NewsLocal News

Actions

Local manufacturers discuss ways to battle headwinds of inflation, supply chain, workforce shortages

2022-03-15_17-00-40.png
Posted at 5:22 PM, Mar 15, 2022

CLEVELAND — New inflation numbers out Tuesday showed the Producer Price Index up 10% over February of last year. Seeing that firsthand are Northeast Ohio manufacturers who are dealing with rising costs, supply chain issues and ongoing workforce shortages. That's what brought a group of them together for a meeting with Ohio Treasurer Robert Sprague.

"It's the perfect storm that is happening. You have inflation that's running wild to a level that you haven't seen basically in my lifetime," said Colin Cutts, whose family owns G&T Manufacturing in Mentor. "Whether it's the situation in Ukraine, it's the situation in the supply chain do to COVID-19, it's the situation of the workforce because of the shutdown from COVID-19."

Workforce though, he said, is the number one issue.

"We've run into a big influx of you'll hire somebody in and for the first couple of days they seem to be interested, and then all of a sudden they'll get a paycheck and they'll disappear and then you can't get a hold of them," Cutts said.

The demand for their products has the company eyeing expansion but there's the issue of finding the workers to fill the jobs plus the cost of building to expand just skyrocketed.

"The cost of construction has gone up astronomically in the past year. We were looking at a building that was about $1.5 to 2 million and that has now expanded out to a $4.5-$5 million project at this point in time," he said. "It's a requirement for our business to expand which is also another workforce problem because we're going to need the labor to expand to support the building so we're kind of running into roadblocks all of the way along this path that we're going on right now."

Tuesday's meeting was at Cleveland's Jergens, Inc. where demand for their products is also at an all-time high, creating the biggest backlog of orders they've seen in 80 years.

"But the problem is the supply chain is so broken we can't get computer chips to build our screw drivers, our next gen screwdriver's been slowed down out there, our steel prices are going through the roof," said Jergens President and CEO Jack Schron.

On some orders, he said that were facing a 52-week delay he said they're now telling customers it will be 102 weeks.

"The reality is that a lot of these small manufacturers are in a pressure cooker right now," said Ohio Treasurer Robert Sprague. His hope on this day is that by talking it out and spitballing ideas they might find a way to ease some of that pressure.

"Look, that's what we put on the table. We said how can we help—we have a $20 billion balance sheet in the treasury. If you can think of ways that the state treasury can help in some way the manufacturing community," Sprague said. "We want to be there to help us much as we can."

What they want most, Cutts said, is something no one can give—assurances of smooth sailing ahead.

"No one can really give any certainty in the economy right now. So the economy's been kind of running wild and it's been great for the past two years but it's like everybody seems to be thinking the cliff's like coming and it seems like the world isn't exactly cooperating to give us that warm fuzzy feeling anymore that we're not going to go off the edge anymore," he said.