Business is brisk for state's manufacturers Strong exports help against defense slowdown

January 18, 1998|By Sean Somerville | Sean Somerville,SUN STAFF

Manufacturing in Maryland is expected to hold its own this year, with help from exports and a generally strong economy.

"Things are going very well," said J. Alexander Doyle III, president of Micro Machining Inc., a Woodlawn machine shop, and chairman of the Maryland Manufacturers Association. "The high-tech guys are looking real good."

Sales at Micro Machining were up 8 percent last year to about $2.5 million. Doyle hopes the company makes a similar leap this year. But like other manufacturing executives, he said one possible restraint is the availability of qualified labor for skilled trade and technical jobs.

"We might have broken $3 million in sales," with more qualified workers, he said.

Nobody's talking about a return to the days when more than one factory boasted 10,000-plus workers. But manufacturers are benefiting as strong exports overcome flat defense spending, according to the Regional Economic Studies Institute at Towson University.

Exports have grown as a portion of the state's manufacturing products from 6 percent to 18 percent since 1990. Benefiting are industrial machinery, chemicals, printing and plastics.

At the same time, said Towson University economist Anirban Basu, a slowdown of consolidation has helped industries such as printing. "There are not as many firms to bump heads," he said.

Basu also said high-tech manufacturers such as Ciena Corp. of Linthicum are thriving. And biotech firms are awaiting federal approval for new products, which could give manufacturing a nice lift.

In the meantime, business is so brisk that the typical manufacturing worker is putting in 180 hours more per year than in 1982.

FMC Corp.'s Baltimore plant assigned so much overtime last year that it prompted a labor dispute. The company anticipates a strong 1998. "We don't expect a let-up in demand," said Jeff Jacoby, the company's director of public affairs.

This year, the Regional Economic Studies Institute expects manufacturing output to increase by about 4 percent -- higher than the projected 3.2 percent national rate.

But production improvements won't mean employment will get the same increase. In fact, the institute expects manufacturing employment, now at about 173,000, to decrease .77 percent.

Perhaps the best example of improved production and declining employment is Bethlehem Steel Corp.'s new $300 million cold-rolling mill, to be built at Bethlehem's Sparrows Point plant by the year 2000.

Because of technology improvements, the new mill will require about 400 fewer people than the mill it will replace. And to get the mill built at Sparrows Point -- as opposed to Virginia and West Virginia -- the United Steelworkers of America agreed to savings that will cut another 500 jobs plant-wide.

That would cut employment from 5,300 to about 4,500 -- another notch down from the 1960 peak of more than 30,000. "We'll probably be between 5,000 and 5,100 by the end of 1998," said Duane Dunham, president of the Sparrows Point division.

The company plans to start construction in April, an undertaking that will require hundreds of workers. "A lot of people will be employed in and around Maryland because of this project," he said. "It will be no different from what you've seen with the construction of the new stadium."

As Bethlehem starts construction on the new mill, the company expects that slower economic growth will keep steel shipments relatively flat. "But it will still be a relatively good year," Dunham said.

Two of the state's other manufacturing powerhouses expect employment to remain stable, while they fight for profits.

McCormick & Co. Inc., the Sparks-based spice company, will try to build on a turnaround it completed last year. The company emerged as the winner in a worldwide spice war last May, when its Sydney, Australia-based rival, Burns Philp & Co. announced it was getting out of the business.

McCormick, which employs 7,700 worldwide and 2,100 in Maryland, expects to continue growing into next year.

Robert J. Lawless, McCormick's chief executive, said the company will move aggressively to land Burns Philp's customers, in venues such as discount shopping clubs. He also said the company will be shopping for major acquisitions. "I cannot be more excited about where McCormick is positioned," he said.

Towson-based Black & Decker Corp. spent much of 1997 trying to fill the gap left by the decline of the hit SnakeLight flexible flashlight. The company, which employs about 2,700 people in Maryland and 29,000 worldwide, faces tough challenges in 1998.

Investors are putting pressure on Black & Decker to do something about its ailing household products division, which is only marginally profitable with SnakeLight sales hurting. At the same time, the company is widely considered a possible takeover target for Sunbeam Corp.

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