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Sunday, April 18, 2021

Texas: A state of manufacturing: NAM leader tours Bell, Lockheed

National Association of Manufacturers

www.nam.org

According to the NAM, manufacturing supports an estimated 18.5 million jobs in the United States, including 232,800 jobs in South Carolina, and contributes $2.17 trillion to the U.S. economy. –

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Once a sought-after steady job for U.S. workers, manufacturing has become a dirty word to many Americans.

“Too often the perception of manufacturing is dingy, dark and dangerous,” National Association of Manufacturers CEO Jay Timmons said Thursday during a North Texas stop in a seven-state tour to stress the industry’s role in the U.S. economy.

“As you can see through this (Lockheed) facility and Bell, most manufacturing is clean, sleek and technology-driven,” said Timmons as a Lockheed Martin engineer demonstrated an optical projector that allows mechanics to assemble aircraft more efficiently than with earlier methods.

Timmons’ tour began at the Bell Helicopter Training Academy, where Bell executive Gunnar Kleveland, Texas Association of Business President Chris Wallace and Siemens PLM Software executive David Riemer helped relay the manufacturing message to about 100 government, manufacturing and other business officials.

“The strength of manufacturing in America is responsible for the success of America in the world,” said Timmons, whose 14,000 member companies support more than 12 million workers, their families and their communities.

Wallace said manufacturing is critical to Texas, supporting 863,900 jobs – 7.32 percent of the non-farm employment – and producing $238.38 billion – 14.46 percent – of the state’s total products.

“Today’s event showcases the innovative technology generated by sector and the power of manufacturing,” Wallace said. “Let’s keep manufacturers like Bell competitive by giving them the tools they need to grow and succeed.”

While a Federal Reserve Bank manufacturing outlook survey showed a sharp drop in Texas factory activity last quarter, two University of North Texas professors say North Texas manufacturing has fared better than its counterparts in Houston.

“Manufacturing is important here in many ways,” said UNT economics professor Michael Carroll. “We’re so tied to corporate headquarters and general service industries, Dallas-Fort Worth wouldn’t come to mind if you talk about manufacturing. But it provides diversity.”

UNT logistics associate professor Terrance Pohlen agrees. While the Texas outlook survey does not break figure down by region, Pohlen said much of the decline in the Texas economy can be attributed to Houston’s oil and gas dominated industry.

Energy factor

The Dallas-Fort Worth has been insulated from much of those problems, he said, because the 600-plus large manufacturers – not including many smaller firms – cover a wide variety of products.

“We may not grow as fast, but we don’t decline as fast as other parts of the country,” he said.

In addition to the diversity, Pohlen said North Texas manufacturing has benefitted from being in two fair trade zones and at a transportation crossroads including Dallas Fort Worth Airport, the Interstate 35 corridor from Mexico and the intermodal freight line from the west coast.

That enables North Texas manufacturers to import components for electronics and other products from Mexico, assemble parts here and ship them back, avoiding duty taxes until the final products return to the U.S, he said.

Pohlen said those and other factors have enabled North Texas government and business officials to recruit clusters of similar type manufacturers – such as electronics or aviation – to the area.

Pohlen and Carroll acknowledge that manufacturing as a whole have declined but offer explanations that cast a positive light on the data.

“We probably have more manufacturing than any time in history, but service industries have grown so much, manufacturing seems to decline in comparison,” Pohlen said.

Carroll attributes a steady decline in manufacturing employment to the automation that has increased productivity.

“They don’t need as many people,” he said.

Nevertheless, Carroll said manufacturing was “a key component in ending the current recession.”

While automotive supply businesses failed in the Midwest, Carroll said, General Motors and Ford plants survived in Texas by temporarily cutting capacity and jobs.

“When we came out of the recession, they ramped back up to the previous capacity and called workers back,” he said.

Bell and Lockheed are doing that and more.

Bell’s Kleveland showed off the company’s 10-month-old, 8,000-square-foot training academy which annually trains 4,000 pilots and mechanics from 143 countries.

Suppliers

Texas suppliers earned an estimated $110 million last year from Bell, which plans to invest about $175 million in its area facilities over the next five years, a spokeswoman said.

Lockheed’s 396 Texas suppliers earned $795 million last year from the aeronautics firm, which is in the midst of a $1 billion makeover of the factory, said communications director Ken Ross.

Ross said the company is transitioning from the F-16 production line to full-rate production of the F-35, which is expected to be in full-rate production by the end of the decade.

But the manufacturing association’s Timmons isn’t counting on the industry surviving out of good fortune or even good business by individual companies.

Five years into his leadership of the group founded during an 1895 recession, Timmons is on a campaign similar to that undertaken during the Great Depression to inform the public about the vital role of manufacturing.

During the tour at Bell and Lockheed, two of Fort Worth’s major manufacturers, Timmons briefly laid out his “Campaign to Win” – Manufacturing Agenda for Economic Growth and American Exceptionalism.

Timmons describes the agenda as “a policy roadmap” for U.S. leaders to be guided by what he calls the country’s core values and foundational principles _ free enterprise, competitiveness, Individual liberty and equal opportunity.

The agenda includes 11 areas: tax, trade, energy, environment, infrastructure, labor, immigration, workforce, health care, research-development-technology, and regulatory and legal reform.

Timmons elaborated on what he considers the problems with current government policies and action on energy, environment and infrastructure that he said hamper manufacturers and hurt the public.

He urged manufacturers to add their collective voices to the associations efforts to elect leader who will support a multitude of manufacturing needs – all of which need to be addressed.

“Twenty or 30 years ago when America’s leadership was unquestioned, we had the luxury of picking one issue to focus on,” Timmons said. “The only way we’re going to maintain our competitive edge is to deal with all those issues.

“The countries around the world are trying to take our edge off. We have to realize that we’re not just competing against other states. We’re competing with other countries. We need to have that Texas mentality.”

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