Stainless Steel City: Manufacturers hope to sustain national rep

Terry Owen: Local manufacturing is sustained by widespread demand.

Attendees of the Springfield Area Chamber of Commerce’s 2015 Manufacturing Outlook, held Dec. 2 at the University Plaza Hotel & Convention Center, heard a powerful statistic: The Queen City is No. 1 in the nation among stainless steel manufacturers.

Turns out, it’s a self-designated ranking. But according to chamber and industry officials, the city is among the top U.S. markets based on stainless steel consumption.

Since the chamber formed a Stainless Steel Manufacturing Industry Council in 2014, staff members have searched for the rating’s origins.

“We talked to some suppliers and people who are familiar with the industry and its competitors,” said Lindsay Haymes, the chamber’s manager of business assistance. “We found for sure that we are at least in the top three.”

With a multitude of stainless steel-related occupations across multiple North American Industry Classification System codes and larger markets purchasing products that are distributed to other end users, Haymes said it’s difficult to determine which city or region truly holds the industry’s top spot.

“Places like Chicago might bring in raw material at a higher level but then ship it out, so it’s hard to be specific about who is really buying the steel,” she added. “It’s hard to compare apples to apples.”

Nearly 30 companies inside the chamber’s 10-county area are in involved in the stainless steel segment of manufacturing, from tank builders to complementary businesses that service tanks and polish or machine materials. The work is noticed throughout the Midwest.

St. Louis-based Kiefco Products Integrated owner and President Jeff Kiefer, whose company supplies pipes, valves and fittings to manufacturers in a four-state region including Missouri, said the depth of expertise and skilled laborers puts Springfield’s industry on par with other stainless steel strongholds in Wisconsin and Illinois.

“When I was young in the business, I had a boss who told visitors that, whether they liked it or not, the price of stainless steel is determined between Springfield (Mo.) and Decatur (Ill.),” Kiefer said, referencing the former headquarters of agricultural processer Archer Daniels Midland Co., which moved to Chicago in 2014. “Springfield’s always been a stainless steel tank production hub for the whole country. It’s not a mecca, but it reaches near that status.”

The other No. 1
If the city’s national standing holds true for stainless steel, it’s not the first manufacturing segment to place Springfield at the top of the heap.

With at least seven limousine manufacturers with headquarters within a 25-mile radius of the city as recently as 2007, Springfield was long considered the limo capital of the United States.

Now, only a few local manufacturers, such as Executive Coach Builders Inc. and Springfield Coach Group LLC, remain. Others like S&R Coach and Dabryan Coach Builders Inc. shuttered or were absorbed by companies in Ohio and Indiana – where bus, recreational vehicle and limo manufacturing is now primarily centered.

Howard Fisk, owner of J. Howard Fisk Limousines Inc., said the Great Recession, and more so 9/11, changed the preferences of corporate travelers from flashy stretch cars to nondescript SUVs and sedans.

Gone are the days of limo and steel as a one-two punch in Springfield’s manufacturing work.

“The thought that there’s a parallel between the industries just isn’t there,” Fisk said. “It used to be, but that’s all kind of gone and it’s not coming back.”

Central States Industrial Equipment and Service Inc. President Joe Reynolds said the evergreen demand of the markets served by local manufacturers, such as food processing and hygienic products, helped it weather the economic storm that enveloped the luxury vehicle industry post-2008.

“That’s more disposable income-based compared to the demand our industry has,” Reynolds said. “It fluctuates more with the times. The industries that we serve – when the economy is booming they never shoot the moon, and when the economy is dragging they never go off the rails.”

Terry Owen, who represents the specialty sales department of steel tank builder CMC Letco Industries LLC, said the variety of local manufacturers and the businesses dependent on stainless steel manufactured products provide that balance.

“You may have chemicals up one year and the breweries or pharmaceutical companies are down, that’s the kind of balance we’ve seen,” Owen said. “That’s not to say we don’t have our dips – we do – but we don’t have the volatility of work or product demand that’s in other industries.”

Sustaining the industry
Echoing a sentiment heard across other employment sectors, from transportation to construction, area manufacturers agree the biggest obstacle and opportunity in sustaining Springfield’s stainless steel reputation is the workforce.

Chamber research shows the steel industry accounted for one in five regional manufacturing jobs during 2014, but a drop could be waiting in the wings. According to a 2015 joint study by Deloitte and The Manufacturing Institute, some 2 million manufacturing positions will go unfilled the next decade primarily due to a skills gap.

Reynolds said one of the Stainless Steel Manufacturing Industry Council’s ideas to address the pending glut is to change the image of stainless steel careers for the next generation. He noted Ozarks Technical Community College developed an industry-specific course this year as result of the demand.

“We all tried recruiting on our own, but we didn’t have a concentrated effort toward encouraging students to enter this field,” Reynolds said. “In a day when the value of where college is taking kids is being heavily debated, we’re trying to change the discussion about the importance of trade school and on-the-job training.”

Additionally, over a dozen companies are collaborating with the chamber, Springfield Public Schools and 10 other school districts to connect high school students to the local  engineering and manufacturing industries through the Greater Ozarks Center for Advanced Professional Studies program.

CMC Letco’s Owen said the city of Springfield’s workforce development department is preparing a Web publication on manufacturing’s competitive average salary in the Springfield metropolitan statistical area – roughly $6,700 higher than the area’s average base salary for all jobs in 2014, according to the U.S. Bureau of Labor Statistics.

The cross-institutional initiatives are part of the collective approach Haymes said Springfield’s stainless steel leaders refer to as “coopertition,” a cross between cooperation and competition.

“Some of our lead men in the shop are making $55,000 to $60,000 a year, and that’s attractive to a lot of people,” Owen said. “But we’re going to continue to see that worker shortage until we change the mindset.

“Eventually, it’s going to pay dividends.”