There was a lot of talk during the election campaign about bringing jobs back to America, and revitalizing manufacturing.
That’s a topic that resonates in Connecticut, where there’s a complex ecosystem of aerospace parts makers.
But how do you achieve a thriving manufacturing business in a globally competitive world? Are we bound to keep exporting work to cheaper nations?
You’ve probably never heard of the company Aerocision, but the complex metal shapes it specializes in making are currently flying in some of the world’s most advanced jet engines, assembled by major companies including Rolls Royce and General Electric.
But it wasn’t always so.
When CEO Andrew Gibson and his partner took over this company in 2008, he had a pretty candid assessment of its capabilities.
“We were the worst machine shop in all of aerospace, and I mean the worst,” he said.
They were bleeding business and losing clients. Eight years later, the tiny Connecticut shop with its 66 employees, beat out global competition to be named supplier of the year for one of the world’s biggest engine makers, Rolls Royce.
Aerocision has achieved its turnaround largely through investments in technology.
On the shop floor, long-time employee Joe Greco worked a new $150,000 grinding machine. At 63, Greco has been with the company for 30 years, and he’s enjoying the changes.
“It’s much, much faster, more efficient. Stuff that used to take me two hours to grind now only takes me 12 minutes,” he said.
A new computer system means Greco never has to go looking for his next task or wonder where supplies are coming from. He can simply look it up.
The shop machines and makes parts from unusual, hard-to-work metal hybrids, many of which have to operate in the hottest parts of jet engines.
Guy Nigro, another veteran machinist at Aerocision says he frequently has to invent ways to make things. “The new parts coming into the company every day are more difficult. You wouldn’t even have been able to make this stuff five years ago, but now it’s becoming a norm for us,” he said.
The robotic machines the company has invested in make it possible.
Andrew Gibson pointed out a new five axis machine. Aerocision got a loan from the state of Connecticut to buy the equipment, and he said now they’re able to save as much as five hours of set-up time on each part.
“We’re doing two things at once. We’re turning and we’re milling. So I would say our costs have been cut on those parts by 40 percent,” said Gibson.
That’s critical in an industry where there are no price increases built into long term contracts. Small machine shops must constantly find a way to drive down the cost of what they make, even as the complexity increases.
“If you can make a product in America by shrinking the labor cost, but investing in technology, you’re going to win,” said Gibson.
In fact, despite the huge cost of new machinery, actually the biggest expense for a business like this is labor.
Gibson said he is hiring right now, but he’s specifically taking on high skilled roles in areas like engineering, design, and quality control -- people who will work on ways to cut his labor costs in the long run.
"So we are going to be hiring five high-wage people," he said. "Those people, their job is to bring our technology to life and lower the labor cost. If we don’t do that, I’m looking you in the eye and telling you, those jobs will go overseas where they can automatically lower the labor content."
Gibson fully believes manufacturing has a great future in the U.S., but it will not be a future that includes mass employment of lower skilled workers.