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California must get its fair share of U.S. manufacturing renaissance

Posted by Gino DiCaro, VP, Communications on Feb. 21, 2014

Last week we looked at recent investment levels of manufacturing across the country and found that California is still lagging the country in the ever-important category of new and expanded facilities.  This week we took a look at the state's manufacturing employment levels since 2000 versus the country.  The California trend continues with a larger percentage loss than the rest of the United States.

Manufacturing employment chart sine 2000

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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 manufacturing job loss overshadows employment gains

Posted by Gino DiCaro, VP, Communications on Jan. 24, 2014

Today's monthly employment report showed that California lost another 6,000 manufacturing jobs in the month of December 2013, despite some general good news -- slight overall job gains and an improvement in the unemployment rate.  

While the state has grown its manufacturing employment slightly since the economic recovery started in 2010 we still lag the rest of the country's growth by a significant margin.  At a $77,000 average wage and tremendous ripple effects in the economy, we all must become champions of manufacturing growth -- In the words of CMTA's Chairwoman Pamela Kan earlier this week, "Manufacturing multiplies everything!"

One side note: This week we heard about Vision Service Plan's commitment to grow 250 more manufacturing jobs in its new Folsom facility.  Congratulations to VSP and its future workers.  We hope many other Californa manufacturers find good reason to trust their future investments in the state.

manufacturing jobs chart

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State of California manufacturing

Posted by Dorothy Rothrock, on Jan. 24, 2014

This week Governor Brown delivered his annual State of the State address. At CMTA we are also taking stock of how manufacturing is faring in the state and what we can look forward to in coming years. 

Let’s start with the broader picture of global and domestic manufacturing. You’ve heard about the “renaissance” of U.S. manufacturing as many firms are choosing to locate and expand manufacturing facilities in the U.S. rather than overseas. The logistical hassles and increasing costs of doing business in remote locations combined with attractively low domestic energy costs are key factors leading to this resurgence. But what about California – Are  we well-positioned to attract our fair share of new manufacturing investment? Will California citizens have a good chance to live a middle class or better lifestyle holding exciting jobs in these growing and innovative manufacturing firms? 

Manufacturers have choices for where to expand or site new facilities. Other industrial states are moving quickly to attract this growth. The recovering economy is generating surpluses in government revenue and these states are proposing to broadly cut taxes or provide targeted tax relief for economic development programs. Florida’s Governor proposes to eliminate the sales tax on manufacturing equipment, reduce business taxes and cut property taxes. New York Governor Cuomo suggests a corporate tax reduction and elimination of taxes on manufacturers in upstate New York. Michigan may provide a broad-based income tax cut for residents. 

Last year California took a positive step in this direction by adopting a statewide partial sales tax exemption on the purchase of manufacturing equipment. But we were disappointed that the Enterprise Zone program was eliminated at the same time some manufacturers were harmed. We’ll need to redouble our efforts to reduce costs wherever we can to keep them competitive in the state.

To keep us from falling behind, CMTA will try to stop bills and regulations that would add costs or burdens to manufacturers. We are fighting proposals that would make it easier to increase local taxes by lowering the two-thirds vote threshold to a simple majority. We also want regulators and lawmakers to stop higher carbon fees in the cap-and-trade program under AB 32, the Global Warming Solutions Act passed in 2006. We will push back on a variety of bills that would impose new fees, higher penalties, impose overly burdensome rules for operations and lead to frivolous litigation.  

But it’s not enough to stop bad ideas. Other states are actively working to improve their business climates. With your help – all the CMTA members up and down the state – we should convince lawmakers to take meaningful positive steps to attract manufacturing investment and employment. Local and state elected officials need to hear, directly from you, what it takes to be competitive in California and the challenges you must overcome every day. Let them know that the future state of California manufacturing will be positive with their active and energetic support.  

Tags: Grow #camnfg

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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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