the second in a series examining the real human impact of trade agreements like the TPP. Watch the first video on how the TPP could put the lives of cancer patients in danger.

Clinton, Adding to Jobs Agenda, Proposes New Tax Incentives to Revitalize U.S. Manufacturing

 hillary clinton (WisPolitics.com FLIKR)

As part of her plan to create good-paying jobs for American workers, Hillary Clinton is outlining a strategy to win the race to lead the world in advanced manufacturing. The centerpiece of her announcement is a major new tax credit – dubbed the “Manufacturing Renaissance Tax Credit” – to incentivize investment in communities that are at risk of a downward spiral because they have seen manufacturing jobs and production depart.

“My plan will help spur reinvestment in communities that have lost jobs because of factory closures,” Clinton said. “By strengthening our manufacturing sector for the future, we can help create the next generation of good-paying jobs and put more people back to work across the country.” 

Clinton’s announcement continues her month-long focus on a jobs agenda that will lead to higher incomes for hard-working Americans. It comes on the heels of her $275 billion plan to invest in U.S. infrastructure, which was announced last week.

Clinton is focused on manufacturing because it is a source of higher-paying American jobs, with studies showing it pays between 8 and 20 percent higher than other industries.

Under Clinton’s manufacturing agenda, communities would be eligible to apply for tax relief after a significant plant closure or round of layoffs in their area. Clinton’s new tax credit would offer options for relief modeled after the existing New Markets Tax Credit, which one survey found, on average, has supported projects worth $16 million. They could also be eligible for relief for long-term investments, or refurbishing and repurposing facilities. 

Clinton would also expand President Obama’s “National Network for Manufacturing Innovation” program, which supports regional hubs that bring together workers, business, universities, and community colleges to develop world-leading technologies and production that anchor good-paying jobs. In addition, her plan would double funding for the Manufacturing Extension Partnership – a public-private program that provides federal support to help small and mid-sized American manufacturers compete – while insisting on strong domestic sourcing requirements and “Buy American” provisions so that materials that are “Made in the USA” receive priority. 

Clinton’s agenda extends her long record of fighting to expand manufacturing and boost American jobs. As Senator, Clinton co-founded the bipartisan Senate Manufacturing Caucus, fought Bush Administration efforts to cut support for manufacturing, and called for a “New Manhattan Project” to rebuild American manufacturing. 

A fact sheet on Clinton’s manufacturing proposals is available here.

Leo W Gerard: The TPP — Another Deadly Trade Deal

President Obama (WH IMAGE Pete Souza)

President Obama (Official WH Images, Photograph by Pete Souza)

Americans who once earned family-supporting wages working in factories, foundries and mills across this country began destroying themselves at a shocking rate five years after implementation of the North American Free Trade Agreement (NAFTA).

That’s because such deals – schemes exactly like the proposed Trans-Pacific Partnership (TPP) trade agreement released last week – encouraged corporations to offshore manufacturing, decimating decent American jobs and the lives of decent American workers.

Unemployed, desperate and despairing, these once-middle-class workers are killing themselves at unconscionable rates with guns, heroin and alcohol-induced cirrhosis. To such workers, the TPP would mean more tragedy, more death. The opposite is true for CEOs, shareholders and Wall Street financiers. To them, the TPP would mean even more luxury, more wealth. Trade schemes like the TPP further rig the economy in favor of the already-rich and against the hard-working rest.

2015-11-08-1447010232-5776390-Mortalityrategraph.jpg

Purple dashed line shows rising death rate for white men aged 45 to 54 with high school diplomas or less education. Red line is black mortality rate for same age group; green line is Hispanic; teal is caucasian.

Two Princeton economists last week published a study showing that white, middle-aged Americans with high school diplomas or less education are dying at a faster rate than they did before NAFTA. They began suffering diminished life expectancy in 1999.

That stands in stark contrast to all other age and ethnic groups, including African Americans, Hispanic Americans and Europeans, whose health and life expectancy have improved.

The typical killers, diabetes and heart disease, didn’t take these white Americans aged 45 to 54. It was suicide, drug overdoses and alcohol abuse.

Before 1999, the mortality rate for this group, as for the others, had been declining. Since then, their rising rate means, “half a million people are dead who should not be dead,” said study co-author Angus Deaton, a 2015 Nobel Prize winner. That is close to the number of Americans killed by HIV-AIDS.

Unlike AIDS, this has been a silent epidemic, unexposed until the report by Deaton and co-author Anne Case. The cause of the self-slaughter, the researchers suggested, is financial strain.

Bread winners couldn’t pay their bills and couldn’t foresee a future when they could. That is because jobs in manufacturing and construction – jobs that had provided middle-class incomes for workers without college degrees for decades – disappeared.

Between 1997, three years after NAFTA took effect, and 2014, the country lost more than 5 million manufacturing jobs.  The vast majority, according to the Economic Policy Institute, vanished as a result of growing trade deficits with countries that the United States signed so-called free trade and investment deals with.

Just since 2001, 56,000 American factories closed. Corporations moved many of these to low-wage, low-worker-safety, low-environmental-protection countries with which the United States has so-called free trade deals enabling the companies to sell the foreign-made products in America with little or no tariffs or duties.

The TPP, the largest so-called free trade deal ever, encompassing a dozen Pacific-Rim countries including forced and child labor violators Brunei and Vietnam, would send even more American industry and jobs overseas.

The Wall Street Journal calculated that the TPP would increase the U.S. trade deficit in manufacturing, car assembly and car parts by $55.8 billion a year by 2025. Using the U.S. Department of Commerce estimate of 6,000 jobs lost for every $1 billion in trade deficits, the TPP would cost another 330,000 American manufacturing workers their jobs, their income, their hopes. Maybe their lives.

That 330,000 probably is a low-ball estimate because the TPP negotiators secured no enforceable protections for American workers. For example, the TPP would provide no way to compel partner countries to stop manipulating their currencies to gain competitive advantage over American manufacturers. Countries like Japan, Singapore and Malaysia, all TPP partners, lower the value of their currencies to make their exports cheaper in the American market and American exports to theirs more expensive. Ford Motor Co. opposes the TPP for this reason.

Similarly, the TPP fails to include enforceable methods to stop foreign labor abuses including poverty wages and violations of collective bargaining rights. This facilitates the race to the bottom on wages. Corporations move factories overseas because they can’t get away with paying Americans the 90 cents an hour that is the average wage in Vietnam.

Also, disastrously, the TPP would lower the content requirement for cars and auto parts to be considered produced in a TPP country. NAFTA set the figure at 62.5 percent for cars. That meant 37.5 percent of a car could be manufactured in China, shipped to Mexico for assembly and the car deemed made in Mexico for tariff purposes.

The TPP would reduce the domestic content percentage to 45, so that 55 percent of a vehicle – more than half – could be manufactured in China and the car still considered made in a TPP country and benefit from zero tariffs when shipped to the United States.

In addition, the TPP’s proposal to immediately eliminate U.S. tariffs but allow TPP partners to sustain theirs for years would lure U.S. factories offshore. That’s because it means corporations would have to pay tariffs to ship American-made goods to TPP partners, but they would pay none if they move manufacturing to a TPP country and export to the United States.

Another way the TPP would send American work overseas is by ending the Buy American preference. The trade deal would allow any TPP partner to bid on federal contracts, so American tax dollars would be spent to create jobs in TPP countries like Mexico and Malaysia instead of in the United States.

Literally hundreds of lobbyists were given a seat at the secret TPP negotiating table, resulting in these rules favoring multi-national corporations. For decades, the regulations for international commerce, for so-called free trade, have lined the pockets of the already wealthy and emptied those of workers thrown out of their jobs.

It was cruel enough that America countenanced for decades so-called free trade that cost millions of U.S. manufacturing workers their source of family-supporting income. But now that it’s clear that bad trade schemes also cost workers their lives, the TPP must be stopped. It cannot be permitted to kill more Americans who want so desperately to work.

When Will NH Manufacturers Quit Fabricating Stories About Not Having Qualified Workers

Manufacturing Tech Expo at College of DuPage 2014 (COD Newsroom FLIKR)

Manufacturing Tech Expo at College of DuPage 2014 (COD Newsroom FLIKR)

This morning the Union Leader posted an article about New Hampshire manufacturers, like GE, who are looking for highly skilled, highly educated workers to fill vacant jobs.

“Signal processing, navigation, optics and measurement are particularly advantaged in New Hampshire,” she said. “No other state is doing this type of advanced manufacturing to the same degree as New Hampshire.”

The state also shines in semi-conductors, complex electronics, precision machining, aerospace and defense, medical devices and technology. But there’s a problem.

“Take precision machining,” said Lands. “We found the average age of a worker in that field is in the mid-50s, which means that precision machining knowledge is walking out the door, and is not easily replaced. It is not something that can be learned from a textbook. It is something that has to be apprenticed at the hands of an experienced machinist.”

Folsum from GE Aviation pointed out that the average age at his plant is 50, and he is trying to hire 300 people. “I think we are representative of a lot of manufacturers,” he said. “That’s why we’re here.”

…”Employers are not expecting high schools or community colleges to turn out master machinists. They’re looking for entry-level employees with the basic skills needed to succeed in an apprenticeship program.”

Two things jump out at me instantly when I read this article.

1. Your aging workforce has probably been working there for decades and those workers started when manufacturing paid workers well and was the gateway to the middle class.   They started when working in a manufacturing plant was a prestigious, well respected position for many people and especially for those who choose not to go to college or were unable to make it.

Manufacturers would hire workers, and in partnership with the union, train them to do the job.  Together the union and the employer would continue to train workers so they could move up and make better money and stay right inside the plant.

Now manufacturing has changed.  It is highly technical and many employers require college degrees before they will even consider an employee.  This leads into my second question.

2. What are you paying these “apprentices” in your manufacturing plants?

You cannot expect college graduates, most likely with massive student loan debt, to jump up and take a job in a manufacturing plant at rock-bottom wages.  Now I do not know what GE, or the others, offer in starting pay (because they do not post it on their jobs listings), but I would venture a guess that it is not high enough.

For a long time now New Hampshire has had a problem with our young workers leaving the state and our population growing older and older.  The “graying” of the workforce is a combination of low-wages offered by employers and high cost of living, so young people are fleeing the state.  (This is also in part to our extremely high cost of college.)  They go off to find jobs in cheaper places to live.  They are not finding better jobs, but they feel they are making more because they spend less to live.

I am glad the Governor, Colleges and Universities, and business leaders are coming together to talk about the needs of the business community, however you have to stop telling us that there are no workers with the education you require.

According to national data from EPI, the unemployment rate of 2015 college graduates is 7.9% and an under-employment rate of 14.9%.

The people are out there but what are NH manufactures willing to do to attract them here?  The simple solution is to raise the wages and you will attract highly educated, highly qualified individuals who would like to live and work in New Hampshire.

Manufacturing’s problem is not that there are not enough educated workers out there to do the job, it is there are not enough college educated adults willing to do the work for the wages you offer.

Governor Hassan Kicks Off Annual Advanced Manufacturing and High Technology Summit

Highlights Importance of NH Manufacturing Industry to the Economy, Discusses Efforts to Strengthen Workforce, Support Job-Creating Businesses

Image by The Lead Us FLIKR

Image by The Lead Us FLIKR

MANCHESTER – Highlighting the importance of the advanced manufacturing and high-tech industry to New Hampshire’s economy, Governor Maggie Hassan today kicked off the 12th Annual Governor’s Advanced Manufacturing and High Technology Summit.           

“As the state’s largest industry, manufacturing is critical to strengthening the foundation for the innovation economy that will expand middle class opportunity and keep New Hampshire moving in the right direction,” Governor Hassan said. “But we know that there is more we need to do to keep our economy moving forward, to keep manufacturing jobs in New Hampshire and to attract new advanced manufacturing and high-tech companies to the Granite State.” 

Presented by the Business and Industry Association, the New Hampshire High Technology Council, the New Hampshire Manufacturing Extension Partnership, and the New Hampshire Division of Economic Development, the Advanced Manufacturing and High Technology Summit brings together businesses, educational institutions, local economic development officials and other manufacturing experts for workshops and networking opportunities aimed at sharing best practices in order to help the industry continue to grow and create jobs. 

“Today’s summit is a great example of the New Hampshire Way, citizens coming together – Republicans, Democrats and Independents – to solve long-standing challenges and get things done for New Hampshire’s people, businesses and economy,” Governor Hassan said. “But I want to continue to hear from you about what you need to continue thriving and creating jobs here in New Hampshire for years to come, because ensuring state government is responsive to the needs of the advanced manufacturing and high-tech community is critical as we work together to strengthen the foundation for the 21st century economy.” 

Since entering office, Governor Hassan has focused on supporting innovative, job-creating businesses in order to expand middle class opportunity and keep New Hampshire’s economy moving in the right direction. The Governor restored funding for higher education in her bipartisan budget in exchange for the first in-state tuition freeze at the University System of New Hampshire in 25 years and a five-percent reduction of in-state tuition at New Hampshire’s community colleges that began this fall.

The bipartisan budget also revitalized the state’s economic development activities, fully funded the Director of Economic Development for the first time in years, increased travel and tourism promotion and improved international trade assistance.

In order to make it easier for high-tech businesses to start up and flourish in New Hampshire, Governor Hassan and the Business Finance Authority launched Live Free and Start, an initiative that brings together accomplished business leaders and entrepreneurs to make recommendations on how to modernize business regulations and how to improve technology used to do business with the state.

Governor Hassan and the Department of Resources and Economic Development have also launched a manufacturing video contest that partners advanced manufacturing companies with local schools in order to engage New Hampshire’s students and help them understand that there are exciting and interesting career opportunities at manufacturing companies across the state.

“Recognizing the importance of manufacturing’s role in New Hampshire’s economy and connecting students with our state’s innovative businesses is vital to our future and to keeping New Hampshire’s economy moving in the right direction,” said Senator Molly Kelly. “I want to thank Governor Hassan for her efforts in highlighting our state’s manufacturing and I applaud and the NH Manufacturing Extension Partnership for bringing New Hampshire’s manufacturers and educational institutions together and making this week such a success.”

“A quality education not only prepares our children for a brighter future, but it helps expand opportunities for all. A strong and well-educated workforce helps attract new, good-paying jobs to New Hampshire and strengthens our economy as a whole,” said Sen. Kelly. “Our state has a vibrant history of manufacturing, but we need to do everything we can to ensure that New Hampshire continues to lead the innovation economy of the 21st century. Connecting our students to careers in manufacturing is an important step in ensuring that we have a strong workforce that helps attract new businesses, creates new jobs, and keeps our state’s economy moving in the right direction.”

The 12th Annual Governor’s Advanced Manufacturing and High Technology Summit marked the culmination of Manufacturing Week in New Hampshire, which Governor Hassan proclaimed as September 29 through October 3 in order to recognize manufacturing’s vital role in New Hampshire’s economy.

For the full text of the Governor’s proclamation, click here.

 

Governor Hassan, DRED Launch Second Annual What’s So Cool About Manufacturing? Video Contest

Image by TheLeadUS FLIKR

Image by TheLeadUS FLIKR

CONCORD – In order to engage New Hampshire students and to encourage them to learn about exciting and interesting career opportunities in advanced manufacturing, Governor Hassan and Department of Resources and Economic Development Commissioner Jeffrey Rose are launching the second annual What’s So Cool About Manufacturing? video contest.

Through partnering participating schools and local manufacturers to produce a video focused on career opportunities in manufacturing, the What’s So Cool About Manufacturing? video contest is designed to introduce middle school students to careers of the future in advanced manufacturing and what they can do to prepare for them.

“By participating in this video contest, students will come to understand the importance of manufacturing firsthand and how a career in manufacturing helps families across the state expand their opportunities,” Governor Hassan said. “Students can learn about how interesting and exciting these jobs are, lessons that I hope they will pass on to their peers so that this critical industry can continue to thrive and create good jobs for years to come.”

In the video contest’s first year, 12 middle schools across the state produced 13 videos. Fairgrounds Junior High School in Nashua took first place, followed by North Hampton School and Pittsfield Middle School. To view last year’s winning videos, visit https://www.youtube.com/user/NHEconomy.

Below is the First Place winner in last year’s video contest and the entire playlist of submissions.

“In the first year of the contest, middle school students from around the state created some engaging and informative videos that highlighted their interest and curiosity about advanced manufacturing,” Commissioner Jeffrey Rose said. “The contest was a great introduction to the people and processes who manufacture great things right in their hometowns.”

Students and advisors can work with local manufacturers on their video starting now through the February 2 project deadline. Teachers interested in participating can get more information on partnering with a local manufacturer, as well as video contest rules, at http://www.nheconomy.com/videocontest/ or by contacting Christopher Way, deputy director, Division of Economic Development at 271-2341.

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