Do the recently disclosed layoffs at Briggs & Stratton signal the leading edge of manufacturing layoffs in southeast Wisconsin?
Area manufacturing executives and leaders of manufacturing and business groups give an emphatic “no” to that question.
First of all, manufacturers are continuing to hire. Secondly, they’re reluctant to lay off employees.
“We’re still looking for people,” said Pat Koppa president of Milwaukee vertical lift manufacturer PFlow Industries. “Our backlog is still eight months.”
The situation at PFlow Industries resonates with the majority of manufacturers in the Milwaukee area and the rest of the state.
One reason manufacturers need to maintain or increase employment levels is that they’re still catching up with orders that remain in their pipeline. Supply chain problems have eased and now manufacturers can attack their backlogs.
Automotive supplier Strattec Security Corp. (Nasdaq: STRT) would like to add 5% to 10% to its production workforce at its flagship plant in Glendale, said president and CEO Frank Krejci. As automakers have begun seeing improved supplies for computer chips, they are increasing production and need more locksets and other components from Strattec, he said.
“Even if there is an economic slowdown, automotive is still filling pipeline at dealer lots,” Krejci said.
Briggs & Stratton confirmed Jan. 27 shutting down two production lines at its Wauwatosa plant, idling about 160 employees. The company said transitioning operations to plants in Missouri and Alabama will “consolidate production into facilities that manufacture similar Briggs & Stratton products, which will minimize freight costs, streamline processes, allow us to build products faster and more quickly respond to customer needs."
Briggs & Stratton is an outlier because other Wisconsin manufacturers still need workers, said Kurt Bauer, president and CEO of Wisconsin Manufacturers & Commerce.
“Briggs & Stratton is less economic and more of a strategic focus they have,” Bauer said.
WMC surveys and CEO roundtables show manufacturing hiring remains robust, Bauer said.
“I don’t know of any that aren’t hiring,” he said.
To be sure, there are signs of some wobbliness emerging in the economy and concerns about whether consumer spending will remain strong. But the U.S. Labor Department reported Feb. 3 that job growth accelerated — including a slight uptick in manufacturing — at the start of this year and unemployment reached a 53-year low.
A leader of the United Steelworkers union, which represents Briggs employees, said other area manufacturers with Steelworkers-represented employees are seeking production staff.
“Everybody is hiring for the most part at our factories,” said Brad Dorff, regional sub-director. “It’s a pretty good time for us to negotiate contracts because the companies need workers.”
One example of manufacturers continuing their recruiting outreach is a hiring event hosted by Employ Milwaukee scheduled for Tuesday, Feb. 7, from 3 p.m. to 6 p.m. at Employ Milwaukee, 2342 N. 27th St.
Among the companies represented will be Badger Meter Inc. (NYSE: BMI), Master Lock and Arandell Corp., according to a press release from Milwaukee aldermen Russell Stamper II and Khalif Rainey. Also participating will be staffing companies.
A recent survey by QPS Employment Group, which is based in Brookfield and specializes in manufacturing, found 58% of clients anticipate increasing hiring this year and 34% say hiring levels will remain flat with previous periods.
“The entry level in manufacturing has a (labor) shortage,” said Jeri Meyers, QPS executive vice president of sales. “That will continue because there just aren’t enough people participating in the workforce. Manufacturers all are forecasting a healthy year for 2023.”
Manufacturing executives certainly are monitoring the economy for any downturns or hiccups. But so far the signs remain largely positive.
For example, Koppa said his team at PFlow Industries is tracking the pace of new business quotes. They’re down from last year but not by “an alarming amount,” he said.
“We continue to watch, but as of now we don’t see any major sign of slowing,” Koppa said.
Manufacturers are more likely to retain production employees even if the economy cools because of concerns about filling jobs amid a continuing labor shortage.
Recruiting employees remains the top challenge for manufacturers and other companies, noted Bauer and Chris Baichoo, executive director and CEO of WMEP Manufacturing Solutions in Milwaukee and Madison.
“Given the current environment, you would see people think long and hard before they do a layoff because it’s just going to put them back in a hole,” Baichoo said.
If production slows at factories, companies likely will keep employees busy with exercises such as training on cross-functionality and Kaizen continuous improvement while exploring strategies for diversifying customer bases beyond the United States, Baichoo said.
WMC’s Bauer said the labor shortage in Wisconsin will continue to plague manufacturers and other employers for years to come. That means companies will continue striving to recruit new employees to replace those who have left the workforce, he said.
“I think the greatest current and longer term threat to the Wisconsin economy — and especially to the manufacturing sector — is the workforce shortage, not the risk of recession,” Bauer said.