May 2018 Business Magazine by MBA Business Magazine

May201 8

As the labor market tightens and more Baby Boomers retire, an internship program can be one of the best solutions for bringing on new talent for large and small employers alike. Experts agree that internship programs don’t have to be complicated to set up and run, but it does require knowing how to take the first step and what’s involved. Join us for the Manufacturer & Business Association’s first IMPACT Luncheon to learn how you can overcome staffing challenges and set yourself up for success! Here, you’ll hear from Harry Eighmy, chief operating officer of American Turned Products (ATP), on why establishing an internship program is one of the best business decisions ATP has ever made. Plus, representatives from each of the four local universities will explain the resources needed to get started, how to establish a world-class internship program and the role they can play in helping find the right candidates. Whether you are in the manufacturing, health care, financial, professional, nonprofit or service industry, this program is for you! In addition to a dynamic presentation and question-and-answer session, each attendee will receive an internship reference manual that will help deliver additional resources and potential returns for years to come! Target Audience: Small to mid-size employers that may not have a full-time HR manager or resources to get started. Companies that already work with interns, but would like to take their programs to the next level. PRESENTED BY:

l ion ua dit nn E A A h P 9 t e in ad

BUSINESS

VOL. XXXI NO. 5 | MAY 2018

MAGAZINE

MATTHEW DUNN, PRESIDENT

CELEBRATES 50 YEARS ERIE COMPANY PROUD TO BE AN ESSENTIAL PART OF PENNSYLVANIA MANUFACTURING

SPOTLIGHT Q&A:

HOW ZIPPO LIT A FIRE ON INNOVATION

PLUS:

2018 SHOWCASE OF MANUFACTURERS

HOMEGROWN BUILT STRONG. WORKS HARD. WON’T QUIT.

™

You want reliable pliers. You want pliers made in America. Most of all, you want pliers that don’t just finish the job, but defeat the job. Well, good news: CHANNELLOCK® has not only what you want, but what you need. That’s why we’ve been making our pliers in our hometown of Meadville, PA for more than 131 years. Is it the easiest way? Probably not. But, it’s the CHANNELLOCK® way. For true American-made pliers: channellock.com

FEATURES FEATURE STORY | WHAT’S INSIDE

PA MANUFACTURING MATTERS Industry is the cornerstone of the Commonwealth’s future.

COVER STORY | LOCAL PROFILE

ESSENTRA COMPONENTS Learn why this Erie company is proud to be an essential part of Pennsylvania manufacturing as it marks its 50th anniversary in 2018.

SPOTLIGHT Q&A | LEADERSHIP

Mark Paup, president and chief executive officer of Zippo Manufacturing Company and W.R. Case Cutlery, explains the brand’s rich history and why the company is proud to have its global headquarters based in northwest Pennsylvania.

SHOWCASE OF | SPECIAL SECTION MANUFACTURERS

DEPARTMENTS

SPECIAL SECTION

BUSINESS BUZZ

EVENTS & EXTRAS

PEOPLE BUZZ

HR CONNECTION

HR Q&A

WHAT’S NEW

AWARDS AND PROMOTIONS

WORKPLACE TRENDS

GET ANSWERS

Executive Editor Karen Torres ktorres@mbausa.org

Feature Photography Essentra Components Rob Frank Photography

Contributing Writers Jezree Friend Justin Schaneman Rene Sims Matthew B. Wachter

Additional Photography iStockPhoto.com Casey Naylon

Learn about the many manufacturing operations that are making a major economic impact in the Keystone State.

EDITORIAL

See the latest happenings at the Manufacturer & Business Association’s Conference Center in Erie!

HEALTH MATTERS | CLAIMS

READ ON THE GO! For the most current Business Magazine updates, visit mbabizmag.com

How to leverage data to predict the 5 percent who drive the most health costs. Justin Schaneman and Rene Sims

LEGAL BRIEF | CLASSIFICATIONS

Taxation as a C Corporation? A closer look at Tax Reform and S Corporation revocation. Matthew B. Wachter

ON THE HILL | ELECTION

Advertising Sales David Thornburg 814/833-3200 dthornburg@mbausa.org

Design, Production & Printing Printing Concepts Inc. printcon@erie.net

The Manufacturer & Business Association’s Government Affairs Department asks Pennsylvania’s GOP gubernatorial candidates in the May primary to answer how they will improve the Commonwealth’s pro-business standings.

On the Cover: Essentra Components President Matthew Dunn shares how the manufacturing firm is looking forward as it celebrates 50 years in business. See page 4. Mission Statement: The Manufacturer & Business

Association is dedicated to providing information and services to its members that will assist them in the pursuit of their business and community interests. – Board of Governors

Manufacturer & Business Association 2171 West 38th Street | Erie, Pa. 16508 814/833-3200 or 800/815-2660 www.mbausa.org

© Copyright 2018 by the Manufacturer & Business Association. All rights reserved. Reproduction or use of editorial, pictorial or advertisements created for use in the Business Magazine, in any manner, without written permission from the publisher, is prohibited. Unsolicited manuscripts cannot be returned unless accompanied by a properly addressed envelope bearing sufficient postage. The magazine accepts no responsibility for unsolicited manuscripts or artwork. The Business Magazine and Manufacturer & Business Association do not specifically endorse any of the products or practices described in the magazine. The Business Magazine is published monthly by the Manufacturer & Business Association, 2171 West 38th Street, Erie, Pa. 16508. Phone: 814/833-3200 or 800/815-2660.

mbabizmag.com • MAY 2018

True Performers know preventive care is better care. As part of our True Performance program, we’re helping Dr. Christine Florendo keep her patients healthy — and rewarding her for it. By using our data, she and her staff are able to identify patients who need specific vaccines. It also allows them to take a more proactive role in scheduling routine follow-ups. Because of doctors like Christine, to date, this program has saved $180 million in emergency room visits and hospital stays.*

There’s value in that. Download the True Performance ebook at HighmarkTruePerformers.com.

True Performance results:

13% fewer emergency room visits 16% fewer hospital admissions $180 million in cost avoided

*Based on reduction in hospital costs for patients with True Performance doctors compared to those without from January 2017 to July 2017. Highmark Blue Cross Blue Shield is an independent licensee of the Blue Cross and Blue Shield Association.

Christine Florendo, MD Kids Care Pediatrics True Performer

FEATURE STORY | WHAT’S INSIDE

PA Manufacturing Matters INDUSTRY IS THE CORNERSTONE OF THE COMMONWEALTH’S FUTURE Manufacturing has historically been one of Pennsylvania’s important wealth generators and should continue to play a key role well into the future. Today, Pennsylvania manufacturers employ a halfmillion workers — representing one out of every nine private sector jobs. Small to mid-sized manufacturers represent roughly 12 percent of total gross state product, making a big contribution, as well. According to the PA Department of Community and Economic Development, manufacturing has an $84 billion impact on Pennsylvania’s economy, ranking it the eighth largest in the United States. Manufacturing also offers high-paying jobs. Pennsylvania’s average annual wage in manufacturing is nearly 15-percent higher than the average salary across the state. According to a report conducted by the state’s Industrial Resource Centers with research led by Dr. Edward W. (Ned) Hill of Cleveland State University, manufacturing remains a key part of Pennsylvania’s innovation infrastructure. In fact, manufacturers are responsible for driving innovation and are responsible for almost three-fourths of all private sector R&D. The report also states that an essential measure of importance or centrality to an economy is the size of an industry’s multipliers — meaning, the additional jobs, sales or income generated from sales in the industry.

Manufacturing has the highest multipliers of any other Pennsylvania industry. Every $1 increase in final demand for products manufactured in Pennsylvania leads to a total increase in gross value added by all industries of $2.52. No other industry in the state comes close to rivaling the impact of manufacturing. In this issue of the Business Magazine, we’ll celebrate these accomplishments and more in our 9th annual Made in PA edition! Here, we’ll showcase some of the exciting investments and improvements under way at Essentra Components in Erie as the company marks its 50th anniversary of manufacturing in the Keystone State. In addition, we’ll hear from Mark Paup, president and CEO of Zippo Manufacturing in Bradford, on how the company has lit a fire on innovation with its trademark, windproof lighters.

Plus, this special issue includes our annual Showcase of Manufacturers, highlighting the many companies that have paved the way for modern manufacturing in a highly competitive business world. As always, the Manufacturer & Business Association is dedicated to providing its members, especially manufacturers, with the programs and services that can help their operations succeed. Visit our website, www.mbausa.org, to learn about all the resources and programs that are available today!

EXPLORE THE POSSIBILITIES!

mbabizmag.com • MAY 2018

COVER STORY | LOCAL PROFILE

Essentra Components employs a dedicated and highly skilled workforce of approximately 200 people at its Erie, Pennsylvania operations.

CELEBRATES 50 YEARS Erie Company Proud to be an Essential Part of Pennsylvania Manufacturing Essentra Components is a manufacturer and distributor that specializes in small, critical components, but it is also a big story of success. For 50 years, Essentra Components, with its 80,000-squarefoot manufacturing facility at 3123 Station Road and 80,000-square foot warehousing facility on McClelland Avenue in Erie, Pennsylvania, has unassumingly, yet strategically, established itself as a leader in the plastics manufacturing industry and beyond. The company’s rich history can be traced back to its start as Alliance Plastics in 1968 when three entrepreneurs saw an opportunity in the plastics market. As part of a strategic move, UK conglomerate, Bunzl, acquired the business in 1987, expanding itself throughout the United States, Canada and Brazil, and adding to its growing global presence in Europe and Asia. By 2013, Alliance Plastics was rebranded, along with Reid Supply and Richo Inc., to become what is presently known as Essentra Components. The company is one of the four global divisions of Essentra plc, a leading international supplier of specialty plastic, fiber, foam and packaging products. The conglomerate also includes health and personal care packaging and filter products divisions and operates in 33 countries worldwide. Today, with more than 200 employees at its Erie location, Essentra Components is continuing to be a supplier of choice for original equipment manufacturers (OEMs) in the automotive, heavy equipment, oil and gas, and electronics manufacturing industries. The company boasts that it works with 50 of the top 100 global manufacturers, including key players in the highly competitive automotive industry.

MAY 2018 • mbabizmag.com

To keep up with such demand, Essentra Components produces more than 3 million parts at its Erie operations each day. This diverse product line consists of caps for propane tanks and plugs for hydraulic assemblies, as well as clamps, fasteners, handles and knobs, plus access hardware and any number of protection and finishing products that are used every day. “Erie is our flagship site,” explains President Matthew Dunn of Essentra Components’ Pennsylvania operations. “And we are committed to our multimillion-dollar investment in facilities, equipment and people.” The plan, which began in 2017, includes a $4 million capital investment in six brand-new, all-electric injection molding machines and the addition of others this year. Numerous facility upgrades are also under way in 2018.

Matthew Dunn, President of Essentra Components

The improvements complement the vision of Industry 4.0, or what is commonly referred to as the fourth industrial revolution, using information and technology to deliver more intelligent products built precisely for customers’ needs. The company has even gone so far as to develop its own interactive online hub, which features a wide range of information and insights about manufacturing in the future — a future that is integrally tied to manufacturing in the Keystone State. “At Essentra Components, we have a commitment to our people to provide access to the latest technology available in the markets and a commitment to our customers,” says Dunn. “Our commitment in Erie is expanding our facilities, expanding our footprint, expanding our workforce, but

also driving toward one of our goals of being the employer of choice, and that takes time. We’re working to facilitate a culture of empowerment, development and opportunity.”

Top Talent

Essentra Components, like many of the manufacturers in the region and across the country, has continued to look for new ways to recruit top talent, whether experienced or part of an apprenticeship program. In 2017, the company partnered with the Erie Institute of Technology to establish an externship program for its industrial maintenance and mechatronic students, giving them real-world experience that they can apply in the classroom and vice versa. The company already has hired one student and expects to bring another on full time. “That’s something we really want to expand on with the world-class academic institutes here in Erie. We’re looking to partner with them,” notes Dunn. For the past 20 years, the company has offered a graduatetype program that gives students the opportunity, over a two-year period, to learn the entire Essentra business in a program style similar to an MBA. “For two years, they’ll spend five weeks out of the business traveling the world seeing Essentra facilities, learning from some of the brightest people in the industry, all while holding a very important role in the business,” says Dunn. “Expanding their exposure to different functions that they might not have previously been exposed to, different opportunities not only within Essentra, but within the industries. It’s been a very successful program for us.” Dunn, a Texas A&M graduate who began with the company in 2007, is proud of the opportunities that Essentra has created. He initially ran a small distributorship site in Houston and, through his Essentra experience, has been able to broaden his leadership role as Essentra Components expands its presence on the global stage. In fact, in December 2017, Essentra Components finalized its acquisition of Arkansas-based Micro Plastics, which manufactures plastic screws, bolts and washers. The move has helped expand Essentra’s product range in the components division and gives the company opportunity in a new market with a facility in Monterrey, Mexico. “The attractive thing about the Essentra Components’ network is that we’re a business built through acquisitions. We’ve taken complementary brands in the markets that we

Essentra Components President Matthew Dunn speaks with an operator at one of the company’s brand-new, all-electric induction molding machines. Essentra Components launched a multimillion-dollar capital investment in 2017 to invest in state-of-the-art equipment at the Erie facility.

choose to serve and have given an outlet to what would otherwise be very strong regional players, to push those products globally and to the markets that we serve.”

A Culture of Engagement

To create the factory floor of the future, Essentra Components has invested in its technology, machinery, tooling and facilities, while also making an enhanced commitment to health and safety and employee engagement. The goal of these endeavors is to drive ongoing improvements and help to preserve the longstanding legacy of plastics manufacturing in the area. Dunn sees health and safety as “absolutely critical” to his role as president. “I have a moral obligation to return our employees home to their families the same way that they arrived,” he says. “It’s something that’s absolutely uncompromising.” Through its STEP program — stop, think, examine and proceed — Essentra Components has made safety a priority by identifying hazards in the workplace before they become accidents. All of Essentra’s employees, from office employees to manufacturing, warehouse and shipping, are encouraged to participate in STEP, even visitors. Dunn believes that having the buy-in from employees and keeping the workforce engaged is essential to moving the company forward. “If you talk to any of our employees, employment engagement is not something we just talk about; we believe in it and actually measure it,” he says. “Our employees absolutely have a voice.” At Essentra Components, engagement surveys are given annually, and pulse surveys are conducted regularly to gauge employee input. From there, focus groups are formed to keep discussions going.

Essentra Components’ hydraulic injection molding machines can be used for a wide variety of applications.

mbabizmag.com • MAY 2018

IMC has provided us with excellent service since our relationship began in 1999 and has performed admirably for MFG in every respect. Richard Morrison, President/CEO Molded Fiber Glass Companies 2300 Teammates, Fiber Glass Reinforced Plastics IMC continues to provide exemplary service and constantly monitors our business to ensure that our Company is well protected. It is nice to have such a responsive service provider that is always on the ball. Stephen M. Sada, Secretary/Treasurer Channellock, Inc. 360 Employees, Hand Tool Mfg. IMC has done an excellent job in handling our property and workers’ compensation insurance needs. Given the constantly changing insurance market, we rely on their experience and expertise to bring us the best possible options in insurance coverage as well as keeping us current as to any new products that might be beneficial to our Company. IMC’s service level, as well as that of the carriers selected, has far exceeded our expectations.

IMC plays a vital role in our global risk management program. I enjoy working with the team because I always receive prompt, reliable, and accurate advice. They are committed to providing quality service with integrity and a client-driven approach which delivers peace of mind every single day.

Joe Fisher, Director, Business Analysis and Assistant Treasurer LORD Corporation 3251 Employees, Adhesives, Coatings, Motion Management Devices, and Sensing Technologies IMC has been our insurance partner for over 20 years and continues to provide professional guidance for our insurance needs. Robert A. Johnson, Treasurer Ridg-U-Rak, Inc. 329 Employees, Manufacturer of High Density Storage Rack and Specialized Rack Systems IMC consistently provides us quality, personal service with world-class resources that support our growth, both domestically and internationally. Michael J. Dzurik, Vice-President Finance/CFO Plastek Industries, Inc. 1865 Employees, Plastic Injection Molding, Tool & Die Mfg.

John T. Johnson, President Port Erie Plastics 475 Employees, Plastic Injection Molding

IMC’s highly dedicated and well qualified team has consistently delivered on its commitment to provide the best value and service to our company for over thirty years. Simply put, they are best in class. Doug Currie, President Erie Press Systems Manufacturer of Hydraulic & Mechanical Presses The IMC philosophy and culture fits perfectly with our goal of providing the fastest, most reliable service to our customer. Tim Hunter, President & CEO McInnes Rolled Rings 86 Associates, Forged Steel Rings IMC personnel are extremely knowledgeable and an excellent resource in all areas of business risk management. Raymond P Seth, Treasurer Greenleaf Corporation 425 Employees, Ceramic & Carbide Cutting Tools

For over 20 years IMC professionals have exceeded expectations proactively and reactively. Their knowledge and integrity is world class. Scott P. Kalmanek, Secretary/Treasurer/CFO Joy Cone Co. 583 Employees, Bakers of Cake, Sugar and Waffle Cones IMC personnel are both professional and knowledgeable in all areas of risk management. They go the extra mile to insure comprehensive coverage with competitive pricing. Dave Tullio, President Custom Engineering 152 Employees, Contract Manufacturing, Fabrication, Machining, Heated Platens We are happy with our relationship with IMC! We feel they are a true partner by helping us manage our business risk in a very professional and friendly way. Robert Marut, CPA, President & CEO C&J Industries 302 Employees, Plastic Injection Molding and Contract Mfg. The professionalism and level of attention to detail of IMC far exceeds our expectations.

Since March of 2000 IMC has been delivering to Jamestown Container Corporation what they promised, “SERVICE BEYOND EXPECTATIONS”. We have found their knowledge, expertise and follow through to be unmatched in the industry; truly a world-class organization.

Peter J. Morgante, Treasurer Hope’s® Windows, Inc. 210 Employees, Manufacturer of Custom Steel & Bronze Windows and Doors

Richard Weimer, VP of Finance Jamestown Container Corporation 357 Employees, Serving all your Packaging Needs

IMC guys are nuts about risk management…so I don’t have that worry.

The team at IMC is an essential part of our team at ISM. They provide value above measure in regards to our property and liability insurance needs.

You Are Known By the Company You Keep

Tim Shuttleworth, President & CEO Eriez Manufacturing Company 799 Employees, Magnetic, Vibratory and Metal Detection Solutions

IMC has provided insurance consultation to Great Lakes for over 20 years. Their team is responsive and knowledgeable. IMC has been a tremendous asset to Great Lakes in regards to risk management both domestically and internationally. Rob Lowther, Executive VP Great Lakes Case & Cabinet Co., Inc. 215 Employees, Manufacturer of Data Center Thermal Management Solutions IMC has been providing our property casualty risk management solutions for more than a decade. The IMC team has tremendous depth in experience, knowledge and contacts with relevant experts. They have brought value as an integral part of our risk management program to include plant inspections, disaster planning initiatives, coordination of global policies. They understand the subtle details which insure that insurance will work as expected while keeping the cost under control. John A. Ross, CFO Kurt J. Lesker Company 372 Employees, Manufacturer Vacuum Deposition Systems and Components IMC is always reliable! I trust their knowledge and interpretation of the insurance nooks and crannies; I depend upon their selection of coverage that fits our particular business risks; and I am confident IMC will be by our side navigating the details of the claims process. IMC is a Professional Partner with reliable service – just what meets our business needs. Lou Stack, General Counsel Seco/Warwick Corporation 84 Employees, Manufacturers of Heat Treatment Furnaces “When it comes to insurance…we feel we finally have a company which actually analyzes every year what we need…versus one that just rubber stamps an updated old policy and wants us to play golf.”

James J. Rutkowski, Pres. Industrial Sales & Manufacturing 135 Employees, Machining, Fabrication, Assembly, Testing and Finishing of Machined Products

Your time, professionalism and strict attention to detail is extremely impressive and exactly what’s needed to assist LEWCO in current and future plans for our business continuity and growth.” James T. Chapman, CFO LEWCO, Inc. 163 Employees, Manufacturers of Material Handling Conveyors & Process Heating Ovens IMC takes the time to understand our risk management needs. More importantly, they take the time to implement solutions. Bill Kane, Chief Financial Officer Iten Industries 162 Employees, Manufacturer of Thermoplastic and Thermoset Stamped, Molded, and Machined Plastic Parts We feel very fortunate to be doing business with IMC and consider them to be an extremely reliable and highly trusted business partner. They bring a level of professionalism, industry knowledge and subject matter expertise that is greatly valued by our company. Insurance and business risk can be difficult and complex areas to understand and manage, particularly for a chemical manufacturing company of our size. IMC has worked hard to educate us, to gain a keen understanding of our business and to help us craft an insurance and risk management strategy that has been both effective and affordable. And, after several years as a strategic partner, they remain engaged in our business and sincerely focused on customer satisfaction. Bradley J. Westfall, President ASHTA Chemicals Inc. 100 Employees, Manufacturer and Marketer of Potassium Based Chemical Products Your service is outstanding. Your representation of our interests with the various companies has likewise been excellent. We continue to be very pleased with all aspects of our relationship with IMC.

Jay Baker, President Jamestown Plastics, Inc. 101 Employees, Custom Thermoforming and Packaging

Jason Steiner, CFO Morris Coupling Company 135 Employees, Pipe & Tube Couplings, Pipe Bending & Fabrication

Commercial, Industrial, Institutional & Construction Property, Liability, Cyber, Workers’ Compensation & Contract Surety Insurance Agents Lloyd’s London Correspondents and Correspondent Brokers Worldwide

RIMS Quality Award

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814-452-3200 (fax) 814-454-5598 john.bloomstine@imcerie.com www.imcerie.com

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SPOTLIGHT Q&A | LEADERSHIP

How Zippo Lit a Fire on Innovation Zippo was founded in Bradford, Pennsylvania in 1932 when George G. Blaisdell decided to create a lighter that would look good and be easy to use. He fashioned a Zippo lighter and the rest is history. Here, Mark Paup, president and chief executive officer of Zippo Manufacturing Company and W.R. Case Cutlery, explains the brand’s rich history and why the company is proud to have its global headquarters based in northwest Pennsylvania. Zippo has sold over 550 million lighters since the company was founded 86 years ago. What do you credit for the company’s longevity? Zippo inventor and founder, George G. Blaisdell, said: “Build your product with integrity, stand behind it 100% and success will follow.” Zippo is still a family owned company, now led by Blaisdell’s grandson George B. Duke, and remains committed to the founder’s ideals. The Zippo windproof lighter became a global icon after WWII and has only increased in popularity around the world. We make a very good, guaranteed for life, windproof pocket lighter. But where we really excel is at decorating the surface of the lighter. Our engineering team continues to innovate new design methods, like our 360° MultiCut process which can engrave continuously around the sides of the lighter, and our color imaging and photo imaging processes which can replicate any image in vivid detail on the surface of the lighter. What do you believe makes the Zippo brand so special? Zippo is a small company that has earned global recognition as not simply a lighter manufacturer, but as a lifestyle brand. Zippo is synonymous with coolness, individuality and Americana. Zippo lighters have been seen in more than 2,000 films in the last eight decades. Because of this cache, the Zippo brand has been able to diversify into new products, such as our range of outdoor gear, which includes our popular refillable

hand warmers and our new rechargeable hand warmers. Today, the Zippo name is recognized around the world. In order to achieve such global manufacturing success, the company has invested heavily in its people and operations. Please provide us with a snapshot of your workforce, production and manufacturing facilities. Zippo products are sold in 180 countries, and Zippo employs more than 600 individuals. We have 520 people in our Bradford-based corporate office and manufacturing facilities. Zippo also has wholly-owned subsidiaries in China, UK, France and Germany. This allows us to control our own distribution across Asia and Europe. All of our lighter manufacturing is in Bradford, and our facilities are currently capable of producing more than 70,000 lighters a day and a range of 15 million to 18 million each year. Zippo lighter fluid and butane are also bottled in Bradford. In your own words, please explain what “Made in PA” means to Zippo manufacturing. “Bradford, PA – Made in U.S.A.” is stamped on the bottom of every Zippo lighter for a good reason — Zippo is committed to making each and every Zippo lighter right here. It is a symbol of our commitment to our community, our employees and our consumers.

especially internationally, as Zippo lighters cost more overseas because of the associated duties, shipping costs, etc. People are willing to pay the premium for genuine Zippo products — especially in China. For this, and so many other reasons, Zippo ownership will not consider making the lighter anywhere else. It is a core part of the brand’s identity. Without it, we lose our soul. What are the biggest opportunities and challenges facing Zippo today? We see both opportunity and challenge in today’s ever changing e-commerce landscape. Online shoppers want things fast and customized. It’s required us to really focus on speed to market and production of culturally relevant designs for every market we serve. And because we have such strong brand recognition, we continue to see opportunity to diversify our product lines. Our research indicates the Zippo brand makes sense to consumers in a number of different lifestyle areas, and we continue to release new Zippo-quality products to meet those demands. What’s next for Zippo? Incredible new lighter designs and reliable new products in our expanding outdoor product and global lifestyle offerings, and most importantly, remaining true to the brand’s heritage as we head into a future full of growth and opportunity.

The fact that each lighter is made in Bradford is extremely important to our consumers,

mbabizmag.com • MAY 2018

YOU NEED A

PARTNER At WorkPartners, we believe that when things work together, they work better. That’s why we offer fully integrated solutions to more efficiently manage the health and productivity of your workforce. The result? Reduced costs, improved employee engagement, and a healthier bottom line. Now that’s the power of partnership.

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HEALTH MATTERS | CLAIMS

Find the High Risk

How to Leverage Data to Predict the 5 Percent Who Drive the Most Health Costs

Justin Schaneman, MS, is the vice president for Data Analytics at HCMS Group, a WorkPartners affiliate.

Editor’s Note: This is the first of two articles on leveraging integrated data and applying it to clinical interventions. Many employers receive an annual report from health plans listing high-cost claims. Most find themselves looking in the rearview mirror wondering what they could have done to prevent such costly episodes or at least reduce their impact. This impact goes far beyond the rising costs of health care. A HCMS Group study found the top 5 percent of cases drove over 50 percent of overall spending when absenteeism, disability and workers’ compensation were included. Fortunately, it’s possible to leverage integrated data to predict which individuals are headed toward this top 5 percent, allowing employers to offer uniquely targeted clinical prevention.

Rene Sims, MSN, is vice president of Clinical Services at HCMS Group, a WorkPartners affiliate.

But the stakes are high and rising. The HCMS Group’s Research Reference Database, covering 3.8 million members, revealed that the number of cases costing at least $100,000 a year has climbed 16 percent since 2015 and now averages five per 1,000 members. Cases costing $500,000 or more a year have increased 22 percent over the same time period. High-cost cases happen to high-risk individuals — those with multiple conditions who often deal with family and work issues. They typically consume health care, lost time and disability benefits at a much higher rate. This comes at a price to their health and to their employer’s bottom line. Many individuals stay in the top 5 percent cost range year after year with multiple family members in the top 5 percent at the same time.

How is Data Being Used to Better Predict This Risk? Many employers have gained access to data warehouses, hoping to generate actionable insights from mining big data. The value, however, can be limited when only medical and pharmaceutical expenses are included. Integrating a broader array of data produces more actionable findings. Expanded databases incorporate disability and absence data, which reflect the policies that drive people’s behavior and consumption of benefits. They bring into focus the full cost of burden of disease, illnesses and injuries, allowing employers to better harness the predictive power of their data. Sophisticated employers also include the results of employee performance evaluations, compensation levels, safety violations, training course completions and other person-centric data types. Once the Right Data is Being Collected, How Can It Be Applied to the Health Plan? The next step is to fully leverage the value of that broader set of data inputs. An integrated risk index that takes into account compensation and lost time data will dramatically increase the predictive power of the index. This can measure risk related to human capital health and job performance, not just disease. It also provides a leading indicator to flag emerging risk cases early in their trajectory, so interventions can shorten or prevent the period of time when they are both high risk and high cost. Leveraging integrated data on workers’ compensation, disability and incidental absence — in addition to medical and pharmaceutical claims — allows predictive, individual risk indices that enable timely intervention for the high-risk top 5 percent. This kind of risk index can provide early identification of individuals who will soon be both high-risk and high-cost. Clinical intervention can then be offered to those who need it most. As big data opportunities continue to expand in the workforce health arena, advanced analytic and predictive modeling approaches are becoming more relevant and can improve outcomes for both the employee and employer. The key is to partner this predictive power with a clinical service that can leverage that intelligence effectively, targeting individuals who will benefit from the service. Next month’s article will discuss how to set up that clinical intervention. Learn more about HCMS Group at www.hcmsgroup.com or WorkPartners at www.workpartners.com.

mbabizmag.com • MAY 2018

Ridg-U-Rak Inc. for

years! History

“For myself, my family and our employees, manufacturing is a way of life; it creates familysustaining jobs, wealth and unlimited opportunities for our community to grow and prosper.” — John B. Pellegrino, Sr., President & CEO

At the end of WWII, there was a growing need to modernize and expand the nation’s warehousing capabilities. Entrepreneurial business people began to develop innovative storage rack designs to fill those needs. Company after company was springing up, headed by owners who carved out a market share by providing a high level of personal service. In recent decades, however, most of those early family owned companies have been replaced by holding companies, investment bankers or corporate raiders. Virtually no companies like Ridg-U-Rak still exist. Ridg-U-Rak was a minor player in those early years. Although limited in marketing vision and hampered by a lack of manufacturing automation, Ridg-U-Rak had some survival strengths that helped the company to continue to grow. Today, as the operation celebrates 75 years of serving the storage rack market, Ridg-URak is commonly acknowledged as a company built on Integrity and Service, guided by the able leadership of its president and CEO, John B. Pellegrino.

Capabilities

Ridg-U-Rak now has two plants in North East, Pennsylvania, covering 160,000 square feet, with a production capacity of more than 140,000,000 pounds of finished steel products per year. Ridg-U-Rak continues to reinvest profits into equipment and facility improvements, which contributes to it remaining one of the largest storage rack manufacturers in North America and is still a family owned business. One of the key contributors to the company’s success has been the increased talent base of its staff, with the ability to completely manage large projects from design and code compliance, through manufacturing, to final installation and customer approval. Major capital investments in its manufacturing plants have been instrumental in improved productivity. Recent investments include the latest rolling mill equipment, a total shop layout re-vamping, an automated beam manufacturing line, and a 600-foot-long state-of-the-art powder coating line, which not only improves product quality, but also the company’s environmental imprint by reducing its liquid paint usage. From recycling programs to major transformations in manufacturing processes, the corporate philosophy includes doing what is necessary to meet 21st century sustainability expectations.

Products

Ridg-U-Rak provides an unlimited array of storage options. Whether deep and dense storage systems like Push-Back, Drive-In, and Pick Modules, or Narrow-Aisle and Deep-Reach systems, design engineers can layout storage arrangements to meet a customer’s unique load, throughput and capacity requirements. Ridg-U-Rak also provides small storage systems for pallet loads or hand-stacked cartons, 120 South Lake Street and offers replacement parts that interchange with competitive racks. North East, PA 16428 Many specialty storage options are Phone: 814/725-8751 or 866/479-7225 available, including a rack-supported Website: www.ridgurak.com crane system to store large dies and tools.

LEGAL BRIEF | CLASSIFICATIONS

Taxation as a C Corporation? Tax Reform and S Corporation Revocation

Unique Opportunity If a corporation routinely reinvests its profits back into the business, and rarely, if ever, opts to distribute profit to the shareholders, the decrease in the corporate tax rate from 35 percent to 21 percent creates a unique opportunity. By reinvesting capital, and not distributing profits to shareholders in the form of dividends, income earned by a C Corporation would not be subject to “double taxation,” and taxed only (for federal tax purposes) at the new federal tax rate of 21 percent! There are several additional factors that you should consider before converting your S Corporation to a C Corporation, and time should be spent with your professional advisers to determine the best course of action for your business.

Matthew B. Wachter is a member of the Business Transactions and Trusts & Estates practice groups at MacDonald Illig. He concentrates his practice in the areas of business and tax, business succession planning, and estate planning and administration. For decades, the advice given by tax practitioners to privately owned business corporations has remained constant — if your business qualified to be taxed as an “S Corporation,” it was typically a “no brainer” to make an “S election.” Today, the Tax Cuts and Job Act of 2017 (“Tax Reform”) has reversed the analysis for business owners. Now, it is time to crunch the numbers and consider whether you should convert from an S Corporation to a “C Corporation.” Background Most corporations are eligible to be taxed as either a C Corporation or S Corporation. What is the greatest motivator when

opting between classifications? The tax consequences of the decision. Prior to Tax Reform, income earned by a C Corporation was taxed at 35 percent; however, effective January 1, 2018, Tax Reform has lowered the corporate tax rate to 21 percent. The effect of the lowered corporate tax rate is significant because the profit earned by a C Corporation is subject to “double taxation.” The term “double taxation” is shorthand to explain that profits earned by a C Corporation are taxed twice. This means that both a C Corporation is taxed on profits earned, and shareholders are taxed again when those profits are distributed as dividends. Double taxation is a tax trap for the unwary and has discouraged many from opting to classify a business as a C Corporation. S Corporations are taxed differently than C Corporations. S Corporations are not directly taxed; rather, a shareholder reports the S Corporation’s income, losses, deductions and tax credits on his or her personal tax return. The result is that profits earned and distributed by an S Corporation are taxed once at the shareholder level and at the shareholder’s individual tax rate.

Such considerations include potential state level income tax considerations. Namely, conversion to a C Corporation may trigger state level taxation on the amount of any federal taxable income. This is not the case in all states, but will significantly impact your analysis if your corporation primarily does business in a high tax jurisdiction. Additionally, unlike an S Corporation, the amount of any income generated by a C Corporation that is not distributed will not increase a shareholder’s basis in his or her stock. If you plan to sell your corporation in the near future, conversion from an S Corporation to a C Corporation may result in you having to recognize more income in the event of a future stock sale. It should also be noted that after conversion to taxation as a C Corporation, there is a two-year prohibition on distributing any previously taxed S Corporation income. Conversion of tax status is a significant business decision and not a matter to be taken lightly, but with Tax Reform, conversion from an S Corporation to a C Corporation creates a significant and unique opportunity for many small business owners. For more information, contact Matthew Wachter at 814/870-7717 or mwachter@mijb.com.

mbabizmag.com • MAY 2018

Katlyn • Nathan • Katrina Erie FCU Business Lending Team

If your business needs money to grow, take advantage of new opportunities, or buy equipment, be sure to talk to our business lending team about all of the options we offer. You’ll find everything you love about your credit union, now for your business. Contact Nathan Crouch, Commercial Lender (814) 825-2436 Ext. 1052 • ncrouch@eriefcu.org Working Capital Lines of Credit | Equipment Financing

Commercial Real Estate Loans | Business Expansion Loans Loans subject to credit approval. Membership eligibility required. MBA Adv2 0218.indd 1

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The Greatest Revolution Yet –

Industry 4.0

The 4th Industrial Revolution is all about emerging technology breakthroughs, including robotics, artificial intelligence, internet of things, nano technologies, 3D printing and more. This technology will improve lives, create jobs, make goods cheaper and better, and impact the world in ways we’ve yet to image. Technological progress takes people to make it happen. This is your opportunity to get involved. This revolution doesn’t happen without your help.

Now is the time to be imaginative. Now is the time to be creative.

Now is the time to be a manufacturer. Discover how NWIRC is your partner for Industry 4.0. www.nwirc.org

For more on Industry 4.0- check out the video using the QR Code. Also, plan to attend the free Manufacturing Advanced Expo on May 10- hosted by NWPA-NTMA, NWIRC, and NEFF. Details at www.nwirc.org/events.

MAY 2018 • mbabizmag.com

US – UK – Brazil – Mexico Family Owned since 1956 by the Prischak Family, Plastek is a Global Plastics Manufacturer with locations in Erie, PA – Hamlet, NC – Mansfield, United Kingdom – Indaiatuba Brazil – Queretaro, Mexico. Employing more than 1,700 people worldwide, Plastek manufactures a wide variety of Cosmetics, Laundry Care, Home Care, Personal Care, Food & Beverage and Pharmaceutical Products around the world.

(Front Row): Dennis Prischak – President/CEO, Joseph Prischak - Chairman, Douglas Prischak – VP of Global Tooling & Engineering (Back Row): Daniel Prischak – VP of Manufacturing, Donald Prischak - Sales

mbabizmag.com • MAY 2018

BUSINESS BUZZ | WHAT’S NEW MAPLEWOOD HIGH SCHOOL WINS ACES SCHOOL OF THE YEAR AWARD

In partnership with Gannon University’s Center for Business Ingenuity, Americans for the Competitive Enterprise System, Inc. (ACES, Inc.) held its second annual School of the Year Competition on March 23. All winning teams from this past year’s Pennsylvania Business Week programs were invited to compete in an Advertising competition and a Trade Show that both took place at Gannon University’s Center for Business Ingenuity. Teams from Greenville Area High School, Corry Area High School, and Maplewood High School all competed in an effort to win scholarship money. The grand prize offered by Gannon was an annual $1,000 scholarship, with second place receiving an annual $500 scholarship, and third place receiving an annual $250 scholarship. Greenville took home third place, Corry took home second place, and Maplewood took home first place along with a golden trophy. ACES presents PA Business Week programs in public schools throughout Western PA during the school year. PA Business Week is designed to allow teams of high school students to manage companies through a business simulation for an entire week. Students are taught how to manage finances, understand the factors of production, execute effective advertising campaigns, and work together as a team to achieve success. For more information, visit www.aceserie.org.

MANUFACTURING ADVANCED EXPO TO BE HELD MAY 10 IN ERIE

The Manufacturing Advanced Expo is scheduled for noon to 5 p.m. Thursday, May 10, at the Ambassador Conference Center. According to organizers, the free event will showcase the latest manufacturing technology for regional manufacturers. More than 30 exhibits will feature and demonstrate the latest innovations, including collaborative robots, machine safety, energy saving solutions and more. The day will also include educational sessions on technology solutions to improve processes and operations. Presentation topics will include: • Milling strategies to improve profitability • Reduce set-up and increase utilization • Applying collaborative robots to repetitive operations • Machine vision • Traceability • Developments in multi-tasking The event is hosted by Northwestern PA Chapter of National Tooling and Machining Association (NWPANTMA) and Northwest Industrial Resource Center (NWIRC), with NEFF as the premiere sponsor. Registration is required at http://nwpa-ntma.com/ meetinginfo.php. For more information, contact Tami Adams at tadams@nwpa-ntma.com.

MAY 2018 • mbabizmag.com

Students from Maplewood High School claimed the top prize in Americans for the Competitive Enterprise System’s second annual School of the Year Competition held at Gannon University.

LORD WINS BIGGEST CONTRACT IN COMPANY’S HISTORY

LORD Corporation, a global diversified technology and manufacturing company, will develop and manufacture the auto throttle module for Boeing’s 737 MAX. The cockpit control will be designed and produced at LORD Electromechanical Solutions (formerly Fly-by-Wire France) facilities in Saint-Vallier, France and in Cambridge Springs, Pennsylvania. This new multi-year contract reflects LORD’s acquisition strategy to develop innovative electromechanical solutions to provide long-term value for the aerospace & defense industry. LORD acquired Fly-by-Wire in 2016. The development of the cockpit control systems will take place over the next few years with production beginning in 2020. “We are pleased to embark on this monumental journey with Boeing,” said Ed Auslander, LORD president and chief executive officer. “The success of Boeing’s 737 MAX, coupled with LORD’s proven history in providing solutions for missioncritical applications, represents tremendous opportunities for the future of flight.” LORD has been a major supplier to the aerospace industry for electromechanical solutions on cockpit control systems for nearly 40 years. A longtime partner of Boeing, LORD is a recent Silver Boeing Performance Excellence Award winner and has developed and manufactured several systems and components for a variety of commercial and military Boeing platforms. “Our long-term relationship with LORD is taking on a new dimension as they join a large family of suppliers that are contributing to the success of the 737 MAX,” said Jean-Marc Fron, managing director of Boeing France. “We are pleased with this opportunity for growth in activity of our supply base in France with a company such as LORD Electromechanical Solutions that is wellknown throughout France for its know-how and expertise.” LORD, headquartered in Cary, North Carolina, and which has operations in northwest Pennsylvania, is currently constructing a new, state-of-the-art

manufacturing center in Pont de L’lsère, France to optimize and enhance its service to Boeing and other customers, while positioning LORD for future growth. For more information, visit www.lord.com.

II-VI INCORPORATED TO ACQUIRE COADNA

Saxonburg, Pennsylvania-based II-VI Incorporated, a global leader in engineered materials and optical solutions for networks, recently announced its intent to acquire CoAdna, Holdings, Inc., headquartered in Sunnyvale, California, in a cash transaction valued at approximately $85 million at closing. The transaction price includes the acquisition of CoAdna’s approximately $40 million in cash. The transaction is expected to close in the third calendar quarter of 2018 and is subject to the approval of CoAdna’s shareholders, regulatory approvals and customary closing conditions. Founded in 2000, CoAdna is a global leader in wavelength selective switches (WSS) based on its patented LightFlowTM liquid crystal platform and II-VI’s micro-optics. CoAdna’s WSS modules have a long history of successful field deployments and over the years, have been integrated alongside II-VI’s optical amplifiers, optical channel monitors and other II-VI components on ROADM line cards designed by II-VI, CoAdna and their customers. “CoAdna and II-VI have been great business partners for many years, leveraging each other’s complementary products and technologies to serve the optical transport market,” said Sunny Sun, president, Photonics Segment, II-VI Incorporated. “We are eager to realize our synergies to grow the WSS business over our strong sales channels and shorten the time to market for our new products. With our manufacturing scale, unmatched vertical integration and broad product portfolio, we are well positioned for the growth in ROADM demand driven by metro network upgrades, new datacenter interconnect architectures and the emerging 5G wireless infrastructure.” For more information, visit www.ii-vi.com.

ERIEZ EXECUTIVE ELECTED TO NATIONAL ACADEMY OF ENGINEERING

Eriez recently announced that Michael J. Mankosa, Ph.D., executive vice president of Global Technology, has been elected to the National Academy of Engineering. He will be formally inducted during a ceremony at the NAE’s annual meeting in Washington, D.C., on September 30, 2018. The NAE recently elected 83 new members and 16 foreign members, bringing total U.S. membership to 2,293 and the number of foreign members to 262. Election to the NAE is among the highest professional distinctions accorded to an engineer. ®

According to the NAE, Academy membership honors those who have made outstanding contributions to “engineering research, practice, or education, including, where appropriate, significant contributions to the engineering literature” and to “the pioneering of new and developing fields of technology, making major advancements in traditional fields of engineering, or developing/implementing innovative approaches to engineering education.” Mankosa has co-invented numerous technologies which are rapidly being adopted by the mining and minerals industry. His HydroFloat coarse particle flotation system is used commercially in the phosphate and potash industries, while the StackCell fine particle flotation system is being applied within the coal and minerals industries. Mankosa earned his doctorate in mining and minerals engineering from Virginia Polytechnic Institute and State University (Virginia Tech) in 1990. His graduate work focused on modeling, design, instrumentation and control of process equipment. Throughout his career, Mankosa has published more than 100 articles in prominent scientific and technical journals, obtained over 30 process and equipment patents and received more than $2 million in research funding from a number of state and federal agencies. Mankosa is also a member of the Manufacturer & Business Association Board of Governors, serving as vice president in 2018-2019.

THE HARTMAN GROUP WELCOMES NEW STAFF MEMBERS

The Hartman Group today announced the addition of Markell Kunigus and Brady Grove to the Hartman team. Kunigus joins The Hartman Agency as Client Services executive. Her home base will be in the Williamsport office. Kunigus will be facilitating the management of the agency’s customer service/ account management in its commercial property and casualty operation. She is also leading a review of TAM technology solutions to insure best reports and benchmarks for agency performance.

Kunigus is working with the agency’s accounting personnel to insure proper processing of direct and agency billing, producer and client work for timely account receivables, as well as associated employee expenses. She also serves as a secondary resource for accounting functions. Kunigus is a Williamsport native and is a graduate of Lycoming College. She earned a degree in business administration with a concentration in finance and managerial economics. Additionally, she has earned her AU (Associate in Underwriting) designation. She has worked in the insurance industry since 2009.

casualty clients.

Grove joins The Hartman Agency as an account executive. He is working in the State College office with the commercial lines team providing service to the agency’s property and

Grove is a native of Williamsport and a Lock Haven University graduate. Most recently, he served as the general manager for two e-commerce corporations. He was an integral part of the growth of both businesses hosting top-rated eBay stores along with building a successful Amazon store and two Googleapproved e-commerce websites. The Hartman Group was founded by W. Howard Hartman in 1932 in Williamsport. Hartman operates commercial property and casualty, and personal lines divisions. The Hartman Agency, Inc. operates out of offices in Williamsport and State College.

ATTORNEY JEFFERY JOINS KNOX LAW IN NORTH EAST

Attorney Robert J. Jeffery has affiliated with Knox McLaughlin Gornall & Sennett, P.C. (Knox Law). Jeffery, who is admitted to practice in Pennsylvania and New York, has nearly 40 years of experience in real estate law, estate planning & administration, governmental practice, and business law. Jeffery and his staff will continue to serve clients at their current office location, 33 East Main Street, North East, where Jeffery had practiced with Edward Orton, who retired in 2016. A number of attorneys formerly associated with their firm, known most recently as Orton & Jeffery, P.C., have gone on to serve with distinction as judges in the federal and state courts. Attorney James S. Bryan, who has been with Knox Law since 2009, will transition to the new office as Of Counsel to the firm. He has practiced in his hometown of North East since 1974, when he returned from a three-year active duty commitment in the United States Marine Corps.

PEOPLE BUZZ | AWARDS AND PROMOTIONS MBA ASSOCIATION HIRES HR GENERALIST, GOVERNMENT RELATIONS REPRESENTATIVE

The Manufacturer & Business Association (MBA) recently announced that Jennifer Tshudy has joined the not-for-profit employers’ organization as an HR generalist/trainer and Jezree Friend as the MBA’s government relations representative. In her role, Tshudy assists Association member firms in all areas of human resources, including training, HR hotline, recruiting, interviewing, hiring and orienting new employees, writing and reviewing employee handbooks, HR assessments, job descriptions, compensation, unemployment and benefit administration. Tshudy has more than 17 years of combined experience in the HR and training fields with a focus on all aspects of hiring and training, as well as payroll, schedules, benefit administration, workers’ compensation and FMLA. Before returning home to northwest Pennsylvania in 2005, she worked in several states, opening new stores for a national chain retailer, as well as improving stores with operational issues (such as inventory management, ensuring budget control, enforcing policy and procedure, and conducting internal audits). Tshudy attended Gannon University where she focused on human resources and business administration. She is a member of the Human Resources Management Association of Northwest Pennsylvania, the local chapter of the Society for Human Resources Management. Friend, who joins the Association as its government relations representative, is responsible for developing legislative priorities and strategies; encouraging membership grassroots activities; and lobbying on behalf of a pro-growth, pro-business agenda. Friend joins the MBA after holding several prominent political positions, including campaign manager for 2018 Erie Republican mayoral candidate John Persinger where he ran the strongest campaign the City of Erie has seen from an opposition candidate in decades. He also worked in constituent outreach for the Pennsylvania Senate, as a campaign manager in the 2018 primary for Erie County executive, as well as field director for a previous PA Supreme Court candidate. He earned his political science degree from Edinboro University and master of public administration degree with a concentration in organization leadership from Gannon University. Friend is also a veteran of the U.S. Army where he served as a legal noncommissioned officer.

mbabizmag.com • MAY 2018

Rogers Brothers Corporation • Albion, PA Proudly Made in Pa for More than 100 years!

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AMERICAN TINNING & GALVANIZING

552 West 12th Street PO Box 1599 Erie, PA 16512 Phone: 814/456-7053 Website: www.galvanizeit.com A NADCAP certified Metal Finishing company, ATG has specialized in putting the “PRO” in Corrosion PROtection for over 85 years. Anodizing, Electroplating or Galvanizing: ATG’s got you covered!!

AMERICAN TURNED PRODUCTS

7626 Klier Drive Fairview, PA 16415 Phone: 814/474-4200 Website: www.atpteam.com Specializes in contract precision machining of highvolume complex parts for the automotive industry.

CUSTOM ENGINEERING COMPANY

2800 McClelland Avenue Erie, PA 16510 Phone: 814/898-2800 Website: www.customeng.com Custom is a leading supplier of heavy fabrication, machining and assembly of large weldments to a wide variety of world-class companies.

ERIE PRESS SYSTEMS

1253 West 12th Street, PO Box 4061 Erie, PA 16512 Phone: 814/455-3941 Website: www.eriepress.com Manufactures custom hydraulic and mechanical presses for forging, extrusion, stretch forming, compaction and metal forming.

GREAT LAKES CASE & CABINET

4193 Route 6N Edinboro, PA 16412 Phone: 814/734-7303 Website: www.werackyourworld.com Manufacturer of UL Listed enclosures for industrial control panels and IT equipment; available in multiple NEMA ratings for harsh indoor and outdoor environments.

MAY 2018 • mbabizmag.com

HOWARD INDUSTRIES

6400 Howard Drive Fairview, PA 16415 Phone: 800-458-0591 Website: www.howardindustries.com Nationally known, locally owned, Howard Industries is a leading manufacturer of both interior and exterior architectural signage systems. They offer patented, modular, and built-to-order products that are 100% made in the USA.

INDUSTRIAL SALES & MANUFACTURING

2609 West 12th Street Erie, PA 16505 Phone: 814/833-9876 Website: www.ismerie.com Quality contract machining, fabrication and assembly for OEMS since 1967.

LORD CORPORATION

2455 Robison Road West Erie, PA 16509 Phone: 814/868-3180 Website: www.lord.com LORD Corporation is a diversified technology and manufacturing company developing highly reliable adhesives, coatings, motion management devices, and sensing technologies that significantly reduce risk and improve product performance. For more than 90 years, LORD has worked in collaboration with our customers to provide innovative aerospace, defense, automotive and industrial solutions.

MATRIC GROUP

2099 Hill City Road Seneca, PA 16346 Phone: 814/677-0716 Website: www.matric.com Provides electronic contract manufacturing services, contract design, cable and electromechanical assemblies.

MICRO MOLD CO., INC.

4820 Pittsburgh Avenue Erie, PA 16509 Phone: 814/838-3404 Website: www.plastikoserie.com Provides custom mold design & fabrication services along with plastics engineering support services to the medical device and electronics industries.

Pennsylvania’s manufacturing industry comprises more than 14,000 establishments and more than 558,000 employees that represent both traditional and additive manufacturing. Along with national and international companies, small and medium size businesses have a significant presence here, and help continue the state’s manufacturing heritage. Here are just a few of those companies that are proud to manufacture in the Keystone State:

RIDG-U-RAK, INC.

PHB INCORPORATED:

120 South Lake Street North East, PA 16428 Phone: 814/725-8751 Website: www.ridgurak.com Designs and manufactures a full array of storage rack solutions.

7900 West Ridge Road Fairview, PA 16415 Phone: 814/474-5511 Website: www.phbcorp.com Manufacturing capabilities include zinc die casting, aluminum die casting, machining, plastic and rubber molding, tool & die, injection molding, and product assembly.

SEAWAY MANUFACTURING

2250 East 33rd Street Erie, PA 16510 Phone: 814/898-2255 Website: www.SeawayMfg.com Seaway, deeply invested in the Erie community since 1959, is an active industry leader in the manufacture of premium vinyl replacement windows and sunrooms.

THE PLASTEK GROUP

2425 West 23rd Street Erie, PA 16506 Phone: 814/878-4400 Website: www.plastekgroup.com The Plastek Group employees more than 1,600 employees worldwide in four different countries. The company Plastek is a lead global manufacturer in injection molding products, and tool design and tool building.

SMITH PROVISION COMPANY, INC.

1300 Cranberry Street Erie, PA 16501 Phone: 814/459-4974 Website: www.smithhotdogs.com Manufacturer of premium quality wieners, sausages, deli meats, bacon and awardwinning hams.

PLASTIKOS, INC.

8165 Hawthorne Drive Erie, PA 16509 Phone: 814/868-1656 Website: www.plastikoserie.com Provides custom mold design and fabrication services along with plastics engineering support services to the medical device and electronics industries.

TONNARD MFG. CORP.

715 Spring Street Corry, PA 16407 Phone: 814/664-7794 Website: www.tonnard.com Specializes in short- and long-run metal stamping, laser cutting and fabrication. The company is ISO 9001 and AS 9100 registered.

REDDOG INDUSTRIES, INC.

2012 East 33rd Street Erie, PA 16510 Phone: 814/898-4321 Website: www.reddog-erie.com Manufacturing capabilities include high-pressure plastic injection molds; aluminum die-cast dies; and specialized machining.

REHRIG PACIFIC COMPANY

Address: 1738 West 20th Street Erie, PA 16502 Phone: 814/455-8023 Website: rehrigpacific.com Manufactures recycle bins, milk crates, and dairy crates, to name a few.

mbabizmag.com • MAY 2018

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Pro-Business Governor? Why Elections Matter

The Pennsylvania primary election will take place on May 15, 2018. Registered voters will have the opportunity to choose who will represent their party in the general election. Although there will be many things on the ballot, the governor’s race is receiving the most attention. There are three candidates trying to be the one to take on Governor Tom Wolf, a Democrat, in November. There are many important issues facing the business community in Pennsylvania right now, and we continue to rank toward the bottom of “business friendly” states. The Manufacturer & Business Association’s Government Affairs Department recently reached out to the Republican Party’s gubernatorial candidates in the May primary for their response to the following question: Pennsylvania has the second-highest corporate net income tax rate in the country at 9.99 percent. Last year, we recorded 1-percent job growth and ranked 27th by Forbes for Best States of Business. As governor, how will you improve these numbers? Laura Ellsworth Successful businesses have two things: a business plan and a sound budget. Pennsylvania has neither. We will create “The Map” – a visual depiction of what we intend Pennsylvania to look like in 10 years, including multiple energy sources, manufacturing, infrastructure/ transportation; educational /workforce

assets; and more. Second, we will create a Council of Business Leaders to provide specific recommendations to enhance business climate and grow jobs. Government doesn’t create jobs; citizens do. This Council will bring their voices to the table on topics including reducing the CNI, The Map design and identification of job-crushing regulations. Third, we will institute a transparent and disciplined budget system based on No Budget; No Pay; no one in the legislature or executive branch will get paid until we have a timely balanced budget. Finally, we will overhaul our regulatory system by instituting a Responsible Officer System mandating personal accountability; eliminating “regulation by gotcha” where fines fund agencies, creating adversarial relations between citizen and agency; and providing a “customer service” approach that delivers economic development in an administratively sound way.

ON THE HILL | ELECTION

Paul Mango Pennsylvania desperately needs a governor who will put the taxpayer, both individual and employer, first. First, our Commonwealth’s tax code needs a complete overhaul, and that includes slashing the corporate tax rate from 9.99 percent to 3.07 percent. Second, we need to eliminate many of the unnecessarily burdensome regulations, such as many of the DEP regulations, that are stifling economic growth. Third, we must reinvest in the strategic infrastructures (ports and airports, pipelines and locks) that foster investment and job growth. Fourth, we must reimagine vocational education and retraining, and bring dignity back to the trades in Pennsylvania. Finally, we need a governor who will actually market the great benefits our Commonwealth can provide businesses and urge them to relocate to Pennsylvania. Not only has Tom Wolf been an ineffective chief executive, he has been an MIA chief marketer. Under my administration, this will change. Scott Wagner

Government does not create jobs, but it can hinder their creation. With abusive regulations and burdensome taxes, Pennsylvania has created a hostile environment that is running businesses out of Pennsylvania and stopping future businesses from opening as they seek a better business climate. Pennsylvania’s tax code is a direct reflection of the special interests that have a grip on Harrisburg, and as governor I will prioritize comprehensive tax reform. Such reforms include immediately lowering the corporate net income tax and eliminating property and inheritance taxes. It is past time that our tax code puts taxpayers and small businesses first. I would remove the massive regulatory burden that our businesses exist under by assessing every governmental imposition for its impact on economic development and remove those barriers by implementing a Red Tape Reduction Act to count, cap and cut the number of regulations by instituting a onein, two-out regulatory model. As governor, my administration will implement favorable policies to guarantee economic growth and situate Pennsylvania as an economic powerhouse in the Northeast. mbabizmag.com • MAY 2018

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Free Savings Analysis: Contact Judy Rosatti today at 814/833-3200, 800/8152660 or jrosatti@mbausa.org!

ESSENTIAL TOOLS Attorneys at Knox McLaughlin Gornall & Sennett, P.C. understand the unique challenges faced by manufacturers. From small proprietorships to large corporations and from sintered metals to pet nutrition, we have worked with all types of businesses and in many industries. We can provide the legal tools essential to your success. Rely on Knox Law to find innovative solutions to your problems and add value to your business.

• • • • • •

Business, Tax & Succession Planning Employee Benefits Finance & Securities Intellectual Property & Technology Mergers, Acquisitions & Divestitures Labor & Employment

MAY 2018 • mbabizmag.com

• • • • • •

Commercial, Contract & Complex Litigation Real Estate Acquisition Environmental Law Zoning & Land Use Workers’ Compensation Product Liability Defense

Knox McLaughlin Gornall & Sennett, P.C. Erie, PA | Jamestown, NY | North East, PA 814-459-2800 | www.kmgslaw.com

How much can you save with the new MBA

WORKERS COMPENSATION PROGRAM?

LOESEL-S INSURAN CHA CE AGENCY, AF INC.

90 Years of Service

LOESEL-SCHAAF INSURANCE AGENCY, INC. www.LSinsure.com

Call Doug Loesel or Patrick Wachter and find out.

814-833-5433 Loesel-Schaaf Insurance Agency, Inc. is the carrier for the MBA Work Comp program, Eastern Alliance, is a Pennsylvania based company.

90 Years of Service

LOESEL-SCHAAF INSURANCE AGENCY, INC.

rvice

s of Se 90 Year

mbabizmag.com â&#x20AC;¢ MAY 2018

The Erie County Technical School supports careers that promote manufacturing in our area by offering quality technical education programs in Drafting & Design, Electronics and Electrical Engineering. SINCE 1968

CELEBRATING

For more information contact ECTS at 814.464.8600 or visit ects.org.

YEARS

SINCE 1968

CELEBRATING

YEARS

8500 Oliver Road | Erie, PA 16509 | (814) 464 - 8600 Erie County Technical School is an equal opportunity educational institution.

Celebrating 50 Years Your Solution for Total Fire Protection • Fire extinguisher inspection and maintenance • UL300 Wet Chemical kitchen hood systems • Clean agent and CO2 fire systems • Paint booth and industrial dry chemical fire systems • OSHA compliant fire extinguisher training classes • Bar code inspection system • Fire alarm installation, testing and repair

www.firelinegroup.com 30

MAY 2018 • mbabizmag.com

611 W. 5th Street Erie, PA 16507

814/456-9634

HR CONNECTION | WORKPLACE TRENDS MANUFACTURERS INDICATE INCREASED OPTIMISM FOR 2018, SURVEY FINDS

Nationally recognized professional services firm Bennett Thrasher has jointly released the results from the 2018 Leading Edge Alliance (LEA) National Manufacturing Outlook Survey.

More than 450 manufacturing executives participated in the survey, which includes the opinions of respondents who produce industrial/ machining, transportation/automotive, construction, food and beverage, and other products. Optimism is high as manufacturers’ responses indicated they have a more positive outlook about the economy for 2018 than in 2017. The growing U.S. and global economies, rising energy and commodity prices, and improved business and consumer confidence support this positive outlook.

Don’t Toss It! Why You Need to Educate Your Team on EOBs

Survey results for 2018 include: • 81 percent of manufacturers believe their revenue will increase in 2018, with 72 percent eyeing organic growth in the United States as their primary opportunity to increase sales.

According to Emily Payne from Benefits Pro: Transparency has been a key focus in the effort to create better health-care consumers. But as employers try to help them understand the relationship between medical costs and health insurance premiums, one area that needs a little more explanation is, well, the explanation of benefits.

• Manufacturers are more optimistic about the regional and national economy than the global economy, yet notably the optimism rating for all three has increased by more than 10 points since the 2017 outlook.

According to a recent survey from Vitals, an online resource for health-care transparency, for one in three consumers, the arrival of an EOB in the mail (or digitally) causes confusion or frustration, and they’re unsure what the dollar amounts on the EOB mean — and who is going to pay them. According to Vitals, part of the problem is a lack of industry standards with regard to creating an EOB. Without a confident understanding of what the codes or procedure names mean, patients are unsure how to read the bill, which, in turn, leads to apathy, according to the research, with one out of 10 consumers surveyed admitting that they typically throw out the EOB.

• 62 percent of manufacturers expect their sectors to grow, more than doubling the 2017 outlook; food and beverage and construction materials cite the highest optimism for sector growth. • Manufacturers’ top three priorities are growing sales, cutting costs and addressing the talent gap. • As in past years, labor remains a significant challenge. More than half of survey participants cited the labor shortage as the greatest risk or barrier to growth, and more than half of manufacturers expect to increase hiring.

However, as the push for greater transparency has shown, consumers are doing themselves and their health insurer a disservice. Auditors have found that more than 90 percent of the hospital bills contain an error, resulting in significant overcharges. Consumer issues with EOBs: • one in three feel confused, frustrated or angry after receiving an EOB • 30 percent aren’t sure whether or not their EOB is a medical bill • 90 percent of hospital bills contain billing errors • one in 10 consumers treat their EOB like junk mail and throw it away • 55 percent believe the information on an EOB is not clear • 60 percent want their doctor or insurer to explain how medical billing works ahead of time

• Respondents plan to utilize technology to reduce risks and build a competitive advantage.

To better educate your workforce on EOBs, please contact the Association’s Insurance Division at 814/833-3200 or 800/815-2660.

Melissa Damico is the manager of Client Services for the Manufacturer & Business Association Insurance Division. Contact her at 814/833-3200, 800/815-2660 or mdamico@mbausa.org.

mbabizmag.com • MAY 2018

HR Q&A | GET ANSWERS HOW LONG DO WE HAVE TO KEEP RECORDS OF BACKGROUND CHECKS?

There is no specific time limit given in laws regarding background checks. However, various civil rights laws list document retention periods for information used in a hiring or employment decision. Therefore, the safest course of action is to choose the civil rights law with the longest retention period. Section 1981 of the Civil Rights Act of 1866 has a four-year statute of limitations for claims of race discrimination, so the safest course of action is to keep background check records for four years. If you use a third-party provider to conduct your background checks, remember that you fall under the Fair Credit Reporting Act (FCRA). The FCRA doesn’t state a time frame for document retention, so employers should use the standard described above.

ONE OF OUR EMPLOYEES HAS BEEN ARRESTED AND IN JAIL. ARE WE OBLIGATED TO HOLD HIS JOB? CAN WE TERMINATE?

Sometimes state background check laws can provide limited guidance, since they tell employers how and when to consider (or not consider) the arrest record of an applicant, or a current arrest of an applicant, and those guidelines may apply to current employees. Such guidance primarily addresses whether employers could take adverse action based on the nature of the offense, however. It does not require employers to excuse absences for employees who cannot report for work while in jail. Employers shouldn’t be too quick to terminate based on an arrest, because it’s possible the employee could return to work pending disposition of the case. It is usually best to wait until more information is available before making the decision to terminate based on the nature of the alleged offense. While the case is pending and bail is being determined, an employee may be able to use paid leave such as vacation or take an unpaid leave of absence. An exception to giving such consideration would be if the crime (allegedly) committed relates to the job duties. For example, if the crime was against a child, the evidence seemed overwhelming and the employee’s job involves working with children, that would be a reason not to have the employee come back. However, conduct some due diligence (look at the arrest report, talk to the police, prosecutor or defense attorney, look at the complaint filed in court) to get the facts before making that determination. Be fair to the employee, while still doing what the organization needs to move forward.

Tips for Application and Resume Screening An employer’s main objective in reviewing applications or resumes is to identify anything that might cause it to discontinue the screening process. In other words, an employer is looking for possible disqualifiers or red flags that indicate the applicant may not be a good fit for the organization. When reviewing an employment application or resume, there are certain things an employer should look for. Naturally, this will vary depending on the type of application and the type of position. But, there are some general factors to consider: • Does the applicant have the key qualifications? • Does the applicant have experience in a similar job or environment? • Is there an indication that the person has skills and knowledge associated with the essential functions of the job? • Are there any meaningful accomplishments? The criteria listed above are good qualities an employer is looking for. There are, however, some things to be aware of: • Gaps in employment dates, • Evidence of job hopping, • Vague information, • More emphasis on earlier experiences or education than recent, • Missing information (i.e., why isn’t the salary history given?), • Reasons given for changing jobs, and • Job history showing decreasing responsibilities. When reviewing an employment application or resume, an employer is looking to determine what the applicant could do for the employer — how he or she could handle the position — how he or she might fit in with the organization. The best way to find these answers is to determine how the applicant has done those things in other organizations or experiences. So, past experiences are one of the most important things to watch for when reviewing information. For more assistance with your recruiting needs, email the MBA’s HR Services Division at hrservices@mbausa.org.

Stacey Bruce, SPHR, SHRM-SCP, is the director of HR Services Division at the Manufacturer & Business Association. Contact her at 814/833-3200, 800/815-2660 or sbruce@mbausa.org.

MAY 2018 • mbabizmag.com

St. Marys Box Company, Inc.

NOT JUST BOXES!

Assisting Buyers and Sellers in Acquisitions and Divestiture of Businesses • Keeping your business and employees in your community

We have developed some of the most innovative corrugated products available. Our LIFT TM pallet is light weight but can withstand a 10,000 pound static load test and can be shipped

• Providing Decision Associates M & Adeep LLC market

internaionally because it is exempt from wood pallet export restrictions. We also offer our patented wood replacement logs,

research to find the perfect buyer for the perfect seller

• Evaluating your business’s readiness to sell at maximum value

partitions, corner protectors, display cartons and of course.... BOXES.

The Patented LIFT™ Pallet phone 814-834-3819

www.stmarysbox.com www.li�-pallet.com Place an Order: order@stmarysbox.com Don Moore 814-881-6168 B.J. Lechner 814-602-2228 decisionassociates.net

Your local seed source

ernstseed.com sales@ernstseed.com 800-873-3321

Norcen Industries Inc. is a full service Machine shop with almost 50 years’ experience in machining Metals and Plastics. We specialize in small to medium-large parts and offer applications such as Milling, Turning, EDM wire, sinking, hole drilling and Router for large sheets. Most of our work is Cad/Cam generated for increased accuracy and repeatability. Our capabilities include high speed 4 and 5 axis machining, Grinding and Welding services. Norcen utilizes modern meteorology methods with CMM, Video and Optical measuring equipment. We are a Quadrant Plastics Distributor and stock a full line of prodcuts in Sheet, Rod, Tube and Tiger Flex Hose. We would be pleased to quote any job.

Phone: (570) 398-4363 | Fax: (570) 398-2507 Email: sales@norcen.com Please visit us at www.norcen.com

mbabizmag.com • MAY 2018

Custom Group Industries... THE

Local manufacturers of corrugated boxes and protective packaging since 1988 Visit us: sandspackaging.com

10549 Crosby Circle Cranesville, PA 16410 (P) 800.633.0272

Sales@sandspackaging.com

Your Single Source Everything from Large-Scale Metal Fabrications to Precision Machined Parts Large-Scale Fabrication & Machining

We solve your problems so you can solve the worlds!

Tolerance to .0005 inches Production Outsourcing Prototype Development High-Volume Parts Machining Complex Part Production Precision Machined Components

Custom Engineering • Venango Machine • Lamjen, Inc. www.CustomEng.com

www.VenangoMachine.com www.Lamjen.com

85 YEARS. 3 GENERATIONS.

ONE TRUSTED NAME. AT LINCOLN RECYCLING, we’ve been buying production scrap

from industrial customers since 1932.

Our real value lies in our expertise and in our ability to help customers streamline processes — and grow or even create new profit centers. We’ll help you develop a scrap management plan that will not only provide you with greater internal efficiencies, but also maximize the market value of your material.

Howard and Barney Lincoln at Lincoln Metal in 1973.

Erie 1602 Selinger Ave.

MAY 2018 • mbabizmag.com

Meadville 986 French St.

(814) 838-7628 lincolnrecycling.com

CELEBRATE OUR 30TH YEAR! Register as a new subscriber to the FREE digital edition of the Business Magazine and be entered into our 2018 raffle drawing! Winners will be announced at the end of each month! The Business Magazine is the premier monthly member publication of the Manufacturer & Business Association and the comprehensive news source for the human resource, legal and legislative issues facing employers today. Among its 15,000 readers are business owners, CEOs and top executives throughout central and northwest Pennsylvania, as well as northeast Ohio and western New York. Read the latest issue on www.mbabizmag.com.

REGISTER NOW to receive our digital edition. YES! Please send me the free digital edition of the Business Magazine each month! Name: Company: Email:

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Please return this form to the MBA at 2171 West 38th Street, Erie, Pa. 16508, fax back to 814/833-4844, scan and email to ktorres@mbausa.org or sign up online at www.mbabizmag.com. Thank you!

EVENTS & EXTRAS | NETWORKING & MORE

The Manufacturer & Business Association (MBA) strives to keep its members informed on the most current business issues affecting employers in the region. For more information about upcoming events or to view the MBA’s photo gallery, visit www.mbausa.org.

Dr. Clark, who was named president of Saint Vincent Hospital in May 2017, provided an overview of the world-class medical facility from an enterprise perspective, reflecting on the hospital’s affiliation with Highmark Health and Allegheny Health Network.

Christopher Clark, D.O., MHA, president of Saint Vincent Hospital, presents at the Manufacturer & Business Association’s (MBA) March 20 Eggs ‘n’ Issues briefing at the MBA Conference Center in Erie. He shared information about the transformation of the hospital’s campus and how that change is creating a new way to deliver health care to patients.

an Founders Room to hear Congressm Business leaders packed the MBA , during al to Pennsylvania’s employers Kelly address topics that are critic the February luncheon.

res his thoughts on the y (R-16th District) sha on Congressman Mike Kell Legislative Luncheon A’s MB the 2018, during legislative agenda for Erie. in ter Cen nce fere A Con February 23 at the MB

Representatives from Marquette Savings Bank, including CEO Micha el Edwards (at right), congratulate bank employee Kimb erly J. LeCorchick (center), durin g a Recognition Ceremony at the MBA Conference Center in Erie. LeCorchick was one of many gradu Association’s regionally recognized ates of the Supervisory Skills Certificate Serie s.

mbabizmag.com • MAY 2018

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UPMC Health Plan received the highest numerical score among commercial health plans in Pennsylvania in the J.D. Power 2016-2017 U.S. Member Health Plan Studies. 2017 Study based on 33,624 total responses from 8 commercial health plans in Pennsylvania measuring experiences and perceptions of members surveyed January 2017 - March 2017. Your experiences may vary. Visit jdpower.com. 2017 Best Doctors listing, Best Doctors, Inc. Go to upmchealthplan.com/BEST