EP 1 | Manufacturing 2020: How Challenges Became Opportunity
Nick Novak (Host) | Vice President of Communications & Marketing | WMC
Are you a leader in manufacturing? Have you needed to change your business model in 2020? Do you want to learn about success stories of your peers? If you said yes to any of these questions, this is the podcast for you.
Voiceover
You’re listening to Wisconsin Made. The Podcast. brought to you by Wisconsin Manufacturer of the Year, a premier annual awards program celebrating excellence in manufacturing in the state of Wisconsin. Now, here’s your host, WMC Vice President of Communications & Marketing Nick Novak.
Nick Novak (Host)
Hello and welcome to the very first episode of Wisconsin Made. The Podcast. The show that takes you inside the strength and resilience of Wisconsin’s manufacturing community where we hear from Wisconsin’s CEOs and executives to learn about their challenges opportunities and success navigating their business through the covid19 pandemic. I’m your host Nick Novak and today we’re going to talk generally about why we decided to start this podcast and what you can expect in future episodes. This podcast is in association with Wisconsin Manufacturer of the Year which is sponsored by Baker Tilly, Michael Best and Wisconsin Manufacturers & Commerce. Together, we remain committed to our mission of recognizing excellence in the manufacturing sector right here in our state.
Nick Novak (Host)
Today we’re joined by our program partners, Partner and CPA Greg Sofra of Baker Tilly and Firm Managing Partner, David Krutz of Michael Best and President and CEO of Wisconsin Manufacturers & Commerce Kurt Bauer. So Greg, David, Kurt, first of all thank you for joining the first episode of this podcast and we want to get to know each of you a little bit and obviously being partners on the Manufacturer of the Year program, Baker Tilly Michael Best and WMC, we all play our individual parts and want to get to know each of you a little bit, so Greg I’m going to start with you, can you just tell us a little bit about Baker Tilly and why you’re involved in the MOTY program.
Greg Sofra | Partner & CPA | Baker Tilly
Sure Nick, truly appreciate the opportunity to be here. Again I’m Greg Sofra, I’m a Partner with the accounting and advisory firm Baker Tilly. I also have the very good fortune of leading our manufacturing and distribution practice here within our state. Our firm started here in Wisconsin 90 years ago this year actually to be exact and although we’ve grown from a Wisconsin firm to a firm that’s now coast to coast serving clients globally, our roots are here in Wisconsin and specifically they’re here in in the manufacturing industry in Wisconsin. I personally have had the great fortune of working with manufacturers my entire career and I’m very proud of that and I’m very proud that Baker Tilly continues to sponsor the MOTY program along with WMC and Michael Best. Manufacturing is important to me, it’s important to our firm and most importantly it’s important to our economy here in Wisconsin and I look forward to celebrating those achievements in this industry this year even if that celebration does look a little bit different.
Nick Novak (Host)
Well I know we all miss being in person and hopefully we’ll be able to get back to that soon enough. Now over to David, Managing Partner at Michael Best, obviously just another great partner of ours on the Manufacturer of the Year program, so David tell us a little bit about Michael Best and why you’re involved in the program.
David Krutz | Firm Managing Partner | Michael Best
Thanks Nick and thanks Greg good to see you all in one sense I guess. I am David Krutz, I do serve as the Managing Partner of Michael Best. Together with Michael Best Strategies, we’re a full service law firm and strategies is our government relations and public policy arm. What we do is we serve the middle market of Wisconsin. Many manufacturers and the businesses that serve the manufacturers, a lot of them are closely held clients. What I would say what we do is we help clients protect their most valuable assets whether it’s their intellectual property, patents, trademarks, licenses, their talent you know the talent that they have and leaves the door each night. On the strategic advice, we try to let them know what’s going on in the economy, where they can go and then at the back end if they decide to grow we’ve got them a crowd as well as the ability to have succession planning and exit. Why we are involved with MOTY is it’s been just a great relationship between us, WMC, Baker Tilly, it allows us to give back really to those manufacturers and those clients that do so much for the state and that’s what we really enjoy. We’ve been here 173 years in the state and we’re hoping for 173 more.
Nick Novak (Host)
Well thanks David, WMC has only been around for 110, but hopefully we can keep that going strong as well. Speaking of WMC, Kurt, you’re here with us today, just you know WMC being the manufacturers association here in Wisconsin, what does it mean to have the MOTY program each year and you know why do we do this?
Kurt Bauer | President & CEO | WMC
I was going to emphasize that we’re 110 years old but David kind of went scoreboard on us with 170, so you got us beat by quite a bit. WMC is the state chamber of commerce, the state manufacturers association and the state safety council, so obviously manufacturing is our forte. We were founded in 1911 as the Wisconsin Manufacturers Association and manufacturing of course is the largest sector in Wisconsin, so we really do focus from a public policy perspective on a lot of what manufacturing needs because it is the foundation of the economy. It’s the bread and butter of the middle class and it’s just very important to the state, not only manufacturing specifically, but the supply chain around it, so we’re honored to be part of the Manufacturers of the Year. It was started by my predecessor, Jim Haney, very innovative of him and you know he would always joke that he said he came up with a black tie dinner at the Pfister Hotel in the middle of winter and it took off and it is too bad that we’re not at the Pfister this year, but we will be back next year.
Nick Novak (Host)
Well and obviously, you know to all of our listeners you know, I’m sure some are aware of the MOTY program and have been involved in it previously but hopefully we have a few folks listening in who maybe aren’t as familiar with the Manufacturer of the Year program and for all of those, it’s an annual program that really recognizes the manufacturers in our state, all of the amazing work they do and unfortunately as manufacturers responded to COVID-19 and really stepped up this year, we aren’t able to celebrate them in the same way by having that big event at The Pfister and really focusing on their accomplishments and so we kind of talked about different ways that we could highlight the good things that they did and that’s what this podcast is going to be about and so I want to bring in Greg from Baker Tilly, obviously we want to recognize these manufacturers and we’re doing that with this podcast. Why do you think, Greg, it’s so important that we have this podcast and tell those stories about what manufacturers did in response to this pandemic?
Greg Sofra
Perfectly honest, I’m not a big podcast guy so this is all pretty new to me and honestly a pretty pleasant surprise, but you know when we saw all the great submissions coming in, all the great stories that are happening across the state, we knew we had to find a forum and an outlet to share those and I know we all wish, Nick and Kurt, as you both mentioned, we could be at MOTY at The Pfister (Hotel) this year having the program although I’m probably glad I don’t need to try my tuxedo on right now, that’s just not in the cards this year, but the stories are great, we have to find ways to share and this podcast is a phenomenal outlet. Just like so many of the manufacturers in our state have of all their operations, our MOTY team is responding as well to those challenges and this podcast is a great way to make sure these stories are shared so we can recognize and celebrate all the great things manufacturers are doing in our state.
Nick Novak (Host)
Well I certainly do miss the open bar that we have at the MOTY event each year, we probably should have done that for the podcast here, that might have been a way to get some you know good stories going through.
Kurt Bauer
I’m sure people are missing my joke too.
Nick Novak (Host)
I’m sure, well now you just have another year to work on it so that should be good.
David Krutz
We’re looking forward to it Kurt.
Nick Novak (Host)
So obviously we’re not all together, we’re not able to you know have a big celebratory night, but it doesn’t mean that we can’t talk about what manufacturers have been doing and David I know that you work closely with businesses all across the state of Wisconsin and a lot in the manufacturing sector, so what are you hearing from your clients and how did they respond to 2020?
David Krutz
Well what we’re looking at with respect to 2020 is, let’s put ourselves back in March and April, I mean that was a fog that nobody knew where this was going you know the predictions was that two weeks of shutdown were okay then it was this may never go away so I really think what we want to cover with these podcasts is hearing what Wisconsin manufacturers did, how they stepped up for their employees, how they stepped up for their communities and really what they did that’s not often covered in the media. You know, a lot of this gets drowned out in the political ends of both parties, but when you really think about Wisconsin manufacturers did, there’s some really unique stories out there, some really insightful ones. The other thing that I’m hoping we get out of this is just the insights what people are planning for 2021 and beyond. As business leaders and community leaders really what we need is insight, we need perspectives from each different tranche, each different narrow area and then that allows us to all make those decisions to go forward and I think our clients are looking for the same thing, so we think that this podcast as well as just sharing these stories just an invaluable way for WMC and Baker Tilly and Michael Best to again give back to the community.
Nick Novak (Host)
Well you’re exactly right there David, I mean the stories that we’ve heard from these applications from the different manufacturers that we work with throughout the year, I mean some of them are just amazing stories and these companies really did step up. Kurt, you’re the head of WMC, you know we have a huge number of manufacturers in the state who are members of ours and you’re talking with them on a daily basis, what have you heard from them you know throughout 2020, how did they respond, what are some of the things that they did that you’ve heard about?
Kurt Bauer
You know, David had a good point in going back to what seems like ages ago, but just about a year ago when this began we started receiving contacts and phone calls from the White House and the Wisconsin Economic Development Corporation here at the state level asking for businesses to step up with PPE and hand sanitizer and other types of disinfectants and things that were needed during a global pandemic and I have to tell you that the manufacturing sector in this state and in our country has really stepped up and I think this has really showcased the power of free enterprise in the private sector. There has been a massive response, we know that we have a lot of our members that have retooled to provide PPE and other types of critical supplies, we’ve had others that have made sure that they funded their or supplied their local food bank because of the economic woes that have been caused by this so there’s a variety of a spectrum of the things that the manufacturing sector and the private sector just generally have done and I think the highlight of course is what the pharmaceutical industry has done with the warp speed and able to come up with a vaccine as quickly as they did so I think it’s great that we’re celebrating the private sector and manufacturing in particular because they’re not getting as much credit as they should for what they’ve done during this pandemic.
Nick Novak (Host)
Well and David mentioned the insight that we’re getting from all of these honorees that we’re going to talk about throughout this podcast for Manufacturer of the Year, obviously things are never going to be the same again. I mean we talk about this new normal that exists and that we’re going to hopefully move into sooner rather than later as more and more vaccine gets rolled out throughout the country, where do you see manufacturing going Kurt following this, I mean what are those changes that you think might stick around for a while, you know we have you know folks who work in offices are working from home, but you can’t do that in a manufacturing facility. You have to space out, you have to have masking, you have to have you know things to separate folks, where do you see manufacturing going?
Kurt Bauer
I think the answer is manufacturing has a tremendous opportunity because what COVID-19 has demonstrated is that we need to manufacture critical supplies in the United States because again remember when this first came down, PPE, various medicines and therapeutics all were manufactured elsewhere, largely in China and it really revealed a vulnerability for our country, so we have I think an opportunity from a policy perspective with a new administration in Washington to address that, to incentivize manufacturing in the United States because we do have a US advantage right now on energy which I fear we’re going to squander, but if the administration would take a look at the opportunities that we have on energy, on innovation, that the fact that you know we do have a workforce shortage here in Wisconsin and much of the country, but we’re the United States and immigrants want to come here, so we’d be able to attract the workers that we need at the low end, medium and in high skill area and then of course we’ve got a tax rate now at 21 which is globally competitive, I hope we don’t squander that opportunity and I would argue that nationally we need a tax incentive for manufacturing production in the United States like we have here in Wisconsin. We have the Manufacturer’s Tax Credit which incentivizes production here jobs here we should do that at the national level because we have an opportunity right now to really revitalize the manufacturing sector and the economy along with it and of course the middle class.
Nick Novak (Host)
Well I’m going to go over to Greg here because I think Kurt you brought up some good points on the tax side of it on you know kind of how businesses need to retool and Greg you know you’re with the accounting firm, you know, you’re the accountant on the podcast here today so what are your clients having to do to make changes to work within the business climate that we have here in Wisconsin? Obviously it’s a changing business climate with the new administration, you know, what are you hearing from your clients on what they’re planning for moving forward?
Greg Sofra
Yeah, so I think an underlying theme is 2021 is going to continue to bring disruption right nobody’s got the crystal ball of what it’s going to look like in the future and you know companies are preparing themselves for that right. They’re looking at this as an opportunity to revisit past practices and retool operations and change behaviors. You know, we as a firm work with a lot of organizations on revisiting a supply chain, right, is it an optimal supply chain? Does a supply chain have resiliency? Can it change or can it be impacted by some of these disruptions? And, how well it can it mold and change through that process? Same thing on buying behaviors, right, we’re helping clients and companies look at how they’re purchasing and heard who they’re purchasing from in order to be more resilient in this ever changing climate and then you know finally I kind of think about, you know, as we all kind of talked about we’ve been in this environment of remote working for almost a full year now and that’s putting a lot of stress on cyber security and awareness and making sure companies are not just have a good plan, but they’re being proactive and testing that plan and making sure it is resilient penetration testing etc., all these threats are new and evolving they’re not all new, but they’re changing, they’re being increased and we want to work with organizations to help them through this because embracing the disruption I truly believe this on the other side of this these organizations are going to come out stronger, they’re going to come out better if they embrace this disruption and look at this as a way to revisit operations and retool what they’re doing.
Nick Novak (Host)
Well David you’re, I mean you’re probably hearing the same things from your clients, you know, as their attorney and you know all the other different services that Michael Best offers, same question to you, I mean where are you seeing the industry going and what changes and challenges are you seeing in 2021?
David Krutz
I’d say the biggest thing that is out there, expect a lot of change on the regulatory and enforcement side and that’s what we’re telling our clients. The new administration is acting very quickly on the regulatory side as well as the enforcement side, it’s not just at the federal level too. There are different states that are emboldened now either at the attorney general’s office or their state enforcement. Now we can’t necessarily take a position whether that’s good or bad, but it is coming and manufacturers are affected by this and they’re affected at the detail level, you know we tend to in the media look at only the big changes whether it’s healthcare or what have you, it’s really those regulatory changes that are going to be very quick and sweeping. A couple key areas OSHA, energy, environmental enforcement, labor policies, obviously tax policies, all of those affect the manufacturing community and it I think Greg hit it best that is going to be a lot of disruption and it’s coming quicker than people think. That said, there are a lot of opportunities and I would we recommend and our clients are embracing keep up with the change, bring in the experts, listen and take in the information, but at some point you have to be prepared to act because by not acting you are acting and the change is coming, so I’ll tell you this, it’s going to be an exciting year to be an attorney and an accountant and I’m not sure our clients always want to hear that but you know that’s we’re going to help them get through it and I think that with innovation and thinking through processes differently and embracing the change our clients can survive.
Nick Novak (Host)
Well I want to touch on one point that you brought up and that’s OSHA, I mean we obviously have a new administration and they’re talking, you know, they’re going to have different ideas on how OSHA enforces things, what regulations manufacturers are going to have to go with. Kurt, you know, at WMC we run Wisconsin Safety Council which helps people to not only make sure they’re following rules and regulations that come down through OSHA, but just ensure they’re being safe generally. You know, how is the safety world changed when it comes to COVID-19 and manufacturing and relying on that I mean, what can the Safety Council do to help our members?
Kurt Bauer
I think you’re right about OSHA by the way, I think we’re going to see a much more punitive and adversarial relationship where it has been far more cooperative during the Trump administration which should be of concern to some of our manufacturers. Look, I think manufacturing and the private sector generally have done an outstanding job of reconfiguring their workplaces to make sure that their employees and their customers and the public in general are safe during COVID-19. And again, I don’t think that they get enough credit for that, I honestly believe that the safest place for people to be during this pandemic has been in the workplace because of the guidance that they have followed from OSHA and also from the CDC.
Nick Novak (Host)
Well I think your spot on there, I mean if we’ve learned one thing in 2020 and now in 2021 it’s the fact that the private sector, manufacturers have not only stepped up to respond to the COVID-19 pandemic and be one of the leading responders as the state and federal government try to take care of everyone and move past this as quick as possible to get the economy moving on again, but we’ve also learned that manufacturers truly do want to take care of their employees, they really want to keep their employees safe, their customers safe, the public safe and so that’s that you know if one thing came out of that it’s definitely that we’ve seen just tremendous stories coming out of the manufacturing sector.
We are wrapping up here as we get towards the end of this podcast. Obviously, we’re very excited about the future podcasts we’ll be talking with CEOs and different executives from manufacturing companies about their personal stories and what 2020 was like for them, but before we end here I just want to go to each of our guests and just in one to two sentences, you know, really quickly what is your view of what manufacturers did in 2020 and how would you explain to folks really the resiliency that they had throughout the year? So Kurt I’m going to start with you.
Kurt Bauer
I think I already covered a little bit in my earlier remarks, I think that they deserve tremendous credit and I love the fact that the Manufacturers of the Year award program is going to be to focus and highlight on what they have accomplished in 2020 and of course now we rebuild in in 21 and beyond. I think the future of manufacturing in the state of Wisconsin is very bright, we have some challenges that has been noted, but overall I think that the sector is strong and will continue to be so.
Nick Novak (Host)
Well I said one to two sentences so that was a little bit longer, but that’s okay so we’ll go to Greg next, you know, what has been the impact of manufacturing in Wisconsin over the last year and what have you seen as they helped respond to the COVID-19 pandemic.
Greg Sofra
Yeah I mean one word comes to mind, innovation right, you know, manufacturers and maybe specifically manufacturers in Wisconsin have always been innovators and despite all the challenges of 2020, we saw firsthand how the manufacturing industry adapted and kept our state and our state’s economy running through all this and then looking to the future I see manufacturing leading the way. I think our best products and ideas come out sometimes through the biggest problems and challenges and I see that continuing through in 2021 and I know us as a firm we look forward to supporting those innovations and you know this is a phenomenal forum to recognize those achievements.
Kurt Bauer
Are you going to scold him for going longer?
Nick Novak (Host)
I was going to but now you already have so let’s see if we can keep the attorney to one to two sentences, let’s see what David has to say.
David Krutz
That’s such a challenge.
Greg Sofra
David’s billing rate is greater than mine so.
David Krutz
WMC is celebrating its 110th year in operation, it’s done that because manufacturing has been the bedrock of Wisconsin for its entire existence, you know, manufacturing is going to continue to be the bedrock for Wisconsin families, Wisconsin communities and the Wisconsin economy for the next 110 years and beyond.
Nick Novak (Host)
Well thank you David, thank you Greg, thank you Kurt for joining us here on our first podcast as we really feature a lot of amazing stories from the manufacturing sector and celebrate them in a way that due to COVID-19 where we’re not able to like we normally would at the Pfister Hotel with the traditional Manufacturer of the Year awards so again thanks to all three of you for joining me.
David Krutz
Thanks Greg, thanks Kurt, thanks Nick.
Greg Sofra
Thank you very much, appreciate it.
Kurt Bauer
My pleasure.
Nick Novak (Host)
Next week we’ll share our first story from a manufacturer on adapting to the COVID-19 pandemic as we highlight Nicolet Plastics from Milwaukee and shed some light on the challenges they faced, opportunities they had and some of the successes that they saw in 2020. Plus, we’re going to learn more about the future state of manufacturing in Wisconsin post pandemic and if you found value in this episode we really hope that you’ll hit subscribe and share it with your peers, we really do want to share all the good news stories about manufacturers throughout 2020 and beyond and we hope that you’ll help us do that and that you’ve enjoyed this podcast, so for now, this is Wisconsin Made. The Podcast. I’m your host Nick Novak, thank you for listening and we’ll see you next week.
Voiceover
This is Wisconsin Made. The Podcast. The show that takes you inside the strength and resilience of Wisconsin’s manufacturing community where we hear from Wisconsin’s CEOs and executives to learn about their challenges, opportunities and success navigating their business throughout the COVID-19 pandemic. Thank you to our program sponsors Baker Tilly, Michael Best and Wisconsin Manufacturers & Commerce.