A year into taking the wheel of the state’s New Jersey Manufacturing Extension Program from its former formative leader, Peter Connolly still is making inroads up and down the Turnpike.
There’s a lot of ground to cover with some 11,000 manufacturers based in the state, many classified as the under-75 employee businesses that the NJMEP nonprofit works to support in the Garden State.
Connolly has been in his director role at the organization since the spring of last year, when John Kennedy stepped down after more than a decade leading the NJMEP. He said the many nooks and crannies of the state’s manufacturing space are often underappreciated.
There’s a lot of interesting manufacturing stories to be discovered in New Jersey’s busy industrial corridors. Connolly said he’s trying to become the most acquainted of all with them.
Connolly took a call with ROI-NJ while on a trip to Rowan University, a South Jersey institution the manufacturer-supporting nonprofit has tied itself to more closely. The group recently opened an office at Rowan’s South Jersey Technology Park.
He spoke about the local manufacturing sector at a turning point, with those driving the industry’s activity contemplating what a new White House and Capitol Hill makeup might mean for them.
Here’s a look at the conversation:
ROI-NJ: Let’s start with supply chain disruptions we’ve all heard about, especially during COVID. Are local manufacturers through the worst of it? What imprint has that left on their business?
Peter Connolly: That’s been one of the bigger issues in New Jersey. I think a lot of it, from where we were up to today, has subsided. It hasn’t been as bad, and we don’t hear about it as much from manufacturers. There’s still some uncertainty. And we find that manufacturers are holding a bit more inventory than they used to. But over the past two years, we’ve definitely seen the issues reduce.
Manufacturers are not sole sourcing anymore. They want two vendors that can do the same thing, especially when it comes to machine parts. Before, a lot of companies would just deal with the one company that they dealt with all the time. But they’re not increasing their supply chain (diversity) that way. So, if you have one company that’s experiencing a supply chain issue, you have other suppliers now. That’s the lesson learned: Increase your supply chain and spread it out. And that’s true whether it’s international or domestic. Those buying internationally might also start to develop a relationship with a supplier in the United States, too. And that’s important, because you can’t plan for what you don’t know.
ROI: Speaking of what we don’t know — there’s talk of tariffs under the new presidency, despite the details not being clear yet. How’s that being received by New Jersey manufacturers?
PC: We’ve gotten a number of calls over the past couple days from manufacturers wondering about the tariffs. We’re still at a wait-and-see attitude on that. No one knows yet if it’s based on countries, or if it’s based on products. There are some manufacturers both nervous and cautious, and that’s going to continue until we hear more from the administration about where they’re going to go with tariffs. One area, at least in New Jersey, where tariffs may work, or help, is in the pharmaceutical industry. Most of our drugs are produced in China and Ireland, and depending on those countries, we’ve seen some extreme costs in diabetes and heart medicines. We don’t produce even Aspirin in this country anymore. That’s one area that could help the state, but that wouldn’t happen overnight. It would take pharmaceutical companies time to bring that manufacturing back.
ROI: If there’s any way to say without the full picture being available, could the push to “re-shore” manufacturing see some success?
PC: Personally, I think it’s going to be tough. Certain industries, absolutely. But if you look at iPhones and batteries and things along those lines, I’m not sure. But with some of the (microchip) production, you’re probably going to start seeing some of that move back. We’ve broken ground on facilities in other states doing that work. I think that will continue. Any administration would want to bring back manufacturing of that technology. Some of the automotive manufacturing and other stuff would be tougher to move back. This is our second (President Donald) Trump administration. The first one, he put tariffs in, and then they ended as soon as the next administration came in. It’s hard for some of this on-shoring to happen within just four years. Aside from that, companies are rated financially on how much they make every quarter. They don’t often take a long-term view in which they’re saying, ‘We’re not making money now, but we’re bringing in jobs to the United States.’ Until Wall Street starts rewarding companies for doing that, it’ll be tough. They’re looking at the last quarter. And that has driven us offshore. They’re in the only position to take us back on-shore. That’s probably not a popular political view, but that’s what I see.
ROI: What other issues are local manufacturers looking at down the line?
PC: We have an aging workforce, with an estimated 10,000 Baby Boomers reaching retirement age every day. And there’s areas where it’s becoming particularly tough to refill the talent pool, including in welding. The state needs upwards of 2,000 welders. That’s why we’re working to create teaching programs across the state. We’ve been going into high schools with partners and bringing in training equipment — virtual welder systems, cobot (or collaborative robots) and drilling machines — to teach students about today’s manufacturing and set them up for careers. We’ve had around 3,000 students go through those programs.
But it can be difficult. I had a 22-year-old (in a welding training course) ask me, ‘Can I work from home?’ What we’re seeing with our manufacturers is that Gen Z wants a different lifestyle. Manufacturing jobs are trying to fill the gaps they have while also managing that.
ROI: And what’s on the horizon for your organization?
PC: We’re really looking at offshore wind manufacturing, which the state is big on. Attentive Energy, Atlantic Shores and Leading Light — we want to help them with the supply chain and get small manufacturers — and disabled-, veteran- and women-owned manufacturers — folded into offshore wind. We just received a contract from the National Institute of Standards and Technology to be the lead MEP, along with four other states in the region, to help with supply chain resiliency for offshore wind. We started that in October. The question is: How do we not recreate the wheel in every state? In Paulsboro, we have a monopile facility. Does each state want to do that? Or maybe just New Jersey does, but Rhode Island does cables, and someone else does another component. That way, each region is focusing on what it’s good at and we do our work with that. So that’s an exciting area that we’ll continue to do more with.
Conversation Starter
Reach New Jersey Manufacturing Extension Program at njmep.org or call 973-998-9801.
