California Continues To Lead U.S. in Manufacturing
Published May 27, 2009
As the nation’s leader in manufacturing, California produces products as varied as pipe components at the Tri Tool Inc. plant in Rancho Cordova.
The long track record of success hasn’t dimmed for the state’s 30,000 manufacturing operations, which continue to provide a solid base of capital investment and jobs throughout the state.
California manufacturers employ an estimated 1.43 million workers and produce $250 billion in annual revenue – making it the top manufacturing state in the nation.
“Manufacturing’s salary, benefits and job multipliers are very important to California’s working families,” says Gino DiCaro, vice president of communications for the California Manufacturers and Technology Association. “Manufacturing is the gateway to the middle class for our workers.”
Computer and electronic products, petroleum and coal, chemicals, food products, and transportation equipment make up the top five manufacturing categories in the state. The average annual salary for manufacturing employees exceeds $66,000 – a figure $10,000 higher than the average of all jobs in the state, according to the National Association of Manufacturers.
Incentives Pay Dividends
Although the sector faces challenges, such as increased environmental regulation and suppliers’ price hikes, California’s leaders are working to ensure that businesses continue to thrive.
The state has instituted a system of enterprise zones offering incentives for companies making certain types of business investments, which helps draw new companies to the area, says Richard Chapman, president and chief executive officer of Kern Economic Development Corp. in Bakersfield. “Some companies can get a $35,000 credit per employee in tax offsets,” he says.
Another positive factor is the state’s network of deep-water ports, providing access to Asia and other overseas markets, Chapman says, adding, “Our market strengths are location, logistics and labor.”
While traditional manufacturing continues under such brand names as Alcoa, Del Monte Foods and Tyco Electronics, the use of innovative technologies and new product development move the industry forward. One such company is Tesla Motors, an electric vehicle plant in San Carlos. Tesla benefits from another state program that waives sales tax on new manufacturing investment for zero-emission vehicles.
The company’s production facility constitutes a $300 million investment and creates about 300 jobs.
While impressive, those figures actually underestimate the plant’s impact, DiCaro says. “For every one job created, 2.5 jobs are created in the economy as a result of the vast supplier networks that are needed in manufacturing.”
Story by Renee Elder
Photo by Jeff Adkins
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