Q&A: manufacturing roundtable.

• Position: Industry Outlook - Discussion

Besides having the largest payroll in the state, Utah's manufacturing industry is also one of the state's strongest economic drivers. Trends of reshoring and innovation are at the forefront of this industry, and while it continues to move full steam ahead, challenges such as a skilled worker shortage and competition with international manufacturers continue to test the industry. Here, area experts discuss how they are keeping up.

We'd like to give a special thank you to Todd Bingham, president of the Utah Manufacturers Association, for moderating the discussion.

Not Pictured: Chad Parker, Manufacturing Extension Partnership

Paul Archibald

Orbit Irrigation

Matt Holton

Utah Manufacturers Association

Susan Johnson

Futura Industries

Curtis Nielsen

Ogden-Weber Applied Technology College

Michael Bouwhuis

Davis Applied Technology College

Josh Brown

Rio Tinto Kennecott

Wim de Jager

Black Diamond

Grant Foster

Holland & Hart

Mark Jenkins

Petersen, Inc.

Clint Morris

Lifetime Products

Eric Pope

U.S. Synthetic

Clair Rood

CBIZMHM

Mark Suchan

MOM Brands

Todd Bingham

Utah Manufacturers Association

What are the challenges facing manufacturing in Utah and the nation?

One of the things we face specifically with consumer products is the need to innovate new products. You have to have a pipeline full of ideas because of the length of time it takes to bring a new product to market with all of the design, prototyping, tooling, testing and design validation. In today's world, everything is about smart products. That's kind of a paradigm shift for a lot of consumer manufacturers--developing these high-tech products that didn't used to be high-tech products. There's an appetite for newer, better and different products, and it's almost at breakneck speed that you've got to develop and roll out these products.

~ Paul Archibald

POPE: Our people are at the heart of our ability to beat out our competition. It's not necessarily about how much money we spend, even though that is an input. It's not necessarily about how good all of our education centers are. At the end of the day, every company has a responsibility to figure out how they develop their people to win. We keep saying we need skilled people, but where are they coming from? Whose job is it to create them?

We have innovation problems and we do have to go faster. But we feel our only option for success is our ability to create and develop people. That's what we focus on every single day. We want the education centers to be part of that and to help us out, but we are not expecting you to do it. We ultimately know that we win and die by our people.

That's our biggest challenge--but it's also our biggest strength. Until business leaders can embrace this idea that it's your job to create people, you are going to be complaining about it forever. We were saying the same thing 10 years ago.

JOHNSON: The trade legislation in Congress right now is quite concerning. There are 26 U.S. industries that have put a tremendous amount of effort and money into protecting their market with tariffs.

The Chinese establish an industry as an industry of interest--which means they are going to steamroll it out of existence. You need to look no further than Magcorp, which is the only magnesium business left in the U.S. because the Chinese established magnesium as an industry of interest and then they started dumping their products in the U.S. below the cost of raw material. They have massive government subsidizing. By the time the magnesium industry realized what was happening, it was too late. Magcorp survived because the defense contracts have to buy from a domestic supplier.

The same thing was happening to aluminum extrusions. Our industry spent $3 million and the International Trade Commission got 400 percent tariffs. Our own Department of Commerce has administrative reviews where the wrong parties, in this case the Chinese, can come back and just chip away at the tariffs in place. It's astounding the amount of innovation that goes into circumvention and breaking the rules.

There's a trade bill in Congress right now that's extremely important. And you know who is fighting it? The National Retailers Association. They have potentially gotten the U.S. Chamber of Commerce to support them. Retailers want to source cheap things so they can sell them to their customers. I totally understand that. But if that goes away, they are all going to source materials at the same cost.

But the manufacturing jobs, which pay two to three times more than retail jobs--if those go away, who is going to buy products? In Utah, we've got two aluminum extrusion plants with 600 jobs. We have steel, rebar, paper, plastic. All of them are under attack from the Chinese. It's a hugely important issue. We have to fight to protect our own industry from someone who is part of the WTO but does not behave as though they are part of the WTO. The industries that are having their business taken away by the Chinese are not having them taken away on level playing fields. They are competing with someone who doesn't pay Workers' Comp or Social Security.

Many of these industries are basic infrastructure industries. If you take away commodity infrastructure industries, what does a country have left? What types of opportunities are you seeing in the state for organic growth?

POPE: It takes leadership first to understand that strength is in the people. Strength is in every individual's ability to make good choices, to see and solve problems.

How do we get this state unified around building problem solvers in this state? If we could become the world's best, we will have no competition. We have some great building blocks to be able to do that here.

ARCHIBALD: When you think of Utah, do you think of manufacturing? Can you name the businesses that produce the products that we buy day in and day out? Is there a way that we can get the word out that there are good-paying jobs in the manufacturing sector in Utah? A lot of companies fly under the radar for years and have a hard time recruiting kids out of school because they don't think there's high-paying jobs in the industry when, in fact, as you try to be competitive and you reshore products back from overseas, you are doing it through high-tech automation. There's a lot of high-paying engineering, production and planning logistics-type jobs out there that I don't think a lot of kids know about. They think of other avenues to pursue for their career. Part of it is just promoting Utah manufacturing so the kids are a little bit more interested and they don't think of manufacturing in terms of production line work that doesn't pay much.

BINGHAM: Most of...