Bermo, Inc. Vice President David Berdass conducts a tour of the manufacturing company with Minnesota 6th Congressional District candidate Jim Graves, DFL.
He’s the plant manager at Bermo, Inc. Over the past 14 months, the Blaine company has more than doubled its workforce, hiring another 140 people.
But it’s not just people that are needed to keep up with customer’s demand for steel parts. Bermo is purchasing and installing sophisticated metal stamping equipment. Two more precision lasers will be installed soon to slice through up to inch-and-a-half steel.
“We’re receiving new equipment monthly and hiring new people weekly, daily now,” Ottosen said. “It’s great to call people and offer them a job rather than the opposite.”
Bermo’s not alone, as other manufacturers across the state see increases in factory orders, production and hiring. That’s welcome news to Enterprise Minnesota, the manufacturing industry’s trade group.
The $26 million Circle Pines, Minnesota, company bids competitively for this work, and profits when it can perform more efficiently and intelligently than its global competitors. In 2006, these imperatives led the company to adopt 3D CAD software from Dassault Systèmes SolidWorks Corp. and 3D tool & die design software from 3D QuickTools Ltd.
These tools help Bermo deal with the complexity in manufacturing parts as ostensibly simple as, say, a bracket for a snowmobile suspension system. Although the order comes to Bermo as a 3D CAD model, the physical part will start out as a length of rolled sheet metal—steel, aluminum, brass, or copper—run progressively through a series of dies in massive presses applying up to 600 tons of force on the Bermo factory floor.
The many facets of unfolding designs
Manufacturing engineers like Bermo’s Jay Suhsen need a way to virtually unfold the design into a strip that can be cut from the rolled sheet metal. They need to lay out the strip in a way that makes the most economical use of materials; create the tooling that will precisely bend, punch, stamp, extrude and cut the piece; and determine the optimum progression of processes to create the finished part.
In the old days, much of this work was done from two-dimensional plans, intensive hand calculations, and a heavy dose of what Suhsen terms “black magic.” None of it was straightforward. What looks to a consumer like a simple bend, for example, is a process that consumes space from adjacent planes, affecting .002-inch tolerances and distorting many part features.
The high cost of business in Minnesota came in first; issues like taxes, workers compensation insurance, and regulation. Second was the way Minnesota calculates corporate income tax. Some states tax based only on the portion of a company's sales that occur within the state borders. It's often called "single sales factor." Minnesota taxes are based on property and payroll as well.
"If you are capital intensive in the state of Minnesota, or you are headquartered in the state in Minnesota, you are penalized by having that capital and human capital in the state," according to Katie Kohlmann of Golden Valley-based General Mills. "We currently pay four times more in the state of Minnesota proportionately than our competitors that are from single sales factor states."
Wisconsin recently chose to shift towards single sales factor. Kohlmann said several other states have enacted the policy as well, including Iowa, Nebraska, Missouri, and Illinois. Pawlenty was sympathetic, but said the change would cost Minnesota tax revenues.
"It's not going to be easy to do in these times of budget shortages, but I think in terms of economic development and job growth, it's coming up frequently enough, where it has people's attention. Hopefully it has people's attention, if we get some breathing room in our budget it's something we can and should consider," the governor said.
Several executives recalled President Bush's decision to create an undersecretary for manufacturing and pressed for a similar focus on the sector in state government.
"Who do we go to in this state when we want to discuss these issues? Who's there to help us? Who's there to convince us not to go to Sioux Falls? I mean, where is the help from the state? Who's working for manufacturing?" asked Ron Lowry of Dayton Rogers Manufacturing in Blaine. "We need somebody on our side, and even fighting the global issue. The global issue is big. That is a state issue because all of us are losing a lot of work globally."
Pawlenty told the group to look to Matt Kramer, commissioner of the Department of Employment and Economic Development.
The forum was intended to focus on issues the state can control, but Lowry wasn't the only one to bring up global competition. Low cost manufacturers in China have been a substantial concern among Minnesota firms.
Dan Berdass of Bermo recalled a presentation from a Chinese manufacturing company executive who spoke to a group of Minnesota manufacturers.
"He said his goal is to wipe us out. And I guess I don't know if the governor wants to hear a story like that or not, but I think it's important that we all know that this is the competition we're up against," said Berdass.
BERMO INCORPORATED MAKES ALL KINDS of housings and enclosures for electronic equipment. It turns out tens of thousands of plastic and metal computer cases, DVD and telephone shells and much more for customers worldwide, including big names like Cisco Systems, and Dell Computer.
CEO Fred Berdass says up until just a couple of months ago, his factories in Minnesota, California, Mexico and Scotland couldn't keep up with demand. Then the bottom fell out.
"It slowed up the third week in February and I think we went all the way up until the third week in March and then it became apparent there was not enough work to keep them busy," Berdass says.
You'd never guess Fred Berdass is 80 years old. On a tour of Bermo's Circle Pines plant, which is attached to the company's headquarters, he asks if the walk through the facility larger than five football fields is lasting too long.
The space is filled with dozens of massive machines. Some mold plastics. Others transform huge rolls of steel into metal boxes destined to be filled with circuit boards and switches.