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Recession Grinding on Machine Shops

By Jim Kinney, Business Writer,  The Republican

As seen in The Republican, Tuesday, August 25, 2023

A trade group of local machine shops has shifted its focus from developing a workforce of skilled machinists to simply finding enough business to keep each other afloat.

"The little guys are in tough shape," said Larry A. Maier, a Past President of the Western Massachusetts Chapter of the National Tooling & Machining Association. "I haven’t seen a lot of closings. But there are companies on the brink."

Maier, President of Peerless Precision Inc. in Westfield, acted as host for the chapter’s third annual pig roast. Creative Machining and Molding Corp., also of Westfield, co-hosted.

He said it’s a chance for machine shops owners to network and learn of opportunities, such as subcontracting for each other if one company has the ability to perform a manufacturing operation another company lacks.

"This is all about relationships,"" he said. ""My own projections for business next year is either 10 percent lower than last year or 10 percent greater than last year."

A few years ago, all the talk at chapter meetings was about workforce, where companies such as Peerless are going to get young people trained to use computer-controlled machining equipment. The recession has cooled that talk a bit even though most members have avoided laying off workers. Peerless had to reduce hours for its 22 employees, Maier said.

"The reason for that is that these people are so hard to replace if they go elsewhere," Maier said. "That’s why we have to keep the new-employee pipeline going, even if just a little bit. Because if it stops, it will take us at least five years to get it going."

The Western Massachusetts Chapter of the National Tooling and Machining Association has about 70 members and associate members in the Pioneer Valley, including gun giant Smith & Wesson in Springfield. All told, they have about 3,500 employees. Of the 70 members, about 38 are machine shops averaging about 20 employees each. Those shops are centered in Westfield, Chicopee, Enfield and Holyoke, he said.

Experienced machine operators earn $60,000 to $70,000 a year. He starts out new machinists just out of trade schools at $35,000.

Ronald E. Overton, president of the National Tooling & Machining Association, said the national group started the year with 1,633 members and is now down to 1,550. He said business is off at least 10 percent, more in the Midwest where most machine shops mostly made parts of the auto industry.

In the Pioneer Valley, companies are more likely to build parts for the defense, aerospace and medical-implant industries. But the problem is small machine shops are dependent on orders from bigger companies, said E. David Smith, an owner at G and L Tool Corp. in Agawam.

"We don’t make a product," Smith said. "We make a different product every month."

He said he expects to have his 12 blue-collar employees back working 40-hour weeks soon. His company just bought a $100,000 piece of equipment.

"If you don’t keep up with the latest technology, you might as well close the doors," he said.

Jim Kinney can be reached at [email protected]

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