Manufacturing propels state's job growth
Companies like Terex, a builder of aerial lifts, have hired hundreds of new workers as demand slowly rises. The state's manufacturing sector added 14,600 jobs — most of that growth in the Seattle area — over the 12 months ending in March, leading all other sectors.
Seattle Times staff reporter
Inside a large Redmond warehouse, hundreds of workers crank out blue Genie aerial lifts, telescopic booms and scissor lifts with relentless efficiency.
Director of operations Clint Weber walks along the color-coded assembly line and puts his hand on a steel section of the S-60 telescopic boom. He smiles.
"Warm. That's when you know the throughput is right," he said. "Like a bakery, right? You don't want to eat cold bread."
Since December, Terex Aerial Work Platforms has hired about 500 workers in Washington amid rebounding demand for its lifts.
The state's manufacturing sector added 14,600 jobs — most of that growth in the Seattle area — over the 12 months ending in March, leading all other sectors, according to data released Wednesday by the Employment Security Department.
"It's been the highlight of the past 12 months," said Dave Wallace, the department's senior labor economist.
Manufacturers added 1,000 jobs in March, half of all private-sector job growth for the month, according to Employment Security.
The sector accounts for about a quarter of all job gains since February 2010, the recent low point in employment. Hiring by Boeing and other aerospace firms contributed more than half of those new manufacturing jobs.
But other types of manufacturers have added jobs as well.
They include producers of fabricated metal, machines, food products, electronics and industrial equipment.
"It's not only about the jobs numbers," Wallace said. "These tend to be pretty high-paying jobs. They tend to have a stronger economic impact."
Makers of transportation equipment, a category that includes aerospace, had the biggest impact among all manufacturers, paying $16.5 billion in wages in 2010, the latest year available. The average annual wage: $87,668.
The relatively few workers in iron and steel forging made $203,105, the highest average wage.
To be sure, certain types of manufacturers in the state haven't bounced back. The deep contraction in home construction hurt producers of furniture, lumber and building materials.
And declining demand and lower commodity prices have contributed to layoffs at paper and pulp mills. On Sunday, Kimberly-Clark closed its Everett mill, eliminating 760 jobs.
The Great Recession forced some manufacturers to disappear.
There were 7,193 firms and 289,286 employees at the peak in 2007, according to Scott Bailey, a regional economist at Employment Security.
Then came the longest and deepest slump since the end of World War II.
The sector proved fairly resilient: About 6,800 firms survived.
In March, manufacturing employed 277,900.
As lower-wage manufacturing jobs disappeared, the average wages have risen among remaining workers: In 2010 it was $64,925, up 9 percent from 2007.
Manufacturers, meanwhile, "are making more money than they've ever made," said Dave Gehring, executive director of the Manufacturing Industrial Council of Seattle, which has about 60 members.
As a group, factories here are healthy because many supply capital goods to businesses, such as oil exploration and development in Alaska and Canada, he said.
At the same time, prices for seafood and agricultural commodities held up well during the recession, Gehring said. Those industries go through equipment quickly.
And shipbuilding and repair work has kept thousands employed from Bremerton to Ballard, he said.
"We have generations of engineering knowledge, craftsman knowledge in a phenomenal location surrounded by economic activity that needs this stuff," he said.
Terex's presence in Redmond is overshadowed by Microsoft, the city's largest employer.
The nondescript Redmond industrial park looks like any other, except for the blue Genie lifts in the parking lot, rising above the roofline like mechanical dinosaurs.
"We've always stayed low profile. No one knows who we are," said Matt Fearon, vice president and general manager for Terex Aerial Work Platforms Americas.
Even so, its footprint here is the equivalent of more than five Costco stores.
Step into two beige buildings on its north campus, and you know you're in a factory. The smell of paint and diesel hits the nostrils. The din of metal being cut, welded and bolted has a rhythm to it.
Combined with its facilities in Moses Lake and North Bend, Terex has nearly 1.4 million square feet in the state, which is still the flagship of a global manufacturing operation that has plants in South Carolina, South Dakota, Italy, China and Brazil.
More than 80 percent of the 3,000 people employed by Terex Aerial Work Platforms work in Washington state, where the Genie lift got its start.
In 1966, Bud Bushnell bought the manufacturing rights to a lift that hoisted a platform up on compressed air.
In 2002, the local company was bought by Westport, Conn.-based Terex, one of the leading manufacturers of heavy construction equipment.
Terex's lift division laid off nearly 500 workers in fall 2008, after convulsions in global markets and a sharp slowdown in construction. The company was able to adapt quickly to the downturn because of its business model.
Most of the fabricated parts, steel and aluminum that go into a Genie lift are made in the state, the company says, allowing it to match inventory with orders and stay ahead of rivals in the Midwest, Canada, Europe and Japan.
"We keep our capital investment low so we can compete with anyone who comes in to attack us globally," Fearon said.
Such vertical integration also lets the company meet customers' needs quickly. It keeps its 280 engineers — half focused on product design, half on manufacturing — next to the factory so changes can be tested and rolled out fast.
The factory prides itself in practicing the kaizen methods of continuous improvement made famous by Toyota.
Managers, engineers and production workers identified about $300,000 in savings last year from tweaking the manufacturing process.
This year, Terex Aerial Work Platforms set a savings target of $1 million.
For now, the sales forecast is as blue sky as the trademark color of the lifts. The company says it believes the industry will see healthy sales for the next five years, driven mainly by large equipment-leasing firms' need to replace aging fleets.
The fact that banks are lending again to smaller firms helps, too.
"Over the last eight months, we see smaller companies are able to get financing," Fearon said.
Half the workforce at its Redmond facility doesn't speak English as a first language. Most have been hired locally, usually as temporary workers later made permanent, the company said.
"The workforce we have here is outstanding," Fearon said.
While Terex doesn't disclose its average wage, the company said it's competitive and pays above the median for its sector.
Terex still has difficulty filling jobs for welders, machinists and maintenance technicians, Fearon said, because it's competing against Boeing and other manufacturers for talent.
"We have to train inside to bring people's skill up," he said.
There's a small learning lab where new recruits get a week's immersion in mechanical tasks.
"A lot of people haven't been in a job where they had to tighten a bolt or know mechanical skills," Fearon said.
"We instill a culture around safety and quality. It's been a huge success."
Sanjay Bhatt: 206-464-3103 or email@example.com