Mercury Marine Scoops the “Wisconsin Manufacturer of the Year” Award

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They are the Oscars of the manufacturing industry. The Wisconsin Manufacturer of the Year Awards Ceremony was held on February 21, 2019, at the Pfister Hotel in Milwaukee, and Mercury Marine (the world leader in marine propulsion and technology) was awarded as 2019’s Wisconsin Manufacturer of the Year in the Mega category.

This is the third time Mercury Marine (which is also the largest division of Brunswick Corporation) has won the prestigious award: first in 2006 then again in 2014. It also so happens that the Fond du Lac-based firm is celebrating its 80th anniversary in 2019.

For those not acquainted with the awards, they are presented once a year by Wisconsin Manufacturers and Commerce (WMC) to companies based in the state. All nominees of the awards should be firms that produce world-class products and create employment for people in communities where they (the companies) are located.

“We are honored to win the Wisconsin Manufacturer of the Year Award for the third time,” said John Pfeifer, the President of Mercury Marine. “We have invested more than $1 billion in expansion and R&D over the past 10 years and in 2018, we had the largest product launch in the history of our company,” he added.

Below is an enumeration of milestones Mercury Marine achieved in 2018.

  • Broke ground on completing a $10 million expansion project that added a 20,000 square feet research facility to the 2.5 million square foot campus. The firm also made major upgrades to its other facilities.
  • Had the largest, major new-product rollout in the company’s history. The rollout included 19 new V-6 and V-8 outboard engines and 7 other new engines. Better yet, on average, Marine Mercury has released a major product every six weeks for the last six years, allowing it to set the pace for marine innovation.
  • Workforce expanded by 12 percent to support increased production. The firm experienced an unmatched product demand response in 2018.
  • Adopted state-of-the-art, automated manufacturing equipment. These already-installed and implemented gadgets are highly effective compared to the previous equipment the company was using.
  • Also had to adopt new manufacturing practices and adapt them to higher output when demand skyrocketed beyond their expectations.

“Although Mercury has unveiled many new innovations and has amassed many successes through the years, 2018 stands out as a particularly remarkable year of achievements that will help to shape the future of both Mercury Marine and the entire boating industry and it is gratifying to be recognized for this honor by the WMC,” Pfeifer wrote in a statement after winning the award.

As a show of appreciation, the company has decided to celebrate its 80th anniversary throughout the year with its customers and employees.

Generac Ramp Up R&D Spending

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Generac Power Systems have been steadily increasing their R&D spending over the past decade. The company spent $9.9 million on R&D in 2008 and by 2016, they were investing $37.5 million per annum. Aaron Jagdfeld, President and CEO said that investing in R&D would “quicken the pace of our product development cycles, which is critical to remaining at the forefront of the industries we serve.”

The company plans to invest $73 million in its Wisconsin headquarters and manufacturing facilities over the next five years in order to “realize efficiencies… that will drive continued innovation.” The funds will be used to expand corporate headquarters, production operations and research and development activities to advance Generac’s engineering and major product development. The improvements will allow prototypes to be made and tested more quickly.

It is expected that around 400 jobs will be created in Wisconsin by the project, adding to the current workforce of 2,000. The Wisconsin Economic Development Corp (WEDC) will support the project with up to $10 million in enterprise zone tax credits through to 2021. The tax credits awarded will depend on the number of jobs created, amount spent on training employees and capital spent on the expansion.

Mark Hogan, CEO of the WEDC commented that “In addition to the jobs created by this project, this expansion will enable Generac to usher in a new era of innovation and develop products to reach new markets and position the company for future growth.”

Generac manufacture power products including residential, commercial and industrial generators. Jagdfeld has stated the company is looking to diversify its product range and will focus on growing its natural gas business. Over recent years, the company has expanded through global acquisitions in Germany, Mexico and Italy.

The Wisconsin Credit for Increasing Research Expenses is available for companies undertaking eligible R&D activities, and can be reinvested into growing the business. If you would like to discuss R&D tax credits for your business, contact Swanson Reed R&D Tax Advisors today.

State-of-the-art Electronics Plant to Be Built in Wisconsin

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Electronics manufacturer Foxconn has announced plans to build a $10 billion, 1.6 square mile production facility in southeastern Wisconsin, which is expected to initially create 3,000 jobs. Over the next four years, the factory is estimated to support 10,000 jobs and 6,000 indirect jobs.

The plant will supply state-of-the-art LCD screens for use in autonomous cars, aircraft systems, surveillance, office automation and more. Foxconn is the largest contract assembler of iPhones and other Apple devices. It also supplies gadgets to Google and Amazon.

Six other states were in the running for the facility but Wisconsin won due to proposed tax incentives. Wisconsin Governor Scott Walker said that he will call a legislative session to discuss incentives, which will include up to $1.5 billion in income tax credits for creating jobs and $1.3 billion in income tax credits for capital investment.

The display fabrication plant will be built close to Lake Michigan, whose water supply will be necessary to help keep work spaces dust-free.

The plant is supposedly the first in a series of facilities to be built in the US, according to Foxconn CEO Terry Gou, and will be part of an 8K+5G ecosystem. Gou states that the US does not currently have the ability “to produce a complete 8K system,” which is the current highest ultra high definition television resolution. “We are going to change that and it starts today with this investment in Wisconsin,” he declared.

Foxconn has offices in nine US states that conduct manufacturing, R&D, sales, servicing and assembly. They also operate in Asia, Europe and Latin America.

U.S. Universities Spending More on Research and Development

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U.S. universities are spending more and more on R&D these days. In 2015 alone, colleges and universities spent a combined $68.8 billion on research and development with the top 20 colleges accounting for 30% of that.

To discover the universities spending the most in research and development, 24/7 Wall St. assessed R&D expenditure by university for the 2015 fiscal year with data from the National Science Foundation. Of the 1,871 major colleges and universities reviewed, 10 schools spent more than $1 billion on R&D.

Top 10 Universities for R&D Expenditure

  1. Johns Hopkins University in Baltimore, Maryland
    • Annual R&D spend: $2.31 billion
  2. University of Michigan
    • Annual R&D spend: $1.37 billion
  3. University of Washington
    • Annual R&D spend: $1.18 billion
  4. University of California, San Francisco
    • Annual R&D spend: $1.13 billion
  5. University of California, San Diego
    • Annual R&D spend: $1.10 billion
  6. University of Wisconsin – Madison
    • Annual R&D spend: $1.07 billion
  7. Duke University in Raleigh, North Carolina
    • Annual R&D spend: $1.04 billion
  8. Stanford University in Stanford, California
    • Annual R&D spend: $1.02 billion
  9. University of California, Los Angeles
    • Annual R&D spend: $1.02 billion
  10. Harvard University in Cambridge, Massachusetts
    • Annual R&D spend: $1.01 billion

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If your company is conducting R&D through a local university or college, you may be eligible for a higher R&D tax credit rate. Contact a Swanson Reed specialist to find out more information.

How Does Your State Rank on the Innovation Scale?

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Innovation Is Key

Innovation is crucial to sustainable economic growth, but for innovation to occur businesses must have both the incentive and the capacity to invest.

As innovation is key to the United States’ economy as a whole, many U.S. states are showing off while others are falling short when it comes to patents, R&D, venture capital and academics.

So which states are excelling in innovation and which ones are lacking, you ask?

Patents

The top states in patents per population include:

  1. Wisconsin
  2. Washington
  3. Texas
  4. Utah
  5. California
  6. Massachusetts

The bottom five patented states include:

  1. Alaska
  2. Mississippi
  3. Tennessee
  4. West Virginia
  5. Wyoming

Venture Capital

The top states for venture capital are:

  1. Massachusetts
  2. California
  3. Utah
  4. Washington
  5. Colorado

The lowest are:

  1. Arkansas
  2. Alaska
  3. Hawaii
  4. Wyoming
  5. Iowa
  6. South Dakota

R&D Spending

The leaders in R&D spending are:

  1. Delaware
  2. Michigan
  3. California
  4. Connecticut
  5. Massachusetts

The states that spent the least on R&D include:

  1. Arkansas
  2. Wyoming
  3. Louisiana
  4. Alaska
  5. Mississippi

Academics

As for academics, the top states include:

  1. New Mexico
  2. Maryland
  3. Rhode Island
  4. Massachusetts
  5. Alabama

The lowest academic rankings were for:

  1. Louisiana
  2. Arkansas
  3. Delaware
  4. Wyoming
  5. Nevada

If you are a U.S. based company conducting R&D you may be eligible for the federal and/or state research tax credit. Please contact a Swanson Reed representative to find out further information.