COVER STORY – Tyrannosaurus Next

Posted on Sep 1, 2012 :: Cover Story
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Posted by , Insight on Business Staff Writer

Paul Rauscher is on a mission – to educate everyone that manufacturing isn’t a dying industry or some kind of dinosaur. Rather, it’s an exciting field with a bright future.

“Manufacturing is here to stay. It’s not the industry people think it is,” says Rauscher, president of EMT International in Hobart. “Today’s factories aren’t dark and dingy. They are bright and full of technology. These are exciting jobs with endless possibilities.”

The idea of endless possibilities is something that Rauscher knows well. From 2006 to 2011, EMT, a designer and manufacturer of custom and standardized equipment for the printing, paper and converting industries, grew 100 percent each year. Nearly two years ago, the company opened a new 68,000-square-foot facility in Hobart while keeping its other two sites in Green Bay open. At the same time he was building up EMT, he also lit the fire that started the Northeast Wisconsin (NEW) Manufacturing Alliance and remains one of its loudest supporters.

“Paul is a visionary and very forward-thinking,” says Ann Franz, the coordinator for the NEW Manufacturing Alliance and the strategic partnerships manager at Northeast Wisconsin Technical College (see Face Time, p. 19). “He is a great ambassador for the manufacturing industry. He has such great passion for manufacturing and it’s contagious.”

Evolving with the industry

EMT International started in the 1930s as Economy Machine and Tool, a small tool and dye shop. The company quickly developed a reputation for superior craftsmanship and customized equipment focusing on the converting, paper, document processing and printing industries. Continued growth, including expansion into international markets, led the company to change its name to EMT International.

As the 1990s came to a close, Rauscher, who had been with the company since the mid-1980s, realized the printing industry was changing and that EMT had to change with it. “The writing was on the wall that printing was going digital,” he says.

Conventional, off-set printing has declined steadily since the mid-1990s as companies seek to lower costs, improve quality and increase turnaround. In digital printing, a computer runs the press and users can quickly make changes to individualize pages. In 2000, 80 percent of commercial printers’ revenue streams came from conventional sources and less than 5 percent came from digital printing (the remaining came from ancillary services), according to Digital Printing Directions. In 2010, about 50 percent of revenue came from conventional sources and 20 percent came from digital. By 2020, it’s estimated that 40 percent of revenue will come from digital printing and 30 percent will come from conventional printing projects.

In the early 2000s, EMT began to develop its Chameleon line – named such because the line could change to do whatever the client needed. A client could buy just one piece of the line, such as a perforating or punching machine, or the entire line.

“Our big splash with Chameleon was in 2005. You could really see we filled a niche,” says Rauscher, a trained engineer.

Two years later, the company developed and began making digital printers for a large OEM. “We just took off from there,” he says. “We design and build our printers to work with their ink jets. It’s essential they speak to each other.”

Companies who print a lot of material with unique information – such as financial institutions or utilities – are the prime end users of the machines developed by EMT. For example, a bank can digitally print thousands of unique credit card statements and then use the perforator to tear off a portion so consumers can mail in their bills.

“As far as the eye can see, digital printing will continue to grow and we’ll grow with it,” Rauscher says.

The company’s growth led Rauscher to pursue a new home for EMT, settling on Hobart’s new business park. Elaine Willman, Hobart’s community development director, says Rauscher’s strong leadership skills are the key to EMT’s success.

“He really understands his industry, manufacturing and the overall workforce,” she says. “Paul’s also done a lot of work with the manufacturing industry as a whole, which can only make our region stronger.”

After moving into the new facility in the fall of 2010, Rauscher couldn’t meet his initial goal of having just one or two sites. “We were too big,” he says so the company maintains two rented locations in Green Bay.

In recent months, EMT has experienced a downturn as a major client put a temporary stop to new orders for large machines. In May, the company had to lay off about a third of its workforce – about half of them temporary workers, many of them in shipping and receiving. While EMT continues its relationship with the key client and expects orders to resume this fall, it’s a reminder that business can be unpredictable, Rauscher says.

“We’ve gone through five years of nothing but growth – and in the middle of the recession we were a happy camper,” he says, pointing out that EMT still employs almost three times as many workers as it did just five years ago. “Now we’re going through a reset of sorts. But that’s life in the manufacturing world. It’s not always steady-eddy; you go through ups and downs, especially when you are building capital goods, as we are. What happens in a situation like this is you want to hang on to your higher-skilled workforce.”

Rauscher remains bullish on the company’s future. “Digital printing is where the industry is at,” he says. “Think about it … you can print one copy of a book or print separate, personalized statements without changing a thing on the printer – the computer does it all.”

He is convinced that a skilled workforce remains key to the success of his company and other manufacturers. To that end, he noticed in the mid-2000s that a lot of his employees “had gray hair or were going that way” and there didn’t seem to be a pipeline of well-trained workers to take their place.

“We have a skilled labor shortage in manufacturing. People hear it all the time and it’s true. We need workers,” Rauscher says. “This isn’t just an EMT thing or a New North thing. It’s happening across Wisconsin and the country. We are feeling it more intently here because we are so heavily involved in manufacturing.”

Since EMT designs its own equipment, engineers play an integral role and finding them continues to be a challenge. “There is a lot of competition out there for engineers. There’s not enough of them,” Rauscher says.

That skilled worker shortage was the impetus behind the NEW Manufacturing Alliance.

A champion for manufacturing

In Rauscher’s mind, the work done at EMT is an example of what manufacturing is today – a fast-paced, challenging workplace using the latest in technology. The environment is also what most outsiders might not expect. The dim, industrial factory most people imagine is replaced by a bright, airy facility where employees work in cells and no two days are the same. Presenting this next generation of manufacturing to the public – especially teenagers and their parents – is one of the NEW Manufacturing Alliance’s key initiatives.

An aging workforce and the perception that it’s a dying, dirty industry are part of the problem. “For a long time, people didn’t pursue careers in manufacturing or the people out there weren’t equipped for what was needed,” he says.

Rauscher and Franz met in January 2006 to discuss the lack of skilled workers. Six months later, the NEW Manufacturing Alliance held its first meeting.

“I knew manufacturers had to get involved. We had to get out there and share our story – what we are doing and what skills we need,” Rauscher says. “If we didn’t, no one would know.”

Franz echoes those sentiments. “When we first started meeting (about the Alliance), it became clear that to make this work, we would need manufacturers to take the lead,” she says. “They would need to help guide us about what they’re seeing in the industry and the skills they need to succeed. Paul more than stepped up to the plate. Paul’s passion and his ability to get out and talk to his colleagues in manufacturing really helped us to grow.”

When the Alliance started, there were 12 manufacturers involved. Today, the Alliance has a total of 101 members, with 75 of them manufacturers ranging in size from giants like Oshkosh Corp. and Marinette Marine to small manufacturers with only a few dozen employees. In addition to manufacturers, educational institutions and workforce development boards also serve as members.

“Educators – for the most part – have a different opinion of manufacturing than they did before we started. There is more discussion about how manufacturing is a valid career,” he says. “It’s also out there about the skills we need. Low- or no-skill jobs are few and far between. Most everything in manufacturing requires a one-year, two-year or four-year degree.”

Northeast Wisconsin Technical College and the other technical colleges in the New North have been strong partners in the Alliance. In 2006, for example, NWTC had 26 welding grads. Five years later, after getting out the word about the need for welders and the industry’s vitality, NWTC had 108 welding grads.

“The message being shared by the Alliance that manufacturing is a vibrant, well-paying career is resonating with people,” Franz says.

The Alliance’s Manufacturing All Stars publication showcases exemplary young adults working in manufacturing in a variety of careers from line workers to design engineers and managers. The magazine goes out to local technical colleges as well as school districts; there’s also an online component designed to engage the more tech-savvy younger generation.

“That publication changed our image quite a bit,” Rauscher says. “It shows young people what a career in manufacturing is really like.”

Franz credits Rauscher for “rolling up his sleeves and getting involved” instead of just complaining about the lack of qualified workers. “As a president of a company, he’s very busy on his own, but he makes time in his schedule to stay actively involved with the Alliance. He’s also willing to invest his time and resources to make a difference.”

Rauscher says the Alliance’s success is essential to his company – and the entire manufacturing sector as a whole. “Without having skilled workers, we can’t compete. We can’t be at the table.”

Breaking down stereotypes

During the economic downturn, it wasn’t uncommon to see headlines featuring manufacturers cutting jobs. But just because one sector – for example, automobiles – struggles, that doesn’t mean the whole industry is hurting, says Paul Rauscher, president of EMT International Inc. in Hobart.

“Manufacturing is an up and down industry. Sometimes, one sector is doing really well while another may be slowing,” he says. “You can’t lump it all together and say manufacturing itself isn’t doing well as an industry.”

For manufacturing employees, many have skills that can easily be transferrable between industries. “You also have those so-called ‘soft’ skills such as working well in teams and being flexible. In manufacturing, just because things are tough at your place doesn’t mean that guy across town isn’t looking to hire,” Rauscher says. “You can take the skills you have learned at one place and take them somewhere else.”

Ann Franz, coordinator of the NEW Manufacturing Alliance, says that while companies grab headlines when they slash jobs, not too much attention is paid as they add back jobs, unless it’s on the massive scale.

“When Marinette Marine said it was going to hire 1,000 people, that got attention, but manufacturers every day are adding workers – maybe it’s just a couple here and there, but that adds up,” Franz says.

Manufacturers, as a whole, are optimistic about the future. The NEW Manufacturing Alliance Vitality Index reported that 71 percent of area manufacturers predict 2012 sales will be higher than 2011 numbers. In addition, 43 percent of manufacturers also said they plan to add workers in 2012.

For more on the NEW Manufacturing Alliance, visit http://www.newmfgalliance.org/

A Closer Look
» EMT International Inc.
» Locations: Three facilities with headquarters in Hobart and two other sites in Green Bay
» Employees: About 200
» What they do: Design and manufacture custom and standardized equipment
for the paper, printing and converting industries
» President: Paul Rauscher
» On the Web: www.emtinternational.com

For updates on EMT, visit the Insight blog at www.insightonbusiness.com.