Editor’s Note: Manufacturing Execs Offer Insights on the Effect of Trump Administration’s Policies on Growth
75% of C-level manufacturing executives surveyed believe that economic conditions under the new Trump administration will be favorable to moving ahead with new facility or facility expansion plans.
Q1 2017
Seventy-two percent of the C-level respondents examined are responsible for their companies’ final location decisions. About half of them plan to open a new domestic facility (not relocate an existing one) over the next five years. Interestingly, three quarters of these respondents believe that economic conditions under the new Trump administration will be favorable to moving ahead with their new facility or facility expansion plans.
This optimism on the part of the respondents echoes what other C-level executives have been saying. For example, post-election, Thomas Williams, CEO of Parker Hannifan Corp., told Bloomberg news, “I think a lot of things that Trump is thinking about, whether it’s tax reform, regulatory reform, infrastructure, are all things that would help Parker.”
It would appear Trump is putting his thoughts into action. On January 23rd, Trump’s first official day in the White House, he hosted CEO’s from a cross-section of the of the country's largest manufacturing corporations where he requested they present a “series of actions" within 30 days to spur domestic manufacturing growth. For his part, President Trump promised to simplify regulation, fast-track plans to open factories (including incentives) and cut corporate taxes “massively.”
Only 15 percent of all the C-level respondents say they believe potential penalties for moving operations/jobs offshore — as proposed by President Trump — will have an effect on their plans for new foreign facilities. (Half did not respond to this question.) However, only about 18 percent of the respondents have plans to open new foreign facilities. And just 3 percent plan on relocating a domestic facility offshore.
None of the C-level respondents have plans to reshore facilities back to the U.S. And, only 3 percent believe there will be financial inducements under the Trump administration to do so. Bringing jobs back that have been moved offshore is more complicated than the new administration in Washington would have its supporters believe. According to an MIT Technology Review released in November 2016, Trump’s promise to bring back production jobs ignores the realities of advanced manufacturing. As noted by Scott Paul, president of the Alliance for American Manufacturing, in a reaction to the President’s inaugural address: “The offshored jobs President Trump has promised to return will not look like those that left. Manufacturing industries change rapidly, and so do the skill sets they require of workers upon entry. His administration must lead the way in preparing our workforce for this changing economy, so they can participate and reap its benefits too.”
The respondents we examined echo this sentiment, 60% believe availability of skilled labor is having an effect on new facility/expansion decisions. Of those, 70% believe workers are lacking the “advanced skills” necessary in the advanced manufacturing economy. In light of these responses, it should not be surprising if workforce development and training is emphasized in the “series of actions” that the leaders from our nation’s largest manufacturers will soon be presenting Mr. Trump.
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Geraldine Gambale, Editor, Area Development Magazine
Geraldine Gambale has overseen the editorial operations at Area Development magazine for 27 years. Under her direction, the publication has provided valuable site selection and facility planning information to its corporate readers through insightful articles and advice from industry experts, as well as from those who work in the economic development field. Her meetings with high-level government and industry officials in the United States and abroad have provided a prospective of what’s behind companies’ location and expansion decisions. She is also responsible for conducting and analyzing the results of Area Development’s highly regarded Annual Corporate and Consultants surveys. Prior to joining Area Development, Ms. Gambale worked in the banking industry. She holds a BA in English from Queens College of the City University of New York.
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