When the Iowa Governor’s Office told everyone in January that 2017 would be the “Year of Manufacturing,” business investors took notice.
After all, Iowa is a state where 6,100 manufacturers employ 200,000 people and contribute $29 billion annually to the state economy — good for 18 percent of Iowa’s real GDP.
That’s not good enough, said state leaders. They want to raise that total $3 billion by 2022 to $32 billion.
“We must create an environment that ensures Iowa manufacturers and their employees can meet the competitive levels that are being set nationally and around the globe,” the Governor said on April 24 in kicking off the Year of Manufacturing. “Advanced manufacturing is a significant driver of our state’s economy. Our administration is committed to strengthening the industry by encouraging innovation, entrepreneurship and investment.”
About 14 percent of Iowans are employed in manufacturing, but the Governor wants to see that number climb.
“Advanced manufacturing is by far our most critical sector,” says Gov. Kim Reynolds. “The advanced manufacturing sector is so strong in Iowa because the public and private sectors work together to ensure conditions are favorable for growth to remain competitive in the global marketplace. We have tapped the Iowa Economic Development Authority (IEDA), the Iowa Association of Business and Industry (ABI) and Iowa State University’s Center for Industrial Research and Service (CIRAS) to spearhead Year of Manufacturing efforts — but that’s just the beginning.”
The focus of the year-long effort is three-fold:
Reynolds says the effort includes a new online toolkit for manufacturers, available at www.iowamfg.com.
Listening to the Voice of Business
A prominent leader in the cause is ABI, which has served as the voice of Iowa business since 1903. ABI is comprised of 1,500 member companies that employ more than 330,000 Iowans in all 99 counties.
Lori Schaefer-Weaton, past chairperson of the ABI Board of Directors and president of Agri-Industrial Plastics Co. (AIP) in Fairfield, says the key to growing Iowa’s advanced manufacturing sector is “workforce, workforce, workforce.”
“What makes manufacturing so strong in Iowa is the fact that Iowans have a very strong work ethic,” she says. “Many grew up in farming and come with a mechanical, problem-solving background. We also have a very strong educational system from K-12 through our community colleges and universities. For us to grow our manufacturing sector by $3 billion over the next five years, we must ensure that we have the workforce needed to support that growth.”
Schaefer-Weaton says her own firm, AIP, has been on “a pretty steep expansion path the last 12 years. We have another machine scheduled to arrive from Germany this summer. That means we need to hire eight to 10 more people so that we have support on every shift. We are right at the 200 mark in total employment and would like to be at 220.”
The Fairfield-based company added 105,000 sq. ft. to its facility about 18 months ago and now has about 350,000 total sq. ft.
Schaefer-Weaton wants investors to know that “we got some really important pro-manufacturing legislation passed this year including on workers’ compensation. Advanced manufacturing in Iowa receives strong support from the Governor’s Office, IEDA, and the Senate and House leadership.”
Debi Durham, director of IEDA, says that the Year of Manufacturing is designed to “play to our strengths in Iowa, which include biosciences, advanced manufacturing and information technology. These are mature platforms in Iowa. My role is to look for emerging opportunities.”
One of those opportunities, she says, is to make it easier for Iowa manufacturers to innovate and launch new products.
Iowa’s 6,100 manufacturers employ 200,000 people and contribute $29 billion annually to the state economy — 18 percent of Iowa’s real GDP.
“We have noticed that some mature companies are not innovating and they are not introducing new products,” says Durham. “We are reaching out to them with opportunities to help them innovate and improve their global competitiveness.”
This outreach will include personal visits to manufacturers that have a smaller workforce, Durham notes. “We are working with our utilities and our local economic development partners, but my team at IEDA has personally committed to calling on over 400 manufacturers. We will present them with a comprehensive toolkit. Basically, it says, if you need strategic planning, here are resources that can help. If you need help with product development, here are researchers who can help you. We are excited about the whole thing. It is being very well received.”
Durham adds that Iowa created incentives to help companies keep ownership at the local level. The state has also become increasingly aggressive at wooing firms across the state line.
Breaking Down the Border
Two Western Illinois companies recently received support from Iowa’s High Quality Jobs program to move their headquarters across the Mississippi River to Iowa. Lewis Machine & Tool Inc., a small arms and components manufacturer that supplies US forces and countries around the world, is moving from Milan, Illinois, to Eldridge, Iowa. The company is building a plant in Eldridge and creating 178 jobs.
Wave Reaction Inc., a software company that makes solutions for supply-chain management, is moving from Galena, Illinois, to Dubuque and plans to create 20 jobs.
Business climate improvements have resulted in Iowa moving up Chief Executive magazine’s annual ranking of the best state business climates in America. This year, Iowa moved up three spots to No. 14. The publication surveyed CEOs around the country and ranked Iowa as having the second-highest-quality workforce in the nation. The CEOs also ranked Iowa the third best state for financial services companies and the third best state for living environment.
“We have built an entire ecosystem to support technically oriented companies,” adds Durham. “We have adopted the apprenticeship training model for manufacturers, and Future Ready Iowa is all about Iowa having 70 percent of its workforce being fully trained to meet the needs of the modern workplace by 2025.”
Dr. Maureen “Mo” Lockwood, manufacturing manager of Thombert Inc. in Newton, Iowa, says the success of her own firm is due largely to assistance from CIRAS at Iowa State University.
“CIRAS is a fantastic resource. They have helped us in a variety of ways,” she says. “One particular project resulted in improving the performance of one of our tires.”
Thombert, with plants in Newton and Brooklyn, Iowa, is the world’s largest maker of polyurethane wheels and tires.
“We did not have the right lab equipment. We needed help with understanding the chemistry. The lab in the chemistry engineering department at ISU significantly improved the quality of our tires,” Lockwood notes.
“We just tripled the size of our Brooklyn plant. We are designing and engineering automated production equipment that will go in place in 2018,” she adds. “Altogether, we added 36,000 square feet to that space.”
Due to the high level of automation at both plants, the total workforce of Thombert will remain around 100, says Lockwood. “We have also been helped by the local community colleges and the University of Northern Iowa. Plus, Iowa State has a metal casting center for 3D printing, and CIRAS came in and helped us figure out how to best use our limited warehouse space.”
Lockwood wants other manufacturers to know that these same resources are available to help them innovate and expand.
“Iowa has over 6,000 manufacturers and all of us have different needs,” she says. “The Year of Manufacturing will help communicate the many resources that are available to help manufacturers grow in this state.”
This Investment Profile was prepared under the auspices of the Iowa Economic Development Authority. For more information on Iowa, contact Tina Hoffman of the IEDA at 515-725-3150 or by email at email@example.com. On the Web, go to www.iowaeconomicdevelopment.com.