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Experts: Change vital for manufacturing's future

Aug. 29, 2013 @ 12:00 AM

WHITE SULFUR SPRINGS, W.Va. -- As West Virginia continues efforts to become an attractive prospect for start-up and expanding businesses, there are some key changes that could improve the environment for manufacturing in the Mountain State, according to some manufacturers doing business here.

Those issues were highlighted Wednesday at the West Virginia Chamber of Commerce's 2013 Annual Meeting and Business Summit.

Panelists representing the natural gas and chemical industries, as well as higher education, shared thoughts on changes needed in terms of taxes, science and technology education in the state, and a slew of other factors that could make West Virginia a better place to do business.

Participating in the panel were Jim Clements, president of West Virginia University; Greg Babe, president and CEO of Liquid X Printed Metals Inc.; Marty Durbin, president and CEO of America's Natural Gas Alliance; and Mark Hager, senior legislative representative for The Williams Companies Inc., primarily focusing on the company's interstate natural gas pipeline.

Their discussion was titled, "Manufacturing's Future in West Virginia," and their comments focused on efforts that could reverse the downward trend of manufacturing in the state.

"As I look around this room, we all know that manufacturing has been leaving this state in droves," said moderator Steven Hedrick, president and CEO of MATRIC Inc., a technology and research company.

The factors that help the state include its location and its access to rail and river, Babe said. Other less certain issues are the workforce, legal environment and taxes, even if they are improving, he said.

"Everyone is going to check to see if we have a trained, reliable, expandable, drug-free workforce," he said. "This is an area of concern for everyone who considers coming here."

Also, investors want a predictable, pro-manufacturing legal and regulatory environment, he said.

"We have work there yet," Babe said.

Hager cited that issue as one that can make or break natural gas developments or projects such as a cracker plant in the state.

"Regulatory uncertainty is the biggest impediment," he said. "I need to know the

rules of the road and that they're going to be there five, 10 years from now."

He also said if the tax scheme moves up and down based on who's in office, that's something to be concerned about.

"I need to take a hard look at that in our site decisions," Hager said.

Babe said if he could remove one barrier to manufacturing in West Virginia it would be the corporate tax rate.

"There are states out there where you're looking at lower corporate tax rates or zero corporate taxes, and that, to me, is the top line issue you have to go after," he said, acknowledging that those breaks create revenue issues in the state but that attracting more business and creating economic development can help alleviate those problems.

When it comes down to it, however, an industry such as natural gas can bring benefits to multiple states in a region, Hager said.

"Regardless of where it's located, the entire region will benefit," Hager said. "I think it's important for us to link arms and maximize opportunities. Gas doesn't care which state it flows under or flows through. I think there are a lot of smart people here who can start planning for the long haul so that a company is going to be here and making things for a long time, and not just making money to take somewhere else."

Helping ensure that West Virginia has the trained workforce to maximize the opportunities before it is a challenge that WVU is attacking from many angles, Clements said.

He has serious concerns about the United States slipping behind other industrialized nations in terms of college completion and the results that could have on innovation.

"There is an innovation deficit. It does exist," Clements said, adding that it could affect preparedness for the workforce, the number of patents coming out of the United States and the number of jobs here. Meanwhile, in China over the past 10 years, engineering doctorates earned have tripled, he said.

Clements represents higher education in the United States on a national innovation advisory board. He said among the measures needed are: increasing research, investment in education and technology infrastructure, allowing research universities to operate at a world class level, more businesses partnering with universities in research, more flexibility for universities in entrepreneurial efforts and more women and minorities represented.

He said WVU is hiring STEM (science, technology, engineering and mathematics) faculty members, pushing research and funding up to $30 million in the past few years.

"Fundraising is up significantly, and we're really pushing research and STEM," he said.

"I think it does come down to producing a talented pipeline," he said. "We reach about 16,000 kids a year in a 4-H program introducing STEM. We have to get kids excited about it and the reality of it is we have to start at a young age."

There will be a lot of jobs for them to fill, Durbin said, saying that the natural gas industry is expected to produce well over a million jobs over the next 20 years and that the oil and gas industry is expecting a 50 percent turnover in the next decade.

"Colleges, community colleges, construction trades -- we're going to need it all," he said.

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