Government’s never been more involved in business. For Jay Timmons, President and CEO of the National Association of Manufacturing (NAM), this development has few upsides.

Timmons spoke in Denver last week at a business luncheon sponsored by CACI, the Colorado Association for Commerce and Industry, and took on much of the political establishment in recounting federal policy-maker’s lousy recent record of supporting manufacturing.

Refreshingly non-partisan in his takedown, Timmons asserted that neither political party is getting it right for business from Washington. Speaking on behalf of his 12,000-member organization, Timmons took aim at:

– The GOP House strategy to control the legislative agenda not through elections but with threats and political maneuvering.

– Bipartisan embrace of a growing regulatory framework, with over “3000 new regulations” foisted on business the past 20 years by both Republican and Democratic administrations.

– Including a “disappointing” raft of proposed regulations that may stifle shale gas development, which Timmons credited for fueling a manufacturing revival and adding as many as four million new energy jobs to the economy in recent years.

– The impact on competitiveness of the regulatory burden, where U.S. manufacturers pay an average of 20% more to make the same product as international competitors.

– The shortcomings of education and occupational training, where 82 percent of U.S. manufacturers have job openings they can’t fill due to a lack of qualified applicants.

Workforce issues are a widespread challenge here, with most firms profiled in CompanyWeek citing a lack of skilled labor as a challenge to growth. Timmons listed certification and immigration reform as policy priorities for NAM, including support of the immigration bill approved by the Senate earlier this year that remains stuck in the House.

It’s hard to miss how conventional wisdom may be changing with regard to long-standing business and political affiliations. NAM’s support of immigration reform including a “path to citizenship” runs counter to majority Republican congressional support. The dust-up over shutting down the government also strained established ties in a very public way.

How is it, asked someone incredulously, that Apple and others could possibly tilt toward the current administration as they did the past election? Timmons reminded the questioner that voters spoke clearly the past election; that the Republican spokesperson was “ineffective”.

A more accurate assessment is that Apple and other emerging powerhouse American brands view their future to be more closely aligned with important customer demo’s than with the political influence of the GOP. A downside may be that the progressive political agenda on the left often translates into a more activist governmental role in the economy — including an ever-expanding regulatory framework and development bureaucracy.

It’s evident that neither side is capturing the imagination of business, certainly not NAM’s leadership. And for manufacturers in need of regulatory relief, meaningful immigration and education reform, and cost certainty that inspires investors and motivates customers, government and its proxy network can seem more foe than friend at times.

It’s a fulltime job reading investor sentiment these days, and apparently a confusing one for the business press. On consecutive days last week, local reports had stocks rising one day and falling the next on news the Fed would continue ‘quantitative easing’.

There’s little confusion though about the difficulty Colorado small business is having raising capital. Money has always been the bane of start-ups and early stage companies, but today, it’s become an especially tough game. It’s leaving worthy companies without working capital and the service professionals who raise money and manage deal flow singing the blues.

“The rules have changed”, says Andrew Hurry, senior investment banker with The Yale Group, a FINRA-registered broker-dealer based in Denver. “There’s far less tolerance for risk, investors are looking for larger deals, they’re taking longer to close, and now both clients and investors are blowing up deals prior to closing. It’s often like holding two live snakes and not knowing which one will bite first.”

Hurry’s been raising capital for growth and early stage companies in Colorado and internationally for the dozen years or so I’ve known him. He describes a pervasive nervousness about the economy that’s fundamentally changed the investment landscape.

“I attended an Aspen Business Luncheon where John Calamos, a very well know asset manager, was the guest speaker. I couldn’t believe the questions I was hearing from an audience of very high net-worth individuals, like, ‘What will happen to the US economy when the dollar loses reserve currency status?’ or ‘What do we do now that we’ve lost the ability to use gold as a hedge against equities?’ The individuals weren’t asking how to grow their net worth. They were concerned about not losing the value of the current investments.”

The deals that are getting done tend to reflect this risk-averse sentiment. “When I started in investment banking back in 2000 many of my clients were pre-revenue healthcare and technology companies that were looking for capital to complete product development and get to market launch. Today, many VC’s are now looking at companies only with demonstrable and sustainable cash flows where their investment helps revenues and business grow; or help with execution on a business plan already in place. Deals that can be categorized as having no market risk, no technology risk, and no management risk”, Hurry explained.

“The result is that early stage companies have to be more creative in terms of sources of capital – friends, family, non-traditional lenders, crowd-funding – and do a lot more with a lot less resources.”

Hurry’s assessment isn’t a surprise for Colorado start-ups and growth companies. In the few short weeks we’ve published CompanyWeek I’ve met several entrepreneurs frustrated with the shifting investment sands. It’s no secret that the primary barrier to higher deal flow here is money, not a lack of ideas or risk-takers willing to set the wheels in motion to build a new company or follow a dream.

In Andrew Hurry and likely other investment bankers and brokers, Colorado entrepreneurs have an empathetic partner. “These companies are in a ‘catch-22’”, he says. “Great companies with great products and proven management teams are being left hanging to struggle on with limited resources while investors sit on a perch waiting for the ‘blood in the water’ feeding frenzy.”

It’s enough to leave even a seasoned dealmaker shaking his head.

On paper, they couldn’t be more disparate companies. Springs Fabrication, in Colorado Springs, is a global manufacturer of steel containers and fabricated metal products. Sushi Den is Denver’s iconic Japanese restaurant, making food-art from the most pristine of raw materials – fish.

Both are profiled in this issue of CompanyWeek, surprising to some maybe, but for me a great example of how making and manufacturing span a fascinating cross-section of industry segments.

For a moment in 2011 their paths crossed, the way they often do for companies with global operations and long supply-chains. But the circumstances were unique.

Unknown to many, Springs Fab was thrust into the middle of the earthquake crisis in Japan two years ago, when the company was hired to design and manufacture huge steel containers to capture the radioactive water used to cool the nuclear fire in the reactor at Fukushima.

I’d just watched a Frontline documentary on the Fukushima disaster and was surprised by how close Japan came to a cataclysm that might have surpassed Chernobyl. The accidents were similar: at Fukushima, an explosion tore apart the reactor and left the core fully exposed, emitting lethal amounts of radiation and in danger of secondary explosions that might have poisoned large swaths of the Japanese mainland. Much like Chernobyl, the bravery of pilots and firefighters able to get water onto the fire prevented catastrophe.

I knew that Springs Fab had built the steel vessels used to hold and filter the water pumped out of the reactor. They’d been flown on huge Russian-made Antonov transport planes to Japan. I hoped Tom Neppl, Spring Fab’s CEO, would tell me the story. (Mike Dano also writes about it here.) He did.

“I was sitting in my office on a Saturday, following up on some bids, when a partner of ours called, explained what was going on, and asked if we’d get into the project”, Neppl recounted. “We were actually in a bit of a lull, but had experience with radioactive materials. We assessed the risk, decided it was worth it and jumped in.”

Neppl’s an unassuming guy and downplays what unfolded, but the decision placed Springs Fab squarely into an international drama, involving TEPCO, the Tokyo Electric Power Company that managed Fukushima, the Japanese government, and among others French nuclear officials who viewed Springs Fab as interlopers. For weeks, TEPCO officials were onsite at Springs Fab’s facility, meticulously following progress.

As it became clear Neppl’s company was emerging as the go-to supplier, a senior Japanese government official landed in his office to deliver an urgent request.

“Dr. Suzuki brought me a gift, sat in the chair you’re sitting, and asked if we could reduce our production schedule from three or four weeks to one. How can you say no? I got a yellow-pad out and we redesigned the schedule right there. We met the deadline.”

He won’t take credit but what happened is now part of the historical record: Springs Fab became one of the project’s most innovative and reliable firms. The steel modules, containers and systems designed and manufactured in Colorado Springs were among the most trusted by Japanese energy and government officials where the degree of difficulty took its toll on other solutions.

Fukushima continues to be a difficult proposition for officials. Last week we read of more leaks from the site.

But Neppl’s containers captured water that would otherwise have run off into the surrounding terrain – and oceans.

Japan’s a key cog in Sushi Den’s supply chain, but the restaurant wasn’t impacted by the accident. The Kizaki brothers source their fish “…where they grew up”, in southern Japan opposite the northeastern location of Fukushima (read Jeff Rundles profile). It’s also not clear what impact the accident did, or will, have.

But thirty percent of the thousands of pounds of fish Sushi Den flies into Denver every week is from Japan. No doubt they care deeply about the entire fishery. At least for a brief moment in 2011, the efforts of one Colorado company meant a lot to another, in operations underway thousands of miles away.

Improbable. Fascinating. Important. Now you know.

You’ve seen the numbers: Colorado’s unemployment remains high by recent standards, roughly 7%, with about 40,000 fewer people employed today than in March 2008, when employment peaked at 2,611,357. Certainly the job picture’s improved from the dreadful period culminating October 2010 when the unemployment rate hit 9.1%, but today’s number remains stubbornly high, inching up again only recently:

(Department of Numbers data)

One might reasonable guess that today, employers benefit from a deep labor pool with plenty of qualified workers to choose from. And while this may be the case in certain industry sectors, manufacturers here are challenged to find qualified employees.

This manufacturing ‘skills-gap’ has become a common theme in the business profiles we’ve published in only four issues of CompanyWeek. When asked about his challenges, Taylor Merritt, CFO at Merritt Equipment Co. in Henderson, was unequivocal. “Skilled workforce is the first thing that comes to mind. Manufacturing has a horrible image. People think it’s dirty, it’s hard work, and there’s no potential for a career.”

Jeff Popiel, CEO at Geotech Environment Equipment echoed the sentiment. “Hiring people with the right skill set and mindset that see manufacturing as a career…is a challenge.” In this week’s issue, Bill Sails of EarthRoamer adds, “One of our biggest challenges is finding skilled, good employees…”.

No manufacturing sector may be as challenged on the labor front as the apparel business, where for many re-shoring jobs remains only a worthy idea, despite the efforts of some Colorado manufacturers, like Janksa in Colorado Springs. “It is challenging to compete on price with companies that manufacture offshore,” says Jan Erickson, CEO and founder. “Instead of pennies per hour, we are paying a modest, but livable wage. We have not, however, been able to offer the benefits that I believe our skilled sewers need and deserve.”

For Erickson and others in the apparel trade, the challenge amounts to no less than rebuilding a viable workforce. “When everything went offshore in the ’80s and ’90s, a lot of those sewers went to other kinds of jobs. So far we’ve done fine, but I think a lot of those skilled workers are gone who were here 20 years ago.”

So where to go from here? At the behest of industry and with the support of Colorado’s occupational educators, especially, this past spring lawmakers passed legislation designed to better align curriculum with the needs of industry. As described in today’s issue of CompanyWeek by Ben Nesbitt, Program Director with the Colorado Community College System, HB13-1165 authorized the creation of a “Manufacturing Career Pathway…designed to provide efficient and economical on ramps for individuals interested in pursuing careers in the manufacturing sector.” It’s a promising development, even if tangible benefits of HB-1165 remain a ways off.

Of course tomorrow’s classrooms must be filled with students compelled to pursue careers in manufacturing. For this to happen, the manufacturing ‘brand’ must evolve to better reflect the progressive bent of people and companies driving its growth here, in Colorado. As Geotech’s Jeff Popiel notes, “This is where the state and the city are coming in, trying to rebrand manufacturing.”

I agree there’s high awareness. Denver’s Office of Economic Development, in particular, is intent on ‘messaging’ around manufacturing – and for good reason. The city’s identified the sector as key to its growth strategy, understanding that employers would benefit from a growing, MFG-inclined urban workforce.

But industry can’t – and shouldn’t – rely on government efforts alone. The challenge now is to ensure that effort and influence trickle down from those at the top of the manufacturing food-chain to small business who lack resources and need help to retool today’s workforce. Is Big-Manufacturing engaged? More on that later.

Is a job a job?

Statistics like the unemployment rate suggest it is, but of course they’re not. Pay is the most obvious differentiator. I’m no economist but it’s also easy to make the case MFG jobs, jobs that produce goods and services, are fundamentally different and critical to a sustained, boom-and-bust-proof economy we seek in our region.

MFG jobs are ‘primary’ jobs; they create wealth here as money and capital flow back to the region from sale of manufactured products – and through the ‘indirect’ jobs they create in retail, supplies, professional services, etc.

They may also be an important catalyst to reversing a decades-long trend that continues to be a drag on the economy. Against the backdrop of growing wage inequality, enough new MFG jobs – a higher percentage of total employment – could drive average wages up.

2011 Annual Wages by Sector Colorado

Management of Companies and Enterprises $130,515
Mining 104,898
Utilities 88,322
Information 84,138
Finance and Insurance 74,312
Wholesale trade 71,428
Manufacturing 61,668
Construction 48,865
Government 48,082
Health Care and Social Assistance 44,852
Real Estate Rental and Leasing 43,918
Transportation and Warehousing 43,761
Education Services 37,978
Administrative and Waste Services 37,704
Arts, Entertainment and Recreation 30,734
Retail Trade 27,113
Accommodation and Food Services 18,042
All Industries 49,043
Source: Bureau of Labor Statistics, Census of Employment and wages

Can average wages grow significantly without new primary jobs in the mix? Of course. And many Colorado manufacturers don’t need higher-skilled manufacturing labor that seems short in supply.

But Colorado business has carved out significant leads in growing MFG sectors. The region is poised to build on the successes of what are now internationally known brands. Demand for manufacturing labor seems to be increasing. Employers I know can’t find enough qualified labor. Wages in MFG should rise as a result.

Not all is rosy on the wage front. As the Wall St. Journal reported last year manufacturing wages haven’t kept pace with inflation, or with rapidly rising productivity gains. Yet this in turn has made the United States more competitive on the international manufacturing stage, as wages in China and elsewhere are rising.

The opportunity means little if communities won’t develop and support MFG businesses and train a new qualified workforce equal to the advanced technical requirements of today’s maker companies. ‘Making Colorado’, Gov. Hickenlooper’s rebranding effort for the state, is a good start. But the marketing emphasis on ‘making’ is oddly misaligned with the Office of Economic Development and International Trade’s industry sector breakdown, where ‘Advanced Manufacturing’ is a catch-all for all manufacturing in the state. Or not. Frankly I’m not sure.

But if we’re successful developing a new generation of ‘primary’ employers, we’ll build more wealth and begin to reverse a widening income inequality gap, an economic headwind to be sure.

More on jobs and training in this issue – and next week.