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Recent good and bad on CA MFG

Posted by Gino DiCaro, VP, Communications on Dec. 11, 2015

A relentless challenge to California’s middle class is the lack of wage growth opportunities. Our state currently outpaces the country in overall job growth as it rebounds from the recession but we lag far behind in manufacturing growth, a sector that boasts the highest average middle class wages.  Particularly regions like the Valley and Los Angeles are struggling to produce a modicum of wage growth to support the middle class. To that end, there have been some recent public items that continue to paint a picture, most bad and some good that we thought were worth publicizing.  As always we will update you in early 2016 on the 2015 final manufacturing investment numbers to see how we did vs. the rest of the country.



A new aerospace manufacturing investment

Elite Aviation Products (EAP), an advanced design, engineering, and manufacturing company within the aerospace industry, announced that it acquired its second manufacturing facility in Tustin, California. 

EAP's Tustin facility will be a 34,000 square ft. addition to its existing local facility and will triple its manufacturing capacity. This is a good reminder that early manufacturing seeds often spawn more manufacturing jobs and growth close in proximity.

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Lack of CA wage growth report

A report this week by the California Budget & Policy Center, California’s Sinking Center: How the Economic Recovery Is Leaving California’s Midwage Earners Behind, suggested that wage erosion continues for California’s middle classEven at a time when workers are better trained, more educated, and more productive than ever, California’s median wage continues to lose ground, and wage inequality continues to worsen.

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Opportunity loss of electric vehicle manufacturing facility and 4,500 jobs

Faraday Carmaker announced it will build its first 100 percent electric cars in a $1 billion manufacturing facility in Las Vegas, Nevada, eventually employing 4,500 workers and creating a tremendous boon to their economy. Not sure how much California was in the mix for the investment but it sure would have helped make up for losing the Tesla gigafactory.

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CA investments and disinvestments

Relying solely on publicly available information, Joseph Vranich of Spectrum Location Solutions in Irvine, CA concluded in a report last month that 1,510 companies moved all or some of their operations out of California from 2008 through 2014, taking with them valuable jobs, investment dollars and tax revenue.

Certainly these disinvestments weren’t all manufacturing. Some are call centers, distribution etc., but it seems clear that it is difficult to locate a California facility when there are so many emerging less costly and predictable options.

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