Small manufacturers' pulses perk up

David Hartwell, the manufacturing company owner who reversed his decision to lay off workers last January, must be doing something right.

And let's hope that his Bellcomb Technologies is something of a proxy for the U.S. manufacturing economy, because it's showing early signs of a rebound.

Hartwell took a hit to cash flow for several lean months earlier this year by deciding to retain about 20 of his 100 employees.

"Was it the right decision?" Hartwell, 53, asked rhetorically. "No fricking question about it. We've been painting the plant a little. We delayed some of the new equipment we are ordering that is going to increase our capacity but reduce our labor requirement. Most importantly, we sent a message to everybody that we're going to invest in ourselves, buckle down and work through this together."

Last winter, Hartwell and certain other CEOs were aghast at how swiftly and deeply companies cut workforces. Some did so to survive. Others did so to preserve profits. To be sure, Bellcomb is not making a commodity product for the housing or auto industries, which have been hammered. It's diversified and well run. Maybe you make your own luck with smarts, innovation and a little compassion for working stiffs.

"We're lucky," Hartwell said. "We've actually had to call back several temporary employees through an employment agency."

Hartwell now believes he has a chance at a 20-plus percent sales gain this year, down a little from Bellcomb's 10-year average. But not bad.

And it's about to ramp up production for a new product, a reusable, modular "Future Panel," an interior wall product that can be used to board up empty offices and storefronts. The product costs about the same as drywall, which is commonly used for boarding up storefronts. However, it comes with its own cart and can be reused for years, making it more economical and "green."

Ironically, some of the heaviest demand is coming from mall operators who are boarding up retail shops that have succumbed as consumers cut back on spending because they're out of work or rebuilding a nest egg.

Positive signals

Meanwhile, at little plastic-injection mold shop, Anchor Tool & Plastic in St. Louis Park, second-generation owner Steve Rogers, who had to let a couple of people go last year, expects to increase employment from 15 to 20 mold technicians, salespeople and others by year's end. Rogers expects sales to grow from $1.8 million in 2008 to $2.5 million in 2009.

Things were not looking so good earlier this year for the integrated parts designer and manufacturer. The 40-year-old company serves a variety of industrial and defense contractors with tiny parts that help electric motors run.

Rogers credits an integrated approach and a commitment to quality as reasons for the rebound.

Is this the tidal wave of a fast-rushing economic recovery?

No.

Consumers, who constitute two-thirds of the U.S. spending, are still on the mat, the cash-for-clunkers program notwithstanding. This recovery, in its infancy, will be ignited slowly by business and industrial spending on capital equipment and next-generation technology.

"Despite the lack of government programs designed to specifically stimulate smaller manufacturers, the bottom to this business cycle may be in sight," Douglas Woods, president of the Association for Manufacturing Technology said Monday. July statistics by two trade associations that track machine-tool and related sales showed positive signs. Machine tool orders are a leading indicator of industrial production.

I've had it with booms fueled by funny-money mortgages, greedy bankers, illusory profits, toady regulators and sweatshop importers.

I hope that by fall I can report that more manufacturers are adding workers to make more next-generation components, low-energy vehicles and more efficient building materials, all of which will plant the seeds of a sustainable, long-term recovery.

That way consumers will save more, which is a good long-term fix for the economy, and be able to spend the rest on those still-hungry retailers.