NAM’s politics shortchange small manufacturers

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Things are good for America’s large manufacturers, says Jay Timmons, CEO of the National Association of Manufacturers (NAM). Timmons borrowed an Olympic metaphor last month to proclaim that manufacturing is “going for the gold,” pleased as he is with the trifecta of regulatory relief, lower tax rates, and a proposed $1.5 trillion infrastructure plan, courtesy of President Trump.

His elation is understandable given the high confidence level of his membership and newfound influence in the White House. Timmons picked sides, and his affection for President Trump is as well documented as his enmity for his predecessor.

But of all the reasons to be enthusiastic about manufacturing, and there are many, government’s stewardship of the manufacturing economy should excite Timmons the least. Sure, it’s NAM’s job to move public policy in favor of manufacturing. Yet NAM’s responsibility is to companies large and small, across diverse industries, and it’s an open question as to whether the vast community of small and middle-market companies are feeling the love. The celebration seems premature.

Today channeling Trump also means: supporting tariffs that may raise materials costs for manufacturers and diminish already thin supply-chain options; abandoning trade agreements altogether; diminished environmental stewardship, important to emerging manufacturing sectors like outdoor industry; uncertainty and confrontation in immigration, healthcare, and the emerging cannabis market; and outright hostility to business defying the NRA.

Companies will navigate America’s diverse business and cultural ecosystem to find the state or region that best fits their own operating values. Celebrating public policy that works to lift all of American manufacturing is a meaningful role for NAM, including advocacy for policy initiatives specific to the needs of small manufacturers:

  • Immigration reform, including a long-term resolution of the DREAMer crisis and targeted increases in immigration levels in manufacturing-related sectors
  • Compromise and agreement on healthcare reform that incorporates the best components from bipartisan discussions
  • Reducing — not expanding — import restrictions and tariffs on targeted raw material categories to enhance local and regional supply chains
  • Supply chain engineering to enable communities to recruit and retain manufacturing industry
  • Engagement on global climate-change initiatives
  • Comprehensive cannabis legislative reform including a short path to banking and financial service for industry companies

Becoming just another partisan player in the polarized milieu in Washington, D.C. is a dead end for NAM and the small manufacturers it supports. Time to widen its purview.

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

Here’s the second wave of 2018 Colorado Manufacturing Awards finalists

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Five years ago, an awards program for Colorado makers and manufactures didn’t exist. Today, selecting finalists for the third annual Colorado Manufacturing Awards is like drinking from a fire hose. So much innovation, entrepreneurship, manufacturing acumen, and market leadership to choose from. Who knew?

We did.

Here’s the second and final wave of finalists for this year’s CMAs. (We published the first group last week.)

Last year, we named Fort Collins/Loveland the state’s top manufacturing community, given its compelling mix of manufacturing industries, R&D ecosystem, and effective trade leadership. This year, we invited the NoCo Manufacturing Partnership to help us with the Outstanding Consumer & Lifestyle Brand, in part because they made us look smart. The organization has received national attention for its approach in developing sector support for manufacturing, and the finalists in the category — Denver’s Sarabella Fishing and Knotty Tie, and Grand Junction’s mobile lifestyle brand Vintage Overland — represent the category, and entire state, with distinction.

CAMA, the Colorado Advanced Manufacturing Association, took a different tact and focused on the rich if underpublicized manufacturing community in Colorado Springs to select the three finalists for Outstanding Industrial & Equipment Manufacturer. The finalists are more diverse, with CNC stalwart Diversified Machine Systems, antenna concealment specialist ConcealFab, and the influential fabricator IP Automation, representing Colorado’s deep industrial category from the Springs.

In 2017, Colorado’s brilliant food sector had a distinctive industrial flavor at the CMAs, with bio-specialist MycoTechnology and supply-chain ace Ardent Mills capturing food-related hardware. This year, we invited Colorado Proud, the Colorado Department of Agriculture’s champion for local producers, to help us reconnect with smaller operators with the Small Food Brand of the Year award. It’s a gargantuan task given the innovation coursing through the sector. In fact, in the time it takes us to publish this list, finalists Blue Moon Goodness, Cusa Tea, and The Real Dill may already have outgrown the $2 million in top-line revenue we identified as a small brand threshold.

The Colorado Cleantech Industries Association (CCIA) continues to help companies commercialize and accelerate an array of solutions in the energy economy, at times against an unpredictable public policy backdrop. They also helped us identify three of Colorado’s top cleantech companies for Outstanding Energy & Environmental Manufacturer. Loveland’s Lightning Systems and Denver’s RavenWindow and AMP Robotics are a predictably strong group that again exemplifies the region’s influential cleantech ecosystem.

Aerospace is a regional economic calling card and when paired up with the growing number of electronics manufacturers, many developing solutions for aviation and aerospace OEMs, the award for Outstanding Aerospace & Electronics Manufacturer carries additional weight. This year the Colorado Space Business Roundtable and Manufacturer’s Edge looked across the spectrum of A&E companies to select AMPT, general aviation stalwart Air Comm Corporation, and one of Colorado’s spacecraft stars, Sierra Nevada Corporation’s Space Systems.

If you’re of the opinion that we’ve left some deserving companies off this list, you’re not alone.

As you ponder next year’s list, REGISTER HERE to attend this year’s Colorado Manufacturing Awards event. Miss it, and you’ll miss the best business event on the calendar.

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

Here’s the first wave of finalists for the 2018 Colorado Manufacturing Awards

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With the Olympic Games and Academy Awards providing a worthy backdrop, we’re set to announce finalists in the most important competition of the spring, the Colorado Manufacturing Awards. Gold medals and Oscars have nothing on us.

The 2018 CMAs again recognize outstanding maker and manufacturing businesses across multiple industries, but this year with a meaningful twist. We invited 10 of Colorado’s creative trade and business organizations to help us select worthy finalists within their industry communities. It’s a tip of the cap to their great work, but also a reminder of how manufacturing’s influence spans so many of the region’s key industries.

So here’s a first look at finalists from half the field. We’ll report on the rest next week, as we near the April 5 Colorado Manufacturing Awards gala event, where we’ll announce category winners at The Cable Center at University of Denver.

At some point in the past year, we had no choice but to distinguish Colorado’s brilliant cadre of contract manufacturers with their own category. We reached out to the Rocky Mountain Tooling and Machining Association (RMTMA) to help us identify three finalists, and it’s a predictably strong group. Boulder’s Tecomet, Ft. Collins’ Manes Machine, and standout Arvada aerospace shop Faustson Tool are this year’s deserving finalists for Outstanding Contract Manufacturer.

The Colorado Distillers Guild helped us select three candidates for Outstanding Craft Distiller. Finalists reflect a deep statewide movement that’s positioned Colorado’s sector as a national leader. Carbondale’s Marble Distilling Company, Crested Butte’s Montanya Distillers, and Denver’s standout early-mover Leopold Bros. comprise this powerhouse group.

The region’s craft brewers are a force of nature, today with over 350 companies shaping a regional beer tsunami. With so much innovation, entrepreneurship, and community-building, it’s at once easy yet incredibly difficult to select three — and only three — finalists for Outstanding Craft Brewery. With an assist from the Colorado Brewers Guild, this year’s finalist group includes Longmont’s iconic Left Hand Brewing Company, Divide’s barrel-aged masters Paradox Beer Company, and the upstart artisans at Broomfield’s 4 Noses Brewing.

The State of Colorado has pegged bioscience as a “key industry” and the Colorado Bioscience Association is one of the region’s accomplished trade and business associations. The industry sector is informed by entrepreneurship and great science but also by manufacturing acumen, and finalists this year for Outstanding Bioscience Manufacturer flash all three. As additive manufacturing transforms how surgeons operate, Littleton’s 3D Systems is on its leading edge, and Allison Medical’s story is as compelling as TOLMAR Inc.‘s cancer-treating innovation. The three companies represent Colorado’s bioscience industry with distinction.

Outdoor industry has crashed the national business scene with the force of an avalanche and Colorado’s OI sector is poised to become an epicenter of product innovation and manufacturing. CO Active Colorado, one of the state’s newest trade associations, selected three finalists overcoming the challenges of domestic manufacturing to make and assemble a generation of high-performance gear using local talent, expertise, and grit. Denver’s Meier Skis, Phunkshun Wear, and Alchemy Bicycle Co. fit the Outstanding Outdoor Industry brand.

Next week, we’ll showcase the remaining five industry associations and category finalists: Outstanding Industrial & Equipment, Consumer & Lifestyle, Energy & Environment, Aerospace, and Small Food brands of the year.

REGISTER for the 2018 Colorado Manufacturing Awards event, but don’t wait: The event will sell out.

Launch of Naturally Bay Area a catalyst for CA food brands. But where will they manufacture?

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Last November, we reported that a group in San Francisco was in the process of bringing Naturally Boulder‘s community-building model west, to better organize and accelerate northern California’s natural and organic product ecosystem. Vision became reality January 21 with the sold-out kickoff of Naturally Bay Area at the Winter Fancy Food Show in San Francisco.

Naturally Bay Area is the first “regional affiliate” of a fledgling Naturally Boulder network. On one hand, it’s an acknowledgment of the staggering success of Colorado’s natural food and product community and NB’s community-building methodology. It’s also more proof, if any was needed, of the profound change transforming America’s gargantuan food industry. From Boulder to San Francisco, Brooklyn to Portland, a wave of early-stage brands has captivated both consumers and the industrial brands that, until now, have decided what we eat and how its made and distributed. Today, industry innovation resides squarely in emerging food and product communities throughout the country.

Naturally Bay Area will provide structure and organization to what until now has been a loose ecosystem of brands, service companies, investment partners, and other business mentors. If history repeats, Naturally Bay Area will become a community-building engine, nurturing startups, accelerating promising brands, and enhancing the delivery of key services to natural product entrepreneurs.

Less certain is how brands will manufacture. With a more efficient commercialization of ideas, demand for manufacturing should explode. But within the Bay Area’s technology-driven economy, prospects for a qualified manufacturing workforce are sketchy, and manufacturing infrastructure lacking. Where will Naturally Bay Area members make their products?

The evolution of Colorado’s model suggests that a network of new production resources will develop alongside brands. Powered by technology from food-savvy entrepreneurs like The Food Corridor, it should be much easier for early-stage brands to locate commercial kitchens than it was for companies a decade ago. Brands should be able to escape the limitations of one’s own kitchen earlier and easier.

For later-stage companies, a co-packer that manufactures for multiple brands is often the next destination. Colorado’s network of co-packers has been every bit the catalyst as brands in the development of its natural food play. Will a more capable network of Bay Area co-packers develop to meet demand?

If brands can’t manufacture here they’ll move or sell — to industrial producers with the capability to scale manufacturing and accommodate an influx of new products. It’s the goal of industrial players today to do just that, to innovate through acquisition instead of organic growth. Big Food has waved the white flag: It’s given up on competing with the innovation flashed by early-stage food companies. Today it buys innovation.

Exits are fine, but the goal of Naturally Bay Area and the public/private resources sure to rally in support, is the development of a thousand new brands, employing dozens of employees each, driven by the promise of sustained business and manufacturing support. It’s the promise of the sector in California or Colorado: to incubate middle-market growth companies that cut a wide swath through the economy, not the narrow, top-down ecosystem that consumers and entrepreneurs are abandoning.

Who, then, will rally California’s manufacturing ecosystem? In San Francisco and the Bay Area, the workforce challenge alone is enough to stop development cold. In this tech-centric economy, where will food manufacturing’s new labor force come from? What cities and communities will move to develop facilities and provide incentives for companies to stay and thrive? Where will a new manufacturing workforce find affordable housing?

And as Naturally Boulder evolves to the Bay Area, Los Angeles, and San Diego, are public and private resources ready to rally around manufacturing?

Colorado’s ecosystem has grown organically, without a concerted effort from public officials to juice its development. Given the scale of the manufacturing challenge, California’s natural product innovators may not have that luxury.

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

Apple and Molson Coors signal differing views on U.S. manufacturing

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It’s a contrarian view to consider Apple a manufacturer and not a tech company. But as we’ve argued, how else to describe the world’s most valuable brand? Last year Apple spent about $50 billion with U.S.-based suppliers and manufacturers to build its suite of technology products. By any measure, a company that invests $50 billion in the domestic supply-chain is an American OEM.

For its part, Apple has avoided the “manufacturer” label. And who can blame ’em? Keeping its factories offshore has worked in Apple’s favor in two big ways: keeping 700,000-plus “employees” outsourced and ensconced in offshore factories keeps labor costs down and working conditions obscured behind an “Asian Wall.” It also enables the company to call itself a technology company versus the dirty-and-dying image associated with manufacturing.

We play along with this curious reasoning, because, well, who cares? We love a winner and Apple’s certainly that.

But what if Apple had made more of an investment in American manufacturing early on? I quoted Harold Meyerson earlier this year, who wrote, “If those 700,000 were employed directly by Apple, of course, then Apple would be the world’s largest manufacturer.” What if billions in cash holdings had been invested in training, in apprenticeships, in factories, in resources to develop a more capable supply chain? What if Apple had wrapped itself in America’s industrial legacy, instead?

Last week the company signaled plans to do just that.

Yes, a small percentage of Apple’s $350 billion repatriation of cash and services will be invested in manufacturing infrastructure. But the company’s stated intentions matter to U.S. manufacturing.

Contrast this with news emanating from Molson Coors.

With a blog post titled “Brewery Taproom Visits Dragging Down Sales at the Corner Bar,” the company proclaimed, “As the number of local taprooms and brew pubs continues to grow, so does the number of legal-age drinkers bypassing their traditional neighborhood bars.”

Further, “Total on-premise traffic fell 3.6 percent in 2017, according to data analyzed by MillerCoors. Even more troublesome: In five major U.S. cities (Denver, San Diego, Seattle, Phoenix, and Detroit), between 79 percent and 82 percent of consumers did not visit a bar following a trip to a tasting room, the data show.”

Huh? Today the corner bar is a craft taproom. Where has Molly Ballash, the MillerCoors category development manager for on-premise, been the past few years? “Our bar partners are missing out on high-volume occasions like dinner and happy hour.”

If Molson Coors’ bar partners were today the craft breweries dazzling the sector, the company would be leading from the front. Its choice instead has been to diminish the entrepreneurs inspiring a new generation of beer drinkers, work to hamstring craft’s tenuous distribution channels, and otherwise act like an out-of-touch legacy brand.

Like Apple, Molson Coors also has a choice. It could develop the Coors Craft Fund and award one deserving, early-stage brewery cash and resources. It could graciously return compliments from craft operators who admire the consistent excellence of its iconic pilsner, Coors Banquet Beer, and respect its outstanding malting operation and supply chain acumen.

Apple has decided to take America’s shiny new manufacturing sector out for a test drive. Molson Coors could do the same by supporting its worthy beer-making heirs.

The time is now.

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

Year in Review: Manufacturing is again a center of U.S. innovation

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In 2013, we set out to report on growth companies across multiple manufacturing industries. Since then, we’ve written about nearly 850 businesses, a market sample that likely paints the most complete picture anywhere in media or trade of the transformation of this most iconic of American industrial sectors.

As we reflect back on 2017 through the lens, literally, of the CompanyWeek photojournalists and editors responsible for bringing to life the regional manufacturing economy, it’s also useful to take stock of this transforming sector based on the data we’ve compiled from our rich catalog of company profiles.

So as Jonathan Castner and Judson Pryanovich document their favorite photo shoots of 2017, and Eric Peterson and Alicia Cunningham muse on their favorite profiles from Colorado and Utah, here’s a brief overview of the data:

In every interview, we ask executives to identify their challenges, opportunities and needs:

Top Challenges

1. Managing growth

2. Workforce

3. Market education/product awareness

Top Needs:

1. Workforce

2. Financing/Funding

3. Real estate

4. New service and supply partners

Fastest growing industry:

Food manufacturing; 2018 forecast of 23,100 workers hired, or more than 42 percent of the nondurable goods subsector employees forecast. (source: CU Leeds School of Business 2018 Business Forecast)

It’s important to note our content bias: Where possible we interview companies with growth prospects, or in the case today of Colorado’s rich craft brewing ecosystem, operating in growth markets.

But manufacturing industries written off in prevous years, like consumer and lifestyle manufacturing, are in this region, growth industries. CompanyWeek‘s catalog of company profiles is today shaped by the proliferation of companies in manufacturing industries making a profound comeback. These companies emphatically cite new markets, new products, and market leadership as the top three opportunities available to their business. In our geographical footprint, manufacturing has rediscovered its historical role as an epicenter of innovation.

Our mission in 2018 is to help manufacturers connect with each other and the supply chain to expand domestic manufacturing — to Make More in America. If you’re a manufacturer or domestic supply-chain provider, we’ll get you connected with other companies profiled in CompanyWeek. Here’s how.

In the meantime, celebrate the perspective of the writers and photojournalists who’ve brought the sector to life the past year.

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

3 takeaways from the (first) week in manufacturing

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Fresh off an eventful 2017, manufacturing picked up where it left off and continues to make news:

1. Manufacturing’s employment surge defies conventional wisdom

The business press is conflicted about manufacturing’s role in America’s 21st century economy. Much of the ambivalence stems from manufacturing’s employment paradox: U.S. productivity is at all-time highs, employment near an all-time low. With total jobs as the measure, it’s easy to conflate today’s otherwise healthy sector with a bleak future, and many analysts do.

In 2017, we forecast that employment growth in dynamic manufacturing industries would offset losses in sectors that clearly are in the midst of a fundamental change. New data from the Bureau of Labor Statistics released last week suggests we were right.

The United States added 196,000 jobs in manufacturing in 2017, according to data released today by the Bureau of Labor Statistics. In December 2016, there were 12,343,000 people employed in manufacturing in this country, according to BLS. By December 2017, that had risen to 12,539,000.

That represents a dramatic swing from the year before. In 2016, according to the historical data published by BLS, the United States lost 16,000 jobs. In December 2015, according to the data, there were 12,359,000 people employed in manufacturing in the United States. That dropped to 12,343,000 in December 2016.

Will the net gains hold? Can manufacturing continue to add 200,000 jobs per year to offset structural losses sure to impact legacy industries?

The answer lies in our collective ability to nurture and accelerate thousands of new domestic brands alongside a capable new supply chain. Develop the supply chain and companies will make more things here.

2. Tesla’s production challenges challenge business analysts

Elon Musk would likely admit that a good share of personal and professional criticism he receives is well earned. But criticism of Tesla’s Model 3 production challenges is unrelenting.

In the latest fusillade, Business Insider lectured, “Tesla’s Achilles’ heel has always been its inability to build cars as effectively as the Toyotas and General Motors of the world.” Forbes‘ Jim Collins lamented, “Tesla is not a sustainable enterprise from a manufacturing standpoint, and investors buying the stock at current levels are completely missing that fundamental truth.” Stock picker Seeking Alpha announced, “Tesla’s game is ending.”

Tesla’s operation isn’t perfect, but among other things the company has demanded accountability from its supply chain, a kick in the pants that has already had a positive impact on U.S. manufacturing. Hale Foote, president of Tesla supplier Scandic, said in a CompanyWeek interview, “Bay Area companies like Tesla and Apple want to fail faster to succeed sooner. . . . In Detroit for example, there’s a seven- to 10-year development cycle. That’s why Tesla is so different. They don’t follow that old way of thinking. The idea is to iterate constantly and invent, invent, invent.”

No doubt Tesla’s cash burn and Musk’s financial brinksmanship are unsettling. But capital markets exist to be tapped. Even if Tesla tanks, and I’m betting on Musk, we’ll have been reminded that a steadfast commitment to domestic sourcing and manufacturing every single part of a complex product locally is possible, given the will.

3. Colorado companies innovating with cannabis

Editorial writers at the Wall Street Journal would have done well last week to cut short their defense of AG Jeff Sessions after making the very reasonable point that Congress must legislate a permanent reconciliation to the contradictory state and federal laws driving marijuana businesses — and Sessions — nuts.

Instead, the WSJ argued that a burgeoning $10 billion market would be better left in the shadows, its proprietors subject to federal prosecution, until such a time that Congress agrees otherwise. It seems a fatuous argument give the current state of dysfunction in D.C. and the stability of state-run marijuana markets.

Lost in the self-serving data cited by the WSJ is the irony that the attorney general’s views lack any connection to science or a scientific method.

We’re here to help out the AG.

In Eric Peterson’s enlightening summary of innovation in Colorado’s marijuana industry, we revisit a dozen cannabis companies profiled in CompanyWeek the past few years. Science and technology inform some, manufacturing acumen guide others. All are motivated entrepreneurs pulling a multi-billion dollar industry out from the shadows into the mainstream. In any other industry, the WSJ would be extolling their virtues. We’ll do it instead.

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

Here’s why manufacturing will, or won’t, prosper in 2018

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U.S. manufacturing enters 2018 with momentum and considerable promise. For starters, in this golden age of corporatism, America’s blue-chip manufacturing brands are prospering.

More than that, manufacturers have a once-in-a-generation chance to improve their own fortunes by investing the windfall of tax reform into new companies and a more capable domestic supply chain.

Whether American OEMs choose to do so may define the fortunes of the sector for the next decade. It’s why this moment holds both promise and peril.

Here’s why manufacturing will, or won’t, prosper in 2018.

Will:

1. There are fewer big companies in the U.S. as influence and power consolidate into a new corporate oligarchy, but those at the top are thriving. Confidence within the membership of the National Association of Manufacturers has never been higher.

2. Lower corporate tax rates will provide a short-term financial boost for companies large and small, and a long-term benefit for those that reinvest in new factories and equipment.

3. Powerful trends point to sustained employment growth in multiple manufacturing industries even as robotics and automation put downward pressure on job growth in others.

4. Today, communities seek out manufacturing companies when, a decade ago, light industrial employers were less attractive than technology and service companies.

5. Higher education doesn’t deserve much of the self-serving attacks from its critics, but trends redirecting young people into trade and away from four-year degrees serve the economy, and manufacturing, well. There’s good reason to believe we’re on our way to solving manufacturing’s long-term labor challenge. The battleship has been turned.

6. Ask most anyone if it’s important that we make more stuff in America, and they’ll likely say yes. As obvious as this may sound, it’s a cultural sea change. We value manufacturing again.

Won’t:

1. Large manufacturers are prospering, but many small and middle-market manufacturers operate on a knife’s edge. Incentives, access to capital, labor, technology, new markets, and OEM supply chains tilt to a shrinking cadre of large companies and away from smaller operators. It’s also unclear whether blue-chip OEMs are committed to a more capable domestic supply chain; whether a newfound tax windfall, pressure from the White House, or new tariffs will compel big companies to make more in America.

Harold Meyerson, writing in The American Prospect notes that Steve Jobs once remarked to President Obama that “Apple had 700,000 factory workers employed in China.” What if Apple had invested in U.S. labor and infrastructure? “If those 700,000 were employed directly by Apple, of course, then Apple would be the world’s largest manufacturer. “Instead,” Meyerson says, “Apple conceals its factories — and responsibility for the working conditions there — behind two Chinese walls.”

Have things changed? We’ll find out. President Trump and the GOP Congress have provided U.S. corporations the means to invest in a new domestic supply chain; they’ve also provided us a measuring stick. If OEMs shift their gaze onshore, we’ll know.

2. Public sector support for manufacturing can be spotty. There’s no uniform manufacturing ‘playbook’ for developers, a challenge to begin with as manufacturing spans mulitple industries.

Meyerson’s Apple example underscores why this is important. Is a company that designs or engineers a consumer product locally, but is forced to push production offshore because of a lackluster domestic supply chain, a tech or design firm or a manufacturing company?

What if we’d celebrated our community of contract manufacturers the past decade as we do tech firms, and made it easy for our fictional design company to locate domestic production here?

Manufacturing’s future lies in the supply chain. 2018 included.

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

Related: Five reasons why manufacturing jobs are coming back to stay

Let’s recalibrate “Made in America” to include global operators

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“Made in America” has never been an ideal slogan to rally U.S. manufacturing from its post-globalization doldrums. Too many American companies have come to rely on offshore suppliers and contract manufacturers. Rather, “Made in America” has become a call to arms, a rediscovery of our manufacturing chops. It’s more symbol than substance.

This shouldn’t diminish the extraordinary efforts of U.S. companies that today fully embrace the business and brand benefits of actually making everything in America, or sourcing the components needed to manufacture and assemble goods from domestic suppliers.

But for hundreds of thousands of otherwise well intentioned U.S. brands and OEMs that manage global supply chains to manufacture products, “Made in America” sloganeering has run its course. For them, it’s time for a new and more inclusive rallying cry that’s unyieldingly pro-U.S. manufacturing yet cognizant of the shortcomings of the domestic manufacturing supply chain.

How else to reconcile manufacturing realities?

If your company makes backpacks or athletic shoes by the thousands or garments even by the dozens, in most cases — not all — success involves global operations. Vietnam is today an epicenter of backpack manufacturing, built by investments from U.S. companies (and, ironically, the U.S. government). Apparel entrepreneurs today seek out Asian factories that produce goods for world-class American brands. Consumer and industrial giants design and engineer products in the U.S. but rely on a network of contract manufacturers, foundries, and assemblers located around the globe.

The tie that binds these manufacturers from distinct and separate industries is labor. Machine operators, assemblers, sewers, and skilled makers by the thousands — the tradespeople of advanced manufacturing economies — are today found offshore. Corporate investments follow.

But today other trends point to a wholesale onshoring of manufacturing capabilities, trends that even the most accomplished global operators also embrace. Shortening a supply chain is good business.

American companies are tapping an immeasurable fount of domestic creativity and innovation to design and engineer new products and reimagine entire industry sectors. Robotics and automation and technologies like 3D printing are enabling companies to prototype and manufacture closer to home. Brands conceived in California or Utah are working harder than ever to keep production in those places to enrich communities and control IP and quality, core tenets of today’s entrepreneurial class.

It’s time to cast a wider net and celebrate not just those companies whose products are “Made in America,” but the wave of companies that today seek to “Make More in America.” Companies working to integrate engineering with manufacturing on domestic soil; to retrain a generation of equipment operators; to support local growers and new industries that bleed innovation as they contemplate local production.

In 1988, Harvard Business Journal opined that “Manufacturing Offshore Is Bad Business.” Corporate America ignored the advice.

Today let’s simply acknowledge that American brands and OEMs that “Make More in America” do so because it’s good business. Our collective challenge is to provide companies the means to do more. Connecting manufacturers with each other and a growing domestic supply chain is job one.

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

Why investment capital will remain elusive with corporate ‘tax reform’

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The premise of the ‘Tax Cuts and Jobs Act’ is that lower taxes will lead to an increase in business investment and consumer spending, spurring on growth that will more than offset revenue cuts. We do it by entrusting the corporate class with a windfall we hope they spend wisely.

There’s reason to believe it won’t play out this way.

Jeremy Grantham, chief investment strategist at Grantham Mayo Van Otterloo & Co., has pointed out the price-earnings ratio of the stock market over the past 20 years has been 70 percent higher than the previous 100. The profit margins of U.S. corporations have been 30 percent higher. It’s a golden age for U.S. corporations.

At the same time, Grantham notes that companies aren’t using these dividends to build new plants in the U.S. They’re buying back stock, for one, to drive equity prices higher. Great for corporate executives and stockholders, not so good for U.S. economic growth. “There aren’t as many new firms that get started,” says Grantham, “the number of public companies has halved, the number of people working for firms that are one or two years old, are half what they used to be in 1970.”

Instead, the capital resulting from higher profits is camped out in paper, including billions in private equity. There are 10 times as many private equity firms in the U.S. today than there was in 1990, with over $500 billion to invest but a record capital overhang. Corporations and private investors have more capital to invest than ever. They’re conservative when it comes to investing it.

Why aren’t they spending?

Investors point to a lack of companies. “Equity firms tell us the toughest issue they face is simply finding enough good candidates to look at,” according to Generational Equity, a PE firm based in Dallas, in 2012. “They are hungry for deals, but they just don’t see enough.” Five years later, $100 billion more in equity capital is poised to be invested through dozens of new firms, family offices, and capital funds. It’s more likely that investors aren’t seeing enough deals they like, not that deals aren’t there to be had.

It’s not for want of opportunity. The economy is undergoing a shift to small and middle-market companies. Doug Tatum chronicles the importance of early-stage companies navigating the perilous stage from start-up mode to growth company in ‘No Man’s Land’. Today these emerging middle-market companies “account for less than 3 percent of all businesses, yet contribute 30 percent of all new jobs added by all businesses,” Tatum says. He also writes, “From 2010 to 2013, the number of companies in the U.S. with 20 to 99 employees increased 10 percent, while the number of U.S. corporations with 1,000-plus employees decreased by 16 percent.” Grantham’s point.

For Tatum, these companies are the new heroes of the U.S. economy. They’re also the most vulnerable, as capital and management expertise are most elusive for businesses of this size.

If tax cuts don’t motivate buyers, will lower rates improve the quality of acquisition targets for investors? It’s hard to say. In over 800 interviews with manufacturing executives that we’ve completed the last four years, only a handful of companies cited high taxes as a barrier to growth.

Today the corporate class seems comfortable investing in next quarter’s profits, not next year’s emerging growth company. Tax cuts help the balance sheet. Tax reform, done right, might pursuade them differently.

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