The irony of President Trump’s enmity for California is that if he cared to look, he could point to the state as a case study in success of policies he’s championed. The world’s fifth-largest economy is back in the black, an engine of innovation and entrepreneurship, and flashing a sign that should shine bright all the way to the White House: Its manufacturing sector is leading a national rediscovery.
The poster child for California’s manufacturing story may be Los Angeles County, arguably the most important single economic district in the nation. “In L.A. County, there are about 360,000 jobs in the manufacturing sector, so it’s the largest manufacturing sector in the country on a county basis,” says the L.A. County Economic Development Corporation‘s Lawren Markle.
Let’s stop here for emphasis. Those 360,000 jobs are more than twice the number of total jobs in western states like Colorado and Utah; more than most states in the Rust Belt. In L.A. County alone.
It’s also diverse. “We have manufacturing strengths in aerospace, heavy machinery, food, finished metals, computer technology products, furniture, and apparel — although the apparel sector is shrinking due to labor costs and the trend of offshoring ‘low-value’ manufacturing,” Markle explains. “We also love the advanced transportation sector, including our electric bus sector. Aerospace is a strength here, and a lot of the technology going into autonomous and electric vehicles has roots in the aerospace industry.”
He says L.A.’s manufacturing economy has stabilized after years of decline, explaining, “We’ve kind of hit a space where it’s leveled out. We’re not shedding those jobs like we did, and we have sectors like aerospace that are looking hard to hire more people and have open job requisitions again.”
It’s more than just jobs, though.
The fit with the transportation sector is only one example of how manufacturing outcomes are aligning with L.A.’s economic development challenges, its needs, and opportunities. “We have three companies in town working on different incarnations of the Hyperloop concept that Elon Musk has most famously championed,” Markle says. “You have aerial taxis being tested here in L.A. in the near future. It’s a market in need of these types of services. We’re a fertile testing ground for a new transit paradigm.”
L.A.’s rich cultural mix is fueling growth in other homegrown manufacturing industries like food and beverage. “L.A. is a place where hundreds of languages are spoken, meaning there are big communities from many countries here. You may find a niche because thousands of Koreans live here, and a company may have a new take on Korean food,” Markle says. “A lot of the ag products grown in the central valley of California are trucked down here to processing centers to transformed into everything from ice cream to salsas — or Sriracha! Of course, Huy Fong Foods is here, and they’ve blown up nationally.”
California’s agricultural assets are only one example of a deep and wide supply chain that undergirds manufacturing in L.A. A world-class research and development ecosystem may be the county’s most compelling calling card, turning out talent and IP, rocket fuel for advanced manufacturing in aerospace. “Three of the greatest research universities in the world here: the California Institute of Technology, which also operates JPL [NASA’s Jet Propulsion Laboratory], USC, and UCLA, and you could even throw UC Irvine into the mix,” notes Markle. “Technology that spins out of those universities is ripe for commercialization.”
Not surprisingly, L.A.’s community colleges have also found new footing in a market that’s demanding a modern skill set. “A lot of manufacturing that’s here today is advanced manufacturing, a lot of CNC machining, for one, and these tend to be high-wage jobs,” he says. “This means higher skill requirements for incoming employees. It’s very difficult today to just walk into a manufacturing company in L.A. and try work your way up from sweeping the floors. You need a level of technical skills, and we have companies like Haas Automation partnering with a number of community colleges in L.A. to offer programs and certificates around CNC skills so that manufacturers know there’s a ready pool of talent in L.A. to run and maintain those machines.”
Of course, all this is happening against the backdrop of national narrative that hasn’t been kind to California’s business prospects, including President Trump’s intermittent shots at the state. Markle seems clear-eyed about L.A.’s challenges and insists the community is responding.
“We do have some minimum-wage increases that are rolling in over the next couple years that will put some pressure on some sectors like food processing,” he says. “But many high-value manufacturing businesses are less affected by minimum wage. Besides, there are a lot of incentives to help offset that. There’s the California Competes tax credit, to help businesses stay here in L.A. There’s the sales and use tax credit, another tool that manufacturers can use to buy new equipment and offset various other costs. Our utilities often work with manufacturers to help them look at power consumption to get a better programs, or find efficiencies to reduce costs. Another is the ETP, the Employment Training Panel — funding and systems to support retraining of current employees, so you can upscale your current workforce for the changing tech requirements in today’s modern facilities.”
And the stories of businesses exiting L.A. County for points east? “What isn’t always covered is in-migration, and new business formation. And if you look at the numbers in total, there’s not as much outflow as the narrative might suggest,” Markle says.
There’s also the simple fact that the supply chain matters. “We talk to aerospace manufacturers every day who tell us they get calls from Texas, from New Mexico, from Nevada, who tell them land is cheap, labor is cheap, and so on,” says Markle. “Yet as one owner told me, ‘It’s a fool’s promise. I can put my product on truck, and a mile down the road there’s a certified testing facility; in another two miles there’s a certified welding and painting facility. The supply chain is here, the talent is here, and more. If I try to find that in the middle of Texas, it’s not as easy as you think.'”
If the requisite piece of any plan to grow manufacturing is a working understanding of the tools required, Los Angeles is in good hands. Markle’s deep understanding of manufacturing — and advocacy — is refreshing. Could it be that Los Angeles, and California in general, will end up a poster child for a pro-manufacturing president’s re-election campaign?
The possibilities boggle the mind.
Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com.
Los Angeles digs deep to retool manufacturing, push back on critics
/in General/by Bart TaylorThe irony of President Trump’s enmity for California is that if he cared to look, he could point to the state as a case study in success of policies he’s championed. The world’s fifth-largest economy is back in the black, an engine of innovation and entrepreneurship, and flashing a sign that should shine bright all the way to the White House: Its manufacturing sector is leading a national rediscovery.
The poster child for California’s manufacturing story may be Los Angeles County, arguably the most important single economic district in the nation. “In L.A. County, there are about 360,000 jobs in the manufacturing sector, so it’s the largest manufacturing sector in the country on a county basis,” says the L.A. County Economic Development Corporation‘s Lawren Markle.
Let’s stop here for emphasis. Those 360,000 jobs are more than twice the number of total jobs in western states like Colorado and Utah; more than most states in the Rust Belt. In L.A. County alone.
It’s also diverse. “We have manufacturing strengths in aerospace, heavy machinery, food, finished metals, computer technology products, furniture, and apparel — although the apparel sector is shrinking due to labor costs and the trend of offshoring ‘low-value’ manufacturing,” Markle explains. “We also love the advanced transportation sector, including our electric bus sector. Aerospace is a strength here, and a lot of the technology going into autonomous and electric vehicles has roots in the aerospace industry.”
He says L.A.’s manufacturing economy has stabilized after years of decline, explaining, “We’ve kind of hit a space where it’s leveled out. We’re not shedding those jobs like we did, and we have sectors like aerospace that are looking hard to hire more people and have open job requisitions again.”
It’s more than just jobs, though.
The fit with the transportation sector is only one example of how manufacturing outcomes are aligning with L.A.’s economic development challenges, its needs, and opportunities. “We have three companies in town working on different incarnations of the Hyperloop concept that Elon Musk has most famously championed,” Markle says. “You have aerial taxis being tested here in L.A. in the near future. It’s a market in need of these types of services. We’re a fertile testing ground for a new transit paradigm.”
L.A.’s rich cultural mix is fueling growth in other homegrown manufacturing industries like food and beverage. “L.A. is a place where hundreds of languages are spoken, meaning there are big communities from many countries here. You may find a niche because thousands of Koreans live here, and a company may have a new take on Korean food,” Markle says. “A lot of the ag products grown in the central valley of California are trucked down here to processing centers to transformed into everything from ice cream to salsas — or Sriracha! Of course, Huy Fong Foods is here, and they’ve blown up nationally.”
California’s agricultural assets are only one example of a deep and wide supply chain that undergirds manufacturing in L.A. A world-class research and development ecosystem may be the county’s most compelling calling card, turning out talent and IP, rocket fuel for advanced manufacturing in aerospace. “Three of the greatest research universities in the world here: the California Institute of Technology, which also operates JPL [NASA’s Jet Propulsion Laboratory], USC, and UCLA, and you could even throw UC Irvine into the mix,” notes Markle. “Technology that spins out of those universities is ripe for commercialization.”
Not surprisingly, L.A.’s community colleges have also found new footing in a market that’s demanding a modern skill set. “A lot of manufacturing that’s here today is advanced manufacturing, a lot of CNC machining, for one, and these tend to be high-wage jobs,” he says. “This means higher skill requirements for incoming employees. It’s very difficult today to just walk into a manufacturing company in L.A. and try work your way up from sweeping the floors. You need a level of technical skills, and we have companies like Haas Automation partnering with a number of community colleges in L.A. to offer programs and certificates around CNC skills so that manufacturers know there’s a ready pool of talent in L.A. to run and maintain those machines.”
Of course, all this is happening against the backdrop of national narrative that hasn’t been kind to California’s business prospects, including President Trump’s intermittent shots at the state. Markle seems clear-eyed about L.A.’s challenges and insists the community is responding.
“We do have some minimum-wage increases that are rolling in over the next couple years that will put some pressure on some sectors like food processing,” he says. “But many high-value manufacturing businesses are less affected by minimum wage. Besides, there are a lot of incentives to help offset that. There’s the California Competes tax credit, to help businesses stay here in L.A. There’s the sales and use tax credit, another tool that manufacturers can use to buy new equipment and offset various other costs. Our utilities often work with manufacturers to help them look at power consumption to get a better programs, or find efficiencies to reduce costs. Another is the ETP, the Employment Training Panel — funding and systems to support retraining of current employees, so you can upscale your current workforce for the changing tech requirements in today’s modern facilities.”
And the stories of businesses exiting L.A. County for points east? “What isn’t always covered is in-migration, and new business formation. And if you look at the numbers in total, there’s not as much outflow as the narrative might suggest,” Markle says.
There’s also the simple fact that the supply chain matters. “We talk to aerospace manufacturers every day who tell us they get calls from Texas, from New Mexico, from Nevada, who tell them land is cheap, labor is cheap, and so on,” says Markle. “Yet as one owner told me, ‘It’s a fool’s promise. I can put my product on truck, and a mile down the road there’s a certified testing facility; in another two miles there’s a certified welding and painting facility. The supply chain is here, the talent is here, and more. If I try to find that in the middle of Texas, it’s not as easy as you think.'”
If the requisite piece of any plan to grow manufacturing is a working understanding of the tools required, Los Angeles is in good hands. Markle’s deep understanding of manufacturing — and advocacy — is refreshing. Could it be that Los Angeles, and California in general, will end up a poster child for a pro-manufacturing president’s re-election campaign?
The possibilities boggle the mind.
Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com.
The Farm Bill passed and hemp is legal, right? Not quite. Here’s what’s next.
/in General/by Bart TaylorIf you’re following the cannabis business, you know the 2018 Farm Bill creates an open and legal marketplace for hemp and hemp-derived products like CBD. Farmers can grow hemp, manufacturers can refine the crop into any number of new products, and cannabis businesses can act like real companies. They can operate between states, bank, borrow, insure, invest, and develop brands like any other business.
Just not yet. The Farm Bill requires each state to submit a plan to the USDA for approval signaling, among others, that its ready and capable to implement the new regulatory framework spelled out the legislation. Colorado, California, Oregon, Washington — none have yet submitted their plan, in part because the USDA hasn’t given the states much guidance.
For now, it’s business as usual, according to Duane Sinning, division director for the Division of Plant Industry at the Colorado Department of Agriculture.
“Colorado continues to operate under the current plan, the ‘old rules,'” explains Sinning, even as work has begun on the USDA submittal. “We’ve been in discussions about testing protocols and other details in the Farm Bill.”
Sinning says he is confident the state will lead, and not follow, throughout the process. “Our deliberative approach to the development of a regulatory environment has been successful and a model for other states, in part because we’ve utilized our Industrial Hemp Advisory Committee and input from our various stakeholders. And already discussions are happening between states so conflict doesn’t develop,” he adds.
As for a timeline, much will depend on the feds. “Without any guidance, everybody is kind of operating in the dark,” Sinning says. “But I’d guess states will be submitting plans this summer and fall, including us. Depending on the statutory requirements, some legislatures won’t convene until the follow year, so it may be a year from this summer before the new rules are in place.”
Among the new regs that Sinning and others will be dealing with (thanks to Hemp Industry Daily):
“We hope we’re not in the business of fingerprinting senior property owners,” Sinning jokes, as new rules to track land and crop use take effect.
Still, the game has changed. As Sinning surmises, hemp “is now just another agricultural crop.” And U.S. farmers are really good at growing things. Product development will explode, not only in CBD but also in other consumer markets that turn to hemp. We’ll see the end-to-end professionalization of the hemp supply chain, from farming to manufacturing to logistics and brand development.
And service. Cannabis companies have been able to work around the lack of banking, of insurance, of capital, of the expertise that resides in companies on the sidelines. But with a clear path to a legal marketplace, more service companies will be arriving on the scene, with increasingly capable offerings.
But until the USDA approves Colorado’s plan, and other states, a company’s brand and reputation may pivot on how well-informed, or well-intentioned, local authorities are. The landscape is still confusing. Hemp and marijuana are both cannabis, but only one will be federally legal in the coming months. Sinning says Colorado officials are busy providing as much information as they can, like “giving law enforcement information on the location of particular crops,” to help avoid uncomfortable confrontations. Dustups that might result in the kind of bad press that so many companies have been intent on avoiding.
We’ll provide updates to help inform industry and service along the way.
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
Managing growth, workforce were the top challenges facing manufacturers in Q4 2018
/in General/by Bart TaylorEach week, company executives outline challenges, opportunities, and needs in interviews with CompanyWeek writers. Here’s a summary of data from profiles published the final quarter of 2018.
In Q4 2018, we published 48 in-depth profiles:
Primary Industry: Oct.-Dec. 2018
Bioscience and Medical 4
Brewing and Distilling 7
Built Environment 3
Cannabis 1
Consumer and Lifestyle 11
Contract Manufacturing 2
Electronics and Aerospace 2
Energy and Environment 1
Food and Beverage 6
Industrial and Equipment 5
Supply Chain 6
Total 48
The top challenge for manufacturing companies continues to be managing growth. However, workforce has jumped back up to the #2 spot (as it was in the first half of the year). In Q3, competition had secured the #2 ranking.
Challenges: Oct.-Dec. 2018
Managing Growth 40%
Workforce 25%
Government Regs 17%
Market Awareness 13%
Competition 10%
Location 10%
Workforce/Labor/New Employees, real estate/space and finance/funding continue to be the top three needs for companies profiled (same order as Q3). Efficiency had made an appearance in the top five in the first half of 2018, and new suppliers/service partners ranked in the top five in Q3, neither of which appeared in the Q4 top five.
Business Needs
Workforce/Labor/New Employees 40%
Real Estate/Space 23%
Finance/Funding 19%
Marketing 17%
Equipment 10%
New Customers 10%
In two CEO roundtables I hosted late in the year, executives also expressed concerns about promises made by incoming Governors Polis and Newsom during the campaign. A fear is that business may be asked to carry an additional regulatory or financial burden to fund new social programs.
And tariffs continue to be a topic of conversation. Manufacturers I asked last year seemed to be evenly split on the issue. We’ll be convening more CEO roundtables to discuss this and other issues throughout the year. More on the topic later.
Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com.
For a year’s worth of data, or to receive updates from CompanyWeek profiles on a real-time basis, subscribe to our All Access+Data package, available at discounted rates through January. Click here>>.
Leadership lacking in competition for manufacturing leaving China
/in General/by Bart TaylorThe Wall Street Journal’s John Stoll touched on a topic last week that’s occupied us for years: factors motivating companies to reconsider manufacturing in China. As Stoll points out, today’s dust-up involving tariffs largely reinforces “sentiment that has simmered for years over the low flame of China’s rising labor costs, forced technology transfers and intellectual-property theft.”
Stoll also quotes Bill Lewis, a partner at New York-based AlixPartners, who increasingly sees retailers that sell Chinese goods providing additional impetus: “‘These companies, especially retailers, have gotten good at taking their production out of China,’ Mr. Lewis said. ‘Now China needs to get better at convincing them to stay.'”
U.S. destinations need to get better at convincing them to reshore domestically. And while more and more companies are doing just that, and others are in the process of assessing whether it’s feasible, for many it’s simply not in the cards. Most brands would gladly invest in more local production, in facilities, in people, if a supply chain attuned to their needs was here. When it’s not, it’s hard even for Harry Moser at the Reshoring Initiative and others to help companies make a business case.
Developing the ecosystem to grow manufacturing is a deliberate thing, and while most communities value a growing manufacturing base, not many have developed the secret sauce to catch the attention of even the most fed-up companies.
Most of the shortcomings involve infrastructure or services. Companies are keen to a specific mix, a formula, of community assets, workforce, R&D, access to materials and transportation, and service and supply. Charismatic support for U.S. manufacturing — leadership, in other words — is a bonus.
The leadership piece is elusive. The WSJ‘s Stoll notes that many companies are not giving up on China, per se. He sites Crocs, once a Colorado company, and their sustained commitment not only to China but to Asia. Crocs requires shoes factories, and to build more here would require a huge undertaking. More than that, it takes corporate leadership committed to a new brand, one informed by American manufacturing. It’s possible, not probable.
Making it work for brands that prefer never to leave the U.S. is an easier path, but the leadership piece is no less important. Planners, community leaders, and trade partners must rally around the idea of manufacturing becoming an economic game changer. Some have. Until more do, China — and, more broadly, Asia — will be a destination for as many companies as for those that decide to leave based on politics of tariffs, or the weariness of managing quality and IP.
“Made in China” may not be the slam dunk for brands that it used to be. It remains to be seen which communities in the U.S. will coalesce resources and sustain efforts in pursuit of an alternative for companies that want it.
Leadership will tell the tale.
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
On the topic of leadership: The Colorado Manufacturing Awards will recognize a Manufacturing Advocate of the Year, to be presented at the April 4 event. If you have recommendations, let me know.
Is the manufacturer-as-tech-company narrative finally fading?
/in General/by Bart TaylorWe call manufacturing tech. Does it matter?
Here’s a CNBC.com headline and story from last week:
It’s a manufacturing story that’s labeled “tech.” It’s common in business media. Manufacturing’s not cool. Better in the publisher’s mind to call it tech.
It’s a line that’s blurring, though. Manufacturing’s brand is on the upswing. Some in the media may be catching on.
A Business Insider columnist bemoaned the tendency of reporters to refer to Tesla as a tech company, even if he didn’t go so far as calling it a “manufacturer.” It might have connected his thought better:
That said, Matthew DeBorg’s tip of the cap to Honda is useful. They’re a car maker to respect, with a deep connection to the build, to manufacturing. DeBorg shares this anecdote, and it says it all: “‘I think best when I have a wrench in my hand,’ founder Soichiro Honda once said. Following in his footsteps means to know how stuff works.”
Unfortunately, DeBorg spins away from the promising Tesla-as-manufacturer tangent, and back to the more conventional narrative by concluding that, “CEO Elon Musk’s firm is really a design-and-engineering operation,” a theme fully embraced by the WSJ‘s John Stoll in a column titled, “Tesla Should Pull an Apple: Leave ‘Production Hell’ to Other People,” with a subhead, “The real money isn’t in building beautiful things. It’s in creating them.”
It’s not entirely clear where Toll suggests Tesla would go to build, or assemble, its cars, with vague references to a strategy involving contract manufacturers located in England, maybe, or the U.S. Musk already rides herd on a cadre of contract manufacturers (we’ve profiled several including including Scandic), and is obsessed with build quality and micro-managing even the smallest aspect of sourcing and manufacturing.
Outsourcing more manufacturing and assembly would make Tesla more like Apple, I suppose. But as we’ve seen, despite the media’s habit today of labeling Apple a tech company and not a manufacturer, more attention is being paid by the company to where its products are manufactured and the role U.S. operations will play. It would seem Apple is moving toward a embracing a new moniker, that of technology manufacturer.
Media would do well to follow suit. Aside from the inaccuracy of labeling a manufacturing story as tech, the habit obfuscates the very real trend of technology-informed companies embracing the build, not glossing over it. Consumers — and presidents — increasingly hold companies responsible for the entire supply chain, not just the parts located in the U.S.
Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com.
Best of 2018 California Manufacturing
/in General/by Bart TaylorCompanyWeek editor Eric Peterson’s must-read Best of Manufacturing 2018 summary this week aptly describes the emerging maker economy throughout the western U.S.:
California’s sector looks up at no other state in the Union, so it’s simply left to me to compile a list from this year’s coverage that reflect what Peterson articulates. We featured nearly 80 California manufacturers this year, all exemplary in their own right. Here’s a short list of companies that represent the group with distinction.
URB-E: Cycle and scooter manufacturing has largely been sent offshore, but a vanguard of designers, engineers and tinkerers are embracing domestic builds, and the results are spectacular. The spectrum of work is wide, from full-on composite frame manufacturing to assembly only, but celebrating any or all the fabricating and wrench-turning seems equally appropriate. Grant Delgatty’s head-turning scooters are only slightly more compelling than the cool “factory” that churns them out.
Imperial Commercial Cooking Equipment
Who doesn’t love a top-of-the-line appliance made in the U.S. and not, well, anywhere else? At one point brands like Whirlpool and Maytag were poster children for American industrial might and aptitude. I couldn’t get enough of Peter Spenuzza’s family business from the time the story was filed.
Cayson Design and Betabrand
Apparel manufacturing is tethered to cut-and-sew production, a process that looks much like it did a half-century ago. America stopped training or recruiting qualified labor about the same time, so local brands that manage to develop and sustain cut-and-sew staffs are truly remarkable businesses. Cayson Designs in San Francisco is one such company.
It’s why the sector also begs for innovation in any form, and Betabrand’s unique crowd-based model of prototype to small batch to volume production has catapulted the company to substantial size and influence.
Deering Banjo Company
Manufacturing is at times industry and art, and when family generations manage to sustain the combination in musical instruments like a Deering Banjo, the results demand our respect and awe. That Gregg Deering manages to prosper in the face of offshore competition is testament to his craftmanship and our willingness to pay more for quality and a rich story.
Vortex Engineering
I’m a sucker for bending, cutting, and welding, dating I’m sure to my grandfather’s shop in central Kansas. He welded it all, from farm implements to truck axles. Today’s job shops are at once far removed from Comfort Garage, and not. Vortex Engineering is one of a brilliant new cadre of California contract manufacturers finding a second wind in OEM supply chains like Northrop Grumman’s that demand lower tolerances and faster delivery. But Michael Bice’s shop also earns its stripes by handling difficult work worthy of a true throwback. Cue the sparks.
Jan Al Cases
The story. The rock stars. The craftmanship. The quality. I was enthralled from the first read. As you will be.
Best of Manufacturing 2018: A short list with outsized influence
/in General/by Bart TaylorCompanyWeek published 236 in-depth profiles of manufacturing companies in 2018, an enlightening portrayal of industry and economy across Colorado and the western U.S.
Here’s an industry breakdown (some companies are listed in multiple industries):
Industry
Profiles
Bioscience and Medical
20
Brewing and Distilling
44
Built Environment
24
Cannabis
9
Consumer and Lifestyle
61
Contract Manufacturing
42
Electronics and Aerospace
22
Energy and Environment
7
Food and Beverage
37
Industrial and Equipment
38
Supply Chain
39
The collection defies abbreviation, but companies on my short list promise to capture the imagination of a generation of buyers and employees and the communities where they reside. They’re changing the face of modern manufacturing.
Spyderco
I’m a sucker for good old-fashioned cutting, bending, and welding. It’s a granite-like foundation for every manufacturing era, including this one. When we profile companies where employees’ skill sets would span generations, I’m hooked. Spyderco’s blades fit the bill.
Manes Machine
A top supplier to Boeing, Bruce Page is investing in automation to stay competitive. One outcome of automation has been a reset of workforce needs away from harder-to-find, multi-year machine operators to more of a technical engineer-operator.
Manes is the tip of the spear, a leader in what is otherwise an underappreciated but uber-capable collection of contract manufacturers throughout the West.
Cayson Designs and Betabrand
Apparel manufacturing is tethered to cut-and-sew production, a process that looks and feels much like it did a half-century ago. America stopped training or recruiting qualified labor about the same time, so local brands that manage to develop and sustain cut-and-sew staffs are truly remarkable businesses. Cayson Designs in San Francisco is one such company.
It’s why the sector also begs for innovation in any form, and Betabrand’s unique crowd-based model of prototype to small batch to volume production has catapulted the company to substantial size and influence.
NuVue Pharma
Colorado’s business community has been slow to warm up to it’s homegrown cannabis industry. Malik Hasan and NuVue Pharma lead a cadre of manufacturers that will change the perception of the region’s hemp and marijuana industry.
Hasan’s NuVue is letting science do the talking, and where his R&D will lead may change our recalcitrant views and everything else about the business. It’s easy to envision new medicine and tailored wellness products emanating from NuVue’s operations, products that also relieve us from Big Pharma’s unhealthy stranglehold.
Cusa Tea
We profiled nearly 40 food and beverage companies in 2018 (not including brewers and distillers). It’s an embarrassment of riches if you’re a fan of innovation and more, of leaders transforming staid industries into vital new sectors.
I was drawn to one company that encapsulates all of these attributes except local manufacturing. Jim Lamancusa’s lightbulb moment may have been on a camping trip or outdoor excursion, one of a hundred we’ve all enjoyed as denizens of the West, but followed through to tip-over an entire category with science, entrepreneurship, and determination. Not to mention an aversion for coffee.
Tailwind Nutrition
One notable southwest Colorado company is manufacturing locally as they borrow technology from local brewing cousins and play to the active consumers in the region. Jennifer and Jeff Vierling’s growing company is just one of a wave of brands emerging or locating on Colorado’s Western Slope, an up-and-coming outdoor industry juggernaut.
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
Also VIEW Editor’s Choice: Best Profiles of 2018>>
Here’s why the Colorado Manufacturing Awards take on deeper meaning in 2019
/in General/by Bart TaylorIt’s interesting to watch the shine come off technology’s bellwether brands in the New Year and speculate whether manufacturing will follow suit. Last week’s whipsaw stock market sent mixed messages — as did a weaker-than-expected ISM report on December manufacturing.
Manufacturing advocates who take ISM with a grain of salt were rewarded by a strong jobs report. But even Forbes manufacturing columnist Marco Annunziata, who got it right with “U.S. Manufacturing Can Take The Punches – It Is Stronger Than You Think,” misses a key point: Manufacturing’s strength is as much a result of industry diversity as “innovations in manufacturing technologies.”
We’ve witnessed this firsthand, and it’s one reason the Colorado Manufacturing Awards has become such a powerful standalone event, and a metaphor for a sector in transition. Here’s how:
It’s worth a reminder that the food is the fastest growing manufacturing sector in Colorado. It’s an embarrassment of riches we’ll again showcase.
The diversity of the CMAs is also reflected in the criteria developed to recognize companies. We’ll look at business through the industry lens for each category.
As the year gets underway, the best way to celebrate manufacturing is to acknowledge the accomplishments of companies from across the spectrum of industries transforming the sector. It’s why the 2019 CMAs hold special meaning.
—
View the criteria here and nominate your company!
We’ll report on the process along the way, including features on all the finalists, and gather to celebrate them all along with alumni from past years. And we’ll convene April 4 in Denver to announce winners and celebrate manufacturing. Grab a seat at the Awards event and contact me or Katie Keating with questions.
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.
Soldering not software: Why Governor Newsom must rediscover California manufacturing
/in General/by Bart TaylorThe popular narrative as Gavin Newsom ascends to lead California is that the worst is ahead, that a laundry list of challenges will develop into full-blown crisis, a red-hot economy will cool, and campaign promises will bankrupt the state and sabotage his tenure.
That’s just the start. Has any newly elected official suffered from such stilted expectations?
Governor Newsom will be wise to focus on those things he can control, and despite naysayers, California’s still an economic beast, a bellwether by any estimate. The pieces are in place for Newsom to do great things. If he can pull the right levers, California can be ground zero for an authentic populist economic movement.
This includes the prospect of California’s wide and deep manufacturing economy catalyzing a period of growth, of innovation and expansion. Consider:
Governor Newsom can be the first to connect the dots, to reimagine manufacturing and its role in California’s future. In doing so, the state would emerge a model, not a punchline.
Here’s hoping Mr. Newsom seizes the moment.
Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com.
Small companies working overtime to automate and compete
/in General/by Bart TaylorFerey Feridian’s excellent column this week on the potential of automation to transform U.S. manufacturing also underscores the gap in the rate of adoption between small and large manufacturers and the “uneven rates of digitization across sectors,” referenced by Feridian that we read about each week. It’s a big deal: Ensuring that small companies are tethered to productivity gains will determine whether America’s industrial renaissance fulfills the promise Feridian and others envision.
Three regional industries provide three different case studies in how companies are keeping pace, or not.
The West’s dynamic aerospace and aviation sector is earning plaudits not just for the eye-opening accomplishments of its compelling brands, but for manufacturing prowess that’s fueling growth, much if residing in in the supply chains of SpaceX, Boeing, Lockheed, and others. Today it’s evident that contract manufacturers are responding to the promise and certainty of steady work by investing in equipment, in process upgrades and in technology. Yes, OEMs are demanding lower tolerances, tighter deadlines, and better QC, but in the five short years we’ve been profiling jobs shops throughout the West, there’s been tangible productivity improvements. CompanyWeek’s Contract Manufacturing archive speaks for itself.
In Colorado and much of the West food manufacturing is the single fastest growing manufacturing industry, driven by changing consumer tastes and a preference for all things local. The industry has largely kept pace; smaller brands have managed to self-manufacture or tap a network of co-packers to contract manufacture for them. Technology is also playing a role. Digitization is manifest throughout the sector including apps that help small brands find production facilities nearby.
But that may soon change, in large part by a growing labor crisis. In California, a booming artisanal food sector is certain to pressure the state’s ability to locate and house a sufficient manufacturing workforce. Across the West, a ravenous cannabis industry is siphoning off employees, even though many cannabis businesses already are reported as food businesses. And without meaningful immigration reform, labor markets throughout agriculture and food production will get much tighter before they get better for growers and manufacturers.
Automation is already at the center of any long-term solution in food manufacturing. Technology is migrating across industries into food, from advanced production lines to highly automated logistics and distribution solutions available to small brands. But the race is on and the stakes are high for U.S. manufacturing: Will growth in a modern and decentralized food production ecosystem keep pace as labor markets tighten? The worry isn’t that automation will replace human labor; it’s that industry won’t automate fast enough to make up for an acute labor shortage.
The potential to reshore billions of dollars of product manufacturing frames the outdoor industry opportunity, and technology and automation will determine how fast U.S. brands can repatriate production. An industry long defined by cut-and-sew production is poised for a productivity renaissance.
The wait may be long. Unlike aerospace, apparel and outdoor industry OEMs are largely resigned to maintaining operations offshore and investing in technology and automation through international partners. There are outliers. Brands like Nike, Apple, Patagonia, and GE are investing in U.S. production.
But homegrown brands are the domestic manufacturing heroes in this space, and not surprisingly, companies that would benefit most from technology-fueled productivity gains. It’s here that community players in economic development, in government, in trade and education must be more deliberate in incubating and accelerating the prospects for more domestic manufacturing. And for making technology and automation more accessible to promising companies.
Small steps. In Colorado, the Office of Economic Development and International Trade’s Advanced Industries program today includes outdoor industry and consumer product firms in the pool of grant applicants. Cities throughout the region are fostering industry clusters to better recruit and support consumer-facing brands that make things.
Manufacturing’s future is indeed bright, all the better if the sector’s well-heeled brands and community stakeholders embark on a deliberate path to push technology and automation down and sideways — to small businesses and across industries — in a bid to sustain U.S. manufacturing.
Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.