It’s the supply chain … stupid!

April 4th, 2023

Ever since the COVID pandemic started three years ago, we have suffered from disruptions in supply chains for many products used in our daily lives as well as products and components needed for our consumer products, industrial, and defense industries.  Why?  Because we stopped making things in the USA. We outsourced everything from household goods to high tech products, as well as pharmaceuticals and medical devices. First, it was to friendly countries like the Philippines, Puerto Rico, and Taiwan, and then it became predominantly China after they entered the World Trade Organization in 2001.

The shortages of semiconductors, has made news headlines for the past two years. Semiconductors are used in everything from consumer products such as cell phones, computers, and TVs as well autos, trucks, airplanes, boats, ships, drones, and space vehicles.  There is hardly any product that doesn’t have a semiconductor in it these days, even refrigerators and washing machines. Many other electronic and electro-mechanical components are also no longer made in the USA.

Our domestic innovation capacity is contingent on a robust and diversified industrial base. Our loss of manufacturing capabilities has led to a loss in innovation capacity. When manufacturing heads offshore, innovation follows. We currently lack the ecosystem of innovation, skills, and production facilities to have the secure and resilient supply chains required for economic security. As a result, we are no longer self-sufficient in producing the products we depend on for our modern way of life.    

Even worse, we are no longer self-sufficient in producing the goods and systems needed to defend our country.  Our national security and freedom as an independent country is at risk. This fact was confirmed in the article “From rockets to shells, Pentagon struggles to feed war machine,” from the March 25th issue of the New York Times which stated, “The United States lacks the capacity to produce the arms that the nation and its allies need at a time of heightened superpower tensions…Industry consolidation, depleted manufacturing lines and supply chain issues have combined to constrain the production of basic ammunition like artillery shells while also prompting concern about building adequate reserves of more sophisticated weapons including missiles, air defense systems and counter-artillery radar…illustrated by the shortage of solid rocket motors needed to power a broad range of precision missile systems, such as the ship-launched SM-6 missiles made by Raytheon…Other shortages slowing production include simple items such as ball bearings, a key component of certain missile guidance systems, and steel castings, used in making engines.”

There are two main ways that government can help rebuild the domestic manufacturing base:  penalize offshoring to other countries and incentivize American manufacturers to make is here or reshore their manufacturing to the USA.  The Biden Administration and Congress have reacted to this supply chain crisis within the last year by passing the following legislation:

CHIPS and Science Act of 2022 to “boost American semiconductor research, development, and production, ensuring U.S. leadership in the technology that forms the foundation of everything from automobiles to household appliances to defense systems.”

Amendment to The Federal Acquisition Regulation (FAR) Buy American Act – “This rule increases the domestic content threshold initially from 55 percent to 60 percent, then to 65 percent in calendar year 2024 and to 75 percent in calendar year 2029.”

Uyghur Forced Labor Prevention Act – This Act changes U.S. policy to establish “a rebuttable presumption that the importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China.” Previous law required companies to take reasonable care to avoid products produced with forced labor. This Act requires companies to prove that products from Xinjiang province were not produced with forced labor.

While these new laws and amendments to previous laws will help ease future supply chain disruptions, the real solution to the supply chain crisis is to change the financial calculations to enable making as much as possible in the United States. The Reshoring Initiative has been working towards this goal since its founding in 2010 by promoting the use of the Total Cost of Ownership Estimator® developed by Harry Moser

According to the Reshoring Initiative 2022 Data Report, “Reshoring plus FDI have followed a strong upward trend for 13 years. The underlying trend is driven by the recognition that, in many cases, the total cost of offshoring exceeds that of sourcing domestically. There have been peaks and valleys in the trend. 2017 was driven by the 2017 tax and regulatory cuts. 2018 and 2019 declined due to the trade war. The trend resurged from 2020 to 2022 driven by companies recognizing their vulnerability to supply chain disruptions and, most recently, to geopolitical events.”

The report states, “Jobs announced in 2022 were a record breaking 364 ,000 up from 238 ,000 in 2021. The total number of jobs announced since 2010 is now nearly 1.6 million…we expect 2023 and 2024 to remain strong, continuing at approximately 350,000 job announcements per year. If the current trajectory continues, the U.S. will reduce the trade deficit, add jobs, and become safer, more self-reliant and resilient.”

We need continue to rebuild our domestic manufacturing industrial base if we are going to achieve the goals of Industry Reimagined 2030 to have 50,000 more world-class domestic American manufacturers and a $1 trillion GDP by 2030

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Posted in Made in America, Manufacturing, Reshoring | No Comments »

How to Buy More Made in USA Products

March 21st, 2023

More than 70% (72%) of American consumers prefer American-made products and nearly half (48%) say they’d be willing to pay around 10–20% more. An exclusive poll about buy-American shopping preferences from Retail Brew and The Harris Poll was conducted among a nationally representative sample of 1,986 US adults from July 22–24, 2022.

Overwhelmingly, Americans want to know where their products are made, and they can do so at retail stores by looking for a “Made in USA” label when they shop in person.  However, when they shop online, there is no country of original information provided in the description of a product by the top online e-commerce companies, Amazon, eBay, and Etsy.

In 2020, The COOL Online Act  (S. 3707) was introduced by Senator Tammy Baldwin to require a prominent country-of-origin description for all products sold online as well as clear disclosure of the country in which the seller of the product is located. However, big retailers including Amazon want to hide where their products are coming from and lobbied to prevent this bill from being voted on by the Senate.  The text of this bill was added as an amendment to the Endless Frontier Act (S. 1260), which passed the Senate, but was not voted on by the House.  A similar bill is planned to be introduced this year.

In addition, all of the e-commerce companies take advantage of the “De Minimis” rule, created by Congress as  Section 321 to the Tariff Act of 1930. “De Minimis” is Latin for “too trivial or minor to merit consideration.” Its purpose was “to avoid expense and inconvenience to the Government disproportionate to the amount of revenue that would otherwise be collected.”

A White Paper by the Coalition for a Prosperous America (CPA) states, “The 1938 Congress set low-dollar thresholds for three different importation scenarios, assigning a $5 threshold for bona fide gifts and personal effects travelers brought with them, and a $1 de minimis for  any other situation…Congress raised our de minimis threshold to a whopping $800 in 2015. China’s is 50 yuan, which is less than $8.  Goods eligible for de minimis treatment enter the U.S. free of duties and taxes…Express consignment companies like FedEx and UPS and e-commerce sites like Amazon and eBay are the primary actors lobbying to keep de minimis as a giant open-border backdoor.

“U.S. Customs & Border Protection (CBP) itself acknowledges that raising the de minimis threshold

changed the very nature of international trade.” Under the traditional paradigm, businesses would contract foreign manufacturers, entering into supply contracts, importing particular products by the container-load, and then distribute products to domestic retailers. “Large shipments would be consigned to a single purchaser, and typically consist of the same or similar goods. Under the new paradigm, that same shipping container has individual packages destined for hundreds of individual customers who are fulfilling the legal role of “importer…”

“For regular imports, the law requires importers to provide Customs & Border Protection (CBP) an advance manifest of the incoming cargo describing it. But de minimis shipments, including millions of e-commerce packages, typically arrive with no advance information.”

CPA recommends that Congress “fix this by lowering the threshold back to $9 ($5, but adjusted for inflation).”

One company is leading the effort to adopt a private sector solution.  Don Buckner Sr., recently contacted me about the new online marketplace he is developing to provide consumers with easy access to domestic manufactured products. MadeInUSA.com.  Customers will be able to identify and search by three sourcing categories: Made in USA, Made in USA with US & Global Materials, and Assembled in the USA. They may also search by a Business Certification such as Veteran, Women, Minority, GSA Holder, or Small Business. This will increase a company’s visibility, allowing access to opportunities they might not otherwise have.  Vendors must certify that products displayed on the site are produced in compliance with the Federal Trade Commission Made in USA claim. Strict adherence is required for all vendors.  MadeInUSA is now registering vendors and products at https://madeinusa.com/vendor.  The website is scheduled to go live in late 2023.

I asked what will make his website different from other websites offering Made in USA products, and

Don said, “MadeInUSA.com is an Enterprise level eCommerce marketplace specifically designed to highlight and promote vendors to domestically produced products. MadeInUSA.com is built using the latest technology and is the most comprehensive, secure, online resource for consumers and corporate buyers  As the premier and trusted online marketplace for products made in the USA, the site offers a doorway between U.S. manufacturers and the world.”

Customers will be able to identify and search vendors by one of three categories: Made in USA, Made in USA with US & Global Materials, and Assembled in the USA. They may also search for vendors by a Business Certification such as Veteran, Women, Minority, GSA Holder, or Small Business. This will increase a company’s visibility, allowing access to opportunities they might not otherwise have.

Don explained, “The MadeInUSA.com eCommerce platform is based on a drop ship model and will collect and pay all sales tax and shipping costs. All the manufacturers must do is build it and box it”

The website is now open for vendor applications to offer products directly to consumers. Vendors may list products for free but must certify that products displayed on the site are produced in compliance with the FTC Made in USA claim. Strict adherence is required for all vendors. Manufacturers and vendors can register by visiting https://madeinusa.com/vendor to submit an application.   

U.S. consumers prefer to buy domestic products.  Today, it is hard for consumers to do that and easy for imports to by-pass customs duties.  Congress has legislators working to fix labeling and import duties. I applaud the focus of Don Buckner to reconnect U.S. manufacturers to the U.S. consumers and to create American jobs through increased demand for USA branded products. 

Industry Reimagined 2030 is working with national associations and the private sector to increase consumer purchases of U.S. goods. We share the same commitment that buying USA-made products isn’t just patriotic, it’s an investment into our communities, our labor force, and our economy.  We aim to increase U.S. purchases by $500 billion that will result in 2 million jobs by 2030.  

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Posted in Country of Origin, Made in America, Manufacturing, Trade Policy | No Comments »

How We Can Stop China’s Global Strategy to Cripple America

February 21st, 2023

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Two years ago, Curtis Ellis, one of my heroes died after losing his battle with cancer. Curtis was a prominent trade expert and an astute architect of economic nationalism. In my tribute article to him, I wrote “Curtis was a true patriot and defender of liberty, who believed in all of the greatness of our country and devoted much of his life to putting America first in economic policies to benefit American workers and not just Wall Street.” He believed that we have to fight to save America to create jobs and prosperity by bringing higher paying manufacturing jobs back to America. He was a patriotic crusader against the unfair trade agreements that had caused the loss of millions of manufacturing jobs and our enormous trade deficits year after year.

I knew Curtis had been working on a book before he died, but didn’t know if he had finished it. I was pleased to learn that he had. His longtime partner, Maxine Albert, found a publisher for this timely book – that just launched.  Maxine wrote: “He pushed himself to finish this book because he saw the Chinese Communist’s Party as the most dangerous threat to the nation he loved. Curtis saw something truly sinister in China’s trade abuse as economic warfare.”

It was a great honor to be able to read an advanced copy to write this review of his vitally important book, Pandemonium – China’s global strategy to cripple America, available on amazon and Barnes & Noble. https://amzn.to/3RNWHf1Curtis Ellis  

Curtis Ellis was one of the early policy experts to realize the danger the Chinese Communist Party posed to America.  He understood the world economy and pointed out that “free trade” was a fallacy because of the mercantilist, totalitarian dictatorship in China.  He sounded the alarm on the gathering storm with a chilling account of China’s assault on America in its quest to be the Superpower of the 21st Century.  He foresaw that a crisis with China is inevitable because of their increasing aggression and frightening military buildup that has been funded by America’s manufacturers and consumers. 

He had the talent to be able to transform a complicated economic topic into an easily understandable and compelling narrative that would motivate people to act, and he does that by giving us a detailed, comprehensive and winning plan to declare our independence from China.

In the introduction, Curtis reminded us “Americans lived in a global economy when we wrote the first Declaration of Independence. At that time, the ‘global economy’ was known as the British Empire“ He wrote, “Americans were compelled to send their fiber, timber, and ore on ships across the ocean to ‘the workshop of the world,’ where they were fashioned into finished goods, then sent back and sold to Americans at prices set by others…Today the ‘workshop of the world’ is not Britain, but China.”  

In his first chapter, “How America Became an Invalid,” he outlines how our present position “didn’t just happen. It was not inevitable. It was the result of specific decisions made by specific people in specific places and specific positions of power.”

From my own research for my own books, I was aware of some of these key decisions that led to the decimation of American manufacturing, but I didn’t realize that the ideology of “globalism” started so long ago.  Curtis wrote about a hearing held by the Joint Economic Committee of the U.S. Congress on “the future of manufacturing” that occurred in Washington, D. C. in June 1967.  He wrote, “At the hearing, George Ball, a Wall Street grandee who served in the State Department under presidents Kennedy and Johnson, laid out the ideology of globalism” in which “earth straddling corporations should replace the ‘crazy quilt” of independent nations as the organizing principle of society.” Ball recommended that “Washington should work for “a considerable erosion of the rigid concepts of national sovereignty…the ‘common philosophy’ and ‘common goal’ should be economic efficiency and corporate profits…”

The adoption of this globalist ideology by government and industry certainly explains what has happened in the past 55 years— tax policies that favor multinational global corporations and American corporations moving manufacturing to other countries to maximize profits, first to El Salvador, Puerto Rico, the Philippines, Mexico, and finally China.

In chapter II, “A Dysfunctional Relationship,” Curtis gives a detailed description of how the U.S. relationship with China has become dysfunctional over the past five decades since President Nixon opened our doors to China. 

In chapter III, “Meet the New Boss:  The Global Elite,” he describes how “What’s good for America” became replaced by “What’s Good for the Global Economy” to the detriment of patriotic American businessmen and women. 

Chapter IV, “How China Buys Influence” outlines China’s strategy “to shape American public opinion and influence our economic and government policies to benefit the Beijing regime.”

Chapter V covers a subject near and dear to my heart, “The American System —The Origin of America’s Prosperity” that I wrote about in the first chapter of my book, Can American Manufacturing be Saved? Why we should and how we can. He uses many of the same quotes of the founders of our country that I used, such as “A free people…should promote such manufactories as tend to render then independent from others for essential, particularly military supplies,” from George Washington’s first address to Congress. 

Curtis wrote that the American System was conceived by Treasury Secretary, Alexander Hamilton, by imposing tariffs on imported goods to “raise revenue and protect American industries from predatory competition…. The American System…guided U.S national economic development from the earliest days of the republic, through the Civil War, and into the better part of the twentieth century.” 

In chapter VI, “Setting the Record Straight on Adam Smith,” Curtis clarifies the “foundational economic treatise on the principles of the free market system” proposed by Adam Smith in his book, The Wealth of Nations, published in 1776.

Chapter VII, “Tearing Down ‘The House of World Order” describes how “the international rules-based order,” which is a “euphemism for globalism” that is the basis for the World Trade Organization.  Curtis wrote ”The pandemic showed that the true cost of the China price is very high indeed.   It showed how an economy reliant on global supply chains and just-in-time inventory management is fragile.”

In Chapter VIII, Curtis outlines how to hold China accountable, and Chapter IX describes how to defund China.  In chapter X, Curtis provides common sense on Communist China, and Chapter XI outlines a plan to restore our economic independence.  Chapter XII concludes with a new declaration of independence. 

I don’t want to spoil any of these well thought out prescriptions by providing any quotes from these chapters.  It’s critical that you read these chapters yourself and make your own decision on how you can play a part in saving our country.  I conclude my review with what Maxine wrote as her concluding words in the Foreword: “As I wrote these words, I can hear Curtis saying something he often told me. ‘Each of us has a part to play to stand up for American. You can change the world, one person at a time.’”

I have endeavored to change the world as one person by writing three books and hundreds of blog articles and will continue to do so until the day I die or can’t write or speak any longer. I’m enjoying the greater role I now have the opportunity to play as part of Industry Reimagined 2030 to revitalize American manufacturing to achieve the goals of our vision.  I urge you to take these words of Curtis to heart and do what you can do so our country can become independent from China.

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Action on China or Yet Another Charade by Congress?

January 17th, 2023

On January 10, 2023, the House voted to pass a resolution “to create a select committee focused on U.S. competition with China, fulfilling a campaign promise Republicans made in the lead-up to the 2022 midterm elections.”

An article in The Hill, stated: “The select committee, chaired by Rep. Mike Gallagher (R-Wis.), will zero in on the Chinese Communist Party’s economic, technological and security progress and the strategic competition between Beijing and Washington. The resolution tasks the panel with investigating and submitting policy recommendations on those matters.” The Committee will be “made up of seven Republicans and five Democrats” and “has the authority to hold public hearings.”

The question that should be on everyone’s mind is — Will this Committee have any real impact when Congress has not taken any action on recommendations provided by the annual report they have received from the U.S.-China Economic and Security Review Commission for 20 years?.  Will this Committee just be another “dog and pony” show to demonstrate that Congress is taking the threat China poses to the U.S. more seriously?

For those of you who have never heard of such a Commission, it “was created on October 30, 2000 by the Floyd D. Spence National Defense Authorization Act of 2001, Pub. L. No. 106–398 (codified at 22 U.S.C. §7002) …” This was after China was granted “Most Favored Nation” status, now known as Permanent Normal Trade Relations (PNTR) and allowed to become a member of the World Trade Organization by President Clinton.

The stated “purpose of the Commission is to monitor, investigate, and report to Congress on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China. “

The main duty of the Commission is to provide an annual report to Congress — “Not later than December 1 each year (beginning in 2002), the Commission shall submit to Congress a report, in both unclassified and classified form, regarding the national security implications and impact of the bilateral trade and economic relationship between the United States and the People’s Republic of China. The report shall include a full analysis, along with conclusions and recommendations for legislative and administrative actions, if any, of the national security implications for the United States of the trade and current balances with the People’s Republic of China in goods and services, financial transactions, and technology transfers…”

Each report was required to include full discussion of key factors of the U.S.-China relationship that are very comprehensive.  The following briefly summarizes the key factors:

(A) “The role of the People’s Republic of China in the proliferation of weapons of mass destruction and other weapon systems…”

(B) “The qualitative and quantitative nature of the transfer of United States production activities to the People’s Republic of China, including the relocation of manufacturing, advanced technology and intellectual property, and research and development facilities…”

(C) “The effects of the need for energy and natural resources in the People’s Republic of China on the foreign and military policies of the People’s Republic of China, the impact of the large and growing economy of the People’s Republic of China on world energy and natural resource supplies, prices, and the environment…”

(D) “Foreign investment by the United States in the People’s Republic of China and by the People’s Republic of China in the United States…”

(E) “The military plans, strategy and doctrine of the People’s Republic of China…and the implications of such objectives and trends for the national security of the United States.”

(F) “The strategic economic and security implications of the cyber capabilities and operations of the People’s Republic of China. “

(G) “The national budget, fiscal policy, monetary policy, capital controls, and currency management practices of the People’s Republic of China, their impact on internal stability in the People’s Republic of China, and their implications for the United States.”

(H) “The drivers, nature, and implications of the growing economic, technological, political, cultural, people-to-people, and security relations of the People’s Republic of China’s with other countries, regions, and international and regional entities…”

(I) “The compliance of the People’s Republic of China with its commitments to the World Trade Organization, other multilateral commitments, bilateral agreements signed with the United States, commitments made to bilateral science and technology programs, and any other commitments and agreements strategic to the United States (including agreements on intellectual property rights and prison labor imports), and United States enforcement policies with respect to such agreements.”

(J) “The implications of restrictions on speech and access to information in the People’s Republic of China for its relations with the United States in economic and security policy, as well as any potential impact of media control by the People’s Republic of China on United States economic interests.”

(K) “The safety of food, drug, and other products imported from China…”

The report was also required to “include recommendations for action by Congress or the President, or both, including specific recommendations for the United States to invoke Article XXI (relating to security exceptions) of the General Agreement on Tariffs and Trade 1994 with respect to the People’s Republic of China, as a result of any adverse impact on the national security interests of the United States. “

The 2022 Annual Report to Congress was submitted on November 15, 2022 to Patrick Leahy
President Pro Tempore of the U.S. Senate and Nancy Pelosi, Speaker of the U.S. House of Representatives. “The Commission conducted seven public hearings, taking testimony from 74 expert witnesses from government, the private sector, academia, think tanks, research institutions, and other
backgrounds.”

This report contained the following chapters:

Chapter 1 – CCP Decision-Making and Xi Jinping’s Centralization of Authority

Chapter 2 – U.S.-China Economic and Trade Relations

  • Section 1 – U.S.-China Economic and Trade Relations
  • Section 2 – Challenging China’s Trade Practices
  • Section 3 – China’s Energy Plans and Practices
  • Section 4 – U.S. Supply Chain Vulnerabilities and Resilience

Chapter 3 – U.S.-China Security and Foreign Affairs

  • Section 1 – Year in Review: Security and Foreign Affairs
  • Section 2 – China’s Cyber Capabilities: Warfare, Espionage, and Implications for the United States
  • Section 3 – China’s Activities and Influence in South and Central Asia

Chapter 4 – Taiwan

Chapter 5 – Hong Kong

The report made 39 very specific recommendations for Congressional consideration to address the key factors covered in the above chapters of the report. The Executive Summary states: “The Commissioners agreed that ten of these recommendations, which appear on page 10, are the most important for congressional action.” However, the concluding comment of the Executive Summary states: “There remains a gap between America’s growing recognition of the challenges China presents and our responses to date in dealing with them. The purpose of this report is to assess recent developments and to recommend a set of actions that Congress can consider to help meet the challenges, and seize the opportunities they present.”

Space doesn’t permit considering the ten most important recommendations, but I will at quote the shortest recommendation as an example:

#7. “. Congress create an authority under which the president can require specific U.S. entities or U.S. entities operating in specific sectors to divest in a timely manner from their operations, assets, and investments in China, to be invoked in any instance where China uses or threatens imminent military force against the United States or one of its allies and partners.”

I’ve wondered for years if any Congressional Representative actually read the annual report because I never saw any actions taken by Congress with regard to the recommendations I read in the reports of 2008, 2011 and 2016 when I was writing my three books. It seems to me that the new select Committee on China should review the Commission’s 2022 report and propose legislation to act on the recommendations of the report instead of starting all over with holding hearings.

Our national security is at stake, and we don’t have time to “start from scratch” with a new committee conducting hearings to replicate the work that has already been done by the U.S.-China Economic and Security Review Commission. It would be a far better service to our country to have Congress actually take action to pass legislation recommended by the Commission to protect our country from the plans of China to destroy our country economically and militarily to become the “super power” of the 21st Century.

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2023 Offers Vibrant Opportunities for American Manufacturing

January 3rd, 2023

While some industry leaders are predicting continued supply chain disruptions and even an economic recession, I believe that American manufacturers are poised to enjoy vibrant opportunities in 2023 after nearly three years of economic turmoil and supply chain disruptions.

Americans had a wakeup call during the COVID-19 pandemic when we realized that we had become vulnerable because of our dependency on suppliers from other countries, particularly China.  Our national security and the health of Americans became at risk because of the supply chain disruptions of the goods we needed.

The Industry Week article, titled “Why the US Needs Manufacturing to Succeed”, on Dec. 16, 2022, stated, “With newly focused attention on supply-chain availability and resilience, U.S. manufacturing is at an inflection point. The recently passed infrastructure and CHIPS acts enable direct investment of billions of dollars into the manufacturing sector responsible for critical components, again to improve capacity and supply certainty.”

Manufacturing matters because the high-wage jobs it provides are the foundation of the middle class.  Besides these high-wage jobs, the Brookings Institution says it provides “commercial innovation (the nation’s largest source), a key to trade-deficit reduction and a disproportionately large contribution to environmental sustainability.” In fact, U.S Census data shows that manufacturing still ranks fourth out of the top five employment sectors in the country.

In their annual report dated April 26, 2022, the Reshoring Initiative reported that manufacturing added 1.3 million jobs to the economy between 2010 and 2019, after losing 5.8 million jobs over the previous 10 years. “For the second year in a row, reshoring exceeded FDI by 100%, continuing a recent trend not seen since 2013. Additionally, the number of companies reporting new reshoring and FDI set a new record of over 1,800 companies.” 

I predict that the reshoring data for 2022 will show a continued trend because with today’s heightened need for national security, sustainability and self-reliance, reshoring of U.S. manufacturing, has become, a matter of survival.

 I am not alone in predicting “vibrant opportunities” for 2023.  The Manufacturing.net blog of December 14, 2022, “Predictions for Manufacturing in 2023 – Part I,” provided thoughts on trends from several executives.

A few key thoughts on trends for the upcoming year shared by James DeMuth, CEO of Seurat Technologies, were:

  • “Localization of manufacturing near to customers will reduce economic and environmental costs. Currently, the cost to ship a 40’ container from Asia to the U.S. West Coast is 5X more than pre-pandemic levels.
  • Unpredictable policymaking and inflationary pressures will have less impact on companies that strategically place manufacturing of key components within the U.S. and near to assembly plants.
  • Domestic manufacturing will be emphasized as a matter of national security.”

A few of the key thoughts shared by Molex, a leading provider of electronic components and connectivity solutions, were:

  • Major investments in battery management, zonal architectures and EV charging stations will dominate.
  • Emerging demand for Infrastructure advancements is expected to escalate, which will place greater emphasis on the need for intelligent sensors and high-speed connectors.
  • Investments in Industrial IoT will grow. Robotics and AI will see a surge in usage, as businesses roll out investments made over the last few years.
  • The migration towards Extended Reality (XR) will move data processing to the Edge, allowing inferencing to happen more frequently in real time to match performance expectations. 

Another manufacturing.net blog article, “Key Trends to Remember for 2023,” dated December 29, 2022, predicts:

Continuing Supply Chain Disruption  – “The need to be flexible, and efficiently manage multiple sources of supply while managing overall profitability means sharing information not just within the organization but upstream, driving increased collaboration with suppliers.”

Smart Factories – smart factories encompass two domains:

  • “Improving the capture of data and the operational context to surface the information needed to inform better decisions.
  • Providing the insights and information to more stakeholders, in a more consumable manner, specifically, active rather than passive presentation of impactful data at, or even before, the time of need.”

Continued skills shortages – “Modular robotics in both the physical world and the data environment (through robotic process automation) are reaching levels of maturity that make them more accessible from the perspectives of both cost and complexity.”

Notice that investing and adopting new technologies such as IIOT, Robotics, AI, Industry 4.0 are incorporated into these predictions.  These are examples of “vibrant opportunities” that are happening now, but are not being widely scaled. 

Deloitte’s 2023 manufacturing industry outlook “explores five manufacturing industry trends that can help organizations turn risks into advantages and capture growth.”

      Technology – Investing in advanced technologies to help mitigate risk

“Manufacturers have increased their digital investment over the past few years and accelerated the adoption of emerging technologies. Companies with higher digital maturity have shown greater resilience, as did those that accelerated digitalization during the pandemic. Continued investments in advanced manufacturing technologies can help develop the required agility.”

  • Talent – Implementing a broad range of talent management strategies to reduce voluntary exits

“Addressing the tight labor market and workforce churn amid shifting talent models is expected to remain a top priority for most manufacturers in 2023. Despite a record level of new hires, job openings in the industry are still hovering near all-time highs…”

  • Supply chain – Relying on time-tested mitigation strategies with enhanced tactics to achieve supply assurance

“Of surveyed executives, 72% believe the persistent shortage of critical materials and the ongoing supply chain disruptions present the biggest uncertainty for the industry… Manufacturers are mitigating these risks not only with increased utilization of digital technology…building local capacity and moving from just-in-time sourcing to create redundancy in the supply chain.”

  • Smart factory – Taking a holistic approach to smart factory initiatives to unlock new horizons

“Many manufacturers are making investments in laying the technology foundation for their smart factories. One in five manufacturers is already experimenting with underlying solutions or actively developing a metaverse platform for their products and services.”

  • Sustainability  – Focusing on corporate social responsibility

“The fast-evolving environmental, social, and governance (ESG) landscape may require close monitoring in 2023 for manufacturers…regulators globally are also moving toward requiring more disclosures for nonfinancial metrics. Manufacturers are progressing toward their ESG commitments by making operational changes across their value chains.”

Deloitte’s recommendations are important for American manufacturers to adopt and implement into their company’s strategic action plans in order to take advantage of the “vibrant opportunities” of the future.  They illustrate that achieving the vision of Industry Reimagined 2030 will require a sea-change in the national narrative of the U.S. manufacturing industry to transform from a prevailing worldview of ‘inevitable decline’ to one of ‘vibrant opportunity.’ The vision of Industry Reimagined 2030 is for U. S. manufacturing to be revitalized, globally competitive and advancing societal interests by 2030.  The following goals will demonstrate achieving this vision through unprecedented collaboration and scaling:

  • 50,000 world-class domestic manufacturers (10x increase)
  • Additional 2+ million to the manufacturing-related, middle-income workforce (30%)
  • Reduce the environmental footprint to supply U.S. goods by 30%
  • Consumer purchases of US made goods increased by $500 million

To explore how your company needs to adapt to the disruptive trends that are taking shape, you may wish to participate in our Reimagine Dialogues. They are structured conversations to consider what the world will be like in 2030 and beyond. The purpose is to stimulate business owners and executives to reimagine their business and its environment in 2030. Why? Looking back on the past 10 years, there have been significant changes and disruptions which impacted business. Many companies were caught off guard and unprepared. Going forward, there will be further disruptions for businesses. Vibrant opportunities await those companies acting with foresight and preparedness. Distress awaits those companies caught reacting. There is no charge for participation and this it is not a free preview of another executive roundtable.  Here is the link for further information and to register. https://www.industryreimagined2030.org/

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Inventors’ Rights under Threat Again

December 12th, 2022

Inventor Rights are being threatened by the Pride in Patent Ownership Act, S.2774, sponsored by Sen. Leahy, Patrick J. (D-VT).  Sen. Leahy was the co-sponsor of the America Invents Act of 2011 that adversely changed the patent system from the best in the world to one that has eroded inventors’ rights.

The bill is looking good for either being passed by the Senate separately before Congress recesses for the holidays or passed by being attached to the National Defense Authorization Act (NDAA). The NDAA is “must pass” legislation funding the military at a time when there are credible threats of wars around the world. Attaching the Pride in Patent Ownership Act to the NDAA means it would certainly become law.

“This bill requires disclosure of certain patent-related information, including information about ownership and funding. Under the bill, if a foreign or domestic governmental entity provides funding for fees related to a patent application or for paying an attorney (or patent agent) to prosecute the patent application, the application must disclose the amount and source of such funding.

Similarly, if any governmental entity provides funding for paying a patent’s maintenance fees or for paying an attorney (or patent agent) to submit such maintenance fees, the patent owner must submit a statement disclosing the amount and source of such funding.

The bill also requires patent owners to record information about the ownership of a patent with the U.S. Patent and Trademark Office (USPTO). Patent owners must also update this information when certain rights or interests in the patent have been conveyed to another individual or entity. A patent owner may not receive increased monetary damages for infringement of that patent that occurred while the owner was out of compliance with this ownership information recording requirement.”

This bill doesn’t sound as harmful at first glance, but a closer examination shows just how harmful it is.  As a board member for the San Diego Inventors Forum, I am the liaison between our group and the national organization US Inventor, Inc., an inventor organization in Washington D.C. that advocates strong patent protection for inventors and startups.

Last week’s newsletter stated: “This bill would make gargantuan penalties for not registering a change in patent ownership in a timely enough manner. The patent owner would lose the ability to collect increased damages for willful infringement. Increased damages are about all that remain to discourage the theft of patented technologies.

The bill would also let the infringer off if the mistake in registering is considered to have been done with the intent to deceive, which every opposing attorney will argue and make you spend more time and money that you don’t have. There are other angles on this bill, like giving Big Tech an early heads up on what patents to attack using the PTAB.”

Paul Morinville, former president and founder of US Inventor wrote an article published on October 12, 2022 by IP Watchdog , titled, “The Pride in Patent Ownership Act is Big Tech Boondoggling”

“The Pride in Patent Ownership Act requires those who acquire patents to publicly register their ownership assignments with the U.S. Patent and Trademark Office (USPTO) within 120 days. Thus, it serves to identify potential patent infringement plaintiffs.

If the patent holder misses the 120-day deadline, this bill would make gargantuan penalties for not registering a change in patent ownership in a timely enough manner. The patent owner would lose the ability to collect increased damages for willful infringement. Increased damages are about all that remain to discourage the theft of patented technologies.

The bill would also let the infringer off if the mistake in registering is considered to have been done with the intent to deceive, which every opposing attorney will argue and make you spend more time and money that you don’t have. There are other angles on this bill, like giving Big Tech an early heads up on what patents to attack using the PTAB.”

He explains, “Patent infringement is about stealing technology protected by a patent – it is not about who owns the patent. Because patent applications are made public by the USPTO, fair notice is given to would-be-thieves that an invention is protected by a patent.

The patent holder is irrelevant to an infringer’s decision to steal an invention, so identifying the owner can only lead to gamesmanship, especially if the patent holder is too small to defend themselves”

He asks, “Why is Congress pushing the Pride in Patent Ownership Act through by attaching it to the NDAA? His answer: “Identifying future plaintiffs and gaming the system so Big Tech can steal patented inventions unfettered is the real reason behind the Pride in Patent Ownership Act.”

He adds, “What really matters to Big Tech incumbents is that a well-placed invention can disrupt their multibillion dollar markets and that disruption is a threat to their relevance in that market. A little guy with a big idea can truly threaten the very existence of their monopolies. Think back to Google and how their patented search algorithm sent the search icons of the day, Yahoo and Alta Vista, into the dustbin of history.”

He explained that the Supreme Court decision on” eBay v. MercExchange opened the floodgates to willful infringement by effectively eliminating injunctive relief – the ability to take the invention away from an infringer. In eBay’s public interest test, a patent holder must prove that they have a product on the market and the ability to distribute the product at the level of the infringer.

But if Big Tech steals the invention and, by leveraging their huge customer base, existing infrastructure, and endlessly deep pockets, massively commercializes the invention, no small entity will be able to pass the eBay test.

Treble damages stand as the only remaining deterrent to willful infringement. But the Pride in Patent Ownership Act will eliminate treble damages if you make an administrative error.”

Remember that besides changing our patent system from a “first to invent” to a “first to file,” the America Invents Act also created the Patent Trial and Review Board (PTAB) that has nearly destroyed inventors’ rights.  According to the U S Inventors end of the year report, “The Patent Trial and Appeal Board (PTAB) has cancelled claims in 84% of the 2,500+ patents reviewed since 2011 and most inventors do not have a half a million dollars necessary to fund a legal defense.”

We don’t need another bill taking away the last right that inventors have to protect their patents.

I urge you to take the time to call the Washington office of your Senators and tell them that the Pride in Patent Ownership Act is bad for American innovation, startups, and inventors.

When you call, you could say, “My name is _____ and I am a concerned constituent. The Pride in Patent Ownership Act is bad for American Innovation. It creates an unthinkably huge penalty for a clerical error in registering patent ownership. It provides the attorneys of huge corporations with more arguments to use against American inventors and startups. It creates another barrier for inventors and startups. It will help Big Tech gain more power and will make it harder to compete with China. 

Senator _____ needs to oppose The Pride in Patent Ownership Act including any effort to amend it into the National Defense Authorization Act. This is important for the future of America. Tell your Senators to oppose this bill.”

If they want to know more, tell them to contact the current president of US Inventor, Randy Landreneau at Randy@USInventor.org.”

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3D Printing Provides Vibrant Opportunities for American Manufacturing

November 15th, 2022

The 3D printing industry has experienced consistent and stable growth over the past decade, disrupting multiple industries. 3D printing and other additive manufacturing processes have made huge advancements in technology over the last several years and are playing a key role in reshoring mass production for companies in the USA. Constant improvements to materials and processes in 3D printing are being developed nearly on a daily basis.

Among the many benefits that 3D printing can offer are:

  • Reduce warehousing/inventory – as many parts as needed can be ordered in a much shorter time frame, saving not only time, but large inventory purchases and overseas shipping costs.
  • Agility – 3D printing allows design iterations and new prototypes to be made in mere hours and this allows companies to respond more quickly to market changes.
  • Eliminate material waste – plastic waste for injection molding can be recycled but not reused during production run.
  • Mitigate mass production risk – eliminates need to purchase large volume of parts to get cheaper price and reduces risk of having parts become obsolete before they are used.
  • Consolidate parts and assemblies into lower part count components

To find out more information about the latest trends I interviewed people at three companies.  The first was Melanie Lang, President of Formalloy, a company I mentored in 2017 when I was a mentor for CONNECT’s Springboard Program.

FormAlloy was founded in 2016 by CEO Melanie and her husband Jeff Riemann (CTO).  Both came out of the Aerospace and Heavy Industries and had proven expertise and leadership in machine design and engineering.

Formalloy manufactures two models of 3D printing of metals: the FormAlloy X & L-Series Directed Energy Deposition (DED) systems, which feature closed-loop control, variable-wavelength lasers. The company also offers the FormAlloy AX – Metal Deposition Head designed for robotic systems, manufacturing production lines and retrofits, the FormAlloy PF and ADF powder feeders for gradient or bi-metallic structures, and the FormAlloy DEDSmart software that enables the user to record all build parameter data that can be utilized post-build to analyze the component and verify the build quality.

Melanie told me that they exhibited at the IMTS show, held September 12-17 in Chicago. Her company was featured in the article “See Digital Manufacturing Data in Real-Time” written by Stephanie Hendrixson, Executive Editor, Additive Manufacturing.  Hendrixson wrote, “Formalloy showcased its DEDSmart capability, which displays and captures build data. Prints can be monitored in real time, and the resulting build data can be exported as a CSV file for analysis or visualized with built-in tools, such as DEDSmart Vizualize…Traceability becomes the utmost priority when dealing with highly regulated industries, and as a digital manufacturing process, additive manufacturing offers a potential opportunity: the ability to record data about each build in real-time, which can be used for quality control, part validation and process improvement

“Having access to the full set of build data, and the ability to control the inputs is really groundbreaking for metal AM, as many companies have closed off the controller and/or data,” says company founder and CEO Melanie Lang. “Our view is that we must have open access to data in order to build trust into the parts and be able to use the data for part certification.”

“Metal 3D printer supplier Formalloy has seen its powder-based directed energy deposition (DED) technology applied to produce parts for aerospace, oil and gas, defense and beyond..

 Next, I interviewed Spencer Loveless of Merit3D. Merit3D is a sister company of Dustless Technologies, located in the rural town of Price, Utah.  Spencer said, “Dustless is a family company. We’ve been around for 40 years, and my dad invented a vacuum for taking ashes out of wood stoves that evolved to a wet/dry vacuum. This evolved into different dust collection attachments for tools. We make attachments for jackhammers, attachments for grinders, and SKIL saws, and reciprocating saws, as well as many other products used by manufacturers. In the past, most of our products were made by injection molding, which has been around for 100 years and is a very tried and proven technology. One of the drawbacks that we saw with injection molding was the lack of agility to go to market very, very quickly.”

He said, “We were making most of our polymer components through injection molding, mostly through suppliers in China and were basically focusing on the design and the final assembly at our facility. Almost every time we started to produce a new product, we saw changes that we could make to improve the product, but it was too expensive to change the tooling.”

He explained, “We decided to look into 3D printing and we spent a lot of time researching 3D printing equipment and testing different materials before we settled on a couple of different systems. We needed a product that had properties and qualities of that of ABS and Nylon injection molded parts. We settled on a few solution from Adaptive3D and Photocentric. Both companies had great solutions for ABS like and rubber like materials. We needed 3D printable materials to simulate molded rubber and molded nylon and settled on using some new technologies and developments.

We spun off Merit3D as a sister company, to make 3D printed parts for our vacuum products and to help other manufacturers ramp up with production 3D printing.  In fact, we have had so much demand for our 3D printing that so far, it’s pretty much been limited to other companies in Utah.  One of our customers is Phone Skope, and we can print thousands of phone cases in a day.

He concluded, “We are very excited to see how manufacturing is changing. No longer are companies required to spend a lot of money up front for expensive tools or molds. New technologies are allowing us to mass produce parts at scale and bring manufacturing back to America. Merit3D is a game changer for small to medium businesses to advance their products very quickly”

Lastly, I interviewed Dan Searle, Sr. Account Executive for Stratasys Direct Manufacturing, currently working out of their facility in Tucson, AZ.  I’ve known Dan since 2012 when he was Business Development Manager for Solid Concepts, which was acquired by Stratasys in 2014. 

Stratasys Direct Manufacturing is the parts provider branch of Stratasys. They produce 3D printed parts for customers in eight different additive technologies including metals as well as three conventional manufacturing technologies. Stratasys Direct has over three decades of experience with 3D printing and has been at the forefront of using 3D printing in production applications in different industries but primarily in Aerospace.  With six manufacturing facilities, a world class quality control system ranging from file interrogation, material verification to quality control inspections and more they manage quality and mitigate risk at every step of the product life cycle. They now have nine locations in the U.S. for direct manufacturing and offer over 90 different materials including engineering grade polymers and metals in additive.

Dan said, “Stratasys Direct pioneered aerospace production in additive manufacturing in 2006 and have worked with companies like Airbus, Bell, Boeing, Boom Aerospace, General Atomics Aeronautical Systems, and Northrop Grumman. We have the largest fleet of industrial 3D printers in north America and unparalleled expertise in additive manufacturing that allows us to harness the power 3D Printing in end use part production. One of the advantages of 3D printing is reducing the number of components in an assembly.  For example, one assembly for the Atlas V rocket was reduced from 140 tradition parts to 16 FDM parts for a costs savings of 57% and 89% reduction in parts. Besides interior and cabin parts, we now make flight worthy parts such as air intake plenums and manifolds.”

Dan concluded, “Stratasys Direct manufacturing has seen AM heavily adopted in the Aerospace industry. It is used for functional prototypes, tooling support and end use flight hardware. For one OEM customer we have printed over 128,400 flight parts over the last 6 years. We are now seeing customers come to us to print flight critical components with AM.”

These companies are excellent examples of the vibrant opportunities now available in American manufacturing.  They show the feasibility of transforming the prevailing worldview of American manufacturing from “inevitable decline” to one of “vibrant opportunity” that is the vision of the non-profit which I co-founded with Doug Berger — Industry Reimagined 2030. Our goal of having an additional 50,000 world class manufacturers by 2030 is achievable with the adoption of 3D/additive manufacturing technologies and Industry 4.0 technologies as well as reshoring of manufacturing from offshore to America. 

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California’s Governor Signs Climate Bills that Would Transform State Economy 

October 18th, 2022

At the close of California legislative session, August 31, 2022, the Assembly and Senate passed several climate bills,  signed by Governor Newsom on September 16, 2022. These bills were part of the California Climate Commitment, “a record $54 billion investment in climate action that exceeds what most countries are spending…”

The Governor’s press release states that the California Climate Commitment will:

  • “Create 4 million new jobs
  • Cut air pollution by 60%
  • Reduce state oil consumption by 91%
  • Save California $23 billion by avoiding the damages of pollution
  • Reduce fossil fuel use in buildings and transportation by 92%
  • Cut refinery pollution by 94%”

 These bills are:

California AB 1279 – The California Climate Crisis Act, requires California “to achieve net zero greenhouse gas emissions as soon as possible, but no later than 2045, and achieve and maintain net negative greenhouse gas emissions thereafter, and to ensure that by 2045, statewide anthropogenic greenhouse gas emissions are reduced to at least 85% below the 1990 levels.”

Prior to this new law, the state was required by the California Global Warming Solutions Act of 2006” to ensure that statewide greenhouse gas emissions be reduced to at least 40% below the 1990 level by 2030.”

The very ambitious new target of AB 1279 would require much more drastic tactics to reduce greenhouse gas emissions across all sectors of California’s economy.

A coalition of about 60 chambers of commerce, agriculture, business and industry organizations from across the state opposed this bill as well as AB 2133 that is noted below because these bills would affect new housing construction, agriculture production, energy, transportation, and all manufacturing.

AB 2133) – GHG Reduction by 2030 – This bill “would have increased California’s climate reduction targets to at least 55% below 1990 levels no later than December 31, 2030…it did not receive a majority vote in the Legislature, making it the only Climate Proposal not codified into law.”

In a open letter to the California Senate, the main reason for opposing AB 2133  by the Coalition was:  “Increasing the GHG 2030 emissions reduction target from 40% to 55% below the 1990 level, would require the state to remove an additional 17 million gasoline vehicles off the road by 2030, according to data developed by CARB. Additionally, CARB data shows that CARB’s initial modeling of scenarios in this range concluded them to be “economically and technically infeasible due to the current lack of low-carbon energy infrastructure, unavailability of technology, large job loss and high implementation costs.”

SB 1020 – Clean Electricity. This bill codifies into law a state policy that eligible renewable energy resources and zero-carbon resources will provide:

  • 90% of all retail sales of electricity to California end-use customers by December 31, 2035, 95% by December 31, 2040, and 100% by December 31, 2045; and
  • 100% of electricity procured to serve all state agencies by December 31, 2035.”

To achieve these objectives, “SB 1020 requires that CARB and the California Energy Commission use unspecified programs authorized under existing statutes and employ measures to ensure that implementation of the policy does not cause increases in GHG emissions elsewhere, a concept also known as leakage”

SB 1137  – Oil and gas: operations: location restrictions: notice of intention: health protection zone: sensitive receptors.  The bill “establishes a ‘health protection zone’ of 3,200 feet between oil and gas wells and ‘sensitive receptors’ defined broadly to include residences, schools, healthcare facilities, and any building housing a business that is open to the public.”

It also requires that “all operators of oil and gas wellheads and production facilities must submit sensitive receptor inventory maps that identify sensitive receptors within 3,200 feet of the operator’s wellheads and production facilities” by January 1, 2023. “Health and safety requirements kick in after January 1, 2025, for oil and gas wellheads and production facilities currently located within a health protection zone.”

The bill also “prohibits the Geologic Energy Management Division (CalGEM) from approving any notice of intention after January 1, 2023, to drill a new well within a health protection zone, except under limited circumstances, including when it is for the purposes of plugging and abandoning a well.”

SB 905 – CCUS – This bill instructs the California Clean Air Resource Board (CARB) “to create a ‘Carbon Capture, Removal, Utilization, and Storage Program’ to evaluate the efficacy, safety, and viability of CCUS and carbon dioxide removal (CDR) technologies; facilitate capture and sequestration of carbon dioxide using these technologies; and develop monitoring and reporting frameworks to enforce the proper implementation of these activities.”

The bill “mandates that all CCUS and CDR activities be carried out in a way that seeks to minimize adverse effects on the environment and public health, promote workforce development and employment opportunities, and reduce fossil fuel production in the state, among other goals.”

It also requires “CARB to adopt implementing regulations on or before January 1, 2025, and by January 25, 2025, the state Secretary of Natural Resources, in consultation with CARB, must publish a framework governing agreement …for purposes of managing, developing, and operating CCUS and CDR projects.”

Governor Newsom has faced some criticism from environmental advocates for some of his proposals. Maya Golden-Krasner, the deputy director of the Climate Law Institute at the Center for Biological Diversity, an environmental advocacy group, stated, “Carbon capture technologies are dangerous, expensive and infeasible…It’s creating a ticking time bomb that needed to be addressed before the state goes forward with anything,” she said, referring to the potentially hazardous effects for communities living above any of these deposits.

Of course, the oil and gas industry opposed these bills, warning “that the policies would raise costs for consumers and increase California’s dependence on other countries for fuel.

“It is the California government dictating how and when we can travel and mandating the type of energy we’re using and when we can use it,” said Kara Greene, a spokesperson for the Western States Petroleum Association, a Sacramento, California-headquartered trade group that represents petroleum companies in Arizona, California, Nevada, Oregon and Washington.

“It disregards the livelihoods of thousands of Californians, who still need to drive to work, who still need to drive their kids to school, who still need to balance their household budgets.”

The irony of all of these Climate Commitment bills is that the week after the Governor signed these bills, “the California Independent System Operator (ISO)asked “Californians to not use electricity in large amounts between 4 P.M. and 9 P.M. In particular, they asked residents to voluntarily reduce their power consumption by avoiding using large appliances and charging electric vehicles during peak usage hours of 4 p.m. to 9 p.m.”  The inclusion of “charging electric vehicles” received considerable criticism because of the previously passed ban on gas-powered vehicles by 2035. 

It only took a two-week extreme heat wave to cause this crisis because “the power supply in California has been in a state of constant flux due to the policy of removing oil, gas, and coal plants at a rate faster than wind, solar, hydro, and other renewable sources of energy can replace them.”

At least, there were enough legislators who recognized the problem of the electricity grid in California that they passed SB 846  “to extend the life of the Diablo Canyon nuclear power plant, which supplies nearly 10% of the state’s electricity. Diablo Canyon’s two nuclear reactors were scheduled to close in 2024 and 2025, but SB 846 delays this timeline by five years, to 2029 and 2030, by enabling the United States Nuclear Regulatory Commission and any other state and federal authorities to renew the operator’s license for an additional five years.

All of us want less pollution to enjoy cleaner air and clean water, but not at the cost of not having enough electricity to enjoy the benefits of modern life:  lighting, air conditioning, heating, and the conveniences of electricity-powered appliances.  We also need electricity to produce food, livestock, and poultry, as well as to manufacture the wide variety of consumer goods we enjoy, pharmaceuticals and medical products to protect the health of Americans, not to mention the goods and products needed for our military defense and national security. The goal of our non-profit, Industry Reimagined 2030  to “reduce the environmental footprint by 30% by 2030 is a much more reasonable and achievable goal than California’s unrealistic climate legislation.

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California Targets Manufacturing Industry to Reduce Pollution

October 4th, 2022

On September 14, 2022, I had the pleasure of attending the California Metal Coalition quarterly meeting in San Diego held at the offices of C & H Machine in Escondido. The CMC website states: “California is home to 4,000 metalworking facilities, employing over 350,000 Californians with high-paying manufacturing jobs and health benefits.   Jobs provided by our industry are the path to the middle class for many Californians.”

After introductions, Executive Director James Simonelli provided an overview of legislation and rules changes that could adversely affect the metals industry in California. 

First, he discussed AB 423 – San Diego County Air Pollution Control District: members and duties. This bill was sponsored by Assembly Member Todd Gloria (elected as San Diego Mayor in 2020) on May 28, 2019 and was signed by Governor Newsome on Oct 11, 2019

He pointed out that while “existing law provides for the establishment of air pollution control districts and air quality management districts,” San Diego’s air pollution control district was handled by the County Board of Supervisors. AB 423 required the San Diego County Air Pollution Control District to become a separate agency with a specified membership as of March 1, 2021. It required local governments to appoint members to the San Diego County Air Pollution Control District governing board in a specified manner and appoint a specified liaison to consult with the United States Navy, the United States Marine Corps, and the United States Coast Guard. AB 423 greatly expanded the authority of the SDAPCD for permitting, compliance/enforcement, local air monitoring, and new rule making.

Next, Mr. Simonelli reported further developments with regard to AB 617 that was passed and signed by the Governor on July 16, 2017.  “It requires the California Air Resources Board (CARB) and air districts to develop and implement additional emissions reporting, monitoring, reduction plans and measures in an effort to reduce air pollution exposure in disadvantaged communities. It mandates a statewide strategy to reduce emissions, with a review at least once every five years. Through grants to community-based organizations, locals can more easily analyze data and participate in new air pollution reduction programs.”

The bill is supposed to provide the following benefits to disadvantaged communities:

“Quicker review of pollution control technology – In districts exceeding air pollution limits, the new law supports an expedited process to implement the best available retrofit control technology at industrial sites.

More significant penalties for polluters – Penalties increase five-fold to $5,000 for violating air pollution laws from non-vehicular sources”.

However, Mr. Simonelli said that the task force was set up to find out what concerns disadvantaged communities had with regard to pollution, and the task force is currently looking at facilities where welding of metal is being done as welding operations can create emissions of lead, hexavalent chromium, copper, nickel, and cadmium.

The next item for discussion the agenda went along with California’s recent ban of the sale of new gasoline-powered cars and light trucks by 2035.  They would also like to have Zero-Emission Forklifts.   

Mr. Simonelli said they are targeting internal combustion forklifts, such as propane powered, with a lift capacity of 12000 lbs. or less.  “New equipment cannot be purchased after 2026, and current equipment must be phased out between 2026 – 2038.  The primary option will be electric forklifts.  CMC submitted formal written comments to CARB on August 19 2022.  This measure is scheduled for consideration by the Board in 2023.”

The CRB website states, “Accelerating the transition to zero-emission technologies, where feasible, is an important component of CARB’s strategy to meet the state’s air quality and greenhouse gas reduction goals. As such, CARB staff is currently developing a measure that would drive greater deployment of zero-emission forklifts within fleets throughout the state. This measure, which has been identified in CARB’s Mobile Source Strategy, State Implementation Plan, and Sustainable Freight Action Plan, is one of several near-term actions intended to facilitate further zero-emission equipment penetration in the off-road sector.

CARB staff is currently developing a measure that would drive greater deployment of zero-emission forklifts within fleets throughout the state. This measure, which has been identified in CARB’s Mobile Source Strategy, State Implementation Plan, and Sustainable Freight Action Plan, is one of several near-term actions intended to facilitate further zero-emission equipment penetration in the off-road sector.

Forklifts operate in many different industry sectors but are most prevalent in manufacturing and at freight facilities, such as warehouse, distribution centers, and ports. There are approximately 100,000 forklifts operating in California.”

If you are thinking you are safe because you don’t live in California, think again. In reporting on the ban of gas-powered cars, CNBC reported: “The decision is expected to have sweeping impacts beyond California and will likely pave the way for other states to follow. At least 15 states including New Jersey, New York, and Pennsylvania have adopted California’s vehicle standards on previous clean car rules.”

Mr. Simonelli then discussed two proposed rules by the South Coast Air Quality Management District:

 Proposed Rule 1460 – Control of Particulate Emissions from Metal Recycling and Shredding Operations.  

This rule addresses controlling emissions (fugitive dust) from scrap recycling of which there are about 200 in the district along with several shredding facilities.  It would affect registration, housekeeping, water use, and potential enclosures at these facilities. The first Working Group meeting was held on March 16, 2022, and two additional Working Group meeting were held in May and July.  There was a Public Workshop on September 6, 2022 and a special public hearing on September 21, 2022.  A notice for the final Public Hearing was sent out on October 4th announcing the final Public Hearing to be held November 4, 2022, when the board votes on the proposed rule. 

Proposed Rule 1435 – Control of Toxic Emissions from Metal Heat Treating Processes.

This rule address controlling emissions from heat treating, forging, brazing, plating, anodizing, and other processes in which metal is heated, which may produce hexavalent chromium. The first Working Group meeting was held August 6, 2019, and the University of California Riverside is conducting research on heating metal and creating hexavalent chromium. The SCAQD website states: “Hexavalent chromium is a toxic air contaminant that is a potent carcinogen mainly produced by industrial processes. Long-term inhalation of hexavalent chromium over a lifetime can:

  • Increase the risk of developing lung and nasal
    cancers
  • Cause or worsen certain health conditions such as
    respiratory tract irritation, wheezing, shortness of
    breath etc.

It is important for manufacturers to participate in industry organizations like the California Metals Coalition to be able to keep informed about issues that will affect their industry and have an organization that will lobby for or against issues that will affect their industry. Company owners do not have the time to do research on their own with regard to what their state legislatures and regulating agencies are doing that could adversely affect their company.  I strongly recommend that company owners and executives look into joining the organization that best fits your industry in your state as well as national organizations that keep track of legislation being considered by Congress, such as the Coalition for a Prosperous America, a non-profit, non-partisan organization working to “save American manufacturing, of which I have been a member for 11 years.

It will only be through unprecedented collaboration between organizations such as CMC, CPA, and many others that we will be able to achieve the vision of Industry Reimagined 2030 to transform the narrative of American manufacturing from one of inevitable decline to one of vibrant opportunity that is necessary to revitalize American manufacturing to create more jobs and prosperity for our country. 

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Workshops for Warrior Expands Training Programs

September 20th, 2022

On Friday, August 19th, I attended the graduation ceremony for students in the summer session class at Workshops for Warriors.  I have attended previous graduations and two of their gala fundraising events since I first visited Workshops for Warriors® (WFW) on Manufacturing Day in 2012.

The mission of WFW is to provide quality training, accredited STEM educational programs, and opportunities to earn third party nationally recognized credentials to enable veterans, transitioning service members, and other students to be successfully trained and placed in their chosen advanced manufacturing career field. WFW is a fully audited, board-governed 501(c)(3) nonprofit. Their motto is “Rebuilding American Manufacturing, One Veteran at a Time®.”

In a previous article in 2012, I described how Hernán Luis y Prado and his wife Rachel founded WFW in 2008 and self-financed the training provided in their own garage while Hernán was still in the service. They moved into their first small building in 2011 and moved into their current location in San Diego in 2012.  

Workshops for Warriors is a DoD Skillbridge program offering accelerated four-month courses in spring, summer, and fall semesters in CNC Machining, Welding, and Advanced Welding.

Hernán said students earn nationally recognized portable credentials from The American Welding Society (AWS), the National Institute for Metalworking Skills (NIMS), Mastercam University, SolidWorks, Immerse2Learn, the National Coalition of Certification Centers (NC3), and others.

Including the graduates of this class, WFW has graduated 1070 students in the past 14 years who have earned 11,723 certifications.  There are currently 12 instructors on staff, supported by an administrative staff of three in addition to CEO and Founder, Hernán and his wife, Rachel, who is CFO and Chief Academic Office. 

Director of Operations, Keshia Javis-Jones, is a Marine Corps Veteran who joined WFW in 2017. During the graduation ceremony, she shared some initial concerns that veteran students have in common:

  • Finances – scared because they don’t know what their next money will come from
  • Uncertainty about their future
  • Stressed out

She said these veterans have just taken off a uniform that made them part of an organization that was like their family. She said WFW becomes their new family, and WFW helps them out financially, even providing them a place to live while going through training if needed.

Two graduates were honored during the ceremony for their high scores in achievement for their certifications.  Michael Good received the honor for welding, and Jacob Nichols received the honor for machining.  Michael will continue at WFW for his certification in Welding 2, and Jacob will join WFW as a teaching assistant. Keshia said that many of the graduates have already accepted job offers. She said they have as many as 10 jobs offers for every graduate. 

During the ceremony, Hernán congratulated his wife, Rachel, for being selected as one of San Diego’s 50 Most Influential Women over 50 in July. 

After the graduation ceremony, Adam Jacobs, Director of Marketing of WFW, showed me around. I was pleased to see that they had expanded since my last visit by acquiring an adjacent building on the corner.  The additional space houses a kitchen, dining room/classroom, bathroom, and dressing room full of donated suits for the graduates to wear for interviews.

I asked Adam how WFW had fared during the COVID pandemic lockdowns. He said, “In response to COVID, the Workshops for Warriors team acted with military precision in 2020 and adapted our programs to a remote learning infrastructure in a single weekend.  Practical training was shifted to isolated individual instruction at staggered times, incorporating extensive PPE and cleaning protocols.

We remained open, operational and safe during the pandemic.”

Afterward, I got an update from Hernán on some issues I had written about in previous articles.  In my article of  January 2017, Hernan said “it is a five step process to receive Federal funding, and we are in the middle of step 4 (Operate as a licensed school for 2 years and pass BPPE audit). We hope to be able to accept Federal funding by April 2019.” 

Hernán said, “This did happen, earlier than we expected.  In 2018, Workshops for Warriors received approval from the Veterans Affairs Administration to accept federal monies for authorized students.  This allows students that have GI Bill benefits to use their benefits for the Workshops for Warriors training.”

In my article about the gala event on the Midway that I attended in 2017,  I wrote that Hernán said, “Workshops for Warriors’ Capital Campaign is underway, with a goal of raising $21 million to build a new facility that can accommodate ten times as many students as are currently enrolled.”  I asked Hernán how much money had been raised for the capital campaign, and he replied, “We have raised all but $6.2M of the required funds and are working with some key donors to fund the final portion.  Your readers are welcome to submit their donations to help us reach our goal at: https://donate.wfw.org/give/287011/#!/donation/checkout?c_src=webprimarymenu ”

Hernán explained that they have spent Capital Campaign funds on Capital Campaign related expenses such as:

  • Land Acquisition
  • Architect & Engineer fees
  • Environmental Compliance fees
  • Permits, Fees, Surveys, & Assessments
  • Insurance
  • Site and Construction Appraisals
  • Site Preparation and Development
  • Site and Facility Maintenance
  • Marketing & Advertising
  • Legal
  • Project Management

 He said that the rest of the Capital Campaign money is reserved for:

  • Demolition (expected to start on or about 30 November 2022)
  • Grading and Shoring
  • The construction of the building itself
  • Tenant improvements
  • Acquisition and installation of the required FF&E (Furniture Fixtures, and Equipment) required to run the school

I asked when the groundbreaking will occur that he mentioned during the ceremony. He replied, “We are excited to share that we are finally breaking ground on the Capital Campaign project we have been working on since 2017.  The groundbreaking event will be held on or before the 30th of November.  We are demolishing four existing buildings in order to begin grading and shoring for a new 25,000 sq. ft. facility that is expected to be operational by April 2024.  We have some key elected officials attending so due to security concerns, I can’t give out the exact date yet.  However, I am happy to let you know within a day or so of the event if you are interested in attending.” I told him I would try to be at the groundbreaking event if at all possible.

More good news has happened since the graduation ceremony. Hernán told me that on September 6th, Ms. Isabella Casillas Guzman, the head of the U. S. Small Business Administration, toured their facility when she was in San Diego to meet with local leaders and entrepreneurs to discuss Federal programs that would help the region.  He said that during her visit, “she presented me with the award for “Best Small Business Person in California for 2022.” I congratulated him on receiving this honor and told him he deserved the award for the important work he has been doing in training veterans for good jobs in the manufacturing industry and that the expansion of his training program will be a big help in filling the skills gap in the U.S. 

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