Minnesota needs a strategy to help small manufacturers grow larger -- not to cede its vital manufacturing base, an expert insists.
Gov. Tim Pawlenty and St. Paul Mayor Chris Coleman could have saved the airfare to Detroit earlier this week, because there was no way even a resurgent Ford Motor was going to revive the St. Paul truck plant that's gong to shut down when Ford ends production of Rangers next year.
"Nobody in this administration knows anything about auto plants and what they need," said Fred Zimmerman, a veteran of industry and retired manufacturing professor at the University of St. Thomas. "To have an economic development program ... and I've been around Democratic, Republican and the Ventura administration, you need people with industrial backgrounds or staff who know about it.''
Zimmerman has long warned that Minnesota and America have ceded their vital manufacturing base.
"Since 1980, Minnesota has built one plant of 500,000 or more square feet and that is the now-closed ADC Telecommunications plant in Shakopee,'' he said. "Tennessee built 20. Foreign companies are building plants in Indiana. Ford said it wanted to be nearer to its supply chain, but that's just an excuse."
Ford signaled its iron-clad intentions in 2009 to close the plant, which has shrunk from 2,000 to 950 employees. Ford hasn't gone into detail on its reasons, other than to say it wants to focus on retooled plants in Michigan, Ohio, Illinois, Missouri and Indiana that can produced several models and that are closest to its suppliers.
Zimmerman points out that the St. Paul plant was at a particular disadvantage because it lacks a on-site metal-stamping plant from which doors, fenders, hoods and other parts can be made from rolled steel. Those bulky components are now shipped to the St. Paul assembly plant from out-of-state at big cost.
"The stuff comes to St. Paul from about 11 different locations, and it's a lousy, expensive [alternative to a stamping plant]," Zimmerman said. Most of the new plants built in the United States by Japanese manufacturers have on-site stamping plants, he said.
Coleman and Pawlenty were armed with a basket of financial incentives approved by the Minnesota Legislature last spring, including a plan for St. Paul to buy the huge facility on the Mississippi River, give Ford millions to invest in retooling and lease from the St. Paul Port Authority.
To be sure, the St. Paul workforce is very productive, according to past Ford and other studies reviewed by Zimmerman. But the decline of the Ranger line, the cost over overhauling the plant and the plant's distance from Ford's industrial heartland were too much to overcome.
St. Paul is not alone. Ford has closed about half its plants and cut its North American hourly and salaried workforce nearly in half to 70,000. It has since started to announce some expansions in Michigan and elsewhere over the last year as its sales rebounded faster than competitors.
Minnesota has lost about 87,000 manufacturing jobs of all kinds since 2001, Zimmerman estimates.
Some of that has been to lower-cost Southern states, as well as to Asia as Minnesota companies outsourced the work -- a trend that's been going on for 30 years.
Some of that has enabled operators like 3M, Donaldson and Fastenal to expand and add better-paying jobs in technology, operations and marketing.
Regardless, the question becomes: What's the best way to grow next-generation Minnesota technology-development and manufacturers such as Stratasys, Protomold, Pentair, Compellent, among others, that serve global markets with computer-designed protype parts, tools, data storage and manufactured goods that use less energy and water?
Pawlenty's eight-year-old "JOBZ" program to jump-start rural towns with tax breaks for select companies has been roundly criticized by the state auditor and legislators for giving breaks to some outfits that just may have expanded anyway or started elsewhere in Minnesota.
Zimmerman said some good work is being done by the Minnesota Chamber of Commerce's "Grow Minnesota" initiative, which works through local chambers and area vocational and technical schools to assess what local companies need to prosper and expand in terms of expertise, marketing and trained workers.
He said Independent Party gubernatorial candidate Tom Horner seems to have the best strategy for linking two-year colleges and technical schools with the jobs in welding, tool-and-die making, chemical plating, food processing and safety and electronic technologies.
"We've conned the young people into thinking they can all get a four-year degree and go into 'overhead,'" said Zimmerman, referring to nonproduction jobs such as accounting, management or advertising. "The vocational schools supply the people that industry will need to expand in Minnesota. They have quite favorable placement rates for their graduates.''
Said Zimmerman: "We won't do it with a bunch of bureaucrats flying around handing out training grants. It's going to be in helping small businesses get bigger."
Neal St. Anthony • 612-673-7144 • email@example.com