Top SC CEOs, industry leaders to address manufacturers conference this week
Source: The State
February 10, 2015
COLUMBIA, SC — The 5th Annual South Carolina Manufacturing Conference in Greenville this week will discuss hot topics related to commerce in the Palmetto State, including workforce development, the state’s energy future, projects at the South Carolina Ports Authority, financial trends facing manufacturing and more. Special presentations will be made by Duke Energy state president Clark Gillespy; Jack Ellenburg, South Carolina Ports Authority senior vice president of economic development and projects; and Brent Weil of the National Association of Manufacturers Institute.
Duke Energy’s state president Clark Gillespy will discuss the current and future status of energy operations in South Carolina. Duke Energy SC serves approximately 720,000 electric retail customers in the state. Gillespy joined the company in 2004 and has more than 25 years of combined experience in economic development, site selection consulting, and the practice of international law in both the United States and Europe. Working in partnership with economic development organizations in North Carolina and South Carolina, Gillespy and his team helped attract $18.7 billion in capital investments and more than 58,000 jobs to the Carolinas since 2005.
• From a manufacturing standpoint, available and affordable energy is critical to expansion and location decisions.
Over the past 20 years, South Carolina has evolved from an agricultural-based economy to an automotive and aerospace-based economy and become the No. 1 tire manufacturer in the world. Over the past three years, the steady influx of new businesses has changed the economic development mix in the state from about 70 percent expansions and 30 percent new business, to about 50 percent each, according to South Carolina Department of Commerce Secretary Bobby Hitt. New energy production such as two new nuclear reactors at the V.C. Summer plant in Fairfield County puts South Carolina in an enviable position, according to Kevin Marsh, SCANA chairman and CEO. “I’m not sure there’ll be another state that can match us in terms of what we can provide in clean power. That means the Boeings, and the Bridgestones, and the Continentals and all those people that come to South Carolina know they can come here with plenty of power.”
• Nuclear energy. Securing the state’s future power supply is a key issue for manufacturers.
Right now, South Carolina Electric & Gas Co., the state’s largest electric utility, is constructing two new nuclear reactors that should generate energy for 60 years each upon completion, the company says. When construction of the two Westinghouse-designed 1,117-megawatt AP1000 reactors began in 2012, they carried an initial $9.8 billion price tag. Projected costs have since escalated by $1.1 billion and completion dates for the reactor units has been delayed until 2017 for Unit 2 and 2020 for Unit 3.
• The potential growth of alternative energy sources (wind turbines, offshore energy, solar, etc.) are all important to manufacturers.
On renewable energy: “While renewable energy makes sense for us in certain circumstances ... nuclear is there all the time. We do solar where it makes sense. We just put in the largest solar installation in the Southeast at Boeing,” SCANA’s Marsh has said.
Last year, South Carolina passed and signed into law a historic solar expansion bill requiring utilities to increase their production of solar energy in the state. Later in the year, the state reached an equally critical agreement between utilities and conservation groups regulating buy back of excess solar energy produced by private domains, such as homeowners and businesses.
Several speakers will focus on the need for strong workforce development initiatives, especially in improving the jobs pipeline. A manufacturing renaissance has led the way for new job announcements. But, couple that with many experienced workers on the verge of retirement, and South Carolina is faced with a shortage of critical needs workers. These jobs are those that require more education than a high school diploma but less than a four-year degree. According to the South Carolina Department of Employment and Workforce, “critical needs” jobs account for 45 percent of the workforce while only 29 percent of people have the necessary skills to fill these jobs.
• South Carolina must have a highly skilled and well trained workforce to fill the manufacturing jobs being created. Manufacturing employment in South Carolina has increased 13.5 percent since January 2011, according to Hitt. Last year, the manufacturing sector comprised 55 percent of the new jobs in the state, or 10,496 jobs.
• South Carolina is a national model in apprenticeships – a big asset for manufacturers. Since the state launched Apprenticeship Carolina in 2007, the number of registered apprenticeship programs in the state has grown more than 300 percent and now includes more than 300 programs. The number of apprentices working in the state has quadrupled since 2007 to more 3,100.
• The health of the state’s technical colleges is key to manufacturing success. Technical colleges in South Carolina educate 58 percent of all college undergraduates. Ten years ago, a study showed the technical college economic impact on the state to be $988 million.
• WorkReady Communities in the state are growing and are a tool for manufacturers when considering where to locate. ReadySC is part of the S.C. Technical College System with its 16 colleges and satellites across the state and works with companies to give them recruiting and training assistance.
Financial trends facing manufacturers
Brent Weil, senior vice president of the National Association of Manufacturers Institute, will make a special presentation to the conference on the financial trends that face manufacturers in South Carolina. Having nearly 20 years of combined experience in public and private sector workforce development, management, strategic communications and education, Weil leads industry engagements for the institute and builds partnerships to help students and workers get industry-recognized certifications.
• The skills gap in manufacturing is real. With a projected 2 million jobs to fill over the next 10 years, closing that gap is a critical issue for the Manufacturing Institute and the National Association of Manufacturers.
• Manufacturers need to get involved to support career opportunities for South Carolinians in manufacturing. “Dream It. Do It. South Carolina” is an example of a manufacturing initiative to help inform young people, parents, teachers and guidance counselors about manufacturing and the career and technical programs to launch youth into a rewarding career.
• Increasingly, South Carolinians are earning certifications – including the National Career Readiness certificate, the Certified Production Technician certification, and certifications in areas such as welding and machining – and manufacturers can tap into the valuable pipeline of certified, skilled workers. In addition, companies can offer internships, work-based learning and apprenticeships to grow their own talent.
• Manufacturers face a variety of cost issues as the uncertainty surrounding health care/insurance increases as the laws change.
• Manufacturers are seeing cost benefits of reshoring vs. offshoring. Offshoring in many cases has actually increased costs for manufacturers as quality becomes an issue and distribution costs become too large. A 2013 report on manufacturing said U.S. manufacturing could bring back $70 billion to $115 billion of export business onshore by 2020. Production costs for many products made in parts of China will only be 10 percent to 15 percent cheaper than in some parts of the U.S. where factories are likely to be built, according to that report.
• Federal regulations on greenhouse gas emissions are driving up costs as many manufacturers and utilities have to convert energy sources to meet new federal demands. In the U.S., automakers, for example, are being required to achieve 54.5 miles per gallon of fuel efficiency in light vehicles by 2025. Upstate luxury automobile maker BMW is already on the road to achieving such changes, having reduced the CO2 emissions of its fleet by about 30 percent between 1995 and 2010, with further reductions planned by 2020, the company has said.