Wednesday, July 24, 2024

Labor shortage spurs local production delays, hinders business expansion

This is part two of a two-part series. Catch up on part one, which features the origination of a novel manufacturing partnership that aims to enhance the perception and visibility of blue-collar jobs in the region.

Acme Smoked Fish would have already expanded by now, adding 150 new employees to its Pender County plant, if not for the pandemic-induced labor shortage. (Port City Daily photo/Courtesy Acme Smoked Fish)

SOUTHEASTERN N.C. –– If company leaders were confident they could find the workers, Acme Smoked Fish would have already expanded by now. 

But the manufacturing plant 10 miles outside of Wilmington can’t fully staff its operations as is. 

CATCH UP ON PART ONE: Manufacturing partnership forms to enhance perception of blue-collar jobs, build up local labor supply

The 275-person facility is running 35 employees short amid a pandemic-induced labor shortage. For now, overtime is filling gaps –– an undesirable and unsustainable fix. 

Production is down 15%, as demand swells for ready-to-eat smoked salmon. Last year, laborers pumped out 9.5 million pounds of packaged salmon out of Acme’s colossal facility tucked away off U.S. 421, less than 2 miles north of the Pender-New Hanover County line. “That’s a lot of fish,” said Felipe Espinosa, Acme’s director of manufacturing. Through its own brands and private label contracts, Acme’s Pender facility feeds 100,000 Americans on a daily basis, Espinosa estimates. 

A towering 100,000-square-foot facility first constructed in 2015, the $38 million investment was designed to expand, with plans to eventually form a neat rectangle fronting the tidy line of Pender pines. 

The first fixture in the Pender Commerce Park, the building was streamlined, first prioritizing food safety, and second, efficiency. “This was conceived from scratch,” Espinosa said. Each segment flows effortlessly into the next, with no discernible wasted space or time. Production associates guide frozen salmon filets as they are delivered from the port, dumped out of boxes and loaded onto trolley racks to be thawed, cured, rinsed, smoked, cooled, sliced, and packaged in the facility before hitting grocery store shelves. 

Acme could have already added 150 new jobs to the region with the would-be expansion –– what could have been its second in just three years, a testament to the national increased appetite for fish. Just a few years ago, the company was processing three containers shipped in from Chile a week, about 150,000 pounds. This year the facility sees four to five containers worth, or 200,000 to 250,000 pounds.  

To meet the heightened demand, Acme is embracing a growth mindset; the company’s Brooklyn headquarters just got the greenlight for a 2,000-job expansion to serve as an anchor tenant in a $550 million mixed-use project, with construction beginning this fall. 

Espinosa is tentative to gear up at the Pender facility if he can’t fully staff operations as is. “How can I make sure I have the people?” he said. 

On the slicing room floor, teeming with bobbling blue hairnets assembling packages for distribution, a production associate locks eyes with Espinosa and gives a nod. 

“We unloaded trucks Saturday,” Espinosa said. No one –– certainly not a front-building director with a corner office –– is supposed to work on Saturdays. 

For the past few months, plant operations have called for overtime hours on the company’s off-day to keep up with production needs. “We want people to have their free time,” Espinosa said. 

Management has been toying with the idea of creating part-time jobs to fill the production gap instead of waiting on full-time hires that aren’t arriving. “There might be people with benefits that don’t want to lose them who want to work a certain number of hours,” he said. “Why not? We can accommodate that.”

The shortage has also made the manufacturer consider alternative means to fill the void. “Naturally, we look to automation options,” he said.

An Acme Smoked Fish production associate loads trays of sliced, cold-smoked salmon into packaging before it gets vacuum sealed and delivered to grocery stores across the nation. (Port City Daily photo/Courtesy Acme Smoked Fish)
An Acme Smoked Fish production associate loads trays of sliced, cold-smoked salmon into packaging before it gets vacuum sealed and delivered to grocery stores across the nation. (Port City Daily photo/Courtesy Acme Smoked Fish)

Coming up dry

Though the labor shortage discourse originated with the restaurant industry, it isn’t the only sector vulnerable to staffing issues. The missing lower-wage labor pool isn’t discriminating industries: Restaurants slashed menu favorites and hours of operation; flights are getting cut; even a short-staffed 911 center in Durham is causing delays and making mistakes. 

The state’s labor force (defined as those working or actively looking for work) has shrunk by 137,000 since pre-pandemic, down 2.6% according to N.C Department of Employment Security data. This figure captures those who dropped out of the workforce entirely, many but not all believed to be parents whose hands were forced by at-home instruction and now choose to stay at home to take care of school-aged children. It’s also believed to encompass a shift in the zeitgeist, whereby workers fed up with low pay and tough conditions are taking their time returning or are seeking out alternate career paths. 

Unemployment peaked in May 2020 at a dismal 13.7%. After government bail-outs, it has since leveled out to a cool 4.4% in April, just one percentage point higher than the month before the pandemic.

Federal unemployment benefits are being blamed for dissuading would-be employees. President Joe Biden’s American Rescue Plan, ratified March 11, extended $300 weekly federal unemployment benefits through September 6. The benefits are available to the unemployed in addition to up to $350 from the state, which offers a maximum of 20 weeks of payments. 

During the 20-week period, federal and state unemployment benefits pay the equivalent of about $34,000 a year. Half of the nation’s states, all led by Republican governors, have already ended the federal unemployment boost. Republican leaders in N.C. have advanced several attempts to cut the extension, but so far, none have reached Democratic Gov. Roy Cooper’s desk. Even if they do, Cooper has signaled he supports the extra benefits.

“I’m actually pretty on the liberal side,” said Eric Barton, vice president of supply chain at Tri-Tech Logistics. “But when it comes to this issue: huge error by the federal government. These benefits went way too long.” 

The forensic kit assembly facility in Leland is three months behind on production and down 25 employees. Local staffing companies are coming up dry, Barton said, typically capable of filling dozens of Tri-Tech jobs in a matter of days to help the company ramp up for big contracts with law enforcement agencies and hospitals. 

“We never had a problem getting employees – ever,” Barton said. “In my opinion, it comes down to the extra unemployment benefits, when you can make $16 an hour sitting at home as opposed to making $12 an hour working.”

With no luck leaning on the otherwise reliable temp agencies, Tri-Tech outsourced a portion of its missing labor to Mexico. “I don’t know if they’re going to come back –– because it’s just cheaper,” Barton said of the jobs. “We’re still going to hire more people, but we’re not going to get caught like this again. I’ve been at this company 30 years, I’ve never seen anything like this in my life.”

Barton serves on a steering committee alongside Espinosa for the recently created Cape Fear Manufacturing Sector Partnership, an industry-driven coalition that seeks to enhance the perception and visibility of blue-collar jobs in the region. 

Both men point to the ability for entry-level employees to advance laterally or vertically through the companies, standing out by simply showing work ethic and dependability. Neither company requires advanced degrees or certifications and both report having no staffing issues prior to the pandemic. 

“It’s kind of comforting hearing other people are having trouble hiring people too,” Barton said of joining the partnership. 

“I thought we were the only ones with the problem,” Espinosa said. 

Aiming to deflate the “college or bust” mantra pervasive in public education, Barton points to the longevity and fulfillment a career in manufacturing can offer someone looking to climb the ranks. 

“It seems like the general impression at least amongst most people, or definitely the youth, is you’re doing the same task over and over again, eight hours a day, and there’s no room for advancement, and you’re just kind of stuck in that job for the next 50 years,” he said. “And that’s not the case.”

‘They don’t show up’

Democratic economists offer a cursory counter-argument to the nationwide labor shortage: Pay employees more. Even as wages are inching up nationally, jobs are still missing.

Peggy O’Leary, owner of Premier Staffing Solutions, said her clients, representing a varied range of industries, have upped the hourly rate at almost every opening she has, trying to attract employees. “It doesn’t make a difference,” she said.

O’Leary has heard the benefits angle play out first-hand. A long-time worker who frequently uses the agency to find work called in recently, looking for a gig because their unemployment benefits were running out. 

“I said, ‘I can put you to work right now?’ He says, ‘No, you gotta wait a little bit,’” O’Leary said. 

“No one’s answering the phones or they just don’t call back. There’s a variety of reasons why they’re just ignoring us completely.” 

Workers are on the agency’s rolls for a reason –– they called in looking for jobs. “But now, trying to get them a job, they’re nowhere to be found,” she said. “We get them interviews, they don’t show up; we get them jobs, they don’t show up. It’s the worst I’ve had in 21 years.”

Her fluctuating daily board, typically hosting about a dozen roles, is now sitting at 40, nearly unmoving. 

“It’s every industry,” she said. “It’s all over the place.”

An Acme Smoked Fish employee inspects a trolley loaded with 750-770 pounds of salmon filets imported from Chile at the company’s Pender County plant. (Port City Daily photo/Courtesy Acme Smoked Fish)

‘We have good people’

Acme is painstakingly sanitary. Before entering one of four sanitary zones, workers suit up in coats, rain boots, or clogs in varying color combinations in accordance with the section they’re assigned to. 

Temperatures range between 40 and 50 degrees –– dipping as low as below freezing in the coolest section –– necessitating hoodies under safety gear. 

Espinosa knows the job isn’t for everyone. Acme has struggled with turnover, finding it difficult to convince low-ranking employees to recognize the ladder awaiting them if they just stick to it. After conducting work environment studies, the company implemented a referral program and started hosting food trucks every other week. 

“We have good people,” Espinosa said. “We’ve been able to keep a core of really good people.”

The building is divided into two sections: raw production and slicing and packaging. To enter and exit each, employees shuffle through a conveyor lined with red foot-scrubbers. Action is smooth, even lulled on the raw production side, as workers rub salt mixtures into the flesh of thawed filets by hand. 

Once cured, trolleys loaded with 750-770 pounds of fish are rinsed and loaded into smoking chambers. These chambers get dialed to about 70 degrees, with humidity and temperature tweakable based on the size and species they hold.

The batches are cold-smoked by a secret mixture of hardwoods. “I don’t even know what it is,” Espinosa said. 

On the opposite side of the smoking chambers is a buzzing floor, where the first shift of 110 employees gracefully hurry pink-orange filets along. White-coat skimmers sweep a circle blade over the spine of most filets, pulling out thick strings of brown, visual imperfections packed with omega-3 that get collected and sold in batches to fast food restaurants. 

With visibility limited between the packaging and delivery rooms –– each side preoccupied with the task at hand –– the company implemented a light that shines green or red: a straightforward way the teams can communicate whether production is running smoothly or halted. The idea came from a low-ranking employee, advanced by a suggestion program. Efficiency-improving innovations like this can quickly elevate a production associate into a supervisory role.

Only the salmon passes through either side of the facility, through the campfire chambers, without question; employees traverse between the two sections, separated by narrow alleyways lined by walls of crocs and rubber clogs, some tie-dyed, most blue or white. Outside the employee break room, a production manager with a Brooklyn accent stopped Espinosa.

“You see it in there?” he asked. “The progress report is flying.” 

Espinosa can’t yet distinguish regional accents –– he moved to America from Chile in 2017, the nation’s top source for imported salmon. After taking the job, Espinosa found himself surprised by the universality of the human condition.

“Even in Chile, on the other side of the world, people just want a nice job, to be listened to, to be supported,” he said. “It’s the same everywhere.”

Send tips and comments to Johanna Ferebee Still at

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