The Heritage Foundation opens a new front in the war on manufacturing

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In many ways the national manufacturing narrative has moved beyond the apocalyptic themes of a decade ago. Ten years of growth has changed everything.

Yet naysayers persist, and today the unlikely source is The Heritage Foundation, the respected conservative Washington D.C. think tank.

In “Biden’s Manufacturing Plan: Wasteful Investment in Industry of Past,” Research Fellow Elizabeth Hanke opens a new front in D.C.’s scorched-earth power struggle, using manufacturing as a cudgel. She conjures up a story that Biden’s “Buy American” plan is a dead-end as long as it includes support for low-skilled manufacturing jobs, surmising that “investing and restoring the manufacturing industry is costly, inefficient, and puts American firms at a disadvantage compared to firms based in China and Mexico where production costs are significantly less expensive.”

Her “key takeaways”:

  1. Biden frequently talks about reviving domestic manufacturing, an industry that has sharply declined over the past 40 years.

  2. The movement of American manufacturing away from low-skilled labor has been economically beneficial.

  3. Biden’s unnecessary approach lacks any economic consideration to implement such guidelines.

You get the message, and Hanke sums it up nicely for us near the end. “Biden’s manufacturing plan does not “build back better” or help American workers,” she writes. “It wastes taxpayer dollars by investing in a declining sector of the economy.”

In other words, U.S. manufacturing’s not worth the investment. Better just to say, “If Biden’s for it, we’re against it.” It would make for a better argument.

As a practical matter, it’s impossible to invest in manufacturing’s future without investing in people and industries powering its growth today. A realistic American manufacturing agenda has to include investments in “low-skilled” labor so long as it takes until we have a more highly trained workforce. Manufacturing’s comeback is being fueled by a mix of industries and companies, many that rely on blue-collar talent — labor that we stopped training — and celebrating. Today a labor shortage in manufacturing is the price we’re paying.

I don’t begrudge a so-called thought-leader a misguided position here and there. For a decade we’ve listened to manufacturing’s critics pronounce the sector dead or irrelevant. Hanke’s missive is more of the same.

But events the past year shed even more light on why those pronouncements were wrong. In this case The Heritage Foundation should know better — or tee up a more compelling argument that manufacturing is no longer strategic to the U.S. economy. This attempt falls flat. Politics provides no cover for a byline from even the most haughty of sources.

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

Adventures in the supply chain: My move from Colorado to Texas

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Late in June, my family’s six-month journey to relocate from Colorado to Texas ended successfully in New Braunfels, Texas — the new headquarters for CompanyWeek.

In the end we’d hoped a move like this was easy, or normal, as if picking up and moving for no reason, other than we wanted to, was seen as normal. It wasn’t; folks were surprised we’d leave Colorado. For us, adventure seemed a good idea after finally planting our youngest on a college campus in January.

But it turned out that explaining the inexplicable was easy compared to the move, a move that for me became a metaphor for the supply-chain woes we write about every week.

Americans are on the move. In the West, a migration of humanity is underway, to and from California, Arizona, Texas, and Colorado. The influx of people into Austin, our destination when we began, is staggering. You’ve no doubt read about the Austin housing market. In early February, we hadn’t. The short story is that selling a house in Colorado is easy. Finding a house in Austin, not so much.

But the supply-and-demand narrative involving housing has nothing on the logistical challenge of moving in the midst of a labor shortage. Our moving company struggled to find and schedule employees to move our load out, to transit, and unload. A single, resilient Russian immigrant from Brooklyn, who spoke very little English, was left to unload our 3,000 cubic feet of goods on his own in Texas. Three, then four, then five employees were scheduled to arrive to help. They never showed up. His accomplishment was epic, one for the ages. It was a nightmare for us.

The irony is that in Texas, factions are working to diminish prospects for immigration reform that would ease the burden on employers. The efforts of a Texas governor, George W. Bush, who appeared motivated to solve the immigration conundrum before 9/11, look otherworldly, today. Texas is a logical place for historic immigration compromise. Yet this state with so much workforce promise is bitterly divided.

You can buy a handgun and holster in Texas, and wear it proudly, and if you’re so inclined, move your manufacturing company here, as hundreds of business owners are doing. And for me, the chance to chronicle manufacturing’s Wild West is too good to pass up. The business press is choked full of news of relocations, expansions, and launches. Much like Colorado’s Front Range, South Texas, our new home, is on fire. Like everywhere, workers are hard to find. Builders are backed up; service and retail companies are undermanned — there’s a line for everything; and manufacturers are desperate for employees.

But as I watch Blue Origin touch down in Texas after an historic mission, the possibilities seem limitless.

America’s space race is at home in Texas. As of today, so are we.

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

CompanyWeek Q&A: Harry Moser, Founder and President of the Reshoring Initiative

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Harry Moser’s Reshoring Initiative measures the degree to which U.S. companies are reshoring jobs and attracting foreign direct investment (FDI). With interest and activity heightened from the pandemic, trade wars, and other factors, I reached out for an update.

As with any conversation today about reshoring manufacturing jobs, we talked extensively about China, and a troubling undercurrent that may profoundly affect America’s industrial future.

CompanyWeek: Your 2020 final reshoring numbers are out, and the data indicates, “Reshoring and FDI job announcements for 2020 were 160,649, bringing the total jobs announced since 2010 to over 1 million (1,057,054).” Put those numbers in context for us?

Harry Moser: We track reshoring which is done by U.S. companies, and FDI — foreign direct investment — which is done by foreign-headquartered companies, and we typically report on the total of the two trends. In 2010, the total reshoring that year was 6,000 [jobs], and there was a continuous uptrend until 2017, which was the peak year so far, with about 185,000 jobs driven that year by business enthusiasm for the tax and regulatory reform. And then things fell off in 2018 and 2019, primarily due to the trade war. Companies didn’t know what the rules were going to be, what tariffs were going to apply to what products, from what countries, for how many years, and they said, “Let’s wait and see what happens.”

Then, in 2020, we had COVID, and reshoring surged dramatically. The total in 2020 was about 160,000 jobs, the second highest on record. So to have that happen during a pandemic was incredibly good, and the fact that reshoring was so strong, shows that companies are taking care of “home.” They realize — for U.S. companies at least — that their main market is still the U.S., and therefore they’re putting their investments in the U.S., where FDI has of course slowed down.

From a different perspective, this is the first time that reshoring has been stronger than FDI in about the last seven or eight years. A million jobs have been announced, and given that it will take a year or two from the announcement until the hires are actually made, we think that conservatively, 700,000 or so jobs have actually been created. To put that in perspective, that’s more than the actual employment increase since 2010, meaning that if we hadn’t had the reshoring, manufacturing employment would have gone down instead of up since 2010, and the 700,000 is about 6 percent of total manufacturing employment.

CW: So, what does 2021 look like? It would seem that, given the disruptions in the supply chain companies are experiencing, we’d see an acceleration in the trend?

HM: Our forecast is for 200,000 total jobs in 2021, the reason being that basic driving factors are still in place: companies are still very much aware of COVID, Chinese wages continue to rise — about a week ago it was announced China’s year-over-year consumer price increase was about nine percent — and their business costs continue to go up dramatically, so they are somewhat less competitive overall.

There’s also significant talk about “decoupling.” One of the top China experts [in Asia], Eamon McKiney, believes that China is so mad at the U.S. — because of Trump, because of Taiwan, Huawei and other things — that China, at some point in time, will not allow any of its companies to ship anything to the U.S. They will totally decouple. I’ve heard other experts echo this sentiment, maybe not as strong a view, but obviously, if it happens, there would be a lot of reshoring happening very quickly!

But even the possibility it could happen, that companies could be totally cut off from their Chinese sources, not in two years but bam, like that, should be enough to get companies to pull back the most important, hardest to replace, the most critical items here, but if not here, then Mexico or someone else they can count on.

CW: On the other hand, that seems to run counter to China’s demographic challenge, that China has to create millions of jobs each year to continue to support middle class growth. Many of those jobs are in manufacturing companies making products for American brands.

HM: I would not agree with all of that. Actually China’s working age population, say 18 to 65, is dropping at the rate of about three million per year. Why? Because of the one-child policy that went into place, what, maybe 40 years ago? Even though they’ve relaxed that policy, today the Chinese are saying, “Life’s good with one child! We’re not going to have three or four kids.” A lot has been written about the question, “Will China become rich before it gets too old?” and the demographics, the increase of the over-65 population, is frightening for them. Increasingly, there will be fewer people to replace the retiring population.

What they really need to do — obviously they shouldn’t cut us off completely — is to get their own people to consume more. They save, roughly, 40 percent of their income where Americans normally save 3 or 4 percent of their income. That’s why the Chinese have so much money to invest in factories, in highways, in everything else. They need to get their population to spend more, to become the consumers that Americans are, and absorb that extra capacity they’re shipping to the U.S. Conversely, Americans need to work more and save more, and create the productive capacity that we’re now getting from China.

CW: Just to stay on that point. It does seem, though, it would be a bit of a “cut your nose off to spite your face” approach. Decoupling would force the U.S. to strengthen its industrial base. The U.S. would become a more capable industrial competitor and global threat to China.

Moving on: Do you see, as others do, the entry of China into the WTO as a low-water mark for U.S. manufacturing? Can we coexist with China as an equal trading partner?

HM: Under the current terms of trade, we cannot coexist with almost anybody. The U.S. has a trade deficit with nine of its top 10 trading partners. The exception is the U.K., which is a basket case for manufacturing, relative to its glorious manufacturing past, and the U.S. has followed the same decline.

If you look at what China did, as they grew, they produced products that otherwise would have been produced in Mexico, in Taiwan, South Korea, Japan, India, Malaysia, wherever. But China invested the most, they were the hardest working, bid the lowest prices, whatever, and they got the contracts. Right now we have a $900 billion trade deficit. If China did not exist at all, I still think we’d have a $750 billion trade deficit!

All these countries have industrial policies that combine things like currency, taxes, training and education, investment in research and facilities, et cetera. We don’t. I call it a “de-industrialization” policy. If you want to destroy your manufacturing, you’d do what we do: Every poor country you want to help, you’d give them favored-nation status to import products to the U.S. with lower duties than they give us; you’d spend billions protecting the rest of the world from pirates and terrorism; you’d allow your universities to flourish in liberal arts and your skilled workforce to decline; and you wouldn’t have a value-added tax to protect your key industries. If you want manufacturing to disappear, that’s what you’d do. And we’ve done that.

CW: Well said. How do the numerous recent initiatives strike you — legislation in the Senate and reference to a new industrial policy?

HM: I refer to them as “the Biden supply-chain effort.” And I call those things “tourniquets,” because our country has ignored these things for so long, because we’re in such a dangerous place of losing key industries, it’s certainly necessary to make these investments at a national level, and 10 years from now will be too late.

On the other hand, it’s not clear that you can save the patient that way.

CW: How so?

HM: The simplest thing to understand is chips. Taiwan Semiconductor is talking about one big chip plant in the U.S. Intel is talking about two, and the U.S. government is going to subsidize a few more, and soon we’ll be making two or three times as many chips as we do now. But the cost of making them, no matter the subsidies of the factories, will be higher because of higher labor costs here than in China or Taiwan; the costs of building the factories will be higher. So you’re going to have chips that are more expensively made here than made there.

Then, who’s going to consume the chips? Where do the chips go? Into cell phones, televisions, game boxes, servers, whatever — and almost all those things are made in China! We’ll be a high-cost producer of chips, dependent on China to buy all the excess chips above and beyond what we can consume. So instead of depending on them for chips, we’re going to depend on them being a customer for our chips.

My conclusion is that yes, we have to invest in chips, you can’t just drop out of that game, but we need to make the U.S. competitive by currency, by skilled workforce, by VAT, and motivate companies here to start making the products to consume the chips. Otherwise, we won’t be in much better shape than we are today.

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

Colorado Leaders Q&A: Marcia Coulson, President of Eldon James

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We’ve reported how Colorado lags in large manufacturing-related infrastructure investments, but despite another subpar year relative to other states, a flurry of recent activity lately demonstrates how things could be changing.

Last week alone, three significant new factories were announced, in three growth industries powering Colorado manufacturing. York Space Systems‘ new “mega-center” in Denver, Meati‘s 76,000-square-foot production facility, and Eldon James‘ sprawling new 100,000-square-foot medical-device factory are all eye-opening additions to the region’s manufacturing ecosystem.

I caught up with Eldon James President and 2019 Colorado Manufacturing Woman of the Year Marcia Coulson for a brief conservation last week.

CompanyWeek: You’ve been busy! Can you provide an update?

Marcia Coulson: Well, the pandemic has been a catalyst for us. We never anticipated this, but beginning last spring we started supplying millions of parts for the ventilator project. We pulled out all our stock and began manufacturing as fast as we could to keep up with the demand. We got to work with ventilator companies throughout the world building ventilators. Ford actually wrote us a really nice letter thanking us for being part of their ventilator project. That felt really good for our company.

Then it shifted to producing the vaccines, and we supply a lot of components for the single-use systems that they use for vaccines, including the large plastic bags that they grow drugs in, instead of the stainless-steel systems. They migrated from stainless steel because it takes about a week to clean between different drug lots, and they’re always concerned about cross-contamination from one lot to the next.

So they’ve migrated to these large plastic bags, and we make connectors that are welded into the bags, the tubing that’s connected to those fittings, and all the fittings downstream, including our new SeriesLock quick-disconnect product, that are used in the pharmaceutical industry as well.

We were able to supply components for Pfizer, Moderna, and J&J, and now we’re working on the Sputnik project and supplying a lot of parts for their vaccine program. It’s been exciting to play a small part in such an important initiative.

CW: Or a large part, as it were. I’m curious: You seemed so well-positioned, with a network in place, to plug right in to a national vaccine effort. How did that come about?

MC: We’ve been working more with pharmaceutical companies the past 15 years. When we built our first clean room, it was to manufacture products for that market. So it didn’t happen overnight; we’ve been working with these companies for that amount of time, building products for that industry. We’ve actually migrated to where 85 percent of our sales today goes to the pharmaceutical, medical device, and laboratory supply markets. We actually changed our business, as we were once also focused on automotive and industrial products. Thankfully, now 85 percent of what we manufacture goes to those three markets.

CW: Do you see that mix sustaining? I know there was interest in the beverage industry.

MC: Yeah, we’re not putting as much emphasis on the beverage industry. The pharma market requires quality, so they don’t necessarily beat you up on price. The beverage industry is very competitive, and there’s not as much margin in the products. It’s a fun industry! Just not one we’re putting a lot of focus on.

CW: Speaking of price, I picked up on something in our last conversation that stuck with me, that of the need, in your view, for targeted tariffs, or VATs, to enable domestic manufacturers to compete with Asian imports on price. Given what’s happened the past year, do you still see a need for measures to level the playing field?

MC: Well, we still need support with tariffs. However, one thing I think the pandemic has pointed out is that hospitals are starting to realize that maybe we don’t want all of our drugs and medical devices made in China. And they’ve finally caught on to that!

Take ventilators: Companies were manufacturing ventilators like crazy, but providers didn’t realize that every ventilator that was being used needed two filters — one to protect the ventilator and one to protect the patient — and those have to be changed on a daily basis. I had hospitals in New Jersey that were basically in tears because New York absorbed all the filters that were available in the market for the ventilators. There were none left for hospitals in New Jersey.

We realized that all of the filter media was made in China. We were done when we ran through the inventory. Add to that, for the manufacturers of the filters, the Chinese market was the top priority. I’m sure we lost some people because we couldn’t replace the filters on the ventilators. There’s no statistics to prove it, but it’s a scary thing, that all the filter media manufacturing went to China, and we couldn’t get it when we needed it.

We actually had a filter we were trying to get through the FDA so that we could manufacture filters here, but we just couldn’t get any traction as they were giving all their attention to approving ventilator manufacturers. Fortunately, as providers realized that fewer patients need to be on ventilators, things quieted down a little bit.

CW: But hospitals got the message?

MC: I do think it was a huge red flag for hospitals: “Maybe we oughta break this up and not buy the least expensive product.”

And as manufacturers, we can’t compete with China. There’s no way we can offer the same product at the same price. Medical devices do take humans to build and assemble and package and label and work in the regulatory side.

And something interesting has also come to light: We sell to China, and I know there are companies there that do what we do. To my customers, I’m like, “Why aren’t you buying Chinese products?” We’ve been told, “Well, we prefer in China for our medical devices to buy the higher-quality products made in the U.S., and we sell the U.S. our lower-quality products.”

What they’re saying is: “What we manufacture in China isn’t good enough for us, but it is for the U.S.”

We need more help from the government to equal out the playing field, to encourage hospitals to buy American-manufactured products, whether it’s a bonus program, or a tax-credit program to where they’re incentivized to to buy. Hospitals are under great pressure to make a profit; they’re going to be encouraged to buy the least expensive products.

CW: National policy issues aside, what can be done at a local level to encourage more manufacturing?

MC: We have a hard time hiring employees, so we need to encourage people to go to work, to go back to work. I’m not sure what we’ve created here — it should be interesting to see how it plays out. But we’re incredibly thankful to our great team.

CW: How many employees do you currently have?

MC: Between the two facilities — WilMarc and Eldon James — we’re at about 100.

CW: You’re doing a lot with 100 employees.

MC: Keep in mind we automate just as much as we possibly can so that we can compete on a global basis. We’re working really hard to automate. The new facility will be highly automated — but we still need people! They just don’t have to do the work equipment can do.

CW: Again, congratulations — and we’ll see you in September at the Colorado Manufacturing Awards Alumni gathering!

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

Like it or not, supply chains are infrastructure

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One casualty of our political paralysis is momentum to enact supply chain and manufacturing initiatives that appeared to have bipartisan support coming out of the election. Today we can’t seem to agree on the need to agree.

I thought as much reading Robert O’Brien’s insights last week in Bloomberg, “Supply Chains Are Our Most Critical Infrastructure,” that said so much even as it didn’t.

O’Brien served as national security advisor to Donald Trump and obviously understands the strategic importance of a stronger U.S. manufacturing economy. In one short paragraph he supports and derides President Biden’s $2.3 trillion infrastructure program before concluding, “Republicans may respectfully disagree on the plan, [but] a shared lesson from the pandemic is that essential U.S. supply chains constitute critical infrastructure. That is a point we can all agree on.”

Can we? I’m not convinced we all agree, but O’Brien’s right about the supply chain. He offers other useful nuggets:

  • “[S]trengthening U.S. supply chains and protecting our national security go hand in hand. Bringing our supply chains and manufacturing plants home provides stability in times of crisis and means good jobs for American workers today — many of whom were forgotten when industries rushed to low-wage countries over the past three decades.”
  • “Covid-19 pandemic exposed how dependent the U.S. has become on foreign suppliers for our most essential materials and products.”
  • “The problem is that while the U.S. engaged in free trade for decades, the rest of the world did not. Consequently, we lost many of our critical supply chains and much of our industrial base, imperiling U.S. national security.”
  • “As the 2022 midterm elections approach, it will be good politics for candidates of both parties to support the onshoring of critical American supply chains.”

O’Brien writes as a political actor so he falls short, in the end, of acknowledging that both sides agree action is necessary to strengthen U.S. manufacturing, even as neither side will take all the steps necessary to compromise and cooperate for the greater good. That admission is apparently a bridge too far in today’s landscape.

If we reach a consensus on basic themes, we can get to the business at hand, that of shortening the supply chains of which O’Brien speaks. A slimmed-down infrastructure spending program that energizes supply-chain development should enjoy bipartisan support. The formula is straightforward: help companies accelerate factory innovations that keep production more local, reduce costs to enable OEMs to compete utilizing domestic labor, and use scalpel-like tariffs to establish a more fair domestic market for U.S.-made products. Plus, celebrate U.S. craftsmanship, increasingly fueled by technology: CNC and artisan will co-mingle in the same sentence, a lot, in the future.

The means to accomplish the ends are available to lawmakers.

There are so many good stories to be told, if we can take small but significant steps. Crossing the political divide to undergird U.S. manufacturing tops the list.

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

Event Recap: 2021 Colorado Manufacturing Awards

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CompanyWeek Publisher Bart Taylor co-presented the 2021 Colorado Manufacturing Awards (CMAs) with Manufacturer’s Edge CEO Tom Bugnitz.

Kicking off the virtual event, “This is pretty exciting to be in the second five-year period of the Colorado Manufacturing Awards,” said Bugnitz.

“We’d rather be gathering in person, but we’re thrilled to be here,” added Taylor. “It’s the culmination of six months of programming in what has been an incredible year.”

Bugnitz called the CMAs unique due to the breadth of sectors recognized — with manufacturers in the industrial, food, aerospace, and cannabis among the finalists — and the awards “building a community in manufacturing.”

“Kudos to Colorado and its manufacturers and the trade organizations for truly being about community,” he added.

With 14 categories, 30 judges, and more than 40 finalists, this year’s CMAs were the biggest yet. “The thoughtfulness of the deliberations was impressive,” said Taylor of the judging process. “It was a highlight in my mind.”

Business Innovation | COVID-19 Response

After recorded remarks from Sen. John Hickenlooper, Doug Dell of KeyBank kicked off with the first award of the afternoon.

Winner: Titan Robotics, Colorado Springs

Titan Robotics devised a way to utilize its 3D printers to efficiently and cost-effectively make PPE, and donated it to local healthcare facilities and other essential operations. “There was a huge need at that time, and we just wanted to help the local community,” says CEO Rahul Kasat.

Outstanding Consumer Brand

Tanner Mason of Benchmark Commercial Real Estate introduced Ted Eynon of Meier Skis, the 2020 winner, to announce the nominees for 2021.

Winner: Moots, Steamboat Springs

Surrounded by the Moots team, Jon Cariveau thanked the presenters and discussed the company’s rare longevity. “We’ve been in business for 40 years and have been manufacturing everything from this location since we started,” said Cariveau.

Outstanding Craft Distiller

Introduced by Neenan Archistruction, Marc Staats, co-owner of 2020 winner Dry Land Distillers, handed off the trophy to another distillery, noting, “We all know this is a team sport. You can’t make anything in this industry as an individual.”

Winner: Storm King Distilling Co., Montrose

Co-founder David Fishering and his team toasted and downed a shot of the company’s product in celebration of the win. “It’s a testament to everything we’re doing,” said Fishering. “We’re making it happen. . . . 2021 is looking up.”

Outstanding Food Brand/Co-Packer

Sean Sullivan of Neenan introduced Soraya Smith and Tim Koehler of the category’s last winner, American Outdoor Products, to open the 2021 envelope.

Winner: Motherlode Co-Packing, Hudson

The two big lessons of 2020? “First, it’s better to have partners than customers,” said CEO Jim Kreitman, noting Motherlode’s ability to help with brand building, supply chain, and capital. “The second thing we learned in 2020, you can have the best building, the best equipment, the best ingredients, but what makes a company is its people. This award is for them.”

Cannabis Manufacturer of the Year

Melissa Chisum of Kaiser Permanente cued Andy Rodosevich of 2020 winner Hemp Depot to reveal the new victor.

Winner: Medically Correct, Denver

Owner of the incredibles brand, Medically Correct has been in the Colorado cannabis business since 2010. “We’ve been up for this award the last three years and lost to some incredible competition,” said GM Joe Sandro. “Winning it this year means a lot . . . All the hard work has paid off.”

Colorado Winery of the Year

Katie Woslager of the Colorado Office of Economic Development and International Trade passed the virtual mic to Kevin Webber of Carboy Winery, last year’s winner, to announce the 2021 results.

Winner: Carlson Vineyards, Palisade

When Garrett and Cailin Portra bought Carlson Vineyards in 2015, they “were the new kids on the block” in Palisade, said Garrett. Six years later, the couple is firmly entrenched in the Western Slope winemaking community that’s working collectively to “put Colorado on the map,” he added.

Outstanding Craft Brewer

Nicole Jura of Moss Adams introduced Kevin Delange of 2020 Outstanding Craft Brewer Dry Dock Brewing Co. to announce the results.

Winner: City Star Brewing, Berthoud

Co-owner Whitney Way said it was a moment to look back at 10 years of craft brewing in “What an honor,” she said. “We really look at our team and community that has supported us to get where we are today.”

Manufacturing Woman of the Year

After an introduction by Nextworld‘s Joyce Swanke, last year’s winner, Sue Frank of TEI Rock Drills, opened the envelope in 2021.

Winner: Heidi Hostetter, H2 Manufacturing Solutions

“Thanks for the recognition,” said Hostetter. “It’s really about the community that trusts you day in and day out.”

Industrial/Equipment Manufacturer of the Year

After recorded remarks from Rep Jason Crow, Frank of TEI (the 2020 winner) followed up by announcing this year’s standout.

Winner: Sundyne, Arvada

GM Mark Rauenzahn logged on to Zoom to accept the award for the leading pump and compressor manufacturer. “I want to thank our 350 employees in Arvada for supporting us in this time,” he said.

Aerospace Manufacturer of the Year

Dan Thoren of 2020 awardee Barber-Nichols virtually handed the trophy to this year’s winner.

Winner: Special Aerospace Services, Boulder / Arvada

CEO Heather Bulk accepted the award virtually: “I’m ecstatic on behalf of our team. It’s good to be in aerospace — what a great environment.”

Bioscience Manufacturer of the Year

Tamara Frazier of Squire Patton Boggs called bioscience “a critical part of the Colorado manufacturing ecosystem” while presenting the 2021 award.

Winner: Leiters, Englewood

“All of the recognition goes to our employees,” said Senior Director of Manufacturing Tom Busby, praising the Leiters team’s “resilience” during the pandemic. “Better times ahead, I hope, for us all.”

Energy/Transportation Manufacturer of the Year

John Boner of CAP Logistics announced the judge’s pick for the category in 2021.

Winner: Oribi Manufacturing, Commerce City

“We’ve been putting a lot of work into improving manufacturing operations and have doubled our sales two times in the last two years,” said COO John Barrett.

Building/Construction Manufacturer of the Year

John Marrinucci of RK Mission Critical, the category’s 2020 winner, announced this year’s award.

Winner: Encore Electric, Lakewood

Samantha Hamilton, who heads up prefabrication for the electrical contractor, accepted the award on behalf of her team. “Encore’s been around for 30 years now and won a lot of awards, but this is the first for prefabrication,” she said.

Advanced Manufacturing & Machining Award (AMMA)

Judged by the Colorado Advanced Manufacturing Association (CAMA), the AMMA was announced by Beth Smith, CEO of previous winner StickerGiant.

Winner: Focused on Machining, Louviers

“Holy cow! I’m shocked and honored,” said CEO Justin Quinn, crediting his team. “Congratulations to all of you guys. This is a big milestone for our shop in Louviers.”

To turn the corner on manufacturing, California leaders are first acknowledging the pain

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The Golden State’s most dependable manufacturing truth teller may be the trade group charged with its health and efficacy — the California Manufacturers and Technology Association, or CMTA.

CMTA released data earlier this month that points to more pain than pluses. They deserve credit for doing so.

Manufacturing is measured in multiple ways. Today, more manufacturing companies call California home than any state. But as reports cited by CMTA tell us, California now lags way behind America’s leading manufacturing outposts in private-sector investments and job growth across manufacturing’s varied sectors; at the same time, it tops the list in undesirable categories like energy costs, insurance premiums for workers comp, and corporate tax rates. See the correlation?

How far behind is debatable, but the trends are unmistakable. According to Site Selection magazine’s Conway Projects Database, states like Texas and Ohio are adding “corporate facility projects with significant impact, including headquarters, manufacturing plants, R&D operations, and logistics” at a rate that leaves California in the dust. In 2020, Texas added 781 private-sector corporate projects that exceeded $1 million, added 20 jobs, or involved 20,000 square feet of new floor area. California added 103, behind such manufacturing stalwarts Louisiana (116) and South Carolina (110). The per-capita ranking — projects per million residents — are even worse. (Arizona led the rest of the West with 108. Colorado (29) and Utah (21) lagged further.)

The trends aren’t a surprise to those in a position to fight back on behalf of California manufacturing. CMTA president Lance Hastings and other advocates like Jim Watson of the CMTC, California’s NIST-sponsored Manufacturing Extension Partner, helped craft a comprehensive road map for the sector in 2019. The California Forward Advanced Manufacturing recommendations outline a “statewide manufacturing ecosystem strategy” along four primary axes: strategy, workforce, infrastructure, and trade.

Its proscriptions are detailed and touch on many of the high points in today’s national narrative, like “taking action to upskill our workforce, rebuild our infrastructure, fight for free trade, and promote sustainability.” It also calls for the creation of a new manufacturing bureaucracy, a network of new departments, councils, institutes, and committees. The tactics seem well reasoned. But there’s so much. It can be a head-spinning roadmap.

I can envision company executives asking simply for lower business costs, targeted tariffs and value-added taxes that level the playing field for U.S. companies, more suppliers and better tools to find them, and marketing air cover to encourage consumers and OEMs to buy local, to support local manufacturers.

If California leaders don’t want to emulate Texas, perhaps China’s approach is worth watching. Miao Wei, a retiring minister of industry and trade, made news earlier this year by stating that the global manufacturing leader is in fact “30 years away from becoming a manufacturing ‘great power.'”

It’s a bit of an overstatement.

But his language reflects the importance of manufacturing in the world’s second-largest economy: “Basic capabilities are still weak, core technologies are in the hands of others, and the risk of ‘being hit in the throat’ has significantly increased,” he said, and concludes: “We must maintain our strategic resolve, stay clear-headed, and deeply understand the gaps and deficiencies.”

China leaves little doubt of its intentions to be the global manufacturing superpower. California — and other Western states that ranked poorly — will hopefully redouble efforts to deliver on the recommendations in the California Forward plan, to advance manufacturing.

A renewed sense of urgency would be welcome. So much is at stake.

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

A boycott of the Beijing Olympics would be preposterous. Ask the brands that manufacture there

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In American politics, China is the equal-opportunity villain. All sides have found reasons to pick a fight, including the media, where voices are drumming up support for a boycott of China’s 2022 Beijing Olympic Games.

But an Olympic boycott is the worst of all options to protest China’s behavior or effect lasting change.

For starters, history tells us they don’t work. What was gained from the Carter administration’s boycott of the 1980 Moscow Olympics? Certainly not a USSR withdrawal from Afghanistan. Wider economic embargoes are typically no better. What of the 60-plus year Cuban embargo? If the intention was to sustain the Castro regime for half a century, mission accomplished.

Yet even a symbolic boycott of the Beijing games would ignore our current codependency with China and make for an embarrassing spectacle. Last week’s galling Washington Post op-ed, “Companies must boycott the Beijing Olympics,” aptly demonstrates why.

The Post lectures long-running Olympic sponsors like Visa, Coca-Cola, and General Electric that “[t]heir endorsement of the Games is effectively an endorsement of China as a global leader, entitled to a worldwide celebration of its achievements and worth.”

What, then, of the myriad American brands whose products are made in China, brands that will festoon U.S. Olympians as they parade in opening ceremonies, compete in the Games, or socialize in Beijing? Are they to boycott the games as well? What message would this send to the Chinese factory workers who manufacture their gear? (Here’s the latest on how Ralph Lauren is trying to thread the needle with the “official” U.S. uniforms to be worn in opening and closing ceremonies for the Tokyo games. U.S. outdoor industry brands must be rolling their eyes.)

The degree to which U.S. companies rely on Chinese labor is staggering. Denver’s VF Corp. — parent company to stellar consumer brands like The North Face, Timberland, Vans, and many more — owns or operates over 400 factories in China alone. They’re in good company. U.S. firms operating offshore “effectively endorse” China as a global manufacturing leader every day.

The codependency runs deep. U.S. brands rely on Chinese employees to fulfill the brand promises they make to customers here and around the world. Kühl, Utah’s successful OI brand, proudly proclaims its products are “Born in the Mountains” — the Wasatch Mountains, one suspects. They’re also made in China.

But to single out Kühl or any of hundreds of U.S. brands, is no more appropriate than berating Visa or GE. When U.S. brands have more options to invest in domestic labor and factories, but don’t, The Washington Post will have front page news. Better than today when its columnists parrot the op-ed board to implore companies to ask, “[is] it really consistent with our values to sponsor the Genocide ­Olympics?” even as Chinese labor helps U.S. companies bring American “values” to life every day in the products they make.

An informed approach by U.S. policymakers would encourage American athletes to travel to China and win, as they work overtime to help U.S. companies reshore jobs and fulfill the brand promises they make every day.

No, an Olympic boycott will do nothing to deter China from subjugating its Uyghur population. To effect lasting change, to regain leverage, America must reestablish the domestic supply chains that enable its companies to manufacture more products on American soil. As we’ve written before, a reinvigorated U.S. manufacturing base is the one development certain to capture Beijing’s attention.

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

Handicapping the Colorado Manufacturing Awards: Here’s the list of finalists

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Finalists were announced last week in the 6th annual Colorado Manufacturing Awards. It’s our own March Madness, and the brackets are incredible.

More than 100 companies submitted nominations to the 2021 program, roughly 90 percent of all submissions. Nearly twice as many women were nominated for Colorado Manufacturing Woman of the Year than last year. Finalists earned their way here.

I participate in a selection committee that picks finalists, but I don’t judge or select CMA winners. I do have a front row seat to the proceedings. Here’s my “inside look” at the brackets.

Industrial Group

Industrial/Equipment Manufacturer of the Year

Twin Monkeys Beverage Systems | Aurora

StoneAge | Durango

Sundyne | Arvada

Aerospace Manufacturer of the Year

Redwire Space | Longmont/Littleton

MBK Machine | Longmont

Special Aerospace Services | Boulder/Arvada

Building/Construction Manufacturer of the Year

ROXBOX Containers | Denver

Colorado Timberframe | Lafayette

Encore Electric | Littleton

Bioscience Manufacturer of the Year

Birko Corporation | Henderson

Leiters | Englewood

Hirsh Precision | Boulder

Energy/Transportation Manufacturer of the Year

Keystone Tower Systems | Denver

Rubadue Wire Company | Loveland

Oribi Manufacturing | Commerce City

Industrial/Equipment Manufacturer of the Year may be the CMA’s toughest bracket. Twin Monkeys has fueled Colorado’s nationally renowned beer and beverage industries. StoneAge, in Durango, may be less known to Front Rangers, but read our profile and you’ll understand why they’re a powerhouse. Sundyne? Only one of the country’s top industrial pump and compressor manufacturers, from the maker mecca of Arvada. No joke. Your guess is as good as mine.

Bioscience Manufacturer of the Year presents an intriguing showdown between two stalwart OEMs and one of Colorado’s brilliant contract manufacturers. A celebration of a powerful Colorado industry supply chain.

Building/Construction and Energy/Transportation Manufacturers of the Year are fascinating brackets, a mix of successful companies, up-and-comers vs. established brands. Oribi is a rising player in composites. Watch out.

Aerospace Manufacturer of the Year is predictably strong. Redwire Space, newly formed this year to acquire space-related companies in an innovative new cluster model, including several established companies in Colorado, flashes serious bona fides with components recently landing on Mars. But Special Aerospace Services, including SAS Flight Factory, is a special company and CMA Alumni. Contract ace MBK Machine rounds out a great bracket

Consumer Group

Consumer Brand of the Year

Phunkshun Wear | Denver

FlyLow Gear | Denver

Moots | Steamboat Springs

Food Brand/Co-packer of the Year

Motherlode Co-Packing | Hudson

Root Shoot Malting/Olander Farms | Loveland

Keen One Foods | Boulder

Colorado Winery of the Year

Sauvage Spectrum | Palisade

Carlson Vineyards | Palisade

The Storm Cellar | Hotchkiss

Outstanding Craft Distiller

Storm King Distilling Co. | Montrose

Black Bear Distillery | Green Mountain Falls

Mystic Mountain Distillery | Castle Rock

Outstanding Craft Brewer

City Star Brewing | Berthoud

Denver Beer Co. | Denver

Holidaily Brewing Company | Golden

Cannabis Manufacturer of the Year

NuVue Pharma | Pueblo

Stratos | Pueblo

Medically Correct | Denver

Outdoor industry OEMs and brands have dominated the Consumer Brand of the Year category and this year is no different. Dan Abrams’ high-flying apparel brand, FlyLow Gear, squares off against two OEMs that manufacture in-state. Cycle manufacturer Moots is celebrating its 40th anniversary this year in Steamboat Springs. Substance and sizzle. Moots would be a #1 seed in the NCAA Tournament this year. FlyLow and Phunkshun Wear, a CMA winner in 2018 and three-time finalist, may need a buzzer beater.

Brands and co-packers don’t always meet in the finals in Food Brand/Co-Packer of the Year. In some years, finalists are one or the other. But it’s great when they do. At the epicenter of America’s natural and organic food ecosystem, each shapes the sector in profound ways. Motherlode and Keen One Foods are worthy representatives. Throw in malt maven Root Shoot Malting, and this bracket is tough to call.

Outstanding Craft Distiller finalists are on their way up. No surprise — the story of this young industry, with young players, is about the future, along with the whiskey aging in its barrels. Montrose’s Storm King Distilling Co. was a finalist last year. It may be enough to call them a favorite.

An annual CMA highlight is Outstanding Craft Brewer. The winners list is a who’s who roster, and the group competition has settled into an industry-defining exercise: Finalists are often a mix of established early-mover, middle-market success story, and industry innovator. No different this year. Three great companies, as much as brands. Berthoud’s City Star flat-out makes good beer. Denver Beer is an institution. Holidaily, an incredible innovator. Buckle up.

If the western slope means wine, then Pueblo increasingly means cannabis, and its Cannabis Manufacturer of the Year finalists may be starting a trend in the CMAs. But if Medically Correct is the geo outlier of cannabis finalists, from Denver, it’s also the gorilla of this group. Win or not, NuVue Pharma may well lead cannabis into a new science-based paradigm, while city-mate Stratos continues to impress. You can trust Colorado brands.

The Storm Cellar barely missed out on the finals in the inaugural Colorado Winery of the Year award last year, then went on to win gold at the 2020 American Fine Wine Competition and numerous other medals and accolades. (Take that, CMAs.) Innovation is now a calling card of Colorado wine, coursing through established wineries like Carlson Vineyards and Palisade neighbor Sauvage Spectrum. Stubbornly slow to change, the Colorado wine ecosystem is suddenly awake — and on fire. Will a CMA shift the balance of power to Hotchkiss?

Achievement

Colorado Manufacturing Woman of the Year

Amy Olson | Ready Foods | Denver

Alexandra Gold | Solid Power | Louisville

Heidi Hostetter | H2 Manufacturing Solutions | Longmont

Business Innovation | COVID-19 Response

OraLabs | Parker

LightDeck Diagnostics | Boulder

Titan Robotics | Colorado Springs

Advanced Manufacturing & Machining Award

Titan Robotics | Colorado Springs

Focused On Machining | Sedalia

Linear Manufacturing | Colorado Springs

Judging by the number of nominations, the Women in Manufacturing (WiM) Colorado Chapter is building a high-power following. The women who emerged from WiM board deliberations are leading in different industries — and different ways. Heidi Hostetter has been a finalist all three years of the award and works to advance manufacturing through a variety of initiatives. Alexandra Gold and Amy Olson lead in successful, innovative organizations. I don’t envy WiM’s choice after an impossible decision to narrow the category down to three finalists, but the celebration is off-the-charts worth it.

The Advanced Manufacturing & Machining award — CAMA AMMA as we call it, given the trade group‘s proctoring of nominations — measures continuous improvement through organizational investments. The selection committee was so impressed with the quality of nominees that it considered several of the companies for separate industry awards. A win-win. We’re anxious to report on the outcome.

Manufacturing’s stature has risen through the pandemic and for good reason: companies pivoted to provide key materials lacking in the U.S. supply chain. (Have we heard that before?) OraLabs and Titan Robotics contributed PPE and other material help. LightDeck Diagnostics (formerly MBio) crashed the national scene with a COVID-19 Total Antibody Test that detects antibodies to the SARS-CoV-2 virus to determine prior infection. Crazy innovative things are happening in Boulder County in manufacturing. See above.

Can anyone say bracket challenge?

We’ll be featuring all the finalists the next six weeks in the run-up to the 2021 CMA Winners Reveal and Finale, April 29. REGISTER HERE.

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