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WHILE MANUFACTURING
HAS DECLINED BOTH NATIONALLY AND IN ST. LOUIS, THE REGION'S LEADERS
ARE WORKING TO KEEP MANUFACTURING A KEY DRIVER OF THE REGIONAL ECONOMY.
By Bob Schaper
Employing 190,000 workers across 4,000 establishments—a whopping
17 percent of the private sector—no one doubts that the manufacturing
industry is alive in St. Louis.
Jerry Daniels, vice chairman & CEO of ESSI, leads
a panel at the manufacturing symposium held at the
RCGA headquarters. Joining him are Mike Camp, plant
manager, General Motors; Don Wainwright, chairman
of Wainwright Industries; John Van Gels, vice president
of operations and St. Louis site manager, Boeing;
and Jim Miller, managing division of Wyeth BioPharma. |
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But is it well?
A recently completed study sponsored by the RCGA suggests that the
answer, at least for some manufacturers, is not anymore.
“During the 1990s St. Louis experienced broad-based setbacks across
its manufacturing base,” the study finds. “Manufacturing declined
by 18 percent compared to a four percent decline for the nation.
At the end of the decade, St. Louis lost six percent of its manufacturing
jobs.”
The report, “Positioning St. Louis in Advanced Manufacturing Clusters,”
makes clear the importance of manufacturing to the region. Mitch
Horowitz, who coauthored the study with Dr. Walt Plosilla for the
Battelle Technology Partnership Practice, says manufacturing remains
a critical economic driver.
“It’s an important element for quality of life,” Horowitz says.
“The average manufacturing job pays $51,000 a year, versus $36,000
for the average private sector worker.”
"THE STUDY RECOGNIZES
THAT WE ARE LOSING MANUFACTURING JOBS. IT BRINGS US
BACK TO A FOCUS ON CERTAIN INDUSTRY CLUSTERS, WHERE
WE DO, IN FACT, HAVE A FAIR AMOUNT OF STRENGTH."
Jerry Daniels
vice chairman & CEO,
Engineered Support Systems Inc.
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Analyzing St. Louis manufacturing can be a daunting process. “It’s
so integrated and ubiquitous, but it’s so diverse,” Horowitz says.
“It’s very hard to put your arms around it, because it has such
a long history.”
Rather than viewing manufacturing as a gigantic, amalgamated sector,
Horowitz and his Battelle colleagues broke area industries into
“clusters,” each with specific weaknesses and strengths.
“At one point in time, everything was related to everything,” Horowitz
says. “Today, it doesn’t work that way. You have some quality manufacturing
industries that have multiple markets.”
Horowitz says the majority of the 11 manufacturing clusters identified
in St. Louis fall into a transitional category. To move the region
forward, leaders should concentrate their attention on those clusters
that are trending upward.
As the report itself states: “Trying to be everything to everyone
is a recipe for failing to meet the needs of anyone.”
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The Solae Company produces soy-based ingredients with
direct health benefits for the industrial market and
is an example of a company that fits into the food
products and life sciences manufacturing cluster. |
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After discussions with local companies and the RCGA, two groupings
of manufacturing clusters emerged as logical focus areas: food products
and life science manufacturing, and automotive and aerospace/defense.
Jerry Daniels, vice chairman and CEO of St. Louis-based Engineered
Support Systems Inc. (ESSI), a manufacturer of military support
and electronics equipment, agrees with the study’s key conclusions.
“The study recognizes that we are losing manufacturing jobs,” Daniels
says. “It brings us back to a focus on certain industry clusters,
where we do, in fact, have a fair amount of strength.”
The automotive and aerospace/defense sector, for example, already
accounts for 21 percent of the manufacturing base in St. Louis.
Mike Camp, plant manager at the General Motors—Wentzville facility,
says the existing transportation system is a strong point for the
region.
"THE SIX REGIONAL AIRPORTS,
VIABLE WATERWAYS, AN EXTENSIVE INTERSTATE SYSTEM AND
RAIL SYSTEMS ARE KEY STRENGTHS THAT SUPPORT INDUSTRY
OF ALL TYPES. WE MUST MAINTAIN THE VERY IMPORTANT
AND VITAL TRANSPORTATION INFRA-STRUCTURE THAT WE ARE
FORTUNATE TO CURRENTLY HAVE."
Mike Camp
plant manager,
General Motors
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“The six regional airports, viable waterways, an extensive interstate
system and rail systems are key strengths that support industry
of all types,” he says. “We must maintain the very important and
vital transportation infrastructure that we are fortunate to currently
have.”
The report identifies four key strategies to improve the automotive
and aerospace/ defense cluster group: (1) addressing supplier productivity,
capabilities and distinctiveness; (2) examining potential for an
integrated regional supplier park; (3) developing the region’s areas
of unique advanced manufacturing potential in embedded systems and
advanced machining technologies; (4) developing the region’s capacity
to incubate and launch advanced manufacturing companies.
“You can’t take that cluster group for granted,” Horowitz says.
“The region needs to improve and expand the efforts of these companies.
And that requires taking the next step in terms of efforts to help
it.”
Camp agrees: “The possibilities are there. Business, labor and government
must work together on long-term strategic projections and business
plans that will benefit the growth in this region in the long term.”
In the food products and life science area, the area’s focus should
be in developing alliances between the two distinctly different
clusters, Horowitz says.
“Clearly where the world’s going is ‘nutraceuticals,’” he says.
“This means creating more foods with direct health benefits, and
ultimately looking at food products and plants as delivery mechanisms
for specific therapy.
“This isn’t about a new grain. This is about a new generation of
products.”
Spearheading the development of these “next generation” food products
is St. Louis-based The Solae Company. A joint venture between DuPont
and Bunge Limited, Solae specializes in soy foods.
“We produce soy-based ingredients for the industrial market,” says
Mark Stock, vice president of operations for the company. “We have
to figure out how to get more mileage out of our central location.
We have reasonable economics associated with where St. Louis sits
relative to the customers. I don’t know that we’ve done as good
a job of exploiting that in the St. Louis region as Memphis has.”
In addition to food science (which obviously includes beverage powerhouse
Anheuser-Busch Inc.), Horowitz sees great opportunity in terms of
biologic production for new drugs. “That’s really up for grabs,”
he says. “There’s no reason why St. Louis can’t get a very good
share of that (life science) activity.”
Other key strategies the report recommended for food products and
life science manufacturing include: (1) creating a vibrant cluster
in nutrition and human health, addressing regulatory issues, clinical
trials, shared infrastructure and education and workforce training;
(2) developing a world-class biomanufacturing workforce from lab/production
technician to high-level scientific and engineering professionals;
(3) growing the presence of biomanufacturing activities as a regional
center of excellence in St. Louis.
Meanwhile, back at ESSI, Daniels is working with the RCGA to develop
what he calls a “manufacturing scorecard” for the region.
“What I’m suggesting is that this region list those things that
are important to the industry in any region,” Daniels says, listing
labor relations, cost of living, transportation systems, etc. “We
simply go and identify those key parameters and then we grade ourselves
compared to the rest of the nation.”
Daniels also helped organize a manufacturing symposium that was
held at the RCGA headquarters in May. The event brought dozens of
business, political and academic leaders from around the region
to discuss the state of manufacturing.
Horowitz says the time is right to rethink old ideas.
“St. Louis manufacturing stands in transition,” he says. “The 1990s
were a difficult time. Now is the time for thinking through what
are the types of approaches that will keep manufacturing the key
driver it has been.”
Daniels agrees.
“We have had tremendous success as a manufacturing region,” he says.
“I believe that if business and government get together, there’s
absolutely no reason why we can’t turn that around and find ourselves
bringing new businesses to the region.”
Bob Schaper is a free-lance writer based in St. Louis.
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