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Why Software Should be Made in USA

Tuesday, September 1st, 2020

Our modern world runs on computers and the software that controls them.  Software makes our computers usable for such activities as word processing, accounting, engineering design, production planning, Enterprise Resource Planning (ERP), communication, CGI, 3D printing, teleconferencing, and videoconferencing, not to mention the thousands of Apps for iPhones and Android phones. Software controls many functions of automobiles, trains, boats, ships, and airplanes. If software fails, it can mean the loss of life.  This is why is just as important for software to be Made in USA as it is for manufactured goods.  It is also important for software to be developed in the USA so we can make sure that there is no embedded malware, spyware, or backdoors.

My own manufacturers rep sales agency has been computerized since 1988, and I couldn’t function without my systems. I have also been participating in teleconferencing since 2011 for monthly meetings of  the Coalition for a Prosperous America and giving webinars since 2013 after publishing my second edition of Can American Manufacturig be Saved? Why we should and how we can in 2012.  I have used a variety of programs for videoconferencing, such as Cisco’s Webex, www.GotoWebinar.com, and www.vimeo.com.  Earlier this year I gave a webinar using Zoom. 

After the COVID-19 pandemic hit and shutdowns on nonessential businesses went into effect, many of my customers and prospects started working from home. Many of my customers are in the defense and military supply chain, and my contacts are purchasing agents and engineers. My contacts began to tell me that they were participating in staff meetings using Zoom. The meetings were most likely discussing current contracts and new products in development, but may have included proprietary or classified material.

As the months went by, it became more and more common to hear about Zoom meetings.  I began to wonder how Zoom had taken over the marketplace for videoconferencing from all of the other programs I had previously used. Then, one of my business associates told me that Zoom was allowing people to use its teleconference software for free.  I also heard that Zoom was a Chinese company, but I learned that is not true when I checked it out.

According to Wikipedia, “Zoom Video Communications, Inc. (Zoom) is an American communications technology company headquartered in San Jose, California…Eric Yuan, a former Cisco Webex engineer and executive, founded Zoom in 2011, and launched its software in 2013.”

On April 15, 2020, CNBC reported “Co-founder and CEO Eric Yuan, who previously worked on the Webex video calling product that Cisco acquired in 2007, is the largest individual shareholder of Zoom with 3.9% of the stock’s outstanding shares. He emigrated from China in 1997, when he was 27, CNBC previously reported, but he is a U.S. citizen, according to a December regulatory filing.” The concern about China is probably because CNBC also reported “Zoom’s product development team is based “largely” in China, and it operates research and development centers in that country, according to the company’s most recent annual report.”

Wikipedia explained its exponential growth: “During the COVID-19 pandemic, Zoom saw a major increase in usage for remote work, distance education, and online social relations. Thousands of educational institutions switched to online classes using Zoom. The company offered its services for free to K–12 schools in many countries.”  Chinese companies often sell products at or below cost to take over market share, so Zoom may be following this example. But, I don’t know how any company can afford to give away its product for free unless it is receiving funding from another source.

Regarding Zoom, Wikipedia states “Its software products have faced public and media scrutiny related to security and privacy issues.”  These criticisms cover “security lapses and poor design choices” and “its privacy and corporate data sharing policies.”

An article titled, “Zoom security flaws and Chinese links make US authorities nervous,” on Telecoms news of April 6, 2020, clarifies the connection to China, stating, “the software appears to be developed by three companies in China, all known as Ruanshi Software, only two of which are owned by Zoom. The ownership of the third company, also known as American Cloud Video Software Technology, is unknown. The article states “700 employees are currently in China, which is not unusual as it can save on salaries in comparison to the US, though it does open up the firm to pressure and influence from the Chinese Government.”

This same article reported that Zoom has servers in China that were used by mistake during the initial surge of usage after the COVID-19 pandemic struck. The article’s author, Jamie Davies wrote:

“By default, all participants’ audio and video in a Zoom meeting appears to be encrypted and decrypted with a single AES-128 key shared amongst the participants. The AES key appears to be generated and distributed to the meeting’s participants by Zoom servers. Zoom’s encryption and decryption use AES in ECB mode, which is well-understood to be a bad idea, because this mode of encryption preserves patterns in the input.”

These encryption keys could also be distributed through Chinese servers, which is a bad idea for anyone as companies can be legally compelled by the Government to hand over these keys. Zoom has said this oversight has been corrected and no international meetings will be routed through Chinese servers, but the damage may well have already been done.”

As a result of these concerns, Wikipedia states, “In March 2020, New York State Attorney General Letitia James launched an inquiry into Zoom’s privacy and security practices; the inquiry was closed on May 7, 2020, with Zoom not admitting wrongdoing, but agreeing to take added security measures. Also, in May 2020, the Federal Trade Commission announced that it was looking into Zoom’s privacy practices.

While there is no evidence of wrong-doing on the part of Zoom as of this writing, the fact that their programming is said to be done in China raises troubling security concerns, as programmers in China could easily be pressured by their government to put back doors into the software they write. This is why it is as essential to our national security to keep computer software development in our own country, just as it is important to keep drug development and medical equipment manufacturing in our own country.

Until the FCC investigation is concluded, some security experts are recommending that the President issue an executive order prohibiting the use of Zoom by government agencies, as well as defense contractors to insure no classified or proprietary information is compromised.

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What is the Vision for the Factory of the Future?

Tuesday, August 18th, 2020

In April 2017, the Manufacturing Leadership Council published its “Vision 2030:  The Factory of the Future, which was a Frost & Sullivan White Paper sponsored by General Electric and Intel. In their vision, the factory of the future “will look like an integrated hardware and software system and “is highly automated and information-intensive… fueled by vast quantities of information from every corner of the enterprise and beyond, moderated by analytical systems that can identify and extract insights and opportunities from that information, and comprised of intelligent machines that learn, act, and work alongside highly skilled human beings in safe and collaborative environments.”

The key trends and developments of the factory of the future were identified as:

  • “Digitization  – transforming how manufacturers think about human capital management”
  • “Modularization, with micro factories capable of mass customization using such technologies as 3D printing as well as digital manufacturing technologies”
  • “Manufacturing innovation process will evolve to be more open and extended, with collaborative models that span internal as well as external constituencies”
  • “Supply chains will become highly integrated, increasingly intelligent, and even self-managing”
  • “New business models incorporating outcome-based services will emerge, enabling manufacturers to diversify their revenue streams and provide greater value to customers”
  • “Cognitive computing and analytic techniques will enable production environments to self-configure, self- adjust, and self-optimize, leading to greater agility, flexibility, and cost effectiveness”

The paper also identified four categories of “Mega Trends” that will have implications for manufacturers over the next 15 years:

  • Globalization/Urbanization/Regionalization/Uncertainty:  Global economic forces are “creating shifts in how manufacturers must think about how they design their production and supply networks. As globalization provokes responses such as the erection of trade barriers and as urbanization and the growth of regional economies lead to a demand for localized products and rising labor costs even in previously low-cost areas, manufacturers must continuously recalibrate where and how they produce, whether they outsource, and how they serve emerging markets”
  • Smart/Material/Open/Green: New, smart approaches to innovation…focus on waste reduction fueled by innovations in material science, open systems, and new forms of social collaboration.”
  • Business Model Innovations: Technology forces are transforming the industrial world. “Smart, connected products and real-time analytics will allow manufacturers to sell outcomes-such as jet engine uptime-not just products. This means manufacturers will need to fundamentally rethink their relationships with customers. It also means they will face an entirely new competitive landscape.”
  • Ambient Intelligence: “Advances in technologies such as cloud-based solutions, digital platforms and applications, machine learning, and the Internet of Things are combining to provide all institutions with the unprecedented ability to gain and act on insights.”

Within the Mega Trends, there are “four major themes and eight sub-themes that, taken together, will transform the manufacturing landscape over the next 10-15 years.”  The four major themes are:

Intelligent Design – “personalization and mass customization of products and the location of production closer to the point of consumption”

  • Federated Manufacturing – “Networks of smaller, more nimble factories”
  • Smart Innovations – integrated product design, production, and support processes”  

Services Revolution – “from product-as-a-service to anything-as-a-service model”

  • New Value Networks – “Suppliers will transform from providers of parts to partners in “as-a-service” business models”
  • Outcome-based – “services sold on the basis of usage and guaranteed outcomes”

Platform Revolution – “connected platforms will allow machine learning of a different order…will unleash an era of cognitive learning and improvements.”

  • Connected Platforms – “Enabled by IoT and cloud technologies as well as advanced, real-time analytics, products will become connected platforms, featuring a range of services that will deliver new revenue sources.”
  • Cognitive Platforms – “Connected products-or platforms-will collect vast quantities of usage, performance, and diagnostic data that can be used to improve next-generation designs.”

Human-to-Machine Convergence (Artificial intelligence advancements and robotic process automation)

  • Machine Dominance – “evolving as robots transition from being programmed only to execute repetitive tasks to being collaborative and even sentient”
  • Human Capital Transformation – …manufacturers must clearly define the skills that will be required, take an inventory of current capabilities, and provide tools that enable self-training and skills certification.”

Each of these themes and sub-themes are expanded upon in detail in the body of the paper leading to the authors conclusion that “The general outlines of what future factories and plants will look like are now discernable. They will be organized for greater speed, flexibility, productivity, and efficiency. The people who work in them will be highly skilled about advanced digital technologies and able to work cross-functionally across the connected enterprise…rapidly changing and increasingly sophisticated information and operational technologies are facilitating a shift to mass customization, from mass production, making it possible to satisfy individual needs from transportation to medicine.”

When this paper was published, I was finishing the last chapters of my book Rebuild Manufacturing – the key to American Prosperity, published in September 2017.  While I agree with many of the trends, themes, and subthemes of the paper, I completely disagree with their conclusion that “the globalization of manufacturing, powered by the relentless march of technology, will continue…” 

In my chapter, “Advanced Technology is critical to Rebuilding American Manufacturing,” I discuss how “advanced industries” are utilizing new technologies, such as artificial intelligence, robotics, 3-D printing/ additive manufacturing, the “digitization of everything, machine learning, and Internet of things (IoT).  As a result, American companies are able to be more competitive in the global market place with domestic production and are returning manufacturing to America through reshoring.  The trend of mass production converting to mass customization and the regionalization of manufacturing and creation of manufacturing networks will also increase the ability of American manufacturers to be able to reshore manufacturing to the USA.

In a Forbes article of Apr 7,2020, “New Data Shows U.S. Companies Are Definitely Leaving China”  Kenneth Rapoza wrote, “U.S. companies are leaving China thanks to the trade war. They’ll leave even more thanks to the pandemic…Last year saw companies actively rethinking their supply chain, either convincing their Chinese partners to relocate to southeast Asia to avoid tariffs, or by opting out of sourcing from China altogether.”

As a director on the board of the San Diego Inventors Forum and as a mentor for CONNECT’s Springboard Program, I have seen how 3D printing/additive manufacturing can accelerate the development of a new product and  enable inventors to have a sample product to show/demonstrate in person or by means of a video to secure potential investors. A 3D printed prototype can be the essential ingredient of a video to do a crowdfunding campaign via Kickstarter or Indiegogo or seek investors. 

I conclude my chapter by saying, “The increased efficiency of additive manufacturing/3-D printing, IoT, and automation/robotics could spell a bright future for American manufacturing. The shift to smart manufacturing using these new technologies will save our corporations money and translate into greater profits, more jobs, and more prosperous economies, locally and nationally. As our manufacturing industry moves into a more complex age, so will our workers and products, ushering in a new era of production.

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U.S. Must Stop Trafficking of Counterfeit and Pirated Goods

Tuesday, August 4th, 2020

One of the dangers of reliance on foreign manufacturers is the increase of U.S. vulnerability to receiving counterfeit goods.  Over the last ten years, there have been several reports prepared to determine the extent of the infiltration of counterfeits into U.S. defense and industrial supply chains, to provide an understanding of industry and government practices that contribute to the problem, and to identify best practices and recommendations for handling and preventing counterfeit electronics.

The first was the Defense Industrial Base Assessment: Counterfeit Electronics prepared by the U.S. Department of Commerce on January 2010as a result of a three-year study. “This assessment focused on discrete electronic components, microcircuits, and circuit board products – key elements of electronic systems that support national security, industrial, and commercial missions and operations. A few of the findings of the study were:

  • all elements of the supply chain have been directly impacted by counterfeit electronics
  • companies and organizations assume that others in the supply chain are testing parts;
  • lack of traceability in the supply chain is commonplace
  • there is an insufficient chain of accountability within organizations
  • recordkeeping on counterfeit incidents by organizations is very limited
  • most DOD organizations do not have policies in place to prevent counterfeit parts from infiltrating their supply chain

The Bureau of Industry and Security’s (BIS) Office of Technology Evaluation (OTE) made the following key recommendations:

  • Consider establishing a centralized federal reporting mechanism for collecting information on suspected/confirmed counterfeit parts for use by industry and all federal agencies
  • Modify Federal Acquisition Regulations (FAR), including Defense Federal Acquisition Regulations (DFAR), to allow for “best value” procurement
  • Require U.S. Government suppliers and federal agencies to systematically report counterfeit electronic parts to the national federal reporting mechanism;
  • Issue clear, unambiguous legal guidance to industry and U.S. federal agencies with respect to civil and criminal liabilities, reporting and handling requirements
  • Establish federal guidance for the destruction, recycling, and/or disposal of electronic systems and parts sold and consumed in the United States
  • Consider establishing a government data repository of electronic parts information and for disseminating best practices to limit the infiltration of counterfeits into supply chains
  • Develop international agreements covering information sharing, supply chain integrity, border inspection of electronic parts shipped to and from their countries, related law enforcement cooperation, and standards for inspecting suspected/confirmed counterfeits

However, implementing these recommendations didn’t solve the problem.  On May 21, 2012, the U.S. Senate Armed Services Committee released a report as a result of a congressional investigation into counterfeit goods.  “The year-long investigation launched by Sen. Carl Levin, D-Mich., the committee’s chairman, and Ranking Member Sen. John McCain, R-Ariz., found a total number of suspect counterfeit parts involved in those 1,800 cases exceeding 1 million.” Counterfeit electronic parts “were uncovered in items ranging from night vision equipment to Global Positioning System (GPS) navigation modules.”

The Committee “discovered counterfeit electronic parts from China in the Air Force’s largest cargo plane, in assemblies intended for Special Operations helicopters, and in a Navy surveillance plane among 1,800 cases of bogus parts.

“Our report outlines how this flood of counterfeit parts, overwhelmingly from China, threatens national security, the safety of our troops and American jobs,” Levin said. “

As a result, “the Committee adopted an amendment to the FY12 National Defense Authorization Act (NDAA) to “address weaknesses in the defense supply chain and to promote the adoption of aggressive counterfeit avoidance practices by DoD and the defense industry.”

In the next four years, progress was made as shown by the follow-up report to Congress of February 2016 Government Accountability Office (GAO), which  “found that while the number of counterfeit parts in the DoD supply chain decreased significantly between 2011 and 2015, there were still nearly 50 parts per year that were identified as being counterfeit.  As a percentage of total parts, this was a mere .006% of the DoD supply chain.”

However, a single counterfeit part can have a disastrous impact and identifying counterfeit parts is extremely difficult when they are deliberately manufactured to pass as the “real deal.” Moreover, the threat of counterfeit parts being introduced by U.S. adversaries, such as China, has increased, and these foreign companies are good at figuring out ways to make their counterfeits blend in with other components.

Counterfeit goods are not limited to the defense and industrial supply chain.  The January 24, 2020 report to the President of the United States, “Combating Trafficking in Counterfeit and Pirated Goods,” states, “Counterfeiting is no longer confined to street-corners and flea markets. The problem has intensified to staggering levels…information collected by the U.S. Department of Homeland Security (DHS) between 2000 and 2018 shows that seizures of infringing goods at U.S. borders have increased 10-fold, from 3,244 seizures per year to 33,810.”

This report recommended the following immediate actions for the Department of Homeland Security and other agencies:

1.” Ensure Entities with Financial Interests in Imports Bear Responsibility

2. Increase Scrutiny of Section 321 Environment

3. Suspend and Debar Repeat Offenders; Act Against Non-Compliant International Posts

4. Apply Civil Fines, Penalties and Injunctive Actions for Violative Imported Products

5. Leverage Advance Electronic Data for Mail Mode

6. Anti-Counterfeiting Consortium to Identify Online Nefarious Actors (ACTION) Plan

7. Analyze Enforcement Resources

8. Create Modernized E-Commerce Enforcement Framework

9. Assess Contributory Trademark Infringement Liability for Platforms

10. Re-Examine the Legal Framework Surrounding Non-Resident Importers

11. Establish a National Consumer Awareness Campaign”

These recommendations were very timely since there has been a big problem with counterfeit pharmaceuticals, personal protective equipment (PPE), and medical devices during the COVID-19 pandemic this year. Counterfeit goods in the healthcare industry can cause immediate loss of lives just like counterfeit parts in the defense industry can cause loss of life for our military personnel in defending our country.

Since taking office in January 2017, President Trump has issued three Executive Orders strengthening different aspects of the Buy American Act of 1933: 

EO 13788: “Buy American and Hire American,” April 18, 2017

EO 13858: Strengthening Buy-American Preferences for Infrastructure Projects,” January 31 2019

EO 13881:– “Maximizing Use of American-Made Goods, Products, and Materials,” July 15, 2019

I laud the President’s focus on strengthening the Buy American Act, but the best way to eliminate the problem of counterfeit goods is to return manufacturing to America of all critical goods for our defense and military, as well as our pharmaceutical, PPE, and medical device industries.  This is referred to as “reshoring” by Harry Moser, who founded the Reshoring Initiative in 2010. In an article for Assembly magazine of February 12, 2019, Harry Moser wrote: “The Reshoring Initiative has aggregated consumer surveys from 10 sources, gleaning insight into the preferences of more than 14,000 U.S. consumers. Findings show that there is a decisive preference for U.S.-made goods: 97 percent have a positive view of goods manufactured in the U.S. Americans also have a positive opinion of companies that manufacture in the U.S.: 91 percent believe it is important to manufacture in the U.S. and think the government should take steps to support American manufacturing.”

Only Made in USA products will be able to provide confidence in the quality of the products, but government agencies, the health care industry, and consumers need to know where products are being made to make the choice of buying Made in USA products. Currently, there are limitations of county of origin labeling on products, and no information is provided for products sold on the internet and through catalogs.  We must address this situation if we are truly going to be able to stop trafficking of counterfeit and pirated goods. 

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Manufacturing Generates Exports

Tuesday, June 23rd, 2020

The third reason why manufacturing is important is that the United States is still a top leader in generating manufacturing exports. The U.S. was the world’s largest exporter until 1992, when Germany took over this position. The U.S. maintained a position as the second-highest exporter, until China surpassed it in 2008. Germany remained number one until 2009, when China surpassed it to become the world’s top exporter. The U.S. overtook Germany as the second-highest exporter in 2014. The latest data for world exports is from 2019 when China’s exports totaled $1.8 trillion, down from $2.49 trillion in 2018; the U.S. exports totaled $1.24, down from $1.66 trillion in 2018, and Germany’s exports were $1.12, down from $1.55 trillion in 2018.

According to a 2020 report on exports: ”The following export product groups categorize the highest dollar value in American global shipments during 2019. Also shown is the percentage share each export category represents in terms of overall exports from the United States.

  1. Machinery including computers: $205.9 billion (12.5% of total exports)
  2. Mineral fuels including oil: $199.7 billion (12.1%)
  3. Electrical machinery, equipment: $173.2 billion (10.5%)
  4. Aircraft, spacecraft: $136 billion (8.3%)
  5. Vehicles: $133 billion (8.1%)
  6. Optical, technical, medical apparatus: $90.8 billion (5.5%)
  7. Plastics, plastic articles: $64.9 billion (3.9%)
  8. Gems, precious metals: $59.6 billion (3.6%)
  9. Pharmaceuticals: $53.6 billion (3.3%)
  10. Organic chemicals: $39.3 billion (2.4%)

America’s top 10 exports surpass well over two-thirds (70.3%) of the overall value of its global shipments.”

Manufactured goods “make up more than 66% of U.S. exports…One-third of exported goods are capital goods double the level of 20 years ago… Only 12% of U.S. exported goods are consumer goods…Just 8% of exported goods are foods, feeds, and beverages ($131 billion). The big three are soybeans ($20 billion), meat and poultry ($20 billion), and corn ($9 billion).”

According to the U.S. Small Business Administration, small- and medium-sized enterprises (SMEs) comprised 97 percent of all identified U.S. exporters, generated 64 percent of net new jobs between 1992 to 2009, and represented 31 percent of U.S. export value in 2008. About 65 percent of all U.S. exports come from small businesses with fewer than 20 employees.

Exports of manufactured goods is important to the economies of most states – even in those areas where manufacturing has declined as a portion of the Gross State Product (GSP).  

The top five U. S. export markets:

  • Canada
  • Mexico
  • China
  • Japan
  • United Kingdom

Both President Bush and President Obama had the goal of doubling U.S. exports during their administrations. President Obama even established the Export Promotion Cabinet by Executive Order 13534 On March 11, 2010 and tasked them with a plan to achieve the goal of doubling U.S. exports in five years that he had presented in his 2010 State of the Union address. 

The National Export Initiative (NEI) Executive Order had five components: improve advocacy and trade promotion, increase access to export financing, remove barriers to trade, enforce current trade rules, and promote strong, sustainable, and balanced growth.

The NEI identified eight priorities for the plan, and the Export Promotion Cabinet developed recommendations to address each of these priorities, which covered all five components, cut across many federal government agencies, and focus on areas where concerted federal government efforts can help lift exports.

It was no surprise to me that the plan to double exports in five years was unsuccessful because we are fighting against the predatory mercantilism of countries such as China, India, and Japan. The biggest problem is that the United States is no longer the manufacturing source for consumer and household goods and commodities that it once was. American brands such as IBM, General Electric, and Maytag were known worldwide for their quality and innovation. These types of products are now being made in Asia, mostly in China, and imported by the United States and other countries for their consumers to buy rather than being manufactured in the United States for export worldwide.

The majority of manufacturers that were able to survive the great stampede to offshore manufacturing to China don’t produce a finished product; they are the Tier 2, 3 and 4 suppliers that produce components, parts, and assemblies for Original Equipment Manufacturers. Thus, they don’t have a product to sell for export.  I have been representing this type of company as a manufacturers’ sales rep for over 30 years. Most of these companies do not have engineering staff to design a complete product and don’t have the capability to market a product internationally. 

I’ve been working with inventors and entrepreneurs of start-up companies for years to help them select the processes and sources for their new products.  As a director on the board of the San Diego Inventors Forum, I give a presentation of how to select the right processes and sources for a new product as part of our annual curriculum at our monthly meetings in our program of helping inventors go from product design to market.

If we want to increase our manufacturing exports, we need to help inventors and entrepreneurs develop their products and get them to market.  Additive manufacturing has enabled inventors and entrepreneurs to produce low cost prototypes rapidly here in the U.S. The biggest hurdle is to fund the tooling needed to manufacture their products at production volume levels. For advanced technologies that require research and development, there are government funded Small Business Research Grants that enable small start-up companies boot strap their product development.  Perhaps, we can create a grant program for inventors and entrepreneurs to fund the tooling and initial production runs of new products. 

Remember, Albert Einstein is widely credited with saying, “The definition of insanity is doing the same thing over and over again, but expecting different results.” We aren’t going to increase exports by doing the same things we have been doing for the past 20 years.

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Manufacturing Jobs Pay Higher Wages than Retail or Service Jobs

Tuesday, June 9th, 2020

Continuing my series on why manufacturing is important to America, the second reason is that wages and benefits for manufacturing jobs are approximately 21 percent higher than for non-manufacturing jobs.

As manufacturing jobs have declined over the past 40 years, the difference between the lowest personal income and highest personal income has steadily grown wider.

This difference was projected to get even worse according to data from the U.S. Department of Labor Occupational Outlook for 2018-2028. Employment growth was projected to continue to be concentrated in the service-providing sector of the economy.

  • “The service-providing sector as a whole will grow at a projected rate of 0.6 percent annually, slightly faster than the annual rate of 0.5 percent for industry employment overall. This growth is projected to add more than 7.6 million jobs, resulting in 136.8 million jobs in the service-providing sector by 2028. After declining slightly from 2008 to 2018 (-0.3 percent annually), the goods-producing sector is expected to change little from 2018–28, with an annual growth rate of 0.1 percent.
  • The sectors projected to experience the fastest annual employment growth are health care and social assistance (1.6 percent), private educational services (1.2 percent), and construction (1.1 percent). These three sectors alone are projected to add more than 4.6 million jobs by 2028—including 3.4 million new jobs projected in healthcare and social assistance.”

In an opinion article in IndustryWeek magazine, John Madigan, a consultant with Madigan Associate, wrote:

“Jobs paying $20 per hour that historically enabled wage earners to support a middle-class standard of living are leaving the U.S. Public sector aside, only 16% of today’s workers earn the $20-per-hour baseline wage, down 60% since 1979.  Service and transportation jobs, per se, cease to exist in the absence of wealth. Rather, they exist and thrive as by-products of middle-class incomes buying products and services.” (source)

According to Facts about Manufacturing by The Center for Manufacturing Research of The Manufacturing Institute, “In 2018, the average manufacturing worker in the United States earned $87,185 annually, including pay and benefits. The average worker in all nonfarm

industries earned $68,782.  Looking specifically at wages, the average manufacturing worker earned more than $27 per hour, according to the latest figures, not including benefits.”

According to the IndustryWeek 2018 Salary Survey, the average salary for manufacturing management is $110,200. By industry sector, the salary ranged from a low of $88,500 in the textiles/apparel sector to a high of $142,500 in the medical device/lab equipment sector.

The 2018 Manufacturing Compensation Report, sponsored by the SME Education Foundation and the Arconic Foundation, “found an average compensation of $64,014 for hourly workers and $111,731 for salary workers, including base pay, bonus/commission and dividends/stock options/profit sharing, and such perks as a company car and mobile phone. Following the trend in the rest of the country, 68 percent of hourly workers and 73 percent of salary workers reported a wage increase in the last year.”

In this report, Christopher Barger, senior director of communications at SME, said, “There are multiple paths to success and good-paying careers at all levels of manufacturing, and the good news is these jobs are in high demand. Individuals who pursue a career in manufacturing have several options to gain solid training education, be it entering the workforce from high school through apprenticeships or internships, attending a vocational school and getting certifications, or attending community colleges, and obtaining associates or four-year degrees.”

Most people have no idea of the variety of jobs that are available at manufacturing companies. Besides the usual corporate/executive management jobs, some of the other management jobs available at medium to large manufacturers are in these areas: operations, plant/facilities, manufacturing/production, purchasing/procurement, sales/marketing, quality, supply chain, lean/continuous improvement, human resources, R&D/product development, and safety/ regulatory compliance.

If you have the opportunity to visit the modern manufacturing facilities in the U. S., you would see the most productive, highly skilled labor force in the world applying the latest in information, innovation, and technology. Contrary to popular opinion, the industrial age is not over. We are in the midst of incredible advances in manufacturing – from nanotechnology, Industrial Internet of Things, robotics, artificial intelligence, and biotechnology.

The innovation found in the manufacturing industry has helped to increase economic productivity too. Since the Industrial Revolution, the way we produce and consume goods has drastically changed, and it is continual innovation that allowed and continues to allow our country to become increasingly more productive in the services offered.

Automation and robotics have helped keep American manufacturers not only competitive but the most productive in the world. Manufacturing has long led U.S. industries in productivity growth. Gains in productivity raise a country’s standard of living. In the past 20 years, productivity – output per hour – has more than doubled – actually 2.5 times – that of other economic sectors.

There is also a multiplier effect of manufacturing jobs that reflects linkages that run deep into the economy. For example, every 100 steel or automotive jobs create between 400 and 500 new jobs in the rest of the economy. This contrasts with the retail sector, where every 100 jobs generate 94 new jobs elsewhere, and the personal and service sectors, where 100 jobs create 147 new jobs. In addition, for every $1.00 spent in manufacturing, another $2.74 is added to the economy. Thus, this economic data indicates that each manufacturing job creates three to four other jobs, while service jobs only create one to two other jobs.  

Thus, manufacturing is an important vehicle to grow and sustain a higher standard of living for our nation, our states, cities, communities and individual families. The higher wages of manufacturing jobs contribute to a better quality of life while ensuring that we have a strong domestic manufacturing sector to protect the health and welfare of all Americans as well as protect our national security. 

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Why Manufacturing is Important to America

Wednesday, May 27th, 2020
This week’s article begins a series of short articles on why manufacturing is important to the America economy. Our country’s Founding Fathers recognized the importance of developing a domestic manufacturing base instead of continuing to rely on imports from England, France, and the Netherlands.  They established the U.S. patent system and protected the developing manufacturing industry with tariffs to discourage imports.  This allowed the United States to be the world’s number one manufacturer for more than 100 years, accounting for as much as 25 percent of global manufacturing output in 2007. In 2010, China overtook the U.S. to become the world’s top manufacturing country by output. 
The first reason why manufacturing is important is:  Manufacturing Supplies Millions of Jobs

Manufacturing is the engine that drives American prosperity and is the foundation of the U.S. economy and the basis for its middle class. In February 2020, manufacturing employed 12.6 million workers. According to the National Association of Manufacturers’ facts about manufacturing, “manufacturers contributed $2.381 trillion to the U.S. economy in the fourth quarter of 2019, a new all-time high…Overall, manufacturing accounted for 11% of GDP in the economy.”

In addition, “For every $1.00 spent in manufacturing, another $2.74 is added to the economy. That is the highest multiplier effect of any economic sector. In addition, for every one worker in manufacturing, there are another five employees hired elsewhere.”

The U.S. lost 5.8 million jobs in manufacturing from the year 2000 to 2010 due to a combination of factors, such as the offshoring of jobs to Asia, especially to China, increased productivity of American workers, automation, and robots, as well as the domestic outsourcing of service jobs within a manufacturing company, such as accounting and payroll services, janitorial services, cafeteria/food services, and legal departments. Thus, jobs that may have been classified as manufacturing are now classified as service jobs.

The below chart shows that the U. S. has regained about 1.5 million jobs since the end of the recession. 

American workers achieve a high productivity rate year in and year out, and the growing trend of training in “Lean manufacturing” has accelerated the increase in the productivity of American workers

In 2019, the ten states with the largest manufacturing workforces were:  California, Texas, Ohio, Michigan, Illinois, Pennsylvania, Indiana, Wisconsin, South Carolina, and New York. California’s manufacturing workforce of more than 1.2 million exceeds Illinois and Pennsylvania’s combined manufacturing workforce

A blog article by Alex Carrick of January 14, 2019 on the website www.constructconnect.com, states:  “The five major contributors to U.S. manufacturing employment are:  transportation equipment, a 13.2% share; food manufacturing, 12.9%; fabricated metal products, 11.7%; machinery, 8.9%; and computer and electronic products, 8.4%.

Michigan (with an 11.4% share) leads all states in number of transportation equipment jobs. It’s followed by Indiana (8.2%). California and Ohio (each with 7.3% shares) are tied for third.

By a wide margin, California is out front among states in number of food manufacturing jobs.

California and Texas provide the most ‘fabricated metal product’ jobs; Ohio is in third spot.

Texas, which is big in oil and gas drilling equipment, is the nation’s leader in machinery manufacturing jobs.

More than a quarter of U.S. ‘computer and electronic products’ manufacturing jobs are in California. Second-place Texas has only about one-third of California’s contingent.”

The sooner we reopen all manufacturing, instead of just allowing manufacturers in critical industries to remain open, the sooner we will get millions of manufacturing workers off the unemployment roles and back to producing the goods we need to remain a strong industrial nation, while protecting the health and national security of all Americans.  

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Who Are My Heroes? Part One

Tuesday, April 21st, 2020

As you might expect my heroes are people who have played a role in trying to alert Americans to the effects to our economy of the decimation of American manufacturing and the dangers of outsourcing manufacturing to China and other countries.  These are real people and none are elected officials.

This month marks the 13th year of my journey to do what I could to save American manufacturing. In May 2007, I e published one of my periodic San Diego County Industry reports that I had been writing since 2003.  I titled it, “Can U.S. Manufacturing be Saved?” My report had grown from four pages to 13 pages, and I realized that what I was documenting about the loss of manufacturers in San Diego and California was going on all over the country.  That’s when I made the decision to start writing my first book, Can American Manufacturing be Saved? Why we should and how we can, published in May 2009.  In the course of researching and writing my first book, my second edition of the same (2012), and my third book, Rebuild Manufacturing – the key to American Prosperity (2017), I have connected with many people who shared my concerns and were early advocates of saving American manufacturing.

My first set of heroes are those who either wrote books, articles, or newsletters that I came across researching my first book. When I was writing my reports, I was blaming the loss of manufacturing in California on the bad business climate, high taxes, and the cheap Chinese wages. These heroes expanded my knowledge greatly by showing that it was our primarily our national trade and tax policies, the trade cheating of China and other Asian countries, and corporate greed that was responsible for losing over five million manufacturing jobs between the year 2000 and 2009.  In alphabetical order, my heroes are:

Michael P. Collins is author of Saving American Manufacturing, Growth Strategies for Small and Midsize Manufacturers, published in 2006 and its companion handbook, The Growth Planning Handbook. Prior to becoming a writer, he was Vice President and General Manager of two divisions of Columbia Machine in Vancouver Washington. He is President of MPC Management, a consulting company that focuses exclusively on the problems and challenges of small and midsize manufacturers (SMMs) of industrial products and services. His book is written from the viewpoint of what manufacturers can do to save themselves and grow their business.  I arranged for him to come to San Diego to give a presentation to the Operations Roundtable of the American Electronic Association in 2011.

Lou Dobbs, is an American television commentator, radio show host, and the anchor of Lou Dobbs Tonight on Fox Business Network, and author of Exporting America, Why Corporate Greed is Shipping American Jobs Overseas, published in 2004 as hard cover and 2006 as a paperback. In his book, he “takes aim at the corporate executives and Washington politicians who profit by exporting U.S. jobs overseas—and shows readers what they can do to save not only their own careers, but the American way of life.

Ralph Gomory, who is well-known for his mathematical research and his technical leadership. For twenty years he was responsible for IBM’s Research Division, and then for 18 years was the President of the Alfred P. Sloan Foundation. He is the co-author with the late William J. Baumol of the book, Global Trade and Conflicting National Interests, published by MIT Press in 2001. After connecting by phone and email for years, it was nice to finally meet him at the Coalition for a Prosperous America trade conference in Washington, D. C. in 2018.

Richard McCormack, journalist and founder/publisher of Manufacturing & Technology News which he found in 1994. McCormack also served as the editor of the 2013 book on revitalizing manufacturing, ReMaking America. I read every issue of MT&N from July 2007 until it stopped publication at the end of 2016. He was also recognized as an American Made Hero by AmericanMadeHeroes.com for his newsletter “coverage of the profound financial and economic ramifications of the shift of industrial capability from the United States to Asian competitors.” He wrote “thousands of articles on outsourcing, industrial and technological competitiveness, government policies, and trends related to management, quality, technology and markets.”Mr. McCormack is currently Press Secretary and Program Manager, Office of Public Affairs, for the Department of Commerce.

Peter Kent Navarro is a Harvard Ph.D. economist and author of several books. I read his book The Coming China Wars, published in 2006, while I was researching my book. At that time, he was a professor of public policy at the University of California, Irvine. He currently serves in the Trump administration as the Assistant to the President, Director of Trade and Manufacturing Policy, and the national Defense Production Act policy coordinator. I first met Mr. Navarro when he was a professor at the University of California, San Diego and running for mayor in 1992. I also had the pleasure of seeing him when I attended the trade conference in 2018. I also read his book, Death by China, which he co-authored with Greg Autry, published in 2012.

Raymond Richman, Howard Richman (son), and Jesse Richman (grandson), authors of Trading Away our Future: How to Fix Our Government-Driven Trade Deficits and faulty Tax System Before It’s Too Late, published by Ideal Taxes Association in 2008. Raymond died in October 2019 at the age of 101. His tribute by Ideal Taxes states, he “authored four books, dozens of journal articles and hundreds of commentaries about economic development, tax policy and trade policy…Beginning with a commentary in the Pittsburgh Tribune-Review on September 14, 2003 (The Great Trade Debate), he became one of the first advocates of a policy of balanced trade, an alternative to the free trade vs. fair trade debate. His essential argument was that trade, free or not, benefits both countries if it is balanced.” I am sorry that I didn’t get to meet him before he died.

Roger Simmermaker, author of How Americans Can Buy American: The Power of Consumer Patriotism, third edition published in 2008. He also writes Buy American Mention of the Week articles for his website and World New Daily. His book provides a guide to assist American’s who wish to purchase products made in America and discusses the importance of “Buying American” for the future economic independence & prosperity of America. He earned special recognition as an American Made Hero. After years of connecting to him by phone and email, it was a pleasure to also meet him at the same trade conference in 2018.

Alan Tonelson, a Research Fellow at the U.S. Business and Industry Council Educational Foundation, and a columnist for the Foundation’s globalization website, Tradealert.org and a Research Associate at the George Washington University Center for International Science and Technology Policy. He is also the author of The Race to the Bottom, published in 2000. “He has written extensively on the trade deficit between the United States and other countries. He has also written on free trade, globalization and industrial decline. He argues that U.S. economic policy should aim for “preeminence” over other countries, just as, he believes, other countries’ economic policies seek their own national interests. He is critical of various forms of “globalism” and internationalism.”

When I was researching my first book, the U.S. Business and Industry Council was the only organization that had a written plan to save American Manufacturing.

I introduced my book as a speaker at the Del Mar Electronics Show in San Diego County, California on May 6, 2009, and had my book on display at my company’s booth at the show. One of the first persons to buy my book was Adrian Pelkus, President of contract manufacturer, A Squared Technologies.  He was also the informal leader of the steering group running the San Diego Inventors Forum.  He invited me to the next SDIF meeting which I attended, and then invited me to join the steering committee, which I did.  After reading my book and endorsing the purpose and ideas I presented in my book, the steering committee changed the focus of SDIF from helping inventors source their products in China to sourcing the manufacture of their products in the U.S.

The SDIF meetings have an informal curriculum of topics to cover in a year, and I have been giving an annual presentation on how to select the right manufacturing processes and vendors to make their products.  It has a pleasure to be able to help so many inventors and entrepreneurs source their products in America.

My connections to theses heroes led me to connections with many other people and organizations who became part of my second set of heroes after my book was published.  I will write about these people in My Heroes Part Two. 

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U.S. Private Sector Jobs Have Declined since 1990

Tuesday, December 10th, 2019

On November 14, 2019, Cornel Law School “announced the launch of a new tool for evaluating the U.S. employment situation and predicting related variables: the U.S. Private Sector Job Quality Index (JQI).” The Index described in the White Paper represents 18 months of research by Daniel Alpert, adjunct professor at Cornell Law School and founding managing partner of the investment bank, Westwood Capital, LLC, Jeffrey Ferry, chief economist at the Coalition for a Prosperous America (CPA), Dr, Robert C. Hockett, Professor of Law at Cornell Law School, and Amir Khaleghi, a Research Fellow at the Global Institute for Sustainable Prosperity (GISP) and a PhD student at the University of Missouri–Kansas City.

At the many economic summits I’ve attended over the past 25 years, I’ve heard economists state that the U. S. is creating more low paying jobs than high paying jobs but there hasn’t been any data available to track this trend on a regular basis.  For the first time, the Job Quality Index provides a tool to measure “desirable higher-wage/higher-hour jobs versus lower-wage/lower-hour jobs.”

The authors define job quality as “the weekly dollar-income a job generates for an employee” They explain that “The JQI is an analysis of weekly incomes earned by the holders of each of the private sector P&NS jobs in U.S. It derives its data from the hourly wages paid, and hours worked by, holders of jobs in 180 separate sectors of the American economy.”

Since the end of WWII, the “percentage of private U.S. jobs in the service-providing sectors increased steadily from approximately 55%” to “around 83.5%” at the end of the Great Recession in 2009.  It has remained flat since that point. However, the paper states that “While service-sector growth as a percentage of all jobs has leveled off, job quality continues to worsen.”

The authors commented, “As weekly earnings of services sector jobs have, to an increasing degree, materially lagged those of jobs in the goods- producing sector (Figure 6), an increase of the percentage of service sector jobs would naturally result in an increase in the number of jobs below the mean, as reflected in the JQI.”

In addition, the authors note that the gap between higher-wage/higher-hour jobs versus lower-wage/lower-hour jobs” has widened almost four-fold to $402 in 2018 from $104 in 1990”  

The paper states, “jobs as tracked by the JQI are defined by reference to data on private sector (nongovernmental) employment provided by third party employers—it does not include self-employed workers. In the first iteration of the JQI being presented in this paper, the index covers only production and nonsupervisory (P&NS) positions, which account for approximately 82.3% of the total number of private sector job positions in the country.”

By the end of 2020, a second index (JQL-2) “will run and be maintained side-by-side with the original JQI-1 index. This will track all private sector jobs, with data commencing in 2000.”

Monthly revisions to the JQI-1 will be published “contemporaneously with the monthly release of U.S. employment data by the BLS (generally on the first Friday of each calendar month. In the future, the JQI will be “presented as a three-month rolling average of monthly readings. This is done to address month over month variability which is too volatile to be a reliable directional trend measure.”

The November JQI stated:  “the U.S. Private Sector Job Quality Index (JQI)® has been revised to a level of 80.39, representing a minor decline of 0.04% from its level one month ago and reflecting a somewhat lower proportion of U.S. production and non-supervisory (P&NS) jobs paying less than the mean weekly income of all P&NS jobs, relative to those jobs paying more than such mean. The mean weekly income of all P&NS jobs as of the current reading (reflecting the level as of October 2019) was $794, a change of 0.9% from its level the month prior.”  The chart released is shown below:

The paper is divided into five parts:

Part I — Need for the JQI: The Unmeasured Problem with American Jobs

Part II — Construction of the JQI: Capturing and Tracking the Data (explains the development technical detail, setting forth the assumptions and algorithms inherent in its generation)

Part III — Applying the JQI: Illuminating Areas of Confusion in Economic Transmission (discusses the relationship and potential forecasting usefulness of the index in connection with other economic data)

Part IV — Further Developing the JQI: What the Future Holds for the Index (discusses future maintenance and expansion of the index)

Part V — Conclusion: An Index for our Time

Among other things, Part III discusses “The relevance of the resulting “Phillips Curve,” relating lower unemployment to higher levels of inflation…[which] remains—in various modified forms—part of central bank policy consideration to this day.”

It also discussed the impact of the JQI on household incomes and consumption with regard to the U.S. Balance of Trade in Goods. The authors comment, “…as American consumption has continued to rise, the goods consumed had to be produced by someone—even as U.S. goods production jobs plummeted. As evidenced by the U.S. balance of trade over the past several decades, goods consumed by Americans at the margin came increasingly to be manufactured abroad”

They later comment, “The decline in U.S. job quality over the past three decades is linked substantially to a decline in goods-producing jobs.”

 Some of the findings of the research that were of particular interest to me in Part III were:

  • “The JQI’s definition of high-quality jobs (those above mean weekly earnings) provided an average of 38.26 hours of weekly work at year-end 2018, compared with low quality (those below the mean) which provided 29.98 hours.”
  • The percentage of goods producing jobs as a percentage of total private sector jobs dropped from 25.6% in 1990 (down from a high of 43% in 1960) to 16.4% in 2018.

The researches commented, “Surprisingly, the data as analyzed with the JQI also tend to predict the performances of many other salient metrics of the national economy and—in the end—financial markets too…The JQI can significantly improve decision making of policymakers as well as better-inform participants in the financial markets.”

In their Conclusion, the authors remind us of the fact “that the US manufacturing workforce has declined dramatically in the past three decades.” Between 1970 and 1990, the decline was gradual, going down from “17.8 million manufacturing workers” to “17.7 million.” By the year 2000, “it was down 2.4 percent to 17.3 million manufacturing workers.” In the next decade, “manufacturing employment fell off a cliff. By 2010, manufacturing employment was down a shocking 33.2 percent at 11.5 million. Since 2010, the figure has crept up only somewhat, to reach 12.8 million in May 2019.”

 “Meanwhile, the total US working population has grown dramatically over those years. In 1970, manufacturing workers accounted for 22.6 percent of total US civilian employment. As of May 2019, they accounted for just 8.2 percent of the total.”

They comment, “An important question surrounding the decline of manufacturing is whether those leaving manufacturing are transitioning into better or worse jobs.  After building the new Job Quality Index, “the answer is that lost manufacturing jobs were chiefly replaced by lower-wage/lower hours service jobs.”

The White Paper confirms my research in writing three books and hundreds of articles in the past ten years — losing millions of manufacturing jobs between 2000 – 2010 resulted in a decline in the middle class because manufacturing jobs are the foundation of the middle class. Without a strong middle class, we risk becoming a nation of “haves” and “have nots.” I hope the Job quality Index will wake up more economists, Congressional representatives, and employees of government agencies to the dangers of this trend before it’s too late. 

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San Diego Has Largest Woodworkers Guild in U.S.

Tuesday, August 6th, 2019

On June 29,2019, I attended the San Diego County Fair held at the Del Mar Fairgrounds with my family as I have done annually for the past 20 years. One of my favorite exhibits is the fine woodworking exhibits, actually divided into two exhibits, one for hobbyists and professionals and one for students.  For the first time, I picked up a pamphlet about the San Diego Fine Woodworkers Association (SDFWA) and a flyer for the Cabinet and Furniture technology program at Palomar Community College.

The pamphlet described the new woodworking shop in San Diego, open for all woodworkers to join. The shop is a membership based, non-profit, all volunteer shop run by the SDFWA.  I was able to interview Gary Anderson, Member Shop Chairman about the organization and its history.

Gary said, “The Association was started by Lynn Rybarczyk in 1981 after he had seen some beautiful custom furniture in the San Francisco Bay Area. At that time, woodworkers in San Diego had few opportunities to collaborate and had no way to show their work to the public. Lynn was motivated to present the idea of creating a fine woodworking exhibit at the San Diego County Fair to the exposition staff, who agreed to develop an exhibit as long as there was an active community woodworking organization to sponsor it. 

Fortunately, San Diego’s first retail store selling woodworking supplies, tools, and materials opened about the same time —The Cutting Edge. The owner allowed Lynn to set up a card table at the store during the grand opening, and Lynn began to sign up the members of what became the San Diego Fine Woodworkers Association.

During 1981, regular meetings were held at local public schools to attract members. The San Diego Fine Woodworkers Association (SDFWA) was organized as a 501(c)(3) non-profit corporation in early 1982, and by June of 1982, the first annual show, initially called The Southern California Expo Fine Woodworking Exhibit displayed 45 pieces selected from 95 entries, all submitted by SDFWA members.  The show was such a success that Fine Woodworking Magazine gave it a multi-page spread.”  

He added, “The exhibit at the Fair is now called the Design in Wood Exhibition, and has grown to display more than 300 entries. It has achieved national and international recognition and includes demonstrations by wood turners, scrollers, carvers, and model ship builders – all members of local organizations. A traditional woodworking shop at the exhibit produces red oak children’s chairs for donation to local social service organizations. More than 1,700 chairs have been donated over the past 34 years.”    

In answer to my question about the growth of the association, Gary said, “Membership steadily increased and peaked at 1690 members in 1999. There are actually over 200 woodworking guilds/associations in the US., but San Diego’s is the largest with about 1200 members.  As far as we know, only four have their own woodworking shop.”

I asked what the difference between a “guild” and “association,” and he said that the term “guild” is often used interchangeably with “association,” but guilds historically referred to individual craftsmen rather than company members.

He explained that most of their members are doing woodworking as a hobby, and only about 10% or less are professionals who make a living from woodworking.

Gary added, “Members have access to a variety of special interest groups that provide the opportunity to connect with experts in a variety of woodworking, such as carving, CNC machining, toy building, and women in woodworking.”

When I asked when the association opened the Member Shop, he replied, “We opened the shop in June 2017, and it is 4,000 sq. ft in size.  Membership provides access to just about every kind of power and hand tool and equipment that a woodworker would need to complete a project, including, saws, router, sanders, lathes, etc.  It also has an extensive library, design software, classes, and a 3D printer.”

He explained, “One of our reasons for opening the shop was that we were concerned about the diversity of membership, both with regards to age and ethnic diversity.  Before we opened our Member Shop, we were an association of “old white men,” above the age of 60. We recognized that we needed to attract more diversity in age and ethnicity. Now, we have a lot of young people joining as members. When the shop opened, only about 3% were female and now 40% of  our new members are female.” 

The SDFWA pamphlet listed two levels of annual membership:

Silver at $250/year, which provides 15 slots (a slot is one visit to the shop for up to three hours

Gold at $395/year, which provides 50 slots

When I asked if they also have an hourly rate like a “makerspace, he said, “no, you have to be a member to use the facilities.  We don’t have provision for using on an hourly rate.”

I told him that I had also picked up a flyer at the Fair for the Cabinet & Furniture Technology program at Palomar College and asked if the association has a relationship with the college

He replied, “We have an Informal, but students have to pay to be a member to use facilities.  Some of their members have taken or are taking woodworking classes at Palomar to get more training on to expand on the member shop classes.” 

When I asked if there are any other colleges in San Diego that have a similar program, he replied, “I don’t know of any other college that has a program as complete as Palomar, which is a nationally recognized program, but I did hear that SDSU has a small program as one of its instructors became a member.”

In answer to my question as to whether there are any high schools that have woodworking shop classes, he said that he heard that Oceanside High School has a program, but he didn’t know of any others. I told him that the San Diego Continuing Education Center on Oceanview Blvd. has a small woodworking shop and classes, and the MakerPlace on Morena Blvd. in San Diego also has a small woodworking shop and classes. After the interview, an internet search showed that Escondido High School also had a woodworking shop and classes

With regards to whether or not there are any local furniture manufacturers, he responded, “I don’t know of any furniture manufacturers in San Diego other than shops making cabinets. But, SDFWA President, Travis Good, recently visited a lumber supplier by the name of Bennett-Crone, and the vast amount of their business is with woodworking manufacturers in Mexico.

After doing search on the internet, I found seven furniture manufacturers listed in San Diego County, but three of the seven have addresses down in Otay Mesa, which is the industrial park on the U. S. side of the border with Mexico, and companies in this park usually have offices on the U. S. side and manufacturing plants on the other side of the border in Tijuana, Baja California, Mexico.

There are two musical instrument companies that would utilize the woodworking skills of SDFWA members:  Deering Banjo Company in Spring Valley, and Taylor Guitar Company in El Cajon.  However, Taylor Guitar also has a plant in Tecate, Baja California, Mexico.

I thanked Gary for all of the information and arranged to visit the Member Shop soon. I enjoyed learning about the background of my favorite exhibit at the San Diego County Fair. If any furniture manufacturers doing business in China and other parts of Asia decide to return manufacturing to America, the San Diego region would have an abundance of skilled workers to staff their plants

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Urban Workshop Sets High Bar for Makerspaces

Tuesday, May 21st, 2019

·         Autodesk Fusion 360 Software -Free Fusion 360 software for Urban Workshop and for all members.

After the NACCE summit I attended on April 27th formally ended at 1:30 PM, I went on the optional tour of a nearby makerspace, the Urban Workshop in Costa Mesa. It is the largest makerspace I have visited in my travels around the country and is the largest makerspace in southern California.

“Urban workshop was born out of my engineering and manufacturing company called Automotive Technology Group Inc., which opened in 2001. Prior to the economic downturn, we were one of the top EV and hybrid vehicle engineering houses in the country doing advanced R&D for the large auto makers and smaller startups such as Fisker Automotive. We also did a small number of professional motorsports.

When the economy slowed, most of the engineering services and manufacturing dried up but the motorsport business swelled. The rich guys who were racing cars weren’t affected by the downturn of the economy so we did well. Around January 2013, I started doing STEM presentations to kids at local high schools and colleges to tell them about the race cars hoping to peak their interest in the sciences. I had heard about makerspaces and started asking some of the teachers their opinion about them. Jokingly, they started to introduce me as the guy who is opening “The Shop.”  I didn’t correct them, and before I knew it, people were showing up at ATG asking if this was “The Shop” and if it was open yet.

The Urban Workshop was founded by, and is privately owned by, Steve Trindade. During the tour, Steve told the story of how he started the makerspace, and later emailed me the following story:

“By January 2014, I had become very frustrated with the engineering services business due to customers not paying or going out of business leaving me holding the bag. Simultaneously, three to five people per week were stopping by to look for “The Shop.” That was when I decided to go for it. We wound down the projects we were working on, and signed a lease for a 5,500 square foot R&D space in May 2014.”

Steve said, “Our facility was basically built, painted, and set up by volunteers. People who walked in the front door and asked, is this “The Shop?”  I said, It’s Urban Workshop, but we aren’t open yet. Almost always they replied, can I help? I said yes, and put them to work.

In the end, we renovated the facility and got ready to open with nearly all volunteer help. Using all volunteer help, we set up the new facility and opened as Urban Workshop on July 2014. We had a similar experience with volunteer help when we moved into our current larger building in April 2015.

Since then, the business has grown significantly, and our membership is over 1,700. Our small business members do approximately $20M in annual revenue directly out of our facility, and collectively they have raised nearly $70M in angel and venture funding. In 2015, we added youth programing similar to the old school shop classes and now serve over 1,000 students age 10 to 16 years old annually.”

I was impressed by the kind of equipment and resources the Urban Workshop provides. It is a full-scale DIY workshop and makerspace meaning that it includes all aspects of engineering, prototyping and manufacturing equipment.  Steve said, “We have nearly $1M worth of equipment and because we used to be a professional services company, all of the equipment is current state of the art industry relevant equipment as opposed to the typical hobby level equipment you find in all other makerspaces. We teach classes on all the equipment and continue to add classes as fast as we can generate the course materials.

The equipment I saw on the tour included computers and software, large format plotters and printers, 3D printers, laser etchers, sheet metal fabrication equipment, manual and CNC machines, MIG and TIG welding, a vacuum forming machine, an autoclave, a silicone molding pressure pot, an extensive wood shop with a large CNC router, a composites fabrication shop, a vinyl cutter, sewing equipment, an electronics lab, and an auto shop with five auto lifts. 

On their website, the following companies are listed as commercial partners/supporters:

·         Epilog Laser Etchers – Educational pricing on equipment and extended warranty support to Urban Workshop

When I asked what “Making” meant to him, he said, “In one word, opportunity. Opportunity for our members to learn new skills, open a new business, fix something, help others, learn a new skill, make a new friend, complete a personal project or who knows what. It has been very satisfying to watch people come in the shop with one idea and end up making five more things they never thought of before on equipment they have never used before with the help of someone they met at Urban Workshop.”

·         Haas CNC Machines Educational pricing on equipment, extended warranty support, free computerized training and simulation station to Urban Workshop.

·         Autodesk HSMWorks Free HSMWorks CNC programming software for members to use on site.

·         SolidWorks– Free engineering software for members to use on site.

·         Laguna Tools – Educational pricing on equipment, software and extended warranty support to Urban Workshop.

·         National Instruements – Free Virtual Bench all-in-one test equipment and LabView software for members to use on site.

·         Ingersoll-Rand – Educational discount on machine tooling and fixtures to Urban Workshop.·        

Steve said, “The initial response to Urban Workshop was overwhelmingly positive, and the level of enthusiasm was incredible. The response continues to be great and the level of excitement and comradery continues to grow. Almost weekly a member comes to my office to thank me for opening the shop and enabling them to be able to make their dream project or start their new business. I knew this would be fun and satisfying, but I never imagined the extent that it would be so well received.”

One other observation he made is that whether you call it hacking, making, or tinkering, “the desire people have to use their hands is universal and fundamental. It is extremely satisfying to figure something out, address a problem or need one has or create something from scratch. I believe it has a therapeutic value and allows one to focus on something for a time without distraction. This is something that is unusual in these days of smart phones and social networking.”

In describing the projects his members are working on, he said, “Theyvaryjust as much as the members do. We have young professionals who are starting their own businesses all the way to the “burning man” crowd. It is impossible to nail it down and give a simple example. I have seen everything from ruggedized super tablets designed and manufactured in the shop to an Arduino controlled dog feeder and a talking Wi-Fi enabled Christmas tree. Urban Workshop’s membership is approximately 45% startups developing and manufacturing new products, 40% hobbyist, and 15% students. The hobbyists are the most diverse and work on home projects, vehicle restorations, boats, motorcycles, gifts, tons of wood working and cabinetry, arts and crafts, holiday decorations, cosplay, prop making, toys, and you name it.”

When I asked what his future plans are, he said, “Our long term the goal is to open additional locations. Currently, we are expanding our class offering to include many more project classes that will help guide people on the path of making. The youth program continues to grow, and additional levels will be added. Our most promising new product is the licensing of our operational procedures and class documentation to other makerspaces world-wide, providing operational training, and instructor training to enable them to prosper and help even more people.”

I’ve only visited one other makerspace about which I wrote, Vocademy in Riverside, that had a plan to expand to other locations, but its focus was on working with high schools to provide the career technical training that high schools used to provide.  With the depth and breadth of Steve’s business experience, he is more likely to succeed with his future plans than others. 

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