On Wednesday, June 29, CMTA, the California Correctional Peace Officers Association (CCPOA) and Lt. Gov. Gavin Newsom convened the "Everything Grows with Manufacturing" Summit in Sacramento. More than 150 people attended and more than 170 watched the live webcast, as a diverse group of Californians -- including labor, investors, economists and policy leaders -- showed broad consensus and confirmed the importance of manufacturing for our state's future.
Newsom announced that his California economic development plan will be released in July and he said that manufacturing growth will be one of the cornerstones of that plan.
Perhaps a closing quote from Lt. Gov. Gavin Newsom summed it up best: "We need a bias for action", Newsom said telling the crowd emphatically that "we must deliver, not just comment in California".
CMTA president Jack Stewart outlined the Association's own vision for California's future, citing the state's recent manufacturing investment decline, as well as the tremendous economic surge that comes from the sector when it can compete regionally. You can see CMTA's vision document here.
Moving forward, the Summit proves that there is real consensus in support of California manufacturing and the need for a competitive environment. California can not assume that our natural advantages will attract high wage manufacturing job growth. We need a plan, predictability, regulatory cost analysis, and lower costs if we are serious about welcoming all manufacturers.
Unfortunately, to this point, California's only plan has been to focus on very few specific types of manufacturing, all while ignoring California's existing industrial base. Everyone benefits when we open the doors for all manufacturing. We shouldn't pick between existing and emerging sectors. It's all advanced manufacturing. Every manufacturer in California innovates, create jobs in other sectors, exports, and provides high wages for our middle class. Further, our existing manufacturers are the most environmentally friendly in the world.
For example, we can't afford to lose Boeing's C-17 production facility with its 3,000 employees in Long Beach and 7,000 supplier jobs throughout California. C-17 program manager Bob Ciesla indicated at the Summit that Boeing likely could not compete in that same facility if the C-17 project is terminated.
Stories from the front lines like that are a wake up call. For that reason CMTA has set up an online tool for Californians to sign on to support manufacturing as an essential part of the state's future and the livelihoods of our hard working families.
CMTA will make a chaptered Summit video available soon, but for now you can watch the full video here.
Here are some key quotes and paraphrases from some of the panelists:
Lt. Gov. Newsom:
"We've not had an economic development plan sponsored by CA in decades. Arguably because we've never needed one. But now we've become average."
"We have the highest income inequality in America since the Great Depression."
"The iPhone is designed in CA, but all the phones are assembled in China. That doesn't work for us."
"We need to start 'casing' other joints."
"There is no more well placed state for economic recovery, if we implement an economic development plan."
"Education IS economic development" (CMTA: this is an important concept to grow our waning career technical education system)
"We must acknowledge problem. 20 counties have more than 15% unemployment rates."
"One CA CEO got a cell phone delivered to her from Gov. Perry from Texas. It had one programmed phone number in it."
"We're the innovation capital of the world. We have to get into the business of the future."
"Establish a framework of leadership and singularty of focus on job creation."
"95 percent of job growth is organic" (regarding our need to focus on existing manufacturing)
"There is tremendous opportunity in CA because the bar is so low." (tongue firmly in cheek)
----------------------------------------- CMTA's Jack Stewart:
"CA has four new or expanded facilities for every million people in CA over last four years. The U.S. avg is 40."
"College is important but we also need other pathways for students to pursue careers."
"We have to expose our kids and teachers to the benefits of manufacturing careers."
"California can be the magnet for manufacturing and economic growth if we commit to a vision that includes creation of a predictable and welcoming business climate in the state."
"We must work collaboratively with interest groups that have not always worked together toward a common purpose."
----------------------------------------- CCPOA's Mike Jimenez:
"We've recognized that the only way we are going to turn CA around and support vital services is to grow our job base and manufacturing."
"We're not creating vocational learning opportunities to build the middle class."
----------------------------------------- Milken Institute's Ross DeVol:
"Manufacturing playing a big role in nation's economic recovery." (explaining that CA needs to get a piece of it)
"CA can take actions to change our policies if we have the WILL to do so."
"You can't be successful with just conceptual knowledge, You have to have practical knowledge to grow."
"$2 billion ready to go for oil refinery investment in Richmond, but obscure regulationss have all but haulted the project."
"We're not retaining the value of innovation through manufacturing."
----------------------------------------- E2's Bob Epstein:
"Don't discourage manufacturing for no public good." (ie sales tax on mnfg equipment)
"Green business has to make the good stuff happen sooner."
----------------------------------------- State Sen. Bob Dutton:
"Investors don't like uncertainty. They don't like chaos. They need to know a region is stable."
"A gentlemen who builds desalination plants has been working to site one plant in California for ten years. He's built six other plants in other parts of the country in that same time." (on duplicative and time consuming regulations)
----------------------------------------- Labor leader Art Pulaski:
"We must give our students the choice of career tech education."
"Most effective training programs to move kids into long-term middle class jobs are union apprenticeship programs."
"CA led the way in creating infrastructure that built CA middle class. We need to recommit to investment in infrastructure."
"We support bill in legislature that creates a single point of entry for biz in CA."
"It's important for labor & biz to find common ground. If we just oppose one another, we're never going to get anywhere."
----------------------------------------- Boeing C-17 manager Bob Ciesla:
"We are the largest private employer in Long Beach. Once this airplane goes away, Long Beach and California is going to feel it" (On not being able to guarantee they'll produce another product in that California facility)
"We face a stark reality. If we don't get more orders, this program will shut down."
"We need to be more competitive." (regarding the possibility of a B1 and B2 program in California after the C-17 program)
"Business has to get involved with defining STEM curriculum in our schools."
----------------------------------------- AE BioFuels CEO Eric McAfee:
"If you fail to attract the growth capital sector you kill off your future."
"Need to nurture young ppl to be the new innovators that create CA economy of the future."
"There is an 8-month delay before we can put out first bolt in the ground in CA."
"Think about CalPERS money. Very little of it is dedicated to manufacturing." (that's telling)
"We also have a funding problem/chasm. Most funding coming from China."
Former CA Secretary of Trade & Commerce Julie Meier Wright
"CA is only one of three states that taxes the purchase of manufacturing equipment."
----------------------------------------- Key tweet from labor:
ssmith_calabor: Rich discussion with a diverse group. Bottom line: We need good jobs. Let's work together to rebuild manufacturing #mfgsummit
A coalition of industries and employers fighting for a competitive California and a smarter regulatory environment released the first round of results this week from a survey to understand how companies feel about the regulatory climate in California. The Los Angeles Times wrote the first story this morning.
More than 400 companies have answered the survey. Of those 400, 84 percent said they would not consider locating a new business here if they were not already in California and 72 percent said they did not have formal plans to grow in the state by more than 10 percent in the next five years.
Two findings are becoming clear:
Existing and future regulations will have a major negative impact on job creation, and
Favorable attributes of California don’t outweigh the negative regulatory climate.
The coalition is releasing the first round of results to inform a legislative hearing on bills to develop a smarter rule-making and review process. The bills capture different policies for independent economic impact analysis, sunset reviews and regulatory triggers.
Those regulatory process reform bills being heard on Tuesday, April 12 in the Senate Government Organization hearing include :
SB 396 (Huff) Analysis on existing regs and 5-year reviews on regs going forward | Letter
Last Thursday, the California State Senate voted in support of Sen. Wright's SB 381 on an overwhelming and bipartisan vote of 32-2 (2 no's: Simitian and Wiggins -- 5 abstains: Alquist, Cedillo, Oropeza, Romero, Wolk). Over the weekend, the most emailed article out of the New York Times was a piece, written by Matthew Crawford, on how we have devalued working with our hands. The two items together represent a growing shift back to education reality and the fulfillment of all our students' dreams.
Crawford summed up how, over time, our country has begun to view our children's success:
"A gifted young person who chooses to become a mechanic rather than to accumulate academic credentials is viewed as eccentric, if not self-destructive. There is a pervasive anxiety among parents that there is only one track to success for their children."
The fact that SB 381 passed so overwhelmingly shows that we might be reaching the tipping point for a more balanced educational system that provides more than the traditional access to a resume of academic credentials, but options for technical skills and careers.
SB 381 calls for curricular balance in school districts that adopt the UC/CSU course admission requirements (known as "a-g") as a high school graduation requirement, by also requiring those districts adopt alternative graduation coursework that includes the core academics currently mandated by the state, along with a series of at least three career technical education classes.
We must not forget also, that this bill is a simple and clear reminder to districts of their legal obligation to maintain curricular equity and balance, as outlined in Education Code Sections 51224 and 51228:
51224. The governing board of any school district maintaining a high school shall prescribe courses of study designed to provide the skills and knowledge required for adult life for pupils attending the schools within its school district. The governing board shall prescribe separate courses of study, including, but not limited to, a course of study designed to prepare prospective pupils for admission to state colleges and universities and a course of study for career technical training.
California's manufacturers offer high paying but very technical careers to our workforce. These jobs play an important role in our society and pay, on average, $20,000 more than service sector wages for our hard working families. At the very least, students should have the choice of exposure to these skills and this particular pathway. SB 381 takes a big step toward equality for all students' dreams and, after weeks of internal legislative squabbling, garnered almost unanimous support. SB 381 now moves to the Assembly. Stay tuned.
Here's some video from the floor debate that's worth your time:
SB 381 Author, Sen. Rod Wright's, closing speech (4:41)
California State Senate Republicans today announced an economic recovery package to reduce costs on consumers and businesses to help dampen the burden on the State's $20 billion deficit. Among the recovery measures was a request to delay the greenhouse gas implementation for one year. AB 32 will impose new costs -- estimated at $511 billion by the EPRI -- on the California economy and worsen the budget crisis. We are already 23% more expensive than the national average in business costs. The one year additional time for implementation would delay those new costs, and also allow more time for the federal government to act. Delaying implementation by this modest timeframe also gives the Air Resources Board time to develop rational regulations and work toward a market to keep compliance costs low for California companies.
All of the proposed measures work within existing law. In AB 32, there is specific language that allows for a temporary adjustment by the Governor during extraordinary economic times:
"38599. (a) In the event of extraordinary circumstances, catastrophic events, or threat of significant economic harm, the Governor may adjust the applicable deadlines for individual regulations, or for the state in the aggregate, to the earliest feasible date after that deadline. (b) The adjustment period may not exceed one year unless the Governor makes an additional adjustment pursuant to subdivision (a)."
The California-only greenhouse gas undertaking has been lauded as one of the biggest and boldest policy decisions this Sate has made in the last 20 years ... for a reason. It will cost consumers more money, negate even more competitive balance for California employers and, with a dismal budget, threaten our State's finances. A momentary pause is almost meaningless to the bill's goal and, in fact, provides more time to understand the effects of the myriad of future regulations.
Video footage: Watch CMTA Dorothy Rothrock on the AB 32 proposal Watch State Senate Republican Leader David Cogdill and Sen. Bob Dutton introduce Economic Recovery package Watch Sen. George Runner responding to questions Watch Sen. Cogdill responding to questions