Montgomery County ED/GE — Economic Development/Government Equity — grants in recent years help tell the story. In 2008, 15 projects received ED/GE funding. Eleven of those went to manufacturers. In 2009, 10 projects received ED/GE funding with nine of those were manufacturers And last year, of 17 ED/GE awards, 10 went to manufacturers.
In the most recent ED/GE funding round, of six award recommendations, four went to small- to medium-sized manufacturers, including $50,000 to American Heat Treating and $54,250 to Dayton Progress.
That shouldn’t be surprising, said Joe Tuss, Montgomery County economic development director.
“We’ve always had a fair number of manufacturing projects as part of the ED/GE program,” Tuss said. “We have said for a long time, even in the height of all the GM and automotive transitions, that manufacturing is not dead at all in Dayton and Montgomery County.”
Tuss believes “the real story” is that smart companies added value to non-commodity products, had a diverse array of customers and were able to endure.
“Now they’re poised to grow as the economy recovers,” he said.
Companies like American Heat Treating in Dayton came through the worst economy since the 1930s, but now are expanding and investing. Larry Gray, American Heat Treating president and owner, recently invested $150,000 in rebuilding two furnaces and is readying to invest another $1 million into his property and machinery.
One reason: Gray’s single biggest customer represents no more than 12 percent of his total sales.
“I didn’t put all my eggs in one basket,” Gray said.
West Carrollton toolmaker Dayton Progress has fully half of its business in the auto sector, but spread out among many customers. It would take 200 to 300 customers to reach even five percent of its total business, said Alan Shaffer, Dayton Progress chairman, president and chief executive.
Said Shaffer, “It’s a huge industry.”
Business observers stress the growing importance of smaller companies within supply chains. Michael Hicks, director of Ball State University’s Center for Business and Economic Research, said big manufacturers once owed their existence to a regular supply chain of a small number of firms, Hicks said. But since the advent of supply chain “improvements” of the last two decades, assembly plants have tried to organize production around more suppliers. In order to avoid supply disruptions, big companies often buy components from multiple suppliers. That’s especially a trend for “transplant” auto OEMS, like Toyota and Honda, Hicks said.
A former resident of Montgomery County, Hicks said smaller manufacturers are more important than ever.
Hicks predicted that 2011 is going to be a “record year” for production in the United States. 2007 was the last record year, he said. But U.S. manufacturing is achieving those production levels with fewer workers.
Said Hicks, “That’s because we’re so damn good at it.”
Contact this reporter at (937) 225-2390 or tgnau@DaytonDailyNews.com.
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