Name: James F. Marquart
Position: President/chief executive officer of Manufacturing Jewelers and Suppliers of America, a national jewelry trade association formed in 1903, whose headquarters has been in Providence since October 1995.
Backround: Previously served as president and chief executive officer of New York State Hospitality & Tourism Association for 18 years. Also a Certified Association Executive of the American Society of Association Executives.
Education: Long Island University, bachelor’s degree and MBA in finance.
Age: 57
Residence: West Greewich
Family: married, 5 children
PBN: I understand MJSA is relocating its headquarters from its 1 State St. location in Providence to Silver Spring Park (in Providence). Why are you building a new building?
Marquart: The reason we’re building the headquarters is that we’re totally out of space here at 1 State St. And although we have a significant amount of parking, 18 (spaces), that go with our lease, it’s insufficient when we have a number of committee meetings up here and we have guests coming up for educational programs. I think to really show the community that this is the capital of the jewelry industry, MJSA building its headquarters will be asserting its position as a major player right here in Rhode Island. Over 25 percent of the manufacturing jobs in Rhode Island are in the jewelry industry, so it’s certainly an economic factor here in Rhode Island and Massachusetts.
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Describe the new building ?
It’s in lot two in Silver Spring Park, directly across from the Cellular One Building. We have purchased a little over two acres from the city of Providence, we will build a 15,000 square-foot building, with approximately 4,000 feet that we will sublet on a five or more year term base. That is future growth space. We will occupy 11,000 square feet. (compared to 6,000 square feet the association has now.) We’re going to put in two conference rooms, a full training room, and then additional space to expand the staff as we continue to expand our services. And most important for our members, parking for about 65 people.
Are you going to be adding more staff?
I don’t think there’s any doubt. We’ve got a couple new projects that we’re really working on, it’s very likely we’ll put on a government affairs director and support person, and I think we’ll continue to expand our educational department and membership department as well.
What kinds of educational programs will you be adding?
We’re looking at developing basic programs to educate people into the jewelry industry. We just put a fair amount of equipment at Rhode Island College and we have a program with them for the jewelry industry (where) we will be doing computer training. We’re doing a lot of work with workforce development, career development, high schools.
Are you going to be recruiting in high schools?
It’s not just recruiting, it’s educating them, letting them see what the industry has to offer as a profession. The workforce of the jewelry industry, the craftsmen, are all getting older and older. And we know that we’re going to have an employee problem in the future if we don’t start developing the craftsmen. That’s a real heavy emphasis for this industry. We’ve got to look at the future for employment, especially with what we’re doing with international trade policies. If all of a sudden trade barriers were to come down and U.S. manufacturers were selling more product overseas, it’s going to have a real stimulus to this industry, and will require a real increase in the workforce.
What is your strategy for getting young people excited about jewelry?
Last year we did a career day during Expo Providence and we brought over a thousand young people in, and they had a chance to see many of the manufacturers and see their operational structures. So they could see what it was like to work on various equipment. And a lot of those skills are transferable. You can work on a lathe in the jewelry industry or you can work on a lathe in a machine shop. There is a lot of overlap.
China is now attempting to join the World Trade Organization. What kind of impact would China’s entry have on local manufacturers?
Tremendous. When you really think of the countries that send product into the United States (with) little or no tariff barrier, China, Thailand, India, three of the most populated countries that we cannot export product to. If those trade barriers come down the question is: Will the residents of those countries buy American product? History says American products are always salable. Even if they’re at a higher price point, American product is sought after. China has already agreed that, when APECC (Asian-Pacific Economic Cooperative Countries) submits in December (in Seattle) the new global world trade policy (which calls for) the elimination of all non-tariff trade barriers and an equal global tariff rate of 5 percent, those barriers will fall. And if the WTO accepts the proposal, you’re going to see a huge influx of product being able to be sold overseas. That is going to be tremendous.
What are examples on non-tariff trade barriers?
China requires that all gold must be filtered through the Bank of China. That’s a non-tariff trade barrier. China’s bank can either license you to sell product, if you also want to pay the duty presently, or they can say ‘No product is going to come in.’ In many countries Customs is a non-tariff trade barrier. If your goods are going to be held up indefinitely at border points, and all of a sudden your delivery date of contract is violated, you’ve got a situation where even if it ever gets past Customs, the purchaser in that case can say, ‘Well, I’m not going to accept it.’
What is the U.S. tariff on most jewelry goods coming into the country?
Most of the jewelry product is coming in at about 6, 6.5 percent.
But that’s low compared to other countries?
China’s 40 percent. India is 40 to 60 percent. Thailand is 40 percent. South America, which is a number of countries where people wear a tremendous amount of jewelry, we’re basically blocked out of South American countries because of their non-tariff trade barriers, and their tariff rates. If all of a sudden we have a global equal playing field it opens these markets which we have not been able to penetrate. Ever.
The reason countries should buy into a level playing field is, in most cases, it’s black market jewelry that gets into their country, that they’re getting no tax revenue at all. And if you have a 5 percent tariff rate, it does not pay to have black market jewelry. There will be tax revenue coming in on product that was coming in under the table. So, the countries will get a financial float in lieu of what they’re getting now which is no float on black market jewelry. That’s part of the rationale we’re going to use in talking to our counterparts in various other parts of the world.
At what point did it become important for manufacturers in the United States and Rhode Island to start exploiting foreign markets, as opposed to relying on the domestic market?
Since 1977 to 1997, this industry has lost a third of its jobs and a reasonable percentage of its market share. When you lose a third of the jobs because you’re not competing effectively overseas, and it’s not your fault that you can’t compete because you’ve got road blocks up and our own government tears down the road blocks on the product coming in, at some point you’ve got to stand and be counted. We’re going into a full educational program with industry manufacturers on how to reach the export community. There’s no question that manufacturers in this industry have not had the ability, except in some rare cases, to do a lot of exporting. Getting into that marketplace will require some education, commitment, some guts. When you really come down to it, it’s a stomach for it. The rewards for it, though, are there.
How many U.S. jewelry manufacturers are setting up factories overseas?
Some. Definitely there are some American companies that have taken advantage of the low labor costs, the lack of environmental regulation, and so on overseas. Jostens is a perfect example, which moved its operations to Mexico, was going to take advantage of the low cost of labor, and they moved back.
Why?
I think when you talk to Jostens you’re going to find that really, although labor costs are low, productivity was not that high.
There are certain environmental practices we in the United States expect. To what extent do manufacturers carry those practices overseas when they start manufacturing in foreign countries?
If you were a manufacturer and you were overseas you’re going to follow the regulations of overseas. You’re not going to increase your cost of production dramatically to meet the standards of the U.S. if that’s not what’s required over there. I don’t think you’ll find that they implement new standards just to be a good citizen. I cannot tell you that I’ve seen a lot of plants (overseas) to say that that’s factual, but it doesn’t make any sense that you would do any more than what is required by government.
Overall, do you encourage companies to explore the option of setting up factories overseas?
No. We do not at all try to entice companies to look overseas. In fact we try just the opposite. We really want to make American manufacturing attractive. And the best way we can help manufacturers is to increase their ability to sell product, not manufacture product overseas. I think we can really have a major impact in increasing the labor force here and quality of life here by increasing production (by) reducing the trade barriers.
What about the local business climate? Where does Rhode Island stand?
I’ve been very pleased to see what the governor and General Assembly has done in Rhode Island. They are reducing business expense. Slowly. Can we do a lot more? Absolutely. We need to make Rhode Island as competitive as any state in the United States, and we’ve got a long ways to go to be that competitive. At the same time, I can praise Rhode Island government as far as the workforce improvement grant they’ve provided MJSA and our members, international marketing grants that they’ve approved. We have come a long way. I’d say Rhode Island has been very supportive of the industry. I will say that last year, labor and business and government have never worked, in my opinion, closer, and looking at changes of regulation, policies, tax regulations to help reduce the tax burden on operating a business here.
What’s the No. 1 thing you’d like to see changed?
Besides (the) corporate tax structure, to me the inventory tax is horrendous in this state. Property tax problems, is horrendous, they need to be addressed. Sunday work rules. If you can’t compete with your neighbor because of Sunday work rules, and inventory tax, you cannot compete in this marketplace. That hurts this industry, and it hurts most any consumer industry. Those are some of the things I think need to be addressed and we have to do it very quickly.
If trade barriers came down, and manufacturers gained easier access to foreign markets, could Rhode Island return to jewelry heydays?
In my opinion, yes, I think that is a feasible situation. I don’t think the American manufacturers are going to secure much more of the market share of the American market, I think their expansion is really in the world economy. When you look at the population of the world economy, even attacking 1, 2, or 3 percent is a huge number for the American manufacturing industry. There is no reason why we can’t sell our product anywhere in the world. The American product is a very good product.
Costume jewelry manufacturers here say trends and fads drive the business. Are consumers in other countries mostly following American trends?
In most cases, yes. Europe has some of their own trend lines. In many cases, each continent might have each of its own trend lines. What I think has been lacking in the United States, the minimal look, which is fashion design by the clothing design industry has certainly hurt the jewelry industry because the models are not showing jewelry along with their fashions.
We have developed a coalition called the Tailored Apparel Jewelry Accessories Council. We’re looking to put together a national promotional advertising program featuring billboards, consumer print media, point of sale promotional pieces, and hopefully, if funding can be developed, even get to radio and TV, depicting to the consumer ‘
It’s time to dress up,’ that’s the tag line. And letting the consumer see action photos of us wearing tailored apparel and jewelry accessories and how well it looks. If that transcends into the higher-end designers to get away from the minimal look and they see that the consumer enjoys wearing jewelry and they think that it enhances their appearance, then that can be a real catalyst.
I was involved with the ‘I love New York’ commercials. The national trade associations that have developed those type of national programs, definitely see an increase in business. I’m hoping that the clothing industry, the jewelry industry, the accessories industry, banding together, can fund a multi-million dollar national advertising program. I think that will have tremendous effect.
When will promotion start?
We’re hoping we can have this in place by July 1.
