Viewing blog posts written by Jack Stewart

Why Not California #8: More solar companies producing elsewhere to sell to California

Posted by Jack Stewart, on March 3, 2009

It looks like Tennessee just attracted a $1 billion solar manufacturing facility and 500 accompanying jobs from a German solar firm, Wacker Chemie, and an Associated Press story hints that the Volunteer state put up a $50 million incentive package to recruit the high-wage company.  This news adds to a previously announced $1.2 billion investment from another solar firm, Hemlock Semiconductor, looking to produce solar products in Clarksville, Tennessee.

Why is it that little old unsophisticated Tennessee can attract $2.2 billion in solar power investments and the home of solar and other green power mandates can sit and watch its unemployment numbers skyrocket to the country's third worst rate - 10.1 percent - and leave behind an economy-altering number of manufacturing jobs?  Didn't Gov. Arnold Schwarzenegger and then-Assembly Speaker Nunez promise that California's global warming mandate would create tens of thousands of new green jobs in the Golden State?  And didn't the California Air Resources Board in its economic analysis of AB 32 say that "implementing the recommended measures will have an overall positive impact on economic growth in California"?  Peer reviews shot many holes in the analysis and disputed AB 32's "riskless free-lunch" and now we've seen states such as Tennessee, Oregon and Nevada begin to attract these very high-wage manufacturing jobs and create hundreds of green careers for their working families.

Could one of the main answers be that business costs are so high in California that we will never see significant green investments; that workers in other states will be the chief beneficiaries of California's environmental mandates and that California's brightest and best are fleeing to states that put a high priority on economic growth?  The latest cost of doing business survey by the Milken Institute finds that operating costs for California manufacturers are 38 percent higher than for their competitors in Tennessee.  Is it any wonder that investments in industries that create high-wage jobs routinely bypass California?

Just look at California's record of job destruction over the past eight years.  Since January, 2001 California has eliminated 730,000 private sector jobs with an average salary of $69,000.  During that same period, California created 763,000 new private sector jobs that average only $43,200 per year.   It's time to wake up and take a whiff of the smelling salts.  This isn't working.

While we may want to gloss over theses disadvantages, bury our heads in the sand and believe that new business will come to California because of our sunny skies, beautiful scenery and a green commitment; the fact is that unless the Governor and Legislature deem improving the business climate to be as important as fixing the state budget and reducing greenhouse gas emissions, they should stop fantasizing about California leading the nation in new technology jobs and send Tennessee Governor Bredesen our congratulations and best wishes.

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California Needs a Fresh Start

Posted by Gino DiCaro, VP, Communications on March 7, 2008

As I cleaned out 12 years of clutter from my office this week in preparation for CMTA's big March 28 move to a stone's throw from the Capitol, one thing came to mind -- California and I need a fresh start.  The move will take care of my itch, but I have a few things the State should consider as a refresher for it's own house.  Among the detritus of a decade's worth of paper, press releases, issues archives, pesky "to do" lists, reports, and un-expensed receipts, I came across three very worthy items that deserve California's attention.

The first was a 1998 5-pound notebook from the now defunct California Trade and Commerce Agency titled, The California Location Book -- a book created to give corporations every reason to grow in the state.   (see table of contents)

The second was a study done in 2006, titled Manufacturing Prosperity Initiative, proving the decline in wages and requesting the reinvigoration of the Jerry Brown instigated -- but never implemented -- California Commission for Industrial Innovation. (see letter / summary)

The third was a 2004 Proclamation by Gov. Arnold Schwarzenegger to "Reaffirm California's commitment to the success of our manufacturing industry."  (see Proclamation)

The recruitment tool, the original Commission (and the 2006 request), and the Proclamation were meant to be important cylinders in the engine of high wage manufacturing growth and certainty in California.  All are lifeless.  All need a fresh start.


First the fact that there is no California recruitment agency (AKA someone accountable for the loss of 400,000 lost manufacturing jobs) charged with the State's economic security as it pertains to our biggest wealth creator is at the least, worrisome, at the worst, negligent (See Tesla Motors ... Buck Knives ... Intel's wafer fab ... Oregon's new solar cluster).  The Local Economic Development agencies are doing yeoman's work at the local level -- and usually understaffed -- but we need a statewide organization that can lead, oversee, track, market and advocate.  If we had one, they'd be diligently working on new recruitment tools, much like the 300-page brochure unearthed in my office this week, and making a case for competitive tax incentives and some degree of certainty in policies affecting job creators.

While corporate decisions aren't made on recruitment books and marketing materials, the absence of such things means no one is asking what incentives to market. (Granted, the Gov. has done his own sporadic marketing in between governing the largest state in the union)

Second, the Manufacturing Prosperity Initiaitive proved the State is slouching toward a service-sector economy.  Most importantly showing data on the growing sectors versus declining sectors:  growing sectors average wages were $15,000 less than the declining sectors.  CMTA updated these numbers to reflect 2001 to 2006 data.  The difference increased to $26,000.  (see chart)

Third, the Legislature and Governor, in these times of budgetary debate, need to once again affirm that manufacturing and the always-to-follow R&D jobs are the lifeblood of Californians -- not to mention new global warming innovations -- and provide the much needed revenue and growth needed to help pull the State out of it's $16 billion deficit.

March 28 is my fresh start.  I'll be at our new digs at 1115 11th Street working on California's fresh start.

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