The ultimate Q&A on manufacturing

Five panelists from the industry answered tough questions from the audience at the New Jersey Manufacturing Extension Program State of the State event last week in Trenton.

The panelists:

Thomas Hoversen
Founder and president, Comarco Products, Camden
A family-owned food processing company.

Noah Nichelson
President, Asbury Carbons, Asbury
A 123-year-old family and employee-owned global manufacturer of primarily carbon-based value-added raw materials.

Vicki Molloy
Vice president of energy services, Concord Energy Services, Voorhees Township
The New Jersey Board of Public Utilities’ energy consultant.

Howard McIlvaine
Vice president of operations, UNEX Manufacturing, Lakewood
Designs and manufactures order picking solutions such as gravity conveyor products for distribution and manufacturing operations.

Clifford Lindholm II
CEO and president, Falstrom Co., Passaic
A 150-year old family-owned manufacturer of electronic enclosures, machine components and assemblies primarily for navy and coast guard ships.

Q: What would you say are the biggest challenges facing your business and industry today?

Clifford Lindholm: We often get workers in our facility who have a base set of skills, but for them to be successful, we must engage in a lot of on-the-job training and development of their skills over time. … Workforce development not only means making sure that we have students in our training programs, but also it is a challenge to find people to properly instruct these programs.

Howard McIlvaine: We’re on the lower tech, more old-school side of manufacturing — most of our employees, many of which are machinist or brake operators, have been with us for our tenure and will be retiring within the next five years. We can always train in-house but, seeing as these jobs are not as fancy, they are not always the jobs that people are looking for.

Vicki Molloy: We want to make sure that our clients have savings over the utility rates that they must pay. Some of the highest cost in New Jersey are employment and energy, and we try to help make that more efficient to remain sustainable in the state.

Noah Nichelson: We produce product and sell to 70 different markets from seven sites in the U.S., two in Canada, one in Mexico and one in the Netherlands — the projected shortage of 120,000 truck drivers over the next 10 years worries me.

Thomas Hoversen: We have a ready, willing, economical and able workforce in Camden — but we are landlocked right now and have great concerns about how we are going to be able to grow our company into the next phase.

Q: How have you worked with the vocational and technical schools to create programs that encourage students to want to work for you?

CL: I had a very interesting meeting last week with the president of Mercer County College, which just established a new machining lab. … We said, ‘Tell us what you need and what the training is and you can send your students to our facility for internships.’ … What I am seeing is an encouraging realization from county colleges that they need to be able to tailor their curriculum to a specific company’s needs.

HM: We provide a scholarship for engineers at the local high school to go to college. … I want schools to let me come talk to people who don’t plan or can’t afford to attend college, because I will tell them to come work for me so that I can pay for their college.

Q: I am from the government (Department of Labor and Workforce Development) and often that scares businesses and manufacturers from wanting to talk to me. How can we effectively get you to the table to hear exactly what it is you need or lack?

HM: I receive more than 100 emails a day and delete a lot of stuff that looks like junk. So, call me. I don’t want to fill out a survey or click on a link and maybe that is my bad. But if you call me and tell me who you are and what you are looking for, we can have a worthy discussion.

Q: What are your ideas as to what the state might do to be more business friendly?

TH: Our company has a three-acre site next door that we purchased the tax lien on in 2009. Since that time, the New Jersey Department of Environmental Protection has really set up a lot of roadblocks in developing it. … When we went to foreclose on the property, we found that the NJDEP had a judgement against it and met with them to discuss it. Six weeks later, they doubled the judgment. … Our company’s biggest challenge right now is needing to expand our physical plant. We are becoming more discouraged by the day with this deal and if it comes down to it, will purchase another facility elsewhere.

(READ MORE from ROI-NJ on manufacturing ideas.)

NN: We are opening a new facility in North Carolina right now because the state offered us more than $1 million in incentives. Lower taxes plus massive incentives made it hard for us to justify further expansion in New Jersey. … Now, we recently opened a facility in the Netherlands nearly two years ago in which the state takes high school and college students and provides them to the facility for internships and apprenticeships free of charge. We’ve hired from those programs that last anywhere from three months to one year. That is a nice, productive state-sponsored program that we have seen good value in. We get to try out young people, they get to try us out and we don’t absorb all the costs of hiring someone. We would like to experiment with the same sort of program in the U.S.

VM: Transmissions costs with Public Service Enterprise Group alone have gone up more than 600 percent in New Jersey since 2009. And, because the infrastructure had not been upgraded in the 20 years prior to Superstorm Sandy, we are paying for it now. … We need to make sure that we handle responsibly the energy costs in New Jersey and I’m not sure that New Jersey alone should be footing the bill.

Q: It is unlikely (the Legislature) will change our positions about raising the minimum wage or instituting paid family leave. However, are there any crazy regulations or programs affecting your business that may have made sense decades ago that no longer do?

TH: We contract with three New Jersey farms to process approximately 6 million pounds of eggplants from August to October. That means we must buy fresh produce nine months out of the year from different parts of the country. One of our biggest competitive disadvantage is the recent electronic data logging for truck drivers. For example, in January of last year, we paid $5,000 to move a truckload of fresh eggplant from Arizona to Camden. This year, we were quoted $12,000 for the same truck. How does that happen?

CL: My favorite example is that we pay something called a ‘life hazard use’ fee to the Department of Community Affairs each year to the amount of nearly $1,600. When I researched it, I discovered that nearly 80 percent of this fee is passed back to the local fire department. So, I’ve got this high property tax bill that goes toward the local fire department and on top of that, I pay a fee to the DCA that then also goes to the local fire department. It’s almost like I am getting hit twice.