A Fracking mess

I went to a dinner recently where the speaker, an API spokesperson, presented Hydraulic Fracturing (HF) to us.  The Industry has some work to do to convince the public that they are being good neighbors.

Here are some links the speaker presented:

After the presentation, I was speaking with another industry watcher who works mostly for the oil and gas companies and he said that the water purity and environmental standards are in place.  You can check for yourself at the above links.  He said the standard is that water quality of returned water must be as good as drinking water or better.  Air, noise and other emissions must meet EPA/DEP standards for the state.  Other waste must be dealt with in an environmentally-responsible manner.  So the standards are in place and are sufficiently stringent.

The real issue is enforcement.  This guy (very off the record) says the industry is not policing themselves to meet the standards they have adopted.  Sufficient testing to prove all standards are met is not being done.  Some minor superficial testing is done but not to the level to prove “as good as drinking water or better” for example.

As to the amount of water returned to rivers, he said it varies but the average is somewhere near 55%.  This is because the cleanup process uses some heat and much of the water evaporates.  [I personally do not believe that CO2 emissions are a big problem, or certainly much less of a problem than other emissions.  That can be a whole other article.]  Just looking at the chemicals being used and I’d say VOCs from ponds should not be a big issue, even if the concentrations were a lot higher.  Most are soluble or have low volatility so they would not be considered VOCs.  The ones that are, like isopropanol, are only present in tiny amounts.  I’d suppose they’d break down in the heat of the fracking process forming less volatile constituents.  But that’s what proper testing would show.

This is a case where the government needs to get involved to enforce existing requirements.  (I can’t believe I’m saying this!)  I suppose the key point is that these standards are voluntary, not mandated.  So they are not strictly “regulations”.  Even periodic spot checks of every well’s data and drop-ins would serve to bring the industry into line, so long as there were severe penalties for non-compliance.

I pressed this guy as to why he thinks they are not doing the things necessary to comply.  His answer was economics.  He said the general population wants gas prices to be lower.  I recall about 30 years ago when commercial levels of gas were at $6/MM Btu.  Today they are in the $2 range.  I said even if compliance raises the cost 50% (to $3) or even 100% (to $4), we would still be below the $6 of 20 years ago, which is  equivalent to $14 in today’s dollars.  See http://www.bls.gov/data/inflation_calculator.htm   Still a bargain!  I believe there is plenty of room for proper environmental protection.

My point here is that the public outcry should not focus so much on the pollution but on industry adhering to their own guidelines and making them prove they are doing what they say.  I doubt the industry could mount an effective argument against that.

Think about how seat belts, catalytic converters, and air bags were argued against because they were too costly, and now they are in every car.

Fracking has certainly been around a long time, and is growing by leaps and bounds.  Let’s make sure that we protect the environment while doing it, even if it costs us more.  Let’s not make a Fracking mess out of the planet!

Tom Smith
Managing Director
Focused Solutions Group


Fixed vs Time-based pricing

As our Vision points out, we work to develop a fixed price solution for our clients.  We find this is preferred by most clients, since it helps them to establish a budget for their project, along with an anticipated Return on Investment (ROI).  This enables the client to more easily make the decision to work with us.  It also incentivizes us to make sure our estimates are sufficiently detailed so we can make sure the project is profitable at that price!

One question we are frequently asked is: why don’t we quote time-based (hourly rate) pricing like most other consultants?  Well, it’s simply because we are not like most other consultants!  We will not even quote if we feel we do not have the right expertise to handle the project.  But if we do, we also have the experience to develop a scope of work for a particular deliverable, whether it is documentation or a physical product.  And developing a scope allows us to quote fixed price.  This also differentiates us from most others who either can’t or won’t do the work to develop a detailed estimate.

Think about this from the client’s perspective:  Wouldn’t you prefer to know your budget?  Take an example of two consultants, one says they will work with you at a rate of $200 per hour and they estimate 200 hours to get the project completed, but they will bill upon actual hours spent.  This is essentially an flexible estimate of $40,000.  What if we came in and said we will quote a fixed price of $50,000, which of course is 25% higher than the other quote.  You’ve done some research and think both consultants might be comparably experienced.  Of course, we are willing to quote a fixed price so one might conclude that we are more confident in our price.  Do you think the 40k one is more likely to bill at 40k or some range between 40 and 50k?  How about the possibility of them billing more than 50k?  And what about the time frame for the work?  Let’s say both estimate 2 months to get the work done.  Since there are about 200 man-hours per month, this is about one half person per month.  Which consultant is incentivized to get done early?  It’s obvious the fixed price firm is more likely to benefit from getting the work done early.  And the client benefits too.  If they can then implement early, they improve their ROI.

There are times when it is not easy to develop a fixed scope of work resulting in a fixed price.  And about 15% of our projects are like this.  So we do work that way, when there is no other choice, and when we bring experience to bear that outshines the competition.  But we try to keep those projects small so that, once we get to a point where the scope can be defined, we convert to a fixed price.  This is a strength of ours that we leverage to your benefit.

Call us to see how we can help you!

Tom Smith
Managing Director
Focused Solutions Group


Broad is better for small companies

We often hear about focus.  You need to focus on a particular area in order to grow that area.  And it’s true.  Focus on something and you will become better at it.  “What gets measured gets done” as the saying goes.

I’m not disputing that.  My point is that, when you are in a small company, you need to be good at a lot of things.  Broad is better at small companies.  They don’t have a lot of people, so it helps when their people are cross-trained in many functions.  The more cross-trained you are, the more valuable you are to any small company.  Therefore, the more likely you are to be needed and this promotes your own job security.

I started out at small divisions of large companies, and the incentive there is the same.  You wear many hats and the more responsibilities you take on, the more valuable you are to your employer.  I am a sponge who enjoys learning opportunities and was lucky to be thoroughly cross-trained early in my career.   When I moved to management at smaller companies, I wore even more hats and became even more valuable.  Today, I still enjoy learning new things and also mentoring others.

It’s a path choice.  You can choose to get your Masters or Doctorate in your field.  This tends to make you a Subject Matter Expert (SME) in your particular field. You will likely remain in that kind of silo and/or industry your entire life.  And you will have a great depth of knowledge in your field.  There are many who choose that path and become quite content and successful.  I don’t begrudge anyone choosing this kind of path.

I’ve come to enjoy breadth over depth.  I consider myself a Jack-of-all-trades, Master-of-Many.  In small companies, you need to have a significant depth in multiple areas to be successful in whatever project you are working on.  The small employer is wiling to provide this On-the-Job Training (OJT) to you if it helps them succeed and they have confidence in your ability to tackle different problems.

I once built an Engineering department from one non-degreed draftsman to a number of degreed folks, who were each specialists in their own areas.  Our projects were too small to have teams of engineers working on them.  We made it a point to cross train everyone.  So a Chemical Engineer learned electrical, instrumentation and PLC skills, while the Electrical Engineer learned process and mechnical, and the Mechanical Engineer learned process, PLCs, structural, etc.  After a while, ALL of the team, getting some help from each specialist, learned enough of EVERY discipline to handle projects on their own, tackling every discipline themselves.  They only asked for help when something was particularly complicated, and those requests diminished as the cross-training increased.

I think if you ask any of those people, they would tell you that that was the most valuable training they ever received.  I also think it helps if you are interested in a management path.  When you are a manager, you will be more successful if you are able to truly understand the needs of each of the disciplines reporting to you.  And the higher you go, the more broad you need to be in order to understand the needs of the diverse folks under you.

In a small company, you can progress to the highest levels and still be involved in every area of the company.  Even though there may be some level of delegation, you may find yourself pulled into the details to help solve problems.

In large companies, the nature of the number of people involved and the number of problems to manage is so large that the shift to more delegation and less detail is inevitable.  So many large companies break into specialty silos for particular disciplines.  And they’ll need SMEs to work in a structure like that in order to be successful.

There’s been a lot of talk about how small businesses are the engines of the economy.  I believe that.  If you ascribe to this view, take control of your career and make a conscious effort to broaden your skill set.  This will make you more valuable to any small business employer.

Tom Smith
Managing Director
Focused Solutions Group


Build to Sell

A number of years ago, author Jim Collins wrote a great book, Built to Last.  Great book about building companies that can stand the test of time.  This article touches on some of the same points.

Succession planning comes into play when you want to built a company that lasts.  Obviously PEOPLE do not live forever, so their knowledge, that was accumulated for years using corporate dollars, must be integrated into the company, so when they depart, the company can survive.  This is called building the corporate knowledge base.

Some employees think by keeping this knowledge to themselves, they gain job security.  Perhaps, for a short time, they are right.  When no one knows better than you how to do something, you are the “go-to” person.  That’s fine if you want to stay there forever, doing the same job forever, and never learning anything new.  If the company sells that particular product line or component, you might still be out of a job, or might have to move to wherever.

I found throughout my career that if you can organize the information of your job into data that can be passed along to others (less experienced than you), it enables you to help them learn the new job (mentor them) and move on to something more interesting.  Back then we didn’t call it “building the knowledge base”, but that is certainly what it was.  We called them Design Manuals or Operating Procedures, for example.  And I did it on my own, without anyone asking me to do it, because I WANTED to move on to something more interesting.  Today a whole industry has been built around Business Process Management, the creation, documentation, organization, continuous improvement, and control of business processes.

I think you become more valuable to a company when you do things like that that add value to the organization, taking some initiative, like I did when creating those Manuals and Procedures.  By becoming more valuable to the organization is how you increase job security on a long term basis.  Just doing what you are told does not get you job security for very long.

Small companies often thing about succession planning, as getting life insurance, setting up a will, etc.  And, while those things are important and necessary, they are not they key to succession planning.  Building a Knowledge Base is.  Creating a system that others can use to train new employees in how you operate is.  Having a system where people continuously contribute to the knowledge base is.  Mentoring others to create multiple and intertwined personnel backups is.

The small business owners’ key responsibility (after building sales) is to mentor and train the workforce, not making products.  hopefully, he has already delegated that to the Production department.  Another great book, Michael Gerber’s E-Myth, talks more about this and the various stages of entrepreneurship.  Most owners start out as “Mechanics”, meaning they are building the products and the business, but they are not necessarily good managers.  I hope I’ve sufficiently explained above that they can’t move on until they have created a way to trust those employees to do the job first!

We all understand that you cannot truly delegate until you are sure the recipient can do the job without you.  This is why you need a system in place so employees are clear on what must be done, and you have a way to measure them against those processes.  Like Reagan always said: “Trust but verify”.

By the same token, if you do not have a son who will take over the business, or other relative, who will take over the business when you leave?  If you have thoroughly trained all levels of employees, you may wish to set up an ESOP, essentially selling the company to the employees.

You could simply close the business and auction off the assets.  This is the best way to leave the business if business value is not important to you, because closing it creates the lowest business value.  If you have no family or relatives, and do not care much about your employees and their families who all have part of their lives invested in your business, it is one option.  Obviously closing a business requires laying everyone off.  I would argue that if you are considering that, you don’t care as much about your employees as you have been telling them.

If you have been diligent in building a knowledge base, and that includes financial systems, you have also been building business value.  And guess what?  An external Buyer would be interested in your business!  Which is another path, selling the business to a third party.  You can do it if you have not built the knowledge-base, but external buyers would see your company as a value play (meaning it is undervalued, they can pick it up cheaply, and have plenty of room to fix it up).

The price you can get for your business is not the price you want.  It is the price a buyer will pay.  Any buyer will pay more for a company that is “Built to sell”.  So every day, think of something else to add to the knowledge base.  If you are always building your business with increasing its valuation in mind, then you will more than likely have a successful business.

And if you need help doing any of this, call us!

Tom Smith
Managing Director
Focused Solutions Group


A rising tide lifts large boats first


Image via Wikipedia

This is a copy of the article published today  at http://chenected.aiche.org/general-interest/rising-tide/

You know the saying.  It’s “all boats”, of course.

Current data indicates the economy is improving, albeit at a slower pace than usual.  Past recessions have enjoyed a more robust recovery.  What does this mean for the average small business?

Many small businesses went into “hunker down” down in 2008.  This means they curtailed most capital purchases and certainly stopping hiring.  They may have laid off people.  If they didn’t lay people off, they might have reduced the number of hours worked.  They had no choice!  Their customers reduced orders to them, asked for pricing concessions, and stretched out payments.  Even large companies did this to the small companies.  Why?  Because everyone else was doing it.  I’m not saying this is unreasonable.  It’s just the way most businesses work.

Business try to use the periods of reduced sales to continue to market into new areas, or develop new products with existing capabilities, or establish alliances with other companies.  They also do this when times are good, but you can spend more time on these areas when things are slower.  There’s less pressure to do these things when times are better.  You focus on improving operations to become more efficient, but that requires investment.  In “hunker down” mode, you avoid investment unless you are sure it will pay off.  If things get a lot better, you might be able to hire someone to help in those areas.

Back to the current situation.   Small business can’t layoff too many people.  Believe it or not, small business owners in particular loathe laying anyone off.  They know they are affecting families when this happens, and it feels very personal.  It is also a matter of survival, so sometimes it must happen.  But unlike large companies, there is not a lot to cut before you are cutting muscle.  There are many key people in a small company, that, if you laid them off, would get another job, and you would not be able to bring them back.  So small business owners “carry” them.  This means they do not have the profitability or the orders to keep those people but they keep them for the sake of the future of the company.  Most employees don’t realize this.  The owners assign other tasks to keep these people busy until the climate improves.  and the owners still might need to reduce hours.

As the economy improves you will see hiring start to pick up.  The large companies are hiring.  The work week in increasing as the small company has more orders and can bring their reduced team back to full time.  Check the BLS for data on the work week.  The increasing number of hours indicates hiring will follow.  And, in case you didn’t know, you can subscribe to all kinds of BLS reports.

Once the employees are working full time with maybe a little overtime, the small business owners gain some confidence that maybe the sales are here to stay, and they begin to hire.  They hire slowly, and fire slowly, as in their nature.  This small business hiring lags well behind the large business hiring, hence the title of the article.

Do you agree that most small businesses are more than fair, as described here?  Let us know!



Tom Smith, a new contributor to ChEnected, is Managing Director at Focused Solutions Group in Chatham, NJ, and can be emailed directly here.


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NJ Mfg job losses slow to lowest pace in 10 years

This is a reprint of an article printed in the Sunday Bergen Record on 4/17/11 by Alex Macinnes, Staff Writer.  See http://www.northjersey.com/news/119995144_Finding_the_bottom_.html for the full article.  Tom Smith, our Managing Director was quoted in this article.

New Jersey lost 3,400 manufacturing jobs last year, and despite the fewest job losses in that sector in 10 years, area manufacturers are not ready to celebrate those employment figures.

Joseph Brown, owner of Brown Industries in Paterson, is cautious about the state of manufacturing. 


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Joseph Brown, owner of Brown Industries in Paterson, is cautious about the state of manufacturing.

That reluctance to look for a silver lining, even as some industry observers predict a small rebounding in manufacturing hires for 2011, follows two decades when New Jersey shed 253,000 manufacturing jobs, according to the U.S. Bureau of Labor Statistics. The survivors, mostly smaller shops that produce lower quantities of higher-value goods, say they do not trust talk of an industry recovery, and therefore, will not bring on new hires.

“We’re not seeing the recovery we expected,” said Robert Schmidt, owner of machine tool maker F.P. Schmidt Manufacturing Co. in South Hackensack. “Washington is saying things are looking up, the recession is over and the stock market is up. We see no cause for it.”

New Jersey manufacturers last year reduced their workforce by 1.3 percent, from 259,000 jobs in January to 255,600 in December, according to the federal count. It was the first time in five years the job loss was contained to fewer than 10,000 positions, and some optimistic manufacturing leaders believe that after decades of hemorrhaging jobs, the industry has found its natural bottom — and could even rebound, slightly, this year.

Fewer losses

Manufacturing jobs in New Jersey:

Year Employees Actual job loss Percent job loss
2000 421,900 900 0.21%
2001 381,600 40,300 9.55%
2002 358,000 23,600 6.18%
2003 344,100 13,900 3.88%
2004 335,200 8,900 2.59%
2005 328,300 6,900 2.06%
2006 317,600 10,700 3.26%
2007 305,600 12,000 3.78%
2008 287,200 18,400 6.02%
2009 259,000 28,200 9.82%
2010 255,600 3,400 1.31%

Source: U.S. Bureau of Labor Statistics

A similar analysis of county manufacturing activity is incomplete, because the U.S. Bureau of Labor Statistics has not released 2010 numbers at the local level. Even so, between 2001 and 2009, Bergen and Passaic counties saw the largest drop-off in textile employment. Bergen County lost 81 percent, or 1,459, of its textile jobs, and Passaic County saw a 69 percent drop, or 1,462 positions, during that period.

Companies continue to rely on foreign manufacturers for high-quantity runs of mass-produced textiles, such as clothing, according to business leaders.

Where they do see some hope is in the manufacturing of parts for durable goods — larger-ticket items that need precision tooling, such as printers or medical devices. Tom Smith, executive director of the New Jersey Tooling and Manufacturing Association, believes companies are ready to replace old machinery, and he hopes when they do, they will rely on U.S.-based manufacturers to fabricate those parts.

“My sense of what our members told us was that 2009 was really dead and 2010, there were kernels of recovery,” Smith said. “I’ll predict for 2011 [the number of overall sales] will be higher at the end of the year, because the economy is growing.”

The U.S. gross domestic product expanded 3.1 percent in the first quarter and has increased for six straight quarters.

Others agree with Smith, saying those companies that made due with outdated equipment during the recessions will now invest in replacing machinery and tools.

That would be welcome news for Bergen County and Passaic County machinery manufacturing shops, which eliminated 2,011 jobs, a 40 percent reduction, between 2001 and 2009. During that period the two counties lost 61 machinery manufacturing companies, a 25 percent slide.

Machinery Services Corp. of Paterson has been providing industrial plants with custom-built machinery for 40 years. The company installs, rebuilds and services equipment for area paper and foil manufacturers and the waste water treatment industry. Its president, Rich Taylor, believes that many of his clients have put off major projects for too long.

“We see an uptick here in our activity level,” Taylor said. “People are very conscious of cost, and we’ve seen the cycle before where they didn’t do anything for an extended period to the point where they have to do something. We have people who are now considering projects that were put on hold for quite some time.”

To accommodate that projected growth, Taylor said he will increase his current workforce of 75 employees by about 10 percent this year.

Timothy McBride is president of Lydon Oven in South Hackensack, a company that produces industrial and scientific drying ovens, mostly for pharmaceutical companies. McBride cited several examples of customers replacing their ovens, but he does not think the early surge in orders will result in a strong rebound this year.

“My projections for the balance of 2011 are just kind of so-so,” he said. “It doesn’t look, at this point, any rosier than it did a year ago. We survived, but we have the same issues that we had a year ago.”

Those issues include a decline in orders for replacement parts and fewer requests for new ovens. McBride said the lack of replacement-part orders indicated to him that some of his clients had turned off their ovens during the last few years, and “that was very scary.”

Nationally, employment in durable-goods manufacturing has risen by 243,000 since December 2009, according to the Bureau of Labor Statistics. That growth, and New Jersey’s relatively stable 2010 numbers, has some state business officials guardedly optimistic that smaller, more precision-based manufacturers will lift production and their workforce.

“The name of the game now is to survive, you have to be more flexible, you have to be smaller and you have be able to turn on a dime to meet customer specifications quickly,” said Philip Kirschner, president of the New Jersey Business and Industry Association. “That leans more to smaller manufacturers, but they’re around. Collectively, they have really helped stanch the bleeding from loss of mass manufacturers.”

Kirschner said the smaller production orders is less likely to be done in other countries. Nations such as China operate more mass production that “can be done anywhere at the lowest cost.”

“What is left is the company who does smaller jobs, custom jobs that are not easily outsourced,” Kirschner said.

That company can sometimes be referred to as a “job shop,” a small operation that specializes in general machining. Those shops supply larger manufacturers that need a limited run of new parts for their equipment.

Brown Industries of Paterson is one such job shop — a business that can produce ventilation dampers or create moldings for food producing companies.

“Any industry, we take jobs from anyone,” said Joseph Brown, owner of the East 31st Street workshop.

Brown, who employs one machinist, agrees with Kirschner that many companies that need larger runs will go overseas. That, however, does not necessarily mean more opportunity for him, mainly because as the larger manufacturers leave New Jersey, that leaves fewer clients.

“You have far less people needing tools, because there’s less manufacturing here in the state,” he said.

The only growth Brown sees for his company is a result of a competitor’s ill fortunes.

“We’ve increased slightly in work, but that’s because this one place went out of business and I think we’ll get more of their work,” he added.

One of Brown’s colleagues doesn’t believe the national or state employment figures, because, the information does not match the reality. And, even if the economy improves, it is too early and risky to hire someone new, said Richard Ebersbach, president of Ringwood‘s Bach Tool Precision. Started in 1992, Ebersbach’s company fabricates machine parts and employs three workers, down from six in 2008.

Ebersbach dismissed the latest numbers as good news, because, he said they still show an industry in decline, no matter the pace.

“To say that things are better, because they’re less worse, it’s really not better,” he said. “Why have things gotten the way they are? [Those jobs] are not going to go back to where they were. Just because it’s less worse, I’m sick of hearing that.”

E-mail: macinnes@northjersey.com


Career Paths for ChEs

This post is a copy of my post at AIChE Chenected’s blog.

which career path?Whenever I attend one of our NJAIChE events at Snuffy’s in New Jersey, I am inevitably asked by students:  What do you think is the best career path?

An interesting question with many possible choices.  Hopefully I can boil it down for you here.  Basically it comes down to deciding what you like to do, since you will be more satisfied if you like what you do.  Did you select your college school because it was more theoretical or practical?  Do you prefer working alone or with a team?  How competitive are you?  What is your financial situation?


Even excluding industries, some basic starting options you may be familiar with are:

  • Research
  • Development
  • Process
  • Project
  • Sales
  • Marketing

What does each path entail?

Obviously if you want to work in research or development, you may want to consider a higher level degree, even to a PhD level.  Think of research as creating basic innovations and development as trying apply some research concepts to the real world.  It is much harder to put the time in for a PhD if you are trying to work full time.

A marketing path may lend itself to a later MBA. Speaking of MBAs, it is helpful for a process, project, or sales paths too. And an MBA can be earned while you are working.

I’d suggest that development and process engineering require more engineering prowess, while project engineering is more people, budgeting, and schedule management.  Sales and marketing are more customer relations. Marketing tends to be more analytical than sales. Each of these jobs require a different mix of extroversion, practical application, and competitiveness.  So there are paths for everyone!

In my personal career I mixed it up, having worked in all of these areas. Personally I’ve found product development and project management to be the most fulfilling. If you are as lucky, you will be given the option to try different things to see what you prefer. If you are not sure about the right path for you, you can (and should) ask your boss about this from a career development perspective.

Since chemical engineers are good with math, there is no reason why you can’t move into the financial side of the business, if that is one of your likes. Or how about IT, or HR, or supply chain (purchasing/logistics)?

What about later?

Are you interested in a step up to management?  Today it is almost imperative that you have an MBA, or at least a master’s to step on that ladder. Many people do not like the extra stress of managing other people, providing assignments, reviewing work, mentoring, and disciplining. If you are one of those, management is not for you! If you want to try it, ask your boss if you can help train some newer people, and you will get a taste.

The great news is that a chemical engineering degree is a fantastic starting point for almost any career. Of course, I’m biased!

What are your questions about choosing a career path?

Tom Smith, a brand new contributor to ChEnected, is Managing Director at Focused Solutions Group in Chatham, NJ, and can be emailed directly here.


Signpost photo: Sam Dal Monte via Flickr

Yes, New Jersey is waking up!


In answer to my July post:  Yes, I think NJ is Waking up!

Today I attended a Jobs for Jersey forum at Montclair State.  My company was invited by the Manufacturing Network of NJBIA to which we belong.

There was a panel of dignitaries, which included 3 past governors, Brendan Byrne, Donald DiFrancesco, and Jim McGreevey.  Others on the panel: Dennis Bone (Pres of Verizon), Ralph LaRossa (Pres of PSE&G), and other academics and small business owners.  The panel discussion was intended to be a first step in providing solutions to NJ’s employment challenges.  Lt. Governor Kim Guadagno made the Closing Remarks.

A lot of good points were made covering many areas.  I think everyone agreed that anything government can do to streamline bureaucracy is a step in the right direction.  The “normal cost of doing business” in NJ is high and part of this is related to regulation delay.  This creates investment postponement or delay.

Some questions from the audience seemed to call for more financial support from the state for programs such as convention centers or sustainability programs.  In today’s climate, this is not realistic.  Better for you to build a business case and go forward on the merits. Someone on the panel pointed out that the current NJ regulations favor green, wind, and solar projects, and that it would be difficult to find anther state where the incentives are better. Another mentioned that many of the state-sponsored projects such as Liberty Science Center, while interesting and appealing, have not paid for themselves and continue to require state subsidies.

Governor Christie has decided not to move forward on the new tunnel project, mainly because any cost overruns would be born by the state.  And which major government project has not had significant cost overruns?  Now if they were using us for Project Management support, that would be different!  If we allow bridge and tunnels rates to rise during the peak hours, then most people would shift to off-peak hours.  Right now there are roughly 1.5 hour windows around each rush hour where the crossings are at capacity.  Go into the city in the middle of the day or the middle of the night and it is a breeze.  We can force this kind of shift at almost no cost, thus increasing total daytime usage significantly.  Yes, people don’t want the pain of paying to go outside normal business hours.  No pain, no gain, right? How about saving some/most of that increased revenue so any new capital project pays for itself beforehand?  A Port Authority Lay-Away plan!

But I digress.

Much like Lt. Gov. Kim Guadagno’s speech I wrote about in July, she came on today again with excitement and positive.  She now has 10 months in office so she spoke on the changes in place already. One program I like which addresses the main issue above is the Red Tape Review Commission which has already started to reduce the time to get permits reviewed.  Note that they are not guaranteeing to approve permits, only to complete the permit review process a lot faster.  Some cases will be reviewed in 10% of the time it currently takes!  And it will cost the state less!  Now THAT’s progress!  What else are they doing?  You can see for yourself at NJ’s Priorities. Ms. Guadagno was a great speaker.

All in all a good session.  I came away feeling that NJ is waking up and realizing that they need thriving businesses in order to create jobs.  And now they are doing some good things to get them.

Tom Smith
Managing Director
Focused Solutions Group


We need education for those NOT going to college

The following was in response to a 7/23/10 blog posting by Dave Opton of Execunet:


What about those not going to college?

It’s true that K-12 have not been taking the science/engineering path.  It’s perceived to be too hard for most.  Since I was an engineering undergrad a few centuries ago, I can understand the frustration.  I mean, who wants to do all that work if they can have it easier and make more money?  Okay, moving into an executive role later may help if you are interested in making money or making more of a contribution in your work.  Some aren’t.

Most parents are just happy to have their kids going to college.  And most of the HS programs are geared to do just that.  And I do not begrudge them that.

I’m a Manufacturing executive at Focused Solutions Group.  Do you know about http://ratzenberger.com/manufacturing.php or http://www.nutsandboltsfoundation.org?

The HS guidance teachers are so focused on getting kids into college that kids who are not going to college get forgotten about.  Meanwhile there are some fairly decent paying jobs in manufacturing these days, especially for operating some of the computerized equipment we use these days.

So back to my original question: What about those not going to college?  We need every Guidance counselor to realize whether or not they make their goal of 95% going to college, they need to guide 100% of the students to be the best they can be (no disrespect to most GCs).  And if we want to keep Manufacturing in the US (and I think we need to, but that’s a much longer discussion), we need to help those kids get properly trained to handle today’s manufacturing jobs.

I am also active in Manufacturing networks in New Jersey and I can tell you that my fellow small business owners lament the lack of quality help and vocational education every day.  Many state and county governments are not doing it well.  Pennsylvania does have a nice program, though.

I would like to see every child go to college.  And most into the sciences.  But that’s not practical.  So I’m talking about a path for those who don’t.  Perhaps we need some breadcrumbs to make that path more clear.


Tom Smith


New Jersey Waking Up?

This is an article that was in the May-June 2010 NJ Tooling and Manufacturing Association Newsletter.  You can download the full version at www.njtma.com


New Jersey Waking Up?

by Tom Smith

NJ Lt. Governor Kim Guadagno spoke at a breakfast I attended on 6/15, sponsored by the Association For Corporate Growth.  This was ACGNJ, www.acg.org/nj.

The topic was “Making New Jersey More Business Friendly”.  She spoke for about 30 minutes and took questions.  As you might expect, it was generally upbeat and positive.  It was mostly superficial, but the overall tone was good, and I think they are really thinking how they can help, especially without using taxpayer support (which I generally agree with).  After all the deficit is huge!

Of course, she spoke about the state’s 11 billion dollar budget deficit which they are fighting to close.  She stated that they feel the Number 1 thing they can do without spending tax dollars is to eliminate red tape.  Nice article from 6/8 about this at http://www.nytimes.com/2010/06/09/nyregion/09njbudget.html.  Christie feels they will have something close to what they need by the end of this month, and Ms. Guadagno supported that position.  As of this printing they have agreement on the cuts.

She mentioned Executive Order # 2 a number of times.  Christie signed it on 1/20/10.

Go to   http://nj.gov/infobank/circular/eocc2.pdf for the actual text version, or go to http://nj.gov/infobank/circular/eoindex.htm for a listing of all executive orders.  EO#2 sets “Common sense principles of red tape”, and all cabinet members needed to buy into this before they were appointed.  She went over a few of the tenets but it is not a long read so you can check the link.

She mentioned they need to stem the flight of population exiting NJ, being about 250,000 since 2002.  This means decent jobs must be created to slow or reverse the trend.  So they have initiatedthe NJ Partnership for Action, funded privately by a number of large NJ companies such as Verizon and PSE&G among others (no taxpayer money), see http://www.state.nj.us/governor/news/news/552010/approved/20100412b.html for some points on the subject.

She noted that PA has 23 offices overseas.  NJ has had none.  NJ is establishing 2; one in Shanghai and one in London.  She noted that for every dollar spent on tourism, $3 to $6 goes back to the state’s economy.  She also noted that Christie is against drilling for oil or natural gas off our coasts and this decision was prior to the gulf oil crisis.

Ms. Guadagno provided us with her cell phone number, 609-575-8111, and asked anyone who needs her help is free to call her.  That was interesting!  She also asked us (business owners) to give her the contact information from our 5 favorite vendors and 5 favorite customers that are outside the state and she would contact them to attempt to get them to move to NJ.

Her assistant stayed later and answered more questions.  Her name is Christina Genovese, Director of Business Affairs, Office of the Governor, PO Box 001, Trenton, NJ  08625-001, 609-575-2537, Cell: 609-575-5616, Fax: 609-777-0350, E: Christina.Genovese@gov.state.nj.us.  By mid afternoon, she had sent me a “thanks for speaking with me, and is there anything I can do” email.  Impressive!

It’s still too early to tell, and actions speak louder than words, but I like what Governor Christie is doing so far!  Let’s see if he can keep it up!

Tom Smith (www.fsgnj.com)

Note:  Tom is a director of NJTMA.  This article conveys his views and not necessarily the views of NJTMA.