A look at California's manufacturing scale ups by Senate District

Posted by Gino DiCaro, Vice President, Communications on June 14, 2013

Have a look at last year's California manufacturing facility investments by Senate District. We received just under one percent of the country's investments but a few Senators can tout manufacturing scale ups in their districts.

(Data source: Conway Data, Site Selection Magazine)

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California awarded prize for economic development

Posted by Gino DiCaro, Vice President, Communications on May 30, 2013

Today, California won the "Silver Shovel" award from Area Development Magazine for remarkable success in growing high-wage jobs in recent years. The Governor's Senior Advisor for Jobs and Business Development, Mike Rossi, and the Director of Governor Brown's Office of Business and Economic Development (Go Biz), Kish Rajan, deserve a lot of credit for beating the pavement and bringing lucrative investments to California.

We know economic development doesn't just happen. It takes a lot of work to make a region competitive so a company will invest large amounts of money to site a facility and hire employees. California can be a good place to do business with the right combination of policies and recruitment savvy from local and state government experts.

The projects that earned the "Silver Shovel" award were a $300 million Samsung research and development center planned in San Jose and an Amazon decision to build fulfillment centers in Patterson and San Bernardino. Together they represent an investment of about $250 million and the creation of nearly 1,100 jobs.

These are substantial projects that will employ both middle class and professional workers which will expand government tax revenues. We hope manufacturing will be included in the next round of firms choosing California. The state received only one percent of the country's manufacturing investments in 2012 -- 25 new or expanded facilities out of 3060 nationwide. Manufacturers are sensitive to high operating costs and regulatory burdens, so Rossi and Rajan will need more tools to attract these valuable companies. A statewide sales tax exemption for the purchase of manufacturing equipment would be a good start.

We congratulate Go Biz and hope that the state provides them more resources to bring home the critical manufacturing investments we need. Next year, maybe the "Golden shovel"!

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New 2012 numbers show that California is still lagging the country in manufacturing investments

Posted by Gino DiCaro, Vice President, Communications on May 23, 2013

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One of the world's three 'sustainable manufacturing' degree programs is in California's backyard

Posted by Gino DiCaro, Vice President, Communications on May 9, 2013

Manufacturing got technical over the last few decades. It got harder. It's paying more. It's more innovative. It's "advanced", and In California it has to be tremendously efficient to compete. It must constantly improve and account for the end-of-life of its products.

California State University at Chico has answered the state's call by providing one of only three programs in the world that offers a four-year degree in "Sustainable Manufacturing". This program is in part filling a massive and growing California void of industrially trained students that can go from the production floor to management soon after graduating from college.

The Chico program has a whopping 100 percent job placement success rate and 15 percent of their graduates are women. The average initial pay is $54,000 and sometimes starts as high as $76,000.

No, these students don't often put on a tie and go look important in a cubicle. They have real knowledge and skills. They go on to make the highly innovative products that California has been famous for engineering and producing. They create solutions to real-world problems and tend to the evolution of those solutions within companies with lots of employees. They often end up in high managerial positions for extremely successful manufacturers.

Specifically the "Sustainable Manufacturing" program at Chico is an integrated field of study that combines technical feasibility with environmental responsibility and economic viability. You might think the word "sustainable" is just another packaging of the buzz term "green" but it's not. The degree focuses on making sure the students understand business viability for the manufacturing of a product. That means keeping the business operating, growing and competitive, as well as focusing on successful end-of-life dynamics for a product. The program is both lecture-based as well as hands-on in laboratories with industrial grade machinery.

The leader of the program, Daren Otten said, "with this program we are addressing California manufacturing workforce needs with technically educated Californians who understand the challenges and opportunities associated with doing business in the state."

While Chico is doing great things, the shortage of hands-on education in California is systemic at the University level and even more importantly at the high school level. Less than 30 percent of our high school students ever get to take a hands-on course. Exposure to these skills and real-world learning in the teen years could drive a larger movement of success and interest among our future workers and provide colleges like Chico with students who are willing to dive into the opportunities that manufacturing provides. If more universities offered programs like the one at Chico, our high-wage manufacturers would have access to a larger pool of talent to grow their efficient production facilities in California.

CMTA tips its collective hat to Cal State Chico in developing a program that could be the leading edge of future manufacturing training programs.

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Manufacturing sales tax exemption bills move forward

Posted by Gino DiCaro, Vice President, Communications on April 25, 2013

This is a follow-up to last week's 'Tipping Point' piece on CMTA's proposed sales tax exemption on manufacturing equipment purchases.

Both tax exemption proposals were heard in committee this week, receiving positive comments from legislators. SB 376 by Sen Lou Correa received a unanimous 7-0 vote in the Senate Governance and Finance Committee and Assemblyman Kevin Mullin's AB 486 received an affirming hearing but we won't know the bill's fate until the Assembly Revenue and Taxation Committee votes on it in its 'suspense file' hearing next week.

Both bills enjoyed wide support in testimony with the only opposition coming from California Tax Reform Association, a group funded by public employee interests. In ten years, among at least 30 proposals, only one ever made it past its first hearing,

CMTA stepped up its game this week to show the job impact from the manufacturers investment credit back when it was originally implemented in the state in 1993 for a ten-year period. See for yourself below. We basically caught up to U.S. manufacturing in the first seven years and grew by seven percent with 131,000 new manufacturing jobs before the massive tech bust occurred.

California manufacturers can overcome big challenges with the support of state and local government. Most manufacturers realize there is a premium to pay to operate in the state, but the total valuation of California costs makes it almost impossible to compete. Bringing back the sales tax exemption on manufacturing investments is one way to get back in line with most other states and position the state to compete for manufacturing scale-ups.

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