I reached out to several manufacturers last week to ask about COVID-19-related disruptions and assess — to the extent we can at this early stage — any long-term effects on operations or supply chains that support regional manufacturing.
Companies managing global operations have been dealing with COVID-19 fallout for many weeks. A redundant or diverse network of suppliers is serving companies well.
Doug Campbell, CEO at battery innovator Solid Power in Louisville, describes a challenging international landscape. “Our partners in Europe vary in terms of their extent of shutdown: Partners in France and Italy are in total shutdown although still taking telecons from home. In contrast, our partners in Germany are partially operational.”
“Asia is quite a bit different,” Campbell continues. “Our partners in Korea appear to be getting back to business as usual and the worst seems to be behind them. Japan appeared to be in a similar situation but I learned from a call last night that the number of positive cases is starting to rise again and so the Japanese government is heavily encouraging folks to stay home again although it’s questionable how strongly they can enforce it.”
The domestic situation is similar. “Partners here in the U.S. are either in partial or complete shutdown. I had a call with one in Detroit earlier today who said things were pretty bad there and the governor announced they are at peak infection next week,” Campbell notes. “We’re lucky in terms of having such a diverse, international supply chain, as things might be bad in one area but not so bad in another.”
Kelly Watters, co-founder of Telluride apparel brand Western Rise, agrees. “We have a very diverse global supply chain, which is more important now than ever, ” she says. “One of the other areas we will be focusing on is a factory’s ability to respond to a changing environment quickly. For example, we are working with our pants factory in Los Angeles to modify the production lines to make masks, and several of our international factories on new shift policies to allow for more social distancing while keeping production going.”
Companies sourcing from China have been managing a raft of issues, some of which existed before COVID-19, including tariffs. Mike Henderson with Colorado-based lean consulting firm FlowVision canceled a trip there in February, but describes chaotic supply-chain logistics. “Through the third week of March, China couldn’t produce to meet customer demand due to COVID-19,” he says. “They can now produce at capacity and are filling up the shipping containers they have and putting them into transit.”
U.S.-bound products run headlong into the crisis here. “The containers in the U.S. are not being unloaded and returned at the rate needed, so there is now a shortage of containers returning to China,” notes Henderson. “Since China is building to eliminate the backlog, they will be running out of containers to put the material in and in a month shipments will slow down again. To top it off, in July people will want to start filling their shelves with products for Christmas.”
Lakewood-based Encore Electric has some exposure to shipping challenges, says Vice President Jeff Thompson. “I am concerned about light fixtures and fire alarm supplies, which largely come from China,” he says.
Logjams are developing in the U.S. as well. “Some U.S. suppliers have reduced their workforces, slowing production and distribution, including the New York docks,” Thompson notes. “Others have suspended manufacturing and shipments due to shelter-in-place directives from state governors. However, most manufacturers we deal with are currently on track, but they are issuing warnings to expect potential delivery issues in the future.”
It’s enough to encourage brands and companies to manufacture or source more locally — where possible. A supply chain that would support wholesale reshoring here doesn’t exist today. Will COVID-19, like tariffs and IP theft before, be a spark?
Mark Inboden, president at control-panel maker UCEC in Arvada, speculates it might. “Businesses will rethink their sourcing strategy. They must assess the delivery risk from each supplier,” he says. “This is a great opportunity to rely on strong local and regional partners.”
Inboden believes there will be more businesses looking at opportunities to reshore overseas sources. Post-crisis, he forecasts, “Chances are that businesses that survived COVID-19 have been establishing new supply chain resources, and those should be their new “go-to” partners and not forgotten. Businesses need to develop new supply chain partners for worst case scenarios, and local partners will be paramount.”
For John Morse and Englewood-based Dubach Tool Company, Colorado’s reputation as a manufacturing backwater, deserved or not, remains a barrier. “Colorado is interesting in that in spite of a healthy manufacturing community, I feel we are not perceived as “real” by the rest of the country.” he says. “I suppose this is true when you hold us up to regions that have a lot of heavy industry. Still, we serve medical, aerospace, food processing and others, so we are not going away. The economic aspect of this crisis is going to leave some wreckage in its wake, so we will have to wait until it has passed to see what we have left.”
But for Morse and Dubach Tool Co., one the region’s few tool and die manufacturers, business is still good. “For now, we are still working,” he says, modestly.
Few companies have been thrust front and center into the COVID-19-related crisis, with U.S.-made equipment, as Colorado Springs-based dpiX. CEO Frank Caris describes dpiX as “a single point of failure in the U.S. to keep the complete supply of x-ray devices going,” the very definition of mission critical in today’s crisis.
Caris says that the company is seeing a big spike in demand for its portable X-ray sensors and detectors made by dPix’s partners from permanent and temporary hospitals, due in part to the ability to scale to a facility’s need.
He is clearly proud of his company’s role in battling the pandemic — and its U.S. roots. “It shows that we can do all of this in the U.S.A. — and we should keep it that way,” he says, alluding to challenges in America’s manufacturing ecosystem.
In particular, Caris says he worries about offshore competitors and the lack of industrial policy that would protect, at some level, key American manufacturing industries against unfair competition. “I think as a country we need to continue defining what critical manufacturing and supply chains we demand to be in this country,” he says. “There is not a single soul who is actively promoting outsourcing critical military products to non-allied countries. We don’t build our aircraft carriers overseas.”
He adds, “[T]he current crisis has exposed vulnerabilities underneath the surface. Look upon it like an unexpected X-ray picture that has now been shared with the American people. . . . It’s up to all of us to define the best way forward.”
For Colorado and the region, the way forward may already be laid out in front of us. As Dubach Tool’s Morse points out, the state and region boast a diverse industrial character. As COVID-19 refocuses attention on the manufacturing supply chain, a first step for companies is to redouble efforts to work with more local providers.
Our list of possible new partners is growing. Let’s maintain the momentum.
Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com to connect with these manufacturers and others.
Submit a production capability or need for publication in CompanyWeek’s Supplier Bulletin — helping companies and brands manage supply disruptions during the COVID-19 crisis. Submit your free 250-wd. listing here>>
We’re expanding the Supplier Bulletin: Get involved with SCoP, manufacturing’s new Supply Chain Portal
/in General/by Bart TaylorTwo powerful forces are reshaping U.S. manufacturing in the wake of the COVID-19 crisis:
Broad support, finally, to fortify U.S. industrial supply chains to reduce the vulnerability of offshore disruptions, but more, to ensure investments in people, equipment, and technology are made in U.S. communities.
A seismic shift in the way companies do business. In-person contact will be limited in the future. Businesses must adjust to a “distancing” world.
Both are at the center of CompanyWeek’s new supply-chain initiative called SCoP — short for Supply Chain Portal. Our mission is to connect OEMs and brands with local or regional suppliers to enable more domestic manufacturing, and do so with digital tools that help overcome the challenge of communicating in a post-COVID world.
SCoP — pronounced “scope” — is first a searchable directory of manufacturers, brands, and suppliers, starting with the 1,500 or so companies featured in CompanyWeek since 2013, and companies posting in the Supplier Bulletin. As an example, OEMs or brands will immediately be able to search from a directory of over 250 local or regional contract manufacturers we’ve already featured.
The SCoP directory will launch this June. Longer term, SCoP will be much more.
SCoP isn’t necessarily a new idea. But timing is everything. Plus, several things have been missing from directory projects to date: a focus on local and regional connections; value-add information and tools — like a CompanyWeek feature — that make more manageable the dozens of variables that go into forming meaningful partnerships; and emphasis on manufacturing’s diverse industries, each with unique supply-chain requirements.
Here’s how to be part of SCoP:
If you’ve not been featured in CompanyWeek, use this short form to create a digital listing in the SCoP directory — and have your company publicized in the Supplier Bulletin. It’s a great way to provide a quick update to the marketplace and become part of the searchable directory. Here’s more information.
Have your company featured in CompanyWeek. The feature will contribute to a rich digital profile in SCoP. Contact us directly.
Update your CompanyWeek profile with industry information and capabilities here.
Service companies: SCoP will include a searchable service directory. Use this form to submit a listing.
U.S. contract manufacturers and other suppliers have never been more capable. Product manufacturers and brands have never been more compelled to find local partners. It’s time to rebuild the U.S. supply chain — one relationship at a time, company by company, community by community. Connecting OEMs and brands with suppliers in the western U.S. from California to Utah to Colorado, is our first priority.
The time is now.
Coming this June.
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
Why supply-chain matchmaking is a crucial next step, and how to accomplish it
/in General/by Bart TaylorAs gratifying it is to watch the country rally around manufacturing, new laws that would incent companies to reshore jobs, or require companies to source domestically, will run headlong into issues that force companies offshore in the first place, including the most obvious: an inability to find qualified, cost-effective suppliers in the U.S.
It’s why the sector’s next great challenge is to connect America’s importers — its product brands and manufacturers — with domestic suppliers that map to their needs, one by one, company by company.
Matchmaking is the short path to renewed expansion for U.S. manufacturing.
It’s not a new idea. Literally every trade or industry group has expended money or energy on supply-chain mapping. We continue to try, and fall short.
Understanding who is reshoring, and why, is an important starting point for a new approach.
Harry Moser is founder of the Reshoring Initiative (RI) and has studied the economics of offshore production for more than a decade. RI’s free tools like the Total Cost of Ownership (TCO) Estimator is today helping companies do the math as it relates to moving jobs or investment dollars back to the U.S.
Moser has quantified reshoring activity throughout the past decade. “In 2010, the total for reshoring and FDI (foreign direct investment) was 6,000 jobs in that year, and by 2017, it had risen to 180,000 jobs in that year, up thirty times. In 2018, it fell off to about 150,000, and our preliminary numbers for 2019 say about 112,000 jobs, off a third from 2017 but still 20 times greater than 2010,” Moser explains.
Why the falloff later in the decade? Call it a hangover from the certainty of tax and regulatory cuts to the chaos of a trade war. “We went from talk of how good the tax cuts were to the uncertainty of tariffs,” says Moser. Still, he sees a quick recovery under certain conditions. “Our best belief is that if we can stabilize the trade war and get beyond coronavirus, the rate of reshoring and FDI both will pick up and in a reasonable time get back to the rates of 2017,” he says.
What types of companies will reshore in the future? Easy reply. “The companies that have been coming back,” says Moser.
Transportation has been a reshoring leader. “The big numbers are always in transportation equipment,” Moser explains. “When Toyota or Audi builds a new factory, they bring 10 suppliers with them — often 10,000 to 20,000 jobs.
“Then, typically, electronics, appliances, and machinery are active — all situations where there’s significant TCO economics that favor it,” he says. “Or products that may have significant trade costs associated with importing, frequent design changes, IP risks, or unstable or variable demand. Or where hidden costs other than price are a substantial part of the total cost.”
Finally, automation is crucial. “If you expect to bring it back, certainly you want to automate more than when it left, and preferably more automated than where it is in China or wherever it is, because we still have significantly higher labor costs here,” says Moser.
Fortunately, for Colorado, California, Utah, and other western states, the list of top reshoring industries correlates geographically with the industrial assets of the region. Compare the list of most active industries, below, to California and Colorado’s top pre-COVID-19 manufacturing growth industries:
Most jobs reshored, 2010-19 (Reshore Initiative, preliminary 2019 data):
Here are the top 5 employment sectors California, pre-COVID:
Three of the top 5 sectors are trending up:
Largest employment sectors in Colorado manufacturing, 2018 (CompanyWeek/University of Colorado Leeds School of Business 2020 Business Outlook Report)
Fastest growing Colorado sectors/Top Gainers (total employees):
Here, then, is a different approach to matching companies in these industries to local partners:
We’re working on several new projects including the new Suppliers Bulletin, to better map and connect America’s supply chain as companies reshore or develop organically here.
We need your help, that is, your participation. Let us know who you are by submitting a suppliers listing. Our growing list is the basis for a new resource that will map the region’s capabilities to connect and advance the sector.
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@comapnyweek.com.
Sent packing by the PPP
/in General/by Bart TaylorMy Payroll Protection Program (PPP) experience was over before it started.
On the evening before the April 3 opening of the program, I’d gathered information for the application and documented payroll expenses per the language in the CARES Act, that stated:
The language was a relief. My company is comprised of a network of talented independent contractors, of editors, writers, designers, and photographers who bring CompanyWeek to life each week. We’re gig professionals and entrepreneurs. If anyone needed a reminder of the importance of this segment of the economy, COVID-19 has provided it.
Yet not in time, apparently, to be sent packing. On Friday morning, as the first applications were funneling through banks, the Small Business Administration (SBA) moved the goalposts. Responding to a wave of questions about the program from confused businesses and advisors, the SBA posted its own Q&A, including this nugget:
Rejected. No employees, no payroll costs, no PPP loan. As a practical matter, the guidance killed plans that would have enabled me and others to keep a staff and payroll together, to provide certainty for gig entrepreneurs who rarely have it. Left alone, the original stipulation would have also saved the system from hundreds of thousands of additional applications from sole proprietors and freelancers.
The SBA must have feared duplicate submissions. It’s a hollow concern — and crippling distinction. I hope to have employees. But my company will always support freelancers, at least until I’m smart enough to build a media business immune to a foundation of quicksand. I’ve no idea what the media landscape holds for me in 18 months, let alone a reasonable term of a small business loan.
I do know our mission is sound. Manufacturing keeps us motivated — me and the cadre of journalists reporting on America’s innovative and lately, highly appreciated, maker community. COVID-19 is only the latest in a series of existential threats to the U.S. economy that underscore the importance of American manufacturing.
Today elected officials and wonks who do their bidding pick winners as if a command and control economy were the American norm. On one hand I support it. That status quo wasn’t working for manufacturing. I’ve argued for specific targeted tools that enhance U.S. manufacturing competitiveness and juice growth industries that would create new and sustaining jobs.
But today a new skill determines whether small business succeeds or fails — the ability to navigate a sometimes arbitrary command bureaucracy to score the grants and loans and advise that have become a variable for success.
I’d prefer my PPP failure not be a badge of honor in a losing cause.
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
Fool me twice: Why COVID is the wakeup call that tariffs weren’t
/in General/by Bart TaylorIn August of last year, as tariffs were buffeting U.S brands, I wrote, “There may never be a better opportunity to rally the nation around a moonshot-like goal to reconstruct our manufacturing commons, our national means of production.”
I was wrong. COVID-19 is even a more compelling reason.
For years, consumer spending has powered the U.S. economy. Yet COVID is kryptonite: Spending will be a wild card for the foreseeable future as jobs and income stabilize. And of the many companies COVID will leave in its wake, manufacturers will be among them — companies and brands in food and beverage, in building and construction, in locally made gear and equipment — companies that thrive on a profligate consumer sector.
Which means capital investment and business-to-business spending in the U.S. now takes on a new level of urgency. If there was ever a time to reassess investments we make in human capital and infrastructure in manufacturing outposts in China and elsewhere, it’s now. American communities need jobs and business spending, the sooner the better.
Tariffs should have been a lesson. Chinese industrialists decided early in the trade war to pivot from strength in basic consumer manufacturing to higher-value advanced manufacturing in order to offset American leadership in those areas. The U.S. has no such plan.
This past January, I quoted the Wall Street Journal‘s John Stoll, who at that time said that tariffs largely reinforce “sentiment that has simmered for years over the low flame of China’s rising labor costs, forced technology transfers and intellectual-property theft.” If tariffs fueled a simmer for companies manufacturing in China, COVID has ignited a raging fire.
What to do? Today we’ve run out of excuses to fight for relief from tariffs instead of new manufacturing infrastructure, to buy a cheaper offshore option instead of paying a few dollars more for a U.S.-made product, or to bypass the opportunity to look for U.S.-based suppliers. Our communities depend on us making different choices.
Here, we start by encouraging U.S. manufacturers and brands to support domestic suppliers and sourcing options. If qualified suppliers are tough to find locally, then regional or national options are the next best thing. In today’s Supplier Bulletin, companies from New York, Michigan, and Pennsylvania took the time to publicize their solutions. We should welcome more.
Here’s the growing list of companies available to fill orders, or provide consumer options with products they make. List your company, or tell us what you’re making. And let small tactics that support U.S. manufacturing blossom into a strategy that carries us back from crisis and lays a foundation for the future.
Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com.
Related from Bart Taylor:
Leadership lacking in competition for manufacturing leaving China
China’s pivot from tariffs a lesson for U.S manufacturing
Ordered to leave China, American manufacturers must shoot for the moon
How Colorado manufacturers are managing pandemic-related disruptions
/in General/by Bart TaylorI reached out to several manufacturers last week to ask about COVID-19-related disruptions and assess — to the extent we can at this early stage — any long-term effects on operations or supply chains that support regional manufacturing.
Companies managing global operations have been dealing with COVID-19 fallout for many weeks. A redundant or diverse network of suppliers is serving companies well.
Doug Campbell, CEO at battery innovator Solid Power in Louisville, describes a challenging international landscape. “Our partners in Europe vary in terms of their extent of shutdown: Partners in France and Italy are in total shutdown although still taking telecons from home. In contrast, our partners in Germany are partially operational.”
“Asia is quite a bit different,” Campbell continues. “Our partners in Korea appear to be getting back to business as usual and the worst seems to be behind them. Japan appeared to be in a similar situation but I learned from a call last night that the number of positive cases is starting to rise again and so the Japanese government is heavily encouraging folks to stay home again although it’s questionable how strongly they can enforce it.”
The domestic situation is similar. “Partners here in the U.S. are either in partial or complete shutdown. I had a call with one in Detroit earlier today who said things were pretty bad there and the governor announced they are at peak infection next week,” Campbell notes. “We’re lucky in terms of having such a diverse, international supply chain, as things might be bad in one area but not so bad in another.”
Kelly Watters, co-founder of Telluride apparel brand Western Rise, agrees. “We have a very diverse global supply chain, which is more important now than ever, ” she says. “One of the other areas we will be focusing on is a factory’s ability to respond to a changing environment quickly. For example, we are working with our pants factory in Los Angeles to modify the production lines to make masks, and several of our international factories on new shift policies to allow for more social distancing while keeping production going.”
Companies sourcing from China have been managing a raft of issues, some of which existed before COVID-19, including tariffs. Mike Henderson with Colorado-based lean consulting firm FlowVision canceled a trip there in February, but describes chaotic supply-chain logistics. “Through the third week of March, China couldn’t produce to meet customer demand due to COVID-19,” he says. “They can now produce at capacity and are filling up the shipping containers they have and putting them into transit.”
U.S.-bound products run headlong into the crisis here. “The containers in the U.S. are not being unloaded and returned at the rate needed, so there is now a shortage of containers returning to China,” notes Henderson. “Since China is building to eliminate the backlog, they will be running out of containers to put the material in and in a month shipments will slow down again. To top it off, in July people will want to start filling their shelves with products for Christmas.”
Lakewood-based Encore Electric has some exposure to shipping challenges, says Vice President Jeff Thompson. “I am concerned about light fixtures and fire alarm supplies, which largely come from China,” he says.
Logjams are developing in the U.S. as well. “Some U.S. suppliers have reduced their workforces, slowing production and distribution, including the New York docks,” Thompson notes. “Others have suspended manufacturing and shipments due to shelter-in-place directives from state governors. However, most manufacturers we deal with are currently on track, but they are issuing warnings to expect potential delivery issues in the future.”
It’s enough to encourage brands and companies to manufacture or source more locally — where possible. A supply chain that would support wholesale reshoring here doesn’t exist today. Will COVID-19, like tariffs and IP theft before, be a spark?
Mark Inboden, president at control-panel maker UCEC in Arvada, speculates it might. “Businesses will rethink their sourcing strategy. They must assess the delivery risk from each supplier,” he says. “This is a great opportunity to rely on strong local and regional partners.”
Inboden believes there will be more businesses looking at opportunities to reshore overseas sources. Post-crisis, he forecasts, “Chances are that businesses that survived COVID-19 have been establishing new supply chain resources, and those should be their new “go-to” partners and not forgotten. Businesses need to develop new supply chain partners for worst case scenarios, and local partners will be paramount.”
For John Morse and Englewood-based Dubach Tool Company, Colorado’s reputation as a manufacturing backwater, deserved or not, remains a barrier. “Colorado is interesting in that in spite of a healthy manufacturing community, I feel we are not perceived as “real” by the rest of the country.” he says. “I suppose this is true when you hold us up to regions that have a lot of heavy industry. Still, we serve medical, aerospace, food processing and others, so we are not going away. The economic aspect of this crisis is going to leave some wreckage in its wake, so we will have to wait until it has passed to see what we have left.”
But for Morse and Dubach Tool Co., one the region’s few tool and die manufacturers, business is still good. “For now, we are still working,” he says, modestly.
Few companies have been thrust front and center into the COVID-19-related crisis, with U.S.-made equipment, as Colorado Springs-based dpiX. CEO Frank Caris describes dpiX as “a single point of failure in the U.S. to keep the complete supply of x-ray devices going,” the very definition of mission critical in today’s crisis.
Caris says that the company is seeing a big spike in demand for its portable X-ray sensors and detectors made by dPix’s partners from permanent and temporary hospitals, due in part to the ability to scale to a facility’s need.
He is clearly proud of his company’s role in battling the pandemic — and its U.S. roots. “It shows that we can do all of this in the U.S.A. — and we should keep it that way,” he says, alluding to challenges in America’s manufacturing ecosystem.
In particular, Caris says he worries about offshore competitors and the lack of industrial policy that would protect, at some level, key American manufacturing industries against unfair competition. “I think as a country we need to continue defining what critical manufacturing and supply chains we demand to be in this country,” he says. “There is not a single soul who is actively promoting outsourcing critical military products to non-allied countries. We don’t build our aircraft carriers overseas.”
He adds, “[T]he current crisis has exposed vulnerabilities underneath the surface. Look upon it like an unexpected X-ray picture that has now been shared with the American people. . . . It’s up to all of us to define the best way forward.”
For Colorado and the region, the way forward may already be laid out in front of us. As Dubach Tool’s Morse points out, the state and region boast a diverse industrial character. As COVID-19 refocuses attention on the manufacturing supply chain, a first step for companies is to redouble efforts to work with more local providers.
Our list of possible new partners is growing. Let’s maintain the momentum.
Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com to connect with these manufacturers and others.
Submit a production capability or need for publication in CompanyWeek’s Supplier Bulletin — helping companies and brands manage supply disruptions during the COVID-19 crisis. Submit your free 250-wd. listing here>>
Coronavirus brings an end to unconditional globalization. Here’s how to compete for manufacturing jobs moving out of Asia.
/in General/by Bart TaylorAs the human tragedy of the novel coronavirus unfolds here, the impact on China compounds for the worse, in loss of life and now in the increasingly dire consequences for its mighty manufacturing base. If tariffs forced U.S. companies to look harder at manufacturing in China, coronavirus will only accelerate the exit of American brands. China’s rise to world manufacturing superpower may be over.
Newt Gingrich, erstwhile Congressman and conservative pundit, believes the U.S. is ready to step into the void. Last week Gingrich proposed a one-time tax credit for companies moving production from China back to the U.S.
What Gingrich misses, of course, is that U.S. companies aren’t operating in China because of taxes, but because America’s manufacturing supply chain often doesn’t enable local production.
That said, companies aren’t powerless to invest in a more capable supply chain here. We’ve chosen not to, instead chasing less expensive labor and materials in Asian countries more than happy to build parts and products for U.S. brands and companies.
But it seems that America’s unconditional support of globalization is over. The implications of our choices are clear enough.
Here’s a blueprint to bring more manufacturing back onshore:
Coronavirus is only the latest cause of heartburn for U.S. brands and companies manufacturing in Asia. How many more will it take to stir U.S. companies and policy leaders into action?
Let’s lessen the odds of finding out.
Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com.
The ruinous result of shuttering small businesses
/in General/by Bart TaylorTo label any business “nonessential” has always been a non-starter. It’s anything but to founders, employees, and customers, and to suggest there’s any daylight between working and living for stakeholders in America’s vast engine of small businesses is naive at best.
It was only fitting that in Colorado, nonessential beer and cannabis forced a reversal of a blanket “shelter at home” order by Denver Mayor Michael Hancock. It’s especially ironic that long lines at cannabis dispensaries forced the mayor’s hand. Despite its critics, the industry is apparently more mainstream than ever. In America democracy and capitalism still prevail and in Colorado residents have used both to impose their will.
Capitalism is on hiatus, though, in Washington D.C. As mayors shutter small companies in COVID-19-related dictums, elected officials in D.C. pass on holding corporations to the same high standards as small companies — standards like managing risk and resources in open markets that always, inevitably, go south.
As I write today, a multi-trillion dollar stimulus package is being finalized that would enable flawed companies to remain unaccountable and reward other brands that bypassed the opportunity afforded by “tax reform” to invest in the future. It’s a miserable outcome.
Two years ago I joined the chorus of critics speculating that publicly-funded corporations might use a corporate tax cut — “tax reform” to supporters — to fund stock buybacks, enrich shareholders, and pass on opportunities to invest in startups and other capital projects, including domestic factories. In November 2017, I wrote, “Today the corporate class seems comfortable investing in next quarter’s profits, not next year’s emerging growth company. Tax cuts help the balance sheet. Tax reform, done right, might persuade them differently.”
The opportunists who did just that can today breathe easy, assured of massive backstops, as small companies stare into the abyss.
No reasonable person denies the threat of COVID-19. And today, blaming early missteps to contain the outbreak, or the indefensible lack of testing and delay in utilizing the Defense Production Act, seems pointless.
Denver Mayor Hancock and other local officials across the country would prefer that governors like Colorado’s Jarod Polis provide cover with regional stay-at-home orders. As with a bailout plan that doesn’t discriminate against bad economic actors, such orders diminish case-by-case decision-making at a local level.
But small companies can be the engine of the recovery — with limited staff where necessary. Today, local officials must allow small companies to operate, reasonably, within community lockdowns. Trust us to make responsible decisions. For our part we should encourage our elected officials to regain sight of the long game, of the opportunity provided by tax reform and realization that offshore manufacturing leaves America vulnerable.
As we sort though a $2 trillion rescue package, the wreckage of a small business community that played by the rules should be a reminder that every company is essential. Let’s get healthy and redouble our efforts to create new jobs, not paper profits.
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
Here’s the first wave of CMA finalists
/in General/by Bart TaylorThe Colorado Manufacturing Awards reach a milestone in 2020 — five years of celebrating companies and people reimagining manufacturing in this most unlikely industrial outpost.
Surprising or not, Colorado’s sector is today a national model of diversity and innovation, and the 40+ companies and people selected from a record number of nominations represent the best-ever CMA finalist class.
Here’s the first wave of CMA finalists. It’s an influential class.
The wine group is a CMA first. The finalists are equally fresh; innovation for this group means refocusing on quality even as new production and packaging solutions continue to shape the industry.
Two past CMA winners are back to defend hard-earned titles in the Building & Construction Manufacturer of the Year category, only to compete against a successful upstart from Aurora. Colorado’s crazy-innovative food sector is represented by two of its leading brands and one of its most influential co-packers.
Equipment makers dot the manufacturing landscape here and three of Colorado’s finest emerged as 2020 CMA finalists. The Aerospace category is unsurprisingly brilliant, with a finalist from last year, Barber-Nichols, Inc., returning for a go at the top spot.
Finalists in the Consumer Brand category flash industry-leading design acumen, appropriate as the CMAs first-ever Innovative Design category shines a light on companies and products conceived and manufactured in the tightening design-to-production continuum reflective of modern shops.
Three distinctive Energy & Environmental finalists round out this first wave, setting the table for next week’s remaining 2020 CMA finalists.
Outstanding Food Brand/Copacker
Ready Foods, Denver
American Outdoor Products, Boulder
Honey Smoked Fish Holdings, Denver
Innovative Product — Design-to-Manufacture
Eldon James/WilMarc, Fort Collins
Guerrilla Gravity, Denver
TEI Rock Drills, Montrose
Outstanding Consumer Brand
Black Hound Design Company, Arvada
Meier Skis, Denver
Parasoleil, Westminster
Aerospace Manufacturer of the Year
Barber-Nichols, Arvada
AdamWorks, Centennial
Roccor, Longmont
Outstanding Energy & Environmental Manufacturer
VAIREX air systems, Boulder
Agri-Inject, Yuma
Segrity, Denver
Winery of the Year
Carboy Winery, Littleton
The Storm Cellar, Hotchkiss
Buckel Family Wine, Gunnison
Building & Construction Manufacturer of the Year
RK, Denver
Tharp Cabinets, Loveland
CeDUR, Aurora
Industrial/Equipment Manufacturer of the Year
TEI Rock Drills, Montrose
Right Stuff Equipment, Denver
Panther Industries, Highlands Ranch
Read about the remaining finalists next week:
Outstanding Woman in Manufacturing (with Women in Manufacturing, Colorado chapter)
Outstanding Craft Distiller
Advanced Manufacturing & Machining Award
Outstanding Bioscience Manufacturer
Outstanding Cannabis Manufacturer
Outstanding Craft Brewer
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
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Register here to attend the fifth annual Colorado Manufacturing Awards April 2, 5-8 p.m., as winners are announced at a gala reception and program.
Here’s the second wave of finalists for the 2020 Colorado Manufacturing Awards
/in General/by Bart TaylorAs Denver flashed its diversified manufacturing economy in the first wave of CMA finalists announced last week, a Colorado Springs-based contingent emerges in this second group of industry finalists, even as Northern Colorado continues to make its case as the the most growth-oriented manufacturing community in Colorado.
Colorado Springs’ Titan Robotics and Montrose’s Mayfly Outdoors lead an innovative group in contention for the inaugural Advanced Manufacturing and Machining Award, racking up the most points in a two-round assessment of machining and operational acumen.
The state’s bioscience industry is often a quiet contributor to regional manufacturing, yet finalists in the Bioscience/Medical CMA speak loudly as one of the strongest finalist contingents in the 2020 Awards. Molecular Products, a Bioscience finalist, also contributes Angie Hellstern, one of four women selected among nominations in the Outstanding Woman in Manufacturing category, sponsored by the Colorado chapter of Women in Manufacturing.
Throw a dart at a map to locate any of a hundred quality brewers or distillers that dot the state. Colorado’s craft beverage stalwarts are among the new power players in America’s beer and spirits market — and continue to innovate to the delight of a growing number of consumers. Change agents, indeed.
Finally, Colorado’s major cannabis manufacturers and brands are leaders in the emerging national industry, and finalists in the second annual Cannabis Manufacturer of the Year award carry an even heavier industry load. Finalists this year documented progress in achieving safer, more professional operations through key certifications and audits, crucial for a sector still fighting for legitimacy — and trust.
2020 Colorado Manufacturing Awards Finalists
Outstanding Woman in Manufacturing, with Women in Manufacturing’s Colorado chapter
Debra Wilcox, The 3D Printing Store
Heidi Hostetter, Faustson Tool / H2
Susan Frank, TEI Rock Drills
Angie Hellstern, Molecular Products
Outstanding Bioscience Manufacturer
Leiters, Englewood
MBio Diagnostics, Boulder
Molecular Products, Louisville
Outstanding Cannabis Manufacturer
Medically Correct, Denver
Stillwater Brands, Denver
Hemp Depot, Colorado Springs
Outstanding Craft Distiller
Mythology Distillery, Denver
Storm King Distilling Co., Montrose
Dry Land Distillers, Longmont
Advanced Manufacturing & Machining Award
Columbine Label Co., Centennial
Mayfly Outdoors, Montrose
Titan Robotics, Colorado Springs
StickerGiant, Longmont
Outstanding Craft Brewer
Goat Patch Brewing Company, Colorado Springs
High Hops Brewery, Windsor
Dry Dock Brewing Co., Aurora
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
Register here to attend the fifth annual Colorado Manufacturing Awards April 2, 5-8 p.m., as winners are announced at a gala reception and program.
Here’s the first group:
Outstanding Food Brand/Copacker
Ready Foods, Denver
American Outdoor Products, Boulder
Honey Smoked Fish Holdings, Denver
Innovative Product — Design-to-Manufacture
Eldon James/WilMarc, Fort Collins
Guerrilla Gravity, Denver
TEI Rock Drills, Montrose
Outstanding Consumer Brand
Black Hound Design Company, Arvada
Meier Skis, Denver
Parasoleil, Westminster
Aerospace Manufacturer of the Year
Barber-Nichols, Arvada
AdamWorks, Centennial
Roccor, Longmont
Outstanding Energy & Environmental Manufacturer
VAIREX air systems, Boulder
Agri-Inject, Yuma
Segrity, Denver
Winery of the Year
Carboy Winery, Littleton
The Storm Cellar, Hotchkiss
Buckel Family Wine, Gunnison
Building & Construction Manufacturer of the Year
RK, Denver
Tharp Cabinets, Loveland
CeDUR, Aurora
Industrial/Equipment Manufacturer of the Year
TEI Rock Drills, Montrose
Right Stuff Equipment, Denver
Panther Industries, Highlands Ranch
U.S. manufacturing, the road less traveled, beckons for Outdoor Industry’s reluctant brands
/in General/by Bart TaylorAmong America’s growth industries, none seem to value the importance of company culture more than the Outdoor Industry. OI companies and the trade groups that support them — including the Outdoor Industry Association, its powerful national mouthpiece — are today leaders in sustainability, climate and environmental awareness, diversity, employee empowerment and other progressive values. It’s commendable stuff.
Yet a challenge for many OI companies is ensuring these admirable tenets extend across supply chains that stretch from here to Asia. Most domestic OI companies make things, and most of them make things offshore. Materials, labor, expertise — the industry’s manufacturing supply chain — have largely been offshored.
OI brands have become master supply-chain managers, if not domestic manufacturers. In the best cases, owners and operators have developed relationships with offshore factories that extend a brand’s core values, manifest in how materials are sourced, products are made, and employees are managed.
But let’s be real. Qualities that define a company can be lost along the way, stopped cold by distance, the vastness of the Asian production ecosystem, and cultural differences. More, supply chains stretching from here to Asia are highly unsustainable compared to a domestic counterpart. And the machinations of designing and prototyping products locally, only to marry them up with an overseas factory to refine the prototype and manufacture, present ongoing challenges.
Yes, factories in Asia are modern and efficient: how else to explain the fantastic products and high level of quality emanating from most American OI brands? And many companies manage, over time, to find production partners that become reasonable extensions of the U.S. company they build for. (For an example, read our Krimson Klover feature from last week.)
But they’re Asian companies! OI’s investment in Chinese human capital and infrastructure alone, is staggering. That U.S. corporations aren’t making those investments in the U.S. manufacturing commons is the irreconcilable piece of the brand extension game. It’s also the most underreported story in the outdoor industry.
It’s easy to understand why: The biggest and most outspoken brands in the outdoor world are investing millions in materials, workforce development, technology, and machinery in Asia. It’s not a story that VF Corporation’s PR team is rushing to get published.
The Industry’s trade groups follow along. Protecting public lands in Utah was a priority for OIA. Adding substantial manufacturing and production content to the educational track of Outdoor Retailer? Not so much. Developing a 21st-century U.S. production ecosystem doesn’t seem a priority for its largest sponsors and stakeholders. It would shine light on an issue that OI leadership would prefer remain behind the Asian production wall.
This then, is OI’s crossroads as the decade begins. Yes, brands like Patagonia, Under Armour, even Nike, are investing in U.S. factories. It’s not enough. Until domestic production is a central part of the industry ethos, OI companies will continue to manage bifurcated organizations where the brand promises a company lives by matter to only parts of the business.
It’s no less than an existential decision, a “Boeing moment”. Last year, The Atlantic‘s Jerry Useem summed up Boeing’s current crisis by citing a single event: the decision in May of 2001 to move of 500 executives to Chicago away from 30,000 engineers in Washington. “The present 737 Max disaster can be traced back,” Useem said, “to the moment Boeing’s leadership decided to divorce itself from the firm’s own culture.”
Today, some OI companies have divorced themselves from the culture their customers value. In 2020, we’ll focus a lens on companies choosing the road often less traveled; companies working hard to ensure that brand promises are best kept by shortening a supply chain, by investing in local talent and local entrepreneurs.
It’s the least we can do to advance their cause, and that of American manufacturing. Today they’re one and the same.
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.