Some Companies Expand, But Jobs Won't Be Created Immediately
02/24/10 7:50AM By Ross Sneyd
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(Host) We return now to "Hitting Home," our series on how the economy is affecting Vermonters.
And today, we look at manufacturing, which provides one of every 10 jobs in the state.
Although about 20 percent fewer people work in the state's factories than did just five years ago, some companies have announced expansion plans that would create dozens of new jobs.
But, as VPR's Ross Sneyd reports, it could be months or more before anyone is hired.
(Sneyd) In some ways, SB Electronics in Barre is a throwback.
In an era of computerization and robotics, these machines are still firmly tied to the industrial age when they spooled thin bands of metal into little "capacitors" that helped convert electricity into a charge that could power a motor.
(Sawyer) "The last five years, amazingly, people are heading back in our direction."
(Sneyd) Ed Sawyer is CEO of SB Electronics.
At its height, Sprague-Barre - as SB Electronics was originally known - had more than 900 people working in this factory at the southern edge of Barre.
But in the ‘70s and ‘80s, most production moved overseas, primarily to Asia. And all but 50 or so jobs were lost. SB held on by producing for niche markets, such as Taser stun guns.
Now, Sawyer says, a new market has developed as the auto industry rolls toward a future of hybrid and electric-power vehicles.
(Sawyer) "So if you're looking inside a Prius, for instance, and you see one of these unusual boxes you've never seen before sitting on top of your engine, if you were able to crack that box open, inside there you'd see a capacitor like we're making as part of that filter. Every one of them has one."
(Sneyd) The capacitors convert electricity from batteries into energy that can power electric engines.
With help from a federal government that wants to boost domestic manufacturing capacity, SB Electronics is poised for growth. Sawyer says he expects sales this year to grow by 25 to 30 percent and reach $5 million.
(Sawyer) "We have plans as part of the Department of Energy project, to add 150 people to the company, which would put our total at about 200. And there are other markets beyond the automotive transportation side, alternative energy, the wind-solar area, ... and some military projects that we're working on. We could easily be 300-plus people over the next five or six years."
(Sneyd) But for Vermonters hoping to ride the success of a company like SB Electronics out of the recession, that's the problem.
The growth and the new jobs don't come immediately.
Like the handful of other Vermont companies that have announced expansions, SB Electronics expects to add jobs in phases over the next few years as orders come in - and while a second factory is built.
Even at the rare companies that have seen growth during this recession, there's a lot of caution.
Solar energy company groSolar in White River Junction has profited from the newfound interest in renewable energy. But it's been careful about hiring too quickly.
(Wolfe) "Flat is the new good. We've been able to stay steady."
(Sneyd) Dori Wolfe is a co-founder of groSolar.
(Wolfe) "I've got the fiscal hat on that says we've got to watch our budget because we have to be very, very cautious. But there already are requests from every single department in the company to grow. So, we're poised."
(Sneyd) Economist Richard Heaps says that's what we can expect as the recovery begins to take shape.
(Heaps) For the next few months or so, you may in the same newscast here, ‘Good news, that manufacturing is up,' but, ‘Bad news, housing starts are down.' And so what does that mean? Well, it means we're at the turning point."
(Sneyd) Some companies will continue to shed jobs. Others will begin taking people on again. And so there will be churn in the labor markets.
Back at SB Electronics in Barre, some of the new opportunities are already helping Vermonters who were out of work start over again.
Dan Bisbee was one of about 190 people who lost their jobs when Lydall Incorporated closed its plant in St. Johnsbury. He says he spent about five months searching for work.
(Bisbee) "There were some other companies. I was actually looking in western Massachusetts and other places. This one seemed to be about the best fit that I was able to find this past summer. It's worked out great for me."
(Sneyd) As manufacturing engineer, it's Bisbee's responsibility to keep all of these machines around him operating at capacity. But his job wouldn't have been created without the new product line for the automotive industry.
And the factory jobs almost weren't created in Barre. Company CEO Ed Sawyer says the original plan was to build the capacitors in China.
(Sawyer) "We had a plan in place ... that was to expand some of our plant here, within the facility we have - and some of our most critical parts of the technology - but to actually work with a partner in China to do quite a bit of the labor intensive assembly work in China."
(Sneyd) Now, once the ground thaws, SB Electronics will begin construction of an $18 million plant. And the U.S. Energy Department is paying half the cost.
The bulk of the new jobs will follow, probably by the end of the year.
For VPR News, I'm Ross Sneyd.