Tackling the Image Problem in Manufacturing

Early in the morning on November 17, 2004, an unusual coalition of small manufacturers from the New Haven, Bridgeport and Waterbury areas of Connecticut held a Manufacturing Summit that included half a dozen State legislators. For one hour, the manufacturers gave presentations on the state of manufacturing in Connecticut, and then asked a panel of legislators to respond.

The results were disquieting. Panel members spoke of their concern for manufacturing, but seemed not to grasp the vital role that manufacturing plays in economic growth and stability in a state like Connecticut—which was once a center of heavy industry—but is now home to much smaller firms that have real survival issues. The legislators talked mostly about taxes and promised to look at any negative impacts upon manufacturers. Then they departed to their next meeting.

However, the coalition had made its point. By joining together as a coalition they had seized the attention of their legislators. They also were forced to realize that the political scene was not terribly interested in the manufacturing sector, did not see its connection to good jobs and to the elimination of urban poverty, and had no plans to promote the success of manufacturing other than to hold steady on corporate income and property taxes. In fact, given that many legislators were slightly antagonistic to the labor policies of Connecticut’s two giants, United Technologies and Electric Boat, a distinct carry-over of distrust of all manufacturers seemed to hover over the Summit. The coalition realized that they had work to do. The State’s climate for small manufacturers was not good, and it was not going to improve by itself. Action was needed, and the time to act seemed to be now rather than later.

 

The Summit Program

To start at the beginning, that November’s Summit was actually the third summit in two years, and was the surge from a storm started years earlier. Manufacturing in much of Connecticut suffered through the 1990s, as high costs and ecommerce reduced the competitiveness of local firms and forced many to close or to leave the state. Although State and local governments showed concern for the loss of jobs, remedial action was pretty much limited to low-cost loans, subsidized consultant support and various kinds of tax abatement. Moving into the new millennium, the State slowly realized that manufacturing was suffering from a complicated, stubborn disease that showed little response to tax reductions and productivity improvement programs. Manufacturers recognized this themselves, and began to organize as activists determined to improve their lot in life.

Small manufacturers—especially those in the plastics, metals and printing industries—realized that their interests were quite different from the Top 500 tier, and that what was good for General Dynamics might actually be bad for them, especially in terms of State policy. Skilled, motivated, reliable labor was—and is still—in short supply with little being done about it. Environmental regulations and State labor laws imposed hidden costs and obstructions, which delayed capital improvements and increased operating costs. Economic development agencies were not effective in helping small manufacturers find new customers and new markets. Public images of manufacturing remained locked in World War II scenarios. Abandoned old factories and dumps did little to refute these images.

In July, 2003, the New Haven Manufacturers’ Association (NHMA) decided to lead an effort to improve the climate for manufacturing, at least in the New Haven metro area. With consultant support from United Illuminating, the local distribution utility, NHMA organized a Manufacturing Summit at the University of New Haven. The turnout exceeded expectations. Using organization evaluation techniques provided by United Illuminating, major manufacturing issues were defined and voted upon by the attendees—almost all of whom were CEOs or top managers of small manufacturers. The results were extraordinary. NHMA realized that the problem ran deeper than anyone expected.

 

The Nature of the Beast

Six goals emerged from the Summit I attendees, and they are ranked in order of importance:

1. Publicize that manufacturing in this region can be successful.
2. Raise public awareness that a healthy, growing manufacturing sector is important to you and your neighbors.
3. Revitalize civic pride in what Connecticut manufacturers make and contribute to our State’s wealth and vitality. Create an image of regional manufacturers as tough winners using modern tools and skilled workers to succeed in a challenging environment.
4. Refocus and reinvigorate curriculum at all educational levels to attract and prepare people for challenging and rewarding manufacturing jobs of today and the future.
5. Enhance the State of Connecticut’s incentives and reduce disincentives to manufacturing to match, as a package, the value of top tier, business-friendly states.
6. Identify and promote the adoption of U.S. trade policies that are fair, as well as free.

Note the absence of demands for tax breaks, subsidies and labor union constraints. Note instead the emphasis on public image, from which all State policy flows. In essence, a poor image in the State, and a consequent lack of public support in all its forms, was seen as the major threat to small manufacturers. Public image, no less! A grassroots lack of support! These company leaders realized that a negative image in the State led inevitably to oppressive taxation and regulation, and to a lack of publicly-funded economic development assistance. The root cause was identified. But this raised the next daunting question: how can manufacturing improve its public image to the point where it creates a supportive, growth-oriented public policy for manufacturing? The first Summit provided no answers. A search for answers led to the next two Summits.

Summit II on September 18, 2003 attracted a bigger crowd to the University of New Haven, and used intensive sessions to form strategies to achieve Summit I’s goals. Understandably, there were many creative ideas and securing a consensus was difficult. Concepts ranged from establishing a Manufacturing Pavilion in Hartford, the capital; establishing a traveling Manufacturing Bus to visit high schools; creating a TV program about manufacturing for public television; and, placing displays in Hartford’s international airport. But what emerged as most important was a planned strategy to engage the Legislature, one-on-one, to get across the message that manufacturing is essential to the State, and that small manufacturers create most of the jobs and are most in need of a supportive, business-friendly, no-hassle environment.

The task of Summit III was to create an initial dialogue with area legislators, away from the Capitol and its lobbyists. The intended message was simple: small manufacturers need legislative support to survive and prosper, and they have the economic and joint political power to reward or punish politicians who they perceive as threats. In unity there is strength, and, for the first time in recent Connecticut history, manufacturers were banding together to create political muscle strong enough to make a difference.

 

Lessons Learned

States that traditionally hosted most of the nation’s manufacturing are losing much of it to a steady migration of manufacturers, both large and small, to southern right-to-work states. These states are agile, with a great thirst for investments, which create good jobs and push down high unemployment rates. Their counties offer huge tax and other benefits to migrating companies. States like Connecticut are on the losing end of this migration, but have not met the issue head-on because of political inertia born of an inherent dislike of manufacturers.

This is a strong and unpopular claim, but Summit I gave solid evidence of its existence and power. Summit III again gave evidence of this covert, pervasive force within the general population, especially in the cities. It is reflected in the viewpoints and actions of the Legislature and many elected officials. It is this negative image that Connecticut’s coalitions of manufacturers seek to topple and change. Banding together was a good idea: it has already generated good results. The same could be achieved in other States, and in some places it has been achieved. It would seem that coalitions of small manufacturers can make a difference if they organize, create agendas at the local level and actively court politicians who are inclined to become allies.

Those who oppose coalition goals should be identified and targeted for local lobbying efforts or, if appropriate, for defeat in favor of a pro-manufacturing candidate. This is the strategic thinking emerging in Connecticut, a northern state steadily losing manufacturing companies and related employment. The same might apply to other States in the same predicament. But if nothing else, the Connecticut experience suggests that small manufacturers—and this certainly includes moldmakers and injection molders—can become a political force at the local level capable of influencing area legislators. Coalitions of area groups need to be formed to project unity and political power. It is then necessary to begin a process of image improvement, which is currently uncharted territory, for the unknown road ahead. The journey may be crucial for a small manufacturer hard-pressed to stay in an expensive rust-belt city.