TTWCP-878-03 Tech In Politics Frank Edelblut Governors Race: Frank Edelblut, Governors Race

On This Episode…

Frank is running to be the Governor of the State of New Hampshire. The Primary election is on Tuesday, September 13.

I asked Frank to come on and discuss some the Tech issues that affect the residents of New Hampshire. We were once only 2nd to Silicon Valley in California for the number of high-tech jobs. There is plenty of high-tech talent here.

Frank Edelblut is a New Hampshire business professional and politician serving elected in 2014 representing the people of Hillsborough County District 38. There he is part of three committees; the Finance Committee, Special Committee on Pensions and the Child and Family Law Committee. Additionally, he serves in his town government as the Water Commissioner for the Town of Wilton. Now, a 2016 Republican candidate for Governor of New Hampshire. He is the father of 7.

After graduation from college, his career began as an auditor for PricewaterhouseCoopers (PwC) serving as a CPA auditor for a variety of businesses. He then briefly served as CFO for Niagara Corp, a previous PwC client. Then he started his own business, Control Solutions. He sold Control Solutions to Altran in 2009. In 2013 he began his early stage investing company.

As we talked, we found many commonalities with our families, friends and business contacts. We talked about Tech Employment in New Hampshire and how to keep our STEM graduates here. We spoke of the strengths of NH Manufacturing and how we are making strides in that area. We briefly discussed the problem with H1B and how it is displacing NH high-tech workers.

 

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TRANSCRIPT

TTWCP-878-Frank Edelblut

Below is a rush transcript of this segment, it might contain errors.

 

Frank Edelblut

Airing Date: September 10, 2016

 

Craig Peterson: Welcome back to Tech Talk with Craig Peterson. We’re gonna talk a little bit about politics right now. And the technology, of course, is impacting politics. How is it going to impact it? We’re joined right now by Frank Edelblut. He is running for governor here in the state of New Hampshire. Businessman with a lot of experience. In fact, it was fun talking off-air. He and I have a lot in common. Frank, welcome.

Frank Edelblut: We do. And thanks, I’m happy to be here. And we do have a lot in common. I didn’t realize we would when I walked in here.

Craig: Right, right. So you have seven kids, which is a good start.

Frank: Right, right. Well, I didn’t quite catch up to you. Yes, I have seven children. It’s been great raising them here in New Hampshire. It’s a great place to raise your family.

Craig: It is. I absolutely love it. I’m concerned about the job stuff… we’ll get right down to it.

Frank: Ok, jobs stuff.

Craig: We only have a little bit of time with you. When we’re talking about jobs in New Hampshire, New Hampshire was, for the longest time, second in the nation per capita for high tech jobs. We were doing really, really well. We’ve slid down somewhat. And jobs just don’t seem to be here. We have a lot of kids leaving the state. Educated here even. And they’re not coming back. What do you see going on? Is there anything the governor can do about that?

Frank: So I do think there’s something that the governor can do. And we basically have some structural problems in our economy right now. I mean we’re at 2.8% unemployment, which is essentially full employment. But we ranked 39th in terms of GDP growth. And we ranked 49th in terms of productivity growth. Which is really where salary increases come from.

Craig: Right.

Frank: And so we have to fix these structural problems and they’re not gonna be fixed by some kind of political, gimmicky kind of thing. And it comes back to, really, a lot of the education system in terms of, you know, the skills that the kids are coming out high school with and how they can engage. Even some of the skills the kids are coming out of college with, believe it or not. And so I’m of the school that government doesn’t create jobs, but government does create an environment in which people are going to take a risk and invest. And I say that, you know, businesses are saying, you know I’m gonna expand here in New Hampshire and they have other options. They could go to North Carolina, they could go to South Carolina, they could go to Arkansas. Or somebody’s gonna cash in their 401k plan and say I think I can start a business, or mortgage my house and start a business. And that takes a lot of risks. So people have to believe that they’re going to be able to get a return in that investment that they make. And so they government really needs to stay out of the way. But they can create this environment in which those people who wanna take that risk can do it or feel comfortable doing it and can thrive. And so I talk about skills and the workforce as the number one thing.

Craig: STEM has been a big thing for me over the years. Science, Technology, Engineering, and Mathematics.

Frank: Exactly.

Craig: Those skillsets.

Frank: Right. You know it’s interesting, I was just recently talking to a guy who has a company in New Hampshire manufacturing high end parts. He’s got CNC machines. He’s machining turbines. He also got a factory in India. And what he’ll tell you is that he want us to hire some of these kids coming out of high school. But these kids coming out of high school don’t have the basic math skills to be able to be employed right away. But he goes to India and those kids come out of high school do have the math skills. So our kids are not being prepared. And so skills is number one. Number two, healthcare. We have the highest healthcare cost in the country. I bet everyone who is listening to this knows somebody who can only get 30 hours a week at their employment. Because they’re saying like we don’t wanna give you full employment because they were gonna have to pay benefits. I mean that could cost an extra 20 or 25 thousand dollars to the employer. It makes it hard to employ somebody. It also makes it hard on families who are trying to access healthcare.

Craig: Well that means you’re gonna have two jobs.

Frank: two 30-hour jobs.

Craig: Exactly. Instead of one 40-hour.

Frank: Yeah, so it makes it hard. So we can do something about that. Actually, when I think about healthcare, I sort of have this vision that we’re in like in the 13th century and we’re in a castle, New Hampshire is the castle. And we’ve drawn up the drawbridge because the 21st century is approaching and seems really scary and we’re saying we don’t want the 21st century to get us so that we have to like protect ourselves from it coz those are the kinds of laws that we got in place here. The next is electric cost. You know the cost of electricity again. Hard on families, but really difficult on businesses they’re trying to produce something.

Craig: I was gonna tell you. I have a data center in Manchester. I have another office down in Nashua. And I have computers here as well as kind of a backup. And my electric bill right now is about a thousand dollars a month.

Frank: Oh my gosh.

Craig: And that’s using the competitive electricity provider, right. It’s crazy how expensive it is.

Frank: It really is crazy and there’s some things we can do to fix that. Business taxes are very high. We’ve got the highest business taxes in the New England area. Like all of our neighbors are lower. Now in the legislature we did make some headway there and we are reducing the business taxes. But as of January 1st, we’re just gonna be 1/10th percent lower than our nearest neighbor. And I’m telling you, you know from 1/10th of 1% nobody’s gonna pick up a business and move it to New Hampshire. We’ve got more work to do there. And we’ve got regulations which are just stifling businesses there. They’re crushing them. You know just recently, it’s not a very tech kind of thing but I have a friend who’s developer. You know, those commercial buildings. And he had a project lined up for this summer that he and his crew of 10 guys are gonna be working on. But because of the Long Eared Bat issue, I’m not sure if you’re familiar with that issue.

Craig: No.

Frank: So the Long Eared Bats apparently have a nose cold. And so their numbers are dropping off. And so what we’ve done is we said well you can’t harvest certain areas of trees between May and September because that’s when they’re mating and we need them to reproduce. The difficulty is that the government, you know the DES knew that this ban on the harvesting during the mating cycle is gonna be in place but they sprung in our businesses in the last minute. So this project, he didn’t get his land cleared so he can’t start his project til September. You know they could have been alerted if I say hey guys, the bats are mating from May to September so why don’t you guys clear the land before that. You know and they it would have been all set. Those ten families would have had jobs this summer and they would have been on vacation and enjoying themselves but as a result they couldn’t do that. So just regulations are stifling.

Craig: Very huge. And coming from the feds and they’re coming from the state. And you have to keep up on it.

Frank: Exactly.

Craig: Which means at best you have to hire attorneys and you have to hire accountants

Frank: And accountants.

Craig: Exactly. They’re not helping you build your business. So not saying now you can do this and your widget will cost less and you make more, the widgets. All they’re trying to do is get you to comply.

Frank: Yeah, well and so these other professionals are just helping people comply. I mean, I was at that business so I know something about that.

Craig: Great.

Frank: Yeah, exactly.     

Craig: It’s a leach frankly. And I look at government and say, you know you’re right. It cannot create jobs at all ever. The only thing that they do is destroy the environment for jobs. And we’ve seen they’ve been doing a very good job on that.

Frank: You know it’s interesting and I don’t know if this is the direction you wanna go in in this conversation but so a couple of the other folks who are running for governor in this race here in New Hampshire have put out some of their economic ideas and these ideas basically, you know so one is basically to subsidize the biotech sector. And then we can talk more about that. And the other one is saying like, well we need more of a certain kind of occupation so what we’re gonna do is we’re going to agree to pay off student loans for people who choose that occupation and work in New Hampshire. And when I see these kinds of policies I’m saying like you know this is picking winners and losers. This is progressive thinking at its worse. And all they’re saying. I don’t differ from the democrats, they’re just saying I can make better decisions to intervene into the economy than the democrats can. So what’s the real difference if you don’t believe in free market economy?

Craig: Well you’ve got a really good point there. Because you’ve been involved with investments as an angel. You’ve built your own company. Very large. You were able to sell it. So you understand investments. So you as angel, are lucky if 1 out of 10 on your investments work.

Frank: I’m really lucky then.

Craig: And you’re lucky if that’s what happens, right? And you know the industry, you know the environment, and yet the government at the same time somehow figures it can pick the winners. And they have no experience with the industry. They have no experience in industry and yet they’re trying to pick winners.

Frank: Exactly.

Craig: Which is insane.

Frank: Wait, wait, wait. As to your point, I have a track record of success. You know, I am able to actually, you know, make money at figuring out who’s gonna win and who’s gonna lose. And yet basically what you’re saying is we’re gonna take some money from this investor and we’ll let government bureaucrats decide how to allocate that money.

Craig: Exactly.

Frank: What are the chances that they can be successful if I’m 1 in 10, what do you suppose their odds are?

Craig: And the worst part is, not just taking money from investor, they’re taking money at the point of a gun. From widows, from people like us that are trying to raise a family.

Frank: By force.

Craig: Yeah, by force. That’s what it means, you know. Anyways, I’m just gonna get more upset. So you’re going to go ahead now and you’re looking at how can we reduce the cost, the burdens on business through regulations that are in place that are needed or aren’t needed. I know people who think that, for instance, a barber should be licensed. That’s a regulation. Somebody’s cutting my hair.

Frank: We in New Hampshire, I mean you bring up something, you know, licensing. We are a state that doesn’t do very well in terms of licensing. We’ve got, you know, a long list of professions that are licensed. You’ve mentioned barbers. We’ve got shampooers. I mean like I shampoo my hair every day, and I don’t have a license you know.

Craig: Exactly. Imagine that.

Frank: You know, but it’s also really inconsistent in terms of how the licensure fees and stuff like work out. So, you know, one profession, maybe you’ve got like a CDL and you’re driving hazardous materials. It’ll cost you, you know, $50 a year and a one-time education thing. And another person is driving something that, you know, not hazardous and not a problem. But they have to pay like an $800 fee and they’ve got like annual requirements to go get re-trained. So it’s just really inconsistent that depends how strong the guild was at that time that the licensing regulations got put in place. Whether they were really honorous or not as honorous.

Craig: Right. Trying to keep other people out of the profession.

Frank: Exactly.

Craig: Right.

Frank: That’s really what’s happening.

Craig: We see that all the time in the software industry too. So, there’s a million things to talk about. One of the ones I have to talk about, because I’ve been impacted by this personally, my business, for instance, I have some Fortune 100 companies that are clients of mine, some of the clients of mine for over two decades… a long, long time. I’m coming up against something that I’ve never seen this bad before. In 1990, we put in the H-1B visa program and put it in place. Right now there’s estimated 700,000 people here in the United States, who, a company has sworn there is no one available in the United States to do these jobs. And I go up against these companies. They’re under bidding me by dramatic amounts. They are way under-delivering. It’s just incredible. And it’s hurting American jobs.

Frank: Right.

Craig: Right here in New Hampshire. Now I took a minute and I had a look here during the break and I took a peek at a couple of different companies out there. For instance, here’s one called Akken. A-K-K-E-N Inc., and they’re in Nashua, New Hampshire and they have 304 people here in New Hampshire on H-1B. That’s one company. So that was at the ace…

Frank: Three hundred jobs in Nashua, New Hampshire that are out on H-1B?

Craig: That’s what it looks like. This is at first look.

Frank: Exactly.

Craig: We haven’t delved into this in great detail.

Frank: Well let me just clarify this for those who are listening. So that’s basically saying that there are 300 employment opportunities in Nashua, New Hampshire… that there are no Americans that have skills to be able to do.

Craig: And we shut down Digital.

Frank: Yeah.

Craig: They’re gone.

Frank: You and I both know that there are plenty of tech people out there right now.

Craig: Of course. That’s my point. You know, I went to the other point of the scale, the very, very end, to Zenith, also in Nashua. In fact, less than a couple of miles away from where we are at right now, there’s another 58.

Frank: Yeah.

Craig: I look at that and say, wait a minute. Now, the people who are supporting the H-1B program were saying, well they have to pay comparable rates. You know, this isn’t a bypass. And yet when you look at what’s really happening here, they only have to pay comparable rates based on the area code. So, they have a $50,000 average salary right here. That’s all they have to pay. It doesn’t matter if the job has a $120,000…

Frank: About the space, about the specific type…

Craig: Exactly. So you’re looking for a very advanced developer at $120,000. You’ll only have to pay them 50, and you bring them in from India, which, by the way, is the number 1…

Frank: Can you imagine 350 good paying jobs here in Nashua that is available?

Craig: Right here in Nashua.

Frank: Yeah, that’s incredible. You know, just so that you know, so H-1B program is really a federal program.

Craig: It is, yeah. Exactly.

Frank: So, as the governor, all I can do is be a thorn in the side and allow them out to complain about how it’s affecting our state.

Craig: I agree.

Frank: In terms of jobs that are going away. I do know a little bit about it because in my company, we have an opportunity sometimes to hire some H-1Bs.

Craig: Sometimes you have to.

Frank: Correct.

Craig: It goes back to, I saw a quote from Donald Trump, who at the top of your ticket, the Republican ticket out there, and they showed him on a TV show with his ties, right? And they were talking about the ties and, oh where are these made? Oh these are made in China. You why did you make them in China? And he just kind of fumbled a little bit. And this is an anti-Donald Trump ad.

Frank: Correct.

Craig: The reality is, he could not compete. He could not stay in business if he was doing it here in New Hampshire. So…

Frank: But you know what we can here in New Hampshire?

Craig: I’ve hired H-1B people just so I could compete in the past.

Frank: Right. So it’s kind of a death spiral in that sense?

Craig: That’s a race to the bottom.

Frank: In other words, it’s a race to the bottom. That’s really what you’re saying. But I actually, so there is an opportunity for a race to the top here in New Hampshire. I mean, I think that we have some real gems in the state. In particular, I love advanced manufacturing. You know, so whatever we do here in New Hampshire, it has to be a high value ad. It has to be something that’s got, you know, high enough margin that you can afford to distribute it.

Craig: Right.

Frank: You know, coz we’re tucked up here in Northeast part of the part of the country where this is not Ohio or Tennessee where you can get stuff back and forth to your customers easily. So I think it’s that. And we have a lot of experience in the state because we have a history of a lot of machining and CNCs type of work and precision parts in the state. So there’s some skill out there, not only it is being deployed right now, but we have some skill out there.

Craig: And that is growing.

Frank: It is growing.

Craig: That factor is growing.

Frank: And I think that that’s really the direction we need to go in terms of differentiating ourselves. And so you have both the experience and it’s a market niche that is not necessarily being exploited by a whole lot of folks in different parts of the country. But we also have an education system. Our community college system right now has some great programs. Great Bay has a composite manufacturing program. You know, Nashua and Manchester both have advance manufacturing program where they’re allowing the students to work on really some of the state of the art CNC machining, some lathing and some other precision manufacturing stuff. Just recently in Nashua, they’ve set up kind of a mock manufacturing line so the kids can actually visualize and see. And you know they’ve got robotics working on that line. Pick and play stuff for them. So there’s a lot of… I think that is really where our future’s gonna be. And that actually can compete with China. In other words, because the combination of the precision associated with it, because sometimes it’s difficult in these other folks in the other places they do it. But actually right here in Nashua, you’ve got a rapid manufacturing.

Craig: Yeah. You know I was thinking of them.

Frank: J. Jacobs is just… again, he’s carved out a niche and he’s doing really well with his business there. He was able to grow and expand because of, really, the knowledge system, the knowledge base that he’s adding to his products which makes them valuable and he can compete.

Craig: Yeah. I think that’s a wonderful thing. So going forward, we mentioned the schools already. We talked a little bit about FIRST Robotics, great program that is out there.

Frank: And as it turns out, our children both participated in FIRST Robotics. We’re in the same team in FIRST Robotics.

Craig: How’s that for bizarre right? But nefirst.org, you can find out more about that and I really encourage people to get the kids involved. It isn’t just about the engineering side, FIRST Robotics gets them involved with safety. Making video, doing business plans and presentations, raising funds.

Frank: Project management.

Craig: Yes.

Frank: Teamwork, you know, like understanding how you break down a project into components and you put it all back together so it works and stuff like that.

Craig: Right. It’s absolutely fantastic. So there’s a lot we could talk about. We’ve run out of time here. I appreciate your being with us. Where can people find out more Frank? Voting is on Tuesday.

Frank: September 13th. So Tuesday, September 13th. You can get more information at FrankEdelblut.com. And there’s a T at the end. So can I spell it?

Craig: Edelblut.

Frank: Edelblut. There you go. Just say it that way and you know there’s a T at the end exactly.

Craig: So, it’s E-D-E-L-B-L-U-T.

Frank: Exactly, .com

Craig: .com

Frank: And you can find me on Facebook as well. Frank Edelblut for governor.

Craig: Alright. Very good. A lot of signs around. Congratulations and thanks for being on the show today.

Frank: Appreciate having me. Thanks so much.