Posted by Matt Register

We sat down with James Franks, President of Franks Manufacturing, to talk about the state of manufacturing in Texas.

Please excuse any typos in this hasty transcript.


Matt Register: Hey guys, welcome back to the show, Texas Business Radio. We’re talking about manufacturing today. There is a lot of manufacturing going on in Texas and there’s a whole lot for us to talk about. I’m your host Matt Register, here as always with Jay Curry. Jay?

Jay Curry: Got to love it. Absolutely, got to love it. Talk about manufacturing, the impact manufacturing on the state, impact of manufacturing on the country. My goodness gracious this is, this is exciting stuff. And we’ve got a real expert here with us to talk about it.

Matt Register: Yeah. No doubt. Guys, a little housekeeping. Don’t attempt to take notes, we’re going to have links to everybody we’re talking to right there at Texasbusinessradio.com. There’s three ways to get in touch with us; Twitter, #TBR, get your questions in that way. We have a 24 hour call in line, 844-814-8144, or go to the eb site, send us an email from there, Texasbusinessradio.com, Texasbusinessradio.com. Let’s jump right into it. James Franks is the president of Franks Manufacturing out of San Antonio, Texas. He is also on the board of directors of the San Antonio Manufacturers Association. James welcome to the show sir.

James Franks: Thank you, good to be here.

Matt Register: So talk to me a little bit about Franks Manufacturing. What do you do? Who do you do it to?

James Franks: Franks Manufacturing is a custom thermoforming house. We do everything from agricultural to aerospace. Mainly heavy gauge thermoforming. We do secondary containment for the oil field. We do beverage trays for some of the companies here in San Antonio and we’re, we’re spread across the industry in just about anything you can come up with.

Matt Register: OK, in layman’s terms we’re talking about plastics. Right? We’re talking about vacuum formed plastics.

James Franks: Right.

Matt Register: So, pretty much anything you make with a sheet of plastic. Right?

James Franks: That’s it.

Matt Register: Vacuum form it against mold and out comes the part. That is what you guys do and you guys do it very well. Correct?

James Franks: Been doing it for 35 years.

Matt Register: Wonderful. Second generation in your company. Now, your free job, right, your extracurricular activities, your position with the San Antonio Manufacturers Association. By the way, probably the leading manufacturers association, certainly in the state. Right?

James Franks: Yes it is.

Matt Register: Talk to me a little bit about what it is you’re seeing in your role there as far as, you know, Texas right now is, has always been leading the country in growth, right, in their economy. What role is manufacturing playing in that in Texas?

James Franks: Well, 30 to 40 years ago when Texas diversified from being an oil state into, going into other manufacturing. I mean the Houston areas, the Dallas areas, were always, you know, they were fairly diversified. But the rest of the state wasn’t, it was either agricultural, it was oil.

Matt Register: Sure.

James Franks: And after the first crash in early 80s, middle 80s. Well, we had to do something else. And so a lot of the manufacturers like us, we moved into other things. My company, my company does not have any one business that will shut my shop down.

Matt Register: Sure.

James Franks: And this is like that too.

Matt Register: But we’re not only talking about the customer concentration or lack of customer concentration. We’re talking about no industry concentration either. Right?

James Franks: Right.

Jay Curry: Diversification. I mean that’s the only way to make it. Right?

James Franks: I mean the state, the state diversified as far as manufacturers go. And so, we’ve pulled away from just being known as the oil state of the United States.

Matt Register: Well, in some levels we still are, right? It’s still very heavy…

James Franks: Yeah, a lot of my business is tied in with with the old industry as far as secondary contained.

Jay Curry: Just not 80-90 percent, like you use to.

James Franks: No, no it’s not like we used to.

Jay Curry: Yeah.

James Franks: You know it’s, we’re, we’re doing everything.

Matt Register: Sure. Well talk to me about manufacturing in the state because a lot of folks are relocating from other states and bringing in… Texas is very friendly tax wise, it’s very friendly regulation wise. What are you seeing as, as a member of the San Antonio Manufacturers Association about larger companies and even smaller companies choosing to relocate to this area because of that?

James Franks: I think a lot of your larger companies are looking to states like Texas that don’t have the high tax burden, doesn’t have employee income taxes or individual income taxes to come into the state and work. Because we can, we can give them things that the other states can’t. I mean, you can hire $12 an hour employees and they can live. Were the other states, if you’re not making 15-20 dollars an hour, they can’t, they can’t make it.

Matt Register: Sure.

James Franks: But they can here. I’m not saying it’s the best thing to be working at. But entry level, you can bring them in and they can learn and they can move up. And I think that’s where Texas has the ability to do that, were the states don’t.

Matt Register: Well, it’s certainly a combination of a low cost of living, a large labor pool, a business friendly tax and regulation environment, all that kind of combines together. What kind of scale of companies are you seeing moving into the Central Texas market though?

James Franks: We’re seeing a lot of large companies moving in. You’ve got a lot of, a lot of companies that are moving in. And then all of the support companies that are moving in with them. I was just talking with Caterpillar this morning, another board of directors. And he was wanting us to come over and look at some of their dunnage stuff. Because they’re moving their plants from out of state to Texas and they’re going to be consolidating a lot of their plants here in the state.

Matt Register: Sure.

James Franks: So, you have a lot of plants like Caterpillar that are going to be doing stuff like that. We do work for other manufacturers that have plants in Mexico and I’m starting to see a lot of that stuff starting to move too. To where they’re going to bring a lot of it back to the United States. Still, maybe, do a lot of the, the production down there for assembly.

Matt Register: Sure.

James Franks: But they’re going to bring most of the suppliers back to the United States to send back down the way it used to be.

Matt Register: Now that’s interesting, where everything used to be going offshore, it’s turning around and coming back.

James Franks: Right, it’s coming back. And I see that as far as in the plastics business, for a while plastics especially in the polyethylene, you had, there wasn’t anybody making the machine. And it was, it was all going overseas. China was buying up all the, a few years ago was buying up all the regrind.

Matt Register: Sure.

James Franks: So, polyethylene prices went through the roof and now it’s starting to come back. And so, were, were, a lot of our extrusion houses now are starting to produce more polyethylene. There’s going to be several resin suppliers that are going to be opening up in, in Texas. One of them, we’ve got two that are going to be opening up on the coast. That are actually going to be making olefin resins.

Matt Register: Wow.

James Franks: That we didn’t have.

Matt Register: Sure. That you didn’t have, that you had to pay transportation and get in. That decrease your ability to be competitive against the global market. Right?

James Franks: Well, a lot of the problem is regulation.

Matt Register: Sure.

James Franks: I mean you didn’t have…

Jay Curry: Still is…

James Franks: Yeah.

Jay Curry: but it’s getting better.

James Franks: You didn’t have refineries being built or processing plants being able to process the fuels that we can send out there. Or the natural gasses that turn into olefins and plastics and everything else. Well now they’re here, so they’re being built.

Jay Curry: In San Antonio area with the San Antonio Manufacturers Association. You’re having quite an impact on this.

James Franks: Yeah. I mean you…

Jay Curry: Are you seeing good, vibrant growth?

James Franks: The growth is, in San Antonio has come up quite a bit in the last 10 years. This trade show is a good show of it.

Jay Curry: Yeah, I heard it’s better than last year as far as the number of businesses.

James Franks: Yeah, last year, last year we had roughly 120-125. I think this year we’ve got one hundred forty something exhibits.

Jay Curry: That’s a good job.

James Franks: And it can only get better.

Matt Register: Wonderful. Well guys, we’re going to continue to talk about manufacturing. We have James Franks, who is the president of Franks Manufacturing out of San Antonio. Franksmanufacturing.com is the web site. He’s also a member of the board of directors of the San Antonio Manufacturers Association. SAMATX.org is the web site for that. We’re going to have links to both of those from Texasbusiness.com. So, don’t bother taking notes. Go right there and get all you need. James thank you very much for joining us.

Jay Curry: Very informative. Thank you.

Matt Register: Yeah. Thank you very much. We’re going to continue to talk about manufacturing right after the break. Got a hard break. We’ll be back right after this. Got to pay a couple of bills. Don’t go anywhere.

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About the Author
Matt Register

Matt Register

In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.

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