Viewing blog posts written by Gino DiCaro


California's MFG is big but growth is small

Posted by Gino DiCaro, VP, 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 sacb.ee/2oaO pic.twitter.com/0GwbGPi4YM
 
Stockton Buzz (@stocktonbuzz) California leads U.S. in manufacturing jobs centralvalleybusinesstimes.com/stories/001/?I… #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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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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A look at California's manufacturing scale ups by Senate District

Posted by Gino DiCaro, VP, 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.

 

Investment by Senate District map

 

(Data source: Conway Data, Site Selection Magazine)





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California awarded prize for economic development

Posted by Gino DiCaro, VP, 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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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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