September 29, 2014
Shop Talk
Q&A Jack Healy, Director, Massachusetts Manufacturing Extension Partnership, Worcester
Jack Healy, Director, Massachusetts Manufacturing Extension Partnership, Worcester
By Rick Saia
Jack Healy knows manufacturing; in fact, he knows it well. He worked his way up to vice president at Squibb Beech Nut — he couldn't go to college because “I kept getting promoted,” he says — before moving over to LEGO Group in the 1970s. After seven years as a consultant to manufacturers, in 1999 he landed at the Massachusetts Manufacturing Extension Partnership (MassMEP), which advocates for the industry.
The manufacturing industry in Massachusetts has seen a lot of erosion over the last 20 to 30 years. But now some of it's coming back. What's fueling that comeback?
Manufacturing in Central Massachusetts has changed dramatically in terms of employment. In terms of product produced, it's gone the opposite way. Right now, if you took our gross state product for the Worcester metropolitan area, it's 16.9 percent. If you took that (as a) real GDP, it's like 19 percent. That's a pretty big section of our economy. We're one of the few places where we've been able to maintain that type of production.
In terms of employment, it's changed and it's going to continue to change. We're (a state with) a high cost of doing business. You have to have high value-added products to support people on the payroll.
The industry, at least locally, is made up of a lot of small manufacturers. Is it a challenge for them to arrange capital financing?
We just did a study in Northern Worcester County and found there was really no demand for capital because they're not making investments. Business is good. People are making money and when you don't have to finance growth, you make more money. In terms of difficulties in financing, the difficulties we may come across (are) that people do not prepare adequately for a presentation to the bank to show how they're going to use the (money).
What would impress a bank enough for it to say, “Yeah, we'd like to lend money to you”?
I find the banks are willing to lend money. There's (a perception) that the banks have held down their investments. Maybe some banks have but, by and large, they look at (the fact that) you have a steady income, a steady return. They're not looking for these “one off” type of things and they're very happy to finance growth.
If there's one thing that manufacturing in this state needs in order to grow, what would you say that is?
An educated workforce. The equipment has gotten much more (advanced, so what) used to be what we referred to as middle skills are now entry level, and that's a big change. That's compounded by the fact that our educational system hasn't been able to support that.
Quinsigamond Community College has done an outstanding job in supporting the manufacturing community. And we had the opportunity to work with Siemens, (which) provided the schools over $722 million in software.
How has manufacturing leadership changed the most since you worked in the industry?
The business schools — MIT, Harvard — preached a philosophy of minimizing investments, maximizing return on assets … they did such a good job (that) we have lost approximately 70 percent of our large manufacturers in this state in the last decade … manufacturers that drove the manufacturing community. The only reason we still have some of it left is because it's defense-related.
The other change is (that) you have a group of small manufacturers left in this state; 91 percent or so (that have) under 100 employees. They're very conservative. They're not necessarily looking to blaze new trails; they're looking to maximize their returns. One of the problems we have had is that we haven't had many new business starts to offset the contraction. So, the result is that the remaining manufacturers are doing well.
Video
Q&A Jack Healy, Director, Massachusetts Manufacturing Extension Partnership
WBJ Web Partners
Most Recent
Most Recent
0 Comments