Central Valley focuses on retaining and growing manufacturing jobs

California Economic Summit
by Jim Mayer

May 12, 2015

In the San Joaquin Valley, people grow things. And while farmers grapple with chronic water problems and an acute drought, public and private sector leaders in the valley are trying to cultivate more manufacturing jobs.

Some 50 manufacturers were convened in Fresno in early May by the California Partnership for the San Joaquin Valley‘s Regional Industry Cluster Initiative. The one-day Manufacturing Summit was a forum for Valley businesses to learn best practices, new technology, and ways to bridge the skills gap.

The producers included Central Plastics and Manufacturing from Tracy, which contributes to medical devices and airplanes, toys and packaging; the Betts Company, which has been forging vehicle parts since before the automobile; and, Excelsior Metals, which set up a laser and plasma cutting facility in Fresno in the mid-1990s.

These producers were joined by public sector leaders – from community colleges, workforce investment boards and permitting agencies – that need to better align their programs to the needs of employers and employees. Some of the ideas – like Six Sigma practices – could benefit public as well as private sector enterprises, while the bridges between education and employment must be true partnerships.

“I believe the Summit will provide a gateway to generating knowledge of and participation in the Manufacturing Cluster in the future,” said Mike Dozier, executive director of the Office of Community and Economic Development at CSU Fresno. “Over 30 businesses have signed up to be part of the cluster as a result of the Summit. We will begin planning for the 2016 Manufacturing Summit in two weeks.”

Dorothy Rothrock, president of the California Manufacturers and Technology Association, said while manufacturing jobs are increasing nationwide, they are nearly flat in California, as is investment by those companies.

Nationwide, manufacturing jobs grew 7.52 percent from 2010 through 2014. In California, manufacturing jobs grew by 1.93 percent, up 24,000 jobs to 1,267,500. Fewer than 2 percent of expansions or new sites nationwide were in California in 2013.

“The truth is that even if the company is still ‘in’ California, the amount of expansions and new site investments is too low to maintain, much less grow, our base,” said Rothrock. “The shrinking is happening below the radar, outside the notice of policymakers, and it will be too late when the job losses inevitably follow.”

Most companies, Rothrock said, make long-term capital investment plans, and if they are not modernizing their facilities in California, those facilities are vulnerable to closure if costs continue to increase or the economy slows.

“It’s a crucial time where California needs to show that it will accommodate the needs of ‘getting-bigger’ companies,” Rothrock said. “Taxes, electricity prices, the time and expense to acquire permits, and the availability of skilled workers in the nearby area are key issues during these decision-points.”

Developing a skilled workforce is emerging as a high priority as leaders in the San Joaquin Valley and other regions assess the uneven recovery, the growing income gap, and the inability for an increasing number of Californians to climb above minimum wage jobs.

The Chancellor’s Office of the California Community Colleges has been encouraging regional alliances among the campuses to coordinate comprehensive options for students, and it has developed “sector” navigators to connect employment clusters with specific college programs. Better coordination is required for students to move more quickly through programs and better alignment is required to make sure students learn the skills that employers need.

“The feedback I received was positive,” said Gurminder Sangha, who is a deputy sector navigator for advanced manufacturing. “Now future progress is based on how well we can keep the employers, community college leaders and faculty, and WIBs engaged and working together in one direction.

“It is extremely difficult to keep all engaged as the change is very slow and expected solutions are complex and most of the time solutions are beyond the reach of an individual or any one organization,” Sangha said. “Furthermore, due to the geography of the Central Valley, it is extremely difficult to have meaningful relationships with various organizations.”

The Partnership for the San Joaquin Valley is among the regional organizations that harmonize their priorities through the California Economic Summit, where the Advanced Manufacturing Action Team identifies and advocates for specific changes that will improve the climate for business with well-paying production jobs.