FAME Develops World Class Manufacturing Technical Talent

February 4th, 2020

Over the past several years, I’ve written nearly 30 articles about programs that address the shortage of skilled manufacturing workers. Last Friday, I had the pleasure of being connected by a friend to interview Dennis Dio Parker, who heads up the Federation for Advanced Manufacturing Education (FAME). The purpose of FAME “is to be the driving force for developing global-best technical talent for manufacturing and other employers of technical workers.  FAME strives to be a powerful conduit between industry and education.”

Dennis told me that according to the 2018 Deloitte and The Manufacturing Institute Skills Gap and Future of Work study. “The Fourth Industrial Revolution is transforming the world of work through artificial intelligence, advanced robotics, automation, analytics, and the Internet of Things. Despite common fears, these technologies are likely to create more jobs than they replace—as illustrated by the tight labor conditions in the US and global manufacturing industry.”

While there was a shortage of about 500,000 unfilled jobs in 2018 due to the skills gap of manufacturing workers, the “study reveals that the skills gap may leave an estimated 2.4 million positions unfilled between 2018 and 2028, with a potential economic impact of 2.5 trillion.” The reason why 2028 is a watershed year for the age of workers is because the last of the Baby Boom generation (1946-1964) and the first of Generation X (1961-1981) would be starting to retire.

Dennis explained that the FAME Advanced Manufacturing Technician Program was an outgrowth of training that Toyota Motor North America provided for employees when they built their new manufacturing plant for vehicles in Georgetown, KY in 1987.  Dennis was one of the first 13 trainers hired to start the training in 1987 and he is the last one still working of the original 13 as he transitions to support transfer of the program after The Manufacturing Institute and Toyota Motor North America announced a partnership to hand-over operation and stewardship of FAME in September 2019.

Dennis added, “Toyota had the advantage of having a culture of continuous improvement, and we continually improve the program. The original vision was to have the training program set up at eight locations where Toyota has a manufacturing presence in North America. We wanted to have other manufacturers as partners in these regions to create a pool of skilled workers for all.  Part of our goal was to help solve the problem of the lack of skilled workers, but the problem is too big and endemic for one program to solve.  There are a lot of good programs, but FAME is different from the others in the way it is structured. This is an employer-led program, not an education-led program.”

When I asked how the training expanded out of Toyota, he said, “In 2005, Ernie Richardson and I made a proposal to Keith Bird, Kentucky Community Technical College Chancellor and Jim Kerley, BCTC President to build a new community college in Georgetown to introduce a new education program. The new campus design was established at NAPSC in 2006 and began operation with the first students in 2007.

With the campus in place, we completed development of the Advanced Manufacturing Technician program establishing an employer group to participate in it. I contacted Ken Carroll, then V. P. of the Kentucky Association of Manufacturers, and worked with him to develop an employer collaborative to support the AMT program. We held the first discussions with other companies in 2008 – 2009, and by October we had formed an organization and elected officers. The first name was the Bluegrass Manufacturing Development Collaboration. (B-MDC)”

He explained why the program stalled, saying, “The Great Recession hit full force in 2009, and we decided to be inactive until business conditions improved. However, Toyota began the first AMT training class in August 2010 at the new campus. By 2011, business conditions had improved to the point that Ken and I decided that it was time to restart the B-MDC. On September 29, 2011, the group met again. We had invited a number of special guests to help relaunch the effort, including Jennifer McNelly, president of the Manufacturing Institute; Wil James, president of Toyota’s Kentucky plant; Dr. Vince Bertram, national president of Project Lead the Way; and Dr. Stanley Chase, a national expert on educational collaboration with business and industry. Since that meeting, the employers group supporting the AMT Program has been in continuous operation.”

Continuing, he said, “Other companies sponsored their first students in the AMT Program with the class of 2012 when 3M, Central Motor Wheel Manufacturing, and GR Spring added their students. In March of 2013 the re-born B-MDC elected new officers, installing Terry McMichael of 3M as President and Danette Wilder of SealingLife as Vice President.”

When I asked how the name was changed to FAME, he said, “The West Virginia Toyota plant started the AMT Program with their college and in close partnership with the West Virginia Manufacturers Association (WVMA). When West Virginia governor announced the start of the AMT Program, he also announced “WV FAME” as the name for the future group of manufacturers which would support AMT in West Virginia.  The “FAME” name was immediately recognized as a powerful promotional identifier for the whole Advanced Manufacturing Career Pathways effort, and with permission of the WVMA, we adopted FAME as the name for North American use, and the B-MDC voted to change the name of the group to KY FAME.”

He added, “On January 14, 2014, Governor Steve Beshear announced the formal incorporation of KY FAME as a state-wide organization with a state board of directors to guide it and direct support of the Kentucky Cabinet for Economic Development. The Kentucky Community and Technical College System adopted AMT as a state-wide degree track, available anywhere that a local FAME chapter formed. a KY FAME chapter.

Dennis expressed that the results of the training were so compelling that the FAME sites became a destination for educators and educational researchers, business and industry, and news organizations. The AMT programs in Kentucky began contributing to research and study efforts, and had over 1000 visitors from across the U.S. and six foreign nations.  It was judged by many national educators and workforce leaders to be the best 2-year technical program in the U.S.  

He said, “The results of the program and the publicity fueled the growth beyond what Toyota ever expected. It became more than what Toyota could effectively support.  Toyota wanted to maintain what they had, but wanted to establish it on a long-term basis. This is what led to the program being transitioned to management by The Manufacturing Institute. In order to help make this transition successful, I am now on assignment by Toyota for the next few years to manage the transition.”

Dennis explained, “There are currently 403 participating companies at 34 community college campuses and four universities in 13 states, and the numbers are growing every year. The reason for the success is that the employer, not the student, is the number one customer and the profoundly higher outcomes of FAME AMT graduates compared to traditional graduates.  The program incorporates the six professional behaviors, the seven essential behaviors, and the five professional practices, all soft skills, in addition to the manufacturing core exercises that are based on five Lean manufacturing practices.  As a result, the program provides globally competitive technicians that support the success of U. S. manufacturing. The program is a core pipeline for students to continue to Advanced Manufacturing Business and Advanced Manufacturing Engineer degrees. In the AMT program, students go to school three days a week, and work for their sponsoring manufacturer two days a week.  The students are paid for their work, and the student makes enough to pay their tuition, so they can graduate without any student debt.”

He elaborated on future strategies by saying, “We want to proactively change the equation for technical career pathways.  We have been partnering with Project Lead the Way (PLTW) to engage PreK-12 students in the career pathway because they have a comprehensive, seamless, and coordinated PreK -12 program nationwide.  Toyota and others are already providing plant tours to high school students in PLTW programs.  Currently, the PLTW national office supports FAME with development or material and other engagement activities and FAME supports the PLTW national office with PR and involvement with activities on a regional basis.

We also partner with the National Alliance for Partnerships in Equity (NAPE) because they focus on encouraging young woman and minorities to choose STEM careers.  Their “Make the Future” program, developed at our request, is connecting girls to manufacturing.”

I told him this topic is dear to my heart as I have been a woman in manufacturing since starting as an engineering secretary at age 18. I concluded the interview by saying it was a pleasure to learn about FAME and hope that it will expand westward in the future all the way to California where I live.

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U.S. Private Sector Jobs Have Declined since 1990

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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China RX Exposes Risks of Dependence on China for Medicines

November 26th, 2019

After her presentation at the Made in America trade show last month, I met Rosemary Gibson, co-author with Janardan Prasad Singh of China RX, published in 2018. China RX is an expose of the pharmaceutical industry just as Death by China by Greg Autry and Peter Navarro was an expose of the general manufacturing industry. China RX describes how the pharmaceutical industry has transferred the manufacturing of generic drugs to China, which has resulted in great risk to the health of Americans as well as a substantial risk to our national security.

If you take prescription drugs, over-the-counter medication, or vitamins, then this book is a must read for you. I was horrified to learn that both of my blood pressure medications (Amlodipine and Lisinopril) are produced in China. Would you believe that 80% of all ingredients of pharmaceuticals and 100% of ascorbic acid are now made in China according to Ms. Gibson’s presentation.  We are talking about antibiotics, birth control pills, antidepressants, pain relievers, not to mention drugs that treat HIV/AIDS, cancer, bipolar disorder, and epilepsy. The list even includes antidotes to Ebola and Anthrax. Doesn’t that frighten you?

The authors immediately capture your attention with the story of one of the victims of the contaminated heparin blood thinner scandal of 2008, Bob Allen, MD.  Heparin is routinely given to patients to prevent the formation of blood clots in the blood vessels, but in his case, the contaminated heparin caused blood clots leading to such a massive heart attack that his heart completely failed, and they had to remove his heart and hook him up to an artificial heart until he could have a heart transplant. Unfortunately, the heart transplant three months later didn’t succeed, and Dr. Allen’s death became another statistic of the 246 reports “made by healthcare professionals to the FDA about deaths associated with heparin from January 1, 2008 to May 31, 2008.” However, “As with all reports it receives, the agency makes no claim of certainty that a death was caused by a drug.”  

How did the pharmaceutical industry start sourcing pharmaceuticals in China? In Part II, “Pivot East:  How it Happened,” the authors document the complex chain of circumstances that led to China becoming a major source of pharmaceuticals.  The story is similar to what was described by the authors of Death by China. Once a patent for a drug ends, the manufacture of generic versions to that patented drug begins. Competition reduces the price of the drug sometimes to the point that the original manufacturer can no longer compete in producing the drug. In order to retain any market share, the original manufacturer may seek to reduce manufacturing costs by subcontracting the manufacture of the drug to an outside source.  Due to lower costs of labor and other costs of doing business, China became the source of choice. This outsourcing benefitted American pharmaceutical companies to begin with, but in the long-run has led to the decline of the American pharmaceutical industry resulting in closed plants and loss of jobs.

The authors point out that corporate America, and particularly multinational corporations, focus on short-term, profit-driven outcomes whereas China focuses on long-term outcomes. When American companies source production of goods or pharmaceuticals, they are essentially transferring the technology and know-how to Chinese vendors. The outcome for such pharmaceutical companies as Baxter, GlaxoSmithKline, Johnson & Johnson was that their Chinese vendors began to produce their own brands to compete with their former customers. As they have done with other manufactured goods, Chinese pharmaceutical companies began to flood the U. S. market with lower cost drugs driving prices down to the point that American companies stopped producing certain medications. For example, the authors state that the last plant making aspirin in the U. S. closed in 2002.

You might be asking yourself, why doesn’t the Federal Drug Administration put a stop to importing drugs and medicines produced in China? In Chapter 9, “Are Drugs from China Safe,” and Chapter 10, “Made in China, Sue in America? Good Luck” the authors outline the complex factors that prevent the FDA from preventing this from happening. 

In chapter 11, “The Perfect Crime,” the authors state: “A poorly made or deliberately contaminated prescription drug is a perfect crime. It is hard to detect. Manufacturers keep the public in the dark. Regulators are tight-lipped so they don’t offend manufacturers. Perpetrators are rarely caught. Most victims are unaware.” They outline how the underfunding of the FDA is a major source of the problem. In fact, in 2014, there were “Only two full-time FDA staff members are assigned to work in the agency’s office in China to inspect drug-manufacturing facilities…”  While funding has been increased since then, the authors conclude that “outsourcing of America’s medicine making is so complex it seems impossible to ensure that they are safe.”

Chapter 12, asks the question “Where does the Secretary of Defense procure his medicine?  You would hope that the answer would be made in America. The authors write, “They must be made in the United States or in an approved country according to the Federal Trade Agreement Act (TAA) of 1979. China is not a designated country. The TAA allows for exceptions when no other source is available…” Thus, when the authors contacted the Pentagon to see which drugs were made in China due to lack of availability, “A spokesperson replied that the department has had to buy thirty-one prescription drugs from China.” The same is true for the Veterans Administration that provides healthcare for all of our veterans and their families.

In chapter 13, The authors do an outstanding job of showing the danger to our national security. by being dependent on China as a source of vital medicines and medical devices. They quote Dr. Goodman, dean of the Milken Business School of Public Health at George Washington University, saying, “It is a matter of national security that we have the essential drugs we need…I think it is time for an examination, for some of the most critical drugs, and it’s not just drugs, medical supplies, masks are all made overseas. Do we need to think about having at least some resilient manufacturing capacity built in this country?”

The book concludes with the authors’ ten-step plan to bring the pharmaceutical industry home. You need to read this for yourself.  Relying on China for the bulk of our medicines and medical supplies makes about as much sense to me as if we had bought these products from the Soviet Union during the Cold War. China has not become the more market-oriented or more rule of law country that some hoped would happen. They have changed from producing commodities to going after advanced technology production in pursuit of their plan to become the Super Power of the 21st Century. China could bring the U.S. to its knees and achieve their goal by simply disrupting the supply of critical drugs to America. Medicines are essential to life. Think of what could happen if we had an epidemic, and China withheld the antidote. Congress and the White House must take the steps the authors recommend to ensure the health of Americans and our national security  

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Women Lead Made in America

November 12th, 2019

Few people are aware that more than 11.6 million firms are owned by women, employing nearly 9 million people, and generating $1.7 trillion in sales as of 2017.  In fact, women run businesses are helping to lead a resurgence in American manufacturing.

Many women-run businesses participated as exhibitors in the Made in America show, and as I mentioned in my last article, I participated as a panelist for the Women Leading America Made session that featured five women running their own American-made businesses. Moderator Rose Tennent asked each of us to briefly describe our businesses.

Barbara Creighton, CEO of Sarati International, Inc. started her company in 1992 in south Texas to make private label prescription drugs, proprietary drugs, and skin care products. She said, “We develop custom formulations and then private label them. We make products like you would purchase, and we private label them. We are woman owned and woman run.”

Beverlee Dacey, owner of Amodex Products, said that her parents started the company in the early 1970s, and now she runs it.  “We make a soap-based product that is an ink and stain remover liquid solution and do our own manufacturing in Bridgeport, CT. Amodex is the only stain remover recommended by the manufacturer of Sharpie to remove Sharpie ink from anything.”

Connie Sylvester said, “I am an inventor and founder of two companies, Water Rescue Innovations and Mommy-Armor USA.  I founded my first company six years ago in Duluth, MN to make the ARM-LOC water rescue device that slides onto the victim’s forearm and locks into place so that a rescuer can pull the victim to safety.  I sell to a male-dominated industry of first responders, fire-fighters, police, and rescue squads. I’m often the only woman telling men how to rescue people.”

She shared how she started her second company, Mommy Armor USA. On February 14, 2018, after she dropped off her son at school, she got a text message saying there was a school shut down due to a shooter. She was thankful that it wasn’t at her son’s school, but her heart broke for the 17 parents that lost their children at Parkland in Broward County, Florida.  She said, “There was a problem, and I came up with a solution. I had some bullet proof material and suggested to my son that I could make a bullet-proof backpack, but he said they had to leave their backpacks in their lockers. I asked what they got to take to class, and he said they get to take their 3-ring binders. My other son said they get to take their daily planners. So, I got the idea of making a bullet-proof cover for the 3-ring binder and the daily planner.”

She then demonstrated how the bullet proof daily planner could be attached to the 3-ring binder and how it could be used to shield your body like armor. She is just launching the product in time for Christmas.  She has the Mommy Armor fabricated by a company in the hills of the Appalachian Mountains, Capewell Aerial Systems LLC.

Leigh Valentine, founder of Leigh Valentine’s Beauty said that she went through a terrible divorce, lost everything, slept on the floor, and was on welfare for a while. Then, the Lord gave her an incredible idea for a non-surgical face lift product made from plant extracts that dramatically firms skin and takes away wrinkles.  She was on the QVC shopping network for 14 years and sold over 40,000,000 products.  She said many people have told her she could save money by buying from China, but she said, “All of my products are made in America, and I try to buy as much as I can in America.”

I shared that when I started my sales agency 34 years ago, I chose to only represent American manufacturers.  I was a woman in a man’s world because I started out selling castings, forgings, and extrusions. No buyer or engineer I saw had ever been called on by a woman.  I visited all of the companies I represented and learned everything I could about their manufacturing so I would be informed. When I saw what was happening to manufacturing and how it was being decimated, I started writing blog articles and reports and then wrote my book. Can American Manufacturing be Saved” Why we should and how we can that came out in 2009. A second edition came out in 2012, and I have written over 300 articles in the past ten years. We have saved American manufacturing, and now we need to rebuild it. I showed everyone my latest book, Rebuild Manufacturing – the key to American Prosperity.

Rose asked us to what message we would give to a woman who has an idea for a product or who has already started her own business.  Leigh said, “You really have to fight to bring your product to market. I partnered with some people that I wish I never had partnered with.” She would advise women that if they need a partner “be careful to pick a partner that has the same values and vision you do. They will steal from you and lie.” In the end, it cost her $6 million to end the partnership.

Beverlee said, “When you run a company, don’t think you are ever going to reach an equilibrium where you don’t have problems. Every single day there are stress and problems. Then you realize that the problems don’t go away, they just get bigger and worse.  It is normal.  It is part of what you do when you run a company. The other lesson I have learned is don’t grow too fast. There is only so much you can do and only so much you can do well. We are only a five-person company. When we got picked up by Lowes, we made the decision not to go with Home Depot because we wanted to be a good partner to Lowes.”

Barbara said, “Don’t believe all the lies that are being sold to young people. There is no a glass ceiling. Men created the glass ceiling to keep women down. I have never felt held back by a glass ceiling. I was the first women on the west coast to sell chemicals, and the first women in land development. The ceiling is only created by you.”

Connie said, “Don’t set the bar too low and never give up.”  She did high jumping like her brothers and they never lowered the bar for her even though she is only 5 ft. 3 in.  She actually coached track and field for five years.

I said that I would advise a woman to never stop learning. “I recently got my certificate in Lean Six Sigma to be of more service to my customers. Service is all I have to offer — service to the companies I represent and service to my customers.  When I started my company, I chose a motto:  you achieve your goals by serving others.”

Rose commented that there seems to be more comradery at this trade show and asked us to share what we thought about the show.

 Leigh said, “It is such an honor to be here. I am thrilled and honored to be here. This is a movement, and we’ve got to stick together and support each other’s businesses.”

Connie said, “This is like a family. I was actually at another Expo here and saw an announcement on the TV in my hotel about this show, and I knew I had to be here.  When I walked the aisles, I knew I had found my people. Everyone of these people know what it takes to make products in America.  We could have hit the easy button and made things cheaper in other countries, but we chose to make our products in America.”

Barbara said, “In this incredibly divisive world, we need to help one another. I am extremely excited about being able to share joy. I just try to lift others up. We are Americans and are proud to be Americans, and we want to have joy in a country that has given us amazing opportunity.”

Beverlee said, “The Made in America movement has been around for awhile now, but what I have enjoyed the most is that for the first time we have a “hubable” wheel where there were a lot of silos. All of us here are together in this.  It’s not a trade show, it’s a forum.”

I said, “This show is a dream come true for me. Most people don’t realize that manufacturing is the foundation of the middle class. We lose manufacturing and we lose the middle class. We’ve had wage stagnation for 20 years, and my children aren’t as well off as I was. We have to get the message across to our children and grandchildren of how important it is to make things in America again. I heard it said that there are only three ways to create tangible wealth: “Grow it, mine it, or make it.” We need to create wealth for our country by making things in America so we can have a safe and free country. After our panel session ended, we said that we would look forward to seeing each other again at the 2020 Made in America Show. We know it will be even bigger and better, so don’t miss it.

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Made in America 2019 Trade Show Sparks New Revolution

October 22nd, 2019

It was a dream come true to see so many innovative companies making products in America when I attended the first Made in America trade show that was held October 3-6th in Indianapolis, IN. The event began during Manufacturing Week declared by President Trump and the show opened to the public on the national Manufacturing Day. Not only was it the largest-ever public showcase of American made products, the focus was different than any other trade show I’ve ever attended. 

My plane from San Diego arrived too late Thursday to attend the gala kickoff party where the band Big & Rich and special guest Ted Nugent entertained the audience. While at the show, John Rich announced his generous donation of over $50,000 to Folds of Honor, a nonprofit organization that provides educational scholarships to families of military servicemen and women who have fallen or been disabled while on active duty in the U.S. Armed Forces.

Fox News sent Fox & Friend’s correspondent, Carley Shimkus, to report live from the show on Friday and Saturday, and she did an update every hour (watch the videos at foxnews.com).

On Friday, opening ceremonies began at 9:00 AM, an hour before the show opened to the public. After prayer was offered, a color guard presented the flag for saluting, and the national anthem was sung anthem, the audience was welcomed by show’s founder and chairman, Don Buckner, and COO, Brad Winnings, and Indianapolis Mayor Joe Hogsett welcomed everyone.

Then, Lloyd Wood, Deputy Asst. Secretary for textiles, Consumer Goods and Materials made brief comments on behalf of the Trump Administration, noting that 500,000 manufacturing jobs have been created since the beginning of 2017, there are 7,000,000 current job openings, and 300 companies of the National Council for American Workers have signed a pledge to expand apprenticeships  He also mentioned that President Trump just signed trade agreement with Japan and is working on trade agreement with United Kingdom.

Economist Stephen Moore, was the featured pre-show speaker. Highlights of his comments were:  average income has increased by about $5,000 per year since 2017, unemployment is down to 3.4%, and Black and Hispanic unemployment is at record low.  Federal tax revenue was higher than any previous year; regulations are down by 34%, yet air quality is better as CO2 emissions have been reduced by 70-80%. Also, for the first time, we are a net exporter of oil and gas.  

Radio talk show host Mike Gallagher, one of the most listened-to radio talk show hosts in America, broadcast his show Friday at the booth of Mike Lindell of My Pillow fame. Mr. Lindell had a booth for his new venture, My Store, which will feature only American-made products for online sales. He was one of the guests on the show along with economist Stephen Moore and Mike Lindell.

After the show opened, there was a simultaneous schedule of speakers from 11:00 AM to 3:00 PM.  Harry Moser, founder and president of the Reshoring Initiative started off the sessions with “What’s Happening with Reshoring.”  By using the TCO Estimator, nearly 3,000 companies have reshored manufacturing to America since 2010 creating nearly 800,000 jobs.  Next, marketing guru, Steve Schwander discussed “How to listen to the customer.”  After lunch, the afternoon sessions were “Protecting your IP from abuse in China” by Amy Wright and “Stay out of trouble when making Made in the USA claims” by Russell Menyhart. Mark Andol, CEO of General Welding & Fabricating, concluded the afternoon session by telling how his Made in America Store has reached big milestones in its mission to save and create American jobs by boosting US manufacturing for nearly a decade. His store in Elma, NY features over 9,000 Made in USA products.

I didn’t spend my time listening to these presentations as I wanted to see the displays by exhibitors.  Outside of the Consumer Electronics Show in Las Vegas, I’ve never been to a show with so much variety of consumer products.  Of course, most of the products exhibited at CES are made offshore, whereas all of these products were made in America.  It was a pleasure to see American made bedding, mattresses, furniture, rugs, draperies, flatware, dinnerware, cook ware, cabinets, and other kitchen goods. These are all industries that some said were lost forever.  There were also bicycles, sports equipment, tools, and toys.  It was especially nice to see Made in America apparel and make up.

While a few of exhibitors probably exhibit at county fairs for their homemade crafts and food stuffs like candy, popcorn, pickles, and sausage, other exhibitors were the more traditional plastic, rubber, and metal fabricators that exhibit at shows like WESTEC, FABTECH, and the regional Design2Part shows. There were also companies that probably don’t exhibit at traditional trade shows, including a company that builds roller coasters.  With about 300 exhibits, it took me both days to completely walk the show as I stopped to talk to so many exhibitors. 

While Friday’s show ended at 5 PM for the public, it was followed by a dinner and speeches for exhibitors, sponsors, and VIP’s.

First, Don Buckner shared his story of how and why he started the Made in American show.

Mr. Buckner said, “I started a company in my garage 20 years ago and recently sold it.  Now I have the resources, capitol, and desire to finally do something.  We decided to make a difference. So, we came up the idea of a trade show in Indianapolis. We rented the Indianapolis convention center for the first week of October to bring 700-800 manufacturers and celebrate U.S. manufacturing in a way that’s never been done before. If you draw a circle around Indianapolis, about a 200-mile radius, probably about half of our manufacturing is in that circle. And the other thing is the heartland of this country truly does believe in buying American-made products being pro union, pro-labor and blue collar.  The name and brand of Made in America has been around for over 100 years. It has value and means quality.  According to Consumer Reports, 80% of Americans still want to buy an American made product, and of those 80%, 60% of those are willing to pay a premium for an American product….” 

Next, Wahl Clipper Corporation, the household name in grooming, presented a $75,000 check to Jeremiah Paul, spokesperson for Wounded Warriors for the Wounded Warrior Project.

Hernan Luis y Prado, founder and CEO, described Workshops for Warriors (WFW), which is a GuideStar platinum-rated nonprofit that provides training for veterans, wounded warriors and transitioning service members to fill America’s void of qualified CNC machining, 3-D printing, welding and advanced manufacturing workers. Since WFW is located in San Diego, I’ve written three articles in the past to support his mission and goals.

Alfredo Ortiz, President and CEO of Job Creators Network, briefly explained that JCN is a nonpartisan organization whose mission is to educate business leaders, entrepreneurs, and employees and provide them “with the tools to become the voice of free enterprise in the media, in Congress, in state capitals, in their communities, and their workplaces—allowing them to hold politicians accountable to job creators and their employees.”

Paul Wellborn, President and CEO of Wellborn Cabinets, accepted the award for American manufacturer of the year on Friday night because he had to leave the show to attend the wedding of his grandson on Saturday. A whole Made in America kitchen was on display at his company’s booth. The award categories highlighted rebuilding America’s manufacturing workforce through reshoring and innovations in manufacturing techniques. The rest of the awards were presented on Saturday night.

My Pillow’s founder and President, Michael J. Lindell, ended the evening with his personal story of going from being a crack addict to becoming a multimillionaire business owner thanks to the intervention of friends and help from God. The evening event lasted until 9:30 PM and ended with a closing prayer.

There is no way to do justice to the show in one article, so my next article will cover day two of the show.

One of the video promos for the trade show said, “There was a time not too long ago when a little elbow grease and a whole lot of pride defined American made.  We were industrialists driven by determination and innovation. We set the bar for quality and ingenuity, generation after generation. Something changed — Technology, foreign influence, loss of respect for the American worker.  It cost us our jobs, factories, communities, our homes. Some called it a natural evolution.  We call is the spark of a new revolution. We are redefining the next chapter in American made history bringing prosperity to the red, white, and blue behind every man and women committed to returning our country back to its glory days of manufacturing.  We invite you to join us in this monumental revolution.  The power of change belongs to us…” 

I believe this trade show did become the spark of a new revolution and I am joining it. I made it my goal ten years ago when I published my first book, Can American Manufacturing be Saved?  Why we should and how we can to do everything I could for the rest of my life to first save and then rebuild American manufacturing to create prosperity. I am glad I am no longer a lone voice in this cause. Please join us.

Posted in Economic Development, Made in America, Manufacturing | No Comments »

Baldwin-Hawley Act Would Fix Overvalued U.S. Currency Problem

September 3rd, 2019

The Baldwin-Hawley Senate Bill, S.2357, titled the “Competitive Dollar for Jobs and Prosperity Act” was introduced by Sen. Tammy Baldwin (D-WI) and Josh Hawley (R-MO) on July, 31, 2019. The purpose of the Bill is “To establish a national goal and mechanism to achieve a trade-balancing exchange rate for the United States dollar, to impose a market access charge on certain purchases of United States assets, and for other purposes.”

This Bill is the legislative vehicle for the Market Access Charge (MAC) first proposed in a paper titled, “The Threat of U.S. Dollar Overvaluation: How to Calculate True Exchange Rate Misalignment & How to Fix It” released on July 11, 2017 by the Coalition for a Prosperous America and written by Michael Stumo (CEO), Jeff Ferry (Research Director) and Dr. John R. Hansen, a former Economic Advisor for the World Bank, CPA Advisory Board member, and founding  Editor of Americans Backing a Competitive Dollar (ABCD).

The paper explained the problem of the dollar overvaluation, showed how to accurately calculate the dollar’s misalignment against trading partner currencies, and proposed a solution to this serious threat to America’s future by means of a Market Access Charge (MAC). Dr. Hansen’s proposal was “to initiate the MAC with a 0.5% charge “on any purchase of U.S. dollar financial assets by a foreign entity or individual…As a one-time charge, the MAC will discourage would-be short-term investors, many of whom hold dollars or dollar-denominated securities overnight or even for minutes for the sake of a tiny profit.

The MAC rate would operate on a sliding scale, geared to the value of the trade deficit as a percentage of GDP. The MAC tax would rise if the trade deficit rose, and fall as the trade deficit falls… Most importantly, the MAC would have a substantial impact on the dollar’s value, moving it gradually and safely to a trade-balancing exchange rate and keeping it there, regardless of what other countries do. If the trade deficit goes to zero, so would the MAC.”

In an email to supporters on August 13, 2019, Dr. Hansen wrote, “A major milestone has just been reached in the battle to kill the U.S. trade deficit, stop the offshoring of U.S. industry, and put millions of Americans to work at well-paying jobs…The bill’s presentation to the Senate is indeed a major milestone – but only one of many that lie between where we are today and the bill’s ultimate passage. You support and advice would be most welcome as the process moves forward.”

The Bill’s summary cites the following ”Findings” by Congress:

 “(1) The strength, vitality, and stability of the United States economy and, more broadly, the effectiveness of the global trading system are critically dependent on an international monetary regime of exchange rates that respond appropriately to eliminate persistent trade surpluses or deficits by adjusting to changes in global trade and capital flows.

(2) In recent decades, the United States dollar has become persistently overvalued, in relation to its equilibrium price, because of excessive foreign capital inflows from both public and private sources.

(3) Countries with persistent trade surpluses maintain or benefit from undervalued currencies over a long period of time. As a result, those countries overproduce, underconsume, and excessively rely on consumers in countries with persistent trade deficits for growth. Those countries also export their unemployment and underemployment to countries with persistent trade deficits.

(4) Countries with persistent trade deficits, including the United States, absorb the overproduction of countries with persistent trade surpluses, thereby reducing domestic wages, manufacturing output and employment, economic growth, and innovation.

(5) The United States possesses fiscal and monetary tools to pursue national economic goals for employment, production, investment, income, price stability, and productivity. However, exchange rates that do not adjust to balance international trade can frustrate the achievement of those goals. The United States does not have a tool to manage exchange rates in the national interest.”

The Bill defines a “United States asset” as “(i) a security, stock, bond, note, swap, loan, or other financial instrument—

(I) the face value of which is denominated in United States dollars;

(II) that is registered or located in the United States; or

(III) that is an obligation of a United States person;

(ii) real property located in the United States;

(iii) any ownership interest in an entity that is a United States person;

(iv) intellectual property owned by a United States person; and

(v) any other asset class or transaction identified by the Board of Governors of the Federal Reserve as trading in sufficient volume to cause a risk of upward pressure on the exchange rate of the United States dollar.

It excludes:  “(i) a good being exported from the United States; or (ii) currency or noninterest bearing deposits.”

In the above mentioned paper, Dr. Hansen proposed that the MAC to be “a 0.5% charge on any purchase of U.S. dollar financial assets by a foreign entity or individual…As a one-time charge, the MAC will discourage would-be short-term investors, many of whom hold dollars or dollar-denominated securities overnight or even for minutes for the sake of a tiny profit. The MAC rate would operate on a sliding scale, geared to the value of the trade deficit as a percentage of GDP. The MAC tax would rise if the trade deficit rose, and fall as the trade deficit falls…”

The Balwin-Hawyley Bill stipulates that “On and after the date that is 180 days after the date of the enactment of this Act, there shall be imposed a market access charge on each covered buyer in a covered transaction…The Board of Governors of the Federal Reserve System shall establish and adjust the rate of the market access charge at a rate that— (A) achieves a current account balance not later than 5 years after the date of the enactment of this Act; and (B) maintains a current account balance thereafter.”

However, under the “ALTERNATE INITIAL MARKET ACCESS CHARGE” clause, “If, on the date that is 180 days after the date of the enactment of this Act, the Board of Governors has not established the initial rate for the market access charge, the initial market access charge shall be established at the rate of 50 basis points of the value of a covered transaction.”

The bill concludes with a description of how the Market Access Charge should be charged, collected, and reported to the U.S. Treasury.

At the time of the CPA paper cited above, the “The U.S. dollar was calculated at 25.5% overvalued compared to itsFundamental Equilibrium Exchange Rate (FEER). However, in an article titled “Why We Need Baldwin-Hawley Currency Reform Now,” by Jeff Ferry, CPA Chief Economist, published on August 21, 2019, he writes that the Coalition for a Prosperous America estimates “the dollar is overvalued today by 27 percent.” He points out that” that an overvalued currency makes it harder for a nation’s exports to compete in world markets and easier for foreign imports to take share in its domestic market.”

Mr. Ferry explains that “…overvaluation undermines our industrial base, makes our agricultural goods less competitive and tilts the income distribution in favor of the top 10 percent. Instead of an economy built on production and employment, we get growth built on consumption and debt. In fact, the only sector that favors overvaluation is the financial sector, because it helps Wall Street bankers sell stocks and bonds around the world. On Wall Street they like to call overvaluation the ‘strong dollar.’”

He concludes by saying that “Voltaire said the world is like a giant watch: it runs automatically according to an internal mechanism. If one of the settings is wrong, the watch won’t run properly. Our economy is a huge $21 trillion watch. If an exchange rate is set too high, a national economy runs down. If an economy doesn’t invest enough in its own industry, it becomes less competitive…On the international side, the US economy has been underproducing and overconsuming for some 40 years and adjustments are needed. Right now, Baldwin-Hawley is the most crucial adjustment Congress could enact.”

As a sales representative for American manufacturers, I can testify that America’s manufacturing industry is hurt by the overvalued dollar.  It hurts the ability for American companies to export products that are competitive in the world marketplace. It even hurts the ability for American manufacturers to compete against the low prices of Chinese imports in the domestic market.  I firmly endorse the passage of this critically needed bill by Congress in this session to reduce the U.S. dollar’s overvaluation, discourage unwanted investment in the dollar, and significantly reduce America’s trade deficit.

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Posted in Currency Misalignment/Munipulation, Legislation, Trade Policy | No Comments »

CPA Report Shows Higher China Tariffs Could Increase U.S. Jobs and GDP

August 19th, 2019

On July 22, 2019, the Coalition for a Prosperous America released an update to their study on the effects of increasing tariffs on all imported Chinese goods to 25% that had originally released in May. The study was conducted by CPA’s Chief Economist Jeff Ferry and Steven L. Byers, Ph.D. The Coalition for a Prosperous America is a non-profit, non-partisan organization working to eliminate the trade deficit with smart trade and tax policies to create jobs and prosperity.

According to the report, “The tariff revenue totals $547 billion over five years. If those funds are reinjected back into the economy each year, this additional stimulus to growth results in a $167 billion boost to GDP and 1.05 million additional jobs in 2024…The results of the Coalition for a Prosperous America (CPA) model show that tariffs will have a sustained, positive impact on the US economy, including jobs, output, and investment.”

The report states:  “The tariff would stimulate the US economy through two channels: first, the relocation of US-bound production from China to other nations would lead to a reduction in the average cost of imports because many alternative production locations ,such as those in Southeast Asia, today have lower costs of production than China; and secondly, because a portion of the production in China relocated to the US, would directly stimulate the US economy.”

In stark contrast, the opinions of professional economists are reflected in an article titled, “Trade Wars Are Not Good, or Easy to Win” in The Atlantic on August 5, 2019, staff writer Derek Thompson, wrote, ” President Donald Trump has stubbornly insisted on Chinese tariffs over the objections of his economic advisers—not to mention the near-universal outcry of the professional economic community. In a University of Chicago poll of several dozen international economists, zero disagreed with the statement that “the incidence of the latest round of US import tariffs is likely to fall primarily on American households.”

Why do the conclusions of the CPA research directors differ so greatly from the opinions of the economic community? The authors explained, “Our results differ remarkedly from other economic modeling efforts regarding tariffs…The differences result primarily from different assumptions about how businesses and consumers react to tariffs. Other models reflect a pro-free-trade bias and assume that (a) no production returns to the US as a result of tariffs (b )prices of US imports always rise when imports move from China to third countries and (c) US consumers react very negatively to higher prices, leading to educed sales and output in the US economy. A close study of the available empirical evidence shows these assumptions are unwarranted.”

The report states:  “Our model consisted of two parts:  a partial equilibrium model, which looked at how production in China for export to the US responded to the presence of a permanent across-the-board tariff, and a general-equilibrium model, based on the widely-used REMI  economic model to explore the effects of production shifts on the US economy over a five-year forecast period.”

The report takes into consideration China’s retaliation against the tariffs and China’s moving manufacturing to the U.S. or other countries. It shows that the tariffs will encourage production relocation out of Asia and generate significant reshoring of manufacturing to the US by American manufacturers who had established plants in China. This opinion concurs with the data collected by the Reshoring Initiative for several year showing that “the location decision for manufacturers is not just about cost: reliable supply, closeness to customers, political stability, and building customer/consumer brand awareness all matter!”

The original May report went into more detail about the benefit of reshoring, stating, “The US job gains from PATB-25-induced reshoring are disproportionately concentrated in the manufacturing sector, with 192,416 additional manufacturing jobs (27 percent of total jobs created by the tariff). This is because the vast majority of US imports from China are manufactured goods. By 2024, our model forecasts that $69 billion worth of annual production will have migrated from China to the United States. While US production costs in many industries remain higher than in China, that is not the whole story. Locating production in the US offers other advantages, including lower transportation costs, more logistical flexibility, and closer connectedness to consumer markets, distributors, and senior management. Relocating in the US also insulates companies against the uncertainty of potential future trade tensions. Some industries, such as apparel, have already seen reshoring due to these advantages. A permanent tariff would speed up the process.”

In a webinar to CPA members on August 1st, Ferry cited several examples of American companies reshoring production to the US; namely, Caterpillar, Stanley Black and Decker, Hasbro, Whirlpool, Optec, and West Elm.  The website of the Reshoring Initiative lists  nearly 3,000 companies that have reshored, and the list grows by the week.  

In an interview for The Epoch Times,  Ferry said: “As time goes by, people are accepting it because they’re seeing that tariffs are not provoking huge increases or any increases in consumer prices. They’re not disrupting our supply chains”

He also said “the goal of the U.S. government is to fix these problems and to restore prosperity to the United States, and he thinks tariffs have their role to play. If the trade deficit continues, and if we want to see certain manufacturing industries grow in the United States, I think we need to do more, and tariffs on all Chinese imports is a good solution…It’s a delicate and dangerous game [the Chinese regime is] going to have to play to pivot from being an economy that’s completely dependent on exports to being a more balanced economy, and it’s anybody’s guess whether they can pull it off.”

I’m betting that the conclusions reached by CPA would prove true if President Trump did impose 25% tariffs on all imports from China because of the strong evidence of the benefit of reshoring to the US economy.  According to the Reshoring Initiative, data from the manufacturing employment low of January 20190 through 2018, 749,000 jobs have been brought back to the US from offshore. In addition, manufacturing jobs pay higher than service and retail jobs, so tax revenue will increase from more people having higher paying jobs.  Another benefit would be that as we reduce our imports, our trade deficit would go down. However, the best benefit is that as we resume making the products and systems needed to defend our country in the US, we will protect our national security.

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Posted in Economy, Manufacturing, Trade Policy | No Comments »

San Diego Has Largest Woodworkers Guild in U.S.

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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Brookings Recommends New Focus for SBA’s Small Business Investment Corp Program

July 9th, 2019

can better support America’s advanced industries.

On June 26, 2019, Mark Muro, Senior Fellow, Brookings Institution Metropolitan Policy Program submitted testimony to the U.S. Senate Committee on Small Business & Entrepreneurship regarding the “Reauthorization of SBA’s Small Business Investment Company Program,” and particularly on how the Small Business Investment Company (SBIC) program.

Mr. Muro’s expertise is in America’s advanced industry sector, which are the high-productivity, high-pay innovation industries that anchor American competitiveness and are critical to America’s prosperity.

In his testimony, Mr. Muro wrote that advanced industries are identified using two criteria and must meet both criteria to be considered advanced.:

  • “industry’s R&D spending per worker must fall in the 80th percentile of industries or higher, exceeding $450 per worker
  • The share of workers in an industry whose occupations require a high degree of STEM knowledge must also be above the national average, or 21 percent of all workers”

He explained, “Based on this definition, the U.S. advanced industries sector encompasses 50 diverse industries, including 3 energy, 35 manufacturing, and 12 service industries. These prime industries include manufacturing industries such as automaking, aerospace, pharmaceuticals, and semiconductors; energy industries such as oil and gas extraction and renewables; and critical service activities such as R&D services, software design, and telecommunications.”

He wrote, Advance industries matter because they “are in many respects the nation’s core sources of prosperity and economic preeminence.” Specifically, the advanced industries sector:

  • Encompasses many of the nation’s most crucial industries
  • Represents a key site of innovative activity
  • Trains and employs much of the nation’s STEM workforce

In addition, “its sizable advanced manufacturing sub-sector—delivers critical, specific, under recognized value to the nation and its people and places:”

  • Employment – “In 2018, the 50 advanced industries in the United States employed 14 million U.S. workers, or nearly 10%of total employment. Of that, the 35 advanced manufacturing industries contributed 5.7million jobs and 4% of U.S. employment.”
  • GDP – “U.S. advanced industries generate $3.7 trillion worth of output annually, or 18.5% of U.S. GDP in 2018…advanced manufacturing was a particularly sizable contributor of $1.4trillion worth of U.S. output.”
  • Productivity – “Each worker generated approximately $260,000 worth of output compared with $120,000 for the average worker outside advanced industries.3For the advanced manufacturing sub-sector the figure is $250,000.”
  • Pay – “In 2018, the average advanced industries worker earned $103,000 in total compensation, double the $51,000 earned by the average worker in other sectors. And real absolute earnings in advanced industries grew by 63 percent between 1975 and 2013, compared with just 17 percent for other workers…”
  • Multipliers – “Every new advanced industry job creates 2.2 jobs domestically—0.8 jobs locally and 1.4 jobs outside of the region…On average in other industries, new jobs create only one additional domestic job—0.4 jobs locally and 0.6 jobs outside the region.”
  • Innovation – “Advanced industries perform 90%of all private-sector R&D and develop approximately 82%of all U.S. patents.”

Muro explained that these advanced industries need government financial support because “there is now abundant evidence that the primacy of America’s advanced industries, and especially its advanced manufacturing sector, is being aggressively contested—and eroding.”

The challenge is succeeding because China and other competitor nations “are accelerating their investments in the key inputs to advanced-sector competitiveness—basic and applied research and development (R&D), STEM worker development, regional supply chain deepening—just as the U.S. commitment has weakened.”

He asserted, “As a result, the future competitiveness of the U.S. advanced industries sector has become uncertain because the United States is losing ground on important measures of advanced industry competitiveness.” In fact, “the U.S. has since 2000 run negative trade balances with both China and the world on advanced technology products, with the deficit continuing to grow.”

“On innovation, for example, the U.S. share of global patenting and R&D is falling much faster than its share of global GDP and population. While the U.S. lost 1.6 percentage points in its share of world populationbetween1981and 2016, its shares of global patenting and R&D spending both fell by over 15 percentage points.”

He pointed out that “when the ‘Made in China 2025’ industrial policy implies direct support to thousands of firms through state funding, low-interest loans, tax breaks, and other subsidies to the tune of hundreds of billions of dollars according to third-party estimates, U.S. advanced manufacturing firms—especially smaller ones—struggle to access affordable capital.”  

He added that “while the United States has the most developed venture capital (VC) system in the world, that system remains difficult to access for manufacturing firms…the natural biases of VC and other capital sources skew the existing small-firm finance system far away from capital-intensive manufacturing enterprises and are leaving them to face a debilitating lack of access to critical finance in the United States.”

Because “innovative firms engaged in complex, advanced manufacturing production require greater capital and more time to make a profit than non-production firms…most existing small-firm finance sources (especially venture capital) default to the low-risk, high-reward nature of digital start-ups and stay away from the longer profit horizons of manufacturing.”

He explained that “Tech” companies, after all, can produce fast-turnaround, consumer-facing products with little-to-no physical infrastructure. Advanced manufacturing firms, by contrast, require much more time, risk, and capital to develop products, bring them to market, and achieve scale, ensuring they get fewer VC opportunities.”

He concluded that “acute capital shortfalls are likely hobbling the ability of smaller advanced manufacturing concerns to grow their operations, contribute to local supply-chain deepening, and enhance U.S. competitiveness, community by community.”

Next, his testimony focused on how the SBIC could offer the ideal tool for assisting advanced manufacturing concerns in the coming years.  However, the current SBIC program has “several limitations that prevent it from investing as helpfully in growth as it might.” He stated that “the lack of sectoral specificity in SBIC loan-making means that public funds are not always channeled toward the highest public benefit—most notably that of advanced industries…[and}

its repayment structure, which begins immediately and is comprised of an SBA annual charge plus interest due semiannually, is not conducive to the nature of the longer-term product development timelines that advanced manufacturing firms require. In general, the SBIC’s offerings are not “patient” enough to optimally support advanced manufacturing business models.”

In order for the SBIC to help fill the void and maximize the program’s benefit to U.S. competitiveness through the support of U.S. advanced industries, he recommended that policymakers should:

  • “Explicitly prioritize advanced manufacturing growth in the SBIC’s equity capital toolbox.”
  • “Encourage robust and patient capital in SBIC funding.”

He explained that these actions are needed because “advanced-sector production enterprises are not specifically mentioned in program policies and criteria. They should be, because as of now they are losing out.” And “currently the program favors low-risk, high-reward, relatively short-term enterprises, which discriminates against advanced manufacturing concerns.

Accordingly, the committee should amend the Small Business Act to create within the existing SBIC a program that will offer preferred financing terms to VC firms that invest in advanced manufacturing firms. To determine eligibility for participation in this funding activity. manufacturers’ ‘advanced’ status could be confirmed by their location in designated NAICS codes, employing the same definitional methodology and industry list as employed in this testimony…Funding, therefore, should be growth-oriented, as much as possible—not time-bound. Changes can include tying repayments to a percentage royalty from sales, as well as denoting full repayment as a multiple of the original loan amount, rather using the current fixed payment-plus-interest model.”

In conclusion, he stated, “American’s medium-and long-term competitiveness and economic prosperity will be determined by success in a few select, but significant, industrial sectors: namely, the nation’s advanced manufacturing, energy, and digital industries. Success or failure there, meanwhile, will be determined by our choices, both what we choose to do and choose not to do, in world of state competition for valuable industries. Fortunately, one tool for which we can make good choices is the SBA’s SBIC program. Given its important role in enterprise finance, it is well worth the time and effort to make sure it is optimized to serve as a tool for national competitiveness. If rigorously targeted to investment in America’s advanced manufacturing sector, it will absolutely help us reassert national competitiveness, support vibrant communities, and promote dignified work.”

I’ve worked in the advanced manufacturing sector my whole career and was part of the team of a startup technology-based manufacturing company in the past. I’ve been a volunteer mentor for startup entrepreneurs for the San Diego Inventors Forum for the past ten years and was also a mentor for entrepreneurs in the CONNECT Springboard program simultaneously for three years. I know how hard it is for entrepreneurs to raise seed capital, but the crowd funding programs such as Kickstarter and IndieGoGo are greatly helping.  I’ve seen entrepreneurs raise all the money they needed to get their product into the marketplace, but it’s raising the funds to scale up to full production that is the problem.  Investors are looking for quick profits or the kind of company that will be able to do an IPO rapidly.  I believe that the Brookings recommendations for expanding the scope of the SBA SBIC program will be beneficial in helping to rebuild America’s advanced manufacturing sector.

Posted in Legislation, Manufacturing | No Comments »

Unique Maker Skills Academy launches in California

June 25th, 2019

On June 11th 2019,  I received a press release announcing the launch of the Vocademy Maker Skills Academy (MSA) — a one-of-a-kind, hands-on skills training program. This intensive program covers many of the vocational, career, and soft skills that are no longer taught in our schools. The kinds of skills thousands of employers are seeking. The program is available to anyone over the age of 16, with no prerequisites, transcripts, or GPA requirements.  The first ten-student MSA team starts July 8th, so enrollment is now open.

It is well documented that there is a massive skills gap in traditional and advanced manufacturing in America today. In past articles, I’ve mentioned that an estimated one to two million good-paying manufacturing jobs are going unfilled due to a lack of people with the right skills. There are also thousands of young adult makers looking for effective alternatives to college. The press release states: “An ideal solution has not existed …until today. This truly unique type program addresses the desperate needs of thousands of employers.”

In 2016, I wrote an article about Vocademy when it was essentially a traditional makerspace open to the public and beginning to offer skills training classes to high school students during the day. During that visit, founder and president Gene Sherman told me, “I started Vocademy because I had witnessed the demise of hands-on skills teaching in this country over the past 20 years. Schools have done away with these critical classes that taught practical life skills like woodworking and metal shop. These were the classes where people learned how to use tools and technology and develop the mindsets necessary to create new and amazing things.

When I saw ‘makerspaces’ springing up, I wanted to combine that type space with teaching the kinds of skills that were previously taught in ‘shop’ classes. I wanted to create a place for those who want to use their hands, in addition to their minds ? makers, inventors, and dreamers. I believe that if our country loses its ability to make and build things, we will have lost what made America great.

I wanted to provide access to these tools, but with proper and practical instruction on how to use them correctly and safely. I wanted a place that teaches the most state-of-the-art manufacturing techniques, not just traditional shop skills. I wanted to teach these important skills without the bureaucracy of academia because many more Americans should have the same opportunity to innovate, collaborate, learn, and create their dreams.”

 I visited Vocademy, located in Riverside, CA, on June 20th and interviewed Gene to find out more about the transformation from a makerspace to a skills discovery and training center.  Gene said, “Employers today are looking for those with a breadth of hands-on and soft skills. They want generalists and not specialists because the economy and workplace are changing at a rapid pace.  We have created the Maker Skills Academy to meet the needs of a career-centric workforce. Our goals are to teach real world skills, get our students career ready, and show them the amazing opportunities in the world of making. We’re looking forward to changing lives and creating the makers of the future. The program only takes six-months to complete. We do this by including over 90 fundamental classes in real-world subjects,” such as:

  • 3D Printing and Computer Aided Design
  • Laser Cutting and Engraving
  • Sewing and Textiles
  • Plastics, Vacuum forming, and Composites
  • Costume, Prop, 3D Papercraft, and Model Making
  • Fundamental Electronics, Soldering, Raspberry Pi and Arduino.
  • Robotics, Automation, and Hardware Programming.
  • Machine Shop Basics and CNC machining
  • Welding, Fabrication, and assembly
  • Wood Working.
  • Hand Tools, Power Tools, and support equipment 
  • Life and career soft skills for manufacturing, engineering, entrepreneurship and many other jobs

He emphasized that “by including the soft skills classes employers are seeking, the Maker Skills Academy is the perfect way to prepare for jobs in advanced manufacturing and other maker careers.

And unlike any other training programs or schools, MSA students will also have access to using our equipment every single evening to practice their skills, collaborate, create amazing resumes, and build capstone projects.”

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As Gene led me on a tour of their facility, he explained, “Classes have minimal theory or history and lean heavily toward hands-on, practical skills learning. There are only eight to ten students per MSA team. We have a high instructor-to-student ratio for effective and intimate learning of skills. Our modern facility has over $500,000 of traditional and state-of-the-art manufacturing equipment.

During the tour, I saw that Gene had upgraded the 3D printing lab with all industrial machines rather than the hobby-type machines previously in the lab.  He had also upgraded to industrial sewing machines from the home-type machines he had previously, and there were now two cutting machines in the laser workroom. There were two new park bench projects in the fabrication workroom that the students had built themselves to utilize their metal fab and woodworking skills. He showed me the Little Free Libraries projects that are being placed in front of homes in neighborhoods, which are the capstone projects for the woodworking class.

Gene said that the Maker Skills Academy is perfect for those looking for:

  • a unique alternative to college, with real job and life skills
  • an ideal learning program to explore a multitude of maker skills
  • an effective pre-engineering program before entering university
  • an intensive course in maker skills for entrepreneurs or inventors
  • a set of job skills that will make STEM or maker careers future-proof

The website provides the following description of what is included in the Maker Space Academy program:

  • Six months of subjects and classes designed by industry experts and based on real-world needs of companies.
  • All raw materials, tools, and supplies the student will need for the classes in this program.
  • Six months of maker lab access with use of all equipment the student has been trained to use. 7-days-a-week, 5-10pm.
  • A Vocademy Maker Academy work shirt, basic measuring and hands tool set, a shop apron, and safety glasses.
  • An incredibly creative environment, surrounded by other makers, students, and engineers.
  • An Intellectual Property (IP) free facility. Student developed products or inventions are the property of the student.
  • A unique learning experience for anyone seeking to become more valuable to the world.
  • To develop an amazing set of skills for a career, personal enrichment, or for entering engineering schools.
  • Student graduates will receive Vocademy Certificates of Completion for every subject completed.
  • The opportunity to collaborate and work on your projects or ideas using modern and traditional industrial equipment.
  • To create an incredible resume full of projects, practical skills, and hands-on experience.

I asked what was expected of students, and Gene replied, “There are no mid-terms or finals. Students must commit to classes, self-guided learning, and the creation of projects. They sign a Commitment Pledge to put forth their best effort to ensure a successful learning experience. Students must be willing to continue self-guided depth learning and skills practice during maker lab hours and personal time. And, students are expected to complete a final capstone project for their maker portfolio/resume either solo or as part of a team.”

When I asked what his future goal is, he said, I want the Maker Skills Academy to be the choice of manufacturers for training employees, both existing and those being hired.  I want the MSA to be considered as the “Olympic training center” for manufacturing skills. I envision local manufacturers becoming partners with Vocademy for their employee training.”

I told him that I hope he realizes his goal because programs like his would go a long way in solving the skills gap and attracting the next generation of manufacturing workers.  It is critical that we get back to being a nation of “makers” as manufacturing is the foundation of the middle class, and our middle class has been shrinking for the last 30 years as we moved more and more manufacturing offshore.   

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Posted in Education, Manufacturing, Training, Workforce Development | No Comments »

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