A small town mirrors shift to 'flexible' factory era

Greenville turns out some odd things: rubber roofing and athletic scoreboards, pharmaceutical ingredients and band uniforms. Lots of band uniforms.

But none of those is quite so strange as entrepreneur Charlie Barenfanger's scheme to build a second industrial park east of the town, and make Greenville a manufacturing mecca.

Never mind that the first park stands nearly empty after a decade. Or that America's manufacturing sector continues to consolidate, thanks to foreign competition and the current slump in domestic business investment. Greenville is "sort of a diamond in the rough," Mr. Barenfanger says.

Is he right? Can Greenville – and the United States – polish up its factories and still thrive on manufacturing? Short term, the prospects look iffy because the sector's expansion has slowed. Long term, the answer looks more positive, experts say, with one twist: today's factories don't create as many new jobs as they used to.

Call it the downside of productivity. Today's factories churn out nearly three times as much real value as they did in 1965 but actually employ slightly fewer people. Thus, the good old days when a new plant might mean hundreds or thousands of new jobs appears to be drawing to a close. Towns, especially small ones like Greenville (pop. 6,955), may have to readjust their expectations to smaller, more flexible facilities with dozens of workers.

"The manufacturing sector in the long run is not a net job creator," says David Huether, chief economist for the National Association of Manufacturers (NAM) in Washington, D.C.

Greenville looks like a town run by a tourist board. Brick storefronts house neatly kept shops. A trompe l'oeil of a man painting a welcome sign greets visitors to the historic courthouse square. Someone has put a scarecrow on one of the park benches.

Tourists come from miles around to visit the place. They have to. The nearest big city, St. Louis, lies nearly an hour's drive away. Surrounded by corn and soybean fields, isolated Greenville has to rely on its industrial base and a local four-year college to spark most of its growth.

But the winds that have chilled the nation's manufacturing sector blow here, too. Sales are slower than they used to be.

"It's not that business is terrible," says Bill Marsden, president and chief executive of DeMoulin Brothers and Company, the nation's largest maker of band uniforms. "Our business is on hold."

Nationally, manufacturing appears to be staging a mild recovery after a terrible 2001. Factory orders in July jumped 4.7 percent, according to the US Commerce Department. But that's only about half the growth rate the sector usually enjoys in the first stages of a rebound, points out Mr. Huether of the NAM.

In Greenville, Mr. Marsden's main challenge is the way the nation's slump is squeezing state and local education budgets. That's forcing some band directors to delay ordering uniforms. So far, though, he's not had to lay off any of his 175 workers at the local plant.

The slump has also slowed commercial construction.

"Basically, our mantra is do less with less," says Stephen Schwar, national sales manager for Carlisle SynTec Inc., a Pennsylvania manufacturer of rubber and plastic roofing with a facility in Greenville.

With the commercial roofing industry down at least 10 percent, sales don't look great. But by anticipating the downturn two years ago, the company has streamlined operations and poised itself for growth when the slump ends. "We are maintaining or growing our market share," Mr. Schwar says.

One key to survival: keeping up with technology.

"We're always looking for new ways to improve efficiency, decrease costs, and increase quality," Marsden says. In the seven years since he bought the band uniform company, he's overseen the installation of computer-aided design, an automatic cutter that has sped up operations and cut down on errors, and an overhead conveyor system that delivers trousers to the workers.

Even the arrival of a new clothing-label machine has freed up an employee who used to spend most of her time creating labels. While most apparel companies have moved offshore, DeMoulin remains because it has developed the expertise to customize small batches of hard-to-make clothes and still turn a profit.

Keeping up with technology counts even in small niche industries. Just ask Mary Gayle Nevinger, president of Nevco Scoreboard Company a few blocks away. Delays in offering wireless scoreboards and outdoor boards with the latest light-emitting diodes have hurt Nevco's sales. In the past month, however, the company has begun selling both products to schools and parks departments in the US and internationally.

"I think we'll probably hold where we are or go up a little because we have caught up technologically," says Ms. Nevinger, who employs 90-plus people. "This is a high-tech business."

While Greenville has managed to hold onto its manufacturing base, it hasn't aggressively expanded it. Only two tenants have set up shop in its decade-old industrial park. That explains why Barenfanger keeps running into local skeptics when he lays out his plan to quadruple the city's industrial park area.

"When someone comes in and presents a plan like this, it's easy to pass him off as some kind of a nut," he admits. But he's already pulled off a similar venture two counties away in Effingham, Ill. His plan: build a short-line railroad next year, giving park tenants access to two railroads beyond the four interstate highways already nearby. At least four companies have committed to investing in the site if the railroad gets built, he says.

"I'm convinced we're sitting on a gold mine," adds Chamber of Commerce director Randy Alderman, rapping his desk for emphasis.

Even if successful, the new venture won't bring a gold mine of new jobs. Nationally, manufacturing employment has ridden a long, slow rollercoaster downward ever since peaking in 1979. Instead, Barenfanger hopes to bring in small facilities like the Krispy Kreme plant that opened recently in Effingham, which makes doughnut mix and ships it as far away as California and Canada.

"It's a far different plant than you would have built 50 years ago," Barenfanger says. "They use fewer people and pay higher wages."

But these days, that's not a bad tradeoff.