July 7, 2015

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Article

Manufacturing Roundtable

July 7, 2015


 

 

 

  • Todd Bingham, Utah Manufacturer's Association
  • Chad Parker, Manufacturing Extension Partnership
  • Clair Rood, CBIZ MHM, LLC
  • Clint Morris, Lifetime Products, Inc.
  • Curtis Nielsen, Ogden-Weber Applied Technology College
  • Eric Pope, U.S. Synthetics
  • Grant Foster, Holland and Hart
  • Harvey Scott, GOED
  • Josh Brown, Kennecott Utah Copper
  • Mark Jenkins, Petersen, Inc.
  • Mark Suchan, Malt-O-Meal Company
  • Matt Holton, Utah Manufacturers Association
  • Mike Bouwhuis, Davis Applied Technology College
  • Paul Archibald, Orbit Irrigation
  • Susan Johnson, Futura Industries
  • Wim de Jager, Black Diamond

Besides having the largest payroll in the state, Utah’s manufacturing industry is also one of the state’s strongest economic drivers. Trends of reshoring and innovation are at the forefront of this industry, and while it continues to move full steam ahead, challenges such as a skilled worker shortage and competition with international manufacturers continue to test the industry. Here, area experts discuss how they are keeping up.

We’d like to give a special thank you to Todd Bingham, president of the Utah Manufacturers Association, for moderating the discussion.    

Not Pictured: Chad Parker, Manufacturing Extension Partnership

What are the challenges facing manufacturing in Utah and the nation?

ARCHIBALD: One of the things we face specifically with consumer products is the need to innovate new products. You have to have a pipeline full of ideas because of the length of time it takes to bring a new product to market with all of the design, prototyping, tooling, testing and design validation. In today’s world, everything is about smart products. That’s kind of a paradigm shift for a lot of consumer manufacturers—developing these high-tech products that didn’t used to be high-tech products. There’s an appetite for newer, better and different products, and it’s almost at breakneck speed that you’ve got to develop and roll out these products.

POPE: Our people are at the heart of our ability to beat out our competition.  It’s not necessarily about how much money we spend, even though that is an input. It’s not necessarily about how good all of our education centers are. At the end of the day, every company has a responsibility to figure out how they develop their people to win. We keep saying we need skilled people, but where are they coming from? Whose job is it to create them? We have innovation problems and we do have to go faster. But we feel our only option for success is our ability to create and develop people. That’s what we focus on every single day. We want the education centers to be part of that and to help us out, but we are not expecting you to do it. We ultimately know that we win and die by our people.

That’s our biggest challenge—but it’s also our biggest strength. Until business leaders can embrace this idea that it’s your job to create people, you are going to be complaining about it forever. We were saying the same thing 10 years ago.

JOHNSON: The trade legislation in Congress right now is quite concerning. There are 26 U.S. industries that have put a tremendous amount of effort and money into protecting their market with tariffs.

The Chinese establish an industry as an industry of interest—which means they are going to steamroll it out of existence. You need to look no further than Magcorp, which is the only magnesium business left in the U.S. because the Chinese established magnesium as an industry of interest and then they started dumping their products in the U.S. below the cost of raw material. They have massive government subsidizing. By the time the magnesium industry realized what was happening, it was too late. Magcorp survived because the defense contracts have to buy from a domestic supplier.

The same thing was happening to aluminum extrusions. Our industry spent $3 million and the International Trade Commission got 400 percent tariffs. Our own Department of Commerce has administrative reviews where the wrong parties, in this case the Chinese, can come back and just chip away at the tariffs in place. It’s astounding the amount of innovation that goes into circumvention and breaking the rules.

There’s a trade bill in Congress right now that’s extremely important. And you know who is fighting it? The National Retailers Association. They have potentially gotten the U.S. Chamber of Commerce to support them. Retailers want to source cheap things so they can sell them to their customers. I totally understand that. But if that goes away, they are all going to source materials at the same cost.

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