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Hartford Business Journal: Why one CT producer is investing time, millions to reshore

PMA & NTMA featured in Hartford Business Journal article.

Monday, March 06, 2017

Cromwell factory owner Jack Carey saw the threat looming several years ago, and began steps to protect his product source, employees and the future of family-run Carey Manufacturing Inc.

Well before this sitting president's "America First'' campaign and mounting public support for boosting jobs at home, Carey, whose company supplies metal latches, catches and handles to commercial, industrial and military customers, sought to end its reliance on heavily subsidized Chinese raw materials and manufacturers of hardware found on everything from office desks to missile containers.

So by early 2018, Carey says his $8 million company will have invested $2.5 million in Connecticut-sourced laser cutters, a new quality-inspection station and up to eight new jobs, to produce in-house the more than 300 varieties of latches and handles listed in its catalog.

Chinese suppliers' unpredictable pricing and uneven quality were Carey's principal reasons for home-shoring his hardware production.

"We're trying to compete in a world where … we're competing against governments that give things away. It's tough,'' said Carey, a former Pratt & Whitney Co. machinist who launched his company in 1998.

His move, one of Connecticut's and the nation's growing examples of the "reshoring" trend to bring certain manufacturing and technology back to America, offers plenty of benefits, including a secure, stable supply of product and more production overtime for his shop-floor workers, Carey says. But even more important, says Carey, is that America can recapture production of some obscure but vital components such as the metal missile-case fasteners Carey supplies to the U.S. military.

According to industry observers, reshoring of manufacturing and related technology to America has been underway since the Great Recession but is still in its infancy. The trend dipped in 2015 due to the strong dollar and rising oil prices, which favored overseas production, according to the Reshoring Initiative, a Midwest nonprofit advocate of restoring well-paying manufacturing jobs and vital goods production to the U.S.

From 2010 to 2015, it's estimated that Connecticut added 575 new jobs and eight new companies as a result of reshoring and foreign direct investment, according to the Reshoring Initiative.

Many of the jobs are coming back to America from Asia, particularly China, but Western Europe is also a major job-recruitment source.

Reshoring has gained momentum of late, Carey and experts say, due to relatively stable energy prices and an improving domestic economy that has triggered an upsurge in interest rates, spurring more American producers to act now to invest in new or upgraded capital equipment and facilities.

Another recent example is Hasbro Inc.'s decision to reshore by 2018 manufacturing of its popular Play-Doh, which hasn't been made in the U.S. since 2004. The company plans to move some production of the moldable clay from China and Turkey to a facility in East Longmeadow, Mass.

In their 2017 annual survey of members, some of whom are in Connecticut, the Precision Metalforming Association and the National Tooling & Machining Association said one in four members reported that they reshored work in the past 12 months, up from one in five in 2016.

The chief reason members cited for reshoring work, both organizations said, was the ease of delivery, followed by quality control, and then cost.

"We're going to be able to offer a high level of services to our customers,'' said Paul Lavoie, head of Carey's sales and marketing.

Read more here.