Factory Orders Up But Employers Slow to Rehire

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Last week, Jerry Zeitler, President of Cleveland's Diematic Corp met with his management team to discuss what would seem to most people like an enviable business problem. The company laid off a third of its roughly 75-person staff a year ago, but its rehired six people as orders have picked up and the company moved back in the black. Now, Zeitler's management team says they need to hire again to keep up with orders. Zeitler is hesitant.

Jerry Zeitler: We don't want to bring them back short term for just three months and give them false hope. We'd like to make sure that there's some consistency and stability there in the sales before we bring them back.

Zeitler is by no means alone. Bill Gaskin says he's hearing this sentiment a lot as head of the Precision Metalforming Association, a trade group of nearly 1,000 manufacturers and auto parts suppliers across the US. Gaskin says orders for his member companies are up 50 percent from last year, but hiring has lagged behind.

Bill Gaskin: We are starting to see some rehiring but it's slow and it's cautious. Often it's temporary employees who are coming back. And people are working overtime. They're stressed over quality and meeting delivery orders.

Ohio's most recent jobs report found that statewide unemployment numbers barely moved from 11 percent to 10.9 percent. The good news there was that it didn't go up. But high nationwide unemployment numbers and foreclosures make many auto suppliers wary. Bill Adler heads Cleveland's Stripmatic Products. The small family-owned company is an interesting indicator of the economy because it sells stamped parts for delivery trucks. As orders rise and commerce grows, companies order and service more trucks. Last year Adler laid off more than half of his 40-person staff. Orders are now flowing in, and there are good prospects for the future, but Adler's still being very slow to rehire.

Bill Adler: We have some very good people that we had to put on furlough and hopefully we can bring them in again but it's that comfort level. Is this going to be sustainable? Is the recovery going to be there 3, 6 months from now?
Mhari : And you're still not sure.
Bill Adler: Oh no. (Laughs)

Just south of Adler's plant, Jerry Zeitler shows how one of his company's 22 presses stamps shiny machine parts out of metal.

Jerry Zeitler: This part here is for a medical device.

Zeitler says his company survived 2009 because it services more than just the auto industry. Thirty-five percent of its business is from the medical, roofing, military and mining industries. Zeitler also says Diematic survived because the management team is fiscally conservative, an outlook that he says will help the company flourish no matter what lays ahead.

Jerry Zeitler: We are all doing more with less people. We are definitely working our people harder today than we ever have because we don't have the resources and the opportunity to bring back a lot of people.

But Zeitler says there may be some opportunity to acquire new resources. He is trying to decide if the company will hire back one or two people in the next 30 days.

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