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Local manufacturers look for edge


In 48 seconds, the sheet metal was perforated and sliced into eight identical pieces in the shape of fat crosses.

The metal pieces next will be folded, welded and painted in separate steps to create control box housings for contaminant-free clean rooms, which are used to manufacture electronics and other sensitive components.

The housing parts were cut in Rohnert Park by a new $800,000 punch/laser machine, a large rectangular device that is 30 percent more efficient than its predecessor. The automated machine represents a major investment by ASM Precision, one that the company's owners predict will result in greater productivity, more business and eventually more workers.

"Any time you can get it through the shop quicker and easier, it's better for everybody," said Mario Felciano, president of ASM Precision.

In the last decade, Sonoma County's manufacturing sector faced outsourcing, the dot-com bust and a global recession. More than half of the people who worked in local manufacturing companies lost their jobs, putting the brakes on the Sonoma County economy.

Those manufacturers have long been served by small machining companies that help provide components for the finished products. The owners of such businesses said they survived tough economic times by seeking new markets, investing in high-tech machinery and hiring highly skilled workers who can troubleshoot problems and deliver quality components.

"The only way we can compete in a world market is to automate as much as possible," said Jim Judd, president and co-owner of J&M Manufacturing in Cotati. The company, which has 28 workers, spent more than $1.5 million late last year on a high-speed laser cutter because "we wanted to be ahead of the curve."

The main trade group for local manufacturers says the companies have the potential to offer large numbers of high-paying jobs to a new generation of workers. Durable goods manufacturers in Sonoma, Solano, Marin and Napa counties could need an estimated 3,000 new workers between 2012 and 2016, according to a survey last year by 101 MFG, an alliance of about 200 manufacturing company executives in Northern California.

"We have an industry that is vibrant and growing here and we want to keep it that way," said Dick Herman, the group's president. One challenge, he said, is attracting and training young workers.

The county's manufacturing sector includes everything from the makers of high-tech measurement equipment and medical devices to food processors and wineries. The sector employed slightly more than one in every 10 county workers in 2010 — a higher percentage than for the state or the nation, according to a 2011 report by the county's Economic Development Board.

In 2008, the sector's average wage of $57,791 was 35 percent higher than for the typical private sector job in the county, the report said.

While large manufacturers like Agilent Technologies and Medtronic are widely known, a collection of small and nimble machining companies have long played key background roles in fabricating components for products in a variety of industries, including electronics, medical devices and telecommunications.

Two decades ago Hewlett-Packard had manufacturing facilities in Santa Rosa and Rohnert Park, and a number of local machining companies "were bending sheet metal" for its test measurement devices, said Steve Herron, an Exchange Bank senior vice president who manages commercial banking.

But when Agilent, which had been spun off from Hewlett-Packard, began to transfer the manufacturing work overseas, the local machining companies lost significant business. "A lot of them had to regroup," Herron said.

For some, new opportunities arose in Petaluma's Telecom Valley, which saw a rapid expansion of telecommunication equipment companies in the late 1990s. But a 2001 economic crash among technology companies caused a reversal of fortune and another strong drop in business for the machining companies.

"When it went down, it went down hard," recalled Richard Hunt, who with his wife Analisa are the co-founders of Datum Technologies in Santa Rosa. Due to the downturn, the couple closed an earlier machining company about that time and opened Datum in 2003.

The county's manufacturing sector was hit harder than the rest of California during the downturn. Local manufacturing companies, which employed 19,400 workers in 2001, eliminated 11,000 jobs over the next 11 years, a decline of 57 percent. The drop, which reflects the combined effects of outsourcing, the dot-com bust and the recession on manufacturers, compares with a statewide decline of 33 percent for the same period.

Today the machining company owners say they are finding new niches to serve. Datum recently invested $250,000 in new equipment and is poised to receive a special certification considered crucial for companies producing components for the aerospace industry, Hunt said. The company already builds parts for semi-conductor, medical, energy and test and instrument businesses.

"We want to be able to have the diverse markets that we serve so that we're not controlled by one particular industry," Hunt said.

Owners of the various companies repeatedly spoke about the need for improvement. Survival, they said, depends on constantly asking themselves how they can make their components faster, better and cheaper.

"It's like a shark, you've got to keep swimming," Herman explained.

Automation allows a way for local manufacturers to keep costs low enough to compete with overseas companies. But getting and keeping jobs depends on consistently producing a better quality of components, the owners said. An extra edge over foreign competitors is access to skilled workers who can suggest improvements to a component's design.

"It's about engineering. It's about education. It's about a skilled workforce," said Mike Maendl, president and resource manager for Protofab, a 25-employee company in Petaluma.

The industry still attracts new entrepreneurs. At ASM Precision, partners Mario Felciano, Jay Sandoval and Anthony Mattos opened their business in December 2007.

"Everybody said we were insane," Felciano recalled. But the company has grown to 25 employees who work three shifts on weekdays.

Most of the audio, video, solar and technology companies ASM Precision serves are located within 100 miles of Rohnert Park. The business has added the dry paint procedure of "powder coating" and other services to avoid the need to send work out to subcontractors and then wait for its return.

"We've got way more control," Sandoval said.

And new types of manufacturers in Sonoma County are hiring the machining companies.

Among those that buy such machined components is Small Precision Tools in Petaluma. The facility's 96 employees make special ceramic "capillaries," tiny devices through which pass gold or copper wires thinner than human hair.

The capillaries are used in machines that bond multiple wires onto tiny computer chips and other devices. It would be a rare cellphone that didn't have components bonded by the company's capillaries, said general manager Bob Whitlock.

In order to attract young workers, manufacturers are working with an apprenticeship training program to hold their first six-week boot camp for 20 high school students this summer at Petaluma High School. The young people who complete the program will be certified as ready for entry-level manufacturing jobs.

"Kids have to be exposed to manufacturing," Herman said. "They have to know there are some great jobs out there."

Robert Eyler, an economist at Sonoma State University, said it takes effort to help manufacturers attain the workers, the capital and the support services they need to grow. But so doing can contribute to the county's economic health.

"We have a solid core of niche manufacturing businesses in this county and we need to support their expansion and retention," Eyler said.