EAST BLOOMFIELD — It’s cheaper to manufacture in China, right? That may be true for many businesses, but an economic-development tool called the Foreign Trade Zone helps level the playing field.
That FTZ boost is expected to come to Ontario and five neighboring counties, along with businesses in those counties ready to house such a zone, pending approval by a federal FTZ board. That approval can come none too soon for businesses such as Crosman Corporation, an East Bloomfield-based manufacturer of air-powered pellet rifles and ammunition counting on adding jobs this year.
“When you have a chance to move jobs from China to the Rochester area, you’ve got to jump at the chance,” said U.S. Sen. Chuck Schumer during a visit to Crosman on Friday.
A Foreign Trade Zone is an area in which companies can benefit from delayed or reduced customs duties on foreign merchandise in order to level the playing field with foreign competitors.
“With the FTZ, Crosman will be able to import parts, components and finished goods — now used to manufacture and assemble products in China — and instead bring those parts and finished goods to Ontario County where newly-hired local workers will assemble the finished products for warehousing and distribution to retailers,” Schumer said.
Crosman’s FTZ application has been pending for more than a year, Schumer said before a group of Crosman executives and local officials in the plant on Routes 5 and 20 where the guns for recreational use are made. Crosman employs about 350 full-time workers, including some at a Farmington site on County Road 8 where orders are filled.
Crosman “has budgeted in hopes of bringing new work and new jobs to Ontario County beginning in 2014,” said Schumer. Establishing the new FTZ early this year is critical for job growth at Crosman's Ontario County facilities, he said.
Initially, Crosman intends to in-source — or manufacture internally rather than contracting out — the production of between 30,000 and 50,000 air-powered pellet guns now made in Asia, and plans to in-source more production over the next three years. “The FTZ allows Crosman to only pay duties on the finished product, instead of requiring them to pay duties on the component parts, thus giving incentive for Crosman to manufacture products domestically,” Schumer explained.
With benefit of the FTZ, Crosman estimates the cost to manufacture its products will be at, or close to, the cost it now pays to manufacture in China. In addition, product lines that Crosman plans to in-source from Asia will boost business for Crosman’s local suppliers who will produce some of the component parts for the new product lines.
“Crosman is ready to go,” said Mike Manikowski, director of Ontario County Office of Economic Development. He added that the FTZ will boost economic development for other manufacturers, as the FTZ approval will cover Ontario and five neighboring counties: Wayne, Seneca, Yates, Livingston and Steuben.
Page 2 of 2 - Schumer said dozens of other companies in the Finger Lakes region are in line to benefit, such as Victor-based Constellation Brands Inc. and G.W. Lisk Co. Inc. in Clifton Springs.
Ontario County Administrator John Garvey, who worked some 25 years ago at Crosman in human resources, said he is pleased with Schumer’s push to hasten FTZ approval. It will help Crosman and many other companies either directly or indirectly, Garvey said.
With an FTZ, Crosman would create a minimum of nine new full-time positions in 2014 and would have the potential to create up to 25 new full-time positions over the next three years if it can increase the number of product lines it in-sources from Asia, Schumer said.
Bob Beckwith, Crosman vice president of finance, said that with the help of Ontario County Economic Development, Crosman has succeeded in the past with bringing jobs from China, such as 50 jobs added locally in 2010, and he is confident in this latest effort.
“With the Foreign Trade Zone we will see increased manufacturing,” said Beckwith.