Tag Archive for: made in USA
Putting America Back to Work: 5 Ways Made in USA Is Staging a Comeback
by The Made in America Movement TeamGood news: Americans are making things again, from cars to watches to socks. What’s behind the manufacturing upswing—and what it means for American labor.
10 States Where Manufacturing Still Matters
by The Made in America Movement TeamLast year, the manufacturing sector was responsible for 12% of the nation’s total economic output. In Indiana, the state where manufacturing contributes most, the figure was 28.2%. 24/7 Wall St. reviewed the 10 states where manufacturing represented the largest total share of the state economy.
The states with the biggest manufacturing economies specialize in different industries. In Oregon, nearly $38 billion of the state’s $50 billion manufacturing sector came from computer and electronic product manufacturing. In Louisiana, more than 10% of the state’s entire economic output in 2011 came from the manufacturing of petroleum and coal-based products. Michigan and Indiana both have sizable auto industries, with Michigan’s auto industry accounting for slightly less than a third of all its manufacturing output in 2011.
During the recession, and in many cases before the recession even started, many states’ manufacturing employment faced steep job losses. Between January 2007 and mid-2009, Indiana lost more than 100,000 manufacturing jobs. In Michigan, nearly 125,000 manufacturing jobs were lost between January 2008 and January 2009 alone.
Now, many of these states have seen employment rebound. Michigan had the fastest job growth in the nation from the end of 2009 to the end of 2011. According to Chad Moutray, chief economist at the National Association of Manufacturers, “the auto sector has been one of the driving sectors in the economy, pardon the pun, over the course of the last couple of years.”
In addition to Michigan, many parts of the Midwest benefited as well, he added. In Indiana, employment has risen more than 3.5% a year for each of the past three years, especially impressive in the context of the nation’s slow job growth overall.
While some believe that the benefits of a potential manufacturing renaissance are largely a myth, Moutray told 24/7 Wall St. that investments in the sector have a positive impact on the economy overall. He also noted that the prospect of added jobs may appeal to many Americans because it jobs pay well.
To identify the 10 states where manufacturing matters, 24/7 Wall St. used state gross domestic product (GDP) figures published by the Bureau of Economic Analysis. We determined from these data which states had the largest percentage of output attributable to manufacturing. Data on specific industries within the manufacturing sector from 2011 represent the most recent available figures. Employment figures for each state come from the Bureau of Labor Statistics and are seasonally adjusted.
Seasonally adjusted manufacturing job totals were not available for Alabama and Oklahoma.
These are the 10 states where manufacturing matters.
10. Alabama
- MFG share of output: 16.3%
- MFG output 2012: $30 billion (22nd highest)
- 2012 Unemployment rate: 7.3%
More than 16% of Alabama’s $183 billion worth of total output in 2012 came from manufacturing industries, about $30 billion. Last year, much of this output — $16.6 billion worth — came from the manufacturing of durable goods, which in 2012 accounted for 9.1% of total GDP, the ninth-highest percentage in the country. This includes the manufacturing of wood products, nonmetallic mineral products and so forth. News reports suggest a strong tradition of manufacturing in Alabama. Mobile County, for example, will now be the site of Airbus’s new A320 jetliner final assembly line, which will likely be the company’s first U.S.-based production facility. The project, which is scheduled to begin in 2015, is expected to create thousands of jobs, a welcome prospect in the wake of declining manufacturing industries this past decade.
9. Michigan
- MFG share of output: 16.5%
- MFG output 2012: $66.2 billion (8th highest)
- 2012 Unemployment rate: 9.1%
Each of the “Big Three” U.S. auto manufacturers — Chrysler, Ford and General Motors — is based in Michigan, and car sales are trending upward. This likely will be critical for the state: motor vehicle manufacturing accounted for nearly 5% of the state’s total GDP in 2011, far more than any other state. Michigan also led the nation with $18.8 billion in motor vehicle manufacturing output in 2011. The resurgence in the auto industry has not only boosted output but also led to job growth. Manufacturing employment in Michigan rose 7.9% between the ends of 2010 and 2011, leading all states, and then by an additional 3.9% between the ends of 2011 and 2012, also among the most in the nation. But this did little to help Detroit avoid a bankruptcy filing since extremely few auto manufacturing jobs exist within the city limits.
8. Iowa
- MFG share of output: 16.7%
- MFG output 2012: $25.4 billion (25th highest)
- 2012 Unemployment rate: 5.2%
Iowa had the 30th largest state economy in the nation last year. However, relative to its GDP, Iowa is still one of the nation’s largest manufacturers. This is especially the case for non-durable goods, which accounted for 8.4% of the state’s total output in 2012, the fifth-highest percentage in the nation. In 2011, when non-durable goods manufacturing accounted for 8.3% of Iowa’s output, nearly half of this contribution came from food, beverage and tobacco manufacturing. At 4% of state GDP, this was more than any other state except North Carolina. Despite low crop yields due to drought, Iowa was the leading producer of both corn and soybeans in 2012, according to the USDA.
7. Ohio
- MFG share of output: 17.1%
- MFG output 2012: $87.2 billion (5th highest)
- 2012 Unemployment rate: 7.2%
Ohio is a major manufacturer of a range of products. In 2011, it was one of the largest manufacturers of both primary and fabricated metals products, which together accounted for about 3% of the state’s output that year. The state was also the nation’s leader in producing plastics and rubber products, which accounted for more than $5.3 billion in output in 2011, or 1.1% of Ohio’s total output. Likely contributing to Ohio’s high output of manufactured rubber products, the state is home to Goodyear Tire & Rubber, a Fortune 500 company. At the end of 2012, Ohio was one of the top states for manufacturing employment, with roughly 658,000 jobs, trailing only far-larger California and Texas.
6. Kentucky
- MFG share of output: 17.1%
- MFG output 2012: $29.75 billion (23rd highest)
- 2012 Unemployment rate: 8.2%
In 2011, Kentucky manufactured nearly $4 billion worth of motor vehicles, bodies, trailers and parts, the fifth-largest output in the nation. As of 2011, this manufacturing industry was worth 2.4% of Kentucky’s GDP, the third-largest percentage in the country. In 2011, electrical equipment, appliance, and component manufacturing had an output of only about $1.3 billion the 15th highest, but this may be expected to improve. Louisville is home to the GE Appliance Park, where the company has recently built two new assembly lines. The assembly lines, which cost more than $100 million, will produce high-efficiency washing machines and will create about 200 jobs, in addition to the thousands of jobs GE has created in the region over the past few years with its opening of several other factories.
5. Wisconsin
- MFG share of output: 19.1%
- MFG output 2012: $49.98 billion (12th highest)
- 2012 Unemployment rate: 6.9%
Wisconsin led the nation in paper manufacturing in 2011, with nearly $4 billion in output, which was 1.5% of the state’s total GDP and the third-greatest portion of total output. In 2012, Wisconsin was a large producer of durable goods, which accounted for 11.3% of its GDP, up from 10.7% the previous year, holding on to its fourth place position. In spite of Wisconsin’s high output in the paper industry, the state’s Chamber of Commerce has expressed concerns regarding the implementation of government regulations that may hurt current and future job prospects. Officials in Wisconsin claim the new Boiler MACT regulations, for example, will have a negative economic impact on pulp and paper industry jobs in the state.
4. North Carolina
- MFG share of output: 19.4%
- MFG output 2012: $88.25 billion (4th highest)
- 2012 Unemployment rate: 9.5%
Last year, North Carolina was the fourth-largest manufacturing economy in the country, losing the third-place position to Illinois. In 2011, of the state’s $84 billion manufacturing output, nearly $24 billion alone came from chemical manufacturing.Roughly 5.5% of the state’s GDP arose from chemical manufacturing alone. Another close to $20 billion came from the food, beverage, and tobacco product industry, more than any state but California. North Carolina’s tobacco economy is one of the second-largest in the country, and R.J. Reynolds, the second-largest tobacco company by sales in the U.S., is based in the state.
3. Louisiana
- MFG share of output: 22.6%
- MFG output 2012: $55.10 billion (11th highest)
- 2012 Unemployment rate: 6.4%
None of the nation’s manufacturing leaders produced less output from durable goods manufacturing than Louisiana, at $7.7 billion. Similarly, in 2011, the state produced just $7.1 billion in manufactured durable goods. Louisiana was among the nation’s largest manufacturers of chemicals, as well as petroleum and coal products, that year, helping the state’s totals. As of 2011, more than 10% of the state’s GDP came from petroleum and coal manufacturing, by far the highest percentage in the nation. The state remains one of the nation’s leading oil refiners. According to the U.S. Energy Information Administration, “the Louisiana Offshore Oil Port (LOOP) is the only port in the U.S. capable of offloading deep draft tankers.”
2. Oregon
- MFG share of output: 27.8%
- MFG output 2012: $55.16 billion (10th highest)
- 2012 Unemployment rate: 8.7%
Oregon manufactured nearly $38 billion worth of computer and electronic products in 2011, up from the year before, and second in the nation. That output is behind California, but its percentage of total GDP was 20%, surpassing by far second place Idaho, where computer and electronic manufacturing accounts for only about 5.8% of total output as of 2011. Recent outside investments in the state reinforce the tech-heavy industries in Oregon. In the first half of this year, for example, AT&T invested nearly $80 million in its Oregon network to improve performance for Oregon residents, according to the Portland Business Journal.
1. Indiana
- MFG share of output: 28.2%
- MFG output 2012: $84.15 billion (6th highest)
- 2012 Unemployment rate: 8.4%
Indiana has added manufacturing jobs at one of the fastest rates in the nation over the past several years, with year-over-year growth in manufacturing at or above 3.7% at the end of each of the past three years. Some of this growth came from companies like Honda expanding their factories and adding thousands of jobs, which made headlines in 2011. Developments like these are critical for the economy of the state, which depends on manufacturing more than anywhere else in the nation. In 2012, Indiana had just the nation’s 16th largest economy, while its output from manufacturing exceeded all but a handful of states. In 2010 and 2011, Indiana was one of the leading states in total output from both motor vehicle-related and chemicals manufacturing. Manufacturing of chemical products accounted for 7% of the state’s GDP in 2011, at least partly due to the presence of pharmaceutical giant Eli Lilly, which has vendors throughout the state.
24/7 Wall St.com is a financial news and commentary website. Its content is produced independently of USA TODAY.
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A Return to Made in America: Why Manufacturing is Making a Comeback
by MAM TeamThat happened in January, when Lenovo, a Beijing-based computer maker, opened a new manufacturing line in Whitsett, N.C., to handle assembly of PCs, tablets, workstations and servers.The rationale? The company is expanding into the U.S. market and needs the flexibility to assemble units for speedy delivery across the country, says Jay Parker, Lenovo’s president for North America.But also — and this was crucial — the math added up. While it’s still cheaper to build things in China, those famously low Chinese wages have risen in recent years. “We reached the point where we could offset a portion of those labor costs by saving on logistics,” Parker says.
U.S. firms that have long operated abroad are making similar moves: Caterpillar, GE and Ford are among those that have announced that they’re shifting some manufacturing operations back to the United States. And economists are debating whether these stories are a blip — or whether they signal the beginning of a major renaissances for American manufacturing.
It’s easy to be skeptical. So far, the effect on jobs has been modest. Since January 2010, the United States has added 520,000 manufacturing jobs — and of those, 50,000 have come from overseas firms moving here, according to the Reshoring Initiative, an industry-led group. (That includes 115 in the new Lenovo plant.) That’s a decent number, but it pales beside the 6 million factory jobs that the Bureau of Labor Statistics says vanished between 2000 and 2009.
Yet the optimists counter that the logic of a coming renaissance is impeccable. Besides the shrinking wage gap between China and the United States, the productivity of the American worker keeps rising. And the surge in shale gas drilling gives the United States a wealth of cheap domestic energy to bolster industries such as petrochemicals.
All that could combine to make U.S. factories more competitive in the years ahead, not just with Europe and Japan, but with the manufacturing behemoth inChina. This shift likely won’t mean the United States will have 19 million manufacturing workers again, the way it did in the 1980s. For one thing, automation is still a powerful force. And the types of jobs that come back will be different from the ones that vanished. Still, any significant uptick in domestic manufacturing after a decades-long decline could bolster the economy and spur innovation.
“I think it’s fair to say this hasn’t all registered in the data just yet,” says Scott Paul, the president of the Alliance for American Manufacturing. “But we’re starting to lay the groundwork where we’ll start to see a real effect three to 10 years from now.”
Laying the groundwork
So what does that groundwork look like? For many analysts, the narrowing of the wage gap between China and the United States is the most significant factor.China has been getting wealthier, and its factory workers are demanding ever-higher wages. Whereas the gap in labor costs between the two countries was about $17 per hour in 2006, that could shrink to as little as $7 per hour by 2015, says Dan North, an economist with Euler Hermes, a credit insurer that works with manufacturers.
“If you’re a U.S. company and the advantage is only $7 per hour, suddenly it may be worth staying home,” North says. “If I stay here, I have lower inventory costs, lower transportation costs. I’m closer to my market, I can have higher-quality production and I can keep my technology.”
This notion appears to be catching on. In February 2012 survey from the Boston Consulting Group (BCG), 37 percent of U.S. manufacturers with sales above $1 billion said they were considering shifting some production from China to the United States. The factors they pointed to were not only that wages and benefits were rising in China, but the country is also enacting stricter labor laws and experiencing more frequent labor disputes and strikes.
“Companies are realizing it’s not as easy to do things in China as they thought,” says Hal Sirkin, a senior partner at Boston Consulting Group who has been predicting the convergence of labor costs since 2011.
The flip side is that American workers are becoming more attractive — for a mix of reasons. Worker productivity has been rising steadily over the years. Also, BCG says, the decline of U.S. organized labor is luring companies home, particularly to the nonunion South. Unions, for their part, have often responded by allowing wages to fall in order to keep jobs in the United States. Ford started bringing back production from China and Mexico after an agreement with the United Auto Workers let the company hire new “second-tier” workers at lower wages.
As a result, Sirkin’s research at BCG suggests that some industries could slowly migrate back from China. That includes industries such as plastic and rubber, machinery, electrical equipment and computers and electronics.
Nor is it just China. BCG also found that the United States is on pace to have lower manufacturing costs than Europe and Japan by 2015. Already, companies in those regions have been moving production here. Nissan, Honda, and Toyota are ramping up their exports from the United States. In 2008, Ikea opened a new furniture factory in Danville, Va., to cut shipping costs. The European aerospace company Airbus has just broken ground for a new factory in Mobile, Ala.
America’s glut of cheap natural gas from shale fracking is also attracting its subset of industries. Factories being built in Texas and Pennsylvania will convert natural gas into ethylene, a key ingredient in plastics and antifreeze. An Egyptian company, Orascom Construction, is building a $1.4 billion fertilizer plant in Iowa near a natural-gas pipeline.
Most of the evidence that “reshoring” is happening is anecdotal, and there’s a limit to how far it is likely to go. For one thing, North says, the industries most reliant on cheap labor — including textiles and mass-produced clothing — will likely never return to the United States. Moreover, China has built up a formidable manufacturing infrastructure that will keep many companies there, even as labor costs shift.
“Chinese suppliers have now developed dense supplier networks that now have their own capabilities for introducing new products,” says Suzanne Berger, a political science professor at the Massachusetts Institute of Technology who studies manufacturing. “And, of course, China is a market that’s growing extremely rapidly — so many companies will want to stay in close proximity to those customers.”
But the early signs are notable. Sirkin points out that his model of labor costs didn’t predict that companies would start coming back to the United States until 2015: “We’ve already seen more movement than we expected.”
Industry has changed
Policymakers’ efforts to bolster domestic manufacturing, however, will have to take into account how dramatically the industry has changed since the 1980s.
In a recent report, an MIT task force described how the U.S. manufacturing landscape is no longer dominated by large firms such as Dupont, IBM and Kodak that could handle every aspect of production themselves. Instead, the future of manufacturing will consist of smaller firms that may not always have enough money to train workers, commercialize new products and procure financing on their own.
“There are these holes in the ecosystem, and we have to think of another way to provide all these capabilities if we want to see manufacturing revived,” says Berger, a co-author of the report.
Some firms have partnered with local universities or governments to develop these capabilities, she says. In Rochester, N.Y., for instance, the demise of Kodak meant that there was no longer a dominant company paying to train new skilled workers. So smaller firms in the optics industry banded together to plan new community college curricula and fill the gap.
In New York, the state government has tried to support semiconductor manufacturing by bringing together private firms, research labs and degree programs to share common facilities, expensive equipment, training and research.
The Obama administration is spending $1 billion to fund similar hubs around the country. The first is the National Additive Manufacturing Innovative Institute in Youngstown, Ohio, which will focus on the development of 3-D printing and other processes for manufacturing objects from digital models.
According to the MIT report, such partnerships have the potential to be far more effective than the old model of handing out tax breaks for manufacturers. That’s because they don’t leave a state or locality at the mercy of a single firm that could leave at any time.
How many jobs will return?
There’s also the key question of how many jobs are likely to come back. The United States has 11.9 million manufacturing employees, and experts tend to agree we’re unlikely to see a return even to the much-diminished levels of the 1990s, when there were more than 17 million factory positions.
President Obama has set a more modest goal of 1 million new manufacturing jobs by the end of his second term. But Paul of the Alliance for American Manufacturing says the country is behind pace to achieve even that “reasonable goal.”
The new manufacturing jobs, meanwhile, will also be different from the jobs of old. For one, many plants are now setting up in the nonunion South, and organized labor has largely been shut out of the manufacturing renaissance. On balance, all of the job gains since 2009 have been nonunion. And, unlike 30 years ago, manufacturing jobs no longer have higher average annual earnings than the typical private-sector worker.
At the same time, technological advances will continue to displace factory jobs in the United States and elsewhere. Germany and China — two manufacturing titans — are slowly losing positions because of automation. A report last fall by the McKinsey Global Institute found that the price of robots relative to the cost of human labor has fallen 40 to 50 percent since 1990, and that trend is expected to continue.
Paul, however, points out that Germany has lost jobs at a much slower pace than the United States over the past decade, which suggests that there’s room for improvement. “There’s nothing inevitable about the sort of steep declines we’ve seen here.”
What’s more, experts point out that there are still plenty of other advantages to bringing manufacturing back home. Manufacturing firms tend to spend more on research and development than other businesses, and recent research has focused on the fact that the act of building things can lead to key innovations. Procter & Gamble and Gillette are two companies known for their run-of-the-mill products — diapers and razors — that have turned innovations in the manufacturing process into a key part of their business.
What’s more, the MIT report says, manufacturing can be a potent driver of other service-industry jobs. A small company in Ohio that makes protective sleeves for pipelines, say, will be in a good position to offer technical support for oil platforms and other companies.
“We have the wrong picture if we think on the one hand there’s manufacturing and on the other hand services,” Berger says. “And the idea that we’re going to just go from one to the other is wrong. Almost all valuable things are some bundle of manufactured goods plus services attached.”
Made in the USA: More Shoppers Buying American
by MAM TeamA curious thing is happening among American shoppers. More people are taking a moment to flip over an item or fish for a label and ask, is it “Made in the USA?” Walmart, the nation’s largest retailer, earlier this year announced it will boost sourcing of U.S. products by $50 billion during the next 10 years. General Electric is investing $1 billion through 2014 to revitalize its U.S. appliances business and create more than 1,500 U.S. jobs.
Mom-and-pops are also engineering entire business strategies devoted to locally made goods — everything from toys to housewares. And it’s not simply patriotism and desire for perceived safer products which are altering shopping habits.
The recession, and still flat recovery for many Americans, have created a painful realization. All those cheap goods made in China and elsewhere come at a price — lost U.S. manufacturing jobs. A growing pocket of consumers, in fact, are connecting the economic dots between their shopping carts — brimming with foreign-made stuff — and America’s future.
They’re calculating the trade-offs of paying a little more for locally-made goods.”The Great Recession certainly brought that home, and highlighted the fact that so many jobs have been lost,” said James Cerruti, senior partner for strategy and research at consulting firm Brandlogic. “People have become aware of that.”
‘Made in the USA’ is known for one thing, quality,” said Robert von Goeben, co-founder of California-based Green Toys. All of their products from teething toys to blocks are made domestically and shipped to 75 countries.
“We are reaching a tipping point, where Americans are relearning its competitive advantage,” von Goeben said. “It’s not about the cheapest product, but the best quality product.”
For many consumers, affordability has driven the bulk of purchasing decisions. Businesses in turn have ventured abroad for cheap labor and specific manufacturing skills to keep prices down.
So what’s driving big and small businesses to increase sourcing of U.S. products — beyond the obvious good PR?
In short, a shift in global manufacturing that’s in the early stages. A combination of factors including rising labor costs are eroding China’s cost advantage as an export platform for North America.
Mexico, meanwhile, is rebounding as a manufacturing base, and wages there will be significantly lower than in China, according to a Boston Consulting Group report. By 2015, BCG forecasts that for many goods destined for North American consumers — manufacturing in some parts of the U.S. will be just as economical as manufacturing in China.
For years, the main attraction of China outsourcing has been access to low-cost labor. But pile on related business costs such as transportation of goods, duties and industrial real-estate expenses, and the global manufacturing landscape is no longer China-dependent.
Domestic manufacturing, meanwhile, is on the mend. The pace of growth in the U.S. manufacturing sector picked up to its fastest rate in more than a year and a half in February, as new orders continued to accelerate.
And imported goods — at least in footwear and apparel — are retreating slightly. While more than 97 percent of apparel and 98 percent of shoes sold in the U.S. are made overseas, U.S. imports in those two categories in 2011 declined for the first time ever since such data has been tracked by the American Apparel & Footwear Association.
“The cost competitiveness of U.S. manufacturing is on the rise,” said Cerruti of Brandlogic.
Of course, plenty of goods are still made abroad. And many Americans are broke, jobless or underemployed four years after the 2008 economic crisis. An unemployment measure that factors in those who have quit looking for jobs, as well as those working part-time for economic reasons, is at 14.4 percent. For many, buying “Made in the USA” is a luxury they can’t afford.
USA Love List[p][/p]
Despite many shoppers’ thin wallets, there’s a growing appetite for domestically-made goods.
Blogger Sarah Wagner has turned her passion for “Made in USA” products into a successful website. USA Love List is devoted to sourcing and showcasing where to buy domestically-made items, ranging from lip gloss to pet food. She regularly scans the aisles of big retailers such as Costco and Target for American-made goods.
Site traffic has mushroomed since USA Love List launched in November 2011. “There’s clearly a hunger for this sort of information,” said Wagner, based in Philadelphia. “Companies have no idea how much Americans want to support American companies. They want to get behind their neighbors and communities to make sure those jobs stay there. It’s struck a nerve with a lot of people,” she said.
American-Made Green Products
Among the growing piles of American-made goods, many are green with recycled materials. Turns out it’s easier to manufacture green products domestically because sourcing of recycled materials including recycled plastic is particularly plentiful and transparent in the U.S., said Jenna Sellers Miller, president of Architec Housewares, a 9-employee housewares business, based in Delray Beach, Fl.
Some of Architec’s EcoSmart line of products are sourced domestically. The products are available at Target, Macy’s and Bed Bath & Beyond. “We’re getting appointments with retailers who just want to see our ‘Made in the USA’ products,” Miller said.
Domestically sourced recycled materials and a broader commitment to the environment shape Green Toys business strategy as well. With their factory and warehouse 10 miles apart in northern California, they also cut transportation costs and related emissions.
The 12-employee company also creates a ripple effect of jobs including supporting local drivers, shipping and packaging companies and testing labs. “We could not have started this company anywhere else,” von Goeben said. “This is a uniquely American company.”
Later this year, Green Toys will ship its first batch of toys from northern California to China. Said von Goeben, “It’s the irony of all ironies.”
Made in USA: We Are The 3%
by MAM TeamWalmart to Boost Sourcing of US Made Products: Hiring 100k Veterans
by MAM TeamWalmart announced bold commitments to increase domestic sourcing of the products it sells and help veterans find jobs when they come off active duty. Speaking at the National Retail Federation’s annual BIG Show, Walmart U.S. President and CEO Bill Simon also announced the company is helping part-time associates who want to be full time, make that transition. Read more
Walmart to Boost US-Made Products
by MAM TeamWalmart today announced bold commitments to increase domestic sourcing of the products it sells and help veterans find jobs when they come off active duty. Speaking at the National Retail Federation’s annual BIG Show, Walmart U.S. President and CEO Bill Simon also announced the company is helping part-time associates who want to be full time, make that transition.
President Obama Touring K’NEX Manufacturing Facility at The Rodon Group
by MAM TeamWhen President Obama comes to Montgomery County on Friday, he will speak in front of a two-foot-tall toy helicopter, a toy roller coaster, a toy grandfather clock, a motorized toy carousel, and an American flag made of 49,000 K’Nex pieces.
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What Is ‘Made in America’ Worth?
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