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Manufacturing Professionals Discuss What it Takes to Stay on Top

Salt Lake City—Utah has frequently been named the No. 1 state in the nation for business. But resting on those laurels could be a bad idea for many industries, especially manufacturing, said Todd Bingham, president of the Utah Manufacturers Association, at Utah Business’ annual manufacturing roundtable at Holland & Hart Tuesday morning, which featured 13 members of the field.

Manufacturing, said Bingham, is a roughly $20 billion industry in Utah, which accounts for 16 percent of the economy. Manufacturing—along with agriculture and mining—are the main industries that create new wealth, he said, and as such are critical components of the state’s economy. While Utah has done a tremendous job of making the state business-friendly, Bingham said the state should continue to be proactive in doing what it can to make sure companies look to move to or expand in Utah first, instead of looking to other states or countries.

“Every time one of our local companies chooses to expand an operation somewhere else or [a company] chooses not to come to Utah because of the overall package, that’s jobs and dollars and economic impact that we could lose,” said Bingham. “We’ve got to be aggressive on that. We’re working with our state legislature and the GO and others to make sure we stay at number one. Every other state out there is nipping at our heels and trying to throw everything they can at us, including the kitchen sink, to expand and move ahead.”

When people think of manufacturing jobs disappearing, the first thought is often that they’re relocating to China or Mexico. Corey Thayn, plant manager for BD Medical, said that it’s not just the low cost of production that is beckoning manufacturers away.

“It’s great being number one, but everyone else is trying harder. [We need to focus on] what we need to stay there, whether it’s energy costs or talent or tax policies. I look at my almost 30 years of manufacturing now and I look at what the level of technology outside the U.S. is. We always think of China’s low cost in labor or Mexico,” he said. “They’re [also] catching up from a technology standpoint. They have high automation, high technology for manufacturing. They’re battling their own inflation issues and they’re trying to take down No. 1 with technology. They’ve progressed a lot faster than we have and have caught up quite a bit. That’s a risk out there.”

Working with the state legislature to make sure Utah stays business-friendly, that tax incentives remain current, and selling the state’s quality of life, work-life balance and natural advantages are good ways to make sure manufacturing companies stay interested in Utah. While the manufacturing industry is facing workforce challenges, much like the tech industry, the state’s qualities still make it an attractive place to expand in or relocate to.

“I’m someone who comes from the southeast, where work weeks are significantly longer than what we see here. Generally, people work 40 hours a week here. They want to take time off. They want to go do things,” said Patrick Russell, VP of operations at Orbital ATK. “It’s amazing, the difference. I absolutely love this and so do the people we recruit here.”

“It’s easier for us, in this market, to achieve a living wage for our manufacturing employees. It’s also a very labor-friendly state, both for the laborer and for the employer. It’s mutually beneficial. The cost of doing business for a business is very friendly, to grow and to develop talent and to provide opportunities for these employees,” said Joe Wixom, president and CEO of Fetzer. “Good employees in the state of Utah, they expect to grow vertically in the business. They are not O.K. being static in a position for 30 years, this new generation. That’s more affordable here, because we have a state that has a reasonable cost of living. There’s a lot of safe, affordable neighborhoods where our employees can live that are within a reasonable distance of where our places of employment are. That’s not happening when you go west and it’s not happening when you go to the coasts.”

Bingham moderated the discussion. You can read the full article in our July issue.