Chair Men Build A Sturdy Future

Factories streamline operations to battle recession

 

Originally Posted on NJBiz.com

By Beth Fitzgerald

 

February 2, 2009

 

By retraining its workers in lean manufacturing processes, workers at Lakewood’s Gar Products factory now are able to completely assemble a chair in two minutes.

 

At Lakewood furniture maker Gar Products, workers build a new chair every two minutes out of wooden parts shipped from millwork factories in Europe. With some help from the state, Gar is preparing to bring that overseas production to New Jersey.

 

“We want to switch from being an importer of components, and instead fully fabricate the furniture right here,” said Sam Garfunkle, 31, vice president of operations and a member of the third generation of the 52-year-old company. Turning raw wood on a high-tech lathe in Lakewood — instead of using imports — will add 15 to 20 employees to the 94 already working for Gar Products.

 

The company’s decision to stop outsourcing and create more U.S. factory jobs would be impressive at any time — but especially so now, with the economy mired in a recession. Economic downturns are particularly tough on manufacturing in New Jersey, where the high cost of doing business is a liability even in the best of times. The state lost nearly 16,000 manufacturing jobs in 2008, according to the state Department of Labor, and for every Gar Products that hires new workers, other firms pack up and leave.

 

Typical of the slow evaporation of New Jersey’s industrial work force is Pike Machine Products, a maker of glass display doors for supermarket refrigerators and home wine and beverage coolers. When the Elizabeth plant shut down late last month, 71 workers at the 53-year-old operation lost their jobs.

 

Russell Weisman, chief operating officer, said Pike was sold in 2005 to Los Angeles-based Anthony International, and the Elizabeth production is being shifted to underused Anthony plants in California and Georgia. “This is a case of the economy in general: people are building fewer new homes and stores, and they need fewer refrigerator doors,” Weisman said. “This is all very disappointing and upsetting. A lot of very good people are being put out of work, and that’s the worst part of the whole thing.”

 

While the long-term trend has been a decline in factory jobs in New Jersey, Gar Products belongs to a culture of survivors that embrace technology and figure out how to compete in a global economy.

 

“Any time you visit a manufacturer who is succeeding in the Garden State, they will show you ways they have used business process improvement and work-flow analysis to reduce waste, and save time and save resources, and do more production with fewer employees,” said state Labor Commissioner David Socolow.

 

Gar Products makes 500 chairs a day and sells them to restaurants and hotels — two sectors in severe peril from the sudden drop in consumer pending. “Sales

 

are off 10 percent, but we’re fortunate: we own our inventory, building and equipment, and we aren’t leveraged with debt,” Garfunkle said. “Our customers are looking for a deal. We can offer discounts, and so far that’s working. We’re anxious to see what 2009 brings.”

 

Gar also gained a competitive advantage by retraining its workers in lean manufacturing principles, which emphasize cost-efficient manufacturing methods taught by the nonprofit New Jersey Manufacturing Extension Program. These and other production changes taught workers how to produce a chair in two minutes, and slashed in half the production space Gar needs in its 100,000-square-foot factory.

 

Bob Loderstedt, president of NJMEP, estimates there are about 11,500 manufacturing firms in New Jersey, and 98 percent employ fewer than 500 workers. So far, the recession is keeping Loderstedt pretty busy.

 

“Manufacturers are reaching out to us to see what we can do to help them reduce costs in their factories and their offices,” he said. Some firms are laying off employees and cutting back training, “but we tell them, ‘Even though you are reducing your head count, use the training dollars and really train your employees so that when the economy turns around, you’re ready to compete.’”

 

New Jersey manufacturers employ a little more than 295,000 workers, and another 180,000 work for suppliers, together comprising about 12 percent of the state’s nearly 4 million work force, according to Philip Kirschner, president of the New Jersey Business and Industry Association, which five years ago launched a campaign to battle the steady erosion of factory jobs.

 

Gar Products is seeking financing from the state Economic Development Authority to purchase computerized wood-milling equipment, to be installed where Gar now keeps its huge inventory of imported wooden chair parts. Instead of European beechwood, the company plans to buy from a lumber mill in Maine.

 

A significant share of EDA loans goes to manufacturers to help save jobs. An EDA spokesman said that in the three years ended December 2008, the agency assisted 195 manufacturing projects with $314 million in financing assistance and tax incentives.

 

Manufacturing jobs were declining in New Jersey long before the economic crisis began, yet the state’s manufacturing output kept growing — to $40.8 billion in 2007, from $38.6 billion in 2003, according to the most recent figures available from the federal Bureau of Economic Analysis. The state’s manufacturing work force fell from 350,400 in 2003, to 295,100 as of December 2008.

 

Socolow said the decline in jobs reflects layoffs, companies that shut down or moved out of New Jersey, and the increased productivity that allows factories to get more output with fewer people. He expects New Jersey to create new manufacturing jobs in alternative-energy production and other green initiatives.

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