Q/A: manufacturing: roundtable.

• Position: Industry Outlook - Discussion

Local manufacturing veterans discuss the headwinds their companies are battling, from a tight labor supply to global competition. But, they say, increasing automation is transforming their workforce and creating new competitive opportunities.

Kimberly Bailey

Sun Products

Erin Laney

EDCUtah

Mark Suchan

Post Consumer Brands

Josh Brown

Rio Unto

Steve Marler

Fresenius Medical

Corey Thayn

BD Medical

Grant Foster

Holland & Hart, LLC

Becky Marquette

L-3 Communications

Wick Udy

Jones Lang LaSalle

Steve Keiffer

Big-D Construction

Patrick Russell

Orbital ATK

Joe Wixom

Fetzer

A special thank you to our moderator, Todd Bingham, CEO of the Utah Manufacturers Association.

Q/A

What are the challenges you see in manufacturing as we move forward? What are the big issues your companies are dealing with?

RUSSELL: One of the challenges we've had is maintaining a safe work environment. When I entered manufacturing coming out of the military over 30 years ago, most of the people who entered the workforce had come out of the military, whereas now the new workers are coming right out of high school or out of the applied technical colleges, and they are not work hardened. Trying to get them to understand the need to work in a safe environment has been a challenge and has required a lot of extra training on our part.

MARLER: Getting utilities into the facility in order to expand has been an issue for us in Ogden. We are working with Rocky Mountain to work through some of those issues. Infrastructure has to keep up with growth in Utah.

UDY: Existing manufacturing space is becoming scarce. Our vacancy is right at 5.5 percent. We had 2.3 million feet of space delivered in 2015 and another 2.8 currently under construction. If you go to the northwest quadrant, it's a complete facelift that is taking place. The challenge is a lot of the buildings are built more for warehouse distribution. So they don't have the power. 350,000 square feet has 2,000 amps going into it, so it's difficult to find a true manufacturing facility unless you are finding land and building your own facility.

MARLER: We are producing about 25 truckloads of product every day, so shipping costs are huge. And being located in Utah is a challenge. The cost of our transportation is enormous. Sixty to 75 percent of our population is along the eastern seaboard. And the other 25 percent is the western side. So we are trying to look at our model. Should we be less over time here in Salt Lake City and more geared toward a Tennessee location? Somewhere around the East? I'm a local guy, but it becomes a business decision. Does the shipping cost outweigh some of the advantages that Utah has? The more Utah can do to stay competitive--knowing that they are going to lose ground because there's not much we can do about the cost of diesel. There are other infrastructure systems like rail that we do have a chance to overcome someday that will allow us to stay competitive on the shipping side.

BROWN: Right now we are faced with a very low-cost commodity market, and as a result of that we have had to be more efficient in everything we do. If you look across every industry, they're doing it more efficient, faster, cheaper, higher quality. That's become the norm.

MARLER: Labor is a continuing challenge. I can't recruit a person that's a great machinist, a great automation person. They don't exist. They don't have the skill set.

BROWN: The general consensus is that we have lost a generation, or potentially two. The truck driver as an example, the machinist--those heavy industrial type jobs. We have an entire generation gap between our average worker now and who we're trying to recruit.

I think you had a generation that was really pushing hard for their children to be better than they were. And that...