Helping Out The Brookings Institution

Until last week, I figured that The Brookings Institution, was just another Washington D.C. based non-profit public policy organization focused on research and democracy. It is true, that is what they are, but now at least they have a little more personal face for me. Tara from Brookings contacted me a month or so ago. She said that she was doing research on the Connecticut economy, specifically the Hartford region, and that she was hoping I would meet with her team to explore the questions. I said, “Sure.” Then, I Googled Brookings. Why me? Well, the CBIA gave them my name. Thanks CBIA! Seriously, I was happy to help, especially when they were going to ask questions that were right in my wheel house.

Here are a few:

What explains the performance of the regional economy in terms of its replacement of jobs lost in the manufacturing sector over the last couple of decades with jobs in other sectors? There are two types of explanations for performance: policy/strategy and exogenous factors. We want to know about both.

Also, what explains the shift in jobs amont manufacturing subsectors?

Did individual firms adopt explicity strategies to improve their performance?

So, Tara, and two colleagues, Howard and Alec, met with me at Horst Engineering for an hour long discussion. They took copious notes and I rambled (a bit). They were particularly interested in gaining an understanding of why Horst, and some of our peers, have thrived while other Hartford based manufacturers have faded into obscurity. There are a lot of reasons, but in a nutshell, manufacturing in Connecticut has gone high tech, high mix, and low volume. It is a niche business with strong companies focused on specific sectors like aerospace, defense, and medical. I spoke about how our customers first looked to Mississippi, Arizona and the Carolina’s in the mid-1990’s quest to find lower cost domestic sources. I spoke of more recent low cost sourcing in Eastern Europe, South America, and Asia. I told them why we were choosing to expand both in East Hartford and Nogales, Sonora, Mexico. This intrigued them. I explained that it was less about low cost and more about growth. We have established a second operation in a region where manufacturing is king. Manufacturing was king in Connecticut in the 1940’s. It has only gotten worse since then. We haven’t given up. We have gotten better, but we haven’t shaken the stigma. Kids just don’t dig manufacturing as much as other stuff.

In the Brookings interview, I didn’t hold back and contrasted the productivity growth at Horst with the lack of productivity at the two Connecticut casinos, the Cabela’s store, the strip malls, and the “fast casual” restaurants that  litter the landcape of our region now. I’m not a big fan of those enterprises, regardless of what value they add to the economy. One service sector job does not equal one manufacturing job. All of those cheap imports and all of that lousy look-a-like food are not going to be as cheap as they are today or as cheap as they were last month. The goods and food are only contributing to the United States’ malaise with the average American’s home overstuffed with crappy products and their belly overstuffed with crappy food. I stayed calm throughout the questioning, even when they asked if government was a help in keeping us competitive. I shook my head. I simply said that the small and middle market businesses in our industry had taken matters into their own hands. We wrapped up with a quick shop tour. I showed them how high tech precision machining is. I also showed them how significant the capital investment is. Lastly, I illustrated how important a skilled workforce is to the production of highly engineered products.

Tara and Alec are in their first year with Brookings. They are recent college grads. Alec manned the Apple PowerBook. Howard was the “grizzled veteran” with three years of Brookings experience under his belt. He was a speedwriter in six point font. No, they weren’t the high powered trustees that are often quoted in the media, but they are the worker bees that get those reports done. No reports; no quotes. A quick review of that trustee list reveals some serious firepower.

I’ll be looking for that finished report to see what conclusions were made about manufacturing and the economy. I’ll also pay more attention in the future when the work of The Brookings Institute is cited.

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Horst Engineering

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