Archive for March, 2013

March Legislative Report

Paul Fogleman

This issue of Trends focuses on America’s interest in the return of manufacturing. Not that manufacturing ever left. Manufacturing slipped behind the once-upon-a-time curtain and re-invented itself. Now our political and business leaders have re-discovered a manufacturing segment that is leaner, focused, and sophisticated.

This is the story we are carrying to our friends in the North Carolina General Assembly. The Manufacturing Solutions Center in Conover is generating interest among representatives and senators. It is an inspiring story of what can be accomplished with leadership and industry support. Textiles manufacturers have come to the table in support of the Textile Technology Center in Belmont. Both centers have adopted 21st century models for traditional manufacturing.

On April 10, the Hosiery and Textiles Governmental Affairs Council will host Hosiery and Textiles Day at the Legislature. That Wednesday begins with a breakfast for lawmakers in the Legislative cafeteria. It will be followed by visits with key leaders – especially Appropriations chairs. The mission: protect state financial support for the operation of the centers.

And, of course, say “thank you.”

••••

The first bill that Gov. Pat McCrory signed into law directs the Department of Public Education to create a path for high school graduation with a diploma that indicates specialization in technical training. High school students also can pursue a college-preparation diploma or one that covers both.

Education reform is one of the three “E’s” at the top of the governor’s agenda. Graduating students prepared for the 21st century workforce is among the priorities. Weeding out poor teachers is another. The governor and legislators also are opening doors for more charter schools. Privatization of certain services such as school bus operations has been discussed openly in committee meetings.

Economic growth and efficiency in the delivery of government services are the other top priorities for the McCrory administration. There will be no more seat-warmers on the state payroll, the governor said in his address to the General Assembly.

••••

Tax reform will surface during this session of the Legislature. But when? Finance committee chairs in the House and Senate have given no hint.

Sen. Bob Rucho of Mecklenburg, chair of the Senate Finance Committee, has stated publicly that he wants to abolish income taxes for businesses and administration. Over on the House side, Speaker Thom Tillis has expressed reservations this can be accomplished although he, too, wants major reform.

Spreading the “consumer taxes” from retail to services will be on the table. An 8.05 percent consumer (sales) tax has been floated, including for food purchases. Several other Southern states have no income taxes.

••••

Gov. McCrory, speaking at the Emerging Issues Forum, predicted that traditional manufacturers using new technology will lead North Carolina out of the economic doldrums.

“We tend to think of manufacturing and agriculture as old business … we have to have businesses that make things, that produce something, that innovate” he told the 1,000 participants at the forum.

A former board member for Kewaunee Scientific Furniture in Statesville, McCrory is familiar with the 21st century challenges facing established industries. He pledged to push for upgrades to the state’s infrastructure – roads, rails, water, energy and communications.

Renfro Expands Hosiery Operation In Tennessee

MOUNT AIRY NC – Renfro Corp., a North Carolina-based hosiery manufacturer, has announced a $17.5 million investment in equipment and operations at its Cleveland, T.N. Plant.

Observers say the Renfro investment represents a trend to bring hosiery manufacturing back to the United States.

Renfro CEO Andrew L. “Bud” Kilby Jr. said the decision to expand the former Charleston Hosiery operations is a response to increase demands for current and new lines. The company, one of the nation’s largest hosiery companies, manufacturers and markets socks for leading brands including Fruit of the Loom, Dr. Scholl’s, Ralph Lauren/Polo, Wrangler, Spalding, and Carhartt. Renfro also owns K. Bell and Hot Sox.

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SYFA Announces ‘Get Smart’ Confab

Attendees at the spring conference sponsored by the Synthetic Yarn and Fiber Association will be challenged to “Get Smart.”

The April 18 – 19 gathering will be held at the Sheraton Airport Hotel in Charlotte and will feature presentations by fiber and yarn manufacturers, along with textiles organizations. Economic forecasts also are on the agenda.

Organizers of the conference observe that “smart phones, smart cars, smart fabric and smart computers” are driving marketplace strategies that include the yarn and fiber industry. The trend toward performance yarns and fibers has accelerated over the past decade, resulting in “smart” textile products.

Some 150 manufacturing and marketing executives are expected to attend. Registration information can be found on the SYFA website.

SYFA Candidates For 2013 – 15 Named

The Synthetic Yarn and Fiber Assn. has released the slate of officers for 2015.

Proposed officers are: President, Mike Becker, Michael S. Becker, Inc; Vice President, Stan Pendergrass, Milliken & Company; 2nd Vice President, Machell Apple, Victor Group; Secretary-Treasurer, Alasdair Carmichael, PCI Fibers.

Directors: Roger Crossfield, Goulston Technologies; Joe Cornelius, Unifi Inc.; Joe Capobianco, Precision Fabrics Group; Jim Netzel, DAK Americas; Chris Schultz, NanYa Plastics Corp. America; Hardy Sullivan, Crypton Fabrics.

The managing director of SYFA is Kim Pettit.

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Kaufman Pact With CVCC Ushers New Era For N.C. Entrepreneurs

Kaufman Pact With CVCC Ushers New Era For N.C. Entrepreneurs

The Manufacturing Solutions Center, which has expanded its outreach throughout the region, is positioned to launch a statewide jobs creation program in partnership with the Kaufman Foundation of Kansas City.

The Kaufman Foundation has signed an agreement with Catawba Valley Community College which has nurtured the MSC and the Hosiery Technology Center over the past 23 years. The activities of the MSC prompted the selection of CVCC, it was announced.

The foundation, which is poised to provide millions of dollars through CVCC , has asked the community college to raise $600,000 and use the Manufacturing Solutions Center to screen and select entrepreneurs across North Carolina for grants to capitalize their manufacturing startups.

Dr. Garrett Hinshaw, president, said CVCC is one of three community colleges in the nation selected for the program. Kaufman executives picked CVCC because of the work and reputation of the Manufacturing Solutions Center. A similar undertaking in Ohio has been sponsored by the foundation, resulting in hundreds of new jobs.

North Carolina legislative leaders are studying the concept with the possible addition of funds to the MSC appropriation to help cover the startup funds. Additional funds are proposed from state and private sources.

Dan St. Louis, who was instrumental in the development of the MSC, has 10,000 square feet in his new facility for an incubator. He has been assisting entrepreneurs with product development and marketing over the past decade and he believes the Kaufman grants “will be huge.”

“I have worked with many people trying to start up a business. Having working capital will put entrepreneurs on the road to success,” St. Louis reflects. Candidates for Kaufman support will be identified through community colleges and economic development agencies across North Carolina.

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U.S. Senators Endorse Multi-Lateral Trade Pacts

North Carolina’s two U.S. Senators predict the nation will pursue multi-lateral negotiations with trade agreements, thus moving away from bilateral agreements preferred by special interests.

Speaking at the Emerging Issues Forum in Raleigh, Sen. Richard Burr bluntly told manufacturers that when it comes to trade “You can’t put the genie back in the bottle.”

Burr said there is a misconception that trade agreements cost jobs. “We preserve jobs when we pursue global trade pacts,” Burr continued.

Sen. Kay Hagan concluded that the growing middle class in emerging markets “is the target for U.S. manufacturers. But she also acknowledged that counterfeit textiles coming into this country is more than we produce. She advocates tougher customs operations.

Both senators endorsed tax reform. With a 30 percent corporate tax structure, we don’t compete with 18 percent in other countries, Burr allowed. Also he noted that some small manufacturers are paying 35 percent while largest corporations with loopholes and deductions are paying nothing.

Hagan added that some U.S. corporations are sitting on a total of $1.6 trillion in overseas accounts. Hagan also said the research and development tax credit should be permanent.

Both senators were optimistic that immigration reform will be adopted by Congress. Hagan cited Google, Yahoo, and Ebay as companies founded by immigrants or children of immigrants.

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State Gathering Focuses On Future Of Manufacturing

Manufacturing in America is experiencing a renaissance because “romance and glamour reside in making things, participants at the annual Emerging Issues Forum were assured.

Andrew Liveris, president, chairman and CEO of Dow Chemical Co., told some 1,000 business leaders, politicians, and educators gathered in Raleigh that manufacturing expands the capacity to innovate. “Where production goes, innovation flows,” he allowed.

Liveris warned that the renaissance for manufacturing is fragile. Orders are up, outsourcing is declining, but uncertainty in Europe and Washington is hampering a full recovery.

North Carolina lost 115,000 manufacturing jobs since the turn of the century and has regained only 11,000. Each manufacturing job has a multiplier effect of three to five other jobs in service and supply chain businesses, he said.

The U.S. government has been a roadblock to growth in manufacturing, Liveris asserted. “In China, manufacturing gets the red carpet; in Washington manufacturers get red tape … an advanced vision for manufacturing doesn’t start on its own; it’s within our power to make it happen … .”

Liveris said the vision for American manufacturing should include an energy policy. Dow, he said, spends $21 million for energy and the public should be as concerned about energy as it is with food and security.

Also, the U.S. should have a policy to address the “human capital deficit.” Developing a trained, motivated workforce should be a priority.

And finally the Dow chairman said there needs to be a change in the business climate. He said 60 government agencies are monitoring Dow operations from revenue to environment to safety.

China has a five-year plan to become leader in five strategic manufacturing sectors, Liveris concluded. The U.S. should be as concerned about preserving and promoting its manufacturing, he said.

Following the keynote address by Liveris, Tom Kurfess, assistant director for Advanced Manufacturing in the Executive Office of the President, suggested that the administration has gotten the message.

Kurfess said the department recognizes that while the U.S. leads in research and development, other countries are rapidly catching up. In addition to research and development, the use of robotics, new products, and skilled personnel are shaping the future of manufacturing, he said.

Training for 21st century manufacturing will be a key component for preserving manufacturing, the federal official said. “In times of change, the learners inherit the earth.”

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