A summer research project led by Dr. Stephen Onyeiwu, Professor of Economics, conducted with students Gillian Greene ’20 and Matthew Massucci ’20 entitled, “Trends in the Tooling and Machining Industry of Crawford County, PA”* investigated the state of the industry through a comprehensive survey of 28 Crawford County manufacturers involved in the Tooling & Machining (T&M) industry. Due to the unique history of the tool & die industry in the Meadville area**, Dr. Onyeiwu originally embarked upon this longitudinal study soon after arriving at Allegheny College in 2002.
This summer’s survey, published in August 2019, revealed that technological change and automation enabled northwest Pennsylvania manufacturers in Crawford County to experience growth for the past five years. Local manufacturers see the industry as being stable for the next 10 years, though they see increasing opportunities in the medical equipment and device industry.
“Based on our previous surveys, we were pleasantly surprised to find the industry in such robust health,” commented Dr. Onyeiwu. He continued, “We were equally pleased to learn that recent tariffs have not been detrimental to local shops, and that foreign competition is no longer considered the same formidable threat that it has been in the past.”
Why are Crawford County Tool Shops Doing so Well?
The research suggests there are seven important reasons:
- Rising Costs– The cost differences between area tool shops and foreign competitors like China have narrowed, mainly due to rising costs in the foreign countries.
- Quick Turn Around – Most tool shops said that turnaround time is critical for competitiveness, and have specialized to meet customer demand.
- Quality Advantage – Crawford County shops have continued to maintain their reputation for high quality standards.
- Product and Market Diversification – Crawford County shops have diversified their customer base in terms of the number of customers, as well as the range of products manufactured.
- Cluster Effects – Tool shops in Crawford County operate in a cluster, the largest of which is located in the Meadville area. The benefits of clusters come by way of an agglomeration of traditional economies including access to skills, materials, services, markets, capital and economic development agencies within a geographic area.
- Training Centers for Toolmakers – Although Crawford County is still facing skill shortages, it has training centers for toolmakers, including the Precision Machining Institute (PMI) and the Crawford County Career and Technical Center.
- Weakening of Foreign Competition – while the survey did not produce a consensus of opinion, quality and delivery stood out as the reasons, particularly in specialized markets. Foreign competitors have also seen increases in their production costs, partly as a result of rising wages.
The Future Workforce, Competition and Regulation Remain a Challenge
Moving forward, area manufacturers will continue to invest in new technology, consider new training models for younger workers and have a greater focus on soft skills. While foreign competition is not as onerous as it once was, domestic competition is much stronger than in the past. Tool shops believe that OSHA should play a more constructive role and help educate firms on how to keep employees safe.
Despite the challenges, 85% of the shops expressed optimism about the future of the industry – that’s good news for Crawford County.
*Click here to read the full text version of the study: Trends in the Tooling and Machining Industry of Crawford County, Pennsylvania
**Why Meadville is called Tool City USA
According to the City of Meadville, “the Talon Corporation, headquartered in Meadville, played a major role in the market development and manufacture of the zipper… In the 1980’s, the Great Lakes region saw a major decline in heavy industry. This blow to the local economy was softened by a subsequent surge in light industry, mainly tool and die machine shops, earning Meadville the nickname Tool City, USA. Today, the Meadville area remains a leader in tooling, machining and advance manufacturing and the city serves as the region’s center for banking, education and social services.”
History of Meadville, cityofmeadville.org
Stephen Z. Onyeiwu, Ph.D.
Dr. Onyeiwu is the Andrew Wells Robertson Professor of Economics at Allegheny College teaching courses in Managerial Economics, Advanced Managerial Economics, Management of Innovation and Technological Change, Introduction to Microeconomics, and African Economic Development. His research interests include the Technological Strategies of Firms, Small Business Development, Industrial Organization, and Global Economic Issues.
Gillian Greene ’20 is a double major in Economics and Political Science with a minor in Middle East and North Africa Studies. Matthew Massucci ’20 is an Economics major with a minor in Mathematics.
Faculty Mentored Research
This research project is supported through the URSCA program for Undergraduate Research, Scholarship and Creative Activities. Learn more at Allegheny College Research