“It’s official: Manufacturing is getting crushed.” It’s not, but here’s why that sentiment matters.

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Conventional wisdom holds that manufacturing’s recent job surge is an aberration, that automation and robotics, combined with cost savings from offshore production, will diminish the need for U.S. workers and the importance of manufacturing at the same time.

It’s not a trivial conclusion. Jobs matter. People starting a career or business, or developing a city or state economy, want to bet on a sure thing. Is manufacturing growing or not?

The narrative CNBC favors is that it’s retreating, citing Bureau of Labor Statistics last month to argue that President Trump’s manufacturing-related trade policies are falling short — but more, to suggest that “national manufacturing appears to have peaked”:

It’s reasonbable to believe that jobs “have peaked.” In the same report, the Bureau of Labor Statistics forecasts more net manufacturing job losses in the future — from roughly 12.5 million U.S. jobs in 2018 to 12 million in 2028, falling from 8 percent of total U.S. employment to about 7 percent during that time. A decline would lengthen manufacturing’s downward trend from 13.4 million jobs in 2008 — and earlier, pre-Great Recession, when 16 million Americans worked in manufacturing.

Yet both Obama and Trump have presided over a manufacturing employment surge, and as we’ve chronicled, manufacturing is today a tale of diverse industries and regions. The sector is growing in some states as it retreats in others. For example, Western states, our primary focus, are witnessing the emergence of a new industrial makeup that seems to upset conventional wisdom.

As the New York Times has noted, America’s West is a new engine of manufacturing employment, with its counties growing at twice the rate as their Rust Belt counterparts. In the same period that CNBC’s graph depicts job losses in Michigan, Ohio, and Pennsylvania — manufacturing employment in Colorado, Washington, Oregon, California, and Arizona — bellwether economies in the West — stayed the same or grew slightly.

We’ll dig in deeper to Colorado and California manufacturing employment in the weeks ahead, but the message seems clear enough: Industry mix means everything. In Colorado, we know that food and beverage is the state’s fastest growing manufacturing industry. When combined with high-tech clusters across a range of industries like aerospace and bioscience along with construction-related fabrication that shows no signs of slowing, manufacturing here continues to challenge conventional wisdom. So far it’s lost on CNBC. They surmise: “It’s official: Manufacturing is getting crushed.”

In some industries, and in some places, maybe. But here and other pockets across the U.S., it’s at the center of innovation and growth in industries expanding along new fault lines, in communities that value local production. Or value like-minded companies that outsource manufacturing in regional or international supply chains. It’s the next best thing. Companies like Teton Waters Ranch, featured this week, a manufacturer to be sure but not manufacturing here. Colorado’s food and beverage ecosystem is richer for them being here.

In America’s new and dynamic manufacturing ecosystem.

Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com.

Coors’ cut-and-run is a final capitulation, but also the wrong bet on the future

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Ten years ago, Coors’ stunning cut-and-run from Denver would have been analogous to Microsoft leaving Redmond, Apple leaving Silicon Valley, or Ford leaving Detroit. We’d have been left at a loss for words.

Today, things are different. Today, the move is no more than a final capitulation to a regional craft brewing industry that’s buried Coors under an avalanche of innovation, and to Peter Coors’ hubris and personal failure to build a bridge to entrepreneurs who deep down respected the Rocky Mountains’ first craft brewer, Adolph Coors.

It’s also a strategic blunder that will cost Molson Coors.

According to the Denver Post, Coors is leaving Denver because it can tap marketing talent in Chicago that’s unavailable here, talent from midwest business schools that apparently plies the hallways of the Fortune 500 food and beverage giants from Chicago to Montreal, the Canadian HQ for the brewing conglomerate.

But last I checked, the innovation coursing through food and beverage is emanating from entrepreneurial, early-stage ecosystems in cities like Denver — not from a corner office at General Mills or Miller or Molson Coors. Legacy, industrial food and beverage brands have shifted gears. University of Chicago grads are great, but today, companies are focused on acquiring innovation. As Coors leaves Colorado, a dozen other companies are setting up shop here to tap into the risk-taking creativity on display in all corners of the economy.

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Coors wanted no part of that scene, at least in the end. Last January I wrote about a MillerCoors blog post, “Brewery Taproom Visits Dragging Down Sales at the Corner Bar,” an empty cheap shot at craft competitors. I expected more. I expected an iconic brand to lead from the front.

Luckily, manufacturing is full of companies that are leading — leading by reimagining manufacturing in a dozen industries in response to customers, to employees, to the communities that today value their business. The trend to make more things closer to where they’re inspired or designed, to where they’re purchased and used, has only been accelerated by globalization, by companies chasing the promise of cheaper, easier — or smarter. We’re still finding some of the best things don’t come easy.

Manufacturing’s challenges are unique — as a manufacturer like Coors has discovered. The challenge of selling a Coors Banquet to a Millennial consumer is similar to the challenge of a selling that same person on a manufacturing career.

But as Coors’ retreats from its fight, we’re joining this battle. It’s a better bet. We’re all in.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

The ongoing quest to publicize the generational excellence of the people and companies in manufacturing, in the most entertaining and meaningful way we know how, is underway: the fifth annual Colorado Manufacturing Awards. Nominate your company, your customer or peer, your mentor or someone you respect. As an iconic manufacturer departs, let’s celebrate the economy that it leaves.

5 takeaways from a week in manufacturing data

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1. Is manufacturing dead or a leading indicator for the economy?

Whenever the Purchasing Managers Index (PMI) from the Institute for Supply Management lands under 50, as it did last week, manufacturing naysayers proclaim the sector irrelevant or worse.

This time around pundits are struggling to explain how manufacturing also seems to be a bellwether for the rest of the economy.

“The weakness in manufacturing has now infected the services side of the U.S. economy, which makes up about 80% of it,” sniffed Peter Boockvar, chief investment officer with Bleakley Advisory Group, in a note to clients.

In other words, the U.S. economy goes as manufacturing goes.

Manufacturing’s demise was always overstated. It’s a strategic sector and getting more so.

2. Manufacturers are creating jobs. They can’t find employees.

Manufacturing has an employment crisis — just not the kind reflected in Friday’s jobs report released by the Labor Department that showed U.S. manufacturing losing 2,000 net jobs in the quarter.

How would the graph below look with an additional half-million employees in jobs that remain unfilled? Employment would look a lot different if companies could fill open jobs.

3. Trump’s tariff plan needs a strategy.

President Trump’s trade plan hasn’t yet panned out. CNBC reporting last week summed up the consensus among analysts:

Eric Winograd, senior economist at AllianceBernstein, said in a note Friday that the president’s trade war strategies appeared to be in part responsible for the slowdown.

“A big part of the story for the economy as a whole, of course, is the trade war. We can see that in the payrolls figures too,” Winograd wrote. “Manufacturing has been the hardest hit industry by trade policy and, not coincidentally, manufacturing employment has suffered.”

At some point soon, short-term pain must be framed by long-term gain.

4. American brands have gotten themselves into the tariff pickle by investing in offshore manufacturing.

Trump’s strategy-less tariffs get tarred and feathered, but the crisis in supply-chain management — in making things offshore in China — isn’t Trump’s fault. American companies have made China a manufacturing superpower. (Manufacturers aren’t the only U.S. companies beholding to China.)

It was inevitable that tariffs would be used to change China’s behavior and protect the interests of American companies and workers. The status quo wasn’t working. It’s unfortunate that its intended beneficiaries are suffering given the shortcomings of Trump’s plan.

But this is an industry problem that companies, not government, must fix. Collectively and collaboratively, brands and manufacturers must lead a U.S. production renaissance by investing here, and not in overseas production.

5. Innovation and industry diversity continue to distinguish U.S. manufacturing.

The sector continues to surprise, and much of the good news is related to growth industries shaping a new American industrial character.

Manufacturing is growing fastest in the West, in state economies with thriving natural food, craft beverage, and value-add industries like aerospace. Innovation is rampant here, even in legacy industries where technology is powering a new wave of engineering, prototyping, and manufacturing solutions. (Read this week’s profile of Barber-Nichols.)

There’s a race to a new, global-defining manufacturing economy comprised of exciting new industries flashing the tools of Industry 4.0. And it’s winnable. Here in the U.S.

Step into the fight or step aside.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

Manufacturer or distributor? Both, but let’s help apparel brands reshore production

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A reader in California took us to task last week for “promoting” O’Neal USA, a sports apparel company we featured in CompanyWeek. A legend in the powersports market, Jim O’Neal’s jerseys are a motocross staple.

He also moved apparel manufacturing offshore, a reality not lost on our reader. Instead, the reader said, “highlight and promote companies that keep production/manufacturing and business in California/USA. This story should be sent to Sacramento and DC to discuss the problems with the high cost of doing business here and the tariffs.”

We do feature those companies, every week, but he raises an important issue. Should O’Neal be celebrated as a manufacturer, brand, distributor, or what? Our reader suggested “a U.S. Corporate Office and Warehouse.”

Does it matter? Yes. Because companies that do travel the last mile to manufacture in America think it does. And they’re right. Navigating the issues that bedevil companies like O’Neal, to keep production in the U.S., is often the hard way to go. We should notice. And buy their products.

But in apparel and outdoor industry, O’Neal is the rule, not the exception. Jim O’Neal’s explanation for manufacturing offshore — wages, environmental laws, qualified labor — is common.

We can agree that most designers would keep their means of production closer to home if they could. And the good news is that we’re developing more domestic production infrastructure. Technology is a catalyst.

CompanyWeek Editor Eric Peterson’s story this week on Elementum 3D is one in a series we’ve published that demonstrates how additive manufacturing is becoming a mainstream production option. And it’s only getting better. Elementum 3D is expanding “the materials library” by fueling printers with aluminum, copper, and custom materials, and composites, tungsten, and tantalum in the pipeline.

Yet for O’Neal and others in apparel, production solutions are elusive. Where Nike is on the cusp of printing an entire shoe in America, and doing so in volume, apparel brands still rely on sewers. Innovation comes slowly to apparel production.

But there’s a path, and it’s navigable. The physical act of sewing may be the last thing to change, but that shouldn’t slow us from innovating everywhere else in the apparel supply chain — including what we buy. Supporting small, independent brands is an important step; they keep production home if there’s a way. Focusing on technology that fuels new prototyping and production is a given, including, as Elementum 3D’s Jacob Nuechterlein says, training a new generation of designers. “There aren’t that many people who know how to design for 3D printing,” he says.

Lastly, let’s keep pushing to develop new production and prototyping facilities companies like O’Neal can support — with business. Big guys like Nike and Under Armour are funding their own. We should all work toward democratizing enabling technologies by raising new centers of manufacturing innovation and excellence.

In doing so, we’ll help O’Neal and others keep production onshore. Then we’d have no doubt what to call them.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

How design-centered manufacturing is transforming Industry 4.0—and the 2020 CMAs

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There was a time when American manufacturing’s most effective promotion was products Made in the U.S.A. Today, products designed in the U.S. but made offshore tend to capture the imagination of consumers. “I design it, you build it” is still a rule of thumb for industrial designers, and the build is often “over the wall” offshore.

But the rules are changing, and growth industries of the West are at the center of a broad transformation. Powered by new technologies like 3D printing and software-enabled machining, designers increasingly control the means of production.

The trend promises to alleviate challenges at the center of America’s manufacturing conundrum. Prototyping at the point of design reduces iterative cycles and costs. Intellectual property is more easily managed and less exposed to overseas “partners.” Parts and products also become smarter when manufacturing processes are “baked into” industrial designs.

In sum, the design-to-manufacturing continuum is narrowing. At tomorrow’s factories, tech-savvy machine operators will rub elbows with industrial designers and engineers. It’s a component of Industry 4.0.

We’re embracing the trend. As we launch the nomination period for the 2020 Colorado Manufacturing Awards later this month, we’re pleased to announce a new category that focuses on product design and engineering as much as the build.

A new 2020 CMA category — Innovative Product Award/Design-Centered Manufacturing — will showcase consumer and commercial products designed for manufacture in the U.S.

Here’s the criteria:

The Innovative Product Award recognizes leading-edge industrial design and engineering in a part or product manufactured locally (highest ranking) or in the U.S. (required).

Criteria:

  • Products must be designed or engineered in Colorado
  • Focus is on the design-to-manufacture continuum; integration of design and manufacturing processes

Products will be evaluated on:

  • Aesthetic: Leading-edge visual and aesthetic properties
  • Integration: Degree to which manufacturing considerations are incorporated in design or engineering
  • Advanced processes: Use of advanced manufacturing processes like automation, additive manufacturing, software-enabled CNC
  • Functionality: Innovative functionality, utility, and consideration of human factors: consumer popularity of the final product

Two award categories: Commercial and consumer

Nominations for the 2020 Colorado Manufacturing Awards open Tuesday, October 1 and extend through the end of 2019. Award winners will be announced in April 2020.

We’ll announce criteria for the entire slate of industry and advocacy awards later this month at a kickoff in Denver. Register here to join us Sept. 26 from 3-6 p.m. as we preview the 2020 CMAs, rally for local manuacturing, and hear from stakeholders providing key services for the manufacturing community — all a prelude to national Manufacturing Day events, Friday October 5. Or, contact me anytime with questions.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

Ordered to leave China, American manufacturers must shoot for the moon

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President Trump’s import taxes have always been a tactic lacking a strategy. As such the possible outcomes are limited. If the goal is to end unfair and unreciprocated access to the U.S. market, tariffing the import of Chinese-made shoes, or European cars, is arguably an effective tool.

But if the goal is also to encourage companies to make more stuff in America, tariffs aren’t a remedy. Companies operate in China for a reason. In many cases the means of production reside there, not here. Moreover, as Harry Moser at the Reshoring Initiative points out, “uncertainties from the tariffs will cause 2019 reshoring and FDI (foreign direct investment) to be moderately below the 2018 level.” Tariffs may actually be slowing down the reshoring of manufacturing jobs from China to the U.S.

Now that the President is ordering American companies out of China and production reshored, all eyes are on the domestic supply chain. But if U.S. companies are to actually make more stuff in the U.S., two things must happen.

First, we need to agree that the patient is sick.

Today we labor under the assumption that, in some parts of the U.S., we’re a manufacturing superpower. The past few years, I’ve hashed out the results of Ball State University’s national manufacturing report card, which this year again basically flunked the manufacturing economies of the West. California was an exception in the 2019 Report, improving from a D to a C.

At the same time, the Rust Belt manufacturing economies in states like Indiana, where the report’s sponsor, Ball State University, is located, get As and Bs every year. The difference? Manufacturing employment per-capita. It’s a metric that reflects decades of legacy manufacturing.

Why, then, haven’t we witnessed a tsunami of American brands returning to the U.S. to set up shop in Kentucky, Michigan, or Ohio? I wrote last month of Black Diamond’s decision to return to Asia after reshoring manufacturing in 2013. Why not Indiana? Easy answer. Even in U.S. communities that support high concentations of manufacturing jobs, often the ecosystems lack the skilled labor and advanced processes and machinery that comprise the modern, integrated supply chains found in China.

Are there pockets of highly advanced manufacturing operations in the U.S.? Of course. But scale is lacking, in part because American companies have invested in offshore operations, for decades.

When we acknowledge that U.S. companies can’t immediately walk away from investments in offshore manufacturing, but should redirect resources in the future, we’ll pursue a second imperative: embracing a ‘moonshot’ strategy to modernize America’s means of production.

In a smart column, “Trading Up: Why America Must Ditch China and Pursue Better Manufacturing Opportunities,” Robert Atkison summarizes it this way:

“The second tactic in a market-based decoupling strategy should be to weaken China’s comparative advantage in manufacturing and strengthen America’s manufacturing industry by establishing a national moonshot initiative to modernize and automate U.S. factories. There are various manufacturing applications for new technologies, including 5G, sensors, robotics, and artificial intelligence, which, with the right policy support, could significantly improve factory productivity, making it possible for much of the U.S. manufacturing sector to be a competitive alternative to China. But without a national manufacturing automation strategy, this vision will be fruitless.”

We’re talking a national industrial policy. Are we ready to embrace such a plan? What of the naysayers who object that we’d be playing favorites with manufacturing?

There’s a litany of less ambitious means to pursue as we debate the merits of a manufacturing Marshall Plan: invest in technologies, people, and process for most-favored industries, in some cases driven by regional and community preferences; publicize companies and leaders currently reimagining manufacturing; develop resources that make it easier for companies to locate capable supply-chain partners; elect officeholders who advocate for local manufacturing.

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. At the same time, we should look closer to home. And make small changes that add up to something big in the future.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

As Black Diamond bolts to China, red lights should be flashing.

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Last month I acknowledged I’d been overly optimistic about the outdoor industry’s appetite to bring manufacturing back to the U.S. Just days later, Utah-based Black Diamond stunned employees by announcing 70 layoffs as part of plans to move manufacturing back offshore, reversing a decision made in 2015 to reshore manufacturing to Utah.

Bad timing.

As disappointed as former employees and Utah’s business community must be, the reaction from national voices in outdoor industry has been predictably muted. There persists a quiet resignation that the products of outdoor recreation have to manufactured anywhere but here. It’s an ethos shaped primarily by the reality of apparel manufacturing, where the desire to cut and sew domestically runs headlong into an immovable labor challenge. We simply don’t have the requisite production workforce to make as many soft goods in the U.S. as brands would like.

But BD isn’t moving apparel production back offshore. They’re moving metal fabrication, for products designed and engineered in Utah. It’s precision fabrication that’s often located in the U.S. in other industries; work that may be more expensive than in Asia but seems feasible here.

Black Diamond president John Walbrecht doesn’t see it that way, explaining in an SNEWS interview:

“[T]his isn’t driven solely off financial decisions. It’s the ability to gain access to technology that we don’t have. I don’t have those machines, I don’t have the technology, I don’t have the manufacturing capabilities or the knowledge to do that. In some cases, there’s one that does. We had to turn to facilities in the world that had this technology. As an example, we ended up in an electric automobile facility in order to develop the JetForce avalanche backpack.”

If Walbrecht’s search was exhaustive — and here’s more of his explanation — it’s a hard slap in the face for U.S. manufacturing. America’s manufacturing opportunity is to extend its design and engineering acumen to new manufacturing technologies onshore. It’s a discernible trend in the manufacturing ecosystem — so much so we’re adding a design-centered Innovation Award to the 2020 Colorado Manufacturing Awards.

BD’s rationale surprised local manufacturing professionals I contacted. One founder of a design-to-manufacture firm in Denver surmised:

“The move . . . doesn’t make a lot of sense to us. They have been making carabiners in the U.S. since 2015 because of quality issues and recalls from products made in their Chinese factory. . . . I see nothing in their new products that use any different machinery, unless the type of carabiners that they are designing are something special and new that hasn’t been shown to the public yet. Sounds like the U.S. manufacturing was just a stopgap to address production issues to me, and now they have it sorted so back it goes overseas where the labor is cheap.”

Another put it this way:

“I would interpret that Black Diamond did not have a staff (and/or perhaps management) with the expertise needed to advance their design, nor the equipment to run it efficiently in-house, so they believed it would be more expedient and less capital-intensive to outsource rather than reinventing the wheel. Taiwan is certainly cheaper, which may have been more of a driving force than Black Diamond is letting on.”

As difficult the decision — and for Utah’s outdoor industry sector, it’s yet another punch in the gut — Walbrecht is in good company. He’s insulated from industry backlash — and from criticism from D.C. Black Diamond ain’t Harley-Davidson.

I’m not as sanguine. I was also told, “Surely this does not mean that the proper American company could not have done just as well or better.”

This was a financial decision. To fabricate here is more expensive for some of BD’s outdoor products. But it shouldn’t deter communities that are home to outdoor industry companies from developing a manufacturing supply chain to support brands that want to manufacture their products where they’re inspired, designed, and engineered. America can be competitive in outdoor industry products. That BD chose China, and not Utah, should again be a call to arms.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

As CompanyWeek turns six, what I got right about manufacturing, and wrong

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In the run-up to CompanyWeek‘s six-year anniversary in September, I’m looking back at columns I wrote to see what I got right, and wrong, along the way.

What I got right

  • Manufacturing’s comeback:

Announcing the launch of CompanyWeek in August 2013, I wrote, “Manufacturing’s at the center of profound change in the economy.”

This past June, the Economic Innovation Group (EIG) released a new study, MANUFACTURING’S REAL BUT PATCHWORK REBOUND, stating:

“Manufacturing’s rebound is real. After shedding manufacturing jobs relentlessly between the turn of the century and the Great Recession, the United States has now added them in 82 out of 100 months since January 2011. Such a turnaround is remarkable in a sector in which employment shrunk by nearly one-third between 2000 and 2010.”

  • On the Western U.S. becoming a new model for American manufacturing:

Also in August 2013, I forecast the West would be at the center of America’s manufacturing comeback in a column entitled: Made in America: Will a MFG revival transform the Rocky Mountain economy?

“Colorado will be a case-study in how a region will leverage new manufacturing to great gain, or miss-out to communities that harness the favorable winds pushing along goods-producing businesses.”

The EIG report confirmed the trend. First, The New York Times referenced the new report in a surprising conclusion: “The manufacturing sector is steadily realigning after the shocks of the early part of this century,” said John Lettieri, president of EIG. . . . “The West is emerging as a new growth engine for the sector.”

The report provided more detail:

“The average western county added manufacturing jobs at an annual rate of 3.9% from December 2016 to December 2018, the highest in the country. That figure also represented a sizable acceleration over the 1.7% annual growth rate registered in the typical western county from December 2012 to December 2016.” And, “nearly one-quarter of U.S. counties (24%) now contain more manufacturing jobs than they did at the turn of the century. In the West, the figure is 42%.”

  • On manufacturing’s new industrial character:

In 2017, I bemoaned a national report card on manufacturing in this column, Rust Belt bias flunks the 2017 Manufacturing and Logistics National Report Card: “Sector diversification is manufacturing’s new calling card. Want to begin to solve manufacturing’s labor problem? Showcase its growth industries — beer and distilling, natural and organic food, technology-fueled fabrication in aerospace, and the outdoor industry — that appeal to a new generation. They’re the growth industries of the manufacturing economies in the West.”

Today EIG agrees:

“Most manufacturing subsectors saw modest to healthy growth in jobs from December 2016 to December 2018. A veritable boom was underway in food and beverage manufacturing, which added 84,400 jobs to the economy from December 2016 to December 2018. Beer, wines, and spirits accounted for much of that growth, adding 29,700 jobs and growing by 22% over two years.”

What I got wrong

  • Outdoor industry brands moving production back onshore

I’ve forecast along the way that outdoor industry brands would be leaders in moving production back onshore. In a column, Moving Outdoor Retailer out of Utah carries risk for OIA, I said, “Brands are highly motivated to shorten supply chains and make products closer to where they’re designed and sold. Hap Klopp, founder of The North Face, outlined his reasons last month. Under Armour’s Kevin Plank told CNBC, ‘We should be bringing jobs back, not just to America, but tightening supply chains all over the world. We have the ability to do it better. It’s time for all of us to make an investment.’ It’s why manufacturing will get its jobs back here in the U.S.”

I overestimated their enthusiasm, and the difficulty in developing a U.S. supply chain that supports apparel and accessory manufacturing. Just two weeks after first posting this column, Utah-based Black Diamond stunned employees by announcing 70 layoffs as part of plans to move manufacturing back offshore, reversing a decision made in 2015 to reshore manufacturing to Utah. I would have preferred to have been wrong, again.

Similarly, in “Five reasons why manufacturing jobs are coming back,” I was 20 percent wrong. I’m still convinced that, “Brands want to make more stuff here…in response to consumers, and for other compelling reasons including cost, access to technology, brand integrity, and social responsibility, the trend in product management is for companies to shorten supply chains in support of domestic manufacturing.” I didn’t forecast tariffs would be the biggest motivator.

  • Enthusiasm for the cannabis economy

In December 2017, in a column entitled, A Trump presidency unnerves cannabis manufacturers. Is it time to change tactics?, I wrote, “It still may be a bridge too far for some, but business and policy leaders looking closely will determine that Colorado’s cannabis experiment is today an engine of conventional economic growth.”

Wrong. Cannabis industry continues to suffer an “enthusiasm gap” from business leaders and economic development pros. It’s a mistake, but it’s real. Cannabis is no more an existential threat to conventional business than craft brewing was in its infancy. Billion-dollar industries can’t live in the shadows.

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As for new forecasts, here are three major trends currently reshaping manufacturing, trends we’ll write about and that will inform most all our initiatives. Ignore at your risk.

  1. Contract manufacturers rule: Not only have contract manufacturers prospered the past five or six years, growth has occurred industries, a trend we’ll see accelerate. CMOs hold the keys to more domestic manufacturing.
  2. Design-centered Manufacturing: Industrial designers can now control their means of production. Stand by for a wave of innovative products designed for domestic manufacturing as the promise of additive manufacturing and other enabling technologies becomes reality. It’s one reason local contract manufacturers, flashing new tools and technologies, will thrive.
  3. Manufacturing’s brand will evolve to reflect the automation and technology that’s transforming it. See above.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

Ross Reels’ sparkling new Montrose factory speaks to the state of regional manufacturing

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To tour the new Ross Reels factory in Montrose is a bit surreal, as if you’re looking at something that’s not supposed to be there. So many voices have written off manufacturing, but here it is, one of Colorado’s finest new manufacturing facilities, on the stunning Uncompahgre River because, of course, they make world-class fly-fishing gear. It’s a lot to take in.

What may truly separate this facility, though, is the roadmap it provides for other communities. There’s a model here, with lessons to be learned.

Whether others follow is an open question. Hosting a panel discussion with manufacturers at Grand Junction’s first-ever West Slope Startup Week suggests that towns on the Western Slope of Colorado are still ambivalent about manufacturing.

But first, what Doug and Dave Dragoo, owners of Ross parent Mayfly Outdoors, have accomplished in Montrose is eye-opening. The Dragoos celebrated the official grand opening of the new building with employees and a couple hundred of local notables, pleased as they seem not only with the new physical space but with the city’s support of the project and vision of a modern business cluster focused on the outdoor industry.

Manufacturing for two of fly-fishing’s most respected brands — Ross Reels and Abel Reels — is now consolidated in Montrose at the Mayfly headquarters. It’s part of the Colorado Outdoors development, with a plan that envisions an outdoor industry cluster of light manufacturing, along with new workforce housing, retail, logistics, and hospitality tenants. The end goal is to foster a destination for outdoor enthusiasts and new business and commerce from the region and around the world.

It’s a vision shared by the private and public sector, and here, public action has meant the difference between idea and reality. The city has offset hard expenses on roads and infrastructure and provided financial incentives for incoming firms, but it’s also a co-developer of the river assets and adjacent open space. Colorado Parks and Wildlife is partnering to improve an already spectacular fishery in Montrose’s city limits. Overall, the development is a multi-institutional collaboration, with manufacturing jobs at its core.

If it sounds straightforward, or easy, it’s not.

The type of willful pursuit of manufacturing jobs on display in Montrose runs headlong into economic and social barriers that frame the economic development conversation in other towns in western Colorado. One involves growth — economic growth of any kind. A strong anti-growth sentiment informs local and regional deliberations in tourism- and recreation-fueled communities like Durango, Telluride, and Steamboat Springs. One consequence is that building consensus around the idea of investing city and county resources in roads, infrastructure, and other new assets to recruit new manufacturing companies is often hard.

To be fair, some communities have no interest in manufacturing, even outdoor industry- related manufacturing. They prefer stronger tourism and recreation service economies, or seek a place in the new technology economy, where Google campuses and tech startups, not light manufacturing clusters, dot the landscape. It’s a worthy, modern goal.

In Grand Junction, this seems to be on the minds of some. But the Makers and Producers track in Techstars’ first West Slope Startup Week points to the undercurrent of interest in the Grand Valley to combine a legacy of manufacturing with a tech-savvy future.

In theory, it’s a powerful combination. New manufacturing can be a breathtaking mix of technology, automation, and innovation. Industry clusters in the future will include companies flashing enabling software, automation, tech-driven logistics, and other advanced services. Alongside more advanced CNC shops and other new forms of prototyping and fabricating, these ‘centers of manufacturing excellence’ will be the destination for future for brands and OEMs.

It won’t happen by accident. A new development in Grand Junction, Riverfront at Los Colonias Park, promises similar outcomes as Colorado Outdoors. But how aggressive will the city be in offsetting the costs of roads and infrastructure, moves that are critical to attracting new companies? Is affordable housing and workforce development tuned to the needs of manufacturing brands? These and other questions seem open.

The stakes are enormous. An outdoor industry-focused commerce and manufacturing corridor, with major hubs in Grand Junction and Montrose, would put the region on the national map.

It’s a vision the folks in Montrose have willed into reality. Who will be next?

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

Just Build It: Why Nike tuned out the distractions to invest in Arizona’s workforce

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Nike’s first obligation is to shareholders, not politicians, so it’s no surprise it yanked the Besty Ross flag shoes to appease “talent” that speaks for a growing customer base. Colin Kaepernick has demonstrated he can move the sales needle for Nike. The political voices critical of Nike’s move haven’t.

Not every business calculation pans out, though, and the shallowness of this decision may yet come back to bite the company. But the stakes are much higher for Goodyear, Arizona — and politicians like Goodyear Mayor Georgia Lord. If Nike responds to Governor Doug Ducey’s encouragement to take its new shoe factory elsewhere, her work to bring new jobs to Arizona will have been for naught.

News last week is that Nike will Just Do It, and proceed with the factory. Good for Nike — and for Arizona. The grandstanding must have been hard for executives at Nike to stomach. The factory is a win for Ducey’s ally in the White House and aligns with the president’s push to persuade American brands to relocate manufacturing in the U.S. For a Trump supporter to throw water on a new U.S.-based factory must seem rich. Just last week, Nike confirmed the Goodyear facility would be only its third in the U.S.

Yet this factory represents more than the numbers convey, even though the numbers aren’t insignificant: 500 new jobs with an average salary of $48,514 per year, including overtime and bonuses. It’s a new apparel factory in the U.S. — a rarity these days — with jobs seemingly tailored to Arizona’s growing immigrant population. It’s talent that for decades has done work for American brands, just not on American soil.

An honest assessment of why American apparel brands haven’t opened new U.S. manufacturing facilities begins and ends with the challenge of workforce. In apparel, it always comes down to labor. Today many U.S. cut-and-make shops rely on the expertise of labor trained elsewhere. We’ve written about dozens over the past five years.

Nike has acknowledged that Goodyear offered a unique, hard-to-find talent pool by selecting the community in the first place. It’s a unique win. It’s unlikely we’ll see a surge in apparel manufacturing employment in the U.S. Companies are working overtime as it is to find production partners, and keep them, often in places like San Francisco and Los Angeles, where companies can tap a diverse labor pool. There’s a pathway for others to travel, one that involves an investment in the latest technology and a commitment to retrain underutilized talent. But it’s not easy. If it were, others would have accomplished it.

The hope is that companies like Nike will fuel the model and respond to the demand for more domestically made products, by siting new facilities where pieces are in place. Arizona is one such destination. Nike wisely tuned out the distractions to make an investment in a community willing to invest in a labor force uniquely suited to its needs.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.