Posts Tagged ‘Rebuild Manufacturing’

How has the COVID Pandemic Affected Makerspaces?

Wednesday, November 4th, 2020

In the past several years, I have visited four makerspaces in southern California, and I recently decided to see how the COVID pandemic had affected these facilities.  Makerspaces play a role in reviving the entrepreneurial “maker spirit” necessary to rebuild and grow American manufacturing.  

The first center I had visited several years ago was MakerPlace, located in San Diego, California. MakerPlace was founded in 2012 by Brian Salmon, Michael Salmon, and Steve Herrick. It was touted for its promising concept of a shared “dream garage,” where hobbyists or professionals could use high-end tools and industrial equipment to make their creations. It had equipment for metalworking, electronics, embroidery, sewing and specialty tools such as laser cutters and engravers.  It also rented out studio and office space, making it a sort of workshop/coworking hybrid.

When I called to talk to the owner, I was unable to connect, so I searched online and found two articles in the San Diego Union Tribune. The first article from December 6, 2019 said that the sole remaining business head of the company, Steve Herrick “decided he was ready for retirement and sought a buyer.” In December 2019, Joseph Henseler and his wife and partner, Lorena Isabelle took over as the new owners.  Hensler had ran his construction and design firm, Duende out of the MakerPlace for six years.

The second article, dated February 2, 2020, stated that MakerPlace “has abruptly shut down, asking members to remove all their belongings in less than 10 days. The shop sent an email to its members with few details about the closure. ‘MakerPlace is officially closing,’ the email reads. The building will be open “only for picking up your own personal items/tools/materials. Anything that’s not picked up by Feb. 14 will be forfeited.” The announcement of the closure came as a shock to members, and some had paid in advance for months of use.

Since the announcement of the closure occurred prior to the shutdowns for the COVID pandemic, it is likely that MakerPlace closed for financial reasons not caused by the pandemic.

The second makerspace that I had visited on Manufacturing Day in October 2016 was Open Source Maker Labs (OSML) in Vista, California.  OSML is the only makerspace in North San Diego County.  Dan Hendricks opened OSML in 2013 to provide a high-tech digital fabrication lab where members can learn, collaborate, innovate, design, and build almost anything.  Their lab is filled with open workspace and tools:  electronics, CNC machines, 3D printers, laser cutter, panel saw, press brake, welding and soldering tools, drawing and modeling programs, and a computer lab.

When I spoke to Dan last week, he said they closed down for two weeks until they realized they fit the definition of an essential business that was allowed to stay open under Governor Newsome’s order. 

I asked what he has had to change.  He said, “We follow the stage 2 guidelines and limit the use of our labs to members by appointment only and limit the number of people based on our square footage. We practice a smart sanitization routine for our Maker Lab. We only lost a couple of older members worried about their health, but have picked up some new, younger members. We haven’t had to turn anyone away.  We focus on R&D technology and have a lot of the software needed for designing new products.  We offer a co-working incubator-type atmosphere for startup and existing small to medium-sized companies.”

He added, “I’m an Adjunct Professor at Cal State San Marcos, so we are doing some online classes in partnership with the college. I will be doing an online class on IIoT for the next term.  Our strategy was to ride out the pandemic and not change to be ready to help with the recovery and support the new companies that will form during the recovery and provide R&D resources for existing small and medium sized companies to do their R&D at our facility.

In 2016, I also visited Vocademy – a Maker Space in Riverside, California, founded by Gene Sherman. Vocademy was a combination of the “best parts of makerspaces, school shop classes, trade schools, R&D labs, and dream garages, all in one place. His dream was “to solve the skills gap for the manufacturing industry.” Unfortunately, it was Sherman’s focus on providing shop classes for schools and being a vocational trade school that made Vocademy an early casualty of the COVID pandemic so that it closed down on March 20, 2020 after Governor Newsome ordered all schools and non-essential business to shut down because of the COVID pandemic.  An article in the Press-Enterprise of March 28th, stated: “Vocademy…can’t afford to stay open due to the state order mandating business and school closures, wrote Gene Sherman, the nonprofit’s founder and CEO.

The academy partners with schools, and when those schools closed until next school year, 70 to 80% of Vocademy’s revenue was lost, Sherman said in an email.

In addition, many of our current students did not wish to attend class and other potential community students told us they will not be signing up because of virus fears, Sherman wrote. “We are a small business and, unlike a public school, our revenue does not come directly from educational funding.”

It broke my heart to hear that Vocademy has closed because providing vocational shop classes to youth is critical to providing the next generation of manufacturing workers need to rebuild American manufacturing.

I had visited Urban Workshop in May 2018 after attending a conference. The Urban Workshop Is located in Costa Mesa and was founded by and is privately owned by, Steve Trindade. The 28,000 square foot floor plan includes workshop areas for a variety of manufacturing processes, co-working office space, a work assembly area with assorted hand and power tools, storage space for work in process and materials for members, a conference room, a large meeting room, and a retail store offering convenience materials and consumables.

When I interviewed Steve last week, he said, “We were closed for 60 days before re-opening. I sent a heart-felt message to members and most of them continued to pay their membership dues and monthly charges for storage space. We told them we would make it up at the end after we reopened. We lost our hands-on contract work with a charter school, but we were able to make 50 videos for their online education program.”

He explained, “What saved us is that we have four different revenue streams:  membership dues, fees for storage space for members, fees for classes, and co-working space. We made some decisions early on that were based on my experience in ramping up and down for the racing industry I was in previously. We went down from 330 members to 180 members, but went back up to 335 members within 80-90 days of reopening. We implemented a stringent sanitizing program and members have to make appointments”

He added, “We are continuing our program to license our operational procedures and class documentation to other makerspaces as a “Maker Space Blueprint,” provide operational training in setting up and running a makerspace, and provide instructor training to enable them to succeed and prosper.”

I told him I was glad they have survived the effects of the pandemic because makerspaces play an important role in rebuilding American manufacturing.  We agreed that new businesses will be formed by people who have lost their livelihood during the pandemic just as previous recessions spurred the formation of new businesses

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Comparing Trump’s and Biden’s Policies that Support Rebuilding American Manufacturing

Tuesday, October 20th, 2020

For those of us who support the Made in America/Buy American movement and want to rebuild American manufacturing by returning manufacturing to America through reshoring from China, it’s important to consider the policies of President Trump and former V.P. Biden in their bid to be president.  Two policies, tax rates and the cost and availability of energy, have a major effect on where a company chooses to locate their manufacturing or headquarters if they have multiple plants globally. If the corporation has a plant in a country with a lower tax rate, they may choose to shift their profits to the subsidiary in that country.  Bulgaria and the Czech Republic at 10% and Ireland at 12.5% have the lowest corporate tax rates in Europe. American manufacturers that don’t have plants in other countries face the brunt of the tax burden. Personal tax rates are also important as only 30-35% of manufacturers are C corporations; the others are LLCs, partnerships or sole proprietorships where taxes are passed through to the owner(s).

Taxes

Biden’s Tax Policies:

  • Raise the corporate tax rate to 28%.
  • Require a true minimum tax of 21% on ALL foreign earnings of United States companies located overseas (double the current rate). 
  • Impose a tax penalty on corporations that ship jobs overseas in order to sell products back to America.
  • Impose a 15% minimum tax on book income so that no corporation gets away with paying no taxes.
  • Raise the top individual income rate back to 39.6%.
  • Require those making more than $1 million to pay the same rate on investment income that they do on their wages.

Trump’s Tax Policies:

The U.S. had a corporate tax rate ranging from a low of 15% to a high of 35% until the Tax Cuts and Jobs Act (TCJA) was passed by Congress on December 20, 2017, which reduced the corporate tax rate to flat tax of 21%. TCJA also cut capital gains tax to 15 % and increased the estate tax basic exemption amount from $5 million to $10 million.

President Trump’s tax policy platform for re-election focuses largely on promoting and preserving the tax cuts of TCJA and making various tax rate reductions scheduled to expire in 2025 permanent.  Before the Republican convention, his campaign released his agenda, which included:

  • Cutting taxes “to boost take-home pay and keep jobs in America”
  • Enacting “Made in America” tax credits
  • Expanding opportunity zones
  • Enacting new tax credits “for companies that bring back jobs from China
  • Permitting 100% expensing “for essential industries like pharmaceuticals and robotics that bring their manufacturing back to the United States.”

Energy

Biden’s Policies:

Biden’s campaign website.states that he plans to “Move ambitiously to generate clean, American-made electricity to achieve a carbon pollution-free power sector by 2035. This will enable us to meet the existential threat of climate change while creating millions of jobs…”

His plan is for America to achieve a 100% clean energy target by means of:

  • advanced nuclear reactors, that are smaller, safer, and more efficient at half the construction cost of today’s reactors;
  • refrigeration and air conditioning using refrigerants with no global warming potential;
  • using renewables to produce carbon-free hydrogen at a lower cost than hydrogen from shale gas through innovation in technologies like next generation electrolyzers;
  • decarbonizing industrial heat needed to make steel, concrete, and chemicals and reimagining carbon-neutral construction materials
  • leveraging research in soil management, plant biologies, and agricultural techniques to remove carbon dioxide from the air and store it in the ground; and
  • capturing carbon dioxide through direct air capture systems and retrofits to existing industrial and power plant exhausts, followed by permanently sequestering it deep underground or using it to make alternative products like cement.”

Trump’s Policies:

  • Since he took office, President Trump has rolled back hundreds of environmental protections, including limits on carbon dioxide emissions from power plants and vehicles, and protections for federal waterways across the country, fulfilling a campaign promise from 2016.
  • On June 1, 2017, Trump announced the U.S. withdrawal from the Paris Climate Agreement, saying the deal disadvantaged the US “to the exclusive benefit of other countries.”
  • His administration approved oil and gas drilling in Alaska’s Arctic National Wildlife Refuge, which has been off-limits for drilling for decades.
  • President Trump supports development of all forms of energy without subsidies, including production of natural gas through fracking

Trade/Tariffs

Biden’s Policies

  • Take aggressive trade enforcement actions against China or any other country seeking to undercut American manufacturing through unfair practices, including currency manipulation, anti-competitive dumping, state-owned company abuses, or unfair subsidies.
  • Rally our allies in a coordinated effort to pressure the Chinese government and other trade abusers to follow the rules and hold them to account when they do not.
  • Confront foreign efforts to steal American intellectual property.
  • Address state-sponsored cyber espionage against American companies.
  • Apply a carbon adjustment fee against countries that are failing to meet their climate and environmental obligations to make sure that they are forced to internalize the environmental costs they’re now imposing on the rest of the world.

Trump’s Policies:

  • On January 23, 2017, Trump signed an order to withdraw from further negotiations on the Trans-Pacific Partnership.
  • On September 2, 2017, Trump instructed aides to withdraw from the U.S. trade agreement with South Korea and later renegotiated a better trade agreement.
  • On August 16, 2017, the Trump administration began renegotiating NAFTA with Canada and Mexico. NAFTA was replaced with the new United States–Mexico–Canada Agreement (USMCA), signed on November 30, 2018.
  • On January 22, 2018, Trump imposed tariffs and quotas on imported solar panels and washing machines.
  • ? On March 1, 2018, he announced a 25% tariff on steel imports and a 10% tariff on aluminum.
  • On April 3, 2018, Trump announced 25% tariffs on $50 billion in Chinese imported electronics, aerospace, and machinery.
  • On April 6, 2018, Trump announced tariffs on $100 billion more of Chinese imports.
  • On October 7, 2019 the United States and Japan signed two agreements intended to liberalize bilateral trade. The U.S.- Japan Trade Agreement (USJTA) provides for limited tariff reductions and quota expansions to improve market access.
  •  On January 15, 2020, President Trump and Vice Premier Liu H of China the US–China Phase One trade deal in Washington DC.

Buy American/Made in America

Biden’s Policies:

  • Make a $400 billion Procurement Investment in American products, materials, and services and ensure that they are shipped on U.S.-flagged cargo carriers.
  • Retool and Revitalize American Manufacturers, with a particular focus on smaller manufacturers and those owned by women and people of color, through specific incentives, additional resources, and new financing tools.
  • Make a New $300 Billion Investment in Research and Development (R&D) and Breakthrough Technologies 
  • Bring Back Critical Supply Chains to America so we aren’t dependent on China or any other country for the production of critical goods in a crisis.
  • Tighten domestic content rules to require more legitimate American content
  • Crack down on waivers to Buy American requirements by federal Agencies
  • End false advertising by companies that label products as Made in America even if they’re coming from China or elsewhere
  • Strengthen and enforce Buy America provisions
  • Update international trade rules and associated domestic regulations for Buy American

Trump’s Policies:

Trump’s campaign slogan revolves around continuing his promise to Make America Great Again. One of the ways is to rebuild American manufacturing and create higher paying jobs. He uses protectionism to defend U.S. industries from foreign competition. According to the National Association of Manufacturers (NAM), the U.S. manufacturing sector, added about 450,000 workers during the first three years of Trump’s presidency before the pandemic. Here are some of the actions he has taken as President.

President Trump’s campaign website also lists the following goals for his next term:

  • Reduce U.S. dependence on Chinese manufacturing and bring back 1 Million Manufacturing Jobs from China
  • No Federal Contracts for Companies who Outsource to China
  • Grant tax credits to companies that move manufacturing back to United States; tariffs on those that don’t.

Remember that actions speak louder than words, so be sure to compare what a candidate has done and not just what they promise to do in their campaign platform. Be sure to vote. The future of our country is at stake.

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Who Are My Heroes? Part One

Tuesday, April 21st, 2020

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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