Archive for May, 2018

CPA’s Fair Trade Message Finds Favor in Capitol Hill Meetings

Thursday, May 31st, 2018

The week of March 12th, I was one of over 60 members of the Coalition for a Prosperous America (CPA) who attended our annual conference/fly-in.  In a two-day blitz, members visited more than 120 House and Senate offices in Washington, D. C. to sound the alarm: “America’s massive, growing trade deficit is killing jobs, harming communities, and stifling economic growth.”

Our conference began Monday afternoon with remarks by CPA Chairman Dan DiMicco touting Present Trump’s announcement of imposing Section 232 tariffs on steel and aluminum as a long-overdue measure to safeguard our domestic steel and aluminum mills.  He emphasized that CPA also supports all allowable trade enforcement remedies, such as the Section 201 Tariffs on imported solar panels and clothes washers and the Section 301 Investigation into Chinese intellectual property theft.

CEO Michel Stumo highlighted the new flyers covering issues that we were to discuss with Congressional Representatives and their staff.  Research Director Jeff Ferry introduced the new Job Quality Index he has created, which will differentiate high-paying jobs from low-paying jobs in the monthly job data.

We urged Representatives to support legislation that would eliminate the nation’s trade deficit, address an overvalued dollar, provide stronger trade enforcement, and tackle troubling trade issues with China.

In our meetings, we provided Representatives and their staffs with legislative solutions aimed at eliminating America’s trade deficit, which grew to $566 billion last year. A fact sheet produced by CPA highlighted that no other country has run 42 years of consecutive trade deficits, which has been an average 2.99% drag on our Gross Domestic Product. The flyer offered key reasons why “free” and “fair” trade can result in balanced trade—instead of the job loss that has plagued America’s productive sectors for the past 15 years.

Another fact sheet, showed that ten countries account for 97% of our trade deficit, namely China, Mexico, Japan, Germany, Ireland, Vietnam, Italy, India, South Korea, and Malaysia. Our deficit with China alone jumped from a $337 billion deficit or 38% in 2016 to a $375 billion deficit or 47% in 2017.

We discussed how the he Tax Cuts for Jobs Act narrowed, but did not eliminate, the tax benefit for moving operations overseas, and presented information on how the tax system could be improved with Sales Factor Apportionment, based, which is “a destination of sales system used by many states that would tax corporate income in proportion to a companies’ sales in the U.S. regardless of either domicile or location of operations.”  For example, a multinational corporation that still does 40% of its business in the U.S. would be taxed on the profits of that 40% of its worldwide sales.

The North American Free Trade Agreement (NAFTA) was also another topic of discussion during our visits. CPA supports “mending it or ending it” as CPA has long argued that NAFTA has hurt U.S. manufacturing, cost jobs, and incentivized investment in Mexico rather than the U.S. We explained the provisions that must be included in a renegotiated NAFTA to help America’s manufacturers, such as reinstating country of original labeling for beef and pork, tightening country of origin rules to require higher North American content, requiring periodic reviews, and a mechanism for countries to withdraw, if necessary.

During our Hill meetings, we emphasized the importance to our national security of a vibrant domestic steel and aluminum industry. I mentioned that we outproduced Germany and Japan in World War II, but we would not be able to do so in future wars if we let our domestic steel and aluminum industries be further decimated. We expressed our support for President Trump’s tariffs on steel and aluminum import, especially since CPA has many members in the steel industry.

In addition, we discussed the problem of the overvalued U. S. dollar. And presented the flyer that showed as of May 2017, the U. S. dollar was overvalued by 25.5%, whereas the currencies of Japan and Germany were undervalued by nearly as much, with South Korea not far behind at about 15% of undervaluation.  I told them that CPA has a new Advisory Board member, Dr. John R. Hansen, who is a 30-year veteran of the World Bank. He has proposed a solution to address this problem that “pushes American wages down, increases the trade deficit, disrupts capital markets, and hooks consumers on debt.” He proposed that “Congress should provide the Federal Reserve the responsibility to maintain the dollar at a current account balancing equilibrium price. New legislation should provide the Fed with a new tool to moderate the dollar exchange rate called a market access charge (MAC).” He projects that the MAC would balance trade in five years and that balance would be maintained in the future.

In addition to our congressional visits, CPA hosted a bipartisan group of Representatives to meet with our members, including Rep. Tom Reed (R-NY-23), Rep. Dan Lipinski (D-IL-23), Rep. Mo Brooks (R-AL-05), and Rep. Robert Pittinger (R-NC-09). Last fall, Representatives Brooks and Lipinski introduced House Congressional Resolution 37 for Congress to set a national goal to eliminate the trade deficit.  It is only one sentence long: “Expressing the sense of Congress that Congress and the President should prioritize the reduction and elimination, over a reasonable period of time, of the overall trade deficit of the United States.”

Rep. Pittinger is co-sponsor of HR 4311, the Foreign Investment Risk Review Modernization Act of 2017, which would expand and update the review by the Committee on Foreign Investment in the U.S. (CFIUS) to meet new national security risks. As we distributed this flyer to Congressional Members, we expressed our support for the order President Trump signed to prohibit the acquisition of Qualcomm by Broadcom.  When I met with Congressman Duncan Hunter, he said he had sent a letter to President Trump urging him to stop the takeover of Qualcomm by Broadcom.

As the publisher of my newest book, Rebuild Manufacturing – the Key to American Prosperity, CPA provided books for me to present at my 15 appointments with Congressional Members and/or staff, and I also had the pleasure of presenting a copy of my book to Rep. Mo Brooks and Rep. Robert Pittinger.

On March 16, CPA released a press release about the success of the annual conference fly-in. highlighting the following:

“The 2018 CPA fly-in was our best yet,” said Dan DiMicco, CPA Chairman. “The presentations and panels were very well received and by far the most informative yet, with great speakers and panelists. Without a doubt we made a strong impact on those we visited on the Hill. Our congressional speakers clearly showed us that our messaging is having an impact.”

Michael Stumo, CEO of the CPA said, “We came to Capitol Hill with a united message from our members that Main Street America urgently needs action on trade. We were encouraged to find that our elected officials are becoming more receptive to calls for greater trade enforcement. Our next step is to remind them that voters are watching, and that the time for action is now.”

CPA chair Dan DiMicco said, “In 2016, voters spoke very clearly at the ballot box. They are frustrated and tired with the business-as-usual approach in Washington. We came to Capitol Hill this week to remind our elected officials that the American people are waiting for action, and that reducing our mammoth trade deficit must be a top priority.”

“The Coalition for a Prosperous America trade conference was very useful and successful in educating our members and legislators about the dangers of continuing our country’s obsession with free trade,” said Roger Simmermaker, author of How to Buy American and a CPA member. “Several times, it was evident that many members of Congress and their staff experienced what I would call “light bulb moments” as we laid out our ideas and strategies for a better and fairer trade policy that will benefit our national economy.”

“When real workers, manufacturers, and agriculturalists converge on Washington, theory is tested against reality, and good things begin happening in America,” said Bill Bullard, CEO of R-CALF and a CPA board member. “There is no question that CPA had a positive impact on U.S. trade policy this week.”

The steel and aluminum tariff discussions proved particularly wide-ranging. And as Greg Owens, CEO of Sherill Manufacturing and a CPA member, noted, “Trade and our decades-long deficits are a critical and complex issue. While I applaud the recent move to levy tariffs on steel and aluminum, the comprehensive answer must go beyond that. The overvalued dollar and tax policies are major contributors to the problem that must be addressed. CPA has detailed concrete solutions to these and other issues that I fully support. It was a privilege and an honor to help CPA introduce and develop these solutions on Capitol Hill this week.”

I am proud to be one of the 4.1 million members in the manufacturing, labor, and agricultural sectors who are “united in their view that a continuing trade deficit hampers jobs and productivity nationwide. CPA will continue to urge action on America’s troubling trade deficit, and we look forward to expanding its relationship with Members of Congress who have pledged to fight for America’s manufacturers, farmers, and their workers.”

Chairman Dan DiMicco and CEO Michael Stumo will be in southern California April 18 – 20th speaking to members of Metal Service Center and NTMA, as well as speaking at the San Marcos Manufacturing Summit to be held at the San Marcos Community Center on Friday, April 20th.  As Chair of CPA’s California chapter, I invite you to register to attend.

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Posted in Currency Misalignment/Munipulation, Economy, Legislation, Manufacturing, National security, Taxes/Regulations, Trade Policy | No Comments »

Steel and Aluminum Tariffs Will Help Rebuild American Manufacturing

Tuesday, May 22nd, 2018

There has been quite a furor in financial and political circles since President Trump announced the that he would impose tariffs on steel and aluminum imports from all countries.  There has been an outcry that it would raise consumer prices, end “free trade”, and start a trade war.  The fact is that we have been in a trade war with China for nearly 20 years — from when China was granted Most Favored Nation status (PNTR) in the year 2000 under President Bill Clinton. We have been losing this trade war, and it’s about time that we stood up and fought back.

China has been cheating on what they agreed to do to attain their PNTR status within the World Trade Organization.  They have dumped products in the U. S. at below market prices to destroy American competition. The Chinese government has subsidized their steel, aluminum, and other industries. They have manipulated their currency to make it undervalued compared to the U. S. dollar.  They have stolen the Intellectual Property of American companies.  They have forced American companies to transfer technology to Chinese companies in order to establish manufacturing facilities in China.  This hasn’t been free trade or fair trade.

The U. S. trade deficit with China has increased from a small deficit of $6 million in 1985 to $375.2 billion in 2017.  China represented 40% of our total trade deficit in goods of $810 billion in 2017, and our trade deficit has already increased at a record pace for January 2018.

As I pointed out in my December 7, 2017 IndustryWeek column, “How Trade Policies Led to the Decline of American Manufacturing, “As a result of the escalated trade deficits from 2001 to 2010, the U.S. lost 5.8 million manufacturing jobs and 57,000 manufacturing firms closed… our domestic supply chain has weakened…We even lost whole industries…” This number of jobs lost represents about 30% of the manufacturing workforce we once had.  Actually, “the number of jobs in manufacturing has declined by 7,231,000–or 37 percent–since employment in manufacturing peaked in the United States in 1979, according to data published by the Bureau of Labor Statistics.

In the past three days, I’ve listened to conservative radio talk show hosts lambast President Trump’s National Trade Director, Peter Navarro.  I’m personally acquainted with him because of residing in San Diego where he resided for many years. I even remember when he ran for mayor of San Diego in 1992.  What these talk show hosts and their guests fail to mention is that he was a professor of Economics at the University of California, San Diego for many years, and was professor of Economics at the University of California, Irvine prior to becoming part of the Trump administration.  He knows what he is talking about.

Navarro was one of the first authors to point out the threat that China is to the U.S. I’ve read two of his three books:  The Coming China Wars, published in 2008, which I read when I was writing my own book, Can American Manufacturing be Saved?  Why we should and how we can.” Then I read the second book that he co-authored with Greg Autry, Death by China, in 2011. Greg Autry has spoken at several of the manufacturing summits I participated in producing in southern California on behalf of the Coalition for a Prosperous America.  Greg Autry and I also served together on the board of directors for the American Jobs Alliance from 2011 – 2016.

Navarro and Autry outline the eight ways China cheats in trade in cleverly worded phrases:

  1. The Export Subsidies’ Dagger to the Heart.
  2. The New “Great Game”: Chinese Currency Manipulation
  3. They Think It’s Not Stealing if They Don’t Get Caught.
  4. Trashing China’s Environment for a Few Pieces of Silver
  5. Maiming and Killing Chinese Laborers for No Fun but Lots of Profits
  6. The Neutron Bomb of Export Restrictions
  7. Predatory Pricing, Dumping and the Dragon’s Rare Earth Cartel
  8. Goodness Gracious, Great Walls of Protectionism

If you haven’t read either of these books, I can highly recommend them, and they are still available on Amazon.

The tariffs on steel and aluminum are long overdue and constitute only a single step in balancing our trade deficit.  I’m delighted that President Trump is keeping his campaign promise of imposing tariffs on steel and aluminum.  I was happy when he withdrew the U. S. from the Trans Pacific Partnership Agreement as I had written more than a dozen articles about the dangers of that agreement to the U. S.  It would have been the “nail” in the coffin of American manufacturing.

There are many more policies we need to put in place to eliminate the trade deficit and restore manufacturing jobs to create prosperity.  I have made recommendations in the last chapter of my new book, Rebuild Manufacturing – the Key to American Prosperity, based on the research I have done for the articles I have written in the past six years as a columnist for IndustryWeek, along with many recommendations that have been made by the board of directors of the Coalition for a Prosperous America, of which I have been a member since 2011. Check out these issue papers on their website.

We can win this trade war if we have the same kind of courage and insight we had when we won World War II and the Cold War with the Soviet Union with the help of our allies. Remember, China has a written plan to become the Super Power of the 21st Century. If we lose this war, we may lose our country.

 

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Manufacturing Music – Northeast Indiana Brings Harmony to the Rust Belt

Tuesday, May 15th, 2018

To learn more about why there is such a concentration of musical instrument manufacturers in Northeast Indiana, I interviewed John Stoner, president and CEO of Conn-Selmer, Inc., a subsidiary of Steinway Musical Instruments, Inc.  I learned that the history of making musical instruments really started with this one company. Today, Conn-Selmer has a portfolio of musical brands that has made it the leading manufacturer and distributor of band and orchestra musical instruments and accessories for student, amateur and professional use.

I asked Stoner about the origins of the Selmer Company, and learned that the main Selmer Company is still located in Paris, France. The history of the U.S. company dates back to the early 1900s. It has production facilities in Elkhart, Ind., Eastlake, Ohio and Monroe, N.C.

Next, I asked where the Conn part of the name of the company came from, and Stoner said, “C. G. Conn started a company in Troy, Mich., and then he moved to Elkhart, Ind. The company manufactured brasswinds, saxophones and electric organs in the 1950s.”

When the Selmer company acquired CG Conn, the brands Armstrong and King were part of the acquisition. Later, they acquired the LeBlanc Corporation, which brought another family of brand names such as Leblanc, Vito, Holton, Martin, and the distribution rights to Yanagisawa – making Conn-Selmer the largest U.S. full-line manufacturer of band and orchestra instruments.

“We have a strong portfolio of instruments made here in Elkhart. Seventy percent of our products are manufactured here in the United States and sold globally. The other 30 percent are manufactured in France, Japan and other parts of the Asia Pacific and sold in various parts of the world.” Stoner said.

When I asked if the company had implemented Lean principles and tools, he said, “I looked at Lean when working in a previous industry, and I brought the concepts over to Conn-Selmer. We applied Lean principles so that we could be in a position to be more competitive when there was an upturn after the 2009 recession.”

He added, “Northeast Indiana is a hot bed for musical instruments. At one time there were about a hundred manufacturers of instruments. Over the years, people would leave a company and start their own company to make a musical instrument.  Elkhart became the musical instrument center of the country.”

In my interview with Tony Starkey, president of Fox Products, I learned about the interesting history of another musical instrument company.

Starkey said, “I was an owner of a machine shop before I came to Fox Products. Fox Products is located in South Whitley, a small community of less than 2,000 people, about 10 miles from Fort Wayne. I used to mow the lawn for the company when I was 13. The company was founded by Hugo Fox in 1949 after he retired from being the Principal Bassoonist for the Chicago Symphony and returned to his hometown.  He had the goal of making the first world-class bassoon in the U.S.  He started the business in a modified chicken coup on the Fox family farm, and it took him two years to successfully make a bassoon.”

Later, Hugo’s son, Alan, left his career as a chemical engineer and ran the company for over 50 years, applying engineering principles to making instruments. Fox owned the student market because Alan made the instruments much easier to play.

The first Fox oboes came out in 1974. Later that year, a fire destroyed the woodshop and reed-making equipment, so Alan used other sites in South Whitley to keep the company alive while a new plant was being built. The company expanded and started making English Horns in 1999.

Since Starkey became owner in 2012, the company has grown 30 percent. It now has 130 employees.

“When I took over the company, we didn’t have any prints for the instruments. We had 3D models and patterns and tools in Germany. We had to start over and reverse engineer the instruments to create the drawings. Now, we are able to work in Solidworks and have CNC machines to make the metal parts. We even set up our own silver plating line,” Starkey said. “Indiana is a great business state and a great place to have a business. We did a turnkey operation for our silver line without a lot of regulations and delays.”

I asked if they have applied Lean principles and tools to the company. Starkey said, “I hired people who have a Lean background, so we are using technology and implementing Lean wherever we can, taking the human factor into consideration. We are hoping to get to be where we want to be as a Lean company in about two to three years.”

Last of all, I interviewed Bernie Stone, founder and president of Stone Custom Drum Company. Stone said, “I played drums in a marching band in high school. Then, I worked in a musical instrument store and started doing repair of drums and projects for the percussionists of the symphony.”

He explained, “In 2002, I had the opportunity to purchase the drum shell manufacturing equipment, tooling and assembly line from the Slingerland Drum Company, one of the legendary vintage American drum brands. It gave me the opportunity to own the shell-shaping molds and tools, so I invested my money – and my life – into bringing them up to 21st century standards and crafting Super Resonating® shells that surround punchy tom strokes with full, fat tone, make bass drums kick with big and round low-end responses, and snares cut with a crisp articulate ‘snap’ that sings with resonance. I bought some other equipment I needed on eBay and some from the Gretsch Company, another drum company.  I learned how to operate the equipment and reverse engineered the drums.”

He added, “I started my own company as a LLC in 2011. I am now looking to expand into a S corporation to get investors to grow the company. I think the skill set we have as a company is unique as very few people know how to make a great drum set. We manufacture our own Stainless Steel and brass tune lock fixtures to keep the drum in tune.”

I asked what kind of drums he makes – drums for rock and roll bands as well as for the symphony. Fort Wayne has a great philharmonic, which is a stepping stone to bigger and more prestigious symphonies. For example, Pedro Fernandez started at Fort Wayne and then went on to San Diego and is now at the Houston Symphony.

“The reason I am in Fort Wayne to make drums is that all the suppliers I need are within 50 to 100 miles for the wood, metals, tool and die shops, 3D printing, etc.,” Stone said.

From these stories, we can see that the musical instrument industry had developed gradually over the last hundred years or so from one company spinning off from another company or one company acquiring another or buying the rights to a brand name.

The craftmanship legacy of the Northeast Indiana region’s workers has played a big role in the success of many companies, along with a strong supply chain of subcontractors and materials. It is likely that the region will keep fostering the development and growth of new musical instrument companies to support the strong creative musical arts community of Northeast Indiana.

 

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Northeast Indiana Fosters Manufacturing for the Creative Music Community

Tuesday, May 15th, 2018

It’s interesting to find out how certain regions have become centers for specific industries. I recently had the opportunity to interview economic development and business leaders in northeast Indiana to learn about the region’s advantages for manufacturers and what types of industries have flourished in the region. One of these unique industries is musical instrument manufacturing.

During my interview with John Sampson, President and CEO of the Northeast Indiana Regional Partnership, I learned that the region is highly concentrated in manufacturing.

Sampson said, “We cover 11 counties and collaborate with other counties in the south and east.  The business climate is very favorable for the Midwest –  we rank #2 in taxes and are in the top ten for other factors.  We have a very supportive and responsive part-time state legislature to the interests of employers.  The corporate tax rate is down to 6% and is headed to 4.9% in 2021 in a tiered decline.

On our website, we list the target industries [see below]. Back in 2006, we partnered with the regional workforce investment board, Northeast Indiana Works, for a drive to improve skills training. We make sure that all the training is targeted to what industry needs and made sure that students get transportable certifications. We got a $20 million grant in 2009 for a Talent Initiative to align the region’s talent efforts to the direct needs of defense, aerospace and advanced manufacturing industries.  Ivy Tech is the principle partner in providing training, designing skills training for employers.  They have a center for advanced manufacturing and have career technical studies and apprenticeships for high school students.

We have united with other organizations and are trying to better connect students with the trades. We have a statewide organization, called Conexus Indiana, to organize the logistics of the programs devoted to skills training such as CNC machining, welding, etc.  Conexus Indiana brings together a diverse advanced manufacturing and logistics community to build tomorrow’s skilled talent through industry-endorsed classroom curriculum, experiential learning and earning opportunities, and industry partnerships.”

From their website, I learned that there are three major universities:  Purdue U. Fort Wayne (IPFW), Ivy Tech, Northeast, and Indiana Tech. The Indiana Manufacturing Extension Partnership (Indiana MEP) is in Indianapolis, but Indiana Purdue University is satellite MEP site, located about 100 miles from Fort Wayne.

Ivy Tech is the largest public postsecondary institution in Indiana — and the largest singly-accredited statewide community college system in the entire country.  The system has 45 campus and site locations in more than 75 communities, and serve nearly 160,000 students a year.

I asked if the region has any Makerspaces and he replied, “Yes, we currently have two Maker Lab locations as part of the Allen County Public Library: “The Main Library and Georgetown.  Both labs have 3D printers, 3D scanners, electronics workbenches and other specialized equipment.

We also have a new Makerspace in development at the former General Electric campus where GE made electric motors.  The campus and is now being redeveloped as a mixed-use campus, called Electric Works. There is an opportunity for another Makerspace to be incorporated into the 1.2 million sq. ft. campus.” 

From supplemental information I was emailed after the interview, I learned that it’s 47% more affordable to buy a house in Fort Wayne ($116,000) compared to the national average ($222,000), and property tax is capped at 1%.

The region has a high rate of employment in the manufacturing sector:  28.8% compared to the national figure of 8.9%. Also, Indiana was the first right-to-work state in the Great Lakes region of the U. S.

The supplemental information provided more information on training, saying that the Northeast Indiana Regional Partnership is partnering with regional workforce development organizations like Northeast Indiana Works and WorkOne Northeast career centers to invest in the region’s talent. Northeast Indiana Works oversees 11 WorkOne Northeast career centers in northeast Indiana and provides Skill-Link training at little cost to employers. “Skill-Link is a program that offers certification-based training tailored to employers’ specific skill needs. Employers select high-potential employees for the training, which promotes talent retention, career-pathway development, and, in many cases, leads to promotions and pay increases. WorkOne Northeast assists employers in filling positions left open by the promotion of employees who complete Skill-Link training.”

The Northeast Indiana Regional Profile states that Northeast Indiana “serves as a strategic distribution hub for businesses targeting the Great Lakes and Midwest. The region is located only two hours from Indianapolis and three hours from Chicago, Detroit, Cincinnati, and Columbus, Ohio. The region is served by two major interstate highways, I-69 (North/South) and I-80/90 (East/West), also known as the Indiana Toll Road. Fort Wayne International Airport is home to four major carriers: Allegiant Air, American, Delta and United. There are also two Class I freight railroads, CSX and Norfolk Southern, servicing the region.

It states, “The region currently ranks eighth in best tax environments in the United States and the best in the Midwest based on the 2016 State Tax Environment Index by the Tax Foundation. This business-friendly tax climate creates a thriving community for innovative businesses and growth…Due to legislation in 2011, Indiana’s corporate income tax rate fell by 2 percent. This was the continuation of a scheduled multiyear reduction, which will ultimately see the corporate income tax rate reduced to 4.9 percent by 2022, which would make Indiana’s the second lowest corporate tax rate of any state levying the tax.” The current corporate income tax rate is only 6%, and the personal income tax rate is 3.23%.

The profile also states, “The region has an abundance of water and natural gas, as well as a reliable supply of electricity. “The region’s largest municipal water system, Fort Wayne City Utilities, has an excess water capacity of more than 35 million gallons per day. Our excess water supply is a competitive advantage that fuels our growing target industries, such as food processing and agriculture.”

According to a 2016 Target Industry report from Community Research Institute, research identifies the region’s target industries in Northeast Indiana as:

  • Advanced Materials
  • Vehicles
  • Design and Craftmanship
  • Medical Device & Technology
  • Food & Beverage
  • Logistics & E-commerce

 

The top industrial employers are:

 

COMPANY

 

 PRODUCT

 

 EMPLOYMENT

 
Zimmer Biomet

 

 Orthopedic goods

 

 4,370

 
General Motors

 

 Truck manufacturing

 

 3,900

 
Steel Dynamics

 

 scrap metal processing & steel manufacturing

 
LSC Communications (formerly R.R. Donnelly)

 

 

 Book & other specialized printing

 

 1,935

 
BFGoodrich

 

 Rubber tire manufacturing

 

 1,580

 
TI Automotive

 

 Motor vehicle parts manufacturing

 

 

 1,388

 
Frontier Communications

 

 Telecommunications carrier

 

 1,355

 

 

To gain a better perspective about how the relationship of the creative community to musical manufacturing, I interviewed Dan Ross, VP of Community Development for Arts United of Greater Fort Wayne, Inc.

Mr. Ross said, “Arts United is a nonprofit organization that was founded in 1955. We function as both a united art fund and local arts agency, much like a cultural affairs office for the arts community. Arts United provides arts advocacy and promotion, high capacity for creativity through grant support, the arts campus, and creative community development to more than 70 arts and culture organizations in Northeast Indiana. We own the three different facilities – the Auer Center for Arts and Culture, the Arts United Center, and the Hall Community Center for the Arts – and maintain and service the buildings. Arts United cross-promotes events held in our facilities and other arts and culture events available to the community. In addition, resident organizations housed in our facilities receive subsidized rates at about one-fourth of the typical cost for renting office space in Downtown Fort Wayne.

We provide a variety of back office services for 19 arts and culture organizations, including a health plan that provides affordable health care payroll services, and a shared box office.

Arts United works with economic development organizations to utilize the assets of the arts community, because a creative arts community is beneficial for employers to attract talent from other parts of the country. Arts and culture are an amenity and improve the quality of life in a place. Because of the vibrancy of our community, Fort Wayne is drawing more non-residents to the area.”

He added, “In 2016, we had support from the Indiana Arts Commission to commission the Community Research Institute at Indiana University-Purdue University Fort Wayne to conduct a review of the Creative Economy for the state of Indiana.

When I inquired as to how the creative community contributed to the concentration of musical instrument production in the region, he explained that Fort Wayne has one of the United States’ largest dealers in musical equipment for musicians, recording studios, schools, churches, concert sound companies — Sweetwater Sound. Ross, said, “The company was founded in 1979 by Chuck Surack in the back of his VW bus, and since then has outgrown several buildings and constantly expanded its staff to become the leading retailer that it is today.”

From their website, I learned that in 1995, “Sweetwater established an informational website: www.sweetwater.com, and by 1999, most of their inventory was available for purchase online.” The company grew to the point that in 2006, they had a new 44-acre corporate campus designed and built. “The new headquarters, consisting of corporate offices, a distribution center with warehouse, and a retail store, also includes the Sweetwater Productions recording studio complex and 250-seat LARES-equipped performance theater.”

Ross said, “Sweetwater now has over 1,000 employees. Sweetwater attracts employees from all over the country by providing high paying jobs and opportunities for extensive training.  Sweetwater employees are active leaders and performers in the arts community. Employees both gain valuable experience with the variety of arts organizations in the community, and contribute to their success.”

Sweetwater has attracted instrument manufacturers to the area because they are the number one online distributor of musical instruments nationally.  Also, Purdue University is establishing its first School of Music on its Fort Wayne Campus, including a music and arts technology degree program starting next fall housed on the Sweetwater campus.

Ross added, “The history of making musical instruments goes back over a hundred years in the region.  The majority of orchestra and band instruments are produced in northern Indiana.  One local company, Fox Products manufactures 80% of the world’s bassoons and oboes.  Hugo Fox played for the Chicago Symphony, and he moved back to his hometown of Fort Wayne and started to make his own bassoons and oboes.”  These jobs are highly skilled and highly paid because of the craftsmanship required to make many of the complex musical instruments. New technology and scientific research have improved the manufacturing processes.

As we ended the interview, Dan said that he was a musician himself, playing the trumpet.  He plays for the Fort Wayne Philharmonic, and his career has been a combination of arts administration, teaching and playing music. He studied music in college, so it feels good to combine his creativity with community development goals to enhance Fort Wayne’s history of the creative arts and craftmanship.

We can see that northeast Indiana offers a good business climate for manufacturing compared to other states in the Midwest. In my next article, we will learn more about how the region’s focus on design and craftmanship led the development of the musical instrument industry from interviews with three of the companies making musical instruments.

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