Gray CEO: Why I’m Optimistic about the Future
This year has been filled with uncertainty, fear, and turmoil. The coronavirus came swiftly and with a force that has rocked families and business operations, leaving a staggering impact on the national and global economy.
For Gray, this has meant enabling our more than 1,400 team members across the family of brands to work remotely. It’s meant being agile and flexible on our jobsites and offices, while of course adhering to federal and local health recommendations. It’s been a lot of change, rapidly, with the question of returning to normalcy asked daily.
Fortunately, the tide appears to be turning in a more positive direction. Our business is experiencing record-breaking milestones. This year, we signed our largest contract to date. Our markets and services are expanding. Our teams are continuing to grow to meet the strong pipeline of work that’s projected. From our perspective, these trends will persist.
This optimistic outlook was further validated after a recent meeting in which I participated at the White House. I had the privilege of meeting with the government’s top economic advisors and policymakers, including Vice President Pence, to elevate the critical issues that will determine Gray’s future.
At the forefront of everyone’s mind is COVID-19. This month, multiple vaccines will be in the final clinical trial phase. While “normal” will not emerge overnight, these developments signal some culmination.
Tax Reform 2.0
At Gray, we advocate a few areas that will spark true COVID-19 recovery and jumpstart the economy. The first focuses on pushing the envelope with tax reform. The 2017 Tax Cuts and Jobs Act simplified the tax code, which helped to level the playing field for American businesses, largely those in the manufacturing industry. If investment and job creation are further incentivized, benefits could be felt throughout our markets and the economy.
The tax issue really hits home when manufacturing customers tell us they would have readily invested as much as an additional $30 million at the onset of their projects, if tax reform had been in place before their project began. From Gray’s perspective, one example is that this could have created a 15% increase in workers. For Clemens Food Group, our fresh pork processing customer, it would have created at least 25% more workers and allowed them to create a second shift.
Since 2017, Gray has increased its headcount by over 600 across the family of brands. We also formed Gray Solutions, a Gray company, and acquired InLine Engineers, a Gray company; Spec Engineering, a Gray company; and most recently Anderson Dahlen, Inc., a Gray company to bolster Gray’s markets and services. In addition, our projected revenue for 2021 is triple what it was in 2017. These trends were heavily influenced by tax reform.
Looking ahead, we’d like to see this needle continue in right direction to build upon the tax reform progress, improve and make permanent the pro-growth provisions in the tax code that are set to expire, introduce spending stipulations to counter expanding the deficit, and continually reassess the competitiveness of our tax system.
A second factor that coincides with favorable tax measures is regulatory reform. Rules and regulations play a necessary and meaningful role, but they should be transparent and cost-effective. Tremendous progress has already been made to, again, simplify and rollback cumbersome regulations, but more can be done.
Gray’s manufacturing customers face significant challenges from environmental regulations, whether at the state or federal level. States with the highest level of environmental regulation and more stringent permitting requirements lag way behind in the creation and expansion of jobs.
The complexity of regulations often results in duplicative, poorly designed, and thus ineffective rules adding an unnecessary burden to business operations. Businesses should be able to focus on competitiveness and growth opportunities, factors that feed into a prosperous economy.
Trends show that international manufacturers want to invest in the U.S. In the first half of this year alone, 74,000 manufacturing jobs were announced as a result of reshoring, and another 42,000 jobs were tied to foreign direct investment (FDI), according to the Reshoring Initiative. The most obvious cause of the reshoring jump is credited to medical products reshored as a result of the pandemic. A portion is also due to some announcements of manufacturing projects in categories that have been traditionally supplied by mostly imports.
Domestic companies also want to invest further into the economy but need the support of federal and local governments. Tax reform coupled with deregulation initiatives could better level the playing field for companies, both foreign and domestic, that make products in the U.S.
Moving forward, our position on regulation aligns with the National Association of Manufacturers (NAM), as it does with tax reform. Regulations should be approached focusing on outcomes and utilizing the best-available science. The analysis process for regulations should also be improved and advanced to better inform regulators and agency leaders. Through a refined regulatory system, regulatory objectives will be met efficiently and unnecessary burdens will be minimized.
Most, if not all, business relies on direct or indirect trade. The U.S. is the world’s largest importer and exporter of goods and services. In short, trade fuels the economy. The trade space has been anything but quiet in recent years. What’s necessary for our industry is trade that establishes the U.S. as a competitive player that acts wisely upon import and export opportunities.
Many of our customers look to come to the U.S. for our business-friendly practices. These same principles should be applied to trade. While accountability has to exist, opportunity and fairness need to be present as well. Trade conducted in this way would improve America’s competitiveness in the global economy.
Disclaimer: Gray advocates pro-business policies that impact the markets we serve. This article is not an endorsement for any political party or candidate.
Regardless of who’s at the helm of our nation, these are issues that we will always advocate. In fact, it’s my job to elevate these when the opportunity arises. If effective policies exist—regulatory, tax, trade, and otherwise—the possibilities for economic prosperity are monumental. I’m optimistic that progress can be made in all these areas, which will move the economy forward.