To grow, small manufacturers never stop training

Posted by Gino DiCaro, Vice President, Communications on Jan. 28, 2015

Manufacturers are the lifeblood of our middle class and our economy. This week a Sacramento tool manufacturer of 43 years, Tri Tool Inc., testified alongside CMTA about their phenomenal company growth and the need for help in training their workers. It sheds a light on their importance to our community and their need for skills training -- in 1972 as well as 2015 -- to grow their operations in California.


Good afternoon ladies and gentleman of the Employment Training Panel,

My name is George J. Wernette III. I am a Co-Owner and Vice President of Professional Development for Tri Tool Incorporated. We are a family owned and operated company. Our manufacturing facility is located just up the street in Rancho Cordova.

Tri Tool was founded in 1972 by my father, Dr. George J. Wernette. He was a local general surgeon, who teamed up with a welder and a machinist to design, build and sell the first Tri Tool!

The original tool was designed for the construction of the Rancho Seco Nuclear Power Plant. It was to address quality, training needs and concerns of their current program. They needed ways to test and train their welders to make that perfect weld.

These tools were built in a garage in Placerville and sold from the back room of George’s medical office down off Mission Avenue, Carmichael, CA.

Dr. Wernette has always believed in making the world a safer place. He took on this venture to educate and train the industries who have hazardous chemicals and gases with no leak applications, on how to make a safe weld by having precision weld preparation.

The industries that we serve include everything from geothermal power plants, solar, hydroelectric, nuclear power, oil and gas processing, pharmaceutical, national defense, aerospace and many other companies.

Generally speaking, Tri Tool gives customers the ability to have a precision machine shop in remote locations, either thousands of feet under water or hundreds of feet in the air. You do not have to transport the work to the machine shop but the machine shop can go to the job.

Over the last 40 years, Tri Tool has entered new markets and has invented new and better portable precision tools. This requires a broad range of education and training to operate new and advanced computer software, to better manufacturing processes for efficiency and to focus on producing and operating safely. Safety is our number one core value.

Tri Tool is a vertically orientated company that engineers, manufactures, assembles, and sells all of their products right from California. We sell the products globally and also have an on-site machining services company to do training and contract work for customers that do not want to purchase the equipment and train their own people.

My father has always loved the fact that he gives local families opportunities for a quality job and livelihood while being productive in society and making a difference in the world.

We as a company, try and do everything we can for our employees. However, it consistently becomes harder as a California company to be globally competitive when quality work can be outsourced for a cheaper price. We are proud to produce the finest quality tools that can last forever.

That is why, I am so amazed and thankful for what you, the Employment Training Panel is doing for companies like ours. We are able to give our employees a better opportunity to be more knowledgeable and capable; therefore, having a lifetime of prosperity.

As I quote Henry Ford “Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young.” ― Henry Ford

Thank you ETP and our partner CMTA for this opportunity to give a little background on who and what Tri Tool is trying to do for our employees.

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National outlook for manufacturing looks good in 2015

Posted by Gino DiCaro, Vice President, Communications on Jan. 23, 2015

This week the National Association of Manufacturers (NAM) held their quarterly manufacturing update with their chief economist Chad Moutray. The national picture is definitely improving. Here are some of the highlights:

The Purchasing Managers Index showed U.S. expansion in 2014 (with a slight momentary decline in December).

Manufacturing's Gross Domestic Product grew by 2.4 percent in 2014. Expected growth in 2015 is 3.2 percent.

NAM's survey shows manufacturers are more upbeat on sales, investment and employment.

The four top policies manufacturers would like addressed:

  • Reduce regulatory burden – 82.8 percent
  • Slow entitlement spending – 79.2 percent
  • Pass comprehensive tax reform – 74.0 percent
  • Control healthcare costs – 73.7 percent

Eight of the top ten U.S. export markets are expanding. China and South Korea are not.

There has been sluggish growth in U.S. exports over the last two years but this looks to be improving.

Labor market is improving. 15,000 new manufacturing workers per month last year. We need to keep up that pace. We still have too much part-time and under employment.

The largest manufacturing growth sectors were transportation equipment, machinery, fabricated metals, non metallic minerals, and chemical industries.

The regions showing the most manufacturing growth are the Midwest, primarily Indiana, and the Southwest, primarily Texas.

Our housing market index is improving.

With the lack of inflation and other dynamics, the Federal Reserve will likely stop its “quantitative easing” in the middle of 2015 and interest rates will rise.

The nation's downside future risks included:

  • The global economy (slowing growth in China, sluggish growth in Europe and continued weakness in South America)
  • Labor market volatility
  • Higher interest rates
  • The overall political environment
  • The country’s strengthening dollar can also be a potential challenge for manufacturers

In times like these, California must take advantage of every opportunity to grow its manufacturing base beyond its 1.2 million workers. The sector is the foundation of our economy and the gateway to opportunities for our middle class. Domestic competitiveness to attract manufacturing investment should be our priority. (See LA Times on this issue this week)


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Beacon report outlines emerging competitive issue for CA manufacturers

Posted by Gino DiCaro, Vice President, Communications on Jan. 15, 2015

Manufacturers have many advantages and disadvantages in California. A desirable climate, an innovation and research-rich atmosphere, world class universities, a long history of existing industry and supply chains all contribute to our nation-leading manufacturing community that employs more than 1.2 million workers.

On the flip side, the disadvantages have been well documented.  Energy costs, work comp costs, corporate tax burden (alleviated a bit by a recent sales tax exemption on equipment), time consuming permitting proccesses, and a ubiquitous amount of uncertainty all work against a manufacturer's ability to make long term California investments.

A recent Beacon Economics report highlighted another growing competitive problem for California's manufacturers -- housing costs.

"The cost of housing is perhaps the single-most important policy challenge facing lawmakers in the state today," said the report written by Christopher Thornberg.

"Not only do higher housing costs erode the quality of life for workers who need to devote ever-increasing shares of their take-home pay to afford to live here, it also drives up the cost of doing business by forcing employers to pay higher salaries in order to attract the talent they need."

Earlier in the report Thornberg emphasized that, "Golden State rankings would be that much higher in the growth rankings if we could find a way to make ourselves more attractive to new or expanding manufacturing operations."

Put simply: The talent that our manufacturers need won't be able to live here ... and everything starts with talent on a manufacturing floor.

Like the manufacturing equipment sales tax exemption debate and passage in 2013, we need to keep up the momentum on other competitive hurdles so we can attract new opportunities for our state's massive and often under-employed middle class.

The Wall Street Journal recently chronicled one baby-car-seat manufacturer's attempt to tiptoe back to the United States as wage costs and others balance out in China and other industrialized countries.  The race was close but China won out by a thread. The decision to scale up in the U.S. is becoming at least more defensible for site selectors looking at re-shoring but California must mitigate its own rising challenges if it hopes to attract large scale manufacturing facilities.

As manufacturers seek skilled talent and look for places to put bolts in the ground, California housing costs are on the wrong side of the pros and cons equation.

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Industrial electricity rates reach a new high

Posted by Gino DiCaro, Vice President, Communications on Dec. 18, 2014

California has reached a new high in 2014. For the first time we are consistently paying 80 percent more than the national average in industrial electricity rates.

We looked at the most recent third quarter data for 2014 and compared it to each of the third quarters back to 2010. The trend is moving in the wrong direction. Up from 59 percent in 2010, we now pay 84 percent more than the national average. 

The chart below shows the trend, and a Californians for Affordable and Reliable Energy report -- written up this week by CMTA's Michael Shaw -- lays out an ever important path toward a comprehensive state energy plan for cost effective post-2020 climate change goals. 


Electric rates trend chart


... And here's a look at rates by state in September 2014


Industrial electric rates by state, September 2014

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When business votes, the economy wins

Posted by Gino DiCaro, Vice President, Communications on Dec. 11, 2014

This week CMTA attended the Annual BIPAC (Business Industry Political Action Committee) conference in San Diego, established to bring together all the state projects that are using BIPAC’s "Prosperity Project" (P2) program to get-out-the-vote with employer-to-employee communications.
Because of BIPAC, companies and trade associations across the country are getting comfortable engaging their employees to vote and interact with their elected leaders. Rolls Royce Vice President of Government relations Brian Elson even spoke at the event on their success and how much their employees appreciated the voting information they were now receiving.
P2's online tools delivered 238 million political, policy, and election messages to private sector employees in the 2013-2014 cycle. According to BIPAC, that is a national increase of 21 percent from the 2009-2010 midterm cycle when 197 million messages were delivered.
“The Prosperity Project reaches 22 million private sector employees across all 50 states," said BIPAC Senior Vice President of Field Operations Joe Savarise. "P2 does not tell people how to vote but we help the business community communicate with employees, associates, members, and consumers. Through the tried-and-true practice of employers educating and motivating their workforce about politics and issues, in a non-partisan way, the P2 network drives true grassroots advocacy participation at a local, state, and national level," said Savarise.
As a trade association CMTA partners with the California Chamber of Commerce on the site, and many of our members, such as International Paper and PPG Industries, already participate with their own P2 programs and websites. It’s really easy to set up! If you are interested, contact Cathy Mesch at 916-444-6670.

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