Manufacturing thrives in northeast Indiana
By Doug LeDuc | Greater Fort Wayne Business Weekly
The fortunes of Fort Wayne are strongly tied to the prosperity of its manufacturing, which the latest data from the Census Bureau’s American Community Survey showed employed 17.8 percent of its workers in 2015.
By comparison, manufacturing’s median labor share for 300 of the nation’s more industrial cities was just 9.4 percent, according to a Peer Cities Identification Tool launched earlier this year by the Federal Reserve Bank of Chicago.
The Chicago Fed developed the online benchmarking tool to help cities with similar characteristics learn from each other. An official from the bank visiting Fort Wayne identified labor share as a defining characteristic of the city.
Industrial trends such as offshoring and especially automation eroded the country’s manufacturing employment base from 1970 through 2015, and the peer cities tool showed a median manufacturing labor share decline for the 300 cities in the data set for that period was 61 percent.
Fort Wayne showed greater strength in the employment sector, with a smaller manufacturing labor share decline of 44 percent.
Compared with the rest of the country, northeast Indiana has done exceptionally well in retaining and expanding manufacturing because of its work ethic and skills, John Sampson, president and CEO of the Northeast Indiana Regional Partnership, said in an email.
“Some of this is rooted in our agrarian heritage, which created a generation of workers who appreciate the intrinsic value of hard work and because the culture of the farm produced workers who have a basic mechanical aptitude fundamental to the know-how to make things work,” he said.
“At the heart of what we do well today is a combination of what we did well in the past and because of how we learned to adapt and survive in the global marketplace.”
Columbia City-based Micropulse is an excellent example of a manufacturer leveraging the region’s industrial strengths to thrive through adaptation.
Brian Emerick founded the company in 1988 as a garage tool-and-die shop that did everything for everybody at a time when the economy and manufacturing environment were a little more forgiving.
As it became increasingly difficult to remain a generalist, Micropulse reinvented itself to focus on medical devices, which he said proved to be an excellent decision.
By specializing in low-volume manufacturing of complex or close-tolerance parts - work that is difficult and highly regulated - the company has grown to about 300 employees working three shifts in a 260,000-square-foot facility with room for further expansion of its operations.
With almost a third of the world’s orthopedic industry in the area and hundreds of cottage businesses that have sprung up to supply its original equipment manufacturers as well as their suppliers, Emerick can’t think of another place he’d rather be, he said.
“With our universities and tech schools, we’ve got it all; I feel really good about that infrastructure for education. We have low unemployment but we continue to find good employees,” Emerick said. “As far as electricity costs too, I don’t think could buy it any cheaper anywhere else. When it comes to taxes and all that, it’s one of the better states in the nation.
“Northeast Indiana is the most regionalized portion of the state, as far as working together, and that is a real advantage not only for manufacturing, but for quality of life.”
Indiana and local governments in the region have been very supportive of the use of industrial revenue bonds - which can reduce project financing costs by about 30 percent - and have been good about contributed to business expansion with other economic development incentives, he said.
In addition to Micropulse, a number of northeast Indiana startups have found ways to make the most of the region’s resources and specialize to become the best in the nation and in the world at what they do, Emerick said.
“Think of Lincoln Financial that hatched multiple specialty insurance firms competing from Fort Wayne and northeast Indiana,” Sampson said. “Think of what we learned from making GE motors that left with us a legacy of world class wire-pulling knowledge and experience. How many people connect Philo Farnsworth’s efforts from Fort Wayne and his contributions to the RCA television to the current day presence of global communications firms?
“This did not happen by accident. It is in our DNA: work ethic, legacy knowledge and a gritty Midwest determination to compete and win.”
Indiana is the nation’s strongest manufacturing state and the industry accounts for 29 percent of its total output, which equates to $99 billion, according to the Indiana Manufacturers Association.
Northeast Indiana’s diverse manufacturing economy supplies the country with products from medical devices to defense electronics, pickup trucks, musical instruments, recreational vehicles and aerospace and aftermarket and OEM vehicle components.
Of the region’s 11 counties, Indiana University-Purdue University Fort Wayne’s Community Research Institute says seven are in the top 5 percent of counties nationwide for manufacturing employment concentration.