Tapping Québec for FDIs in Partnership with GlobalFoundries

Tapping Québec for FDIs in Partnership with GlobalFoundries

GlobalFoundries offers both space and an array of amenities for Québec manufacturing companies seeking a U.S. footprint. To capitalize on this market opportunity, the Vermont Chamber, the Vermont Agency of Commerce, GBIC, and CIDEP (Vermont’s foreign trade representative firm in Montréal) are partnering with GlobalFoundries on tenant recruitment efforts to grow Vermont’s $3 billion dollar manufacturing industry. This work supports of the Governor’s economic development priorities to strengthen our ties with Québec and transform Vermont into a Supply Chain Hub. Recruitment of Québec companies in the aerospace and defense sectors also strengthens cross-border commerce and the Vermont Chamber’s work to build the Vermont – Québec Aerospace Trade Corridor.

The State of Manufacturing in November

The State of Manufacturing in November

November follows October, which was celebrated as Manufacturing Month nationwide, and is a time to pivot, get back to business, and navigate the road ahead, which presents a mixed picture.

The Institute for Supply Chain Management’s Manufacturing Purchasing Manager’s Index (PMI), an index that measures U.S. manufacturing activity, fell 0.7 percentage points to 50.2 in October, the lowest level since May 2020, just over the 50 threshold that reflects a shrinking economy. Manufacturing is slowing due to a decline in business spending and demand for consumer goods, according to the National Association of Manufacturers (NAM).

In contrast, the U.S. economy rebounded in the third quarter, expanding 2.6% at the annual rate, due in part to strong consumer spending on services, government, and net exports. According to the Consumer Price Index (CPI), the annual inflation rate also fell 7.7% in October from 8.2% in September. While supplier price and inflation are possibly abating, it is important to remember that rises and falls in inflation have happened before in waves. Real GDP, furthermore, is forecasted to increase 1.8% in 2022 with only 0.7% growth in 2023, elevating the risk of recession.

On the upside for manufacturing, supply chain bottlenecks continue to improve with supplier delivery times, manufacturing production expanded by 0.4% in September (4.7% year-over-year), employment increased by 32,000 in October (up from 23,000 in September), and output in the third quarter increased by 1.4%, demonstrating manufacturing resilience to the many challenges from soaring costs and workforce labor shortages to economic uncertainties.

Vermont Delegation Attends Aerospace Components Manufacturing Tradeshow

Vermont Delegation Attends Aerospace Components Manufacturing Tradeshow

In partnership with the Vermont Agency of Commerce, the Vermont Chamber led a delegation of Vermont manufacturers at the recent Aerospace Components Manufacturers (ACM) event in Hartford, CT. This participation was in support of the expansion of the Vermont – Québec Aerospace Trade Corridor into Connecticut. The corridor connects Vermont’s combined $2 billion aerospace and aviation industry with an $18 billion Québec aerospace cluster.

Vermont’s delegates included Concepts NREC, Manufacturing Solutions Inc., and Stephens Precision, who met with Connecticut aerospace and defense suppliers to discuss workforce and new business development opportunities. The delegates also met with many of the 1,200 students who were engaged with the Job Fair component of the event.

As a Trade Corridor partner, ACM suppliers were able to participate in the recent virtual 2022 Manufacturing Summit, where they secured NDAs and approved supplier status with OEMs and primes, including Bell Flight, Lockheed Martin, and SAFRAN.

 

The State of Manufacturing in October

The State of Manufacturing in October

October is Manufacturing Month nationwide and is celebrated in Vermont with events and onsite tours of plants and facilities. It is essential to showcase Vermont’s $3 billion industry as an important economic driver that employs more than 28,000 Vermonters (10% of Vermont’s workforce) and contributes 9% to Vermont’s Gross Domestic Product.

Manufacturing contributes to the greater economy via the:  

  • Economic Multiplier Impact: Every $1 in manufactured goods generates an estimated $2.79 worth of additional economic activity, the highest of any other economic sector. If the entire manufacturing supply chain is included, every $1 spent in manufacturing adds another $3.60 worth of additional economic activity.
  • Employment Multiplier Impact: Each manufacturing job supports an additional 5 jobs elsewhere.

Nationally, September saw an increase in manufacturing activity from August, but saw a decline in the index, from 52.8% to 50.9%, according to the Institute for Supply Management (ISM). Overall, the data is mixed with new orders contracted, production and inventories increasing, and prices slowing, as reported on the Q3 Manufacturers’ Outlook Survey done by National Association of Manufacturers (NAM).

While the economy added 263,000 jobs in September and the unemployment rate fell to 3.5%, the second quarter saw U.S. economy shrink by 0.6% and the real GDP decline by 8.5% in the manufacturing sector. Manufacturing job openings fell in August from 910,000 to 795,000, according to the Job Openings and Labor Turnover Survey. However, manufacturing job openings remained high overall, as demand for goods increased the need for employees during a severe workforce labor shortage. Manufacturers hired an increase of 24,000 workers for a total of 452,000, up from 428,000 in July, according to NAM.

Inflation accelerated in September, with the Consumer Price Index (CPI) rising 0.4%, for a total of 8.2% over the past 12 months. Looking ahead to the remainder of Q4 manufacturers can expect additional higher interest rate hikes, supply chain disruptions, and worker shortages. All of this will compound, leading to recession worries in 2022 or 2023.

These pressures and workforce challenges will persist into Q4 and beyond, but manufacturing has proved resilient. According to NAM, the manufacturing value-added output increased to an all-time high of $2.768 trillion in Q2, while the industry accounted for 11% of manufacturing value-added output.

Vermont Chamber Hosts 9th Annual Manufacturing Summit

Vermont Chamber Hosts 9th Annual Manufacturing Summit

Since 2013, the Vermont Chamber of Commerce has convened manufacturing industry leaders at the annual Manufacturing Supply Chain Summit. In recent years, the pandemic prompted the event to go virtual, increasing accessibility for global buyers, suppliers, and partners to engage with Vermont and New England manufacturers and leaders. Due to the success of the virtual model, the event was once again held virtually this year, bringing together representatives from throughout the United States, Canada, and Europe. The 2022 event was themed “Rebuilding Supply Chains and Workforce through Content, Collaboration, and Contacts.”

85 suppliers and 25 OEMs, Primes, and Government Agencies held 300 meetings between buyers, suppliers, and partners, representing hundreds of new connections between participants. Many of the attendees were leaders in the aerospace, aviation, defense, and naval/marine industries.

The event also offered a rich two-day agenda of seminars and roundtable discussions focused on new and emerging trends in advanced manufacturing for the aerospace, aviation, defense, space, industrial, and naval/marine industries. Sessions were moderated by Vermont Chamber Vice President of Business Development, Christopher Carrigan.

“The Vermont Chamber is proud to continue our legacy of championing manufacturing by hosting an event that is a catalyst for collaboration and innovation. A testament to this is the 26 Canadian, 8 Connecticut, and 8 Ontario suppliers in attendance supporting the Vermont Chamber’s work to build the Vermont – Québec Aerospace Trade Corridor that now extends from Connecticut to Ontario,” stated Carrigan. “We’re already looking forward to celebrating a decade of Manufacturing Summits at next year’s event.“

Senator Patrick Leahy and Governor Phil Scott both delivered virtual remarks at the event, celebrating Vermont’s leadership in the manufacturing and aerospace industries, and addressing some of the top challenges facing businesses.

In response to severe workforce shortages, the event also featured the “Find Your Future Workforce” initiative, a workforce development effort facilitating employer interviews on the virtual platform with University of Vermont and Vermont Technical College students, as well as Vermont National Guard members, interested in careers in manufacturing for the semiconductor and aerospace industries.

The 2022 Manufacturing Summit was made possible by our sponsors:

To join us as a sponsor for the 2023 Manufacturing Summit, please contact Chris Carrigan: (802) 223-0904, ccarrigan@vtchamber.com.

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Vermont Delegation Champions International Collaboration, Manufacturing, at Aerospace Innovation Forum

Vermont Delegation Champions International Collaboration, Manufacturing, at Aerospace Innovation Forum

In partnership with the Vermont Agency of Commerce and U.S. Commercial Service, the Vermont Chamber hosted a delegation of Vermont aerospace companies at Aéro Montréal’s 2022 Aerospace Innovation Forum. This work was in support of the Vermont Chamber’s ongoing commitment to building the Vermont – Québec’s Aerospace Trade Corridor to connect Vermont’s combined $2 billion aerospace and aviation industry with an $18 billion Québec aerospace cluster.

Vermont had the most significant state presence, with the largest delegation to date, featuring Governor Phil Scott and several Vermont businesses; BETA Technologies, Dynapower, G.S. Precision, Kaman Composites, Liquid Measurement Systems, North Country Engineering, Stephens Precision, Ten Fold Engineering.

Funding provided in part by the Vermont State Trade Expansion Program grant allowed these companies to participate in the conference and meet with large Canadian buyers, such as Bombardier, CAE, and Héroux-Devtek, as well as suppliers for new international business opportunities. This work is crucial to reconnect and rebuild supply chains following the pandemic.

In reciprocation, Aéro Montréal and a Québec delegation of suppliers will participate in the Vermont Chamber’s upcoming virtual 2022 Manufacturing Supply Chain Summit. Chris Carrigan, Vice President of Business Development, discussed the success of the visit and the upcoming Summit in an interview with former Governor Jim Douglas. Listen here to learn more:

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Ep. 3: “State to Main” – Military Retirement

Ep. 3: "State to Main" - Military Retirement

“State to Main” is a policy-focused podcast series complementing the widely read weekly legislative newsletter of the same name.

The third episode of the series, “Military Retirement,” features Chris Carrigan, Vice President of Business Development for the Vermont Chamber of Commerce, and Steve Gagner, Founder of 14th Star Brewing Company in St. Albans, to discusses the tax on military retirement pay, and veterans in the Vermont workforce.

Episodes are available to stream online via Spotify, Apple Podcasts, Soundcloud and on the Vermont Chamber of Commerce website.

“State to Main” is made possible by our sponsor, AT&T.

Self-Managed Utility Benefits Vermont

Self-Managed Utility Benefits Vermont

GlobalFoundries’ economic impact in Chittenden County and the state is tremendous, and its continued success and growth in Vermont is important to the business community. As one of the state’s largest private employers, GlobalFoundries employs 2,200 Vermonters and generates an additional 5,000 indirect. GlobalFoundries owns 8% of the 12% of global chip manufacturing in the nation, 93% of the smartphone market, and is an emerging leader in the renaissance for United States semiconductor chip manufacturing for the auto industry with a recent partnership with the Ford Motor Company.

To address the challenge of high energy costs, GlobalFoundries has proposed an innovative solution; a forward-thinking self-managed utility (SMU) as a way to cost-effectively and efficiently manage its own energy portfolio and meet its customers’ as well as Vermont’s high carbon reduction standards.

Unfortunately, critics have misrepresented the impacts to Vermont and mischaracterized GlobalFoundries’ intent. The benefits include:

  • GlobalFoundries economic impact in Chittenden County and the state is enormous and its continued growth and success in Vermont is important to all of us.
  • The approval of a Self-Managed Utility is critical for GlobalFoundries to manage its own energy costs, remain competitive nationally and globally, and continue to invest and grow in Vermont.
  • The proposal has minimal impact on ratepayers ꟷ zero in the first year and estimated to be less than 0.27% in any year thereafter.
  • Approval will enable GlobalFoundries to continue to make substantial investments in cutting-edge renewable and carbon-free energy generation projects at their campus in partnership with the University of Vermont and other local businesses.
  • GlobalFoundries Self-Managed Utility will help meet Vermont’s climate goals.

The next step in the process will be before the Public Utility Commission who will rule on GlobalFoundries’ petition to move forward. 

For questions or to learn more, please contact Chris Carrigan.

Removing the Tax on Military Pensions

Removing the Tax on Military Pensions

The Vermont Chamber supports the removal of the State income tax on military pensions. Vermont is one of only four states (CA, VT, VA, Washington, D.C.) that offers no tax relief to military retirees. Removing the tax would serve to recruit and retain a diverse population of military retirees and help address the severe worker shortages for all industries. This is a legislative priority for Vermont Governor Scott, the Vermont National Guard & Veterans Affairs, and the Vermont Chamber of Commerce.

To learn more, please contact Chris Carrigan.

Expanding the Manufacturing Tax Exemption

Expanding the Manufacturing Tax Exemption

The Vermont Chamber supports the expansion of the manufacturing tax exemption, as proposed in H.437, a bill currently in the Senate Committee on Finance. The bill would exempt machinery and equipment used as an essential part of an integrated production operation and all ancillary processes between raw materials and finished goods. The benefits to manufacturers include greater compliance and fewer costly audits, savings to reinvest in workforce recruitment, new machinery and equipment, and updated technology for cybersecurity compliance. Expansion would also serve as an economic development recruitment tool and make Vermont competitive with the thirty-three other states that have similar tax exemptions.

To learn more, please contact Chris Carrigan