Leaders in the field of manufacturing from across the state gathered at the Arizona Biltmore last Thursday for the Arizona Manufacturers Council’s Awards and Summit event. The event featured panel discussions and guest speakers from the industry and culminated with the Manufacturer of the Year awards ceremony recognizing those companies that have made significant positive contributions to the manufacturing and the broader state economy. 

In his opening remarks, AMC Chairman Mark Gaspers congratulated the companies represented at the event for their resiliency during the pandemic and highlighted recent significant investments, including by Intel, which is in the midst of a $20 billion expansion in Chandler.

Workforce development in focus

A panel on the state’s manufacturing sector workforce featured Darcy Renfro, the chief workforce and economic development officer for Maricopa County Community College District; Kolu Wilson, workforce program deputy administrator for the Arizona Office of Economic Opportunity; Dave Garfano, executive director of the Arizona Manufacturing Extension Partnership; and was moderated by Dawn Grove, general counsel at Karsten Manufacturing and the past chair of the Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry and previous chair of the AMC.

The main focus of the panel was the work that various businesses and community colleges were putting in to prepare young people for the workforce. One such example is , a program at Central Arizona College that trains prospective workers for hands-on manufacturing jobs with a special focus on advanced automotive manufacturing, which is essential for the new Lucid electric vehicle plant in Casa Grande.

The panelists were in agreement that there are many programs for both workers and businesses to take advantage of to obtain additional training and recruit new skilled workers. 

Sober assessment from U.S. Rep. David Schweikert

Arizona Â鶹´«Ă˝Ół»­ President and CEO Danny Seiden interviewed Arizona United States Rep. David Schweikert, who spoke about the activity on Capitol Hill surrounding President Joe Biden’s attempts to pass both a bipartisan infrastructure bill and a multi-trillion-dollar social spending package known as Build Back Better, which contains a litany of tax increases that would harm job creators. 

Schweikert also urged businesses to become more involved in the issues that are pertinent to their success saying that he’s concerned “business has lost its voice.” 

Schweikert hit an optimistic tone, however, on the rate of life changing innovations hitting the market.  He spoke about the possibility of a cure for Type 2 diabetes in the near future saying that it “could be the best thing our society does.” 

Gov. Ducey touts economic achievements

Arizona Gov. Doug Ducey closed out the summit portion of the program. “We’ve run a marathon in our state,” Ducey said referring to Arizona’s experience in the pandemic. 

The governor said the economy is rebounding to a point where it’s surpassing the pre-Covid economy. 

Ducey took the opportunity to remind the audience of the things that set Arizona apart from other states. He touted his administration’s work to push back against “anti-growth policies” that slow economic growth. Arizona, he said, can go toe-to-toe with other states such as Texas and Colorado in winning new job investments. 

The event concluded with an awards ceremony that honored state businesses and leaders for everything from innovation and sustainability to economic contributions. The honorees were: 

• 2021 Advocate of the Year: of the Arizona Rock Products Association and the Arizona Mining Association
• 2021 Legislator of the Year:
• 2021 Excellence in Innovation Award:  
• 2021 Excellence in Sustainability Award: 
• 2021 Small Manufacturer of the Year:
• 2021 Medium Manufacturer of the Year:  
• 2021 Large Manufacturer of the Year:  
• 2021 Economic Driver:  

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Made in Arizona. It’s a tag that’s becoming more familiar as the state’s manufacturing base grows. Once heavily reliant on real estate development for its economy, Arizona now boasts more manufacturing jobs than construction. 

To celebrate this diverse and rising sector, Governor Doug Ducey declared April “Made in Arizona Month” to encourage everyone to buy homegrown products from tortillas to semiconductor chips.  

Â鶹´«Ă˝Ół»­ spoke to one of the state’s leaders in the industry about the sector’s evolution and impact, Mark Gaspers, chairman of the board of the Arizona Manufacturers Council (AMC), the voice of the industry.

Gaspers, who is senior manager for Boeing’s State and Local Government Operations in the Southwest, gave his take on the industry’s investment in Arizona over the past decade.  

Here’s what Gaspers had to say: 

Q: How has the manufacturing landscape in Arizona changed in the past decade?

A: A recent report shows that Arizona exports increased by over 51 percent from 2010 and 2019. During that time, manufacturers added 28,000 new jobs, an 18.7 percent increase. By 2019, there were 5,157 manufacturing businesses and 177,300 manufacturing jobs in the state.

Our success is not by accident. Arizona’s legacy companies paved the way for the innovative manufacturing and technology growth we’re seeing today.

Others played a role in pushing forward policies that have attracted new companies and accelerated growth for our long-term Â鶹´«Ă˝Ół»­anufacturers. Elected leaders, communities, the AMC, the Arizona Â鶹´«Ă˝Ół»­, trade associations and the Arizona Commerce Authority under Sandra Watson’s leadership.

Some of the policies that have proven effective are a 75 percent reduction in real and personal property taxes for Arizona Foreign Trade Zone users, refundable tax credits for manufacturers creating jobs and investing in Arizona, and a 100 percent sales factor that reduces corporate tax liability for high wage and fiscal benefit exporters. 

Arizona also created additional depreciation, reducing the taxable value of an asset, and sales tax exemptions on purchases of manufacturing machinery, equipment and electricity used in the manufacturing process.

Education is another reason for our growth. We’ve seen rapid expansion of university research infrastructure and we have robust career and technical education programs with industry collaborating on workforce needs. 

Today, these policies have diversified our economy and the breadth of the manufacturing sector. If you look at our council membership, it reflects a range of sectors and products from the Boeing AH-64 Apache to Karsten Manufacturing Ping Golf Clubs and Sub Zero appliances, to name just a few.

Q: Which sectors are seeing the most growth in Arizona?

A: We’re seeing a historic level of investment by the semiconductor industry. Plans for massive investments by Intel and TSMC (Taiwan Semiconductor Manufacturing Company) are a sign of great things to come. Not only are these companies hiring employees and investing here, they are attracting new companies and suppliers to Arizona. 

Intel’s presence, for example, resulted in $8.58 billion for our economy in 2019. And that’s before its recent of a historic $20 billion investment for two new Arizona fabs in Chandler.

We’re also grateful for Arizona Senator (Kyrsten) Sinema’s leadership in the passage of the bipartisan , which is intended to restore America’s leadership in semiconductor manufacturing. That immediately impacted Arizona’s economy as it welcomed Intel’s plan of expansion.

Arizona has always been a leader in the aerospace and defense sector, and we continue to see growth and investment by Boeing, , , and as well as medium and small companies. There’s also a robust chain of suppliers with proximity to military testing facilities such as . 

To put the extent of the aerospace and defense supply chain in context, take Boeing’s average annual spend with just Arizona suppliers— $1.4 billion per year. That’s roughly two times the economic impact of the last Super Bowl in the state every year.

Q: What does the future look like for Arizona’s manufacturing sector? 

A: The future is bright and that means jobs today and opportunities for students tomorrow. One reason I am so excited for the future is because of the innovation and collaboration we see from our education partners. 

We are fortunate to have Maricopa Community College District represented on our Board of Directors. Maricopa’s partnership with other institutions is a prime example of collaboration by education with industry. Maricopa County Community College District, Central Arizona College and Pima Community College partnered together to develop a unified, industry-recognized curriculum specifically designed to teach the skills needed for high-paying, high-tech advanced manufacturing jobs. NAU recognized this innovation and also partnered with these schools. 

We have outstanding university partners that are focused on the needs of industry as well.

Arizona State University’s Fulton School of Engineering is the largest engineering college in the country. 

The University of Arizona leads the country in research in several technologies including space, hypersonics, and quantum computing.

Embry-Riddle Aeronautical University’s Prescott campus is a crucial pipeline for the future engineering and aviation workforce of tomorrow.

Q: Any concerns for this sector that need to be addressed through state or federal policies?

A: We have seen increased investment here because the state is promoting a globally competitive environment that invites capital, promotes innovation, and furthers investment in research and development. Concerns for the sector would be if these policies were dismantled. 

Additionally, the competitive landscape is not static. We should continue to build upon our policies that encourage companies to invest in research and development in Arizona.

We support continued investment in our education system but do have concerns for our smaller manufacturers impacted by the decision of Prop. 208. We are hopeful that this legislative session yields support to our small businesses. 

Workforce remains a top concern for manufacturers. In addition to our education partners’ eye to the future, their ability to rapidly respond to shocks such as the pandemic are important to all of us as Arizonans. Employment in the manufacturing industry declined by 4.6 percent at the start of Covid, but has seen a return.

We are watching with great interest the debate on Capitol Hill regarding tax reform, labor and environmental issues. 

Q: How is manufacturing helping Arizona’s economy?

A: An underappreciated aspect of manufacturing is the benefit it imparts on all other sectors of our economy. It is an industry that generates significant economic activity well beyond primary manufacturing operations. 

A report by the Rounds Consulting Group states that for every dollar of manufacturing value that is added, another three dollars and sixty cents of value-add is generated elsewhere in the local economy. Additionally, each 1,000 direct manufacturing jobs creates another 1,542 secondary jobs in every other industry for a total of 2,542 jobs.

Other sectors are benefiting, too, from agriculture to health care to retail and transportation. 

As we see in the case of TSMC, large manufacturers that have more of their supply base located in the state magnifies this multiplier effect on the economy. And as we attract higher wage positions within manufacturing with regional and other engineering centers, the impact of the multiplier effect increases as well. 

Arizona’s manufacturing sector has fared remarkably well both prior to and through the 2020 recession. In Arizona, year-over-year growth in manufacturing employment was growing at about 5 percent per annum coming into 2020, thanks in large part to recent state and federal regulatory and tax relief. 

Further, while all states lost manufacturing jobs in 2020, Arizona’s losses appear to be about half the rate observed in other states, and the state continues to attract the interest of potential new manufacturers, which bodes well for resurgent growth in 2021 and beyond.To read more about the AMC, visit: .

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Supporting small businesses still struggling during the pandemic, bolstering the state’s stressed healthcare system, and reducing the influence of out-of-state interests on Arizona’s ballot initiative process are some of the top items on the Arizona Â鶹´«Ă˝Ół»­ of Commerce and Industry’s wish list for state legislators this year.  

The Â鶹´«Ă˝Ół»­ revealed these and a host of other policy recommendations Friday during its annual 2021 Legislative Forecast Luncheon. Governor Doug Ducey and legislative leaders also discussed their priorities at the event.

“The health crisis has upended not only the Arizona economy but the entire world in this global pandemic,” said Glenn Hamer, president of the Arizona Â鶹´«Ă˝Ół»­. “Arizona has weathered this pandemic downturn just about better than any state and, as I’ve said many times, our governor has had just the right touch as we have weathered this once-in-a-century event.

“But some of our industries like tourism and hospitality continue to struggle.”

Hamer praised “heroic” healthcare providers and workers in saving lives. He also decried the violent protest that took place at the nation’s Capitol last Wednesday, resulting in five deaths. 

Almost 900 attend event to hear recommendations from business, lawmakers 

The Â鶹´«Ă˝Ół»­ and the Arizona Manufacturers Council hold the event every year to release their of policy recommendations as well as hear from the governor and legislative leaders about their priorities for the legislative session that kicks off today.Ěý

Almost 900 people attended the virtual event including dozens of local, state and federal elected officials and business and community leaders. Hamer thanked the sponsor of the event, Cox Communications, for providing the internet infrastructure that has proved essential for thousands of job creators and their employees to continue thriving during one of the “most disruptive economic periods in history.”

Gov. Ducey calls on everyone to prevent the spread   

This year’s short-term priorities were quite different from last year when state leaders grappled with topics like how to keep up with mushrooming population growth and the booming economy. 

This year, ensuring Arizona citizens receive Covid-19 vaccines quickly and bringing the economy to full recovery were top goals of all who spoke. 

Governor Doug Ducey made several remarks about his priorities for the session. Arizonans’ health is the number one priority now. Getting Arizona citizens vaccinated is critical, he said. 

“This is a modern medical miracle that I don’t think anyone could have foreseen in March,” Ducey said about the successful race to get a vaccine for the deadly virus. “Not only do we have the vaccines here from Pfizer and Moderna and others on the way, they are in the state and they are going into people’s arms.”

Ducey, whose 97-year-old grandmother just received her vaccine, said elderly citizens and health care and essential workers will be vaccinated first before the general public at large. 

Government will also focus on helping the underserved populations in tribal and rural areas.

Communicating that this vaccine is safe and effective is another priority to “get us back to normal as quickly as possible,” the governor said.   

Catching students up post pandemic 

As vaccines roll out, providing resources to education to bring children back up to speed in academics is another important step for economic recovery, Ducey said. Jobs and the economy will naturally follow, he said, and “no state is better positioned than the state of Arizona” to succeed.

Other priorities mentioned by the governor were to continue to work to strengthen relations with Mexico, secure public safety and commerce at the border, and champion Arizona tourism and exports on the world stage. 

Legislative leadership focused on covid, education, small businesses, jobs 

The event also featured a “fireside chat” with Senate President Karen Fann, Senate Minority Leader-elect Rebecca Rios, Arizona House Speaker Rusty Bowers, and House Minority Leader-elect Reginald Bolding, who spoke about what their priorities will be for the session. 

All stated that helping citizens and businesses recover from the pandemic is a major goal. Pressing issues include helping the unemployed get back to work, preventing families from being evicted from their homes, attracting and retaining business and industry, supporting education, and funding infrastructure like broadband access and highway construction.  

Â鶹´«Ă˝Ół»­ business agenda unveiled 

At the event, the Â鶹´«Ă˝Ół»­ and Manufacturers Council provided digital copies of comprehensive policy recommendations for the year. Hundreds of goals with business in mind include topics around education, free trade, civil justice reform, workforce development, the environment and water resources, transportation, tourism and much more. 

Dawn Grove, chair of the Â鶹´«Ă˝Ół»­â€™s , said that “first and foremost” priority will be recovery from the pandemic and mitigating the impact from Proposition 208. 

The proposition, adopted in November, created a new tax for top earning individuals and couples, but also is expected to affect tens of thousands of small businesses. These are “pass through” entities, meaning they do not file their income taxes as corporations. Instead, they file under the individual tax code. 

Under the new law, Arizona’s top income tax rate has jumped from thirteenth lowest in the nation to the ninth highest, going from 4.5 to 8 percent, a 78 percent increase, affecting individuals who earn $250,000 and joint filers who earn $500,000. Small business owners who file under the individual tax code are subject to the tax as well. 

The new tax rate could not only hurt Arizona’s small businesses — companies with 500 or fewer employees — but it could dampen investment here, Grove said. 

Among measures being proposed to help the small business community and keep the state a desired location for new industry are reductions in commercial property taxes. 

Â鶹´«Ă˝Ół»­ officials will also be pressing state lawmakers to enact laws to protect employers, cities and towns, and organizations from “predatory” Covid-19 lawsuits. 

Reforming state ballot initiative process another high priority

Â鶹´«Ă˝Ół»­ officials also will be calling on the Legislature to continue to work in a bipartisan manner, pass laws to promote educational excellence in schools, and to reform the state’s ballot initiative law that has been overtaken by out-of-staters, Grove said. 

“Arizona’s propositions, as you know, once passed can almost never be changed even when they cause the opposite of their intended results,” Grove said. “We can and we must do better together. Our second priority will be to advance reforms to protect our initiative system from out-of-state agendas and enhance the credibility of the system. 

“While recent reforms have added some rigor to the citizen initiative system, Arizona’s system remains attractive to out-of-state groups to use our ballot box to implement policies not in Arizona’s best interest, in part because they know it’s so easy to pass here and so hard to change.”

To read the full business agenda from the Â鶹´«Ă˝Ół»­ and Manufacturer’s Council, go to:  .Ěý

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Individuals and companies that stand out as shining role models in the manufacturing sector were recognized for their accomplishments at the 2020 Arizona Manufacturing Summit and awards ceremony Friday. The event was hosted by the Arizona Manufacturers Council (AMC) and the Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry.

Seven awards were given to manufacturing champions in innovation, excellence, sustainability, and leadership. Featured speakers also talked about the successes over the past year and challenges ahead including racial inequity from the classroom to the boardroom.

This year’s event was not only about recognizing the billions of dollars in revenues manufacturers brought to the state but their efforts during the pandemic, said Mark Gaspers, AMC chairman.

“We want to celebrate their innovation amidst our current challenges and their contributions to the state,” Gaspers said. 

High-paying manufacturing jobs on the rise

Glenn Hamer, president and CEO of the Arizona Â鶹´«Ă˝Ół»­, said the manufacturing industry has been a major contributor to Arizona’s economic success over the past year. Today, the industry employs about 177,000 workers statewide and pumps about $30 billion annually into the economy. 

“We are at a point of time now, because of the good work of the Arizona Manufacturers Council, Governor Doug Ducey, and our friends at the state Legislature, where we have more manufacturing jobs in Arizona than construction jobs,” Hamer said. 

2020 Award winners 

Seven companies and three individuals received awards this year:  

• Large Manufacturer of the Year: Raytheon Technologies

Raytheon is Southern Arizona’s largest employer, serving customers in the commercial aerospace and defense industries. Founded in 1922, the company has become one of the largest aerospace and defense manufacturers in the world. Over the years, it has won numerous awards for its innovative technology solutions and world-class engineering teams.

• Medium Manufacturer of the Year: Mercury Systems 

Mercury Systems has earned a reputation as the leader in making trusted, secure mission-critical technologies more accessible to the aerospace and defense industries. The company’s innovative solutions power more than 300 critical aerospace and defense programs. Mercury established a $1 million relief fund for employees impacted by the pandemic. 

• Small Manufacturer of the Year: Service Wire Co. 

Service Wire Co. is a second-generation, family-owned wire and cable manufacturer started in  1968. Today, its nationwide network of distributors and advanced distribution capabilities enable them to meet and exceed the often complex needs of industrial, commercial, utility, pump, irrigation, and transit customers throughout North America and the world.

• Legislator of the Year: State Representative Ben Toma

Representative Toma, chair of the House Ways and Means Committee, received the award for his “consistent and firm commitment to wise tax and regulatory policy to spur innovation and job creation.”  In 2020, Rep. Toma led passage of House Bill 2771, which revised and extended tax credits including a tax credit to incentivize businesses to relocate or expand manufacturing facilities in Arizona, including manufacturing related research and development. 

• Advocates of the Year: Michael Denby and Eric Massey of Arizona Public Service

Denby, corporate environmental senior policy advisor for APS, and Massey, APS’ director for Environment and Water Resource Management, worked to advance policies in the water, energy, air quality, natural resources, and environmental spaces that encourage job growth and innovation while ensuring that the business community is part of the solution to promote wise environmental stewardship.

• Excellence in Sustainability: Swire Coca-Cola 

With revenues of $2 billion, Swire Coca-Cola produces, sells and distributes Coca-Cola and other beverages in 13 states across the American West. This year, Swire launched its Sustainable Development 2030 goals to increase recycled content in its packaging, decrease the amount of water it uses, and reduce its carbon emissions by converting to renewable energy. In response to Covid-19, Swire donated over 66,000 liters of water to the Navajo Nation.

• Excellence in Innovation: VB Cosmetics

VB Cosmetics conducts research and development, custom formulation, and private labeling and sale of cosmetics and personal care products including a transformational technology called Dazzle Dry, a quick-dry nail polish system. During COVID-19, the company has manufactured Personal Protective Equipment around the state for the Salvation Army.

• Lifetime Achievement Award: Dawn Grove

Grove was recognized for her tireless work on behalf of manufacturers, Arizona workers and the broader community. She is corporate counsel for Karsten Manufacturing Corporation, the parent company of PING. Grove is chair of the Workforce Arizona Council and serves on the boards of the Arizona Commerce Authority, National Association of Manufacturers and Karsten.

Two leading national figures spoke at the event  

Two national figures also spoke at the event. 

Keynote speaker was Rick Wade, senior vice president of strategic alliances and outreach for the U.S. Â鶹´«Ă˝Ół»­ of Commerce. Wade discussed an intensive nationwide effort to improve racial equity in business and industry from the production floor to the board room. 

Wade called on industry to continue to come together to reduce gaps in equity.

“We have made tremendous progress but we have a lot of work to do with regards to equality and opportunity,” he said. 

Wade, who grew up in rural South Carolina in the 1960s when many schools were still segregated, said he was able to overcome racial barriers. But Black citizens continue to be left behind today, he said. They are more likely to be unemployed, incarcerated and poor. 

Improving diversity and inclusion in business is more than a “moral imperative,” it’s also an economic one, he said. Research shows diversity increases company profits, and that if gaps in racial inequity were eliminated, the nation’s GDP would gain about $8 trillion, Wade said. 

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