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Manufacturers beg California to 'stay true'

Posted by Gino DiCaro, VP, Communications on July 1, 2008

Did you know Detroit was the wealthiest city in the World in 1950?  Now, in 2008, half of the city is gone.  I can't tell you all the dynamics that made this occur but I am certain this is not the only time this phenomenon has happened, or the last, given the ultra-competitive nature of domestic and world economies.

Now, hold that thought, I'll come back to it.

CMTA just concluded it's quarterly board meeting.  At the usual Summer gathering, CMTA holds a Roundtable amongst the Board companies to make sure we (the staff) understand the issues affecting manufacturing operations most.

What we found, once again, were companies with an unfettered passion to continue to make their product in California and succeed both for the company and their employees.  We also found a much-less-than-comfortable tipping point for these companies' operational success or failure in the State.

Here's how it broke down:   
  • 22 of CMTA's 42 board companies (ranging from aerospace to bioscience to computers to cement to food processing) were present
       
  • 130,000 California employees represented

Here are the issues raised most (at least 8 times each):   
  • Lack of skilled workforce  (one company reported 90% of their applicants can't pass first skills test)
       
  • Future greenhouse gas reduction costs (and overall energy costs)
       
  • Inflexibility in Meal and Rest period regulations
       
  • Rising healthcare costs
       
  • California Environmental Quality Act lawsuits
       
  • Overall business costs (numerous companies said their California facilities were the most expensive among their countrywide operations)

For these reasons, most participants indicated that if they grew, their companies would likely grow elsewhere and a few said they continue to consider shifting some amount of operations out of the State.

These are good actors bringing in high salaries, incredible benefits and producing the technologies, products and innovation that drive a regional superpower and, in many instances, contribute to our homeland security.    These are companies who should be courted at every turn, not burdens left to ponder their future based on their close vicinity to the Pacific Ocean and a few Universities.  Further, these are revenue producing operations that would be the crown jewel for any other state.

What goes unnoticed in California's lost and migrating manufacturing jobs rhetoric is that the downward spiral is incremental and barely noticeable from month to month.  We don't throw entire 5,000-employee operations and facilities on wide load trucks and move them to Arizona in one weekend.  It's far more incremental and under-the-radar than that and it happens in various ways.  Those ways have led us to the loss of more than 440,000 manufacturing jobs since 2001 (3,300 just last month).

One aerospace supplier and manufacturer with 250 employees said it best at the Roundtable:  "We must stay true," she said with some of the most sincere passion I've seen in a while.  True to what makes California and any other leader great.  True to our workforce's potential.  True to what gives us our base of success, resource, employment, confidence and leadership ability.  True to our soul.  That soul is manufacturing and, for some reason, it's luster in California's Capitol, regulatory agencies and media circles is dying.

We are losing ground to other states and the rest of the world in places like China, Russia and India.  From those countries alone we compete with 300 million of their entrepreneurs, engineers and big thinkers.  People who can otherwise work anywhere they want in today's instant information age.   For that reason, we need to recognize every ounce of good and compete domestically for every sliver of manufacturing.   And if I hear one more person say "Well, it's California," or "We're only losing to India" or "Everything is changing", I'm going to whisper in their ear ever so softly, "Glengary, Glenross."  Because, if you've seen the movie, that's what a majority of our workers will become - angry real estate agents (or worse yet, lawyers) competing for limited pieces of meat and slogging along with a good chance of failure and unrecognized potential.

Our robust producers deserve so much more than superficial recognition ... and I'm not sure they even get that anymore (See Sen. Don Perata saying "Manufacturing is dead" on the Senate floor).  They deserve hard action and support to keep them competitive here in California.  They bend over backwards to do right, take care of their employees, abide by the law, and protect their workers by always looking for new opportunities.  Their employees deserve better too.  They work hard, succeed and they are happy with the houses, cars, college degrees, training and other assorted luxuries afforded within their manufacturing salaries and careers.  They even ponder investing in their own manufacturing companies.

Now, remember Detroit?  After losing a quarter of our industrial base in seven years, California is half way to a similar demise.   Maybe I'm taking that analogy a bit far but take out Hollywood, lawyers and doctors and we'll be an economy running on fumes.  Like CMTA's passionate board member said, "We must stay true"... stay true to our manufacturing soul and workers such as the one who worked for the same woman speaking with so much passion ... her employee had explained a few years ago why he chose his career path: "I have only a high school degree, I make $72,000 a year and I make things that are on the moon."  Let's stay true to that!



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