Viewing blog posts written by Jack Stewart

California's Proposed Budget. Wow.

Posted by Jack Stewart, on July 9, 2008

Yesterday's proposal from the Budget Conference Committee is a lopsided attempt to fix California's unbelievable $15 billion deficit. We understand these are difficult times, but everyone must be part of the solution -- the tax users as well as the taxpayers. With soaring energy and commodity costs, every business in this state is fine tuning its 2008 budget to find a way to stay competitive and end the year in the black. The Legislature should do nothing less.

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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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Earth Day today, CTE tomorrow

Posted by Gino DiCaro, VP, Communications on April 22, 2008

Yesterday was an Earth Day celebration, but the other 364 days of the year are when the work really gets done.  It's when we invest in the workforce and technologies needed to innovate, manufacture, research, install and maintain the products that will keep the forthcoming Earth Days .... well, green.

Accentuating this point at a press conference in the State Capitol yesterday was the Get REAL coalition, Lieutenant Gov. John Garamendi, Senator Tom Torlakson, Assemblywoman Loni Hancock and Assemblyman Martin Garrick.   The overall plea was for the State to stop bleeding career technical education courses out of our high schools.   Almost 90,000 "green jobs" will be created in California by 2020, CTE enrollment has decreased from 74 percent to 30 percent over the last twenty years, and, all the while, 40 percent of our students are dropping out of high schools before they even get exposed to the contextualized training that could lead to high paying careers in the emerging green sectors and others.

One prime example of what's to come:  For every one megawatt of photovoltaics installed, 20 manufacturing jobs and 13 maintenance jobs are created for one year.  For the 20 percent of our high school students who go on to get four-year degrees before they are 25, this might not matter.  For the 80 percent that don't, it  could represent one of the many promising futures if we just gave them the fundamental training and inspiration they need.

As the State navigates difficult budget times, contemplates revenue enhancements and priorities, seeks to establish itself as the greenest in the Union, and covets new investments, it is crucial that existing and any new resources for schools be considered for career technical education.

Earth Day reminds us of our environmental priorities and accomplishments.   We will have a hard time accomplishing anything if our education system tells students and future workforce that CTE exposure is unavailable, unrequired, unfunded, unvalued and unmeasured.

View press conference video
View press release
View chart showing California's CTE decline

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Manufacturing productivity gains at DST Output in Northern California

Posted by Gino DiCaro, VP, Communications on March 19, 2008

Last month DST Output celebrated its selection as one of Industry Week Magazine's "Top 10 Best Plants" in North America.  CMTA president, Jack Stewart, and I attended the facility-wide celebration at their plant in El Dorado Hills, California.

DST Output provides integrated print and electronic billing statements to many of the country's largest financial services, communications, healthcare, and utilities companies.

DST Output's Top 10 accolade was impressive but it was their exponential and jaw-dropping productivity growth over the last four years that gave me pause and once again made me ponder the old mantra, productivity gains = unemployment.

Get this:   DST Output's facility in El Dorado Hills is printing more than 32 million images a day .... and those are all variable images with complex and different billing data on each one.  This was unheard of in the industry just four years ago when DST output was printing only 17 million images a day.  Even more, these increased images are printed on fewer printers.  90 fewer to be exact -- down to 10 from 100.   I asked what happened to the number of employees.  Guess what.   They actually remained about the same ... possibly even added a few.  Go figure.  

Simply put, in four years, they nearly doubled production, used 90 percent less machines and at least kept the same amount of employees.

This is a reminder that California companies are doing more with less, and keeping our economy going with good paying technical careers.  More product ... more training ... less waste.   More technology ... less consumer product cost.

We need to do everything we can to supply our new and existing lean manufacturers with a skilled and ready workforce and, during the current economic downturn, we need to make sure the State's  business costs compete with the rest of the nation so more California workers can find family-wage jobs like the one's at DST Output.

Read Industry Week's write up

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Green tech jobs need stimulus despite -- and because of -- AB 32

Posted by Gino DiCaro, VP, Communications on Feb. 29, 2008

CMTA President Jack Stewart, other business leaders, Speaker Fabian Nunez, Senate pro Tem Don Perata and other legislators gathered at the Capitol yesterday to discuss the important correlation between green public policies and green collar job growth in California. 

While the passage of AB 32 relied upon the premise that California would grow green jobs as a result of the passage of the bill, much work has to be done to stimulate these industries here in the state.  Let's face it, there was no language in AB 32 that incented companies to manufacture these products in California and this state is still very cost-uncompetitive (See Solar cluster forming in Oregon).

Manufacturers are both the source and the beneficiaries of innovation to improve energy efficiency and reduce GHG emissions.  But it will be a challenge to overcome our business climate negatives – high costs of doing business, difficult regulatory environment, and increasing difficulty finding skilled workers.  

A focus on solving these issues will pay huge dividends for the California economy and yesterday's announcement was a very important first step

Press Release
Press Conference video
SD Tribune article

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