- Hi, everyone, Steve Adubato.

We kick off the program with a new mini series, it is called Manufacturing Matters.

And a gentleman you see on camera knows that better than most.

He's Pete Connolly, CEO of New Jersey Manufacturing Extension Program.

Pete, good to see you.

- Great to be seen again and great to be with you, Steve.

- You got it.

The website is up of the organization.

Remind folks what it is.

- So New Jersey Manufacturing Extension Program.

We are a training and consulting firm for New Jersey smaller media manufacturers, and our objective is one, make 'em more profitable, and two more, most importantly, to stay in New Jersey.

And the Manufacturing Extension Program is a nationwide program, and there's one of me in every state to help small, medium manufacturers.

- Talk to us right now, Pete, about where we are in the manufacturing sector in New Jersey.

Where are we?

Where do we need to be, please?

- So we're holding our own with manufacturers, and again, there's probably 10,000 small medium manufacturers in New Jersey and we deal with a lot of 'em over the course of years.

Companies wanna stay here.

There's a lot of benefits for working in New Jersey and owning a company in New Jersey.

We have a skilled workforce, we have great schools, transportation is great, especially up in North Jersey, but there are issues.

We are not the best manufacturing-friendly, business-friendly state.

Our corporate business tax is higher than our states that are around us.

Our corporate transit fee affects a lot of different companies.

So there are issues, but on the whole, most companies wanna stay here and are trying to grow here.

- So you're talking about state policies, Pete, but on the federal level, tariffs.

- Tariffs- - Talk about tariffs and we're taping this program in the middle of July.

We don't know what's gonna happen a week, two weeks from now as it relates to tariffs.

But what does that mean?

The uncertainty vis-a-vis tariffs for the manufacturing sector and those in it, please, Pete.

- Right, you just hit the one word which is uncertainty and companies, they can't judge, and it changes day to day.

And so hopefully in the next couple of weeks, we'll have a resolution on tariffs.

And let's be honest, tariffs are a tax, and it does filter down to the consumer when we're doing this.

When we talked to companies now, a number of years ago, it was always just in time for supply chain.

Now it's just in case.

So people are buying as much equipment and products that they can and bring it in before the tariffs take effect.

- Along these lines, the other, I don't know if it's uncertainty, but it is disruption and it has impact.

Artificial intelligence in the manufacturing sector.

Go ahead, Pete.

- So I think we may have had a conversation before.

AI scares me in certain aspects, but in the manufacturer role, it's actually playing a very, very important role.

And it's grown over the last six, seven months.

We started using it for machine learning, working with companies to feed data out over their machines of when to have preventive maintenance.

What we're doing now is also using AI.

We go into a company and we actually take pictures of their manufacturing floor, their manufacturing processes, and feed that into AI.

And it comes back with a fairly detailed report of you have great OSHA requirements, you need more lighting, you need more ambient light, you need more power.

And AI does that, where we never saw it before.

We would spend hours with companies.

Now we go in, take a couple pictures, fill it into AI and it comes back.

I think you're starting to see that that may put me outta business 'cause companies can do that themselves instead of using, they can take pictures by themselves and feed it into AI, but it is growing leaps and bounds every month, of what AI means in manufacturing.

Speech writing, writing proposals.

It's just growing exponentially.

- But Pete, along those lines, again, there are all these different things going on, developments, trends, but we're doing a lot of programming around energy costs.

Talk about the connection between the increase in energy costs and the manufacturing sector needing to produce what they produce, get it to the market, and sell it at a price that is affordable.

- It's not affordable at the moment, and companies are having problems with that.

It's gone up 25% electric bills, and that then filters down to the consumer also.

What we're also finding is that cities can't get power to new manufacturing facilities.

So as companies try to grow their manufacturing, or build another warehouse or another manufacturing facility, some of the cities, they're grid and they do not have enough energy.

We've dealt with a couple of companies that can only work on the first floor 'cause they don't have enough energy to get to the second floor.

This is a big issue, and we're years away from solving it.

We did, whether we like it or not, we did shut down some of our coal-producing plants.

We're trying to bring nuclear back up.

Who bought Three Mile Island?

I think it was either Google or Amazon for their data centers.

- Right.

- New Jersey used to be a net producer of energy, now we're a net negative producer.

We're actually importing more- - We're buying it.

- We're buying it, and we never used to buy, we used to sell.

So some of those policies.

Wind is not the answer.

All of the energy needs to work together, whether it's wind, solar, coal, nuclear, we need a bit of everything to work.

- And put the website up again, team, there's a manufacturing day on October 3rd that Pete and his team are putting together, and the candidates, there are two major party candidates for governor and as I've said before, we're gonna do in-depth interviews with both Mikie Sherrill, the Democratic candidate, Congresswoman Sherrill, Former State Assemblyman Jack Ciattarelli.

Both of them will be there on that date.

Is that fair?

Now, it's not a debate, Pete, but it is a discussion about the candidates, their policies and manufacturing, correct?

- It's really on business and manufacturing in New Jersey.

And so they'll each get a chance to speak separately.

One is in the morning, one's in the afternoon, and then Dr.

Ben Dworkin of Rowan, RIPPAC will be the moderator for that.

We're gonna have our website have attendees be able to ask questions in advance.

They will not take questions.

We're just gonna have Ben do the questions.

- But there is an opportunity for whomever becomes governor in January of 2026 to make a real statement about not just what they say about the manufacturing sector, but their policies to support the manufacturing sector.

Is that a fair assessment, Pete?

- That is a fair assessment, and I've met with both of them individually a number of times.

They are both saying the right things right now about manufacturing business having a seat at the table in both their administrations and all that.

It's the manufacturing and business is the generator of how New Jersey will go.

- Pete Connolly is the CEO of New Jersey Manufacturing Extension Program.

Part of our series Manufacturing Matters, we'll be talking to business owners in the manufacturing sector, people who are living it every day that Pete knows very well to tell more of this story.

Thank you, Pete.

- Thank you, and we look forward to the partnership between us.

- You got it.

I'm Steve Adubato, that's Pete Connolly.

We'll be right back.

- [Narrator] Think Tank with Steve Adubato is a production of the Caucus Educational Corporation.

Funding has been provided by The New Jersey Economic Development Authority.

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Eastern Atlantic States Regional Council of Carpenters.

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PSE&G.

Valley Bank.

EJI, Excellence in Medicine Awards.

A New Jersey health foundation program.

And by The Turrell Fund, a foundation serving children.

Promotional support provided by NJBIA.

And by New Jersey Globe.

- I'm Tim Sullivan, CEO of the New Jersey Economic Development Authority.

Since joining the NJEDA, I've been struck by the incredible assets and resources that New Jersey has to offer.

The NJEDA is working every day to grow New Jersey's economy in a way that maximizes the values of those assets to benefit every single New Jersey resident.

This includes more support for small businesses and a focus on reclaiming New Jersey's position as a leader in the innovation economy.

Visit njeda.com to learn more about how NJEDA is building a stronger and fairer New Jersey economy.