American manufacturing « savingusmanufacturing.com

Posts Tagged ‘American manufacturing’

Navarro Warns of Fragility of U.S. Manufacturing and Defense Industrial Base

Tuesday, December 4th, 2018

If you don’t watch CSpan, you missed an important speech by Dr. Peter Navarro, White House National Trade Council and Office of Trade and Manufacturing Policy Director, on November 9^th at the Center for Strategic and International Studies in Washington, D. C.

Dr. Navarro spoke about the manufacturing and defense industrial base and how U.S. economic strength is an element of national security and how it fits with the Trump strategy in dealing with the broader economic and defense issues. Dr. Navarro said that in December 2017, as part of formulating a national security strategy, President Trump introduced the maxim that “economic security is national security.”

He explained that everything that the Trump administration has done is part of this strategy, such as tax cuts, deregulation to reduce the onerous regulations put in place by the Obama Administration, ending the war on coal, and the steel and aluminum tariffs. These are all part of supply side economics to help companies be more competitive and grow in a non-inflationary way.

He commented that instead of the “doom and gloom” of economists, there has been “a flood of new investment and capital expenditures” by steel and aluminum companies, and “the waivers granted by the Department of Transportation have gone down from a flood to a trickle.”

He said, “In my estimation, we have the finest U. S. Trade Representative in U. S. history. Doing the Section 301 investigation was a power that lay dormant for decades. This is the way we are able to now protect our technology from Chinese predation. It has been tremendously successful in doing that.”

He outlined how Trump’s tough trade policy, backed up by tough action, has led to the renegotiation of two out of the three main trade deals – NAFTA, the Korea deal, and the WTO. With regard to NAFTA, now called the USMCA, he said, “The whole essence is a provision to bring domestic content back onshore and share the fruits of the assembly and supply chain with our neighbors to the south and to the north. This is a deal which will strengthen all three countries and strengthen the defense industrial base.”

He commented that President Trump is a man who thinks every day about how to put more American men and women back to work, particularly those who work with their hands. He discussed how during his time on President Trump’s campaign trail, a report came out stating that one out of four people were out of the workforce, the so-called “discouraged workers” – men and women who had given up looking for work. He said, “We were told that the jobs for people who work with their hands were never coming back. Now, we have historically low unemployment., and rising employment among Blacks, Hispanics, and woman. Over a million people are back in the workforce through a fundamental restructuring of the manufacturing and industrial base. It isn’t just the quantity of jobs; it’s the quality of jobs.”

He said, “I was blessed to be part of a large team that restructured the sale of arms to our allies and partners. From an economic security point of view, it means more jobs here, good jobs with higher wages. When you reactivate a supply chain, you activate 400 suppliers in that supply chain in 41 states. It helps expand production lines. If you are able to sell arms to allies and partners, it makes that country stronger.”

He then turned his attention to the findings of the “Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States Report” that was prepared by the Interagency Task Force in Fulfillment of President Trump’s Executive Order 13806.

He said that an Interagency Task Force, led by DoD, created sixteen working groups with over 300 subject matter experts from across the federal government. Nine working groups focused on traditional industrial sectors, and seven working groups assessed enabling cross-cutting capabilities, such as machine tools. The report revealed that there are almost 300 gaps and vulnerabilities in America’s manufacturing and defense industrial base. The Executive Summary states, “Currently, the industrial base faces an unprecedented set of challenges: sequestration and uncertainty of government spending; the decline of critical markets and suppliers; unintended consequences of U.S. Government acquisition behavior; aggressive industrial policies of competitor nations; and the loss of vital skills in the domestic workforce.”

Dr. Navarro asked the rhetorical questions, “How did we get to the place where the greatest military power in the world faces serious gaps, close to 300 gaps, in the defense industrial base?…What happens when you randomly cut off dollars from the defense department?

He explained, “There are five macro forces that bear down on the defense industrial base:

Budgets and sequestration
Decline of American manufacturing capability and capacity
S. government procurement practices
Industrial policies of competitor nations
Decline of U.S. STEM and trade skills

He commented that the decline of the manufacturing base itself was due to the forces of globalization as well as the industrial policies and unfair trade practices of our economic competitors, our so-called allies, and our strategic rivals, particularly China. He said, “This report called out China for its policies of economic aggression…China is engaged in unfair trade practices and currency manipulation. From 2003 to 2014, it was documented that China was the worse currency manipulator in the world…so that we are running up annual trade deficits of half a billion dollars.”

He showed a chart, titled “China’s Categories of Economic Aggression.” He said, “This chart is founded on the underlying assumption that China is a non-market economy, a state-directed economy. They use international rules when they benefit them and violate them when it’s to their benefit.” He outlined` six economic strategies that China uses:

Protect their home markets from competition and imports
Protect China’s share of global markets
Secure and control core natural resources globally
Dominate traditional manufacturing industries
Acquire key technologies and Intellectual Property from other countries and the U. S.
Capture emerging industries of the future that will drive future growth and advancement in defense industries.

He said, “There are over 50 ways that China engages in these acts, policies and practices s to achieve these strategies…, if you could negotiate to eliminate 25 of these tactics, you would still have 25 that would hurt us.”

This point is very relevant to the preliminary agreement that President Trump negotiated with Chinese President Xi Xinping at the G20 this past weekend. The agreement included a 90-day delay to the planned January increase in US Section 301 tariffs—which were set to rise from 10 percent to 25 percent on $200B of Chinese imports.

Judging from past history of negotiations with China, it is unlikely that China will keep their part of the bargain of this latest agreement. It will probably unravel before the 90 days are up. Dr. Navarro alluded to the problem of negotiating with China when he said, “The biggest problem is the trust issues. One of the things about working in the White House is that you can ask for stuff. I asked them to give me all the instances where China has agreed to something and then not kept their promise. I got back like five pages of stuff going back 30 years. It’s frightening…”

Space does not permit me to cover his discussion of the tactics China uses. Through research, I discovered that Dr, Navarro had used this same chart when he spoke to the Hudson Institute on Thursday, June 28, 2018, an image of which can be viewed at this link.. It looks to me that he created the chart to be a visual summary of key points made in his report, “How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World,” which he submitted to President Trump in June 2018.

His comments included mention that the globalization of the supply chain has resulted in having only a single source for some critical product or components. For example, he mentioned that there is only one company that can make turrets for tanks. He said, “The F-34 has a seven-tier supply chain, and you need to make sure that production lines for parts can continue and expand if there is a surge of demand…If you have foreign sources for products and components, that is a big problem, especially if China is the source.”

He also briefly commented on the problem of the decline of U. S. STEM and trade skills saying that if you have labor shortages because you don’t have enough skilled labor, that is a problem.

He concluded by saying, “The day that Pat Shanahan turned in the report, DoD and other agencies of government were already moving forward to fill these gaps and vulnerabilities. The day that the report was handed in, we signed two Defense Protection Act Title III orders that would help a couple of small companies in that fragile supply chain…We have initiatives for the national defense stock pile program to help with critical material issues. There is an effort to modernize the organic industrial base…This administration is working tirelessly, tirelessly, to fix those gaps and vulnerabilities. This effort really is the purest expression of the principle of economic security is national security. We will strengthen America’s manufacturing and defense industrial base, and in the process, we will create jobs and build factories and better protect our homeland…”

I’ve made the point repeatedly that we can’t protect our national security or even defend our country without a strong manufacturing base. After writing about how and why we needed to save and now rebuild our manufacturing industry by writing three books and over 300 articles since 2009, it is gratifying to me that action is finally being taken to address this situation the Trump Administration.

Tags:American manufacturing, national security, trade policy
Posted in Economy, National security, Trade Policy | No Comments »

How tariffs Could Rebalance U.S. trade relations with China

Tuesday, November 27th, 2018

President Trump has been accused by many of starting a trade war. Are we really in a trade war and did the U. S. start it? Economist Ian Fletcher recently stated “I define trade war as a cycle of tariff and retaliation where the retaliations are driven not by rational desire to balance trade or achieve the benefits of a tariff-protected economy, but simply by one-upping the other side’s last cycle of retaliation…I believe it is absolutely crucial to make the distinction between trade war, and the ongoing trade conflicts which have always been going on even under nominally free-trade circumstances, clear to the public. If China imposing tariffs on us for years hasn’t been “trade war,” why is it suddenly “trade war” now that we’re doing the exact same thing?”

Michael Stumo, CEO of the Coalition for a Prosperous America, recently stated, “China started the trade war in 1994 with currency devaluation and state-directed capitalism. Then they got better at it.”

Mr. Stumo is right because for the past 24 years, the U. S. has experienced an ever-increasing trade deficit with China, transferring America’s wealth to China and losing nearly six million manufacturing jobs. In 1994, our trade deficit with China was $29.5 billion, and by 2004, it had doubled to $162.3 billion. After a slight dip in 2009 during the depths of the Great Recession, the trade deficit grew to $375 billion in 2017.

Previous administrations did nothing to fight against the trade war that China started. In fact, they aided China’s efforts to win the trade war starting when China was granted “Most Favored Nation” status by Present Clinton in 2000.

The January 31, 2017 report, “Growth in U.S.–China trade deficit between 2001 and 2015 cost 3.4 million jobs,” written by Robert Scott, Director of Trade and Manufacturing Research at the Economic Policy Institute, states that when China entered into the World Trade Organization (WTO) in 2001, “it was supposed to bring it into compliance with an enforceable, rules-based regime that would require China to open its markets to imports from the United States and other nations by reducing Chinese tariffs and addressing nontariff barriers to trade.”

However, Scott wrote, “China both subsidizes and dumps massive quantities of exports. Specifically, it blocks imports, pirates software and technology from foreign producers, manipulates its currency, invests in massive amounts of excess production capacity in a range of basic industries, often through state owned enterprises (SOEs) …China has also engaged in extensive and sustained currency manipulation over the past two decades, resulting in persistent currency misalignments.”

Robert D. Atkinson, President of the Information Technology and Innovation Foundation (ITIF) expanded on Chinese mercantilist policies in his report, “Enough is Enough: Confronting Chinese Innovation Mercantilism (February 2012). He wrote, “China’s strategy is to win in virtually all industries, especially advanced technology products and services… China’s policies represent a departure from traditional competition and international trade norms. Autarky [a policy of national self-sufficiency], not trade, defines China’s goal. As such China’s economic strategy consists of two main objectives: 1) develop and support all industries that can expand exports, especially higher value-added ones, and reduce imports; 2) and do this in a way that ensures that Chinese-owned firms win.”

In a speech to the Hudson Institute on October 4, 2018, Vice President Mike Pence stated, “Over the past 17 years, China’s GDP has grown 9-fold…And the Chinese Communist Party has also used an arsenal of policies inconsistent with free and fair trade, including tariffs, quotas, currency manipulation, forced technology transfer, intellectual property theft, and industrial subsidies doled out like candy, to name a few. These policies have built Beijing’s manufacturing base, at the expense of its competitors – especially America.

He commented, “Yet previous administrations all but ignored China’s actions – and in many cases, they abetted them. But those days are over. Under President Trump’s leadership, the United States of America has been defending our interests with renewed American strength…we’re also implementing tariffs on $250 billion in Chinese goods, with the highest tariffs specifically targeting the advanced industries that Beijing is trying to capture and control. And the President has also made clear that we’ll levy even more tariffs, with the possibility of substantially more than doubling that number, unless a fair and reciprocal deal is made.”

Most people are unaware that America staunchly protected its domestic industries with tariffs on imports until the end of WWII. On August 16, 2018, MarketWatch published an article by Jeffrey Bartash, in which he stated, “One of the very first bills new President George Washington signed, for instance, was the Tariff Act of 1789. He inked the bill on July 4 of that year. The tariff of 1789 was designed to raise money for the new federal government, slash Revolutionary War debt and protect early-stage American industries from foreign competition.

Most goods entering the U.S. were subjected to a 5% tariff, though in a few cases the rates ranged as high as 50%. It was the first of many tariffs that Congress passed over a century and a half. They generated the vast majority of federal revenue until the U.S. adopted an income tax in 1913. In some years tariffs funded as much as 95% of the government’s annual budget.”

Why did we allow the Chinese to win the trade war for so long? Because our economic “experts” and advisers to past administrations naively thought that free trade and free markets would have a transformative effect on China’s totalitarian form of government, gradually democratizing it.

The question is whether or not the tariffs will help rebalance U. S. trade with China. In the article posted on the trade blog of the Coalition for a Prosperous America (CPA) on July 30, 2018, CPA Research Director Jeff Ferry examines “China’s heavy dependence on – or overexposure to – the US for their trade surplus and their exports. He wrote, “But the fundamental message of all the data is that the US is not only the world’s number one consumer and importer, but China’s number one customer. That makes China more dependent on us than we are on them.”

In other words, China would be hurt more by the tariffs reducing their imports to the U. S. than the U. S. would be hurt by having to pay more for imports. Over time, the tariffs would rebalance our trade with China as imports of Chinese goods are reduced, which would reduce our deficit with China.

In contrast to numerous articles projecting job losses from the tariffs, the Coalition for a Prosperous America (CPA) published a press release on August 17, 2018, that provided “details of its new ‘Tariff Job Creation Tracker’ that tallied US manufacturing jobs gained in the wake of recent tariff actions. CPA found 11,100 jobs announced or planned in four major sectors affected by tariffs. These results have now prompted a corresponding study of job losses related to the tariffs. To date, CPA has identified only 514 jobs lost specifically due to tariffs—which means that job gains exceed job losses by a 20:1 ratio.”

On November 27, 2018, CPA released a press release: “Steel Tariffs Creating Jobs, Boosting GDP” which stated: “This ground-breaking economics study by the CPA Economics team shows that the steel tariffs are benefiting the US economy,” said CPA Chairman Dan DiMicco. “The same is true for other tariffs implemented this year. If we continue to follow rational trade policies, the benefits will be felt by every worker, farmer, and shareholder in the US.”

CPA Research Director Jeff Ferry said, “The performance of the US economy since the steel tariff was implemented in March has been outstanding, with over a million more jobs in the US economy today than in March, and GDP growth roughly half a point higher than economists had predicted.”

Already the tariffs are resulting in an expansion of U. S. steels jobs and investment by U. S. steel companies in their facilities. On August 17, 2018 Manufacturing News & Insight featured this article “US Steel to Invest $750M in Gary Works Plant in Indiana” stating, ”U.S. Steel plans to spend at least $750 million to upgrade a century-old steel mill along northwestern Indiana’s Lake Michigan shoreline…Company and government officials said Thursday that the project will help preserve Gary Works’ nearly 3,900 steelworker jobs, and could help ensure the 112-year-old mill lasts another century. The investment accounts for more than a third of U.S. Steel’s $2 billion asset revitalization program…”

Manufacturing is the foundation of the U.S. economy and our country’s large middle class. Losing the critical mass of our manufacturing base would result in the loss of the large portion of our middle class that depends on manufacturing jobs. American manufacturers supply the military with essentials including tanks, fighter jets, submarines, and other high-tech equipment. We can’t manufacture these goods without domestic steel and aluminum. If we lose the domestic capacity to produce steel and aluminum, our national defense would be in danger, and it would be impossible to maintain our country’s position as the superpower of the free world. Let’s give them time to work to rebuild our U. S. steel and aluminum industries. Hopefully, the tariffs will inspire China to open up their markets to U. S. goods to create to a freer, more open trade relationship between our two countries.

Tags:American manufacturing, jobs, trade policy
Posted in Jobs, National security, Trade Policy | No Comments »

MFG Day Motivates Youth to Pursue a Career in Manufacturing

Tuesday, October 23rd, 2018

Since 2012, thousands of manufacturers around the country open their doors to inspire and recruit the next generation of manufacturers on Manufacturing Day (MFG Day), which was held this year on Friday, October 5^th.

MFG Day is produced by the National Association of Manufacturers and the Manufacturing Institute. MFG DAY had ambitious goals: “to change public perception of manufacturing, inspire students to pursue manufacturing careers, and strengthen the future of manufacturing by avoiding the talent shortage on the horizon.” According to the MFG Day website, “We wanted to correct the idea that manufacturing involved repetitive, unskilled tasks that happened in dark, dirty factories — a ridiculous idea to anyone who has actually worked in manufacturing — and show people what manufacturing really looks like.”

Those of us in the industry know that today’s manufacturing jobs are high skilled, and take place in clean, well-lit, technologically advanced facilities. The problem was that there was no way to know whether perceptions were changing until Deloitte became a sponsor of MFG DAY in 2015 and conducted surveys of attendees.

The results of the survey of 2015 showed:

81% of students emerged “more convinced that manufacturing provides careers that are interesting and rewarding.”
62% of students were “more motivated to pursue a career in manufacturing”

The 2016 survey results showed that the percentages rose to 84% and 64% respectively.

The 2016 Deloitte report said, “Projections indicate that roughly 600,000 people attended MFG DAY events in 2016 and that 267,000 of them were students. That means that nearly 225,000 students walked away from their MFG DAY 2016 event with a more positive perception of manufacturing, according to Deloitte’s findings…. Based on the 267,000-student attendance figure, that’s potentially 171,000 new members of a next-generation manufacturing workforce.”

The Deloitte surveys showed that “71 percent of student attendees both years said that they “were more likely to tell friends, family, parents, or colleagues about manufacturing after attending an event,” meaning that they weren’t just convinced — they were inspired.”

This year, the MFG Day website listed 2,739 events planned across the country. In California, there were events planned at more than 250 locations throughout the state. The CMTC October 9th newsletter stated, “This year, CMTC and its California’s Manufacturing Network were much more active in sponsoring, organizing and coordinating events statewide. CMTC was also very committed in pairing up schools wishing to attend Manufacturing Day events with manufacturers and other organizations hosting open houses, career fairs, and expos. CMTC and its California’s Manufacturing Network’s efforts directly resulted in over 50 schools attending these events. At these events, students received first-hand exposure about today’s manufacturing technologies in industries that employ highly-skilled and well-paid individuals while offering exciting, rewarding, innovative work environments.”

Since I moved up to Hemet, CA in September, I attended events in Riverside County instead of San Diego County. There were five events in the city of Riverside, one in Menifee, one Murrieta, one in Perris, and one in Redlands. This is in comparison to my former home county of San Diego with 22 in the city of San Diego, three each in Carlsbad and San Marcos, two in El Cajon, and one each in Chula Vista, Oceanside, and Vista.

I attended only three events in Riverside County because they were located so far apart, and most of the events were held in the same time period between 10 AM and 2 PM. I began my day by attending the event in Menifee at Mt. San Jacinto College to introduce their new Makerspace to students. The auditorium was nearly filled with students form Santa Rosa Academy where a panel of business professionals and professors shared the value of their education to their careers. The event was sponsored by the City of Menifee, the Menifee Valley Chamber of Commerce, and CMTC. The audience was welcomed by Major Bill Zimmerman and Tony LoPiccolo, Executive Director of the Chamber.

Fortunately, I was able to get a private tour of the MakerSpace by Hal Edghill, the MakerSpace specialist, before the students had finished listening to the panelists. The MakerSpace has 15 inexpensive 3D printers and two more advanced 3D printers for students to use for their projects, as well as a small laser cutter/engraver. Mr. Edghill said the MakerSpace just opened in August, so this is the first semester it is available for students to use for projects.

There were so many students that they were divided into four groups for their tour. Afterward, the students enjoyed pizza and soda before returning to school.

I then drove up to Riverside for a tour of Aleph Group, Inc. (AGI). AGI builds custom bloodmobiles, mobile medical and dental clinics, container hospitals, emergency command vehicles, mobile command centers, and specialty trailers, modular units, and vehicles. Founder and President/CEO Jales De Mello conducted the tour personally, and we saw four projects in various stages of construction. One bloodmobile was completed, ready to ship to Saudi Arabia. Another nearly completed project was a mobile medical/dental clinic being built for a northern California Indian reservation. The largest project under construction was a modular clinic.

Mr. de Mello said, “I started the company in 2001 with the goal of “making a positive on people’s lives. Our mobile health clinics are custom designed from the ‘ground-up,’ and are fully equipped for turnkey operation. Sizes range from 28 ft. up to 50 ft., and all of our vehicles and units are 100% wood-free construction, so as to eliminate all possibilities of bacteria and fungus growth associated with the use of wood products. The all-aluminum construction is lighter weight, has greater performance and longevity, and improves fire safety.” He believes that “his industry and its leaders must take a proactive approach in solving the needs of mankind.”

Next, I drove to Phenix Technology, Inc., which manufactures high quality fire helmets and other fire safety products and collectibles. I arrived early for my 2:00 PM tour, so while the formal tour of manufacturing was being conducted, I had the pleasure of getting a private tour of their collectible museum of fire helmets from around the world and memorabilia related to fireman and fire stations. Museum tours are available upon request.

Phenix Technology, Inc was founded in 1972 by Former California State Fire Marshall, Ronnie Coleman and former Assistant Chief of the California State Fire Training Division, Ray Russell to make higher quality fire helmets. Four decades later, Phenix is still a family business who continues to proudly manufacture in the USA, and Mr. Coleman and Mr. Russell “are still there and available to answer any questions you might have about firefighter head protection.”

Tyler Meyer conducted the formal tour, and I saw three different styles of fire helmets being made in the production area. Tyler said they have gone through Lean training and greatly improved their productivity and reduced lead times. He said, “We can now make up to 20 helmets per hour instead of four. Our lead times for most of our products, except for handmade leather helmets. went from 6 weeks to 6 hours in some cases. Our sales went up 51%, and our Net Operating Income went up 1600%+. We reduced our inventory by over $100,000, and our inventory turns are almost unmeasurable as we do everything just in time. We haven’t had any significant price increases in three years though our COGS increased as much as 30% because our controllable costs are down.”

He referred me to their Director of Global Operations, Angel Sanchez, Jr., who emailed me that “it is more important to talk about how Lean has created a culture of continuous improvement and total employee engagement. How Monday is most of our people’s favorite day of the week, not Friday. How we have learned that Lean is about creating a mindset where you see waste in everything and how everyone works together to eliminate it. If you are encouraging people to start a Lean journey, the focus has to be on the pillars of Lean, not the metrics.”

I was happy to get another example of the difference a Lean transformation can make in company performance and how important it is for American companies to become Lean enterprises to help rebuild American manufacturing.

I encourage more manufacturers to plan to participate in MFG Day in 2019. Open your company to a tour. Invite the families of your employees. Invite your customers. Invite the students of local high schools. Invite your elected officials. Many of them have never been in a manufacturing plant. Let’s make 2019 the most successful MFG Day to date.

Tags:American manufacturing, career technical training, Lean Six Sigma, training, workforce development
Posted in Manufacturing, Technology, Training | No Comments »

Lean Frontier Summit Focuses on Transformation into Lean Enterprise

Tuesday, October 9th, 2018

On September 20-21,2018, Lean Frontiers held their annual Lean Leadership Summits at the Westin Hotel on Jekyll Island. This was my fifth year to be invited as a speaker at the conference. This year’s summit continued the combination of Lean Management,/Lean Accounting, and Lean H.R./People Development summits that was begun last year.

Co-founder Dwayne Butcher explained last that year that “It’s about time that the whole enterprise be involved in becoming a Lean company. Lean is a business model and must therefore include every part of the business, including those in Executive Leadership, Accounting, HR, Sales, Product Development, Supply Chain. We need to breakdown the silos between these departments.”

Between the keynote speakers, there were four tracks related to Lean Management/Lean Accounting, and Lean H.R./People Development. Besides giving my own presentation, “How Reshoring and Lean are Helping Rebuild Manufacturing,” based on my new book Rebuild Manufacturing – the key to American Prosperity, I attended the keynotes and several of the sessions in the Lean Management and Lean Accounting tracks.

Lean Frontiers is not a consulting firm. Its sole focus is to provide learning opportunities to

address: Enterprise?wide adoption of Lean and the foundational skills needed to become a Lean company.

Co-founder Jim Huntzinger, said, “The first Lean Accounting Summit was held in 2005, and out of that summit, Lean Frontiers was born. Lean is still perceived as a program with short term results by too many, and we need to make the transition to Lean as a business model. We need to traverse unclear territory — trust the process to go from current condition to the target position. We can use XYZ Thinking: If we do X, then we will get Y, but if we get Z instead, then we will learn.”

Mike DeLuca of the Lean Enterprise Institute introduced a Lean Accounting A3 for attendees to provide ideas on how to achieve the aspiration of having Lean Accounting be self-sustaining within five years.

Jim announced that the Journal of Cost Management has taken an interest in the summit and has a booth in the foyer. Lean Six Sigma Master Black Belt Gary Kapanowski, who is a Guest Editor for the Journal, invited attendees to sign up to contribute articles to the magazine in the coming year as they are interested in running more stories about Lean in the magazine.

Then, he introduced the first keynote speaker, Karen Martin, author and President of the Karen Martin Group, spoke about her new book, Clarity First. Clarity was a concept that she introduced in her book, The Outstanding Organization, wherein she looked at common patterns at companies and individual performance. She covered four areas: clarity, focus, discipline, engagement in her previous book and was asked by her readers to expand on the topic of clarity. She discussed “what is clarity and what it is not,” saying that “it is coherence, precision, and elegance. Information needs to be complete accurate and easy to understand. Think of your target audience as your customer. The opposite of clarity is ambiguity, which complicates, slows, frustrates, increases risk, and is expensive. Ambiguity is manmade and different than lack of certainty. Strategic ambiguity can be useful for certain purposes. “

She asked: “What type are you? Clarity pursuer, clarity avoider, clarity blind” She stated, “Children have a natural curiosity but it gets stamped down when they ask why. Same thing can happen at work. Close to curiosity is humility about how you are communicating and how you are being received. We have 180+ cognitive biases that affect communication. Rushing hampers clarity; take time to be clear. Fear can be underlining lack of clarity. Fear can be biggest reason for resistance to Lean transformation.

She explained that clarity liberates purpose, priorities, process, performance, and problem solving:

Purpose – great way to get people engaged about what you do.

Priorities – defining true north.

Process – Value stream thinking is critical to defining process

Processes: documented, current, followed, consistently monitored, regularly improved; Standard work description is necessary for each task

Problem solving – CLEAR

C = clarity

L = learn

E = experiment

A= access

R = Rollout

In conclusion she recommended, “Infuse clarity into your organization…You need a scoreboard at all levels of company showing how you are doing.”

Prior to the afternoon keynote speaker, Jean Cunningham announced the awardees for the Lean Enterprise Institute’s Lean Accounting professor and student awards. Professor Laurie Burney of Baylor University and her student, Katie Kearny of KMPG received the award for their research on Lean Accounting that will be published this fall.

Harry Moser, founder and head of the Reshoring Initiative was the afternoon keynote speaker. He spoke on “TCO/Reshoring: Simplify your Lean Journey, Improve Employee Morale.” Harry developed the Total Cost of Ownership (TCO) calculator that quantifies he hidden costs of doing business offshore, which is free for companies to use at www.reshorenow.org. Harry highlighted the fact that the tide turned in 2016 between offshoring and reshoring as reshoring increased by 500% and offshoring fell by 75%. Reshoring and Foreign Direct Investment (foreign companies setting up plans in the U.S.) are responsible for an increase of nearly two million jobs in the U.S. He reminded the audience that Lean leaders, W. Edwards Deming, John Shook, and Jim Womack all advised companies to identify the “true cost,” and that offshoring multiples the wastes to be eliminated through Lean: overproduction, waiting transport, overprocessing, inventory, motion, and defects. He stated that among the top ten reasons for reshoring are: “quality/rework/warranty issues, freight costs, inventory, intellectual property risk, rising wages, and communication problems.”

He said, “By understanding the advantage of producing near the consumer, and the small TCO gap instead of the large price gap, U.S. companies can justify domestic investment, process improvement, automation, training, etc., and they do not have to sacrifice quality, delivery, time-to-market, or employees to be competitive and profitable.” He announced two awards for reshoring for 2019: the first Sewn Products Reshoring Award and the second Metalworking Reshoring Award.

In conclusion, he invited attendees to cooperate with the Reshoring Initiative by testing Made-in-USA impact on volume and price, incorporating TCO in your lean efforts, and documenting their reshoring cases.

The day ended with a Townhall Conversation on “The Lean Economy” in which panelists Jim Huntzinger, Tom Jackson, Harry Moser, and Bill Waddell discussed how Lean business and practice can be one of the most profound impacts for elevating a strong economy.

On Friday morning, Mike Wroblewski, author of Creating a Kaizen Culture and President of Dantotsu Consulting LLC, was the keynote speaker on the topic of “Leading a Lean Transformation.” He said, “Most companies measure performance by EBITDA, which he defined as earnings before interest, taxes, depreciation and amortization. Cutting heads is the first thing management does to improve EBITDA by reducing costs. Which path are you on? Lean can be like the path to hell. You need upper management support but you also need lower level support. There are two things you can control – your effort and your attitude.”

He was taught Lean by Shifeo Shinzo from Japan in 1985 when he worked at Hill-Ron. He shared, “We did Kaizen events all week for SMED and after repeated Kaizen events, we got our die change from one hour down to 4 1/2 minutes.” He admonished, “ Kaizen needs to be your way life. It’s the culture. Lean isn’t meant to find blame faster. What do you do in the course of the day? Check email, respond to emails, make phone calls, plan, etc. How much time should you spend in Gemba? You should be spending 80% of your time in the Gemba. The standard you walk by is the standard you set for others.”

Space doesn’t permit me to highlight all the excellent breakout presentations during the summit. If you haven’t started on your Lean journey, I recommend that you do so soon. If you are already on a Lean journey,I encourage you to put next year’s Lean Leadership Week on your calendar.

Tags:American manufacturing, Lean accounting, reshoring, Total Cost of Ownership
Posted in Lean, Manufacturing, Reshoring | No Comments »

Training for Skills and Lean are Important to San Marcos Region Companies

Wednesday, July 11th, 2018

My time in San Marcos, Texas included visits to more traditional companies, such as Mensor. On my first day, we met with Jason Otto, President of Mensor. He told me that he has been with the company for more than two decades, starting as an engineer, before moving up the management chain as product manager, director of sales, and other positions before becoming President.

He said, “Mensor was started in Houston in 1968 by Jerry Fruit and a small group of engineers from Texas Instruments. Jerry had an idea for designing and manufacturing precision pressure measuring and pressure calibration instruments and systems. The company shipped their first product, a quartz manometer for the aerospace industry, in 1970 and most of the company’s business was government contracts.

The company relocated to San Marcos in 1978, but in 1981, our building caught fire and burned to the ground. The company kept going with the help of vendors and customers while a new 26,000 sq. ft. building was built on the same site in only five months. The employees kept their jobs by actually working to help build the new building.

Otto explained, “We acquired our control line of products from Texas Instruments and introduced new controller products in 1983, 1992, and 1997. We introduced a Quartz Pressure Calibrator in 2001, and the modern CPC6000 Automated Pressure Calibrator in 2004.

In 2006, we were acquired by WIKA Alexander Wiegand SE & Co. KG, a very large privately held company in Germany, with a U. S. facility in Lawrenceville, Ga. It was time for the owners of the company to “cash out,” and it was a smooth transition.

Our core competency is pressure sensor accuracy, and it is a very niche market. It is tricky to hire talent, so we have to hire from competitors, as well as engineering graduates. Texas State University, Texas A &M, and the University of Texas in San Antonio and Austin have provided many of our new engineers. We also need calibration lab technicians, people skilled in technical assembly, as well as machinists for our in-house machine shop. We haven’t had any trouble hiring machinists.

I asked if the company has been through training in Lean Six Sigma, and he said, “Our Lean training started after our acquisition by WIKA. We currently have two Lean Six Sigma Black Belts, who do about 6 -8 kaizen events per year. We practice 5S and use QCSD boards for visual management of teams. We put together cross functional teams, use cellular assembly, and have a vendor qualification program. We have never outsourced any of our manufacturing overseas, but we have customers in China and Malaysia. We use the WIKA global sales team, but use manufacturers reps to sell into Mexico and the maquilas because it is a long sales cycle. WIKA has 48 locations around the world, and as part of the WIKA Calibration Line, we represent about 6 percent of the company’s business.”

Next, we met with John Malik, General Manager of Altra Couplings in San Marcos. Malik said, “I grew up working in my dad’s auto parts store. I have been with the company since I graduated with an engineering degree and have survived three sets of company owners. The company was started in Houston and moved to San Marcos in the early 1980s. We were sold to TH Woods in 1990, and then sold to ATR Inc. in 2007, whose corporate headquarters is located in Santa Ana, Calif. ATR has 28 plants and production facilities around the world, with seven locations in the U. S. We have about 120 employees currently.”

Malik explained, “We are a leading global designer, producer and marketer of a wide range of mechanical power transmission components. Our products control and transmit power and torque in virtually any industrial application involving movement and are sold in more than 70 countries worldwide in industries including: energy, general industrial, material handling, metals, mining, specialty machinery, transportation, and turf and garden. Our portfolio of products includes clutches, brakes, couplings, as well as gearing and power transmission components. However, we don’t do any high-volume couplings for the automotive industry.

When I asked about Lean, he said, “We have a team of company employees who have helped us become lean, and the productive gains are essential. It really comes down to asset utilization of people assets and capital assets. You want to keep them adding value continuously. The approach we have taken is a value stream approach to our products. We go narrow and deep in an area and develop it, and then move on to another area.”

Malik added, “We have even implemented Lean Accounting. I spent a lot of time with engineers to understand the true costs. We have some good decision rules for the “make or buy” decision process. Our biggest promoter is our CFO, but our Lean program goes all the way to the top.”

I asked what Altra’s biggest problem is, and Malik responded, “Finding new employees. This is an area that doesn’t have a long tradition in manufacturing. People don’t know what manufacturing looks like, and the mind set for years has been getting a college degree rather than vocational training. There are never enough trained applicants, so we train our own workers. We now have second and third generation workers. It is a lot about how we treat people and the opportunities for growth.”

He added, “We make all our own castings in our Erie, Penn. plant and buy the forgings we need. We have three manufacturing facilities in the U.S. and have a plant in the U.K. We bought a company in Germany and have a plant in China. That plant makes some parts for us, and we make some parts for them. We also have a small facility in Brazil in order to have local content and avoid the high tariffs.”

On my last day in San Marcos, we visited CFAN, which was formed in 1993, as a 50/50 Joint Venture between GE Aviation and Saffron (SNECMA) of France. The partnership was created to introduce composite fan blades in a GE90 engine that powers the Boeing 777. CFAN has leveraged the success of this product to introduce additional fan blades on the GEnx engines that power the Boeing 787 and Boeing 747-8.

We met with Mo Mattocks, who is the President and Plant Manager for CFAN. He is responsible for all plant operations including over 500 employees executing product delivery, quality, and productivity, as well as plant financial results and personnel safety. Mattocks said, “I am originally from New York, but graduated for the University of Michigan and Georgia Tech. I have worked for GE for 21 years and previously worked at the GE Aviation in Kansas City and Atlanta.”

He explained, ”CFAN successfully transferred the composite fan blade manufacturing process from the laboratory to the shop floor and delivered the first production GE90-94B fan blade in September 1994. At first, our quality level was only about 80 percent, so there were a lot of rejects. We kept improving our processes using the widely recognized Six-Sigma methodology, focusing on eliminating defects and reducing variation in shop floor. Over the years, we kept improving our processes, so that our scrap rate is down to only about 1 percent.

In 2001, we started production of the composite fan blade for the GE90-115B growth engine. The GEnx1B fan blade was introduced to production in 2005 and the GEnx2B in 2007. In 2016, we started to make fan blades for the GE9nx, which had its first test flight last week. We are an approved FAA repair station for the GE90 and GEnx fan blades fan. We have doubled our volume since 2009 and have produced more than 20,000 composite fan blades at our plant. We produce about 165 fan blades per week, and each fan blade takes about 340 hours. We expanded the plant from 160,000 sq. ft. to 275,000 sq. ft., and the whole plant is temperature controlled to keep the composite material from “curing” on hot days.”

I told Mr. Mattocks that in the past, I sold composite parts as a sales rep for a company located in Post Falls, Idaho so am familiar with the painstaking production methods used for pre-preg layup composite parts. When we walked the plant floor to see the whole production cycle from start to finish, I could see how meticulous the hand layup process is for these very critically dimensioned fan blades. It would be too tedious to describe the whole production process from start-to-finish, but the number of steps it takes to produce a finished fan blade was mind-boggling.

My last stop before leaving the San Marcos region to spend the weekend with my nephew and his family at their nearby ranch was to RSI Inc., located in Kyle, Texas. We met with President Harish Malkani, who founded the company in 1983. Malkani is originally from India where he earned a B.S. (Chemistry) from the University of Poona. He also received a degree in Chemical Engineering from the University of California at Berkeley and a Graduate Degree in Marketing from the University of California at Berkeley. He was employed with Ray Chem Corp. from 1969 to 1983.

While RSI’s website describes the company as distributor stocking and supplying standard mil-spec products including, but not limited to high-speed interconnect solutions and a wide range of electro-mechanical components, Malkani said, “I started the company as a distributor but over the years we became a value-added manufacturer. I can’t tell you about all of the defense and military programs for which we have used our expertise to provide solutions to the government and defense contractors because they were classified programs. We specialize in providing RFI/EMI solutions. We have done work for BAE, Lockheed, Raytheon, Aerojet, and other Department of Defense prime contractors. We are a Silver certified supplier for Boeing. We also do work for companies in the energy, industrial, transportation, and the oil and gas industries.”

When we toured the shop floor, I could see that the company has the manufacturing, assembly, and test equipment to produce custom assemblies and systems for a variety of applications.

Malkani noted, “Our biggest problem is getting qualified workers. I have hired from Texas State University, but I need more help in finding people with technical skills who are not engineers. We are going to train some teachers at the local high school in our technology.”

He was assured by Dr. Cara DiMattina-Ryan, Director of Existing Business & Workforce Development at the Greater San Marcos Partnership (GSMP) that they would help him get connected to the local programs at the Austin Community College’s local Hays Campus.

Since finding technical skilled workers is critical to all of the companies I visited, I was happy that my hosts arranged for me to have lunch the first day with Dr. Hector Aguilar, who is the Executive Dean of Austin Community College’s Continuing Education division. He said, “Maintaining a talented and productive workforce in a growing local economy requires a commitment to employee development. ACC meets the training needs of businesses by partnering with them to tailor a custom learning curriculum that can be delivered on-site to employees. We have seven campuses in the western Austin region and have about 60,000 students enrolled. Each community college in the Texas system specializes in training for the types of industries in their area. Houston specializes in oil and gas. Austin specializes in semiconductor, aeronautical, and sensor industries, and San Antonio specializes in training for automotive. “

He explained, “The Texas Workforce Commission is responsible for helping companies get training for their employees, and Texas pays for the training. Samsung was the first large manufacturing company for which we provided training when they came to the region. They received a grant of $3 million for the training. Samsung came up with 12 techniques to be taught in an around the clock program under a three-year program (24-hours a day, seven days a week). The original 12 topics became 63 topics, and we trained 1,530 employees in the three years. We had to hire specialists in industries and then cross-train each one so they could teach multiple topics. We did a pre-test and post-test for students. The average pre-test score is 20 percent, and the average post-test score is 85 percent.

He added, “Under our Workforce Solutions Rural Capital Area, training for future employees is provided for free. For example, when EPIC Piping bought an existing facility in San Marcos in 2014, they needed to hire new employees. They do specialized welding of pipes. GSMP came to us to help set up training for new employees.”

I was informed by Ashley Gossen, Vice President of Marketing & Communications for GSMP that underemployment is high in the region – a selling point for companies looking for talent. She said that the greater San Marcos region has more than 5,400 workers with bachelor or graduate degrees working in jobs that don’t require them.

It is obvious that the San Marcos region has a great deal to offer startup, existing, and transplant manufacturers: a good business climate, low taxes, skilled workers, and the educational facilities and programs to train new workers.

Tags:American manufacturing, career technical training, innovation, training
Posted in Economic Development, Innovation, Manufacturing, Training, Workforce Development | No Comments »

New Material Technologies Spur Growth in San Marcos, Texas Region

Thursday, June 21st, 2018

During my visit to San Marcos in March, I visited a diverse group of manufacturers both as to products and size of company. The first company I visited, Urban Mining Company, is still in Austin waiting to relocate to San Marcos when their 100,000-square-foot building is ready later this year.

Right after being picked up from the airport by my hosts, we met with Scott Dunn, who is the CEO of Urban Mining Company. Dunn said that he had attended the United States Naval Academy and then received a degree from the University of Southern California. He said, “I started the company in late 2015, and we moved into our first space in January 2016.

We sought major investors from around the county because we wanted to be able to commercialize our technology very quickly. Out of 90-100 investor groups, there were only a few that fit our bill. We spent a lot of time and money protecting our Intellectual Property with patents. We knew that we had original technology and had to be able to protect it. In June 2016, we secured $25M Series A Funding for to build our recycled rare earth magnet manufacturing facility. After careful consideration, we chose San Marcos because it offers the skilled workforce and infrastructure needed to support our fast-growing operation. Once the facility is complete, we will be adding more than 100 manufacturing and technology jobs to the region.”

He explained, “I spent a lot of time in China to build relationships and skills to be able to buy down time from factory owners in China that had over capacity. Because of where we are right now, we are able to get a supply of components to use for recycling the rare earth materials. We are the only company producing Neodymium Iron Boron (Nd-Fe-B) rare earth permanent magnets in the United States. Our company’s patented Magnet-to-Magnet process repurposes domestic source materials from end-of-life products, such as hard disks or motors, to manufacture high-performance Nd-Fe-B magnets, using zero chemical inputs and wastewater. The magnets are then used to support the development of technology applications across the consumer, medicine, defense, aerospace, clean energy, and industrial sectors.

He added, “Most people don’t understand the ubiquity of magnets. The only rare earth mine and production facility in the U. S., MolyCorp Inc., went into bankruptcy in 2010, and the assets were bought by Chinalco’s subsidiary, Shenghe Resources in 2011. The equipment was dismantled and moved China. It’s critical that we develop this technology because China has the goal of controlling the supply of rare earth products by 2025. If they succeed, then they could control the world. “

He concluded, “We are working with Tesla, GM, Ford, and many other OEMs like Raytheon, Northrop Grumman, and Boeing to develop products for the commercial and military/defense industries. I believe that reusing rare magnets is critical to a cleaner future, and we have created a closed loop supply chain to upcycle these materials into products that can have a positive impact.”

When we visited Texas State University’s incubator, STAR Park, we met with Dr. John C. Carrano, founder and CEO of Paratus Diagnostics, a firm that specializes in medical devices for point-of-care diagnostics.

I asked Dr. Carrano how long he has been in the incubator. He responded, “We have been here just over two and a half years, but I actually founded the company in 2012. We are well past the startup phase and are about 18 months away from being cash positive. It’s a long and complex product development cycle for medical devices. Medical diagnostics is not viewed by investors as a get-rich-quick kind of venture, but it is going to be a $10 billion industry in the future. “

I asked him about his background that led him to start the company, and he said, “I retired from the Army in 2005 after 24 years. I am originally from Long Island, NY, but obtained my B.S. from West Point and my Ph.D. in Electrical Engineering from the University of Texas at Austin. I was recruited to teach at the United States Military Academy at West Point in the Department of Electrical Engineering and Computer Science. Then, I was recruited to be a program manager at DARPA where I led several major Defense Department programs related to bio-sensing after the Anthrax attacks occurred in Washington, D. C. Prior to founding Paratus, I was Vice President of Research and Development at Luminex Corporation., a medical device company, and developed an implantable device to diagnose a medical threat.

He explained, “Our goal as Paratus Diagnostics is to develop point-of-care diagnostic solutions to make healthcare more accessible and affordable. Our hand-held Paratus PreparedNow® System and the ParatusSDS® Cartridge, allows clinicians to make decisions during a patient visit – resolving issues associated with lengthy delays waiting on lab results and improving patient outcomes. There is a big need to diagnose periodontal gum disease because of the serious health consequences if it goes untreated, so our first diagnostic test will be a periodontal test as there is zero competition in this market. Our device tests for the six highest risk periodontal pathogens and two key cytokines using saliva. The results are provided in 20 minutes and displayed on a smart phone by color bar graphs.

We have 26 full-time employees and will probably be up to 37 by year end. We have raised $5 million in private equity from angel investors. We also have grants and plan to launch the product into the marketplace in about 18 months.”

At the STAR Park incubator, we also met with Tim Burbey, President of Blueshift Materials.

He said, “Dr. Garrett Poe and I founded the company in 2013 with the mission to commercialize Polymer Aerogels. In July 2014, we became a member of the FLEXcon Holdings family of companies. In 2015, we officially launched our AeroZero^® line of products, which consisted of rolled film and monoliths. This was the first commercially available Polyimide Aerogel in the world. Its creation derived from customer demand for a clean, lightweight, small footprint insulation material that can easily be incorporated into composites. We wanted to be ale to make the material in a continuous way as it had always been done in a batch process. We call the products aerogels because they are similar to a foam and are 85% air. It starts out as a polyimide resin and through a proprietary process, it is transformed into the various aerogel products.”

He said, we moved into the STAR Park incubator in the fall of 2016 and also have an applications engineering lab facility in New Braunfels, TX (about 20 miles southwest). We also polymerize our own materials from polyimide at our facility in San Antonio, TX. We have a good relationship with the Materials Science, Engineering, and Commercialization (MSEC) program at Texas State University and have hired graduates.”

He showed me several different shapes and styles of the products they can make now, from blocks to film to powder. It had good properties for thermal management. Since it is 100% plastic, it is very good for incorporating into composites.

He explained, “Our product designs have applications across the aerospace, cryogenic, membrane separation, radio frequency, electronics, and automotive industries. We make a film for a Formula One race car by adding it to Kapton. We work with a lot of electronics and RF product companies. Our materials have RF transparency, so will allow signals to go through, but they also provide thermal management. Our polymer aerogels can withstand extremes of temperature from as hot as 300 degrees C down to as cold as -200 degrees C. Our polymer aerogel has a high strength to weight ratio, especially when bonded to other materials and as a composite core. Our new process for make aerogel film will only take minutes to make vs. weeks, which will greatly reduce cost and open new markets.”

He added, “We are developing new products by teaming with a research company in Palo Alto to look at using different polymers besides polyimide. In June 2016, we got a $3 million Department of Energy DOE grant to develop transparent and thermally insulating Aerogel for single pane windows as part of a project to restore historic windows in the Northeast.”

On the second day of my trip I also met with Paul Brown, President of Bautex Systems LLC, which is focused on transforming the building industry by providing builders and architects with smarter, stronger, more versatile building materials and solutions. He is a serial entrepreneur, who earned his undergraduate degree from the Plan II honors program at The University of Texas at Austin and his MBA at Duke University’s Fuqua School of Business. He has enjoyed a diverse career working in industries ranging from technology and telecommunications to construction products.

He said, “I had moved back to Austin, TX during the dot.com bust and was involved in a VOIP company. I love to build and started building houses. I found a technology very similar to the Bautex technology,” and he invested in the company. But, he wanted to do manufacturing in the right way, and that company needed a better manufacturing process. “Oliver Lee is my business partner, and we did the original research in 2007.

We found the right machine in Europe, so in 2008, we had some custom molds made and took them over to Europe. We rented factory time for two weeks and replaced the wood filler with polystyrene to make blocks. We mixed the ingredients together and poured it into the mold. It was an expensive and slow process. We added sand to the blocks and reduced cycle time to 30 seconds to make four 32 X 16-inch blocks in the mold. We had a goal of a weight of less than 50 lbs.

We spent a couple of years doing R & D before we moved to San Marcos, TX. We started shipping products in 2013 and now have six plants along the I-35 corridor.”

He explained, “The Bautex Wall System, comprised of a proprietary cement mixture and expanded polystyrene (EPS), is used to build interior and exterior walls for commercial and residential construction. The benefits to the contractor is that it is complete system that simplifies construction by combining structure, enclosure, continuous insulation, and air and moisture protection in a single, integrated assembly. With the Bautex Wall System, architects can specify an integrated solution that can be installed by a single contractor, saving time, effort and cost. We are two and a half times what the new building energy codes started requiring in 2016. Our system provides 26% more energy savings.”

He said, “We need a new paradigm for construction in this country. The process of building has to be better. When you analyze building construction, 90% of the work to build a house is non-value-added. We need to reduce the costs of construction, and the buildings need to perform better. We had five buildings that were within five miles of Hurricane Harvey, and they did well.”

He added, “Six of the ten fastest growing counties are in Texas, but the access to labor for the construction industry is not here. There is a shortage of masons in Texas. Panelization in construction is appealing to a new generation of contractors. His concern with panelization is that the industry has stayed with the same old technology. In 2020, a new building code will take effect, and each code changes pushes the bar higher.

We are now building one- to three-story buildings, and we can build faster than traditional construction methods using our Bautex Wall System. We have been nearly 99% commercial, but now we are going after residential work.“

Notice that three of the four companies we visited have developed products using new materials for diverse applications. These companies are examples of the spillover of research in technologies related to the MSEC program at Texas State University.

Tags:American manufacturing, economic development, innovation
Posted in Accelerators/Incubators, Economic Development, Innovation, Manufacturing, Technology | No Comments »

Texas Hill Country Transforms into Innovation Corridor

Monday, June 18th, 2018

After returning from Washington, D. C. for the CPA conference and legislative visits in mid-March, I traveled to San Marcos, Texas as the guest of the Greater San Marcos Partnership (GSMP). The Greater San Marcos Partnership is the economic development group representing Hays and Caldwell Counties as a region. San Marcos is strategically located midway between the two major metros of Austin and San Antonio in the beautiful hill country of central Texas. The region is home to a number of other rapidly growing cities, including Kyle and Dripping Springs in Hays County, and Lockhart and Luling in Caldwell County.

I have had a personal connection to San Marcos as my sister lived there for many years, and it is where her youngest son was born. San Marcos is a college town, and the view of the hill above the downtown square is dominated by the campus of Texas State University, only a few blocks away. My sister actually worked at the university when she first moved to San Marcos.

Dr. Denise Trauth, President of Texas State University is Chair of the GSMP Board of Directors, and Adriana Cruz is President of GSMP. My guides for my visit to the region were Ashley Gossen, Director of Communications and Community Engagement for GSMP and Hanna Porterfield of DCI, the PR firm for GSMP.

The 2017 Greater San Marcos Partnership Annual Report states, “It’s no longer a secret — Greater San Marcos is among the most promising regions in the nation. Hailed by Forbes as ‘America’s Next Great Metropolis’ and ranked among Thrillist’s list of ‘America’s Best Small Cities to Move to Before They Get Too Popular,’ Greater San Marcos is increasingly being recognized by the national media, talent and corporate executives as a region to watch.

The report explains that GSMP “continues to serve as a change agent for smart and purposeful economic growth in the two-county region known as the Innovation Corridor…from welcoming new employers and job creation programs to working major projects and garnering national media placements.”

Compared to the other metropolitan areas of Texas, the greater San Marcos area still offers affordable homes nearly (40% less in housing than Austin), as well as large and dynamic workforce. Each town in the region offers its own unique assets and charm, which provide a strong force in attracting new jobs and investment.

When I met with Ms. Cruz, she said that “A major driver of this progress has been our laser-focus on executing the strategies laid out by Vision 2020, a five-year strategic plan to drive economic development in the region, established in Fiscal Year 2015…For example, 2017 was the first full year of utilizing the Vision 2020 Implementation Work Groups — stakeholder groups that work collectively to maximize the region’s biggest strengths and tackle some of our existing weaknesses in key areas such as infrastructure, workforce and higher education and destination appeal.”

From the annual report, I also learned that “San Marcos, together with Austin, College Station, Fredericksburg, New Braunfels and San Antonio, was selected by the U.S. government to host an exclusive innovation and entrepreneurship event, which brought decision-makers from more than 20 countries to San Marcos to explore partnerships and economic development opportunities. Through the 7th Americas Competitiveness Exchange on Innovation and Entrepreneurship (ACE), Greater San Marcos worked with our neighboring cities to share best practices with this influential international audience and to promote the larger Central Texas region as a leader in innovation. The Greater San Marcos portion of the tour included a visit with many of our major employers, a tour of Texas State University and STAR One and a Glass Bottom Boat Tour at The Meadows Center for Water and the Environment.”

Texas ranks second in the 2018 Small Business Policy Index by the Small Business & Entrepreneurship Council for not charging a corporate or individual income tax or capital gains tax in addition to having low gas taxes and workmen’s compensation tax. Here are some other key facts about the region:

3M Talent Pool within a 45-mile radius
66,087 Population Ages 25-44
34% of Adults have a Bachelor’s Degree or Higher (Master’s, Doctoral)
The High School graduation rate for Hays County is 89% and 90% for Caldwell County
Only 12% of Adults are without a High School Diploma

The top ten Manufacturers in Hays and Caldwell Counties are:

Company	Employees	Products
CFAN	700	Composite fan blades for GE engines
Philips Lighting	369	LED lights for outdoor structures & areas
Thermon Mfg.	345	Electric heating cables and control systems
Epic Piping	260	Pipe fabrication including carbon steel, chrome moly, stainless steels, duplex steels, nickel-based alloys
Heldenfels Enterprises	170	Manufacturer/installer of precast/prestressed concrete structures
UTC Aerospace Systems	160	Engine casing and aftermarket support for Boeing 787 and Airbus A350
TXI	145	Provides every step of concrete production, from mining raw materials to refining the finished product.
Altra Couplings	95	Offers the largest selection of industrial couplings
Mensor Corporation	80	Designs and manufactures precision measuring instruments and automatic pressure test and calibration equipment.
Hunter Industries	75	Manufacturer of hot mix asphalt.

When we visited Texas State University, I realized that the research being done at the university is contributing greatly to the region transforming into the Innovation Corridor of Texas. In 2012, the University was designated as an Emerging Research Institution, working on semiconductors, 3D printing, composite material. This opened the door to major research funding, global research talent, and has contributed to a spike in patent filing activity in Hays County.

I had the great pleasure of being given a tour of the Engineering Technology building that houses the Material Science, Engineer, and Commercialization (MSEC) Program by Dr. Thomas H. Meyers, Associate Dean of MSEC. Dr. Meyers happened to be home on a break from a year-long sabbatical in Spain. We were joined by Dr. Jennifer Irvin, Director of MSEC, and Dr. Andy Batey, Associate Professor and Chair of the Department of Engineering Technology.

The purpose of the MSEC program is “to train graduate scientists and engineers to perform interdisciplinary research while equipping them to emerge as effective entrepreneurial leadership the advancement of 21sto-century global discovery and innovation.”

We walked through several labs focusing on different kinds of materials research, such as the semiconductor and solar cell materials lab, Dr. Meyers said, “We work with companies like Texas Instruments and First Solar to do materials research. Students, faculty, and industry work together on multi-year, multi-company contracts to solve problems. We started a Ph.D. program in 2012 to help students and faculty be able to commercialize technology. We have graduated about 30 students from the three-year program. We are not a department, but a program within the College of Engineering Technology. Students are required to work on important projects, such as purifying water from fracking.”

Dr. Meyers said, “We have two levels of clean rooms, a Class 10 and Class 100, and we are working with Hitachi to teach semi-conductor manufacturing and the fundamentals of making a device. We are one of only two universities in Texas to have a full spectrometry lab, which has been certified since 1990, and there are only 20 in the whole U.S.”

When we walked through the machine shop that contained manual, CNC controlled machines, and a 5-axis machining center, Dr. Batey said, “We want our students to get hands on experience in traditional industries during their four-year engineering technology degree program. Engineering technology degrees focus on the planning, fabrication, production, assembly, testing, and maintenance of products and services. We offer degree programs in Electrical Engineering, Manufacturing Engineering, Mechanical Engineering, Environmental Engineering, and Civil Engineering.

As we walked through the construction materials lab, Dr. Batey said, “We also offer a B. S. degree with a major in program in construction science and management and concrete industry management. We can do chemical analysis of constructions materials and concrete in our lab.”

Dr. Irvin said. “Texas State University also has a 58-acre site off-campus Science, technology, and Advanced Research Park (STAR Park), which is dedicated to the university’s research and commercialization efforts. The 36,000 sq. ft. facility serves as a technology incubator for startup and early-stage businesses and provides tenants access to secure wet labs, clean space, conference rooms, and office space. Since 2014, companies located in STAR Park have created over 60 jobs, funded over $1.5 million in university research, hired 14 Texas State graduates, and raised more then $32 million through equity and strategic alliance investments.”

My next article will feature my visit to some of the tenant companies in Star Park, as well as other companies in the region.

Tags:American manufacturing, economic development, innovation
Posted in Economic Development, Innovation, Manufacturing | No Comments »

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

Thursday, May 31st, 2018

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tags:American manufacturing, currency manipulation, free trade agreements, NAFTA, national security, trade policy
Posted in Currency Misalignment/Munipulation, Economy, Legislation, Manufacturing, National security, Taxes/Regulations, Trade Policy | No Comments »

Steel and Aluminum Tariffs Will Help Rebuild American Manufacturing

Tuesday, May 22nd, 2018

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

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

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

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

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

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

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

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

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

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

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

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

Tags:American manufacturing, Manufacturing jobs, trade deficit, trade policy
Posted in Manufacturing, Trade Policy | No Comments »

Manufacturing Music – Northeast Indiana Brings Harmony to the Rust Belt

Tuesday, May 15th, 2018

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tags:American manufacturing, economic development, innovation
Posted in Economic Development, Innovation, Manufacturing | No Comments »

savingusmanufacturing.com

Posts Tagged ‘American manufacturing’

Navarro Warns of Fragility of U.S. Manufacturing and Defense Industrial Base

How tariffs Could Rebalance U.S. trade relations with China

MFG Day Motivates Youth to Pursue a Career in Manufacturing

Lean Frontier Summit Focuses on Transformation into Lean Enterprise

Training for Skills and Lean are Important to San Marcos Region Companies

New Material Technologies Spur Growth in San Marcos, Texas Region

Texas Hill Country Transforms into Innovation Corridor

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

Steel and Aluminum Tariffs Will Help Rebuild American Manufacturing

Manufacturing Music – Northeast Indiana Brings Harmony to the Rust Belt

Follow Us on

Pages

Blogroll

Categories

Archives

Meta