Wisconsin Business Voice | Fall 2019

COOLEST THING

HIRING VETERANS

ECONOMIC OUTLOOK

OVERTIME RULE

See the Nominees & Winner

Solving the Workforce Shortage

Is a Recession Coming to Wisconsin?

Impact of the New Regulations

Fall 2019 Issue 34

Will Manufacturing Continue to Drive Wisconsin’s Economy?

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In This Issue...

Fall 2019 Issue 34

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F RO M T H E P R E S I D E N T Manufacturing Slowdown Has Multiple Causes

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G OV E R N M E N T R E L AT I O N S Exposing Government’s Secret Playbook

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H E A LT H A N D H U M A N R E S O U R C E S P O L I CY Overtime Regulations Finalized – Now What?

Will Manufacturing Continue to Drive Wisconsin’s Economy?

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12 N AT I O N A L AS S O C I AT I O N O F M A N U FAC T U R E R S

Creators Wanted for Modern Manufacturing 16

S M A L L BU S I N E S S S P OT L I G H T Fearing’s Audio Video Security

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TA X P O L I CY R&D Tax Credit Catalyst for Innovation

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C OV E R STO RY Will Manufacturing Continue to Drive Wisconsin’s Economy?

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C O O L E ST T H I N G M A D E I N W I S C O N S I N Nominees & Winner

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E C O N O M I C O U T LO O K Is a Recession Coming to Wisconsin?

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V E T E RA N S I N T H E WO R K F O R C E Hiring Veterans Can Drive Business Success

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BU S I N E S S & I N D U ST RY L U N C H E O N In Case You Missed It...

Table of Contents | wisconsinbusinessvoice.org

Fall 2019

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Are you ready for 2020?

WISCONSIN

President/Publisher Kurt Bauer

Editor Nick Novak

By Nick Novak WMC Senior Director of Communications & Marketing

W

isconsin is going to be the center of attention for all things politics in 2020. Between now and next November, the Badger State will potentially play a role in deciding the Democratic nominee for president, have an extremely consequential state Supreme Court race, elect new representatives to Congress in both the fifth and seventh districts, and likely be the state that decides the presidency. Not to mention, there is a small event in Milwaukee next summer called the Democratic National Convention.

That means a deluge of phone calls, digital ads, television and radio commercials, and candidate after candidate coming to Wisconsin to stump for your votes.

For Democrats, the Wisconsin partisan primary could help determine which candidate will take on President Donald Trump.

That could frame the policies that will be debated in the general election. Will it be a Joe Biden, who has a long track record and is attempting to please left-leaning moderates – while still throwing a bone or two to the far left? Or will it be Elizabeth Warren who is hoping the most liberal wing of the Democratic Party will make her the nominee? Or is there a dark horse who will quickly rise to the top as other candidates drop out of the race.

No matter who the nominee is, the polls show President Trump has an uphill battle in Wisconsin. A recent Fox News poll had former Vice President Biden beating President Trump by nine points, while U.S. Sen. Warren was up by four points. President Trump would likely call the polls bogus and confidently say he is going to win Wiscon-

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Art Direction/Production Kyle Pankow

Contributing Writers Kurt R. Bauer, Nick Novak, Scott Manley, Chris Reader, Jay Timmons, Lane Ruhland, Brittany Rockwell, Cory Fish, Kevin Nicholson, Ashley Allen, Cam Brawley, Adam Jordahl, Andrew Burish, Jorge Hidalgo, Rob Fleming, John Beckord

Advertising Sales Nick Novak, nnovak@wmc.org

sin. The truth is, he might not be wrong.

Early general election polls in 2016 had then-candidate Trump down by wide margins, and in Wisconsin, a Marquette Law School Poll had Hilary Clinton beating Trump by six points just days before the election. As we all know, Trump clinched the presidency with a big boost from his Wisconsin win.

Looking to the state Supreme Court, Justice Daniel Kelly will face voters for the first time after being appointed to the bench by former Gov. Scott Walker. His rule-of-law philosophy will be challenged by more liberal candidates at the same time Wisconsinites head to the polls to select a Democratic nominee for president. The timing is not ideal for Jutice Kelly’s turnout.

And two congressional seats will change hands in Wisconsin with U.S. Rep. Jim Sensenbrenner and U.S. Rep. Sean Duffy both leaving office. Primaries in the mostly conservative districts will likely be hotly contested.

So, be ready for an exciting year that will determine not only the future of our state, but our country. n

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Wisconsin Business Voice is published quarterly by Wisconsin Manufacturers & Commerce. WMC is Wisconsin’s chamber of commerce, manufacturers’ association, and safety council representing businesses of all sizes and from every sector of the economy.

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Manufacturing Slowdown Has Multiple Causes

By Kurt Bauer WMC President & CEO

W

MC was contacted by multiple media outlets in early October to get our reaction to a Bloomberg report that said Wisconsin lost 5,200 manufacturing jobs between August 2018 and August 2019.

In addition to fielding calls from Wisconsin media, like the Wisconsin State Journal and Milwaukee Business Journal, WMC also heard from the Los Angeles Times and Washington

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Post. Those national papers know that Wisconsin is expected to be a critical battleground in next year’s presidential race (see page 4). They also know that how our economy is performing will greatly influence whether or not President Donald Trump carries the state for a second time, which many pundits believe is an imperative for him to win a second term on November 3, 2020.

The national media narrative seems

wisconsinbusinessvoice.org | From the President

to be that the U.S. economy is slowing down, if not contracting. Trump’s trade and tariff policies are most often cited as the cause, and I wrote a column in this space in January expressing my concerns that tariffs would harm Wisconsin manufacturers and farmers.

In fact, WMC’s last economic survey showed that 47 percent of respondents were being harmed by the tariffs, specifically the ones being imposed

The global marketplace where businesses operate is inherently uncertain, fickle and sometimes unstable.

on China. But interesting enough, 67 percent of the same respondents said they either “strongly” or “somewhat” support the tariffs on China because of that nation’s unfair trade practices, including forced technology transfers in exchange for market access, currency manipulation and the systemic theft of intellectual property.

The global marketplace where businesses operate is inherently uncertain, fickle and sometimes unstable. Government shouldn’t make matters worse with policies that create even more uncertainty and confusion. Without question, the tariffs have created an additional layer of uncertainty and complexity, even if many WMC members believe taking a stand against China is necessary and overdue.

Another trade related issue that is causing uncertainty is Congressional inaction on the United States Mexico Canada Agreement (USMCA). USMCA is designed to be the successor to the North American Free Trade Agreement (NAFTA), which was negotiated by the Clinton Administration. A lot has changed since the 1990s and USMCA is clearly an improvement, especially as it relates to intellectual property protections, digital rules and overall trade agreement enforcement. WMC members recognize the need to update the trade agreement. In 2017, 53 percent said they supported renegotiating NAFTA. Forty-seven percent of Wisconsin’s exports go to either Canada or Mexico, and our state enjoys a positive balance of trade with both nations. And given the dire challenges faced by dairy farmers, Wisconsin needs USMCA to be enacted as soon as possible. Mexico, in particular, is a major buyer of Wisconsin

cheese.

If you haven’t done so, please contact your member of the U.S. House of Representatives and both of Wisconsin’s U.S. Senators, especially U.S. Sen. Tammy Baldwin. Tell them to support enactment of USMCA! Of course, state policy proposals can impact jobs as well, even if they haven’t gone into effect. I am referring to Gov. Tony Evers’ push to repeal the manufacturing part of the Manufacturers and Agricultural Production Tax Credit. Gov. Evers included the repeal (again just for manufacturers) in his first state budget introduced in February.

Gov. Evers’ action may have chilled some plans to expand in Wisconsin,

Another trade related issue that is causing uncertainty is Congressional inaction on the United States Mexico Canada Agreement. although it is hard to say. Certainly, businesspeople were paying attention to what the governor put in his budget.

Last December, after Gov. Evers won the election, but still hadn’t taken office, 68 percent of WMC member CEOs said the state was headed in the right direction, according to our semi-annual economic survey. In June of this year, 59 percent of members said Wisconsin was headed in the wrong direction.

Global economic factors also play a role in Wisconsin jobs, manufacturing or otherwise. I have often referred to Wisconsin as a windsock economy. The reason is that we account for just about two percent of U.S. GDP, which means

our economy is inevitably “blown” in the same direction as the U.S. and global economies.

While the U.S. economy seems stable, other nations are experiencing weakening, including Germany and China. The looming so-called Hard Brexit (the United Kingdom leaving the European Union without a deal) is also a compounding factor.

I also wonder what impact the United Auto Worker strike against GM is having on the U.S. economy, as well as in Wisconsin given that we still have a strong auto parts sector, despite the loss of the Janesville GM plant.

But it wouldn’t be a Kurt Bauer column if I didn’t bring up workforce at least once. I believe demographics are playing a role in the reported loss of Wisconsin manufacturing jobs. Eightyone percent of WMC members say they are having trouble finding workers because there are simply fewer people of working age in Wisconsin. So as Baby boomers retire, there are not enough Generation Xers or Millennials to replace them, and some positions are going unfilled. As a result, I would argue that demographics may be impacting job numbers just as much as economic factors.

All of what you just read was part of a speech I recently gave in Waukesha.

After I delivered it, an economist friend of mine approached me. He said that the Bloomberg report may be inaccurate and that when the federal Bureau of Labor Statistics revises its numbers, the loss of Wisconsin manufacturing jobs may be smaller than 5,200. His take is that the initial estimates, based on monthly rather than quarterly figures, overestimate losses. He said we will know by February. n

From the President | wisconsinbusinessvoice.org

Fall 2019

7

Exposing Government’s Secret Playbook

By Scott Manley WMC Senior Vice President of Government Relations

W

e’ve all felt the anger and frustration of terrible calls by referees in NFL football games.

Perhaps the worst among many being the infamous “Fail Mary” call where the referees missed a blatant offensive pass interference penalty against Seattle Seahawks receiver Golden Tate, then awarded Tate the game-winning touchdown after he took an intercepted pass away from Packers defender M. D. Jennings in the end zone on the last play of the game. Two indefensible calls on the same play literally cost the Packers that game.

Today, football fans understandably

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Fall 2019

question what exactly the rules of the game are, and whether the referees even understand them.

Having clear “rules of the game” and knowing what they are is equally important to businesses. Employers deserve to know the rules of the game so they can plan and make business decisions accordingly. They also need a clear understanding of the rules in order to maintain compliance with regulations, and avoid civil or criminal enforcement by regulators.

Unfortunately, staff at many state agencies make up the rules of the game as they go. They establish regulatory policies by whim in what are called

wisconsinbusinessvoice.org | Government Relations

“guidance documents,” which are often hidden in the depths of state government offices. The regulated community often has no idea they even exist, or if they do, what is written in them. That’s because guidance policies are nothing more than what a bureaucrat unilaterally decides to write down on a piece of paper. In this regard, guidance documents are the quintessential “hidden playbook” of state regulators.

Our regulatory system is not supposed to work this way. We pride ourselves in Wisconsin on government transparency and the rule of law. Our statutes require that regulations and policies that have the force of law must

either be enacted by the legislature, or be promulgated by state agencies as administrative rules.

The administrative rulemaking process agencies must follow when proposing a new regulation is cumbersome and time consuming – as it should be. The Constitution vests lawmaking authority in the legislative branch of government, so it is no small matter that the legislature has delegated some of its lawmaking authority to unelected bureaucrats in the executive branch.

In order to ensure this delegation of lawmaking authority is constitutional, it is vitally important for the Legislature to maintain vigilant oversight of executive agency rulemaking. It is equally important for citizens to have the ability to directly participate in this lawmaking process.

Transparency here is the key. It is impossible for citizens or businesses to exercise their constitutional right to petition their government for the redress of grievances if they have no idea what their government is doing because the policies are being made in the dark shadows of government offices in downtown Madison.

For this reason, our law requires executive agencies to issue public notices at the very beginning of the rulemaking process to put citizens on notice that the executive branch is considering enacting a new law that may affect the rights and responsibilities of Wisconsinites. The law also requires agencies to hold public hearings on draft rules, and accept written comments from the general public prior to sending them to the legislature for review.

The whole point of our rulemaking process is to ensure that executive agencies stay within the boundaries of the legal authority delegated to them by lawmakers, and to ensure that citizens have the ability to directly participate in the process of lawmaking done by agency bureaucrats.

When agencies use “guidance documents” as a means to circumvent rulemaking requirements, they rob citizens of their ability to participate in the lawmaking process. The use of

guidance documents as a basis for regulation also prevents lawmakers from exercising the critically important oversight necessary to ensure agency policies and regulations conform to the legislative intent and legal authority the legislature has delegated to the executive branch.

In short, guidance documents that establish regulatory policies are a subversion of democracy, and offend the core principles of the consent of the governed.

Fortunately, the legislature enacted important good government safeguards pertaining to agency guidance documents in December of last year. Gov. Scott Walker signed these reforms into law as part of the “extraordinary session” that drew so much media attention during the last month of his governorship.

The guidance document reforms establish a number of important new protections for Wisconsinites: • Guidance documents must be published on agency web sites so the public can view them.

• Citizens must be given an opportunity to provide comments on newly-proposed guidance documents, and agencies must consider those comments before publishing them.

• Guidance documents do not have the force of law, and cannot be used as the basis to implement or enforce a regulatory standard.

• Executive agency leaders are required to certify that each of their guidance documents contain no regulatory standards, unless they were first promulgated as a rule.

• Citizens, businesses and groups like WMC are allowed to challenge the legality of a guidance document in court.

These reforms should not be controversial, as they simply shine the light on government policies and protect citizens from agencies imposing lawless, arbitrary and abusive requirements on them. However, a coalition of labor unions sued in Dane County Circuit Court in an attempt to block the

guidance document reforms (and other good government measures) enacted during the extraordinary session.

The unions argue that agencies should not be subject to restrictions on their guidance documents because it would create too much work and an undue burden to post them online and receive public input on them. In other words, they argue it’s too difficult for the government that works for “We the People” to show us what they are doing and allow us to have a say in how our government operates. If you think that sounds antithetical to the concept of government by consent, you are absolutely right.

WMC believes strongly in our First Amendment right to petition government and represent the views of the business community in the policymaking process, and we guard that right zealously. We strongly supported the guidance document reforms because they give WMC an opportunity to provide input on state agency policies and hold bureaucratic agencies to account when the unlawfully circumvent the rulemaking process by regulating via guidance.

Accordingly, WMC decided to push back against the lawsuit challenging these important guidance reforms. The case, Service Employees International Union (SEIU) v. Robin Vos is currently pending before the Wisconsin Supreme Court. WMC’s in-house attorneys Corydon Fish and Lane Ruhland recently submitted a legal brief in this case explaining to the Supreme Court the importance of the guidance reforms to the business community. Our brief makes a thoughtful and well-argued case for government transparency, agency accountability and the importance of separation of powers between the legislative and executive branches of government.

WMC will continue to keep a watchful eye over the administrative bureaucracy and ensure that agencies operate within the four corners of the law. The new guidance policy reforms enacted last December will provide us with useful tools to do so. n

Government Relations | wisconsinbusinessvoice.org

Fall 2019

9

Overtime Regulations Finalized – Now What?

By Chris Reader WMC Director of Health & Human Resources Policy

T

he fedral Department of Labor (DOL) released the final overtime rule update on September 24, 2019. The new rule is effective January 1, 2020, bringing to a close a several year legislative debate and court battle on the issue. Employers must now get ready to comply starting January 1, 2020.

What does the rule do? According to DOL, the change will make 1.3 million workers eligible for overtime pay, resulting in an additional $298.8 million wages paid to workers. It does that primarily by raising the standard salary level by 50 percent, from $455 per week, or $23,660 annually, to $684 per week, $35,568 annually. While that may seem like a steep increase, it is far more justifiable than the rule change that DOL proposed under President Barack Obama, which would have more than doubled the threshold. Consider also that the rule hasn’t been updated since President George W. Bush established the current level back in 2004. DOL set the new rate by using the same methodology used in 2004, setting the salary level to the 20th percentile of earnings for full-time salaried employees from July 2018 to July 2019 in the South Census Region and/or in the retail industry.

The rule also increases the overtime exemption threshold for highly compensation employees, from $100,000 annually to $107,432. Again DOL used the same methodology used in 2004, ensuring the figures are transparent and justifiable. The new rate is the 80 percent of salaried workers in 2018.

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What does this mean for employers?

Going into 2020, if you have salaried workers who otherwise are exempt from overtime based on their job duties, but who make less than $684 per week, they will likely be owed overtime pay for all hours over 40 per week. Employers have to decide on a case by case basis how to handle these employees, but really there are two main outcomes – either begin tracking hours and paying overtime, or raise wages above the threshold amount.

DOL also made an update in the rule on the use of nondiscretionary bonuses and incentive payments, which under the new rule will be able satisfy up to 10 percent of the higher salary level. Employers that have salaried workers near the new wage threshold and that utilize such bonuses and payments as part of their compensation package should touch base with their human resources department to ensure compliance.

Importantly, the new rule excluded two items that DOL under President Obama had included, both of which

wisconsinbusinessvoice.org | Health & Human Resources Policy

were challenged successfully in court and were the reason why the Obama proposal was struck down. First, the new rule does not set automatic increases to the salary levels. The prior rule established an automatic increase every three years. While DOL has indicated they intend to do regular updating of the levels, it will be through new rule updates and not by establishing an automatic mechanism.

Second, the new rule does not make changes to the “duties test” as the rules proposed under President Obama did.

The duties test were established by Congress in the Fair Labor Standards Act and lay out what duties a worker must perform to be considered exempt from overtime, assuming the salary threshold is also met. The test includes specific items relating to executive responsibilities, administrative exemptions, professional exemptions, and more. States, including Wisconsin, and business groups led by the U.S. Chamber of Commerce, challenged the rule from President Obama’s DOL in court on the basis that, among other things, it violated the separation of powers by overriding the statutorily set duties test for exempt workers. To date, similar lawsuits have not been filed, as the egregious items are not part of the new final rule.

With the new rule now final, employers need to prepare to ensure compliance on January 1, 2020. If you have specific questions, please contact your human resources department or your employment law attorney. n

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Fall 2019 11

Creators Wanted for Modern Manufacturing

By Jay Timmons President and CEO, National Association of Manufacturers

M

anufacturers across America face a workforce crisis. In recent months, the number of open jobs in manufacturing has exceeded half a million. That’s good news if you happen to be looking for a job, but for manufacturers, it’s an inescapable fact that there are not enough Americans with the skills to take on these exciting and high-paying jobs.

The problem is only going to grow, especially as baby boomers retire, according to a report from Deloitte and The Manufacturing Institute, the workforce and education partner of the National Association of Manufacturers. Through 2028, we will need to fill 4.6 million manufacturing jobs, and 2.4 million could go unfilled due to a lack of workers. That is 2.4 million lost opportunities for American workers and American families.

Now is the time for bold action—and it comes at a pivotal moment for manufacturers. 2020 is not only a presidential election year; it is also the anniversary of the founding of the NAM—the nation’s leading advocate for the nearly 13 million men and women who make things in America, including the more than 475,000 Wisconsinites who work in our modern industry.

To leverage this moment, the NAM has launched “Creators Wanted,” an unprecedented campaign to inspire the next generation of manufacturing talent and keep the spotlight on manufacturing. This is unlike anything the NAM has done in modern history—and it’s

12 Fall 2019

going to transform the modern manufacturing workforce.

We will bring together manufacturers and organizations across the country to invest in long-term programs to recruit more people, especially those from underrepresented communities, into manufacturing. These include Manufacturing Institute programs like Heroes MAKE America, which trains service members for manufacturing jobs before they transition out of the military.

Throughout 2020, we will also lead programming designed to show more people what’s possible in a modern manufacturing career. We will launch an 18-week Creators Wanted Tour of traveling exhibits across the country and a digital storytelling program.

It will all culminate in the Making America Festival in Cincinnati in September 2020, where we will convene industry leaders, manufacturing workers, policymakers and candidates.

wisconsinbusinessvoice.org | National Association of Manufacturers

Manufacturers believe in getting results, which is why we have ambitious goals for this effort. The campaign aims to close the skills gap by 600,000 workers by 2025; increase by 25 percent the number of students enrolling in technical and vocational schools; increase by 25 percent the number of students enrolling in apprenticeships and reskilling programs; and raise to 50 percent—from 27 percent—the number of parents who would encourage their children to pursue a career in modern manufacturing.

Creators Wanted will define our industry for a generation and strengthen manufacturing powerhouse states like Wisconsin. But it’s going to take all of us—manufacturers, business leaders, educators, elected officials and parents—working together to solve the workforce crisis.

Manufacturers have a history of being the solution and inspiring people to achieve the impossible. We’ve sent people to the moon, eradicated diseases, revolutionized communications and powered great strides in sustainability.

Our next mission is to bring more people into modern manufacturing so we can continue to build the future. n To learn more about Creators Wanted and how you can get involved, visit creatorswanted.org.

2020

WorkForce Fair

Jobs, Internships, and Graduate Schools Tuesday, February 18, 2020 | 3-7:00 p.m.

Wisconsin State Fair Park Exposition Center West Allis, Wisconsin

Recruit for full -time jobs, part -time jobs, and internships

Nearly 900 students and alumni/ae from Wisconsin’s 24 private, nonprofit colleges and universities attend this annual event — now in its 29th year — to meet with 185 employers and graduate schools.

Host a corporate employer booth for $550. The deadline to register is January 17, 2020.

For more information and to register, please visit: www.WAICUcareerconnect.org/employers/workforce-fair Wisconsin Association of Independent Colleges and Universities (WAICU)

| wisconsinbusinessvoice.org

Fall 2019 13

Ag Rule Threatens Wisconsin’s Dairy Farmers

By Lane Ruhland WMC Director of Environmental & Energy Policy

T

he stated mission of Wisconsin’s Department of Agriculture, Trade and Consumer Protection is to “partner with all of the citizens of Wisconsin to grow the economy by promoting quality food, healthy plants and animals, sound use of land and water resources, and a fair marketplace.” Proposing, and advocating for a livestock siting rule that all but makes it impossible for small to large size livestock operations does nothing to further that mission.

This proposed rule, ATCP 51, threatens to do irreparable harm to Wisconsin’s farmers, economy and agricultural heritage. Although many believe livestock siting only impacts large farms, the truth is the rule will detrimentally affect even small farms.

The proposed rule requirements impact farms with 500 animal units (roughly 350 dairy cows) or more, that are new or are expanding. In an economy that seems consistently to disadvantage agriculture, growth and expansion are necessary to be able to afford compliance with ever-growing regulation and overcome low milk prices.

According to dairy producer Jim Ostrom of Milk Source, “I and many farmers across the state are extremely concerned about the impact of this proposed rule on Wisconsin’s agricultural economy. This rule would end growth and modernization for nearly all farms and would lead to an eventual collapse

14 Fall 2019

of the cheese industry.”

If policymakers value all size farms, shouldn’t our policies be aimed at cutting red tape and unnecessary financial burdens? Often the only way to afford to comply with regulation is to grow.

The proposed rule makes it impossible to site new farms or expand existing farms by establishing completely unworkable setback requirements for odor management. Previously, setbacks and odor scores were dependent on where a receptor was located (for example, a home, school or somewhere someone might actually be able to smell something). The rule drastically increases odor setbacks from 350 feet all the way to 2,500 feet and are based on property lines. This means that the setback begins at the property line even if a farm is adjacent to an 80-acre cornfield with no human in sight.

It is clear from the rule that DATCP never field-tested the new setback requirements. Despite DATCP’s flawed economic impact analysis, just the setback requirement alone stands cost farmers millions of dollars. Preliminary estimates by farmers suggest that in order to meet setback requirements if they want to add even a small number of cows, they will be required to take drastic action to comply including purchasing nonexistent acreage, or purchasing multimillion-dollar manure digesters.

Beyond the practical problems with

wisconsinbusinessvoice.org | Environmental Policy

the proposed rule, legal problems exist as well. Wisconsin law requires the Department of Agriculture, Trade and Consumer Protection (DATCP) to promulgate rules “specifying standards for siting and expanding livestock facilities.” Those rules must be, (i) “practicable and workable”; (ii) “cost effective”; and, (iii) “designed to promote the growth and viability of agriculture in this state.” Interestingly, the first order of business in this proposed rule is the complete repeal of a legislative intent section and the incorporation of these statutory factors in the introductory note. It seems this deletion serves no purpose other than to set the tone for the rest of the proposal, which abandons these statutory requirements.

This rule has received a few public hearings where the public testimony against the rule has outweighed the support. With nearly all large farm groups opposing the rule, it will go to the DATCP Board for final approval on November 7. Once approved by the Board and the governor, it moves under the jurisdiction of the legislature. There is no requirement that any new rule is promulgated. The DATCP Board should reject the rule based on the public testimony and actually engage the constituency most directly impacted by this rule—farmers—when crafting it in the first place. n

Helping businesses thrive from one generation to another

Mike Steinl, CPA, CGMA, Partner (608) 442-1905 | mike.steinl@wegnercpas.com

Our manufacturing and supply chain team excels in helping companies like yours increase profits and achieve their owners’ goals. We specialize in helping family and closely held businesses thrive from one generation to another. Visit wegnercpas.com/industries/manufacturing to learn more about how our team can help guide you in achieving your goals.

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Fall 2019 15

Small Business Spotlight

Company Profile Company Name: Fearing’s Audio Video Security Location: Madison Founded: 1997 Website: www.fearings.com CEO: Douglas Fearing Number of Employees: 46

16 Fall 2019

Please give us some background on Fearings Audio Video Security and your role in it?

What policies have had a positive impact on your company and how you do business?

Fearing’s was originally founded as Fearing’s Satellite & Sound, Inc, which is still our corporate name. Our dba name has changed 3 times as the company has evolved, from Satellite and Sound to Fearing’s Electronics Systems to its current dba name, Fearings Audio Video Security. We were founded in Portage, WI, with five employees and our first facility was only 600 square feet. Our original product lines were residential satellite, custom sound and Home Theater systems, along with background music and video surveillance for business. In 2005 we opened a satellite office in Madison and as our Madison operations grew it made sense to relocate our entire operations to Madison in 2009. In 2016 we opened an office in Brookfield and continue to expand operations there. I like to say I was a TV Technician with a dream as I began my post-schooling career as a TV technician, working for the business my grandfather started in Reedsburg in 1953, Fearing’s TV & Appliance.

We’ve created a Master Mind group this year, consisting of our senior leadership and we meet weekly, each leader setting short term SMART goals.

This has really helped speed up implementation of advancements.

wisconsinbusinessvoice.org | Small Business Spotlight

What obstacles has proven to be a challenge for business at Fearings Audio Video Security?

Manpower has been an obstacle to us growing but that is turning into a long term “good thing” because it’s forced us to adopt a “draft and develop” mindset and improve our training programs to advance apprentices faster.

What future goals do you have for Fearings Audio Video Security?

One of our big goals involves increasing our presence in manufacturing, which is why are an active member in WMC. Manufacturing is a customer base that uses every discipline we perform, we’re good at it, and having a one stop shop for low voltage can make life simpler for the manufacturer too. We’re also a huge fan of

manufacturing because of the economic impact manufacturers provide to Wisconsin. We believe in win-win. n

Fun Facts: • Doug Fearing serves on the WMC Small Business Council and Wisconsin NFIB Leadership Council.

audio processing & amplification, 220 speakers, Crestron control system, over 1,000 data drops with more than 100,000 feet of data cable and over 10,000 feet of fiber, and over 100 IP Video surveillance cameras. The project took over six months to complete.

• Fearing’s Vision is to “Make a Difference in the World”. One way we do that is through our ongoing support of Schools for Haiti which operates 12 schools with approximately 2,000 students in Haiti. Our support has led to one of the schools being named the Wisconsin School. We’re also active is supporting Big Brothers Big Sisters and other non-profits.

• Fearing’s recently completed the AV, Security and Cabling project for the Kalahari Resorts new convention center which was Fearing’s largest project to date at over $1.2 million. It involved a multi-zone AV system consisting of 17 Panasonic laser projectors, QSC

Upcoming Small Business Committee Meetings: Wednesday, December 11 For more information on WMC’s Small Business Committee, contact Brittany Rockwell at brockwell@wmc.org or 608.258.3400.

Small Business Spotlight | wisconsinbusinessvoice.org

Fall 2019 17

R&D Tax Credit Catalyst for Innovation

By Cory Fish WMC General Counsel and Director of Tax, Transportation & Legal Affairs

R

esearch and development is critical to the growth of any modern economy. It is how businesses stay ahead of their competitors, how new goods – and even whole new industries – are created. Whether the business is a start-up or a century old company, continuous improvement – innovation – is necessary to stay successful. Wisconsin has made significant progress over the last decade to make sure our state is open for business. One piece of this puzzle is making Wisconsin’s business climate more conducive to locating research and development operations here. Former Gov. Scott Walker and the legislature started down this path by making Wisconsin’s Research Tax Credit (R&D tax credit) partially refundable. It’s time to build on this success and make the R&D tax credit fully refundable.

When companies decide where to invest in expensive technology and skilled employees, they look at the total cost of the investment. Thirty-seven states have some sort of R&D tax credit. Competing for high-skilled workers in a global economy is a massive challenge for businesses. This is especially true for Wisconsin.

Manufacturers in rural and northern parts of the state have to pay a premium to attract highly skilled workers like engineers.

An effective R&D credit can help Wisconsin employers lower the cost of attracting these employees, making it feasible for Wisconsin businesses to make these types of investments. These employees then in turn buy homes, invest in their communities, and pay Wisconsin

18 Fall Fall 2019 2019

taxes. However, Wisconsin’s R&D credit currently does not create this incentive efficiently. Wisconsin will lose out to other states without an effective credit that sets us apart.

In 2017, Gov. Walker and the legislature recognized this concern and took a first step towards remedying it by making the R&D Tax Credit 10 percent refundable in the 2017-18 State Budget. With this change, Wisconsin joined 13 other states that have a partially or fully refundable credit, including neighboring Iowa where the credit is fully refundable. This targeted tax reform was an inexpensive (approximately $9 million per year) way to push high-skill, high-wage job creation in Wisconsin.

Detractors of refundable tax credits often argue they do not stimulate the desired activity, however this is not true with the R&D credit. The R&D tax credit is structured in a manner that only incents new investment. The credit is only awarded to claimant companies that continuously invest in new research and development. Specifically, a threeyear rolling average of the claimant company’s qualified research expenses are measured. A claimant company can then claim a credit equal to 5.75 percent of the expenses which are above and beyond 50 percent of that average.

Therefore, if your Wisconsin research and development expenditures do not keep increasing, you cannot claim the credit. A refundable R&D credit protects taxpayers and incentivizes job creation.

Further, detractors will also argue that

wisconsinbusinessvoice.org || Tax Policy wisconsinbusinessvoice.org

these types of tax credits only help big business. The idea that refundable credits only help established large companies is also false. One sector of key recipients of the value of a refundable credit – who currently do not receive the non-refundable portion – are startup companies.

While making strides, Wisconsin lags behind the nation in business startups. A lack of necessary capital for investment is often a key rationale cited for this lag.

A refundable tax credit would provide a direct capital injection into a sector of companies that is largely research and development based. Making the credit fully refundable is an inexpensive way to help startup companies succeed in Wisconsin and create the next generation of products, processes and services that keep Wisconsin businesses competitive and high-paying jobs in the state. The R&D tax credit does not discriminate.

Whether a small business, large corporation or startup, they receive the credit as long as the company makes qualified research expenditures.

In 2019, increasing the refundability of the credit to 20 percent was included in Gov. Tony Evers’ budget proposal and supported by a bipartisan coalition of legislators but ultimately was not adopted. This setback is only temporary.

Making the R&D tax credit fully refundable will spur innovation in Wisconsin encouraging startups and established companies alike to create high-skilled, high-paying jobs and plant the seeds for future economic development in our state. n

Health Care Challenges Need Serious Solutions

By Kevin Nicholson President & CEO, No Better Friend Corp.

M

any of the politicians who supported Obamacare in Wisconsin and at the national level are clearly happy to ignore the rising costs that have resulted from that policy’s effects on our health care system. If that were not enough, they would now like to make the system even more inefficient and expensive. So-called “Medicare-For-All” would devastate our health care system, and further bankrupt a federal budget that is already reeling from health care costs.

As recently as 1970, spending on health programs constituted only five percent of the federal budget. By 2000, that number increased to 20 percent, and by 2017 it reached 28 percent. Without even adding the cost of Medicare-For-All, the Committee for a Responsible Budget projects that about one-third of the federal dollars not spent on interest payments will fund health spending by 2028 – and nearly 40 percent by 2040.

Were the federal government to socialize medicine, any benefits to industry would be short-lived, as the estimated $32.6 trillion bill for Medicare-For-All came due over the ensuing 10 years. Those costs – and likely tax hikes – would be economically crippling for our nation.

There are serious answers to our health care challenges that do not induce economic ruin, and Wisconsinites need to hear them. Price transparency is one of the best tools that we can introduce to enable more people

access to health care at better prices.

According to recent Wisconsin Institute for Law & Liberty research, there is a correlation between how transparent a state’s health care laws are with the affordability of health care. Price transparency not only empowers consumers to make smarter choices about their care, but it also promotes competition between health care providers and leads to more affordable health care options.

Indiana implemented policies that promoted price transparency, coupled with deductible security plans – essentially, health savings accounts with an employer match, along with incentives for making fiscally responsible health care decisions. The changes to Indiana’s system resulted in 35 percent lower health care spending for enrolled employees. If a system like this were implemented nationally, it’s estimated the savings could reach $2.4 trillion

annually across individuals, businesses and government.

Wisconsin businesses and government are currently absorbing the ever-increasing costs of a non-transparent health care market, while consumers have no idea how much anything health care-related costs.

Proponents of socialized medicine will tell you that a government takeover of health care will absolve businesses of a growing portion of their cost structure.

That may be true temporarily, but not for long. Ultimately, politicians will be there to take back the savings through taxation.

Instead of forcing us down a path of further fiscal ruin, policies that promote price transparency can be used in concert with high risk insurance pools (which existed in Wisconsin before Obamacare) in order to lower costs, protect quality and ensure that those with pre-existing conditions have access to health care.

You cannot enforce savings through government control and mandates; that’s socialism, and it necessarily constricts supply, quality or both. Price transparency and rational choices are the only sensible way forward when it comes to health care. n Kevin Nicholson is a management consultant and serves as volunteer President & CEO of No Better Friend Corp. He is an Iraq and Afghanistan veteran of the U.S. Marine Corps and a former U.S. Senate candidate.

Health Care Policy | wisconsinbusinessvoice.org

Fall 2019 19

Will Manufacturing Continue to Drive Wisconsin’s Economy?

By Nick Novak WMC Senior Director of Communications & Marketing

F

or the last three years, I have had the distinct privilege to travel Wisconsin each October to meet with manufacturers from every corner of the state. From food processors to metal fabricators, Wisconsin is home to the best manufacturers in the world – and yes feel free to fact check me on that one.

The reason I get to travel the state is thanks to M3 Insurance and WMC’s State of Wisconsin Manufacturing Tour.

Additionally, we run a contest with Johnson Financial Group that you may have heard of – the Coolest Thing Made in Wisconsin.

With over 150 nominees this year for the Coolest Thing and four tour stops throughout the state, I once again was thrilled to learn more about our state’s manufacturers. I got to see frozen pizzas get made in Milwaukee by Palermo’s. I learned how Weinbrenner Shoe Company in Merrill continues to make their Thorogood work boots by hand to ensure the highest quality. And I got a behind the scenes look at how full-wall window systems are built for buildings around the world during a stop at

20 Fall 2019

Wausau Window and Wall Systems.

Walking the shop floor of manufacturers gives true insight into Wisconsin’s top industry, and it is something we hope more and more people can experience.

Workforce Challenges We have a common saying at WMC about the perception of manufacturing.

The fact is, many people today still believe the industry is dumb, dirty and dangerous. Baby boomers and their parents grew up in an environment where people were trying to get out of factories. They started to view manufacturing jobs as a second or third choice for their children. The industry was for kids who couldn’t cut it at a four-year university or lacked ambition to get a better job.

This perception is not only false, it is potentially harming Wisconsin’s economy. That is why we point out on a daily basis at WMC that manufacturing is now high-tech, high-skill and high-pay.

The narrative is slowly changing, but more people need to get the word out about the rewarding careers available in

wisconsinbusinessvoice.org | Cover Story

manufacturing.

That is why we host a manufacturing tour each October and why we hold a contest to find the Coolest Thing Made in Wisconsin. Young people need to know how great the industry is today. Shop floors are clean. Shop floors are safe.

And shop floors are pretty damn cool.

Not to mention, manufacturing continues to be the leading industry in Wisconsin today. More than 475,000 people worked in manufacturing in Wisconsin in 2018. That is about one out of every six workers. And those half a million people were responsible for $63 billion in economic output – nearly 20 percent of the state’s gross domestic product (GDP).

But, as I mentioned manufacturing sometimes struggles to find workers.

While changing the perception of the industry is important, other factors are at play. During our Manufacturing Tour stop in Green Bay, Pioneer Metal Finishing Chief Operating Officer Scott Kettler made a concise point about Wisconsin’s demographics.

“We can all think it is going to get better, but at the end of the day it is not,” Kettler said. “There are more people

leaving the workforce than joining.”

His point is spot on. There are more people retiring in Wisconsin than entering the workforce. According to the UW-Madison Applied Population Laboratory, the state has 66,000 fewer Wisconsinites under the age of 18 than in 2007.

That is a six percent drop in a decade.

Individuals under the age of 18 today are our state’s workers of tomorrow.

That means we have two issues at play for workforce. Manufacturers need to improve their perception, and Wisconsin just needs more people in general for our economy to keep growing. While the annual Manufacturing Tour and Coolest Thing Made in Wisconsin contest will help to change the perception of manufacturing, we need Gov. Tony Evers and his administration to take a serious look at talent attraction.

Wisconsin has a great story to tell, we just need to make sure people outside our state hear about it.

Business Uncertainty At the end of September, jobs numbers were released that showed Wisconsin’s manufacturing sector contracted during the first half of 2019, which WMC Presdient & CEO Kurt Bauer mentions in his article on page six. As Bauer explains, some of this can be due to business uncertainty thanks to tariffs, trade deal negotiations and split government at the state level.

Bauer’s point about issues at the federal level explain how the global economy impacts the Wisconsin economy. Unfortunately, when countries like Germany and China have economic troubles, it ripples into the Badger

State’s backyard.

Trade deals like the United States-Mexico-Canada Agreement (USMCA) are also critical to keeping Wisconsin as a manufacturing powerhouse.

In a recent op-ed calling for congressional ratification of the USMCA, Bauer said, “Canada and Mexico are two of our state’s largest trading partners, accounting for nearly half of Wisconsin’s total global manufacturing exports, according to a new study by the National Association of Manufacturers. From the food and beverage industry to machinery and chemicals, one out of every four Wisconsin manufacturers relies heavily on North American trade.”

In fact, 96 percent of global consumers live outside the United States and 85 percent of Wisconsin exports are manufactured goods. For this state to continue growing its manufacturing economy, businesses need trade certainty to do it.

It will also take elected officials at the state level to resist supporting policies that are harmful to manufacturers. Raising the cost to do business – like repealing the Manufacturing and Agriculture Tax Credit or increasing the regulatory burden – will eliminate family-supporting careers and hurt our economy.

economy in the country, we felt one day was not enough.

That is why we celebrate the industry the whole month of October.

Manufacturing is part of Wisconsin’s heritage. But, it is also a big part of Wisconsin’s future. While there are challenges facing the industry, the future is bright. Scott Kettler from Pioneer Metal Finishing said at our Green Bay Manufacturing Tour stop that he was “bullish” about the future of manufacturing in the state.

Panelist at other stops agreed, and if the popularity of the Coolest Thing Made in Wisconsin contest is any indication, the entire industry is excited about what’s next. In its fourth year, the contest drew a record number of votes – more than 240,000 – and manufacturers are already calling to find out how they can nominate their own products for the contest next year.

As manufacturers and economists look to the next year, it is true there may be some ups and downs. But, the industry is ready to take on any challenge it faces, and it is ready to keep moving forward. Manufacturers make Wisconsin what it is, and that isn’t changing anytime soon. n

The Future of Manufacturing

To find out more about all the cool products made throughout Wisconsin, check out the next few pages that highlight all the nominees for the Coolest Thing Made in Wisconsin, including all the finalists and the winner! For more information about the contest, visit www. madeinwis.com.

The reason WMC travels the state each October and puts such a heavy focus on manufacturing is because that is when we celebrate Manufacturing Month each year. At the national level, the first Friday in October is Manufacturing Day. Since Wisconsin has the second most manufacturing intensive

Cover Story | wisconsinbusinessvoice.org

Fall 2019 21

COOLEST

THING

MADE IN

WISCONSIN Sponsored by

The Coolest Thing Made in Wisconsin contest is a program that was launched by Wisconsin Manufacturers & Commerce (WMC) and Johnson Financial Group in 2016 to not only determine the Coolest Thing produced within the state’s borders, but also to bring attention to Wisconsin’s top industry: Manufacturing.

The contest has proven to be very popular. This year alone, nearly 160 products were nominated and over 240,000 votes were cast in total.

Companies pulled out all the stops to get votes, from media interviews and prize giveaways to endorsements from local elected officials and rampant social media campaigns. All the nominees are listed throughout the next couple pages. For more information, visit MadeInWis.com.

Quick Rack 1Up USA Dickeyville

PlasmaDyne Pro 3DT LLC Germantown

Pedal Power Display A1 Cable Solutions, Inc. Waterloo

Corrugated Castle ABC Box Co Brookfield

Patriotic Service Dog Vest ActiveDogs.com Weyerhauser

Precision Sonic Sifter Sieve Speed Queen Washers and Advantech Manufacturing, Inc. Dryers New Berlin Alliance Laundry Systems Ripon

Vector® Multi-Cook Ovens Alto-Shaam Menomonee Falls

Aircraft American Champion Aircraft Rochester

Snurfer Snowboards & Sleds American Sports Laminate, LLC Rib Lake

Pecan Turtle Caramel Apple with Milk Belgian Chocolate Amy’s Gourmet Apples Cedarburg

Crackle Collection by Kohler WasteLAB Ann Sacks Kohler

MERV 13 Odor Reduction Filter Aprilaire Madison

Trash Hunter Aquarius Systems North Prairie

Modern Stairway Drama Arcways, Inc. Neenah

“Nearing Leopold’s Shack on BT-67 Aircraft the Wisconsin River, Morning” Basler Turbo Conversions Barbara Smits Artworks Oshkosh De Pere

Clara Bay View Industries, Inc. Oak Creek

Athletic Scales Befour, Inc. Saukville

All-polymer Shopping Cart Bemis Manufacturing Co. Sheboygan Falls

Catalyst Bending Branches Osceola

Bevmit Bevmit Reedsburg

Dill Pickle Lip Balm Blue Poppy Bath Menomonee Falls

Genuine Broaster Chicken® Broaster Company Beloit

Monarch Butterfly Bow Tie Build-a-Bow Racine

Corrugator BW Papersystems Phillips

Remote Control Rover Cooler Boiler Economizer C3 Custom Coolers Cain Industries, Inc. Lake Mills Germantown

LEAP 5000 Cameca Madison

Cap-Pack Sport Cap-Pack Truck Products Whitewater

Firstrike Carignan Innovations LLC Baraboo

Quarterback Training Nets Carron Net Company, Inc. Two Rivers

Flip Flop Grill Catalytic Combustion Corporation Bloomer

Chocolate Cookie Extreme Cedar Crest Ice Cream Manitowoc

Apollo Hybrid Drive Cheata Bikes South Milwaukee

I’m Too Sexy For My Beer Belly Dip Chics-N-Dip LLC Pulaski

Bucky Badger Chrome Domz Fond du Lac

Energy Drink Clutch Energy Drink Random Lake

1270GDS Draw Tape Garbage 10DER Bag Machine CNC Solutions LLC CMD Corporation Johnson Creek Appleton

22 Fall 2019

wisconsinbusinessvoice.org | Coolest Thing Made in Wisconsin

Lake Art CGH Woodcrafters, LLC Ripon

RailCart Tunnel Placer Construction Forms, Inc. Port Washington

Fire Pump Drive Engines Cummins Sales and Service De Pere

DarkAero1 DarkAero Madison

Badger Meter Trade Show Exhibit Derse Milwaukee

Security Floor Sanitizer DeVere Company, Inc. Janesville

RigidStack Siding Diamond Kote Building Products Weston

Arc-reduction VFI Transformer Radius Window Casing Eaton Elipticon Wood Products, Inc. Waukesha Little Chute

Barnwood Interior Wall Planks Enkor Interior Accents Schofield

McDonald’s Signs Everbrite, LLC South Milwaukee

Excalibur Excalibur Automobile Corporation Milwaukee

Madonna Ice Breaking Passenger/Vehicle Ferry Fincantieri Bay Shipbuilding Sturgeon Bay

Flex Farm 288 Fork Farms LLC Appleton

DR 30” Wide Area Mower Generac Power Systems Jefferson

Trumpet Getzen Musical Instruments Elkhorn

STANDCAP Inverted Pouches OH SNAP!® Dilly Bites Glenroy, Inc. GLK Foods, LLC Menomonee Falls Bear Creek

Configurable Cabs GS Global Resources Mukwonago

Luxury Aircraft Gulfstream Appleton

Zip Clean Washable Covers H.O. Bostrom Company, Inc. Waukesha

HaloVino HaloVino Sussex

Cable Tie HellermannTyton Milwaukee

Big Boy All-Weather Rifle Henry Repeating Rice Lake

Sweeter Heater Infratherm Products, Inc. Sarona

Fireline™ Fire Barriers Inpro Muskego

Evolution Excel Garbage Disposal InSinkErator Kenosha

X739 Signature Series Lawn Tractor John Deere Horicon Works Horicon

Chase Center Rooftop Jones Sign Company, Inc. De Pere

EVO J3 LED Headlight JW Speaker Germantown

Kenco-LP Kenco Label & Tap Co., LLC Milwaukee

Sway Lounge Chair KI Bonduel

Door County Love Artisan Granola Kick Ash Products Ellison Bay

Salted Caramel Truffle Ice Cream King Cone Plover

Tool Cart Kirsan Engineering Pleasant Prairie

Bucky’s Cherry Berry Klarbrunn Watertown

Philadelphia Brand Cream Cheese Kraft Heinz Company Beaver Dam

Pepper Jack Wrap Lakeside Foods, Inc. Two Rivers

Custom Specialty Vehicles LDV, Inc. Burlington

3055 Jaw Crusher Lippmann-Milwaukee, Inc. Cudahy

Sea Wire Luvata Appleton LLC Kimberly

Lexus Concept Sport Yachts Marquis Yachts Pulaski

Aspiro Series Doors Masonite Architectural Marshfield

Solorail Knee Positioner Match Grade Medical Neenah

2019 Vertix Mathews Archery, Inc. Sparta

Bucks Arena Max Weiss Company, LLC Milwaukee

400 Defender Clay Target Machine Mayville Engineering Company, Inc. Mayville

Letter Jackets Meca Sportswear Tomah

Cranberry Ice Cream Melody Gardens Restaurant & Skateland Marshfield

450R Mercury Racing Fond du Lac

Structural Steel Merrill Steel Schofield

XMT® 350 FieldPro™ Miller Electric Mfg. LLC Appleton

Motivo Tour Motivo, Inc. New Berlin

REVOLVE by RENEW Plastics Clear Flow Aquaponic N.E.W. Plastics Corp.

Systems® Luxemburg Nelson and Pade, Inc. Montello

MPC2000 MC The Freedom Cabinet™ Messer Cutting Systems, Inc. Metal Art of Wisconsin Menomonee Falls Manitowoc

Cheesy Scarf New Community Shelter Green Bay

Coolest Thing Made in Wisconsin | wisconsinbusinessvoice.org

Fall 2019 23

RadioGenix® System NorthStar Medical Radioisotopes, LLC Beloit

OnKöl OnKöl Milwaukee

Screamin’ Sicilian™ Palermo Villa, Inc. Milwaukee

Reload Palmer Hamilton LLC Elkhorn

Fusion C Paper Converting Machine Company Green Bay

Customized Bar Systems Perlick Milwaukee

Accelerator-Based Neutron Generator Phoenix LLC Monona

Premium Alcohol Seltzer PRESS Milwaukee

Aera Smart Diffuser Prolitec, Inc. Milwaukee

RazorMachete & RazorDagger Christopher Kimball 8-Quart RazorRazor Company Covered Stainless Steel Milwaukee Stockpot Regal Ware Kewaskum

Replace-A-Lace Replace-A-Lace LLC Rhinelander

2-tone Spirit Anchors Roloff Manufacturing Kaukauna

O-Pen Roving Blue, Inc. Lena

Human Hamster Ball S.E.A. Hamsters LLC Cedarburg

Sawmill Craft Beer Sawmill Brewing Company Merrill

Windstorm Scag Power Equipment Mayville

SharkCrates SharkCrates Oak Creek

Sweeper Wheels Simplify Your Tools Verona

Eco-Harvester/Aquatic Weed Harvester Silver Mist Aquatic Services Waupaca

Paczki Smurawa’s Country Bakery Pulaski

Sub Sonex Personal Jet Sonex Aircraft, LLC Oshkosh

Just The Cheese® Crunchy Baked Cheese Bars Specialty Cheese Company, Inc. Reeseville

Nano Brewing System Spike Brewing Equipment Milwaukee

Root Beer Sprecher Brewing Company Glendale

Fishing Rods St. Croix of Park Falls, Ltd. Park Falls

Ciderboys Hard Cider Stevens Point Brewery Stevens Point

PureBlue Refrigerated Trailer Stoughton Trailers, LLC Stoughton

Petits Fours Swiss Colony Monroe

Infused Maple Syrup Tapped Maple Syrup, LLC Stevens Point

Hydraulic Test Center Taylor Dynamometer Milwaukee

American Heritage Moc Toe Thorogood by Weinbrenner Shoe Company Merrill

GutterStuff TJM Innovations, LLC Milwaukee

Motion W - University of Wisconsin TQ Diamonds

CV Wrong-Way Alert System Sleepiphany Traffic & Parking Control Verlo Mattress Co., Inc. Milwaukee Brown Deer

Ice Vulture Vulture Systems, LLC Stoughton

WaterDog Adventure Gear WAG Products, LLC Germantown

Residential Elevators Waupaca Elevator Appleton

SnoGo® LR-44 Blower Wausau Equipment Company New Berlin

Books Webcrafters Inc. Madison

Kefir Weber’s Farm Store Marshfield

Industrial Ovens Wisconsin Oven East Troy

The RITZ Stick Woodrow Engineering Company Ellison Bay

“Diary of a Wimpy Kid” Worzalla Publishing Stevens Point

Jalapeno Cheddar Beef Sticks Wisco Sampler Wenzel’s Farm WiscoBoxes, LLC Marshfield Mount Horeb

Curcumin Infused Healthy Beverages ZYN Milwaukee

24 Fall 2019

wisconsinbusinessvoice.org | Coolest Thing Made in Wisconsin

Frozen Tundra Red Parallel 44 Vineyard and Winery Kewaunee

Perfect Peel The Baker’s Board Appleton

WMC’s Nick Novak and Johnson Financial Group’s Brad Quade joined Milwaukee’s CBS 58 to discuss the Coolest Thing Made in Wisconsin Contest.

Tapped Maple Syrup, a Top 16 nominee, featured on WSAW Channel 7, the Wausau affiliate of CBS.

The Coolest Thing Made in Wisconsin contest featured on Fox 6 News Milwaukee, showcasing manufacturing and encouraging people to vote.

Milwaukee’s WISN 12 welcomed WMC’s Nick Novak to the studio to talk about manufacturing and how the Coolest Thing Made in Wisconsin contest started.

Coolest Thing Made in Wisconsin | wisconsinbusinessvoice.org

Fall 2019 25

2019 Coolest Thing Made in Wisconsin 2019 Coolest Thing Made in Wisconsin Finalists: Henry Repeating Arms (Rice Lake, WI)

Mayville Engineering Company, Inc. (Mayville, WI)

Henry Big Boy All-Weather Rifle

400 Defender Clay Target Machine

The Big Boy All-Weather Rifle is a .44 Magnum/Special, .45 Colt, .357 Magnum/.38 Special. Noticeably lighter in heft than other their hardened-brass Big Boys with octagon barrels. Features durable hard chrome plating combined with tough moisture-resistant industrial-grade coating on the hardwood furniture.

LDV, Inc. (Burlington, WI)

Mercury Racing (Fond du Lac, WI)

LDV Custom Specialty Vehicles

450R Outboard Motor

LDV manufactures custom vehicles including: emergency response, catastrophe response, mobile command centers, SWAT, FBI, dive/rescue, mobile medical, mobile dental, mobile showrooms, mobile tool stores, bookmobiles, mobile entertainment and much more.

26 Fall 2019

The 400 defender was designed to be the only choice for small clubs that need a higher capacity target machine at an affordable price. It holds 400 standard targets and can elevate back 70° and tilt left and right 35° for curling target presentations. Engineered and built by MEC Outdoors.

The Mercury Racing 450R outboard features a 4.6-liter V8 FourStroke powerhead, 450 peak propshaft horsepower, 40% higher torque than the 400R and over 300 pounds lighter than the nearest competitor. 450R delivers all of its performance on a readily available 89-octane (95 RON) pump fuel.

wisconsinbusinessvoice.org | Coolest Thing Made in Wisconsin

Applications for Manufacturer of the Year Awards are due November 22, 2019!

Nominate and apply at www.wimoty.com Manufacturing creates economic growth and is the engine that drives the Wisconsin economy. Manufacturers like you contribute to the vibrancy of Wisconsin and our communities through good business practices, innovative processes and productivity enhancements. This program celebrates the successes of manufacturers in our state: your innovations, philanthropy, technological advances, commitment to customer satisfaction and the quality jobs you create.

Questions? Contact Nick Novak at 608.258.3400

| wisconsinbusinessvoice.org

Fall 2019 27

Has the Wayfair Decision Created a Multistate Circus?

By Cam Brawley, CPA Director of State and Local Tax Services, Wegner CPAs

O

ver the last 15 months since the South Dakota vs. Wayfair, Inc. Supreme Court decision, anyone that sells across state lines has joined a circus of sorts. Most assumed this decision effected online retailers only. Untrue! Any business that sells across state lines (retailers, wholesalers, manufacturers and distributors) are in the states’ center ring spotlight for sales & use taxes - including mom and pop shops to major corporations. Companies need to analyze their sales tax compliance.

For the past 25 plus years, companies avoided the requirement to register, collect, and remit states sales taxes because out of state companies made sales via mail or telephone. The seller was not collecting sales tax on these transactions. The Supreme Court ruled in Quill Corp. vs. North Dakota that a seller must have physical presence before a state could require the seller to collect sales tax. Buyers always have been responsible to self-remit use tax on purchases not collected by the seller.

Quill made it easy for sellers. If no presence, the company didn’t have to collect. The invention of the internet and online sales became an attraction. This further attributed to the states’ decline in sales tax revenues and hurt the bricks and mortar stores’ sales. So states tried a couple creative side shows like click through nexus and electronic cookie (computer) nexus. These side shows grew into this concept of economic nexus. The concept requires sellers to collect the sales tax at the time of sale

28 Fall 2019

even though no physical presence.

Then South Dakota enacted economic nexus statutes that requires a seller that makes $100,000 or more of sales or has 200 or more transactions into the state in a calendar year to collect sales tax. Obviously, South Dakota held online retailers to this and the Supreme Court ruled.

Now, physical presence is not required (because of Wayfair). The Supreme Court did not opine on the South Dakota thresholds. That was referred back to the South Dakota Superior Court. That was not a “pay your money and take your choice” gamble. The Superior Court agreed $100,000/200 transaction was valid.

Now for the second half of the show.

The 10,000 different sales tax jurisdictional rates just get us started. Each state makes its own rules. Not all adopted the $100,000/200 transaction guidance. The thresholds are all over the place from $250,000 to $500,000 in sales only or others use $250,000 in sales and 200 transactions. While watching these two rings of the show, the third ring of the circus is the effective dates of these rules.

Since 2018, 44 of the 46 states that administer sales taxes have adopted economic nexus rules.

The states enforcing economic nexus standards on October 1 for sellers: Arizona, Kansas, Maryland, Massachusetts, Minnesota, Tennessee and Texas.

October 1 is also a main attraction event for marketplace facilitators. What is a marketplace facilitator? It is defined as a marketplace that contracts with third-party sellers to promote their sale of

wisconsinbusinessvoice.org | Sponsored Content

tangible personal property, digital goods and services through the marketplace.

Many states require marketplace facilitators to collect sales taxes in lieu of the third-party seller when economic nexus exists for the marketplace facilitator.

The states enforcing economic nexus standards on October 1 for marketplace facilitators: Arizona, California, Colorado, Maine, Maryland, Massachusetts, Minnesota, Nevada, North Dakota, Texas, Utah and Wisconsin.

In addition to the multiple jurisdictions and the plethora of effective dates, there are a wide variety of goods and services that are taxable. Here are a few side shows to watch: Clothing: Pennsylvania exempts formal clothing; New York exempts clothing less than $110 per item; Minnesota exempts all clothing sales except fur, sports, recreational or protective.

Groceries: generally exempt or at a reduced rate.

Prescription drugs: exempt everywhere but Illinois.

Manufacturing equipment: partial exemptions or reduced tax rates in California and several southern states.

So the grand finale is here! Several states have economic nexus standards enforcement dates throughout 2020.

That’s next year’s show with new acts. n For guidance, contact Cam Brawley, CPA, Director of SALT Services at cam.brawley@wegnercpas.com or (262) 696-5192.

SAVE THE DATE 8:30am 9:00am

December 12, 2019 Monona Terrace, Madison

Registration Welcome Remarks WMC President & CEO Kurt Bauer

9:05am

Rural Wisconsin: Town Halls, Talent & the Truth WMC Foundation Executive Director Wade Goodsell

9:45am 10:45am

Rural Wisconsin Executive Panel Keynote Remarks Vince Bertram, Project Lead the Way President & CEO

11:15am 12:00m 12:30pm

Executive Panel: The State of Wisconsin’s Agriculture Economy Lunch Gov. Tony Evers (invited)

futurewi.org

Is a Recession Coming to Wisconsin?

By Adam Jordahl WMC Associate Director of Government Relations

“U

ncertain” has become a common way to describe many business leaders’ feelings about the future. The Business Roundtable, an association of CEOs from major American firms, recently downgraded its forecast for 2019 GDP growth from 2.9 to 2.6 percent. Citing the trade war and slowing global growth, the group reported a decline in its outlook on hiring, sales and capital investment.

Some pundits have forecasted a recession, citing indicators like an inverted yield curve for U.S. Treasury bonds.

In August, the Federal Reserve Bank of New York put the odds of a recession in the next 12 months at 38 percent.

Is a recession coming to Wisconsin soon? While state economies are strongly linked to the national economy, this bond is not immutable. Lending marketplace LendingTree reports that many states entered and exited the last recession during different quarters than the U.S. economy. Moreover, five states have experienced another recession since the last national one, so a close examination of Wisconsin-specific data is important.

Wisconsin’s top-line economic numbers have been good. In Q1 2019, the state’s real GDP grew at an annualized rate of 2.9 percent, improving over the previous quarter but well below the 4.9 percent growth seen in Q1 2018.

Last year was Wisconsin’s best year for growth since 2010.

While the state’s unemployment rate

30 Fall 2019

went from 2.9 percent in June to 3.1 percent in August, this is still well below the national rate. It had been below three percent since February. Meanwhile, the state labor force participation rate was stable through summer and remains four points higher than the national rate. Employment in the Milwaukee area hit a record in June, even though the state’s year-over-year private sector employment has not grown by more than one percent in any month since March 2018.

More good news came with a report from the FDIC that in the first half of 2019, loans at state-chartered banks in Wisconsin increased by 5.9 percent compared to the same period last year. Net income, total assets and the capital ratio also grew, and as a result, 98 percent of state-chartered banks were profitable, indicating a strong economy.

However, there are also reasons to be concerned, particularly for relatively trade-dependent industries like manufacturing, logistics and agriculture. Indeed, while finance, insurance and retail trade (the latter driven by consumer spending) were the strongest contributors to Wisconsin’s economic growth in Q1 2019, wholesale trade (driven by business spending), transportation and warehousing, and durable goods manufacturing were the biggest drags on growth.

In the first seven months of 2019, the value of all Wisconsin exports dropped by five percent compared to the same

wisconsinbusinessvoice.org | Economic Outlook

period last year. About 40 percent of that decline is due to a decrease in exports to China. Similarly, Wisconsin’s agricultural and food exports decreased by nearly five percent in Q1 2019 compared to Q1 2018.

Finally, citizens are not too optimistic about our economic prospects: a nationwide Gallup poll conducted in September found that 49 percent of respondents believe a recession in the next year is fairly likely. In Wisconsin, as of the September Marquette Law School Poll, the year’s average economic outlook has been a net negative three percent, compared to a 14.7 percent net positive average for 2018.

Overall, many indicators of Wisconsin’s economic health remain better than the national average. Professional services and consumer spending are high points, while manufacturing and agriculture are showing more worrying signs. A September report by LendingTree put Wisconsin’s near-term recession risk as very low, with a 0.66 percent probability of developing weak economic fundamentals in Q4 2019.

The most at-risk state in the study was Michigan, at 58.86 percent.

While Wisconsin still seems to be in a good place economically, we will continue to monitor these trends and update our members. n

step: starting the conversation.

To learn more, download the report from our website, ubs.com/team/burishgroup Andrew D. Burish, CIMA® Managing Director–Wealth Management – Named the #1 Wealth Advisor in Wisconsin*

Planning Towards a Smooth Transition

The Burish Group UBS Financial Services Inc. 8020 Excelsior Drive, Suite 400, Madison, WI 53717 608-831-4282 burishgroup@ubs.com

– Over $4 billion in assets under management as of 1 April 2019 – Relationships with $1 million or more are well served by our capabilities

By Andrew Burish Managing Director & Founder ubs.com/team/burishgroup The Burish Group at UBS Financial Services Inc.

Y

ou’ve worked hard to build your value, improve negotiation and deal tial to the survival of your business. day terms, and minimize the time to close.

5. on See that legal records areassets in good Accolades are independently determined and awarded by their respective publications. Accolades can be based a variety of criteria including under when you might want to walk away management, revenue, compliance record, length of service, client satisfaction, type of clientele and more.

Neither UBS Financial Services Inc. nor its employees order.

Are your legal contracts in Preparing for the future sale of all? Business transition is pay a from fee init exchange for these ratings. planning Past performance is no guarantee of future results. For more information please visitprocedures ubs.com/us/ order? on Areaccolades, your employee your business endesignation-disclosures.

As a firm providing wealth management services to clients, UBS Financial Services Inc. offers both investment advisory services and perhaps one of the most complex tasks and agreements solid, with a change in brokerage services. Investment advisory services and brokerage services separate andsteps distinct, Here areare eight action todiffer helpin material ways and are governed by different laws and a business owner encounter.

Many separate arrangements.

It is will important that clients understand the ways in which we conduct business and that they carefully read the agreements control in place?

Are there and anydisclosures enviyour market-ready. that we providehave to them about the products offer.

Forbusiness more information, visit our website at ubs.com/workingwithus. CIMA® is a registered owners a substantial portionorofservices their weget ronmental, compliance or regulatory certification mark of the Investments & Wealth Institute™ in the United States of America and worldwide. © UBS 2019. All rights reserved. UBS Financial Services family wealth invested in the business, 1. Get your business documentaissues that need your attention? Is there Exp.: 06/30/2020 Inc. is a subsidiary of UBS AG. Member FINRA/SIPC. VIP_06252019-1 a complexity that requires broader tion in order. Start by making sure all a chance to extend lease agreements financial planning strategies to address your business operation and process or take a closer look at real estate retirement and estate planning needs. documentation is up to date. Formalize holdings? Is your intellectual property If you lack a comprehensive plan and extend key customer and vendor adequately protected? to pass on your business, now is the contracts and confirm that well-docu6. Secure your leadership team. Be time to give serious thought to a formal mented processes and procedures are certain you have a leadership team business transition plan. A well-crafted in place. that is ready for a smooth transition transition plan identifies a long-term 2. Organize your financial statements. when the time comes. The next owner strategy that can inform short-term Make sure your financial record keeping of your business will look for a strong decisions. and reporting are transparent and easy leadership team that will stay with the Improve the value of your business to evaluate. As you think about making business through the transition period your business more professional, look When the time comes to sell a busior longer. for clear lines of separation between ness, many deals collapse during the 7. Consider a formal board of direcpersonal and business expenses. buyer’s due diligence when problems tors with outside members. Establish come to light. So, start cleaning things 3. Develop formal strategic plans. Start an advisory council or a formal board up before it becomes an issue. with your business’ core competencies. of directors. Look to include outside As you look to improve the value of What is your long-term vision? What is members who own or have owned your business, think about what factors your strategy to diversify your customer successful private companies. a prospective buyer will place the most base? How will you continue to grow 8. Minimize your business’s reliance value on. What will drive value for a and expand? Have a strategic plan for on you. Many business owners are jusbuyer in the future? Will the business each key area of your business, such as tifiably proud to be the leading driver continue to operate effectively and sales, marketing, operations, technoloof sales and revenue. However, to truly grow if you are no longer at the helm? gy, finance and legal. Know how your drive a growth strategy, you need to What roadblocks should be addressed business is valued in your industry and make the business less reliant on you. now, instead of closer to the sale? look to boost the key metrics.

Reducing business risk is a top priEach business is different and 4. Create business succession and ority in a proactive transition strategy. preparing for a transition is a complex contingency plans. Prepare formal sucWhen your business is perceived as a process. Start thinking about how you cession plans and communicate them to solid opportunity, it may create a comcan maximize the value of your busiyour leadership team. Decisions around petitive buyer environment, increase ness today. n who takes over and how can be essen*Forbes Best inbusiness.

State WealthBut Advisors (2018, 2019) what about the

Transitioning a Business | wisconsinbusinessvoice.org

Fall 2019 31

Hiring Veterans Can Drive Business Success

By Jorge Hidalgo President, Hidalgo Autos, Inc.

O

n June 20, 2019 the Department of Workforce Development released the unemployment numbers for the state of Wisconsin. The amazingly low rate of 2.8 percent reinforced the fact that finding employees is one of the toughest challenges in today’s business environment. As a Madison resident, I know firsthand that you cannot go into any business without seeing a help wanted sign on their property. In conversations with other business owners,

32 Fall 2019

the consensus is that the shortage of personnel is impacting business growth. We need to be more creative and inclusive in our workforce recruitment.

Each year over 200,000 service members leave military service and return to their communities. The annual turnover provides a great talent pool from which to recruit. Veterans currently in the workforce may also be looking for career development opportunities.

We have implemented several recruit-

wisconsinbusinessvoice.org | Veterans in the Workforce

ing practices to attract veterans and have been elated with the results. I’ll detail some of the recruiting practices and explain why veterans are excellent hires.

We have implemented three practices for attracting veterans at Wilde East Towne Honda, the business I operate.

The first is to leverage existing networks and team members. We have ties to the American Legion, Veterans for Foreign Wars (VFW), Marine Corps League and the Wisconsin Veterans

Chamber of Commerce. We get the word out to those organizations and others to inform them that we have available job opportunities. A second practice is to translate military jargon into civilian skills. Veterans in our

Each year over 200,000 service members leave military service and return to their communities.

organization help the managers and HR staff understand the resumes of service members. Most civilians don’t know the skill sets developed and mastered in military jobs. A third recruiting practice is that we market our organization as an employer of choice for veterans. We highlight that we are a highly supportive veteran environment where the owner of the business is also a veteran. Our business offers veterans discounts and we make it a point to not only thank them for their business but also for their service. We are certified by the Wisconsin Department of Veterans Affairs as a veteran-owned firm and proudly post it in our store.

Over the last year, our recruiting practices have enabled us to hire three veterans. Justin joined us after 23 years of active duty, having attained the rank of Master Sergeant in the U.S. Army. Jamil served a total of six years with the Wisconsin National Guard 1st147th Aviation Regiment as a Quartermaster-Chemical Equipment Repairer.

George served 12 years in the U.S. Navy in the security field. They are all successfully working in the sales and leasing consultant/manager role, which is one of the toughest jobs in our business.

Veterans can be great contributors to

any organization since military service imbues them with many valuable skills.

I served 11 years as an Army officer, worked 20 years as a manufacturing executive, and seven years as a business owner. In my experience, the three stand out skills which veterans possess are dedication to duty, integrity and teamwork.

Dedication to duty is the sense of obligation that motivates one to do their best in any assigned position or situation. Service members subordinate personal interests and individual convenience to the requirement of defending the nation. When assigned a mission or task, the successful execution of it is their first priority. They develop mental toughness, get used to long hours, and develop a unique ability to handle stress. To be clear, being in the military can be a 24-hour-a-day job. If deployed there is rarely such a thing as a day off. They are away from family for long periods of time with little opportunity for contact. Service members miss holidays, birthdays, weddings, anniversaries and many other significant events in the lives of their loved ones. They know the critical importance of staying with a task until it is done correctly.

A second skill set which service members possess is integrity. A leader of character not only must have the knowledge of what is right, but also the moral courage to act on it even though it may be unpopular. The principles of truthfulness, fairness, respect for others and a personal commitment to maintain these values demonstrate high integrity. It fosters an unbreakable bond where service members are willing to lay down their lives for each other. Fellow service members are your family, you have their back and they have yours. Prospective employers should realize that in hiring a veteran, they are getting a person with a track record of integrity, which is often backed by a security clearance.

The third value which service members can bring to a business is teamwork. In military service you learn to be selfless. You learn to care about more than yourself. Service members learn to work as a team with individuals regardless of race, gender, geographic origin, ethnic background, religion or economic status. Service members know that successful teamwork comes from caring about your brothers and sisters in arms. Military duties encompass both a combination of individual and group activities. They understand how they and their team fit into the big picture. Evidence of teamwork is demonstrated by how veterans step forward and get involved in community organizations. The American Legion, Team Rubicon, and VFW are just a few of the countless veterans’ organizations that give back to the country and communities.

Service members know that successful teamwork comes from caring about your brothers and sisters in arms.

My business has six veterans working fulltime and another three part-time employees. They set a high-performance level for the organization. A great testament to their dedication to duty was demonstrated when I took the attached picture. They were all working on a Saturday and proudly taking care of our customers. We are the only dealership in the state of Wisconsin to have won American Honda’s prestigious President’s Award for the last six years.

Our veterans have been a key component of our business success. I’m looking for veterans to hire, are you? n

Veterans in the Workforce | wisconsinbusinessvoice.org

Fall 2019 33

In Case You Missed It...

Check out the highlights from WMC Foundation’s Business & Industry Luncheon.

Finalists for the Coolest Thing Made in Wisconsin – including LDV, Inc.’s custom specialty vehicle and Mercury Racing’s 450R Outboard Motor – serve as the backdrop at the Luncheon.

National Association of Manufacturers President & CEO Jay Timmons delivers remarks about the state of manufacturing at the Luncheon.

34 Fall 2019

WMC President & CEO Kurt Bauer delivers the State of Wisconsin Business & Industry Address to open the Luncheon.

wisconsinbusinessvoice.org | Business & Industry Luncheon

WMC Board members with the Luncheon’s keynote speaker after the event.

From left to right: Kurt Bauer, WMC; Steve Loehr, Kwik Trip; Gina Peters, Wells Fargo; Jay Timmons, National Association of Manufacturers; and Glen Tellock, Lakeside Foods.

WMC President & CEO Kurt Bauer (right) with Dan Clayton-Luce (left), Communications Director of Henry Repeating Arms, winner of the Coolest Thing Made in Wisconsin.

High school students from WMC Foundation’s two Wisconsin Business World summer camps being presented with certificates at the Luncheon.

Wisconsin executives discuss the state of the economy at the Luncheon. From left to right: Jud Snyder, BMO Harris Bank; Austin Ramirez, Husco International; Steve Loehr, Kwik Trip; Rebekah Kowalski, Manpower Group; and Wade Goodsell, WMC Foundation.

The Coolest Thing Made in Wisconsin trophy – manufactured by E.K. Machine in Fall River – being displayed as attendees arrived at the Luncheon.

Business & Industry Luncheon | wisconsinbusinessvoice.org

Fall 2019 35

Tapping the Full Value of Intellectual Property

By Rob Fleming Resident Managing Director, Aon

P

rofits and business value have shifted from tangible assets such as equipment and property to the intangible assets that make up intellectual property (IP). Intangible assets come with their own challenges; namely, they can be difficult to recognize, quantify, value and protect, as well as a potentially improper reflection on a company’s balance sheet. Increasingly, this highly valuable yet underprotected asset is also becoming a target of theft and litigation. From industrial espionage to patent wars between companies, IP is increasingly lucrative as companies seek to gain competitive advantage.

The fact is, IP represents an enormous source of value for many companies, and companies that focus appropriately on their IP can increase the value of their enterprises and improve investor perceptions.

To capture the full value of their IP – and help protect it appropriately – companies need to bust some widespread misconceptions.

cross-functional stakeholder group.

This bloc should be represented by finance (including the CFO), risk management, strategy planning, legal and any other teams that are responsible for IP – including those who produce it, likely within technology roles across business units.

Myth: Intellectual Property Is A Cost Center – And Only Legal’s Concern.

Myth: Filing A Patent Is The Only Way To Claim An Idea.

Reality: Securing A Robust Intellectual-Property Strategy Is An Organizational Effort.

IP often gets pigeonholed as patent management, a necessary administrative function and expense customarily handled by general counsel.

Maximizing the value of IP requires companies to deploy a broad,

36 Fall 2019

Myth: More Intellectual Property Is Better.

Reality: The Volume Of Intellectual Property Doesn’t Guarantee Quality Or Value. Context Matters.

Companies often struggle to qualify their IP, so they depend on quantity. This leads to the ‘more is better’ myth. But with IP, context is everything. Quantity is important, but only when it’s properly qualified.

Subjective self-assessments of IP quality can fall short of providing true understanding. Evaluating IP quality with an objective methodology, likely best performed by a third party, can help companies make better IP decisions.

Reality: Other Options Are Available To Document And Protect Companies’ Innovations And Intellectual Property.

Trade secrets have long represented a challenge for companies to quantify, organize and manage.

Keeping an idea or innovation as a trade secret means there’s no need to disclose publicly how it works, so there’s a lesser chance of copycats after filing a patent. However, should a

wisconsinbusinessvoice.org | Sponsored Content

competitor independently replicate an idea, without a patent, the originator has no legal basis to stop it.

One way to solve for this challenge could be through registration managed by a credible third party and using blockchain technology. This way, should there be market competition and a need for legal action, the blockchain could verify the trade secret’s originator and its date of registry.

Myth: Understanding Intellectual Property Is Only Important For Large Organizations Or Those In Intellectual Property-Heavy Industries Like Technology Or Pharmaceuticals.

Reality: All Organizations, Regardless Of Industry Or Size, lHave a Responsibility To Understand Their IP – Though For Different Reasons.

IP maturity is a spectrum. Larger, established companies may have a solid grasp on their IP strategy and valuation but look for guidance with understanding levels of IP risk and developing a solid patent litigation strategy. Startups often prioritize product delivery, cost-consciousness and speed to market, so building IP portfolios often takes a back seat. n This content recently appeared in Aon’s The One Brief. For more information, contact Rob Fleming at robert.j.fleming@aon.com or 920-431-6288.

UnitedHealthcare Association Health Plans

Health insurance savings for Wisconsin small businesses.

EmployerPulse, a program offered by WMC Insurance, is collaborating with UnitedHealthcare to offer Association Health Plans, which may give small businesses like yours more buying power, more choices and lower costs.* For over two decades, UnitedHealthcare has served nearly 1 million employees in association groups across the country, providing you and your employees with: • A wide selection of options, including medical, dental and vision coverage.

• A nationwide network of quality health care providers, including providers in the Wisconsin area.

• Digital tools to make health plans easier to use and help everyone better understand benefits, coverage and costs.

EmployerPulse member businesses can start saving immediately.

Talk to a representative today.

Contact your EmployerPulse representative, Robert Baker, at 608-258-3400 or robert@employer-pulse.com

*EmployerPulse was created by WMC Insurance to support its members in providing access to various benefits for them and their workforce.

Insurance coverage provided by or through UnitedHealthcare Insurance Company or its affiliates. Health Plan coverage provided by or through UnitedHealthcare of Wisconsin, Inc. 9/19 ©2019 United HealthCare Services, Inc. 18-10010

Visit employer-pulse.com

Activity: Industry: Widgets: Soils: Method: Material: Product: Key Features:

Success Story

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Repair & Maintenance Cleaning Food & Beverage Manufacturing Machinery & Equipment Parts Grease, Lubricants, Plant Matter Combination Cleaning Mild & Carbon Steel, Aluminium Mirachem M2750 Performance, Worker & Environmental Safety

Who wouldn’t make the better choice?

Safer is the choice of a new generation.

You want to catch the wave to a safer workplace. But when it comes to repair and maintenance cleaning, you can have clean, or you can have safe. Right?

Well, the choice between safety and performance doesn’t have to be a tight squeeze. Sometimes, all you need to juice up your process is a little power aid.

Like Crystal Clean.

We’re a long way from ordinary. We can give you a better choice, with Mirachem aqueous technologies and advanced equipment that delivers powerful performance and unbeatable safety. And with our full menu of environmental services, there’s something for everyone. We’re the real thing!

So don’t feel like you’re stuck with the same old weak-tea recipe for removing grease and oil. Call us, and get your fill of performance and safety. We’ll drink to that!

This beverage manufacturer thought they had their maintenance cleaning process bottled up. They tested a more refreshing option and found out the old way couldn’t hold water.

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©2017 CSS-1743

Cost Effectiveness Key for Focus on Energy

F

OCUS ON ENERGY®, Wisconsin’s energy efficiency and renewable energy program, recently learned it runs the most cost effective energy efficiency program of its type in the United States. Wisconsin achieved the highest rate of energy savings per dollar spent, according to a study by the Lawrence Berkeley National Laboratory (LBNL).

“The ranking is a testament to the amazing people who work at Focus on Energy and who constantly look for ways to help Wisconsinites save energy and money, which contributes to the state’s economy,” said Focus on Energy Program Director Erinn Monroe-Nye. “We knew we had a cost-effective program, but it’s nice to know we are leading the other states.”

There are three main reasons why Focus on Energy is so effective.

Firstly, the Program is funded by the customers of investor-owned utilities and the municipal and cooperative utilities around the state. It is not a program of one utility – it is a partnership of utilities working together.

“That partnership structure provides us with a larger market base and the ability to align program resources with customers, Trade Allies, utility account managers, and industrial associations representing energy-intensive industries across the state,” said John Nicol, Program Manager for the Large Energy Users (LEU) Program within Focus on Energy. “This is a huge advantage for working effectively and efficiently.”

How effective? A recent third-party evaluation of the Focus on Energy Program found the benefit-to-cost ratio of the LEU program was more than seven-to-one.

Secondly, Focus on Energy has specialized subject matter experts helping customers solve complex energy engineering challenges. These experts have decades of hands-on experience working in the industries they support.

For instance, Richard Reese is part of the Focus on Energy pulp and paper team, with a career spanning five decades in the industry.

“All pulp and paper mills offer energy reduction opportunities, but company and mill culture are critical to developing an effective energy reduction program,” Reese said. “The best corporate energy programs have excellent management support, including the mill manager.”

To that point, Steve Myers, Vice President of Operations for Ahlstrom Munksjo, added, “Focus on Energy delivers the necessary support manufacturers need to remain competitive in the global marketplace.”

Myers’ experience is part of the third reason behind Focus on Energy’s effectiveness – building trust with customers. A case in point is the support Energy Advisor Bill Lumsden has provided to his customer for nearly 20 years.

“I often talk with Bill on a weekly basis,” said Dave DeBolt, Manufacturing Engineer and Continuous Improvement

Leader at Penda Corporation in Portage. “Bill has supported studies of our energy usage, helped us put together incentive requests, and generally become part of the total team effort we’ve developed here with Focus on Energy, Alliant Energy, and our employees.”

Lumsden echoed that approach in remarks he made at the recent Energy Efficiency Excellence Award presentation honoring Penda’s energy management work. “We have a continuous stream of project ideas moving forward. We work together to access those projects, and then we make sure we move systematically from inception all the way through implementation.” n Cost effectiveness and customer satisfaction are Focus on Energy’s goals.

The LBNL study validates the utility partnership structure and the efforts of Focus on Energy industry experts and energy advisors. It’s a role model for programs around the country.

“Energy efficiency is good for Wisconsin,” said Governor Tony Evers.

“When you’ve got utilities, their customers, and technical experts from our Focus on Energy Program all working together, you’ll get results we can all take pride in.”

Sponsored Content | wisconsinbusinessvoice.org

Fall 2019 39

WMC Earns National Recognition

W

isconsin Manufacturers & Commerce (WMC) was recognized on a national level multiple times this fall for its overall work as a state chamber, its revenue growth and safety programming.

WMC was selected as one of three finalists for the State Chamber of the Year Award, presented by the Council of State Chambers (COSC).

The State Chamber of the Year Award provides recognition to state-based Chambers of Commerce who have distinguished themselves by providing exceptional services and results for their members. Finalists were selected because they demonstrated excellence in one or more of the following categories: Public Policy; Political Engagement; Membership and Development; Organizational Development; Best Communications Program; and Membership Services.

WHEN YOU’RE IN FOR SAVING ENERGY, WISCONSIN IS IN FOR BETTER PRODUCTIVITY. “Our production staff has really taken ownership of energy management.

They’ve seen the bottom-line impact and now compete with each other to be the most energy efficient while maintaining our high product quality standards.”

– Doug Bauer Plant Manager, Foremost Farms

40 Fall 2019

WMC was named runner up for the honor at the COSC annual conference.

WMC also received an honorable mention for its growth in non-dues revenue from the Association of State Chamber Professionals, which was awarded thanks to the progress made at Wisconsin Safety Council and WMC Insurance, both affiliates of WMC. Additionally, Wisconsin Safety Council was honored with three national

awards for its work in 2019, including being named an Honor Chapter of the National Safety Council (NSC) for the second year in a row.

The awards were presented to Wisconsin Safety Council – the state chapter of NSC – at the National Safety Council Congress Chapter Meeting Awards Luncheon in San Diego, California.

Chapters were recognized at this event for making significant contributions to safety. In addition to being named Honor Chapter, Wisconsin Safety Council also was awarded with the Advanced Safety Certificate (ASC) Training Award for 114 percent growth in that program and the Workplace Training Award for 233 percent growth year-over-year in safety training programs.

All five awards were presented to WMC in September, when WMC President & CEO Kurt Bauer was also appointed to the COSC Board. n

Working with FOCUS ON ENERGY®, Foremost Farms’ Plover facility has enhanced its data management capabilities. Better data, along with training, flexibility and incentives, allows process operators and supervisors to optimize energy use in production. Foremost employee engagement has created an estimated annual savings of $100,000.

Get in on energy efficiency:

focusonenergy.com/business

wisconsinbusinessvoice.org | National Recognition

®

WMC SEEN & HEARD

Wisconsin Business World students at the UW-Madison summer camp.a

WMC Foundation Executive Director Wade Goodsell speaking at the annual WMC Foundation Golf Outing at Trappers Turn in Wisconsin Dells.

WMC members meeting with Gov. Tony Evers prior to his remarks at

Senate Majority Leader (middle) with WMC President & CEO Kurt Bauer

WMC’s annual Policy Day event in Madison.

(right) and WMC Senior Vice President of Government Relations Scott Manley (left) meeting at the WMC office in Madison.

Local chamber executives at the Wisconsin Chamber of Commerce

WMC staff at the annual WMC Foundation Business & Industry Lun-

Executives annual conference in September.

cheon in October at State Fair Park in Milwaukee.

WMC Seen & Heard | wisconsinbusinessvoice.org

Fall 2019 41

The Retail Sector is Changing. Fast.

By John Beckord, President Forward Janesville

C

learly, the retail sector is undergoing rapid change and, like many small markets in the U.S., retail in Janesville is not immune to these changes. Major retailers like Toys ’R’ Us, Sears, Boston Store and ShopKo are all out of business. On the other hand, new retail outlets and dining options have opened here and retail sales are very strong. So, what is happening in the retail sector?

Let’s look at some numbers and determine if they give us some clues.

In 2008, retail sales in Rock County totaled $207,851,040. A decade later total retail sales had grown to $285,288,780 in 2018. This represents an average annual increase of 3.7 percent per year over that 10-year period.

Retail sales in the county managed to grow over the decade despite a seven percent decline in sales in 2008 and 2009 when the recession took the wind out of retail’s sails (or sales).

This strong trend is continuing in early 2019 with sales up 12 percent for the first nine months of 2019 vs. 2018.

Nationally, retail markets were bolstered by a strong labor market, growth in disposable income and elevated consumer confidence. I suspect those factors align with what we are seeing in Rock County with historically low unemployment and rising wages/ salaries.

Online ecommerce purchases account for 16 percent of total retail sales. Forecasts are common that project online sales to grow to 25 percent

42 Fall 2019

by 2026.

The flip side of the online sales numbers is that 84 percent of transactions take place in stores. The death of bricks and mortar retailing has been, at least up to this point, greatly exaggerated.

However, online retail sales are increasing at a faster pace than total retail sales which would indicate a slow shift to online purchases.

According to a study by global financial services company UBS, 8,000 to 8,500 retail stores, excluding restaurants, will close for every one percent increase in online penetration.

One silver lining in the report is that as stores close, remaining store locations often get a bump in customer traffic and retail sales. eMarketer, an organization that tracks trends in online sales, claims that Amazon now accounts for approximately 50 percent of online sales.

More than 25 percent of Amazon’s sales are from one product category: computers and consumer electronics.

The fastest growing category is apparel and accessories which account for about 15 percent of Amazon sales in 2018.

Eighty-five percent of online purchases from social media come from Facebook which has the highest conversion rate of all social media platforms.

Eight in 10 Americans shop online and mobile ecommerce sales are projected to exceed 65 percent of

wisconsinbusinessvoice.org | Chamber Voice

total ecommerce sales in 2019. Mobile shoppers are impatient: 40 percent of mobile users leave pages that take longer than three seconds to load.

One takeaway from scanning recent articles about changes in retail is the suggestion that consumers are looking for an experience, not just a transaction. That obviously translates to the food and beverage category where Americans are increasingly inclined to spend discretionary income on eating out and having a good time.

But even more traditional retail is moving in the direction of creating an immersive experience for the customer and providing services whenever possible. A common thread for retailers who will prosper is the idea of leveraging the best of both the in-store experience with a digital option. Blain’s Farm & Fleet is a good example: I often search for products on Blain’s web site and then stop by and make the purchase. It is not surprising that Blain’s Farm & Fleet is opening new stores and growing their footprint in Michigan.

The bottom line is that there is still a bright future for bricks and mortar retailing. The often-cited advantage of online sales tax avoidance is disappearing as a result of last year’s Supreme Court ruling giving states the option to require internet retailers to collect sales taxes. Ultimately, shoppers want an engaging, fun experience even if it involves both digital and physical channels. n

2019-20 EVENTS WMC EVENTS Statesmanship Reception December 11, 2019 • The Madison Club, Madison Wisconsin Chambers of Commerce Fly-In February 2020 • Washington D.C. 32nd Annual Manufacturer of the Year Awards February 20, 2020 • The Pfister Hotel, Milwaukee Focus on Manufacturing Breakfast February 21, 2020 • The Pfister Hotel, Milwaukee Business Day in Madison Reception February 25, 2020 • The Madison Club, Madison Business Day in Madison February 26, 2020 • Monona Terrace Convention Center, Madison Wisconsin Safety Council Annual Conference April 19-22, 2020 • Kalahari Resort, Wisconsin Dells WMC Policy Day Date and location coming soon!

WMC FOUNDATION EVENTS Future Wisconsin Summit December 12, 2019 • Monona Terrace Convention Center, Madison Business World 2020 Summer Programs June 14-17, 2020 • St. Norbert College, De Pere June 21-24, 2020 • UW-Madison Foundation Golf Outing July 29, 2020 • Trappers Turn Golf Club, Wisconsin Dells

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501 East Washington Avenue, Madison, WI 53703 | 608.258.3400 | www.wmc.org | WisconsinMC | | wisconsinbusinessvoice.org Fall 2019 43 , WI 53703 | 608.258.3400 | www.wmc.org | WisconsinMC | WMC501 | @WisconsinMC

Life after business Learn key steps to help prepare for a transition

27 March 2019 Chief Investment Office GWM Investment Research

Uncommon success

As a business owner, you understand that planning is often key to your success. With all the time, love and attention you have devoted to your business, you don’t want to be left with any uncertainty when the time comes to sell.

Wealth strategy for entrepreneurs and business owners

If you’re moving closer to selling your business, you’re likely to face some challenges that can slow the process. Common hurdles include: – Uncertainty as to whether employees or family members are interested in running it – Investment planning to shift confidently away from living off the income from it – Lack of clarity regarding feasible exit strategies Transition planning is perhaps one of the most complex tasks a business owner will encounter. Our experienced financial professionals at The Burish Group are here to help you reach the first crucial step: starting the conversation.

To learn more, download the report from our website, ubs.com/team/burishgroup Andrew D. Burish, CIMA® Managing Director–Wealth Management – Named the #1 Wealth Advisor in Wisconsin* The Burish Group UBS Financial Services Inc. 8020 Excelsior Drive, Suite 400, Madison, WI 53717 608-831-4282 burishgroup@ubs.com – Over $4 billion in assets under management as of 1 April 2019 – Relationships with $1 million or more are well served by our capabilities ubs.com/team/burishgroup

*Forbes Best in State Wealth Advisors (2018, 2019)

Accolades are independently determined and awarded by their respective publications. Accolades can be based on a variety of criteria including assets under management, revenue, compliance record, length of service, client satisfaction, type of clientele and more. Neither UBS Financial Services Inc. nor its employees pay a fee in exchange for these ratings. Past performance is no guarantee of future results. For more information on accolades, please visit ubs.com/us/ endesignation-disclosures. As a firm providing wealth management services to clients, UBS Financial Services Inc. offers both investment advisory services and brokerage services. Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that clients understand the ways in which we conduct business and that they carefully read the agreements and disclosures that we provide to them about the products or services we offer. For more information, visit our website at ubs.com/workingwithus. CIMA® is a registered certification mark of the Investments & Wealth Institute™ in the United States of America and worldwide. © UBS 2019. All rights reserved. UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA/SIPC. VIP_06252019-1 Exp.: 06/30/2020