Bill Virgin: How much does manufacturing really mean to you in this state?

Donald Trump tumbled, careened and pratfalled into the White House in part because, when not tossing insults at everyone including leaders of his own political party, he raised some questions that Americans have been worrying about for decades.

Do we make anything anymore in this country? Does it matter if we do?

The answers to those first two questions are yes and heck yes. The answers to the follow-up questions — such as, what can we do to keep what we’ve got in manufacturing and maybe reclaim some of what we’ve lost — require much more complex answers.

But coming up with answers to those complex questions is worth the effort, because of the answers to those first two.

The Rust Belt got its name, and its current political orientation, from a perspective that the answer to question No. 1 was “no.” Manufacturing tends to get conveniently rediscovered around election time as a fundamental American institution like Mom and apple pie, and never so much as in the election of 2016. But the precarious health of American manufacturing has been a concern since at least the 1970s with the decline of the steel and automobile industries — concentrated in precisely those states that proved to be pivotal in this election.

Washington hasn’t been pivotal in national politics in ages, but manufacturing here is still a big deal on the national level. Just one company — Boeing — can influence numbers like balance of trade and industrial production by its success (or lack thereof) in selling planes.

Manufacturing is obviously a big deal in economic terms for Washington, and yes aerospace is a big part of that. In the most recent jobs report from the Employment Security Department, manufacturing employment was 291,300, 9 percent of the statewide total; aerospace directly accounted for 90,600. It’s an even more outsized contributor in terms of economic activity; the Department of Revenue says manufacturing generated gross business income of $39.4 billion in the second quarter, about 20 percent of the statewide total.

But it’s not just a Boeing story. The state is well populated with thousands of small and medium-sized companies selling products globally, in sectors the general public may never see or think about. To pick a local example involving a company that actually has a variant of the word “global” in its name. Tideflats company Globe Machine Manufacturing Co., which makes big industrial equipment, recently announced orders from a Canadian tissue and towel manufacturer for a system to be installed in the Pacific Northwest and from a linerboard manufacturer for equipment to be installed in a mill in eastern Canada.

Those sorts of companies help provide some offset to aerospace when it goes through one of its contractions, just as aerospace proved to be a counterbalance to lumber and building products during the recession. Right now aerospace is contracting, mildly (at least compared with past cycles); the aerospace parts and product category is down 3,300 jobs from a year ago.

The condition of Washington’s manufacturing industry only occasionally figures as a high-profile issue in state elections, and it wasn’t much of one in this cycle. But it ought to draw more attention, because of its contributions to the state’s employment base and because there are some looming problems to pay attention to, both here and in that other Washington.

A big one is the cost of operating a business in this state. One of the drivers of manufacturing in Washington historically has been cheap hydropower. Electricity figures to get more expensive because that hydropower base may actually get smaller and pricier renewables are added. A Trump administration is likely to be friendlier to domestic oil and gas exploration, development and production, which will be a boon to manufacturing.

But energy is not the only cost headache for manufacturing. Labor costs will be pushed upward by Washington’s higher minimum wage. The triple tax increase for Sound Transit will hike expenses directly and indirectly. The cost of real estate and congestion already threaten to price manufacturing out of Seattle. Continued regional cost increases will make Eastern Washington more attractive. Continued statewide increases will make Idaho and Utah more attractive.

That’s a problem, not only for the lost employment and economic activity now but for lost opportunity tomorrow. The state is carving out a piece for itself in emerging manufacturing products and technologies such as space travel, autonomous vehicles, medicines and medical devices and advanced materials including carbon composites. If the companies commercializing those technologies aren’t around, neither will the decent-paying jobs they generate be here.

That’s a challenge that ought to be addressed now, rather than waiting for the next contentious election campaign to raise it.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

This story was originally published November 12, 2016 at 12:14 PM with the headline "Bill Virgin: How much does manufacturing really mean to you in this state?."