Technology, globalization change manufacturing

At the same time, manufacturing productivity has increased, a phenomenon driven in part by technology.

Manufacturing employees continue to be among the nation’s best-paid workers, earning almost 20 percent more than workers in other sectors, according to the National Association of Manufacturers. But there are fewer of them.

As technology advances, manufacturing jobs become more skilled and more technical. Production jobs in many industries are getting fewer and farther between. As this trend continues, demand for higher-skilled employees increases while lower-skilled employees are left to improve their skills or develop new ones in another sector.

The Central American Free Trade Agreement is hoped to open up more markets to U.S. manufacturers.

Meanwhile, cheap international labor and a global market are driving some radical changes in at least one local company.

Allen Filters Inc.

Ron Simon took charge as president of Allen Filters Inc. in February. The Springfield manufacturer of industrial filtration equipment, founded in 1948, is owned by Kathy Allen.

Simon said the company has been struggling for the last three years, but business is now picking up.

Simon worked for Exxon for 30 years, mostly in Saudi Arabia and the Far East, and he brought a global perspective to the local manufacturing plant.

His impression was that the local employees had a strong sense of entitlement while the company was behind the times, especially in controls and systems.

Change was No. 1 on his agenda, but that didn’t go over well with the employees.

“I said, ‘Hey, you guys have been here for 20, 25 years, technology has passed you by. You’ve been asleep,’” Simon said. “Well, they didn’t want to change, so I fired them all.”

The monthly payroll went from $85,000 to $8,000.

“I kept five people, the core of people that really wanted to work and were good at what they were doing, and I hired a couple of new people, especially a new electronics engineer from Kansas City, Kansas.”

Now Simon is outsourcing all of his manufacturing to a welding and fabrication shop.

“We do the design, we do the drawings, we design the control systems, he just makes it,” he said.

He’s also branched out in new directions. The company now does motor oil recycling, turning it into clean burner fuel and selling it to refineries and people who run boilers.

The company also has started a procurement services section.

“We are providing procurement services for overseas companies as well as local companies, which is a very cheap way to make a lot of profit,” Simon said. “All it takes is one person at the computer looking for things and providing service.”

Also, “We still make filters here that aren’t made anywhere else,” he said. Two staff members are devoted to manufacturing the filters.

In the past, about 50 percent to 60 percent of Allen Filters’ business was international, but now it’s closer to 80 percent, with the majority of orders going to Saudi Arabia, Indonesia and Vietnam.

For Simon, the future of manufacturing is “Lean, mean and very aggressive/progressive.”

Simon said business has increased about 100-fold since he came on board. In addition to reducing the work force, he is looking to relocate to smaller quarters as operations are now spread out in three buildings.

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