Sensible climate policy can grow all CA jobs

Posted by Dorothy Rothrock, President on Feb. 19, 2015

California leaders hope that our climate policies will grow the green economy.  We hope they are right.  But even if green jobs grow, we’ve got to be careful that mandates to reduce fossil fuel use don’t hurt even more jobs in the rest of the economy. 
The California Center for Jobs and the Economy released a new report that puts this into perspective.  No matter who is measuring green jobs, they amount to no more than 2 percent of total jobs in the California economy.   Even a high green jobs growth rate won’t add enough jobs to power our economy.  On the flip side, raising energy rates will increase pressure on manufacturers who employ more than 10 percent of California workers.  They already pay nearly 80 percent higher rates than the national average for electricity.  We need to count manufacturing and other jobs at-risk from higher energy prices to provide a full account of the jobs impact of climate policies.  We should also make sure that energy-efficient manufacturing jobs count as “green” when they are lost, or gained, by state policies.  CMTA will be advocating for sensible climate policies to keep the entire economy on track. 
IMAGE -- Green jobs vs Overall jobs

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CA manufacturing GDP trend

Posted by Gino DiCaro, Vice President, Communications on Feb. 12, 2015

A quick look at California's manufacturing gross product trend vs. the United States since 2000.


CHART - MFG GDP trend since 2000 U.S. vs CA

click image for pdf

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California's MFG is big but growth is small

Posted by Gino DiCaro, Vice President, Communications on Feb. 5, 2015

Last week Dan Walters wrote a piece depicting the enormity of California's manufacturing sector, using a recent 2012 Census Bureau report, which prompted tweets like the following:
GO-Biz (@CAGoBiz) 1/27/15, 14:54 FACT: California has twice as many manufacturing firms as the next closest state, TX. @sacbee
Stockton Buzz (@stocktonbuzz) California leads U.S. in manufacturing jobs… #stockton #lodi #los angeles #jobs #manufacturing census via @cvbtnews
California is the most populous state in the country. The fact that we have the most manufacturing is not a surprise. The fact that we aren't growing as fast as the rest of the country is a surprise and a problem.
We are still hovering around one percent manufacturing job growth since the recession, while the rest of the U.S. is close to 7 percent growth. In 2013, we had only 1.5 percent of the country's manufacturing investments. With a state that has about 11 percent of the U.S. population, we must attract more manufacturing.
If we want to be a model for the rest of the country we need a growing number of innovative and energy efficient manufacturers to scale up in California and create middle class jobs. At the very least, we need to attract manufacturing at the same rate as the rest of the country.  It's not just Texas either. States like Indiana grew their manufacturing job base by 19 percent since the recession.
Things have improved no doubt. The Go-BIZ team recently touted 56 new investments (many of whom are manufacturers) as a result of Governor Brown's "California Competes" incentives. We've also seen an uptick in overall manufacturing investments in 2014. We won't know the final numbers for another month, which we will publish here, but California appears to be moving in the right direction. However there is so much work to do to catch up to the rest of the country.
Walters and others are correct to tout our state's large manufacturing industry but our manufacturing size does not equate to the rest of the country's recent growth. With wage inequality growing in California, it is even more important that California re-doubles its efforts to help manufacturers compete and invest and grow the largest manufacturing state in the country.

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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.


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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