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STERIS CORP. BRINGING JOBS BACK

BRINGING MANUFACTURING JOBS BACK TO AMERICA

STERIS Corp. moving some European operations to Montgomery

September 2012

By David Zaslawsky

Photography by Robert Fouts

American jobs for years were routinely sent overseas where the cost of doing business was much cheaper, but that has been changing.

Some of those outsourced jobs have returned to the United States and it’s a trend that has gained traction.

Many of the advantages of shipping jobs overseas have been negated by rising wages in foreign countries; increased transportation and logistical costs; quality issues; companies wanting their products closer to their markets; incentives to bring jobs back; and declining labor costs in the United States.

Boston Consulting Group partner Harold Sirkin said that 600,000 to 800,000 manufacturing jobs will return to the U.S. in this decade. He cited manufacturing jobs in automotive, appliances, furniture, computers, electronics, rubber products and plastic.

STERIS Corp., a medical manufacturing company with a facility at Gunter Industrial Park in Montgomery, is adding 80 jobs over a two-year period as it brings some operations from Europe to the U.S. The company is investing $11.4 million on equipment and its facility to bring fabrication and assembly operations to Montgomery. The construction phase of the project is expected to be completed in early December.

The company, based in Mentor, Ohio, will hire a variety of workers at an average hourly wage of nearly $19. The jobs include material handlers, programmers, material coordinators, tool and die machinists, manufacturing engineers, quality auditors and production supervisors.

STERIS Corp. President and CEO Walt Rosebrough Jr. recalled a speech he gave almost five years ago about people not believing that manufacturing in America made sense anymore.

During the STERIS Corp. news conference about returning jobs to the U.S., he said, “Their reason for that concern is a world where people are willing to work for $20 or $30 a day. That’s $20 to $30 a day that we must compete with.

“The only way we compete with them is to work smarter; more efficiently; with great quality; and great safety. I believe that we could do that and believe you (Montgomery employees) do that. More importantly, our Montgomery team is proving it by getting better every day – every day. That is the key to being able to manufacture in this country.”

Mac McBride, director of Montgomery operations for STERIS, said, “It’s a great day not just for Montgomery; not just for Alabama; but for America. Think about … what is being announced here today. This isn’t something little. If you look at this initiative – if more CEOs around this country and more senior leadership teams would take this leadership and model it and use it in other places – just think what American manufacturing would be like today. We can bring manufacturing back to America.”

Another STERIS executive – Dave Johnson, vice president of global operations and continuous improvement – commented about re-shoring. “I’ve been going around the country on the bandwagon on this: We’re talking about bringing jobs back to the U.S. And were not just talking about it – we’re doing it with the State of Alabama. We’re re-shoring.”

Johnson said that the company is able to bring jobs back to the U.S. “because we can do it better, faster and as inexpensive as anybody in the world. We absolutely believe that.”

He emphasized the importance of re-shoring as well as making the Montgomery manufacturing plant more efficient and more effective.

McBride said that the new project will enable STERIS to be competitive and he said the medical supplies marketplace is very price-sensitive. “We will be able to reduce our costs through this process and expand into markets such as surgical centers and places like that, where we haven’t been able to focus before,” he said.

Ways the company will reduce costs are keeping less inventory throughout the supply chain and incorporating the lean manufacturing process in the plant.

More than 20 state-of-the-art machines and lasers will be added to the Montgomery facility, which will increase the capability to handle new designs. “This technology will also enable us to expand our capability in the product innovation area,” Johnson said.

All the company officials as well as elected officials who spoke about the 80 new jobs and $11.4 million capital investment said it was made possible by the current work being done by the plant’s 270 employees.

The partnerships among the state, city, county and Montgomery Area Chamber of Commerce were also praised. The state funded two-thirds of the incentive money. “The state really did step up in this particular situation because the state, the city and the county understand how important it is for the 270 jobs and for the 80 to 110 jobs,” Montgomery Mayor Todd Strange said.

Montgomery County Commission Chairman Elton N. Dean Sr. said, “When Montgomery recruits you, we don’t forget you. You can tell other businesses that Montgomery does what they say they’re going to do.”

Lee Ellis, Montgomery Area Chamber of Commerce chairman of the board of directors, said, “This is truly a great day for the city of dreams as we try to move forward as fast as we can to make Montgomery a better, better place.

By the way, McBride told his leadership team that there is still 40,000 square feet of space for further expansion.