YOUNGSTOWN, Ohio – Jeremy Gurski looks over a new production line under construction at the Hynes Industries plant in Austintown, a portion of a $3 million investment the company last year committed to its operations.
At another plant in Youngstown, executives at Trivium Packaging say their company plans to invest up to $30 million in its operations over the next two years, while more than $1 million has already been spent on a major expansion at Imperial Systems Inc. in Mercer, Pa.
Elsewhere, Commercial Metal Forming in Youngstown plans new investments at its Youngstown operation, while companies such as Strangpresse embark on innovations that could change the very nature of 3D printing.
These investments exemplify a trend that is consistent across the industrial sector in the region. Manufacturers witnessed a significant rebound in 2021 and believe the momentum will carry them well into 2022.
Meanwhile, they are doing their best to stay ahead of challenges such as higher prices for materials, a tight labor market, and complications related to supply chain issues.
TIMELINE AT HYNES
We’re almost done with the first line,” says Jeremy Gurski, plant manager at Hynes. “It should begin production in either late February or early March.” A second line already in operation will be moved to run parallel to the new equipment, he says. That move should be finished by the end of March.
The new line exemplifies how Hynes keeps pace with rising demand for its products, while simultaneously staking opportunities in fresh markets. In this case, these production lines are dedicated to a rapidly growing segment of the economy – processing the steel components used in the warehousing and materials handling industries.
“We’ve got great plans for growth in 2022,” says Rick Organ, president and CEO of Hynes. “But in order to achieve this, it will be essential to increase ranks of employees.”
Organ says it’s been a decade since Hynes invested in a new production line. The company also installed a new 400-ton press to augment another existing line last year.
Hynes manufactures steel shapes for three major market segments: transportation, solar power and distribution and materials handling. “We take steel and process it through rolling mills,” Organ says. The final shape will go into an end application in the truck trailer industry, for example, or steel frames used to support solar panels.
“We’re one of the top-five producers in the U.S. today for steel components used in the solar industry,” he notes.
The company’s newest market is the red-hot distribution and materials handling segment, Organ adds. Retail giants such as Amazon and Walmart continue to pour more investments into new distribution hubs. Hynes supplies steel components that produce materials-handling equipment – such as conveyance systems – for these major retail customers.
All indicators point to continued growth in this industry, justifying the investment in the new production line, says Hynes’ chief financial officer, Ryan Day. “It’s exciting to have this opportunity,” he says. “It’s a nice expansion project.”
This year, the company anticipates putting approximately $3 million more into its operations.
While supply chain problems haven’t directly affected Hynes’ operations, they have caused disruptions with its customers. “There are concerns. But there’s not as much uncertainty in 2022 compared to 2021,” he says.
Organ says the expansion should yield between 20 and 22 new jobs at Hynes’ plant in Austintown, which currently employs 64. “So, we’re looking at a 20% increase,” he says.
Another 15 or so positions would be added at Hynes’ other sites in Painesville, Ohio, and Kokomo, Ind.
The key is attracting these employees in a very tough labor market, Organ says. “There isn’t anyone out there who isn’t struggling to attract people to their organization,” he says.
WORKER SHORTAGE
Last year, U.S. manufacturers added 349,000 workers, the most since 1994, according to Chad Moutray, chief economist for the National Association of Manufacturers. However, the manufacturing sector has 219,000 fewer workers today than before the pandemic hit in 2020.
“In addition, job openings remain near record highs and firms continue to note difficulties in finding and retaining workers,” Moutray says. “In 2022, we would expect to add around 150,000 to 180,000 employees, building on last year’s strong gains.”
Still, filling positions remains a struggle in the Mahoning Valley, as the number of workers in manufacturing has yet to recover from the effect of the pandemic – and the Great Recession of 2008.
According to the U.S. Bureau of Labor Statistics, the region employed 22,700 in the manufacturing sector in December 2021. That’s a 5.2% decline from the 25,000 employed in March 2020, just as the COVID pandemic began its sweep across Ohio.
OUTPUT INCREASES
Overall manufacturing output in the United States increased during the last quarter of 2021, data from the Federal Reserve show. In October, the Fed’s manufacturing output index rose 1.4%, then another 0.6% in November to 100.5, the highest since 2019. Output in December posted a decline of 0.3%, mainly attributed to supply issues.
These data correspond with what other local manufacturers have witnessed, as business began to pick up during the later part of 2021.
“We finished up on a record year [in 2021],” says Bob Messaros, president and CEO of Commercial Metal Forming Inc. in Youngstown. “In 2022, we should exceed last year. So we’re really excited about that.”
Commercial Metal Forming manufactures metal tank heads that serve about 30 industry segments, Messaros says. Driving growth at the company is a strong resurgence in the propane, compressor and water filtration markets, a trend expected to continue well into this year. “All three look to be strong again,” he says.
Energy markets – particularly oil and gas – are also gaining traction this year, Messaros says. “Prices are high. Supply is down. And rig counts are going up,” he says. “We’re optimistic that the energy sector will have a much better year in 2022 than in 2021.”
Going forward, some uncertainties remain in regard to the economy, Messaros cautions, emphasizing pressures from inflation. “Last year was a historic year with the highest market prices ever,” he says, noting the price of steel averaged $1,600 per ton while mills cut back capacity.
Toward the end of 2020, Commercial invested $3.5 million in a new manufacturing cell that takes steel coil and transforms it into a finished part in a single process, Messaros says. This year, the company intends to replicate this investment in another manufacturing line.
“We’ve made numerous investments over the last 12 years, improving the speed of our processes,” he says. “It’s been a huge driver to our growth curve.”
Commercial, whose legacy dates to 1920 as the Commercial Shearing and Stamping Co., employs 160, 85 of whom work out of its plant in Youngstown on Logan Avenue. The company also operates plants in California and Texas.
“We’re looking for outside sales reps for potential business development,” Messaros says, as well as to fill some positions inside the plant. This year, the company hopes to hire between five and eight employees in Youngstown, between four and five in California and between three and five in Texas, he says. “For a mid-size company, it’s a nice healthy increase.”
Moreover, the company was able to dodge any disruptions related to supply chain issues, Messaros says. “We have great partners and we haven’t had any supply chain issues,” he says. “We’ve found new, creative ways to work.”
SUPPLY SOLUTIONS
Local manufacturers that ship their products internationally have also found ways to circle around any potential supply issues.
“The market’s been very good for about 18 months,” says Chuck George, president of Strangpresse, a portfolio company of the Youngstown Business Incubator that designs and manufactures extruder nozzles used in 3D printing. “International sales have picked up more than domestic sales,” he says, noting that the lingering pandemic hasn’t affected his company’s business.
“We have a large customer in Australia with branches in Thailand and Malaysia,” George says. The company also ships its products to Europe, mostly to a customer in Italy.
Strangpresse has established lasting relationships in the United States, including with Oak Ridge Laboratories and local 3D printing manufacturers such as JuggerBot 3D. Another partnership is with Youngstown State University’s Excellence Training Center, which George believes will help further interest in additive manufacturing among young people.
“The training center is well placed to advance people’s skills,” he says. “That’s going to make the difference.”
NEW BUSINESS MODELS
Concerns over strains in supply lines have presented opportunities for manufacturers to rethink their strategies and business models.
Imperial Systems Inc., Mercer, Pa., made the decision a year ago to manufacture air filters to complement its core product, dust collection housings.
“We thought we wanted to bring that all back to Mercer County and the U.S.,” says its president and CEO, Jeremiah Wann. Previously, the company had outsourced its filter production but believed it necessary to vertically integrate air-filter manufacturing within Imperial.
So far, the strategy has worked, Wann says. In January, the company announced the acquisition of the former 90,000-square-foot Reznor Heating building on McKinley Avenue in Mercer and announced it would place its entire air filtration manufacturing division there.
The project is expected to create 50 jobs this year and another 50 within four years, Wann says. The company employs 100 at its plant on West Market Street and is looking to fill another 20 positions.
Imperial Systems has already invested $1 million in new equipment to accommodate the expansion. Those capital expenditures are likely to increase this year as the new operation is commissioned, Wann says.
Tougher regulations imposed by agencies such as the Occupational Safety and Health Administration to improve workplace environmental conditions have increased revenue.
“Business grew by 53% last year, our biggest growth year ever,” Wann says. “New laws and guidelines are driving business our way.”
SUSTAINABLE PACKAGING
Changing consumer habits relative to the environment have also affected business at Trivium Packaging, formerly Exal Corp., in Youngstown, says plant manager Michael Wood. The company manufactures aluminum containers and cans for a variety of products in the beverage, beauty, home care, and pharmaceutical industries. The plant produces more than 1.2 million units per day.
“We’re eyeing a new line because business is growing,” Wood says. “Folks want sustainable packaging.”
Consumers are more environmentally conscious today, Wood says, moving away from products packaged in plastic containers. Aluminum is recyclable and the company anticipates investing another $30 million over the next two years in its plant along Poland Avenue.
Should demand continue to grow at this pace, there’s potential for expansion that could include another building on the campus, Wood says. “We could hire more than 100 people in the next few years if our business continues to grow,” he says. The operation in Youngstown employs 300 and looks to hire another 40 this year.
Pictured at top: Jeremy Gurski stands in the space where the new production line will be installed at Hynes Industries.