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Update on California's manufacturing job trend

Posted by Gino DiCaro, VP, Communications on April 25, 2014

California's monthly jobs report last week showed that we lost another 1,700 manufacturing jobs even though the state added 11,000 non-farm jobs and our our overall unemployment rate stayed the same.  We continue to lag the nation's manufacturing growth by a substantial margin since we started to recover from the recession in 2010.  Manufacturing jobs in the U.S. are up 5.38 percent while the Golden State lags with only a .53 percent increase.  

The Labor Market Information Department also predicted in a February report that manufacturing is the only private industry in the state that is set to lose jobs over a two-year period between 2013 and 2015.

The growing and consistent acknowledgement from the Governor and his recruitment team Go-Biz that manufacturing is critcal to California's success -- given its tremendous salaries, innovation, workers and ripple effects in the economy -- gives us hope that their leadership will get all Californians and policymakers to do their part to help improve this trend.  

 

MFG jobs chart

 

 

 





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Updated California manufacturing investment

Posted by Gino DiCaro, VP, Communications on March 12, 2014

Last month we showed you how California shaped up for manufacturing investments in the first three quarters of 2013.  We just got the fourth quarter numbers and we have updated our chart below to indicate how it looks for the entire year.  Basically we got 1.5 percent of the nation's new or expanded facilities, accounting for 1.2 investments per one million people in California.

The numbers don't look good but believe it or not, it is a small improvement from last year.  Our economy will depend on big improvements in the coming years and we'll have to learn what will drive more manufacturing to our state.  In the wake of California-based Tesla's announcement to grow 6,500 manufacturing jobs outside of the Golden State, we've learned we can't take any manufacturing for granted -- even an electric vehicle producer.  

We know that California's economic development agency Go-BIZ did all they could to get Tesla to build their large facility here.  Go-BIZ constantly talks to us about what they can do to help manufacturers compete.  For reasons we'll likely never know, Tesla opted to go elsewhere.

This data and the Tesla announcement provide a teachable moment.  We can't win them all, we just need to win our fair share.  CMTA and Go-Biz can't do this alone.  We need a virtual tsunami of manufacturing champions at the state level to help Go-BIZ deliver competitive packages to manufacturers looking to make long term investments.  

 

Investment chart

 

 





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Is California comfortable with manufacturing investment levels?

Posted by Gino DiCaro, VP, Communications on Feb. 9, 2014

California's economy is improving.  Our unemployment rate is down two percentage points over the last year and our state revenue growth has, for the first time in a while, allowed the Governor to project a small surplus in 2013.  

Still California has far too many workers either unemployed or underemployed. The state currently has the second largest percentage of underemployed at 18.3 percent. A big reason is that we continues to lag the country in manufacturing employment growth and in the ever-important manufacturing investment trend. In the first three quarters of 2013, California was dead last among all states in per capita manufacturing investments at 1.17 new or expanded facilities per one million people.  Even worse, the state only reeled in 1.97 percent of the nation's expansions and new sites. 

It's not because California isn't trying. The state's rebuilt recruitment agency, GoBIZ, is doing everything they can to pitch our state's manufacturing benefits -- including a new manufacturing sales tax exemption -- and recruit new scale ups but the competition is tough.  One of the more telling trends is that we're lagging more in expansions than we are in new facilities.  That means the existing manufacturers -- the ones that know the most about operating in California -- are opting to scale up in other regions.

Manufacturing provides a gateway to the middle class for many workers, pays an average $76,000 wage in California and creates many other opportunities in the economy.  Job growth in manufacturing can even allow the state's most vulnerable to move out of poverty.  Our comfort level with an improving economy must not mask our declining facility investments.  Manufacturing champions like GoBIZ, CMTA and others need the state's regulators and policymakers to focus on turning this trend around.

Below is a look at how California stacks up to the country.

Manufacturing investments chart





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California needs more champions of manufacturing

Posted by Gino DiCaro, VP, Communications on Nov. 22, 2013

California's manufacturers are capable of meeting extraordinary challenges and will be the engine of job creation if they have the resources skilled workforce and the long term support of state and local communities.

California's unemployment rate fell from 8.9 percent to 8.7 percent in October but California unfortunately lost another 5,600 manufacturing jobs according to this week's Labor Market Information report.  

Even with a few previous growth spurts in the Golden State's manufacturing sector, the overall trend since 2010 shows a widening gap between the United States' 4.59 percent manufacturing job growth and California's 0.55 percent.  

While the recent loss and the overall trendline vs the country does not bode well for California's economy and middle class workers, there are positive developments that should be noted along with some of the previous job increases.

We have a commitment from the Governor's Office of Economic and Business Development (GoBiz) to grow this industry and a consistent acknowledgement from them that California's economy needs this innovative and high wage industry that pays an average $77,000 salary.  They are making strides in attracting and retaining manufacturing and making sure the industry knows it is their priority.  See some of their tweets from this week pasted below, showing recent expansions from China, conversions from printing faciliities to manufacturing plants, aerospace growth, etc.    

We appreciate all that GoBiz is doing to champion new policies to grow manufacturing and put boots on the ground to recruit and retain investments.  We can't turn this trend around without their unfettered and unending committment.  On the flip side, they also can't do it alone.  They need an army of local and state leaders with an intense dedication to the entire statewide effort.   Every new policy and inititative should at the very least not harm the plan to grow manufacturing and in many cases seek to grow the sector with real outcomes.  

It will take a consolidated effort from both the policymakers as well as the economic development soldiers tasked with growing the economies of their regions within the state's borders.   Everyone should be encouraging manufacturers to plant their economy-boosting roots here in California.  

 

manufacturing employment chart

 

Some tweets this week from GoBIZ:

 





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Governor's 'advanced manufacturing' summit launches new California focus

Posted by Gino DiCaro, VP, Communications on March 29, 2013

Summit pics

 
California manufacturers are capable of meeting extraordinary challenges and can be the engine of job creation if they have the resources, skilled workforce, and long-term support of state and local communities.  This week, with a day-long Summit in Sacramento, the Governor's office took an important first step in launching a new focus on 'advanced manufacturing' growth in California.

The Summit's three panels made up of industry, workforce development professionals, research entities, and academic experts from universities and community colleges brought to the forefront a landslide of critical issues.

The Industry panel discussed the tremendous cost pressures and the fact that all manufacturing is in fact 'advanced' in California.  CMTA members Boeing and Bayer delivered essential input on those cost pressures.

The Academia and Research folks covered the difficulties of connecting the regions' needs to costly technical training and education programs, as well as the need for the technical training to start before college.

The Government Resource group shed light on the difficulties of training and attracting skilled workers to the small to mid-size and highly specialized manufacturers that make up a majority of California's industrial base.

You can watch the entire webcast here and read the key quotes below.

Following the discussions, the panelists and the audience broke into working groups to begin putting together potential action items for the state to grow our high wage 'advanced manufacturing' sector.  The lists were long but CMTA's Jack Stewart ensured the sales tax exemption on manufacturing equipment was listed and seen as a reform that could help the broadest number of manufacturers compete in the domestic and global market.
 
CMTA was pleased to be a part of a new commitment to grow high wage manufacturing jobs and fill them with skilled workers from our high schools, community colleges, and universities.  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, Kish Rajan will enjoy our continued support and participation as they take the next steps to create a short and long term action plan for California.
 
 
Following are some key quotes we (@cmta) tweeted during the March 27 Summit (from last to first):
 
 
GoBiz’ Kish Rajan in closing: We need to get CA in the pole position for the race for advanced #manufacturing.  #govcams
 
 
Community College’s Jose Anaya: hardest manufacturing jobs to fill = technicians. #govcams
 

LAEDC’s Bill Allen: There are significant cost challenges to #manufacturing in CA. We need partnerships to address this. #govcams
 
 
WIB’s Tim Rainey:  If you are a manufacturer not using ETP funds to train your workers, you should be thinking about it. #govcams
 
 
Tim Rainey: Avg age is 55 in #manufacturing. We need to rise to this challenge and provide skills to our younger generations. #govcams
 
 
WIB’s Tim Rainey:  CA is now made up more of small to mid-size manufacturers.  We need to listen to their needs. #govcams
 
 
Jose Anaya: It’s become very expensive to train students in manufacturing. We need help.
 
 
LAEDC’s Bill Allen: LA County has twice as many #manufacturing jobs than we do in entertainment (360k vs180k) #govcams
 
 
UC Berkeley’s Dornfield: Must have tight link between the comm colleges and universities to provide manufacturing skills #govcams
 
 
UC Irvine’s Gregory Washington:  I would highly encourage kids to follow the manufacturing path.  #govcams
 
 
Prof Dornfeld, UC Berkeley - academia must better connect with industry and CA needs #govcams
 
 
UC Irvine at #govcams:  Relationships between industry & universities need 2 be strengthened 2 deliver the skills that industry needs.
 
 
Dean Washington, UCIrvine  Universities develop articulation agreements w/ comm colleges to pipe students to engineering schools. #govcams
 
 
Dr. Chris Beyer, CSU Long Beach.  Students must find their passion, not just fill classroom seats.
 
 
Boeing: Other states are chipping away at CA mnfg base.  We may still be the biggest but we have lost a huge amount of ground.  #govcams
 
 
Boeing: I don’t think we have explained to our kids and students how gratifying it is to have a #manufacturing job. #govcams
 
 
Paul Geery, Boeing is biggest US exporter. #govcams
 
 
Bayer: We work with disadvantaged youth 2 educate them on biotech process. We hired several people out of that program. #govcams
 
 
Gene Russell, MANEX, California's first step must to preserve existing manufacturing base. #govcams
 
 
MANEX: American Licorice company is ‘advanced manufacturing’ … it’s a Willy Wonka on steroids.  #govcams
 
 
MANEX: Academics need to focus on the needs of small and midsize manufacturers #govcams
 
 
Erin Gore, CFO, UC Berkeley manufacturing provides higher wage careers.
 
 
Morei Seiki’s Adam Hansel: Manufacturing is cool.  Best day of my life was putting our first products together to make our first machine.
 
 
Adam Hansel, Mori Seiki -- need more shop classes in high schools to prepare advanced manufacturing workforce . #govcams
 
 
Morei Seiki’s Adam Hansel: Anybody surviving in #manufacturing in CA is ‘advanced manufacturing’
#govcams
 
 
Adam Hansel, Mori Seiki -- difficult finding skilled workforce  #govcams
 
 
Boeing: affordability equation is a huge challenge for our industry and suppliers, especially in California. #govcams
 
 
Boeing on last mile #manufacturing: supply base in CA is $7 billion a year. 60% of money we spend is outside of the company.
 
 
Paul Geery, Boeing, $7 billion supply chain in CA. #govcams
 
 
MANEX: Community colleges will drive new skilled workers but it must start in high school.  #govcams  grow #careertech
 
 
Gene Russell, MANEX, huge shortage of machinists and welders in CA
 
 
Bayer’s Martin Grubbs at #govcams summit: getting the blue collar workforce better prepared at comm colleges is key .
 
 
Sandeep Duggal, EXTRON, final mile manufacturing -- $1 billion output with 100 CA workers. #govcams
 
 
Sandeep Duggal, EXTRON, huge misfit between US workforce skills and needs of high tech manufacturing. #economy #govcams
 
 
Morei Seki’s Adam Hansel at #govcams: We really need 2 think about how our decisions trickle down 2 smaller cos. that depend on bigger cos.
 
 
Adam Hansel, Mori Seiki -- manufacturing drives R & D. #govcams
 
 
Boeing at #govcams: National global realities are squeezing all of us. We need a sales tax exemption on #manufacturing equipment.
 
 
Paul Geery, Boeing, advocates sales tax exemption for manufacturers and hiring tax credit. #govcams
 
 
Boeing at #govcams advanced #manufacturing summit: in 2009 their CA payroll was $2.4 billion for more than 20,000 employees.
 
 
California Advanced Manufacturing Summit. Paving the way for California's manufacturing future. #govcams
 
 




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