Not so long ago, New England was derisively referred to as the Rust Belt,* as manufacturers migrated for the warm climes and relaxed business environment of the Southwestern United States.
That term slipped away as the region rebounded, however, and electronics assembly during the past five years showed surprising resilience. According to our research, the area produced at least $1.2 billion worth of EMS work last year, with Jabil, Sanmina-SCI, NuVisions (now OnCore), Plexus, Benchmark, Mack Technologies, ACT Electronics, Cirtronics and scores of others smaller firms dotting the landscape.
Times are changing, however, and with them many of the local mainstays are either disappearing or in deep decline.
As we’ve been reporting, Plexus (Ayers, MA) and ACT (Hudson, MA) have recently announced they are closing their doors. Titan closed its EMS plant (Neo EMS) in Vermont, the former Nexus Nano. One local publicly held EMS company is said to be down to one customer. Another large, publicly traded firm has a lease coming due on what’s said to be a sweetheart deal, and speculation holds the lessor will not renew it, which may lead to that site closing or relocating. Other factories have leaned heavily on military and defense contracts during the past eight years — monies that may well begin to dry up under a new Washington administration. Others, including EPM (Manchester, NH) and Flextronics (the former Solectron Fine Pitch site in Wilmington, MA), have already bailed. In New York this year, the electronics manufacturing sector has lost 5.1% of its jobs year-over-year; Connecticut 1.3%. (Endicott Interconnect Technologies, located in Endicott, NY, is a clear outlier. The former IBM manufacturing arm continues on a years-long runup.)
New England, specifically the greater Boston area, is the third highest recipient of investment capital. The region is a veritable innovation think tank, with leading institutions such as Harvard, MIT, Yale, Brown, Dartmouth and others, not to mention dozens of blue chip OEMs, Raytheon, EMC, Textron and of course, IBM, among them. There is no shortage of intellectual capital here, and it’s unlikely all that brain power would suddenly migrate elsewhere.
Cycles come and go, it’s true, and regions fall in and out of favor. It would behoove contract assemblers to keep in mind that in a business where relationships still matter, the best way to keep them from rusting from disuse is to stay in contact, and that means staying local.
*I realize some definitions of “Rust Belt” include certain mid-Atlantic and Midwestern states. For the purposes of this column, I’m focusing on upstate New York, Massachussets, Connecticut, Rhode Island, Vermont, New Hampshire and Maine.