Knife maker hires amid U.S. economic woes

Mitchell Hartman Sep 8, 2011

Knife maker hires amid U.S. economic woes

Mitchell Hartman Sep 8, 2011

KAI RYSSDAL: Most of the new jobs in this economy come from small- and medium-sized businesses. The official number — courtesy of the Small Business Administration — is about 64 percent of net new jobs. Only, right now, they’re not creating any jobs. No one is, really. Which is why we’re getting all these plans from President Obama and GOP candidates and the Chamber of Commerce and economic think-tanks and everybody else. There are, though, some small companies that have more business now that they did when the recession began.

We sent Mitchell Hartman out from the Entrepreneurship Desk at Oregon Public Broadcasting to find one.

MITCHELL HARTMAN: Oregon City is a working-class town with a smattering of industrial parks full of small- to mid-sized manufacturers. Many have struggled to stay afloat. Not Benchmade Knife Company, though.

LES DE ASIS: Over here we go to our machining area.

Founder and co-owner Les De Asis says people who visit the factory are often surprised knife-making can be so clean.

DE ASIS: So they expect anvils and sparks and dirt and grime. And what we have here is essentially a very modern computer-controlled manufacturing environment.

We step into De Asis’s office and I ask: In this economy, who’s buying Benchmade’s products — essentially, decked-out pocket knives at hundreds to more than a thousand dollars a pop?

DE ASIS: We sell a market of traditional hunters, sportsmen, first responders, medical, military.

HARTMAN: What do the soldiers use the knives for?

DE ASIS: A simple tool for a hunter when he’s out in the field was purchased by an army medic to free trapped soldiers or people in overturned vehicles.

Those military sales helped the company ramp up employment after 9/11. Then, going into the recession, the company downsized.

DE ASIS: We reduced down to about 130. Today we’re about 180.

That’s more than a 30 percent increase in workers at a time layoffs were soaring nationwide. The company’s also added a machine shop off-site. De Asis says the decision to keep hiring is driven by simple mathematics: sales have been growing by double-digit rates — to around $30 million a year.

DE ASIS: Well, you get to a point you can only get so much productivity before you suffer burnout from overtime and the forced march, so we weigh each and every hire carefully. But as long as the orders keep coming in, we want to fill them.

The company’s also investing in the latest robotic machines to cut, grind, and polish the super-hard knife-blades.

Manufacturing manager Tony Coke says if you thought that would lead to layoffs as people are replaced by machines, you’d be dead wrong.

TONY COKE: Adding automation into some of the more manual repetitive tasks frees up those people to move on to some of the higher-skilled, less repetitive activities and then focus on additional product to provide us growth opportunities.

Economist Bernard Baumohl says an important growth opportunity for mid-sized firms is to cultivate foreign business.

BERNARD BAUMOHL: That would certainly accelerate job growth. Because the export market is one of the most vibrant in the U.S. right now.

It’s certainly vibrant for Benchmade. De Asis says exports are around 5 percent of sales — and growing.

DE ASIS: It was like a 28 percent increase this year over last year, and about 80 percent between this year and three years ago. So our most prolific markets are going to be Russia, Eastern Europe, and China — you know, they just rock.

America might not have the shiniest reputation right now for running an economy, but the “Made in America” brand still shines in the developing world.

I’m Mitchell Hartman for Marketplace.

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