Tariffs provide a clarifying moment. What we do next is the true test.

Republished February 2, 2022, with strikethroughs.


If tariffs COVID has accomplished anything, they’ve it’s brought into focus the manufacturing strategies of American companies and vulnerabilities of sourcing and manufacturing offshore.

For American brands built on Chinese contract manufacturing, it’s a reminder that managing production operations offshore carries risk. For others it’s been an affirmation of decisions made to rethink manufacturing in China or Asia. Still for others, like small manufacturers who work global supply chains out of necessity, the topic can be maddening. A single trade tactic pandemic would never realign their global network of suppliers and manufacturers. Replicating services or replacing suppliers is hard; they’re in China for a reason. They pay anyway.

Regardless of the outcome of this round, tariffs COVID is forcing some brands to reassess Asian supply chains and for many, accelerate efforts to move out of China or back onshore. The question for those considering U.S. manufacturing, is how, and it’s the industrial issue of our time.

If, in the next decade, we create the conditions for some American brands to return jobs to the U.S. or keep them here in the first place, we’ll witness a new era of U.S. industrial accomplishment.

Isn’t that what the tariff supply-chain discussion is all about? If it isn’t, it should be.

America has the requisite pieces to enable brands to manufacture more products here. It just doesn’t have enough of some, like qualified employees. They lead a long list of much-needed resources.

But there’s a community of people and companies working to change the future of manufacturing in the U.S. If you believe in domestic manufacturing, helping these players thrive is a worthy calling:

  • OEM’s innovating to develop domestic sourcing and production capabilities — new domestic supply chains that promise growth. Those shoe brands feeling the pain of tariffs? Many endeavor to establish more prototyping and small batch manufacturing (to start) in the U.S., closer to transformative technology and to customers.
  • Contract manufacturers – companies that make things for other companies across a dozen industries. They’re more capable than ever. Ensuring brands find fabricators and producers, or cultivate new relationships, is imperative.
  • Engineers and designers improving the manufacturability of parts and products, a process that often works to speed prototyping and keep short production runs local. It’s a step in the right direction.
  • Integrators bringing technology and production together; they’re contemplating new ways to fabricate products with new tools and processes.
  • Early-movers in growth industries — brands and manufacturers — that value local supply chains and means of production.
  • Community leaders trying hard to pull the pieces together, understanding as they do the value of manufacturing jobs.

These are among the shareholders in a new domestic manufacturing economy, along with consumers who want more locally made products, brands who’d rather manufacture here and families who want options for their kids.

Let’s move from tariffs COVID to a robust strategy that supports these shareholders in their quest. To do so will strengthen trade agreements but more, fulfill the promise of a new U.S. industrial sector. It’s the outcome we all can support.

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

CMA winners deliver unequivocal message: respect the middle market

Several years ago, I wrote the headline, “Middle-market innovators steal the show at the inaugural Colorado Manufacturing Awards,” to describe the first CMA program. It’s also a takeaway from last week’s fourth annual event and list of winners. The region’s manufacturing sector is overflowing with creativity and success, owing much to mid-sized companies that have grown into market leaders and change agents, many from humble beginnings. It’s a journey we chronicle each week.

The CMAs are only a single manifestation of the vibrancy of regional manufacturing. In 235 in-depth interviews in CompanyWeek last year, executives painted a healthy picture of the manufacturing economy. Here are a few of the our top-line conclusions from the 2018 Manufacturing Market Report.

  • Across all industries, Managing Growth was the top challenge, reflecting positive underlying trends in a sector that’s made a startling comeback from the “dog days” of the 2000s.
  • Workforce, again, is a pervasive challenge across most all manufacturing industries. Data continue to reflect the need to retrain a new generation of manufacturing employees, in fast-changing production environments.
  • Competition has emerged as a significant challenge for companies, as is Market Awareness, reflecting a more competitive marketplace for the products of U.S. manufacturers.
  • Expanding Opportunities for manufacturers is also reflected in high-water three-year marks for New Markets, Growing Markets, and New Products, cited by fully one-third of all companies interviewed.
  • Real Estate has emerged as the top Need for manufacturing companies, second only to workforce. It’s an additional sign of expansion across manufacturing industries.

One anecdotal takeaway from CompanyWeek profiles is that the sector seems to have more resilience than even four years ago. Manufacturing isn’t a single-industry sector and growth can be reasonably forecast across multiple industries.

That said, manufacturing still has a long way to go before its companies and people attain the same rock-star status as technology unicorns or iconic tourism and consumer brands. But the stars are aligning. The companies that today comprise the “maker economy” are on the rise. The opportunity we have once a year to bring together and celebrate this extraordinary group is our great privilege.

Before we look ahead, even to next week, as we track the talented companies shaping the sector, we owe it to the 2019 class to stop and say congratulations. There were no losers in the group of nominees and of 37 finalists last week. Only winners, all adding to the fabric of America’s new manufacturing class.

Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com to get the 2018 Manufacturing Market Report, a summary of CompanyWeek interviews from last year.

A sustained Trump manufacturing surge will force economists to rethink the sector. How likely is it?

A common theme in business is that automation will continue to sap U.S. employment in manufacturing even as productivity rises.

This week the New York Times‘ Louis Uchitelle surmised that “manufacturing is unlikely to be capable of producing a great deal of additional employment,” making the familiar argument:

Modern assembly-line machinery continues to eliminate jobs. Production has been increasing, but factories are doing this with fewer people.

From a post-World War II peak of 19.6 million workers in 1979, employment in manufacturing has declined to 12.5 million, according to the Bureau of Labor Statistics. Put another way, manufacturing has dropped from 23 percent of the total work force to nearly 8 percent. That happened even as factory output rose in total value to $2.154 trillion in 2018. America is making more goods and materials with fewer people.

But to make his case, Uchitelle shorts the argument. Manufacturing bottomed out in January of 2010 at 11.3 million jobs, two years after President Obama took office, but has since then recovered, adding 1.5 million to a total today of 12.8 million manufacturing jobs.

How, then, to square conventional wisdom — that American manufacturing is losing jobs to automation — with the positive trend the past six years?

Let’s back up. Clearly, Obama walked in to a buzzsaw: Manufacturing employment was in free-fall from 17.3 million jobs when President Bush took office in January 2000 to the low-mark in 2010. In all, the economy shed 6 million manufacturing jobs during the Bush presidency.

But from 2010 to 2016, Obama added 900,000 or so jobs, and President Trump’s on a faster pace, adding 480,000 or so jobs in 26 months of his presidency. I’ve pointed to growth in new manufacturing industries as a source for new employment, and clearly red-hot market sectors like food and beverage are piling up the numbers. Manufacturers are generally bullish on Trump’s tax policies and his efforts to reset trade policy with manufacturing powers like China. It’s also more economical to make things in the U.S. than in decades, and fabricators in growth industries like aerospace are finding that innovation is enabling more domestic production. The numbers would look even more impressive if companies were able to fill the half-million or so manufacturing job openings that bedevil recruiters.

It’s possible we’ve reached a peak and employment will head down again. Or, perhaps we’ve found a new equilibrium, where huge jobs losses to offshoring are a thing of the past, and steady growth in new industries will sustain moderate growth.

If the Trump administration is able to maintain it’s hot start, economists and pundits might even be forced to reassess the premise that American manufacturing employment is in irreversible decline. Today President Trump’s cheerleaders boast of his gains compared to Obama, which seems the wrong argument to make. If a Trump manufacturing surge continues at its current pace, to add a million or so jobs in four years, it could reshape the narrative of manufacturing in the U.S.

How likely is it?

The numbers are daunting. The economy added 2.9 million manufacturing jobs 40 years ago, from June 1975 to June 1979, a staggering number by today’s standards. There’s no period in the past four decades that comes close to this surge in manufacturing employment. A Trump recovery of a million manufacturing jobs would be equally impressive, given technology’s influence.

Mining more jobs from legacy industries to add over half a million net new jobs in the next two years seems implausible. Or does it? The president may do well to add carrots to a manufacturing strategy that today relies on sticks.

His manufacturing legacy may depend on it.

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

Service companies contemplate a cannabis future as Farm Bill falls flat

Many thought the national legalization of hemp cannabis in the 2018 Farm Bill would usher in a new era of collaboration and industry development. Since then, the news has been confusing to say the least, and for services providers, downright disappointing:

  • States were asked to submit follow-up plans to the federal government, with approval providing a final free-and-clear signal for the hemp cannabis industry and businesses that support them to operate legally and without fear of retribution or jeopardy. But the USDA, the federal agency responsible for managing the process, has since let states know that they’re unprepared to accept the plans or provide guidance as to what should even be in the plans.
  • The Trump administration is ignoring the Farm Bill altogether, announcing last week that employment in the sector may be a sign that even legal immigrants “‘may lack good moral character if found to have violated federal law, even if such activity has been decriminalized under applicable state laws,’ the [U.S. Citizenship and Immigration Services] guidance states.” The guidance makes no distinction between hemp or marijuana, or provisions in the Farm Bill that profoundly change the sector.
  • Service providers continue to cancel cannabis business associated with hemp-derived CBD companies. Nor has the the Farm Bill led a parade of name service brands into the market with new programs to support cannabis companies or others that operate legally in market but don’t touch plant or product.

That’s not to say service brands aren’t watching cannabis closely. Each brand will likely have a different path depending on their operational footprint, how they’re structured or aligned culturally with cannabis. But it’s a safe bet most every brand is formulating a plan that will lead, eventually, to a cannabis strategy.

How can they not? Hemp CBD companies are thriving, driven by strong consumer demand. The realities of the market may force their hand.

Consider banking in Denver.

If Denver isn’t the most over-banked city in the nation, it’s close. It’s a growth market regardless of the cannabis opportunity and today, the quality and quantity of the banking teams serving Denver and Front Range businesses is extraordinary. Twenty-five years ago a small number of brands like Wells Fargo and Chase (formerly Bank One) rode herd over business banking here. Ten years later, CoBiz Bank, upstart brands like UMB and Citywide, and regional stalwarts like Alpine and FirstBank had carved out significant commercial portfolios.

Today, top to bottom, the sector is home to a world-class array of banking brands targeting the commercial sector. Bank of America and PNC are among recent entrants to business banking along with BOK Financial (formerly CoBiz Bank). Regional players like MidFirst have strengthened through acquisition, and credit unions now dot the landscape. Loan options, including those from Colorado Lending Source that target certain types of borrowers, are multiplying.

How, then, to grow in a market saturated with great people and more banking options than ever?

Developing targeted strategies and service offerings for vertical markets or sectors, for one. Manufacturing, across the multiple industry palette that we report on, is an example. Cannabis is part of that mix, and it’s becoming too large — and, with passage of the Farm Bill, too legal — to ignore. Hemp-derived CBD companies are operating legal businesses and selling products across state lines. CBD demand is creating cannabis unicorns by the dozens. Banks measure success by deposits and loans. In a competitive market, with little or penetration into the cannabis sector, banks not participating in the rush may fall behind, especially when the economy cools.

Given that most brands are not banking cannabis, it’s still a relatively even playing field, not only for banks but insurers, accounting firms, and other service providers. No one, really, has lost by being last.

What happens next seems straightforward enough. Service companies are bound to invest in due diligence to identify the most risk-averse cannabis companies to sell and support. The less risky the client, the less chance for a public setback that compromises decades of sector leadership, of community involvement, of brand equity. As other market signals flash green, service companies will only be more emboldened.

It’s a dance that in so many ways is as interesting, if not as existential, as the two-step that cannabis companies themselves have had to perfect on the way to becoming mainstream businesses in states that support cannabis.

And the music is just starting.

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

Hickenlooper’s stumble leaves manufacturing in search of a Democratic messenger

For Democrats running for president and struggling to find a cogent economic vision for the country, America’s manufacturing renaissance holds promise.

Sure, you say.

But consider this: More than anytime in the 2000s manufacturing’s appeal stretches east and west — from rust belt to farm belt to Silicon Valley. It spans key industries, leverages America’s global-leading R&D ecosystem, and is often the face of generational businesses, of rural and urban economies, and of U.S. grit. Today it’s also a young person’s game: Made in the U.S. inspires a new generation of entrepreneurs.

There’s also a Democrat running for president who has helped shape its new visage, its modern iteration, a candidate well-positioned to be the face of America’s new industrial character and aspirations, from the progressive economies of the West to the Rust Belt.

John Hickenlooper was a craft-brewing pioneer. He helped reimagine craft manufacturing in Colorado and make it fashionable again, demonstrating its power to reshape urban economies, create opportunities for passionate entrepreneurs and reshape entire industry sectors. His pioneering led to two successful terms as governor and the potential to ground a national campaign in the language of business and industry — unique for Democrats. I envisioned talk of the virtues of shortening supply chains to bring jobs home, of providing pathways for families and kids into the trade, and of a new economy where U.S.-engineered and -designed products are increasingly made here.

Yet the promise of becoming a fresh new face of American industry, and a Democrat at that, has been lost to trip-ups over basic questions about capitalism and GDP. For those of us who appreciate Hickenlooper’s business chops, it’s been baffling to watch.

It’s possible the governor overcomes missed opportunities and channels his past to grab hold of the economic dialogue. The stakes seem obvious enough. For aspiring presidents, Ohio, Michigan, Pennsylvania, Indiana, Iowa, and Wisconsin are pivotal states. They’re also states with abiding manufacturing legacies, where voters are likely dubious that tariffs and tax cuts represent a new and compelling industrial strategy. Hickenlooper had the inside track on a new vision for American capitalism.

Can other Democrats find the message? California is a poster child for America’s new manufacturing model if Kamala Harris looks for inspiration from her home state. Joe Biden need only travel west for stops in Portland or Fort Collins to witness manufacturing sectors changing local economies, to more assiduously connect the dots with Pennsylvania’s industrial legacy. Pete Buttigieg hails from Indiana, a state not shy from bragging about its manufacturing chops.

Beto O’Rourke’s Texas also boasts a recovering manufacturing economy, though I read today that Beto’s latest policy proposal involves $5 trillion to fight climate change, the latest add to a list of Democratic proposals to spend money if not make it.

A plan is there. Manufacturing’s involved. Who’ll rise to the occassion?

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

When policymakers get manufacturing wrong: a case study in petty politics

Ever notice how media voices most quick to condemn bias are often those with the sharpest ax to grind?

But the selective use of facts or intentional misrepresentation of opinion isn’t the unique domain of media personalities. We’re all guilty to a degree. We’re all selling something.

Take Chuck DeVore, vice president of national initiatives at the Texas Public Policy Foundation and former California Assemblyman. In a Forbes column entitled “Trump’s Policy ‘Magic Wand’ Boosts Manufacturing Jobs 399% In First 26 Months Over Obama’s Last 26,” DeVore wasn’t satisfied selling the virtues of President Trump’s manufacturing economy. His mission was to throw President Obama under the bus as well. It turned out poorly.

DeVore got right to it. In his third sentence he declared, “President Obama notably said in June 2016 that manufacturing jobs ‘are just not going to come back.’ He said this at a time when manufacturing job growth had flatlined, falling by 31,000 from January of 2016 to when he delivered his pessimistic comments in June of that year.”

That’s not actually what Obama said in the interview DeVore cites. He said, “Some of those jobs of the past . . . are just not going to come back,” drawing a distinction between the types of job being created today, and some of those that were offshored.

The Obama interview, or “town hall”, that DeVore references is worth watching in its entirety. Obama is bullish on American manufacturing, if realistic, including the challenge of retraining the next generation of factory workers. “The days when just being willing to work hard, and just walk into a plant, and suddenly there’s going to be job for you for 30 or 40 years, that’s just not going to be there for our kids,” Obama said. “If you go into that factory,” he continued, “that kid is going to have to know computers, some science and math; they’re not going to be picking anything up, they’re going to be working on a keyboard.”

DeVore would have served the interests of the Texas Public Policy Foundation by writing in support of Obama’s message. Today finding qualified employees is manufacturing’s most pressing challenge. In the nearly three years since the former president spoke these words, his workforce assessment has been borne out. Should we expect Trump to be a visionary with respect to workforce training? Maybe not. Which leaves a vacuum for supporters like Chuck DeVore to step in and do that vision thing for him.

DeVore’s not up to the task. In his zero-sum game, Trump’s a winner, Obama’s a loser. It’s better to diminish manufacturing’s resurgence under Obama and ignore his prescient remarks that both capture the sector’s challenges and size up manufacturing’s emerging star power.

“The good news,” Obama said, “is that there are entire new industries that are starting to pop up, and you’re actually seeing some manufacturers starting to come back to the United States because they’re starting to realize that you know what, energy prices are lower here, workers are better here, this is our biggest market, and even though we offshored and went other places before, now, it turns out, we’re better off going ahead and manufacturing here.”

These are hardly “pessimistic” comments.

Sure, President Obama missed opportunities to support the sector while in office. Lowering the corporate tax rate has helped manufacturers, and most would argue that pressuring America’s economic competitors relating to unfair trade practices was long overdue. Yet he was also a proven advocate, driving dollars into programs like the NIST-sponsored MEP network and technology centers around the U.S. expressly purposed to support domestic manufacturing.

As an otherwise esteemed policymaker, Chuck DeVore should understand that bipartisan support is a preequisite to a full-throated promotion of the sector — and that both adminstrations seem to have grasped the importance of manufacturing. Until that’s his message, he’s an anchor, not an advocate.

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

2019 Colorado Manufacturing Awards finalists: Northern Colorado flexes its muscles

In early 2017, I wrote that Fort Collins/Loveland had become Colorado’s top manufacturing community. The list of finalists for this year’s Colorado Manufacturing Awards (CMAs) suggests I wasn’t far off. Throw in Berthoud, Longmont, Greeley, and Fort Lupton, and 11 of the 37 finalists call northern Colorado home. This standout group reflects northern Colorado’s growing stature as a regional manufacturing powerhouse.

Yet the entire list of finalists, companies from a dozen manufacturing industries across the state, projects again what no single column or awards program can: Manufacturing is again an economic dynamo, a sector ripe with possibilities. From companies you know, to accomplished industry performers and upstart brands, manufacturing’s broad and deep comeback is the big takeaway from this year’s CMAs.

And we’re just getting started.

Join us in person on April 4 in Denver as we celebrate manufacturing and announce winners from the following head-turning group of finalists. As a bonus, we’ll peek across the border and recognize Manufacturers of the Year from Wyoming and New Mexico. And for the first time, we’ll acknowledge the singular work of three individuals and anoint a Manufacturing Advocate of the Year.

Finally, several Colorado trade groups have been integral to identifying worthy companies inside their memberships and out, companies that dot the list below. Their work in advancing the interests of their members and constituencies, and to advancing Colorado manufacturing, is key to this program. Thanks to all for just saying yes. Those partners are also listed below.

See you in April.

2019 Colorado Manufacturing Awards Finalists

Industrial/Equipment Manufacturer of the Year

Merritt Aluminum Products Company, Fort Lupton

StickerGiant, Longmont

Titan Robotics, Colorado Springs

Outstanding Craft Distiller

Distillery 291, Colorado Springs

Golden Moon Distillery, Golden

Laws Whiskey House, Denver

Bioscience/Medical Manufacturer of the Year

Cambrex, Longmont

Infectious Disease Research Center at Colorado State University, Ft. Collins

Osypka Medtec, Longmont

Outstanding Outdoor Industry Brand

Guerrilla Gravity, Denver

Ross Reels, Montrose

Topo Designs, Denver

Outstanding Cannabis Manufacturer

Green Dot Labs, Boulder

Medically Correct / incredibles, Denver

Wana Brands, Boulder

Builder/Construction Company of the Year

Encore Electric, Lakewood

RK, Denver

Tharp Cabinet Company, Loveland

Outstanding Food Brand

Boulder Organic Foods, Boulder

Teton Waters Ranch, Denver

Wild Zora, Loveland

Outstanding Consumer/Lifestyle Brand

Boyer’s Coffee, Denver

Voormi, Pagosa Springs

Vortic Watch Co., Ft. Collins

Outstanding Contract Manufacturer

Custom Microwave, Longmont

Ingram Machining, Broomfield

High Precision Devices, Boulder

Cogitic, Colorado Springs

Outstanding Craft Brewer

Odell Brewing Co., Fort Collins

TRVE Brewing Co., Denver

WeldWerks Brewing, Greeley

Aerospace/Electronics Manufacturer of the Year

Barber-Nichols, Arvada

Special Aerospace Services, Boulder

Wren Industries, Grand Junction

Energy Manufacturer of the Year

Bolder Industries, Boulder

CoorsTek, Golden

Solid Power, Louisville

Manufacturing Advocate of the Year

George Newman, Front Range Community College

Robin Kniech, Denver City Council, At-Large

Tom Neppl, Springs Fabrication

Thanks to our trade partners:

Category winners will be announced at the Colorado Manufacturing Awards ceremony and reception April 4. Click here for tickets.

Los Angeles digs deep to retool manufacturing, push back on critics

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.

Is the manufacturer-as-tech-company narrative finally fading?

We 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.

Leadership lacking in competition for manufacturing leaving China

The 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.