Posted by Matt Register

We talk to Tony Bennett, President of the Texas Association of Manufacturers, about the state of manufacturing in Texas. Special thanks to our friends at Salesforce.

Please excuse any typos in this hasty transcript.


Matt Register: Hey guys, welcome back to Texas Business Radio. Texasbusinessradio.com is the web site. We’re going to jump right into it and talk about manufacturing. I’m your host Matt Register. Jay Curry will join us here in a little bit. Texas is a hub for manufacturing and that is growing and growing. And one of the reasons is that as a state we have position ourselves to be attractive to manufacturing companies that want to move. When companies get tired of the high taxes in California, they get tired of the high taxes in Massachusetts, Texas looks very attractive to be able to move their operations to. We have a whole lot going for us. On the line we have the President of the Texas Association of Manufacturers out of Austin, Tony Bennett. Tony welcome to the show sir.

Tony Bennett: Thank you Matt, it’s great to be with you today.

Matt Register: Well tell me a little bit about the Texas Association of Manufacturers because you guys have a significant impact on why Texas is as attractive as it is for other companies that want to move in here.

Tony Bennett: You bet. Day in and day out TAM represents more than 500 companies from all the manufacturing sectors around the state. That includes 70 of our state’s largest employers. You know, the big names that we’re all familiar with.

Matt Register: Sure.

Tony Bennett: We promote legislative and regulatory interests here at the state capitol and also in Washington D.C. with the help of the National Association of Manufacturers up there. Manufacturing and Texas is huge, it’s the core of our economy. Almost 900,000 Texans work in manufacturing and they make an average compensation of nearly $80,000 a year. So, you know, it’s just a segment of the economy that we’ve got to have. It’s our hidden gem at the core of the economy. Most people, you know, somebody in everybody’s family is working in manufacturing. It’s really important to this economy.

Matt Register: No doubt. And these are high paying very, very good jobs in this sector.

Tony Bennett: High paying with good benefits. You know kids today can go and get a two year degree or, or a internationally recognized certificate and within five years be making 75, 80, a hundred thousand dollars a year in modern manufacturing. So it’s something that young people should all be looking at. And we’d love to tell everybody more about that.

Matt Register: Yeah. No, no doubt. As a, as a guy who has owned manufacturing companies in the past, you know it’s tough to find qualified people but these guys can make a significant amount of money. When they, when they learn a skill. Right?

Tony Bennett: There’s no doubt about it. And just about any, any kind of interest that a young person wants to get into today, it’s available to them. From the aerospace jobs, the petrochemical industry, the pulp and paper industry. It’s just, food and beverage, it’s, it’s all there. The electronics industry, semiconductor industry, they can do just about whatever they want in the great state of Texas. We have it all here.

Matt Register: Yeah, no doubt. Well, you know, looking at the numbers Texas is winning the race as far as attracting manufacturing companies into it. Why is that? What has Texas done to position itself to be able to bring all these jobs here?

Tony Bennett: Well, we’re a high skilled, good labor, you know, good, good amount of skilled labor available in this state. We’re a low tax state. We’re a low regulation state. Our proximity to markets both here in the US with Texas being right smack in the middle of the country.

Matt Register: Sure.

Tony Bennett: Is beneficial. We have ports, we have infrastructure, we have rail, we have highways. We have, most importantly, we have low cost energy. Because, you know, the good Lord has blessed us with a lot of oil and gas over many decades. Which fuels everything from our plants to our homes to the monies used to run our state universities. So, Texas has it all. And we can offer it to, you know, the incoming industries from all over the world that have made the state there home.

Matt Register: Well as much as in the last 20 years or so, offshoring was all the rage. Everybody’s moving their manufacturing centers offshore. That is now reversed. There are ways of finding very economical ways to be able manufacture things back in the United States. And again Texas is winning that. As, as we’re seeing companies bringing manufacturing back onshore, a very significant amount of that is coming back to Texas. What are you seeing on a larger scale, when it comes to that?

Tony Bennett: So that’s what we’re seeing as well. And the reason it is happening, you know, the Chinese labor costs are going higher. Mexico has become more, you know, productive and there their labor costs are still quite a bargain. And so a lot of things are moving back closer to the United States. We’re the number one economy in the world, still are, will be for some time to come. We, we are the market. You’re not going to make a good profit unless you’re close to your market. And folks are realizing that they can get it all done. And the net bottom line, means they need to be closer to the U.S. market. And everything that they used to get over in Asia as far as low cost labor and maybe in some cases, low cost raw material, can now be had near, closer to the U.S. market. Which is where you want to be.

Matt Register: No and there’s no doubt about that. You know guys, we’re talking to Tony Bennett, President of the Texas Association of Manufacturers. You know just from personal experience, seeing companies that take things offshore, there is a cost to… Indeed they are getting a lower labor cost but there are other costs that increase. Transportation costs, the costs of not being able to perhaps get to quality raw materials that they would otherwise get here. And now they are making the decision that it makes a whole lot more sense to come here. What are some of the things you’re working on now with the Texas legislature to make this an even more attractive state?

Tony Bennett: Well, we’re, we’re looking at a lot of things to bring our port more up to date. Modernize the transportation, the rail, the highway, all of the intermodal activities that you need to logistically move things around. You know, folks need to remember Texas is the number one exporting state in the U.S. and it has been for 14 years in a row. And so to keep that trophy, so to speak, we have got to constantly be looking at where we’re falling short. Where are we not as competitive as, you know, the globe requires you to be. Many of my companies have operations all over the world. So we hear feedback from them as to what Texas needs to do to keep winning, you know, the game. And there’s so much to do and we try to communicate that to our legislative leadership and they’re listening.

Matt Register: Talk to me a little bit about your membership because you have members that are big multinational companies but you have a very significant amount of of smaller companies as well.

Tony Bennett: We do. We call those our grass roots members because we just about have at least one member in all 254 counties of the state of Texas. It’s, it’s nearly that good. And so, you know, we have them from every industry sector imaginable. Many family operated companies that have, you know, dad or grand grand dad started the company. We, we used those folks to communicate our information to hear their feedback on what keeps them profitable. What makes them tick. What they need in their respective counties and, and in their regions. The workforce skills and the career tech needs that they need to, so that, you know, they can continue to hire people that have the appropriate skills. Making sure that the community colleges are giving the proper course options and all of the, you know, all the things that you need for a community to be prosperous. That’s what we try to deliver here.

Matt Register: Well, no doubt. And I tell you what, the manpower thing is another show for another day. We’re going to get you on here to talk about that because that is a problem that is facing everybody around the great state of Texas. Tony Bennett, President of Texas Association of Manufacturers. I want to thank you very much for joining us sir.

Tony Bennett: You bet. Thank you for the time.

Matt Register: ManufacturerTexas.org is the web site. And guys, we’re going to have it linked, right there from Texasbusinessradio.com. I want to give a big thanks to our friends over at Sales Force, salesforce.com, for sponsoring this segment. I appreciate it. Guys, we got to go pay a couple of bills. We’ll be back right after this. We’re just getting warmed up. 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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