IT’S SINK OR SWIM FOR NEW JERSEY MANUFACTURERS
State-of-the-State of Manufacturing Summit Hosted Industry Leaders, Partners, and Legislators Committed to Working on Real Lasting Change for the Industry
MANUFACTURING NEEDS MORE COLLABORATION
In some ways the 8th Annual NJMEP State-of-the-State of Manufacturing Summit represents the end of an era, bringing with it the hopeful promise of a new tomorrow. For Peter Connolly, current COO of NJMEP and next in line as CEO, in his opening remarks he told a packed audience, “We need to collaborate more, we need a more resilient supply-chain, and we need to connect with our New Jersey Veterans,” referencing NJMEP’s latest initiative, the New Jersey Defense Manufacturing Consortium (NJDMCC)—a program geared toward bringing manufacturers together with New Jersey veterans to help solve the workforce shortage while also strengthening the DOD supply chain. With over 11,000 manufacturers in New Jersey, most of which are small to medium sized businesses with less than 50 employees, Connolly goes on to say, “Today’s summit was developed to give manufacturers a voice to discuss their issues with the state legislature.” An open discourse between manufacturers and legislators which wouldn’t exist without the forum provided by State-of-the-State.
For Dr. John Harmon, President and CEO of the African American Chamber of Commerce of New Jersey (AACCNJ) and a guest speaker, he says, “It’s important that we . . . allow this to be an opportunity to forge new relationships, to make a transformational impact on our state.” Dr. Harmon continued, “Let us raise our voices and focus our efforts on providing solutions [and] let’s engage our legislators and get them to understand that manufacturing should be one of the priorities of this state.”
A sentiment echoed by Michael Womack, architect of State-of-the-State and Senior Marketing and Communications Manager for NJMEP, who said, “This [event] is about having a constructive conversation and moving the industry forward.”
Manufacturers and industry partners also heard a brief message from Congressman Andy Kim, who was not able to attend but still wanted to take the opportunity and share his thoughts on the state of manufacturing in New Jersey. He pointed to the CHIPs and Science Act as one of the ‘big steps’ toward bringing manufacturing back to the United States—a bill that will infuse $280 billion into high-tech manufacturing and scientific research, including over $50 billion towards research and manufacturing of semiconductor chips in the US. Something Congressman Kim says, “This is good for our economy, this is good for our community, and good for growing jobs here in America.”
Congresswoman Mikie Sherrill, a retired US Navy Pilot who sits on the House Armed Services Committee and the new House Select Committee on Strategic Competition between the United States and the Chinese Communist Party, speaks further about the future of industry in America.
“It’s well known that the last century was the American Century—that US ingenuity, competitiveness, and innovation determined the destinies of billions of people across the world. Years ago, there was a feeling of almost inevitability that this century was going to be the Chinese century. That’s what the Chinese and others wanted us to believe, that democracies somehow weren’t nimble enough for the new economy—that we couldn’t compete. But that has proven to be entirely incorrect. American innovation is once again leading the world.”Congresswoman Mikie Sherrill, 11th District
Congresswoman Sherrill goes on to cite the 385,000 manufacturing jobs created in 2021 and the 396,000 jobs created in 2022—the largest manufacturing job gains since 1994; the Inflation Reduction Act, which incentivizes auto manufacturers to produce their vehicles in the US; the $210 billion investment in semiconductor manufacturing coming from the CHIPs and Science Act; the $150 billion in clean energy generation and manufacturing that will be made possible through the offshore wind project in New Jersey; the $88 billion in Electric Vehicle and battery production; an increase of 34% in manufacturing construction spending in 2022; supply chains becoming more resilient and secure, addressing national security concerns, and improving competitiveness with China, while also helping to keep costs down for consumers—all things which point to a bright future for domestic manufacturing.
TOWN HALL 1: CORPORATE BUSINESS TAX, WORKFORCE DEVELOPMENT, PUBLIC TRANSIT, SUPPLY CHAIN, INCENTIVES, CHILDCARE ASSISTANCE, OVER-REGULATION, AND DE-STIGMATIZATION
Eric Scott, award winning journalist and Event Moderator opened the first Town Hall by saying:
“[It’s] good to see the legislators and representatives of the manufacturing industry taking some time to really talk and see that there is a lot more common ground than issues that may divide us.”Eric Scott, Vice President Town Square Media
He then welcomed the Industry and Legislative Panelists and turned the microphone over to them for opening remarks.
The panel of legislators included Assembly Speaker Craig Coughlin, Deputy Majority Leader Chris Tully, Assemblywoman Beth Sawyer, and Assemblywoman Victoria Flynn. Speaker Coughlin began by thanking NJMEP for the opportunity to participate in the State-of-the-State saying, “It offers us [the legislators] the opportunity to hear what matters and how we can continue to work together to move New Jersey forward . . . by coming together and having an open and honest discussion about issues you get to really understand what’s important and how we move forward.”
As for the Industry Panelists for the first Town Hall, Michell Megala, CEO of Hickory Industries Inc., Elene Costan, CHRO of Berje Inc., Pankaj Das, President of Das’ Creamery, Michele Siekerka, President/CEO of NJBIA, and Tony Russo, President of the CIANJ were there to pose questions to the legislators. Michelle Megala of Hickory Industries kicked things off with the first question: “What is being done to encourage manufacturers to stay in New Jersey?”
Assembly Speaker Craig Coughlin mentioned the $14.5 billion tax incentive and financing program passed in 2020, which created the Manufacturing Voucher Program (MVP)—a $20 million dollar pilot program that provides vouchers to cover 50% of the cost of new equipment for manufacturers. The MVP program also recently underwent a vote in March which approved an increase in funding to $33.75 million, which will allow more manufacturers to upgrade their equipment with the help of subsidies.
Scott made a quick segue into the Garden State’s notoriously high corporate business taxes (CBT), to which Michele Siekerka reminded attendees and legislators that New Jersey continues to rank number one on the wrong side of the equation.
“We do want to thank all our legislative leaders and the governor thus far for their commitment to see the sunset of the corporate business tax at the end of this year,” Siekerka said. “This is a significant situation, and we must ensure that the sunset happens—since New Jersey currently has the highest corporate business tax in the nation at 11.5%.”Michele Siekerka, President/CEO NJBIA
When the 2.5% surcharge does expire, New Jersey’s CBT will land at 9%, which still ranks fourth highest in the nation and nearly double the national average (5%)—with Pennsylvania planning to drive their CBT down to 5% in the coming years, this could mean a mass exodus of industry from the Garden State. “What we need for our competitiveness and affordability is to be ‘in the pack,’” Siekerka continues, “So the sunset should be step one.” She also went on to address the Unemployment Insurance Trust, stating that 37 other states used their Covid Relief money to replenish the Unemployment Insurance Trust and alleviate the burden from employers. She addressed the $10 billion surplus of Covid relief money the current administration has and—to thunderous applause from the audience—asked that that surplus be used to give employers some relief and not hit them with another cost in July.
Once the clamor died down, Eric Scott asked Speaker Coughlin what the thought process was in putting together those incentive programs versus a blanket reduction of the CBT.
“There’s a price tag to reducing taxes,” Coughlin replied, “and so we’ve tried to figure out other ways to stimulate growth and provide opportunities.” The Assemblyman was referencing back to the $14.5 billion in incentives and said that they were a real effort to attract businesses and keep them in New Jersey. He also went on to mention the $19 billion investment in keeping New Jersey’s public schools the top ranked system in the nation, an effort to help build a more highly skilled and qualified workforce. “It’s about trying to strike a balance,” Coughlin added.
One of the key roadblocks in New Jersey with the incentive programs is the amount of red tape involved in navigating those programs—something Assemblywoman Victoria Flynn says negatively impacts how businesses can grow in New Jersey. For her district, breweries seem to be most affected by overregulation, often seeking greener (and more manufacturing-friendly) pastures out-of-state. Sentiments that are later echoed by Assemblywoman Beth Sawyer and Tony Russo, President of the CIANJ who, when speaking about the 17 programs that were put forth in the Economic Recovery Act, says clients within and outside of manufacturing say the view is not worth the climb.
Elene Costan, CHRO of Berje Inc., brings the conversation back to center saying, “Thank you all for what you have done. I think this conversation and these questions are more about next steps to make sure companies remain and are still attracted to New Jersey.” She cites disjointed public transit and childcare issues as some of the key components negatively impacting Berje’s workforce, saying that high school students are not able to participate in apprenticeship programs due to no access to public transportation and also that employers are again running into too much red tape when trying to offer employer-assisted childcare programs—something Assemblywoman Beth Sawyer speaks to saying, “We are overregulating as legislators. And that’s something where I’d say less government is always better. As a small business owner and a single mom, I can relate to both.” An area where more discourse is certainly needed.
Following up on vocational schools and apprenticeship programs, Moderator Eric Scott said that there needed to be more information coming from Educational Institutions and Counselors when talking with students about future plans and career paths, something Elene Costan said needed to be incentivized on the part of the educational institutions to get them to reach out to manufacturers instead of the other way around—as many small businesses and manufacturers don’t have the same resources as Berje does, to send Human Resource staff on outreach to local schools to attract young people to the industry.
For Assemblyman Chris Tully, who is a second generation American, the message about the intersection between vocational and traditional post-secondary education is personal: “I was the first one in my family to go to college, I was a child of immigrants . . . and I think it’s just been a generational shift now that we’re naturally seeing—college is, quite frankly, unaffordable for a lot of our residents, and they’re now naturally looking at apprenticeships and other ways.” He continues, “We’re [the assembly] trying to find that clear pipeline from young people to the workforce.” Tully says the assembly is currently working to expand the highly successful County College Pathway program, which educates students and reduces training costs for employers, while greatly improving student job placements. He also cites the current budget (unapproved at the time of the event) which is providing $27.5 million to support pre-apprenticeships, apprenticeships, and on the job training—something he says is being done to address workforce shortages in the long-term.
In closing the first Town Hall, Eric Scott asked the audience how many of their businesses would benefit from leaving New Jersey—to which roughly a quarter of the audience responded by clapping. It’s something he says underscores the importance of the type of discussions and discourse events like State-of-the-State provides. Scott closes by touting the importance of reaching out to your local representative and bringing awareness to issues specific to your industry, he says, “What we’ve discovered by doing these panels is that you’re not the only one having the problem that you’re having—there are others in the manufacturing industry in New Jersey that are having it as well.”
As for the legislators, Assemblywoman Beth Sawyer closed their remarks with thunderous applause from the audience saying, “We need you to stay here. We believe in you—now, I know we have to convince you to believe in us,” she continues, “We have to invest in our children, because they are our future. With the $10 billion surplus we do have the ability to do this . . . come up to us, talk to us, tell us your concerns, give us your ideas because, again, we are your voice.”
TOWN HALL 2: LIQUOR LICENSING, TRANSIT INFRASTRUCTURE, THE ROAD TO ‘NOWHERE’, WORKFORCE SHORTAGES, AND GETTING PAST THE TALKING STAGE
Before the second Town Hall kicked off, Nick Toth, Deputy Assistant Commissioner of Workforce Development and Director for the NJ Office of Apprenticeship shared updates from a listening session held between the NJDOL, NJMEP, and the industry. Be sure to check the NJMEP blog for an in-depth recap on Toth’s speech.
State-of-the-State’s second Town Hall began with introductions from Briana Vannozzi, anchor for NJ Spotlight News and event moderator—with the Industry Panel consisting of William Scull, Logistics Manager of South Jersey Glass & Door, Alison Brita, CEO Mamma Bella LLC, Ellen Pietrowitz-Phillips, President of LEM Plastics, Christina Renna, President/CEO of the Chamber of Commerce Southern New Jersey, and Luis O. De La Hoz, Chairman of the Statewide Hispanic Chamber of Commerce of New Jersey. On the side of the Legislative Panel, Assemblywoman Verlina Reynolds-Jackson, Assemblywoman Marilyn Piperno, Assemblyman Antwan McClellan, and Senator Kristin Corrado were participating.
“We know that the pandemic ushered in a number of new problems for our manufacturers and the business industry as a whole, but certainly these are not necessarily new,” began Vannozzi, “A lot of these have been building over the years . . . but now we’re really confronted with them.”Briana Vannozzi, NJ Spotlight News
Alison Brita of Mamma Bella began the dialogue by asking how the playing field in the liquor industry can be leveled between license holder permissions—meaning, how can the licensing process be made more fair across all sectors of the alcohol industry—to which, both McLellan and Reynolds-Jackson responded by saying that their offices are reviewing and addressing antiquated liquor laws and trying to reduce overregulation in the industry.
“There is this unfairness built into the process for everyone,” responded Senator Kristen Corrado, “And it’s a conversation that’s ongoing.” The Senator mentioned how the discussion centered around compensating those businesses that had purchased liquor licenses, how to make more licenses available, and how to include breweries and distilleries in the equation. In response, Alison Brita clarified that including those businesses is important and would help bolster the economy, but it’s still not looking at the whole picture, as it doesn’t consider legislation for blenders and rectifiers, like Mamma Bella—which produces award-winning cello and liqueurs.
For Bill Scull, Logistics Manager for South Jersey Glass & Door, he asked the Legislative Panel what plans were in-the-works to expand South Jersey’s transit infrastructure to help facilitate larger-scale manufacturing and supply chain development. Reynolds-Jackson and McLellan both responded in kind by saying that legislators recognize the issues with South Jersey and its inaccessibility, and say that there are conversations happening regarding improvements to transit in South Jersey—particularly in reference to a route 55 expansion. “We do know that Cape May, Atlantic City, and Vineland received $20.4 million dollars in federal funds for traffic improvements,” says Reynolds-Jackson, “but that isn’t enough to say we have the money.”
“I like that you’re saying we’re getting out of the talking phase and getting into the doing phase,” says Scull, “but the research I did on this—since [Route] 55’s inception in 1975, it’s been planned to have a railroad. It’s almost a fifty-year conversation—it blows my mind what South Jersey could’ve been with a fifty-year head start.”Bill Scull, South Jersey Glass & Door
Had the South been given the type of infrastructure it needed decades ago, with access to Philadelphia, Camden, and New York City, Scull believes it could’ve been as successful as certain counties like Bergen and could’ve been a large manufacturing hub. Briana Vannozzi echoes similar sentiments to Scull, saying that the transportation desert that the legislators and panelists are referring to, and the conversation of funding transit expansion in the area, is something that she covered as a journalist nearly two decades ago.
“Would you support a dedicated source of funding [to expand transit access to South Jersey]?” asked Vannozzi of the legislative panel.
Assemblywoman Reynolds-Jackson said: “I would support it, if it doesn’t take away from my housing trust fund—if it doesn’t take away from other projects,” she continues, “We want to support it in its own dedication but not taking away from programs that are needed desperately as well.”
Assemblywoman Piperno, who sits on the Special Committee on Infrastructure and Renewable Energy, also supports the idea of creating a dedicated fund to expand transportation in South Jersey saying, “Having dedicated funds to an area can only help keep us a little more focused,” she says, “We don’t want to keep stealing from Peter to pay Paul, which tends to happen way too much out of the state house.”
Following up, Ellen Pietrowicz-Phillips asks the legislators, “When making these decisions regarding manufacturing in New Jersey, what is the biggest—or who is the biggest obstacle that’s in your way, and how do industry and government start to work together so we can get past these obstacles?”
For Senator Corrado, she says the biggest obstacle is not having all the information they need to make informed decisions on legislation—that they get hundreds of bills a year thrown at them and very often they don’t have all the facts. She says, “Good-intentioned bills have unintended consequences that can really hurt businesses.” An open dialogue with businesses is really the most critically important component to drafting effective legislation.
At this point, Ms. Vannozzi turned the microphone over to Christina Renna of the CCSNJ who said, “I think the overarching theme is the need for less regulation, and more input into the legislative process.” She says this can be done to avoid the need for ‘clean-up bills’ in the future—essentially, getting legislation right the first time. Renna also says it would be beneficial to bring back the ‘red tape committee’—an entity that was created during the Christie Administration, whose sole purpose was to review legislation and see where it can be modified or changed to simplify it.
With the second Town Hall discussion nearing its end, Briana Vannozzi turned the microphone over to the industry panelists once more and asked them specifically where their business faced the most hurdles. Again, the industry panelists echoed much of the same that was previously discussed—workforce development, labor costs and shortages, liquor licensing, public transit access for employees, corporate business taxes, and the ever-looming presence of red tape. Referencing these points, Ellen Pietrowicz-Phillips of LEM Plastics flipped the question back on the industry panelists and said:
“As we bring our problems, as we bring our questions, let’s start bringing solutions and then this way we can get past the talking stage and start working on problem solving.”Ellen Pietrowicz-Phillips, President LEM Plastics
The audience appeared to support this sentiment and responded in kind with uproarious applause.
HONEST ANSWERS: HELP US HELP YOU
Following the second Town Hall panel, attendees in the Patriot’s Theater heard remarks from Senator Michael Testa, Co-Chair of the Manufacturing Caucus, who skipped out on budget hearings across the street to show support for the manufacturing sector in New Jersey. For him, he resounds that more collaboration is needed and that events like State-of-the-State give him hope for the future of industry in New Jersey.
“One thing that we all agree on is that we have to make New Jersey a more business-friendly state, and we have to be able to cut through the red tape,” says Testa, “I’m committed to manufacturing. I’m committed to working with NJMEP, and I’m committing to making the economy and the landscape better for business in New Jersey.” continued Testa.Senator Michael Testa, Co-chair of the New Jersey Legislative Manufacturing Caucus
Following Senator Testa’s remarks, attendees welcomed Torsten Schimanski, NJMEP Chief Strategy Officer and leader of the New Jersey Domestic Manufacturing Community Consortium (NJDMCC)—an initiative that Congresswoman Mikie Sherrill has shown particular support for, owing to her background as a Veteran Navy Pilot. Torsten explained that the program has already attracted the attention of the Joint Base McGuire, Ft. Dix and Lakehurst, and has been attracting a lot of attention and support from manufacturing partners in the DOD sector, but he explained we need to shift even more focus toward supporting our nation’s veterans and their families—a cause any proud domestic manufacturer can certainly get behind. He invited attendees to speak with NJMEP’s team, their account managers, and other participants in the program to learn how they can get involved and support this vital cause.
Closing out the event, Michele Siekerka of the NJBIA offered some closing remarks and invited John W. Kennedy to join her on-stage for what would be his last State-of-the-State as functioning CEO of NJMEP. The key issue, which seemed to thread itself through the fabric of State-of-the-State’s discussions, was that of the skills gap and overall workforce development issues. Manufacturers just can’t seem to attract the young workers they need to rebuild the talent pipeline and continue growing their business in New Jersey—an issue that isn’t just affecting New Jersey businesses but domestic manufacturers across the nation as well.
“I am optimistic about the future of the industry,” begins Kennedy, “Because everything we see, touch, and use each day is manufactured by someone.”
When it comes to tackling the industry’s most critical issue—the skills gap—Kennedy reflects the same feelings Ellen Pietrowicz-Phillips remarked upon in the Town Hall panel and says that while state support and resources can help, manufacturers need to take it upon themselves to work toward solutions.
“What companies have to do is understand that there is no ‘people pipeline,’ and that we all need to work together to refill it,” he said. “Companies are not going to be able to locate that individual with 5 to 10 years’ experience and all the applicable skills, because they’re already working. They have to be willing to hire the entry-level person and use the resources available to train them.”
Kennedy said earlier in the day during his opening remarks that manufacturers will need to invest in apprenticeships and other on-the-job training if they want to begin tackling the workforce development issue, which he says is the industry’s biggest problem—one that will only worsen with new initiatives like the CHIPS and Science Act and Offshore wind. It might not be the answer manufacturers wanted to hear, but, in typical John Kennedy fashion, it was an honest one.
“We’ve really worked hard,” says Kennedy, “The NJBIA, NJMEP, the Community College Consortia, the DOL—and we have developed some programs that worked—we have the Pathways model. It exists. It is not perfect, but we need companies to engage.” For manufacturing in New Jersey, it’s a matter of survival at this point—it’s sink or swim, fight or flight. He continues, “We have to engage. Help us do that. We’ve done a lot of work, there’s a lot of solutions. Is it perfect?” asks Kennedy, “Nope, but we need you to reach out to us and talk about workforce opportunities and discuss how we can get people in the door.”John W. Kennedy, CEO NJMEP
Progress can’t stop at the doors of the Trenton War Memorial either. NJMEP is ready to help manufacturers take the next step and continue moving the industry forward, but it can’t be done alone. Contact NJMEP and find out what we can do to help facilitate real and lasting change for your manufacturing business. Don’t wait, it’s time for action. Stop treading water—it’s time to swim.