Tag Archives: arizona manufacturers council

manufacturing sector expanded

Brewer OKs tax cut law for manufacturers

Arizona Gov. Jan Brewer on Friday signed into law a bill that eliminates sales taxes on electricity and natural gas purchased by manufacturers and mining smelters, a move she said was needed to make the state more attractive to large businesses.

Brewer signed Senate Bill 1413 at a Capitol ceremony attended by a couple of dozen business leaders, calling it “another smart tax reform that will bolster job creation in Arizona and our competitive edge.”

The tax cut is expected to cost the state general fund at least $17 million a year. Brewer also vetoed money in the state budget designed to help counties make up for the losses, saying their loss was small and would set a bad precedent.

“Since becoming governor, my cornerstone priority has been to make Arizona as attractive as possible for new and expanding businesses, particularly for our manufacturing industry, which generates quality jobs and high-wage salaries,” Brewer said. “I want Arizona to be No. 1 and be the pro-business state in the nation and we have worked relentlessly to accomplish that.”

Later in the day, Brewer also signed a law providing a $5 million tax credit many say is aimed directly at Apple Inc. Senate Bill 1484 grants the tax credit to a company that installs at least $300 million in renewable power capacity to supply its own plant.

The governor touted other tax cuts, regulatory reform and business-friendly policies that she has championed since she took office in 2009. Those tax cuts have affected the state’s revenue, but she said they are important to growing the economy.

“When we bring in these new businesses it drives our economy, they bring in construction jobs, they bring in employees, they bring in money into the state,” she said. “So in the end, everybody’s ship rises.”

Brewer called for the elimination of the tax in her State of the State address in January, saying it was needed to make Arizona more competitive and draw new manufacturing to the state.

The bill received bipartisan support in both legislative chambers, although one conservative Republican in the House of Representatives dissented when it came up for a vote earlier this week.

Rep. Brenda Barton, R-Payson, says the bill places a burden on rural counties that rely on that tax base. She and other rural lawmakers managed to get $1.3 million in the budget to make up for the cuts, but Brewer vetoed that money Friday afternoon.

“I am getting to the point that a lot of these special legislation bills that we are promoting are harming the state of Arizona, and they are harming our rural counties and our rural cities, and I don’t believe we are doing a very good job of doing what’s right for the right reasons,” Barton said during debate earlier in the week. She didn’t immediately return calls seeking comment.

Others defended the bill.

“I think anytime we can support small businesses and reduce their taxes and large businesses and reduce their taxes, and allow them to reinvest in their business and reinvest in the communities and reinvest in their employees, I think we need to be looking for opportunities to do this,” Rep. David Livingston, R-Peoria, said.

Steve Macias, chairman of the Arizona Manufacturer’s Council and the operator of a machine shop that will get a small direct benefit from the tax cut, said it could bring in more manufacturing.

“Seventy percent, 80 percent of the business we do is right here in Arizona,” Macias said of his operation. “And almost all of that is to larger manufacturers, the General Dynamics of the world, the guys who make equipment for the solar industry. So when they attract those guys, I get excited because to me those are all potential customers.”

Glenn Hamer, president of the Arizona Chamber of Commerce & Industry, said 38 other states do not tax electricity use by manufacturers and cutting the tax will help the state.

“These are jobs that pay more than the median wage. They’re jobs that every other state competes for, and we’ve done something significant to make Arizona more competitive today,” Hamer said.

The tax credit bill drew the ire of conservative House Republicans, who said say the bill is unfairly tailored to benefit Apple’s planned Mesa sapphire glass manufacturing plant and picked winners and losers among the state’s industries.

Apple said in November it will open the plant and eventually employ 700 workers to provide material for its iPhone 5 cameras and fingerprint reading sensors.

The tax credit could also be claimed by other companies that build similar facilities. Tesla Motors Inc. is currently looking for a battery plant site and often mentioned as a possible candidate.

“We as conservatives have got to step away from this crony capitalist style of development,” Rep. Adam Kwasman, R-Oro Valley, said during debate on the bill Tuesday. “We cannot afford to pick winners and losers in industry. We believe in low taxes for everybody. We believe in simple rules for everybody.”

But the bill sponsor defended it, saying it was a small amount of money to help establish a large manufacturing operation. The Arizona Commerce Authority helped seal the deal with other incentives.

“I believe that they did the right thing to bring Apple here,” Sen. Bob Worsley, R-Mesa, carried the Apple bill, saying he did it because the Arizona Commerce Authority had made a commitment to the company as part of the deal to draw them here. “And the dollars are very small in the whole scheme of things with Apple being in the Valley. They could have gone to Texas, they could have gone other places and we wanted them here. It’s a good decision.”

University of Arizona Customized Executive Education - AZ Business Magazine Jul/Aug 2010

Arizona Manufacturers Council urges skills certification

Not too long ago, Arizona’s five C’s — cattle, cotton, copper, citrus and climate — were the foundations of the state’s economy. Today, the driving engines are a somewhat different set of C’s: choppers, computer chips, cell structure and cruise missiles. Oh, and climate’s still in there.

Gone are the days of Arizona’s insular economy: we are now part of a global economy, one in which the stakes for our future are high; one in which a student graduating from a Greenlee or Maricopa or Mohave County high school competes for a job against not just his classmates, but high school graduates in China and Germany and India, too.

That’s why education has moved front and center in the discussion of economic development goals for the state of Arizona. Businesses already here, as well as those looking to relocate, must know that they have at their disposal a willing and able workforce that is trained and prepared for the jobs and careers of the 21st century. This skilled workforce will also be the catalyst for future innovation and investments in the state’s major industry sectors – science and technology, aerospace and defense, bioscience and healthcare, and renewable energy – leading to even more economic growth and competitiveness, not just for the state, but also for the nation.

Some of these skills require a four-year college degree; others do not, but what they all require is more rigorous training, world-class knowledge and in-depth skills than have been taught in the past. Students need to be critical thinkers, good communicators and problem-solvers who can work collaboratively. They must be able to see the connection between what they’re learning in the classroom and what they’re going to experience in the ‘real world.’ And they must be well-versed in STEM (science, technology, engineering, mathematics) skills.

Along with more than 40 other states, our state Board of Education has adopted the Common Core Standards, grounded in research and evidence, and developed over several years with the input of industry, state superintendents of public instruction and governors nationwide. Now, in 2013, we are well along the way toward implementing in local school districts these consistent, strong benchmarks inspired by the education standards of academically high-performing countries. Assessment of these new, rigorous K-12 standards in English language arts and math will be conducted for the first time during the 2014-15 school year.

Similarly, during the past six years, the Arizona Skill Standards Commission, with the support of the Arizona Department of Education, Arizona State University and the University of Arizona, has developed end-of-program assessments for the state’s high school career and technical education students to ensure that they are workforce-ready when they graduate, regardless of whether they head immediately into the work world or pursue a post-secondary education. These assessments are based on industry-evaluated standards that lead to industry certifications. EVIT (East Valley Institute of Technology) and West-MEC (Western Maricopa Education Center) lead the way locally among the state’s Joint Technical Education Districts (JTEDs). And they must be doing something right: Arizona’s CTE programs annually graduate 90 percent of their students. Statewide, the on-time high school graduation rate is a disappointing 76 percent.

Yet, while CTE is having a tremendous impact on the students and partner industries served, and community colleges systems statewide are doing a terrific job delivering post-secondary, workforce-development programs, how is it possible that the Arizona Commerce Authority reports that 6,452 Arizona employers, big and small, had 52,871 job openings in February of this year and that the state’s unemployment rate in January stood at 8 percent? In the case of manufacturing, the industry I represent, 190 employers had more than 1,045 positions go unfilled. Why?

Manufacturing has its challenges, chief among them a major public perception problem. Just say the word ‘manufacturing,’ and most conjure up pictures of pollution-belching smokestacks of yesteryear’s big-city steel plants. That is hardly today’s reality. Manufacturing has gone high-tech. It’s on the leading edge of innovation and plays a huge role in the U.S. economy, consistently giving back more than is put in. In fact, for every $1 spent in U.S. manufacturing, another $1.48 is added to the economy (Source: National Association of Manufacturers). At the company I work for, employees with GEDs to PhDs use sophisticated process-control software, electronic calibration devices, financial forecasting and product-scheduling programs every day. They use STEM skills as a matter of rote. Yet because of a pervasive, incorrect perception of manufacturing, jobs in our industry and in the many fields that support us go unfilled.

Manufacturing must do a better job of telling its story, not just to students, but also to parents, school counselors and teachers, the people who have the most influence with them. While studies show that the American public believes a strong manufacturing industry is critical to our economic prosperity, standard of living and national security, we steer our children away from careers in manufacturing, in favor of industries we see as more stable, with jobs less likely to be shipped overseas. A 2012 Manufacturing Institute survey found that manufacturing ranked fifth out of seven key U.S. industries that people would consider beginning a career in if they were starting today. Further, just 20 percent of the Americans polled believe their local schools encourage students to pursue careers in manufacturing. This is the case despite the fact that those possessing the advanced skills required to work in today’s highly technical manufacturing facilities earn 19 percent more in wages and benefits than those employed in non-manufacturing fields. In Arizona in 2010, that amounted to more than $76,000/year, according to the National Association of Manufacturers. This is clearly a message we need to get out there.

So why did 1,045 Arizona manufacturing jobs go unfilled in February? Bottom line: There’s a serious skills gap pervading all stages of today’s advanced manufacturing workplaces, from engineering to skilled production. And despite all the good things going on in secondary and post-second education, ‘baby boomers’ are retiring and the skills gap is growing. Employers aren’t finding enough of the skilled people they need right here, right now.

What do we do about that? There’s plenty of work to go around. First, employers have to do a better job of articulating what they’re looking for. They need to invest in their local schools and community workforce development programs. They need to take time out from running their business to get in front of as many people as possible and tell them what they need, or one day they won’t have a business to go back to. “I need employees who can perform this set of skills. I need people who show up to work on time and who take pride in what they do. I need people who are willing to take on challenges and work with others to find solutions. I want people who are interested in careers, not drifting from one entry-level job to the next.”

We need to develop an education-validated, employer-endorsed portfolio of industry skill standards certification, such as the ones developed and piloted by The Manufacturing Institute. Under the auspices of the Arizona Chamber of Commerce and Industry and the Arizona Manufacturers Council (AMC), I have been part of a group that has been working for the past year to develop such a skills gap-closing portfolio. The interest in the Arizona Skill Standards/Education Pathways to Career Skills task force has been great, and the 21 education and business leaders who gather each month bring their best practices and vast knowledge to the table in the effort to provide even more paths to manufacturing skills certification. We expect to present our initial plan at the AMC’s annual Manufacturer of the Year Summit May 31 in Phoenix.

In conjunction with similar efforts in other states, our task force is working to arrive at a set of nationally portable, industry-recognized credentials that validate the skills and competencies needed to be productive and successful in entry-level positions of any manufacturing environment. Our goal is to get to the point that an Arizona manufacturing-trained and certified person can present a skills certificate to an employer anywhere in the U.S., who will a) recognize the endorsement and b) know exactly what that person can do. That employer will know that the investment in hiring this person is a smart one because the applicant will be ready to work from day one.

Is the effort worth it? Absolutely. Manufacturing generates wealth for the nation and supports millions of American families, raising the standard of living for all Americans.

We can’t afford to wait any longer: It’s time to educate and train this nation’s next generation of manufacturing talent.

 

Mark Dobbins is senior vice president for SUMCO Phoenix Corporation. SUMCO Phoenix is the U.S. subsidiary of SUMCO Corporation, an international leader in the production of ultra-pure, defect-free, single-crystal silicon wafers for the global semiconductor industry. SUMCO operates 12 manufacturing facilities located in Asia and the U.S.

sales.tax

Arizona Business Community Supports HB2111

The undersigned organizations and businesses want to express their strong support for the passage of HB2111 with the floor amendment that will be offered by Senator Steve Yarbrough. This final amendment represents major concessions to address concerns that have been expressed by the city representatives.

This final amendment reflects the cities’ request for a separate online portal for the collection of sales taxes in the 18 non-program cities. In addition, the amendment reflects the cities’ demand to maintain the authority to audit single-location businesses in their city. Lastly, the amendment removes all of the changes to prime contracting tax except for the trade and service contractors.

While the Yarbrough amendment reflects major concessions to the cities that undermine some of the important reforms recommended by the Transaction Privilege (Sales) Tax Simplification Task Force, we believe this final proposal still reflects historic progress that deserves final passage.

The Senator Yarbrough floor amendment will provide for the following:

* Single Point of Administration – the Department of Revenue (DOR) will become the single point of administration and collection of TPT. However, at the request of the cities, there will be a separate online portal for the 18 non-program cities. Despite this concession, the cities remain opposed because they want to continue to require businesses making paper sales tax remissions to pay the state and city separately. Their proposal provides most small businesses no administrative relief from making multiple payments to multiple jurisdictions each month.

* Single and Uniform Audit – DOR will administer a standardized state audit program where all state and city auditors are trained and certified by DOR. Despite major concessions from the business community to allow cities to continue to audit local businesses, the cities continue to push for further changes that will undermine much needed reforms to standardize state and local audits.

* Trade/Service Contracting Reform – Service contractors working directly for an owner to maintain, repair, and replace existing property would pay tax on materials at retail and not be subject to the Prime Contracting Tax. During Task Force deliberations, the cities repeatedly conceded that this area of the prime contracting tax was problematic and should be changed. However, after almost a year of study and discussion, they have offered a change to the taxation of service contractors that provides no administrative relief and couples that change with a request that the state give the cities $80 million from use tax collections.

Arizona’s chaotic and dysfunctional sales tax system has been the subject of considerable controversy at the Capitol for over 30 years. The creation of the Task Force, as well as the appearance for the first time that the cities recognized the need for reform, gave Arizona businesses great hope that this system would finally be reformed. We strongly encourage state policymakers to pass a sales tax reform bill that is grounded in sound tax policy and focuses on reducing the extraordinary compliance costs on Arizona businesses.

Kevin McCarthy, President, Arizona Tax Research Association
Michelle Lind, Chief Executive Officer, Arizona Association of REALTORS
Bas Aja, Executive Vice President, Arizona Cattlemen’s Association
Glenn Hamer, President & CEO, Arizona Chamber of Commerce
Steve Macias, Chairman, Arizona Manufacturer’s Council
Francis McAllister, Chairman, Arizona Mining Association
Courtney LeVinus, Arizona Multihousing Association
Michelle Allen Ahlmer, Executive Director, Arizona Retailers Association
Steve Chucri, President/CEO, Arizona Restaurant Association
Rick Murray, Chief Executive Officer, Arizona Small Business Association
Steve Zylstra, President & CEO, Arizona Technology Council
Greg Turner, Vice President, Senior Tax Council, Council On State Taxation (COST)
Lisa Rigler, President, Small Business Alliance AZ
Todd Sanders, President & CEO, Greater Phoenix Chamber of Commerce
Tom Franz, President, Greater Phoenix Leadership
Connie Wilhelm, President, Home Builders Association of Central Arizona
Tim Lawless, Chapter President, NAIOP
Farrell Quinlan, Arizona State Director, NFIB
Ronald E. Shoopman, President, Southern Arizona Leadership Council
Scot Mussi, President, The Arizona Free Enterprise Club
Matt Beckler, Vice President, Treasurer & Chief Tax Officer, Apollo Group, Inc.
Steve Barela, State & Local Tax Manager, Arizona Public Service
Steve Trussell, Executive Director, Arizona Rock Products Association
Michael DiMaria, Director of Legislative Affairs, CenturyLink, Inc.
Gayle Shanks, Owner, Changing Hands Bookstore
Michelle Bolton, Director of Public Affairs, Cox Communications
Nikki Daly, Owner, Flair! Salons
David Karsten, President, Karsten’s Ace Hardware
Reuben Minkus, Minkus Advertising Specialties
PetSmart, Inc.
Tina Danloe, General Manager, Pima Ace Hardware
Molly Greene, Senior Government Relations Representative, Salt River Project
Les Orchekowsky, President & Co-Owner, Sierra Ace Hardware, Inc.
Ann Seiden, Administrator/Corporate Public Affairs, Southwest Gas Corporation
Joseph Hughes, Director of Government Affairs, U.S. Airways
Walgreens Co.

Glenn Hamer is president and CEO of the Arizona Chamber of Commerce and Industry. The Arizona Chamber of Commerce and Industry is committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth and prosperity for all Arizonans.

manufacturing

Regulations knock out production

Picture the slow motion shots of Rocky Balboa getting pummeled by Apollo Creed in the first of that eponymous series of boxing movies and you get the sense of what the economy — manufacturing and otherwise — is up against with regard to federal regulations.

In the course of one day last week, I interacted with people from three completely disparate industries, and the first item on the table of each casual discussion was what the new cost and time commitments would be to meet new federal government regulations.

First up was a customer meeting with a company that supports the oil and gas industry to discuss new traceability requirements put into place since the Gulf oil spill. While we can all agree the BP spill was a horrendous accident, the pendulum appears to have swung way too far the other way as the paperwork requirements for simple machined parts mean we now have to generate a half inch stack of documents that will add 20-25 percent to the cost of the part, which of course the customer does not want to pay, but is required by the government to have.

The second item of the day was a lunch meeting with a health care executive for a charitable event. We quickly became engrossed in the unseen paperwork costs associated with the Affordable Care Act. Their belief is that the added time, money, processes and people added to the system in order to comply with the regulations of the ACA will cause health care rates to jump significantly over the next 3-5 years as it is implemented, based purely on paperwork and systems – not healthcare – needs.

The last event of the day was attending an aerospace and defense supply management conference and dinner. In addition to the obvious talk of defense budgets and sequestration, the supply chain issue of the day was figuring out what to do about the new SEC rule requiring disclosure on the use of conflict minerals. As part of Dodd-Frank, this rule lays out a whole series of regulations on what to do and what must be filed if you used, did not use, knew, did not know, bought, contracted, processed, thought of, or looked at pictures of conflict minerals. Depending on your answer, independent audits may be required. So we’re now faced with not only the prospect of defense budgets being cut, potentially significantly, but now aerospace and defense companies are being asked to add another layer of non-value added work to the process.

Taken individually, each and every one of these mandates or regulations is certainly well meaning and in some cases needed. But when viewed from a cruising altitude, the totality of the regulations to the economy as a whole is stifling, which is especially troubling since we seem to always be a couple of tenths of a percentage point from teetering back into a recession.

As the new House and Senate is seated in DC, they must take stock of not only what effect each rule and regulation has on their particular hot point or constituency, but what it does to the economy as a whole and then truly question if yet another regulation is needed. Hopefully the ending to this movie is more like Rocky II. (Spoiler…Rocky wins.)

Steve Macias is the president of Pivot Manufacturing and the chairman of the Arizona Manufacturers Council. The Arizona Manufacturers Council within the Arizona Chamber of Commerce and Industry is the state affiliate of the National Association of Manufacturers (NAM). For more on manufacturing and NAM, visit http://www.nam.org/.

manufacturing - Arizona Business Magazine May/June 2012

Computer & Aerospace Manufacturing – Arizona Builds Its Financial Future

Computer and aerospace manufacturing plays a significant role in Arizona’s financial future.

The economic storm that has wreaked havoc for most businesses was barely a breeze for Michael McPhie.

“We were really not affected negatively,” says the CEO of Curis Resources, a mineral exploration and development company in Florence. “The economic downturn really did not affect the demand for some commodities, so copper mining continues to be a significant economic engine for the state.”

With 10 percent of the world’s copper supply coming from Arizona, a combination of continued high demand from China and innovative and cost-effective methods of extraction allowed the copper industry — one of Arizona’s oldest professions — to weather the economic storm with little damage.

While Arizona’s Top 10 manufacturing companies added about 3,200 jobs in 2011, some of the state’s other manufacturing companies were not so lucky.

“It certainly wasn’t easy, especially for our smaller manufacturers, who make up 79 percent of Arizona’s manufacturing sector and employ four or fewer people,” says Mark Dobbins, senior vice president and secretary for SUMCO Phoenix Corporation, which manufactures silicon wafers for the semiconductor industry. “Although companies of all sizes were affected by the recession, they were probably hit the hardest.”

While the state’s manufacturing sector is holding steady, the uncertainty coming out of Washington and in the financial markets has not helped its economic recovery, according to Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry.

“The federal health care law, EPA regulations and a National Labor Relations Board that has taken positions hostile to manufacturing has likely done more to slow recovery than spur it on,” Hamer says. “The governor and the Legislature, however, have responded decisively, passing in 2011 a once-in-a-generation economic competitiveness package that makes Arizona more attractive than ever to manufacturers.”

The Arizona Competitiveness Package includes a mix of tax reforms and business incentives designed to encourage expansion among existing Arizona companies, while establishing Arizona as an attractive location for businesses worldwide.

“Arizona manufacturers have underperformed in the export arena as compared to other states in the last several years,” Hamer says. “Economic competitiveness legislation passed by the Legislature and signed by the governor last year goes far in attracting manufacturers, especially those who sell beyond Arizona borders.”

While the landmark 2011 legislation was a shot in the arm for manufacturing and business, the Arizona Manufacturers Council — which serves the state in conjunction with the Arizona Chamber of Commerce and Industry — has identified several legislative issues that are important to manufacturing in 2012, Hamer says. The Arizona Manufacturers Council is striving to:

  1. Streamline regulations and the issuance of permits.
  2. Eliminate barriers to economic development created by inadequate infrastructure for capital intensive manufacturing operations.
  3. Promote a friendlier legal environment through tort reform.
  4. Support policies that will strengthen the solvency of Arizona’s unemployment insurance system.

“We need a clearly defined economic goal and strong collaborative leadership for the next five, 10, 15 and 20 years for the state,” says Dobbins, who is also immediate past chairman of the Arizona Manufacturers Council. “We need a clear education pathway to support Arizonans’ having the job skills to meet the challenges of that goal. We have the infrastructure to become a major player in all of our primary industry sectors. Now we have to create the political will to set the state’s objective to become the international commercial and business hub of the Southwest.”

To get there, Dobbins says, “We need to rid ourselves of outdated policies that discourage businesses from relocating here and be aggressive at pursuing growth. We must invest in education and fund our schools and universities properly so they produce graduates who are vocationally skilled and/or STEM-skilled and job-ready.”

Even in the copper mining industry is transitioning into a knowledge-based workforce, McPhie says.

“We are working with local colleges so we can attract and educate the best and the brightest engineers, hydrologists and geologists,” McPhie says. “There are tremendous opportunities to make significant wages in the copper mining industry, particularly because there will be a significant numbers of retirees due to our industry’s aging workforce.”

It’s not just the mining industry that is looking for a new generation of workers. “We’ve also seen manufacturing (hiring) pick up substantially in the last month,” says Andy Ernst, regional vice president for Robert Half International, a staffing services firm.

While Dobbins says the computer and electronic product manufacturing is generally considered among the state’s strongest manufacturing areas, the production of transportation equipment — which includes the aerospace and defense industries — could be the most captivating, yet challenging, sector to watch in the next several years.

Boeing Phantom Eye

Photo courtesy Boeing

“The advent of Unmanned Aircraft Systems (UAS) in the defense sphere is extremely exciting for Arizona manufacturing,” Hamer says. “The AMC is working with the Arizona Aerospace and Defense Commission and other stakeholders to secure Arizona’s position as a leading location for research and development, manufacturing, and testing of UAS, and we are supporting Arizona’s proposal to be designated by the Federal Aviation Administration as a national UAS testing area.”

Arizona’s largest aerospace and defense companies are investing in the future of UAS, which the military uses to track enemy movements, bomb targets and move supplies without putting soldiers in harm’s way. Boeing moved its unmanned division to Mesa, where it can manufacture the A160T Hummingbird, the company’s flagship unmanned aircraft, once every 12 days. Raytheon in Tucson is working on several UAS innovations, including an operating system that would make it easier to install various brands of sensors and communicate among multiple unmanned aircraft.

But aerospace and defense isn’t the only area expected to create new jobs.

“In addition to the potential growth of Unmanned Aircraft Systems in Arizona, Intel’s $5 billion investment in a new factory in Chandler will require 1,000 workers and is creating 14,000 jobs in the construction sector in anticipation of the facility’s completion in 2013,” Hamer says. “The investment has a tremendous downstream effect on other companies.”
Renewable energy is another potential hotbed for growth.

“If it is able to overcome certain global market challenges, certainly the solar industry has big growth potential for the future of our state,” Dobbins says. “Also, as long as we, as a society, continue to be in love with personal electronics — computers, laptops, cell phones — and our cars, manufacturing in Arizona will continue to grow.”

To help that growth, the Arizona Chamber of Commerce and Industry is focused on two initiatives:

  1. Southwest<>Direct, which aims to make Arizona the international commercial and business hub of the Southwestern U.S.
  2. A collaboration between the education community and business to secure highly trained, vocational skills-certified and STEM-certified employees for today and tomorrow’s increasingly technical workplace.

“The Chamber and the AMC are (also) working together to promote a tax environment that attracts manufacturing, including reforms to the state’s treatment of income derived from capital gains, and lengthening the time businesses can carry losses forward against future profits as way of encouraging more startups and businesses that require large capital investments,” Hamer says.

Despite the increase in job creation and slight decrease in economic despair, the state’s manufacturing sector still faces some challenges.

“With looming federal budget cuts, Arizona’s defense and aerospace manufacturers stand to face some big changes,” Hamer says. “It is incumbent upon our leaders to continue to position our state as a leader in this field by aggressively pursuing Unmanned Aerial Systems flight testing, research and manufacturing in Arizona.”

Hamer says that it will be imperative for lawmakers and business leaders to have a unified vision for the future of manufacturing in Arizona.

“Arizona needs to be mindful of the growing creep of regulations and red tape that stifles business’ ability to focus on innovation and investment,” Hamer says. “Gov. Jan Brewer recognized this when her first act as governor was to institute a regulatory moratorium; the Legislature soon followed the governor’s action with a sweeping regulatory reform package of its own. Increased transparency in the regulatory sphere at all levels of government will help attract (new) manufacturing to Arizona.”

ARIZONA AEROSPACE

Here are four of the major players in Arizona’s defense and aerospace industry:

Boeing: The company’s 4,878-employee Defense, Space & Security facility in Mesa is best known for producing the AH-64 Apache attack helicopter for the U.S. Army. Additional work at the Mesa facility includes production of electrical subassemblies for the F/A-18, F-15, and C-17 aircraft.

General Dynamics: With more than 5,400 employees at its Scottsdale headquarters, General Dynamics C4 Systems specializes in command and control, communications networking, computing and information assurance for defense, government and select commercial customers in the U.S. and abroad.

Honeywell International: With more than 10,000 employees at 21 Arizona facilities, Honeywell International contracts with the Department of Defense through both their Aerospace and their Automation and Control Solutions business units. In particular, Honeywell Aerospace is headquartered in Phoenix, with major facilities in Tempe, Glendale, and Tucson.

Raytheon Missile Systems: Headquartered in Tucson with 12,000 Arizona employees, Raytheon Missile Systems designs, develops, and produces weapon systems for the U.S. military and the armed forces of more than 50 countries.

Arizona Business Magazine May/June 2012