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Strengthening American Manufacturing

Mag Instrument is the only flashlight maker with significant market share that still manufactures its entire line of flashlights in the United States. Our world class manufacturing facility in Southern California, to which every one of our manufacturing employees reports for work, is just a few miles down the road from the place where, in 1955, our president and founder started in business as a one-man machine shop in a rented garage.

The outsourcing of manufacturing by other U.S. companies has meant the loss of hundreds of thousands, if not millions, of jobs in the United States. Indeed, if Mag Instrument had chosen the path of others, the jobs of its approximately 700 employees in Ontario, California would have been lost. And if a well-known “rule of thumb” is true – that each manufacturing job supports five additional jobs in the local economy (a considerably higher “multiple,” by the way, than a typical service-sector job yields) – then that would have meant a loss of 3,500 jobs.

By keeping flashlight manufacturing jobs in America, Mag Instrument "puts its money where its mouth is." But when it comes to promoting U.S.-based manufacturing, Mag Instrument does much more than just set a good example. Here are a few of the company's involvements:

       
   
 

Mag Instrument is a member of the National Association of Manufacturers, a nationwide organization that advocates for governmental policies that can help to preserve and grow American manufacturing.
Mag Instrument is an executive member of the California Chamber of Commerce. As such, Mag has consistently raised its voice against "job killer bills" that would handicap California-based manufacturers, and in favor of legislation aimed at keeping the state's manufacturing businesses healthy.
Mag Instrument loyally supports the City of Ontario Chamber of Commerce.
Mag Instrument frequently corresponds with government officials on manufacturing-related legislative policy. Among the topics on which Mag has spoken out are tax measures to encourage the health and growth of American manufacturing, such as manufacturing tax credits, the reform of the depreciation rules relating to manufacturing facilities and equipment, the preservation of "Subchapter S" tax status for the companies of successful manufacturing entrepreneurs.
Mr. Maglica is frequently invited to speak, give interviews and participate in conferences on U.S. manufacturing trade, tax and regulatory policy including topics such as: Intellectual property rights; investment tax credits for U.S.-based manufacturing; maintaining a "level playing field" in international trading relationships involving the United States; a jobs tax credit for U.S. manufacturers; and a tax credit for export sales by companies who do their manufacturing in the United States.
Mr. Maglica recently testified before a committee of the California State Senate in support of a bill that would bring California’s maverick “Made in USA” labeling law into conformity with the standard followed by the Federal Trade Commission and the 49 other states.
Mr. Maglica is often approached for comment by magazines and other media outlets that focus on business, economic development and manufacturing.

While we at Mag Instrument are doing our best to keep good, high-paying, skilled manufacturing jobs in America, not enough others are doing likewise. Sadly, the State of California presents an extreme example of how not to keep and grow a manufacturing base. Over the 10-year span from 2001 to 2011, California lost one-third of its manufacturing base – that’s over 600,000 good jobs gone. An obviously related fact is that the U.S. Chamber of Commerce, in its annual business climate ranking of the 50 states, consistently ranks California almost last. There are a number of reasons why manufacturers have been fleeing the state:
• Business taxes are not only high but unpredictable, rendering long-term business planning just about impossible. A manufacturing business placed in this position will want to “shelter in place” – it will be reluctant to make the new hires and reluctant to invest in the new capital equipment needed to grow. And it will be bombarded with invitations to relocate to where tax policy is better attuned to manufacturers’ needs.
• Regulatory policy is not only unpredictable but unnecessarily burdensome -- formulated, it seems, with ignorance or indifference toward the effects of regulatory overreach on the competitive needs of California’s manufacturing businesses.
• California’s educational system has been failing to give students what they would need to succeed in a modern, high-tech, well-paid manufacturing workforce. The computer skills necessary to control modern manufacturing processes are not being well or widely taught, and shop courses, and indeed all trade school curricula, have been cut back. All this creates the misguided perception that manufacturing work itself must be low-paid, low-status work, when actually the opposite is true: Modern manufacturing jobs pay significantly better, on average, than the service-sector jobs that seem to be the only jobs many of our young people can find.
• A result of this poor workforce preparation is that even in these times of stubborn high unemployment, some 600,000 manufacturing jobs are going unfilled nationwide, because of the extreme mismatch between the skills that the jobseekers have and the skills needed to do these jobs. Some other states (notably Michigan) have lately been making great strides to close the manufacturing skills gap, but California lags far behind.
• California’s tort reparations system is badly out of control, with too many legislators in the pocket of the lawsuit “industry.” Shakedown suits – the kind where an opportunistic lawyer recruits a figurehead “plaintiff” and aggregates large numbers if minuscule claims into a legal action that, in the end, swells nobody’s pockets but the lawyer’s own -- are easier to file and harder to dismiss in California than almost anywhere else.
• Too many of our legislators behave as if they think that a “post-industrial California” would be a good thing. That is why, year after year, the California Chamber of Commerce’s Website features another dreary list of “job killer” bills.

California is an extreme example of how unwise government policies can drive out manufacturing, but it is not the only example. Many of California’s policies find parallels in federal government policies. Uncertain and illogical tax policies, burdensome regulations, the lack of badly needed tort reforms, and the rarity of manufacturing-skills-based job training opportunities greatly impact manufacturers on the federal level as well as the state level. Like many California legislators, there seem to be too many people in federal politics who fail to grasp this simple truth: For the United States of America to remain a country with a stable and prosperous middle class, we need to remain a country where people actually make things and add true economic value.

Of the many factors that impact manufacturing, there are at least two that are of uniquely federal concern:

Fair (and robustly enforced) international trade rules -- Mag Instrument believes in free trade, as every American manufacturer should, because it should mean the growth of export sales. But free trade must also be fair trade to ensure that there is a level playing field for all of the trading partners of the U.S. This includes trade agreements that contain provisions related to product quality, consumer protection, intellectual property rights, fair labor code, employee dignity, safe working conditions, safeguarding of natural resources, environmental protection, and elimination of unfair trade barriers – such as currency manipulation by foreign governments, notably China -- that impede the free flow of goods and services. Mag relishes the competitive nature of a free global marketplace and believes the U.S. can compete with any country in the world given these conditions.

Fair (and robustly enforced) intellectual property protections -- Mag Instrument also believes in strong intellectual property rights. A key ingredient in any successful formula for maintaining a strong manufacturing base is robust legal protection for the intellectual property that innovative and entrepreneurial companies create. In addition to maintaining strong domestic laws, the federal government’s role in this must include insisting that our trading partners enact and enforce straightforward, effective remedies in their own countries against bootlegging, “knockoff” copying and other forms of piracy of American-made products. Tony Maglica, for example, is personally involved in all product research and development at Mag Instrument, works on new inventions on a daily basis, and is the holder of more than 110 United States patents and hundreds of foreign patents relating to portable lighting technology. Mag Instrument also maintains a vigorous program of trademark registration and enforcement. Over the past 25 years, Mag Instrument not only has vigorously advocated for strong intellectual property rights but also has vigorously enforced its own intellectual property rights, in courts here and abroad, against those who would "knock off" its successful products by imitating their design-patented and trademarked appearance features, infringing the patents that cover the technologies they employ, and appropriating the company's secret and proprietary plans and know-how. Mr. Maglica believes that all American manufacturers benefit from the aggressive defense of intellectual property rights against any and all infringers. By protecting its technical innovations and its trademarks, an American manufacturer protects the American workforce that makes and sells the products that embody those technologies and bear those marks

 
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