CHESHIRE -- Douglas Johnson, president and owner of Marion Manufacturing Co., helped reshore manufacturing in 2011 by beating a Chinese company's price for a small component used in telecommunications.
Johnson, of Cheshire, said he went to a potential client who used the part and took it back to his employees to see how they could lower the price. A few weeks later, he returned to the client and said Marion could make the part for two-tenths of a cent less than the Chinese company.
Johnson said he could not share specifics of the part due to the competitive nature of his business.
"We challenged everybody, and I got a great group of people because they came out with a great solution," he said. The new customer resulted in a 40 percent increase in business and three new jobs. "It's made a world of difference for our company," he said. "It helped us recover from the downturn in automotive, and it helped us to diversify."
Marion, which makes five million of those pieces a week, is a 30,000-square-foot manufacturer of precision metal components with 24 workers at 1765 Reinhard Road. Johnson bought the company, founded in 1946 by the Cramer family, in February after serving as vice president for five years.
Johnson on Thursday shared his story durig a visit from Sen. Christopher S. Murphy, D-Conn., who came to discuss a new report on Department of Defense's overuse of waivers to evade "Buy American" requirements.
"What we're trying to do is to get the federal government to do a realistic cost assessment of outsourcing," Murphy said in Johnson's office.
Murphy said the defense department may save a couple pennies by sending work overseas through waiving the 1933 Buy American Act, which governs federal procurement, but the U.S. government loses money through loss of income tax revenue and higher unemployment benefit costs.
Since 2007, the defense department has granted 307,123 waivers and exceptions to the act, resulting in the offshoring of $176.8 billion to foreign manufacturers, according to the "Not Made in the U.S.A." report prepared by Murphy's office.
The defense department may grant a waiver for eight reasons, including unreasonable cost by U.S. manufacturers, domestic non-availability and if the product is for use outside the country.
The waivers impact Connecticut's economy because the state is one of the world's premiere aerospace, shipbuilding and defense manufacturers, the report states. Further, manufacturing accounts for 90 percent of the state's exports and more than 11 percent of the Gross State Product and employs about 160,000 workers in the state.
After a tour of the facility, Murphy spoke with about 10 Marion employees about the waivers and the importance of training Connecticut's workers in manufacturing, especially with the new jobs coming into the fields of aerospace and shipbuilding.
"We're not just talking about taking someone off the street and or straight out of high school and college and training them," he said. "We're also talking about having resources to go to people who are working here."