Like a long, cold winter in the U.P., manufacturers above the bridge experienced a long downturn in business starting in 2008. However, spring may be on the way for many U.P. manufacturers, as evidenced by increased sales, building expansion and diversification.
"Things are getting better," says Gwen Worley, director of Michigan Works in Sault Ste. Marie. "Some businesses are actually having difficulty finding skilled workers."
Precision Edge, in Sault Ste. Marie, is one such company. Business has remained steady for this company, which manufactures surgical tools for the orthopedic industry. The company had to build another facility in the past year to keep up with demand and finding skilled help is difficult, a problem Michigan Works and others are assisting with.
"We're doing well," says company president John Truckey. "We've experienced 17 percent growth last year, but only 3 percent growth this year, which was by our own choice." Truckey says they need to get the new facility in full operation and workers trained and hired before they commit to expanding production.
Another company in the eastern Upper Peninsula doing well--in fact, they've just reported a banner year--is Superior Fabrication in Kinross.
"We've had our best year yet, with the fiscal year ending in October," explains Tom Armstrong, VP of sales. Armstrong says the future is looking bright for his company, which services oil and gas markets, making things like steel masts for the front end of forklifts. He says it has been important to diversify his line of products since the downturn. They currently employ 90 people, 140 during peak production.
R & B Electronics, also in the eastern end of the U.P., is cautiously optimistic about the future, mostly because they rely on defense and government contracts.
"We're looking at expansion, but we're holding back," says Wayne Olsen, general manager at R & B. Orders have picked up, he explains, but they're waiting to see what cuts, if any, the federal Department of Defense might make. One of their biggest customers is Boeing.
Down in the banana belt of Escanaba things have thawed considerably for
Delta Manufacturing, a company that manufactures innovative equipment for the rail industry. Jean and Harold Ross started the company in 2006, just prior to the collapse on Wall Street. The couple, who had prior business experience, apparently saw the glass as half full during these lean years and followed suit with their company.
"It made us lean and mean, more efficient," says Jean Ross, the company’s president.
One of the more innovative pieces of equipment that Delta manufactures is a portable lathe for the "truing" of train wheels. The future appears bright for this company, which has a solid workforce of 18 people and brings new money into Michigan.
Over in Houghton County, things are looking up for
Northern Hardwoods, a specialty wood products firm. They too suffered lean times during the recent recession. However, the climate looks good for the company, according to company representive John Kantola. They, too, have streamlined their operation over the years, ensuring that nothing goes to waste in the process of turning trees into specialty wood products. For instance, sawdust is sent to companies that make things like toilet seats and liquid smoke, and the bark goes to a paper mill for fuel; nothing is wasted, says Kantola.
Not all companies in the U.P. experienced a downturn around 2008, says Phil Musser, executive director of the Keweenaw Economic Development Alliance and board chair of the Michigan Tech Enterprise Corporation (MTEC) SmartZone. Grants for businesses and the SmartZone concept have helped many businesses survive and even thrive in the last few years.
Musser says with many companies in the U.P. having procurements with the military--niche markets--they didn't experience the recent downturn in the economy like other companies did. He says it's uncertain what the future holds, considering talk of cuts to the military, but for now, business is good.
Many U.P. businesses also have weathered the recession by diversifying into other markets, such as high tech.
"Some of these companies are expanding into commercial markets," Musser says, especially of companies that sell to aeronautics firms, a sector that appears to be growing rapidly in the U.P.
"We experienced a distinct fall out in 2008," says Musser, referring to many of the manufacturers up in the Keweenaw peninsula. "However, the majority of these companies are coming back," he explains. "We're doing a lot of expansion loans."
The economy in Michigan's Upper Peninsula is no longer just about how many logs are rolling down the highway or how many tons of taconite pellets are being loaded on the freighters. Although those still are important industrial sectors in this region, there are U.P. businesses doing a lot of different kinds of manufacturing, which is good for the overall economic picture here in "God's Country."
Neil Moran is a copywriter and owner of Haylake Business Communications in Sault Ste. Marie.