Panel: Local manufacturing renaissance hindered by skills, confidence gaps

Manufacturing in Illinois and the nation has seen a renaissance in the past few years, growing at a pace that has helped pull the economy out of recession.

However, several issues are still keeping manufacturers from growing at a faster pace, a panel of experts told about 100 suburban business executives Thursday at the Daily Herald Business Ledger Newsmakers' Forum on Manufacturing and International Business at the Oak Brook Hills Resort.

The panelists all noted that three drivers have been key in the industry's renewed growth: people, processes and technology. But while manufacturing has grown over the past years, it has done so with "leaner" methods, according to Michael Massaro, partner in charge for Elk Grove Village-based accounting firm Porte Brown. In Chicago alone, he said, there were 690,000 manufacturing jobs in 1990, while last year that number was at 410,000.

"What we're really seeing is that while manufacturers are doing better, they're doing it with less," Massaro, who heads up Porte Brown's manufacturing, distribution and retirement services group, said.

However, Massaro said a lack of confidence in the political climate and bank lending has kept the industry from growing at a time when it needs the boost.

"The overwhelming problem that we're seeing is overall confidence in our society," he said, adding that a number of government tax incentives that helped businesses in the past were eliminated this year.

"Those things are off the table now, right when we really need them the most," he said.

Despite the issues, David Boulay, president of the Illinois Manufacturing Excellence Center based in Peoria, said Illinois still plays a key role in the global marketplace. He compared Illinois manufacturing to a well-balanced mutual fund with a very diverse number of products being produced locally. "If it were your retirement mutual fund, you'd be really happy with the diversification that you see," Boulay said. 'It's a very impressive pie chart with not one industry being dominant."

The state is also a hub where decisions in cash flow and supply chain are being made on a global level, which also give the local industry an advantage, Boulay added.

Kevin Velan, vice president of Chicago-based insurance broker Marsh USA, said he sees a trend of mergers and acquisitions among companies in the next three to five years,

"If you do come up with a new product or have a good manufacturing deal, you might grow so fast that someone's going to pluck you up and pay you a large amount of money for your business," Velan said.

All three noted a skills gap remains and said more needs to be done both my manufacturers and local colleges and universities to provide training and eliminate the "dark and dirty" perception some may still have of manufacturing jobs.

Presenting sponsors for the Newsmakers Forum were Porte Brown and March USA, and American Slide Chart/Perrygraf was a corporate sponsor.