Last 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.
Wal-Mart Pledge to Buy American Meets With Skepticism
in UncategorizedWal-Mart, known for buying the lowest-cost goods wherever they are made, has become a lightning rod for community leaders worried about the hollowing-out of America’s industrial base.
But at Wal-Mart’s Manufacturing Summit held in Orlando, Fla., late last week and attended by 1,500 government officials, suppliers and retailers, the company said it sees a future for U.S. manufacturing.
“At the summit, we are building a network of support for domestic manufacturing,” Simon said. “In the room, we have the capital, the expertise, the ideas, and, most importantly, the will.”
Buying in U.S. good PRCBC business commentator Michael Hlinka dismissed the pledge to buy American as “pure PR” motivated by a political climate in which it is seen as good business to invest in the U.S.
“Wal-Mart has been a wonderful organization with a shark-like focus that says whatever is the lowest price, that’s what we’re going to do,” he said on CBC’s Metro Morning.
“Wal-Mart has been criticized about its procurement policies. It generates about two-thirds of its revenue in the U.S., and there is no way, when you step inside a store, you’re going to see two-thirds of the products are built in North America.”
He points out that with sales of $250 billion a year, Wal-Mart’s pledge to buy $50 billion in U.S. goods over 10 years amounts to less than two per cent of its sales.
‘Buying American’ won’t translate into jobsStacy Mitchell, a researcher with the U.S.-based Institute for Local Self-Reliance, says for Wal-Mart, buying American will be a byproduct of its continued takeover of the U.S. grocery business.
Most grocery products sold in the U.S. are produced in America, and Wal-Mart will be buying more U.S. foods, particularly produce, as it displaces other grocers, she says.
“But this doesn’t mean new jobs, because other grocers are losing market share and buying less,” Mitchell said in an article for AlterNet.
She recalled Wal-Mart’s 1980s “Buy America” program, which occurred as the retailer was moving to do most of its acquisitions overseas.
But business analysts at the Wal-Mart summit say the low-cost manufacturing havens such as China are losing their competitive edge. As workers in developing nations demand higher wages and the cost of transporting goods increases with the cost of oil, it becomes cheaper to buy U.S.-made goods.
Among the businesses who say they are manufacturing in the U.S. are:
“Right now, companies in America are making and selling products around the world at an all-time record pace, and the incentives to make things here and hire American workers is only getting stronger,” U.S. Secretary of Commerce Penny Pritzker Pritzker told the summit.
U.S. Manufacturing Isn’t Dead Yet
in UncategorizedBut for manufacturing to succeed, the business community, institutions of higher education, policymakers and consumers need to make some major changes.
Many of us have the image of a post-World War II-era assembly line, but times have changed and our modern facilities require individuals that can work with sophisticated machinery. In fact, as we toured 32 cities in 32 days on our American manufacturing bus tour, the majority of manufacturers from towns like Tupelo, Miss., and Warren, Penn., complained that there are jobs available but there is a lack of eligible candidates with specialty degrees who are trained to work for the factories.
So, how do we educate and train young adults to be workforce-ready?
Jobs are a key barometer for the economy. Twenty years ago, U.S. manufacturers employed 17 million Americans; today that number stands at 12 million. To compete with these steadily dropping numbers, we need to provide the apprenticeship training necessary for a new generation of American worker to grow as fast as our technology is changing.
And there are innovative schools out there that are teaching young adults the skills necessary to operate new machinery and programs. In schools like Ranken Technical College in St. Louis, Mo., students are being trained on cutting-edge equipment for jobs in the construction and manufacturing industries.
The proof is in the data. These schools have a nearly 98% placement rate and often work with local businesses to employ graduates in hometown companies.
Although education leads to employment, consumers have to be willing to buy American.
Free-range chickens, local oranges and organic avocados in your grocery store. We are largely conscious consumers in that we increasingly research where our food is produced, yet too many Americans don’t take the time to research and demand their t-shirts, jeans and everyday living necessities are made domestically. And some of this burden falls on the manufacturers and storeowners who need to promote the “Made in America” brand.
The perfect example of a major company producing in America is the athletic shoe company New Balance that employs about 1,300 workers in New England alone. While critics make the claim that American-made products are more expensive, New Balance sneakers are competitively priced to foreign-made shoes like Nike.
But what role does Washington D.C. have in this movement? Better yet, what should they be doing to keep jobs in America?
Instead of burying the responsibility in the halls of the U.S. Department of Commerce, we agree with many scholars and thought leaders that there should be a separate agency focused on manufacturing.
A U.S. Department of Manufacturing could create national standards, guidelines and incentives for manufacturers.
As filmmakers, we get tax incentives for making our movies in certain states. Why not do the same for manufacturing companies? Tax incentives would keep U.S. companies from outsourcing and lure jobs back from overseas. In fact, this idea of bringing companies back to America would help bring almost five million jobs to our shores by 2020, reducing our stagnant unemployment rate by three percentage points.
And some — unfortunately, few — are fighting for U.S. jobs in the Halls of Congress.
Scott Paul, president of Alliance for American Manufacturing, a partnership made up of American manufacturers and the United Steelworkers union, has offered great ideas on how to improve our manufacturing policy overseas. He’s called for a refocus on “trade agenda by giving American businesses new tools to counter China’s currency manipulation, industrial subsidies, intellectual property theft and barriers to market access.”
Our country is eager to re-energize U.S. manufacturing and in some towns they are already taking the necessary steps. We are hopeful that success stories slowly coming out of our small and large cities will help motivate a united effort by consumers, educators, the business community and policy makers to bring jobs back to America.
Vincent Vittorio and Nathan McGill are directors of the upcoming documentary “American Made Movie,” premiering nationwide on Aug. 30 .
U.S. Manufacturers Gain Ground
in UncategorizedThe U.S. deficit on trade of manufactured goods in this year’s first half shrank to $225 billion from $227 billion a year earlier, according to data compiled by Ernest Preeg, an economist and trade expert at the Manufacturers Alliance for Productivity and Innovation, an industry-funded research group in Arlington, Va. The improvement, while slight, came after years of ballooning deficits as the U.S. lost manufacturing business to China, South Korea and other nations.
“It’s a hopeful sign,” said Mr. Preeg, who derives his tally of manufactured-goods trade from official U.S. data, leaving out other types of merchandise, such as grain or coal. “At least we’ve leveled off.”
The overall U.S. trade deficit, meanwhile, narrowed recently, as new shale-drilling technologies have sharply boosted domestic energy production.
At present, about 12 million Americans are directly employed by manufacturers, down from nearly 17 million two decades ago. The Obama administration has made a manufacturing recovery a top priority, and major corporations are striving to showcase their efforts to create manufacturing jobs. On Thursday, Wal-Mart Stores Inc. is due to host 500 suppliers in Orlando, Fla., to discuss its “commitment to leading an American renewal in manufacturing” by buying more U.S.-made goods.
Europe’s long-running slump, slower growth in China and a stronger dollar have been headwinds for U.S. exporters, but many have managed to expand overseas sales.
Harley-Davidson Inc. continues to add dealers abroad. “We’re very excited about the growth prospects in our international businesses,” John Olin, chief financial officer, told analysts last month. The Milwaukee-based company recently said retail motorcycle sales jumped 12% in the Asian-Pacific region and 39% in Latin America in the second quarter.
Like many U.S. manufacturers, Harley since the 2008-09 recession has revamped its operations to create a smaller and more flexible workforce, resulting in annual cost savings of more than $300 million and making the company more competitive. Among the changes: The union at its plant in York, Pa., accepted the use of temporary workers, who can be dismissed without severance pay. The number of job classifications at York also fell to five from 62, so workers have a wider variety of skills and can go where needed. As restrictive working rules were eliminated, a 136-page labor contract was replaced by a 58-page document.
Evan Smith, president of Hanover, N.H.-based Hypertherm Inc., said sales of its metal-cutting tools have been growing this year in the Middle East and Latin America. Opening a distribution center in Brazil helped, he said.
Minneapolis-based Graco Inc. has increased sales in Central and Eastern Europe of equipment used to spray paint and other coatings on roads, bridges and buildings, said spokesman Bryce Hallowell.
Big companies, such as Caterpillar Inc. and General Electric Co., have moved some production back to the U.S. in recent years. Some foreign companies, such as tire maker Bridgestone Corp. of Japan, have expanded U.S. capacity, partly to serve customers in the Americas.
As the boom in shale “fracking” lowers natural-gas and electricity prices in the U.S., and wages stagnate, “the U.S. is steadily becoming one of the lowest-cost countries for manufacturing in the developed world,” the BCG report said. The U.S. will have an edge over rival manufacturing nations in energy costs, along with lower productivity-adjusted labor costs than Germany, Japan, France, Italy and Britain, the report said. That will allow the U.S. to grab a larger share of global manufacturing sales.
“This is a fundamental economic shift,” said Harold Sirkin, a senior partner at BCG, who helped write the report. “The trends are going faster than we thought,” he said, adding: “As much as people say we don’t make anything anymore, it’s just not true.”
Even so, the U.S. has lost much ground over the past 15 years, largely because of China’s surging growth and focus on exports. The U.S. accounted for 11% of global exports of manufactured goods in 2011, down from 19% in 2000, Mr. Preeg said. During the same period, China’s share rocketed to nearly 21% from 7%, and the European Union slipped to 20% from 22%.
China’s performance has cooled recently. U.S. exports of manufacturing goods to China surged 19% to $19.9 billion in the second quarter, Mr. Preeg said, but that is about one-fifth of China’s manufacturing exports to the U.S.
U.S. manufacturers still face big hurdles. Many can’t find enough skilled workers to operate and repair sophisticated computer-controlled machinery, a shortage worsened by the retirement of baby boomers. Faster economic growth in China, India and Brazil means many global companies still want to open more plants there. A U.S. corporate focus on quarterly results sometimes deters investment in factory equipment, while many U.S. firms say they pay higher taxes and get fewer subsidies than foreign rivals.
Meanwhile, China no longer relies heavily on labor-cost advantages to get a leg up on other countries. As wages rise, China has shifted to more exports of higher-tech items, including telecommunications equipment, computers and scientific instruments, Mr. Preeg said. Only about 15% of China’s manufacturing exports are in labor-intensive industries, such as textiles or shoes, he said.
Write to James R. Hagerty at bob.hagerty@wsj.com
A version of this article appeared August 19, 2013, on page A1 in the U.S. edition of The Wall Street Journal, with the headline: Manufacturers Gain Ground.
P&G Voluntarily Recalls Limited Quantity of Dry Pet Food
in UncategorizedHealthy people infected with Salmonella should monitor themselves for some or all of the following symptoms: nausea, vomiting, diarrhea or bloody diarrhea, abdominal cramping and fever. Rarely, Salmonella can result in more serious ailments, including arterial infections, endocarditis, arthritis, muscle pain, eye irritation, and urinary tract symptoms. Consumers exhibiting these signs after having contact with this product should contact their healthcare providers.
Pets with Salmonella infections may be lethargic and have diarrhea or bloody diarrhea, fever, and vomiting. Some pets will have only decreased appetite, fever and abdominal pain. Infected but otherwise healthy pets can be carriers and infect other animals or humans. If your pet has consumed the recalled product and has these symptoms, please contact your veterinarian.
This issue is limited to the specific dry pet food lot codes listed below. This affects roughly one-tenth of one percent (0.1%) of total annual production. The affected product was distributed to select retailers across the United States. These products were made during a 10-day window at a single manufacturing site. P&G’s routine testing determined that some products made during this timeframe have the potential for Salmonella contamination. As a precautionary measure, P&G is recalling the potentially impacted products made during this timeframe. No other dry dog food, dry cat food, dog or cat canned wet food, biscuits/treats or supplements are affected by this announcement.
P&G is retrieving these products as a precautionary measure. Consumers who purchased a product listed below should stop using the product and discard it and contact P&G toll-free at 800-208-0172 (Monday – Friday, 9 AM to 6 PM ET), or via website at www.iams.com or www.eukanuba.com. Media Contact: Jason Taylor, 513-622-1111.
Click here to view products affected by this announcement.
Contact:
Procter & Gamble
P&G Consumer Relations, 800-208-0172
Making It In The U.S.A. One Step At A Time
in UncategorizedHowever, in 2002, the Defense Department began bypassing the Berry Amendment’s requirements for footwear by issuing cash allowances to new recruits to purchase any kind of training shoes, including non-American-made footwear. The DoD has spent approximately $180 million on the athletic footwear cash allowance to date, which is money that could have gone to support American jobs and manufacturing.
Defense originally justified the allowance program by citing a lack of American-made options in the marketplace. They believed there simply were not enough footwear manufacturers producing 100 percent American made shoes.
Today that argument has been upended by companies that have devoted money and resources to producing their footwear completely on American soil.
New England’s own New Balance has proven it can be done. With multiple facilities around the region that employ thousands of New Englanders, including 800 employees in Massachusetts and nearly 900 in Maine, they are making sneakers from first stitch to final product in the United States, producing a 100 percent American-made shoe that costs less than the current Army allowance. When the Army recently inquired to see if there were other footwear companies interested in supplying the military with American-made shoes, more than a dozen other footwear companies expressed interest.
With multiple manufacturers interested in or close to capable of producing compliant footwear, action can be taken to close the DoD loophole. Together, we have co-authored an amendment that would do just that, bringing the policy back in line with the 1941 Berry Amendment. Our amendment received strong congressional support and was successfully added to the final House version of the annual defense bill approved June 14.
If passed into law, our amendment would not go into effect until after the secretary of defense certifies that there are at least two domestic suppliers who can provide 100 percent American-made athletic shoes, in order to assuage any lingering concerns about domestic competition.
Major national footwear companies support this effort. A spokesman from New Balance called it a very important win for domestic manufacturing. Wolverine World Wide, the parent company of Saucony, has a Berry-compliant prototype and with help from incentives such as our amendment, could quickly step up a larger manufacturing operation.
Rather than losing jobs to overseas competitors, we must invest in ways to grow the domestic manufacturing base and promote the policies and companies that have committed to keeping jobs here. This amendment does all of that and has the added benefit of simultaneously giving the brave men and women of our armed forces better, quality gear, proudly American-made.
When more products are made in America, there will be greater opportunity for our people to make it in America. Closing the loophole on military footwear is a step in the right direction.
U.S. Rep. Niki Tsongas (D) represents Massachusetts 3rd Congressional District. Rep. Mike Michaud (D) represents Maine’s 2nd District.
'Manufacturing 2.0' Finds Home in New York
in UncategorizedThis space in an anonymous building in New York’s Long Island City neighbourhood, just across the river from Manhattan, isn’t cooking up breads and pastries, however. It’s a factory, filled with 3-D printers “baking” items by blasting a fine plastic dust with lasers.
When a production run is done, a cubic foot of white dust comes out of each machine. Packed inside the loose powder like dinosaur bones in sand are hundreds of unique products, from custom iPhone cases to action figures to egg cups.
Manufacturing is coming back to New York City, but not in a shape anyone’s seen before. The movement to take 3-D printing into the mainstream has found a home in one of the most expensive cities in the country. New York’s factories used to build battleships, stitch clothing and refine sugar, but those industries have largely departed. In recent years, manufacturing has been leaving the U.S. altogether. But 3-D printing is a different kind of industry, one that doesn’t require large machinery or smokestacks.
“Now technology has caught up, and we’re capable of doing manufacturing locally again,” says Peter Weijmarshausen, CEO of Shapeways, the company that runs the factory in Long Island City.
Weijmarshausen moved the company here from The Netherlands. Another company that makes 3-D printers, MakerBot, just opened a factory in Brooklyn. And in Brooklyn’s Navy Yard, where warships were once built to supply the Arsenal of Democracy, there’s a “New Lab,” which serves as a collaborative workspace for designers, engineers and 3-D printers.
3-D printers have been around for decades, used by industrial engineers to produce prototypes. In the last few years, the technology has broken out of its old niche to reach tinkerers and early technology adopters. It’s the consumerization of 3-D printing that’s found a hub in New York. The technology brings manufacturing closer to designers, which New York has in droves.
Shapeways’ production process is fairly simple.
Anyone can upload a 3-D design to Shapeways’ website and submit an order to have it “printed” in plastic at the factory. The company charges based on the amount of material a design uses and then ships the final product to the customer. Smartphone cases are popular, but many items are so unique they can only be identified by their designer, such as the replacement dispenser latch for a Panasonic bread maker. There’s an active group of designers who are “Bronies” – adult male fans of the show My Little Pony: Friendship is Magic – who print their own ponies. The company prints in a wider range of materials, including sandstone and ceramic, at its original factory in Eindhoven, the Netherlands.
If that was all Shapeways did, the company would be little more than an outsourced machine shop. But with the help of the Internet, it’s taking the business model one step further. Anyone can set up a “shop” on the Shapeways site and let people order prints from their designs. Want a replica skeleton of a Death’s-head Hawkmoth? That’s $15. How about a full-colour sandstone sculpture of actor Keanu Reeves? He’s $45.
Under the old mass production model, Weijmarshausen says, designers first need to figure out if there’s a market for their product, then raise money for production, and then find a manufacturer, who usually has to custom-make dies for moulding plastic. The cost can run to tens of thousands of dollars. After that, the designer must get the product distributed and find out how customers react to it.
“With the Shapeways shop, that process is completely condensed,” Weijmarshausen says. “If there is no market for your product, then the only thing you lose is some time.”
For its part, MakerBot is spearheading another side of the 3-D printing boom by making affordable desktop 3-D printers. About the size of a microwave oven, the printers feed melted plastic out of “print heads” that move in three dimensions, gradually building objects as the plastic cools. Instead of sending a 3-D design to Shapeways, a MakerBot owner can print an object in plastic at home, as long as it’s smaller than a loaf of bread. MakerBot’s printers range in price from $2,200 to $2,800.
MakerBot’s factory is in an old industrial building on Brooklyn’s waterfront, across the street from a Costco and a strip club. Only assembly, testing and repair is done here, so the interior looks more like a workshop than a manufacturing plant. Subcontractors elsewhere do the dirty and noisy jobs like machining of components.
The privately held company agreed in June to sell itself to Stratasys Ltd., a maker of professional 3-D printers, for $403 million in stock. Stratasys is based in Minneapolis and Rehovot, Israel, but Bre Pettis, the CEO of MakerBot, says the factory will stay in Brooklyn.
Pettis looks like a Brooklyn hipster, with his thickrimmed glasses and upswept hairdo. The company got its start in the borough, and he says keeping the factory here is a rational economic decision. Having the engineers nearby means the company can work fast and introduce more than one new model a year, a crucial advantage in the fast-moving 3-D printing space. Pettis also notes that labour costs are going up in Asia’s manufacturing hubs. “Brooklyn Pride” is also a factor.
“You can’t underestimate the power of people who take pride in their work,” he says.
Weijmarshausen moved Shapeways to the U.S. to get closer to its customers. He picked New York over cities such as San Francisco and Boston because of its design and fashion industry, which meshes well with 3-D printing.
Alas for New York, the consumer 3-D printing industry is still a tiny one, and there’s no indication that it could single-handedly reverse the long, slow flight of manufacturing jobs. Of the one million manufacturing jobs the city had at its peak during the Second World War, 93 per cent are now gone, according to the U.S. Bureau of Labor Statistics. The Shapeways factory has 22 employees and plans to ramp up to at least 50, while MakerBot employs 274 people. And the jobs aren’t necessarily well paid; Pettis says the MakerBot factory workers make “more than minimum wage.”
But Weijmarshausen points out that Shapeways has the potential to provide a livelihood for many more people – successful designers. There are already hundreds of them making “substantial” money from their online Shapeways stores, but he won’t reveal specific figures.
In a larger sense, 3-D printing opens up the possibility of a new type of manufacturing economy, one that aligns more closely with the strengths of American creative meccas like New York than with the strengths of China.
David Belt, a real estate developer whose company is refurbishing the New Lab space in the Brooklyn Navy Yard, says there’s a demand for products that are made in runs of less than 10,000 units. That’s too few to be economical using conventional injectio
n-m
oulding of plastic, but viable with 3-D printing.
One example of the combined power of 3-D printing and direct-to-consumer sales is the Spuni, a new type of spoon for babies. Boston couple Isabel and Trevor Hardy noticed that a baby taking a bite from a regular baby spoon leaves a lot of food on the utensil. Together with their friend Marcel Botha, an entrepreneur who makes medical devices, they sketched up a new spoon that “front-loads” the food, leaving less uneaten. Thanks to a 3-D printer, they had a prototype utensil eight days later, ready to test with a live baby.
“We were able to reproduce what the final spoon would look like physically at a very low cost,” Botha says.
With the prototype, Botha and his partners were able to demonstrate the Spuni to buyers through a video on crowdfunding website Indiegogo. Their campaign for donations raised $37,235 – enough to start a mass production run. The spoons are being made in a traditional factory in Germany, but Botha is running the Spuni project from the New Lab in Brooklyn.
On the factory floor in Brooklyn, Adjua Greaves, 32, does quality assurance work, testing MakerBot printers before they’re shipped. She used to work in publishing, a signature New York business that’s been hurt by the rise of ebooks. After freelancing for a while, Greaves wanted a steady job, and says she had “a romantic idea about working in a factory,” partly inspired by a Sesame Street episode about the making of crayons.
“I always wanted to have a connection to a factory, but more as an intellectual observer,” she says. “The romantic idea of a factory is very, very different from what it’s really like in a factory, but it’s really, really wonderful to be here.”
Manufacturing Council Eyes Retraining Curriculum For Skilled Jobs
in UncategorizedCircumstances are no different in Jefferson and Lewis Counties, according to David J. Zembiec, deputy director of the Jefferson County Industrial Development Agency.
To remedy the situation, the JCIDA’s Manufacturing Council is planning to start an adult education course this fall to close the skills gap reported by local businesses.
The program will be geared toward training individuals for jobs that require more than a high school diploma but less than an associate degree, Mr. Zembiec said.
Companies are not only looking for basic skills such as welding but also for problem-solving skills and the ability to think conceptually.
The program, which will take students about four months to complete, will involve classes two to three times per week, Mr. Zembiec said.
The idea was developed through a partnership between manufacturing, education, workforce development and economic development officials, and its pilot run is taking place with the aid of donated materials from local manufacturers.
However, without additional help, the program will not be sustainable, Mr. Zembiec said.
To put the program on a more stable footing, its creators are applying to the North County Economic Development Council for additional funding. The goal is to run the program through the Jefferson-Lewis Board of Cooperative Educational Services with a permanently assigned instructor.
For now, the JCIDA has to find space to hold the pilot program, which it hopes to begin in the fall. It is currently seeking a location from BOCES or from a local manufacturer.
If the agency receives a grant from the economic development council, it will use the experiences from the test run to help structure a more formalized program, Mr. Zembiec said.
The goal of the program is three-fold, according to Mr. Zembiec:
■ To serve those who want to improve their career prospects.
■ To help manufacturers remain competitive and grow by making sure they have the workforce they need.
■ To encourage entrepreneurial enterprises.
At its Friday meeting, members of the Manufacturing Council also discussed the prospect of putting together a video aimed at changing preconceived notions about manufacturing held by middle school and high school students as well as their parents and guidance counselors.
M. Lynn Brown, general manager of WPBS-DT, Watertown’s public broadcasting station, was on hand along with two members of her staff to discuss ideas for the video.
10 States Where Manufacturing Still Matters
in Jobs, MANUFACTURERS, Manufacturing, Manufacturing & SourcingLast 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
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
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
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
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
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
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
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
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
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
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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The American Dream Is Built on Fair Wages
in UncategorizedWe built our business on wages above the minimum. For this small extra investment, we get long-term employees who are devoted to our company – employees whose ongoing relationships with customers have been vital to our success.
Good wages have been good business strategy in an industry that has seen more than its share of creative destruction. The last 20 years have been tough on the music business. In St. Louis, two-thirds of the record stores have closed since 2000. We’ve outlasted a 20-store local chain and numerous national and regional chains. Most of those companies paid their employees minimum wage or barely above. My creative, dedicated and better-paid employees won this life or death struggle for us.
Higher wages made us more competitive – not less. While my competition dealt with the costly results of constant employee turnover, constant training costs and the unsatisfied customers that turnover breeds, my employees added great value to my business.
Unfortunately, too many American companies have been driving down wages to poverty levels that are too low for workers to live on and too low to sustain the consumer demand that businesses need to survive and thrive. In a race to the bottom, the winner ends up at the bottom. The American Dream needs a minimum wage increase.
The current federal minimum wage of $7.25 an hour, just $15,080 for full-time work, is too low a floor under our workforce, our customers and our economy. Back in 1979, when we started our company, the minimum wage was $2.90 – that would be $9.33 in today’s dollars. Even back then, it had eroded from the 1968 minimum wage level, which would be $10.74 adjusted for inflation.
We never would have believed that 34 years later, the buying power of minimum wage workers – and millions of workers above minimum wage – would actually be lower than when we started our company. That’s terrible for small business, terrible for our economy and terrible for our country.
There’s a proposal in Congress to gradually raise the minimum wage to $10.10 over three years and then adjust it annually for inflation in the years following. It’s a reasonable proposal that moves us closer to where we would have been if the minimum wage had kept up with inflation since the 1960s.
Small business owners know that higher minimum wages put spendable dollars into the hands of our customers. Minimum wage earners, who live from paycheck to paycheck, spend increases right away. Putting a few hundred dollars more a month in their pockets would be a needed boon to business and the economy.
Companies that pay poverty wages count on other businesses and taxpayers to subsidize them. You may think of food stamps, housing assistance and child care subsidies as helping the poor, and they do, and it’s essential that we maintain them. But when wages are so low that full-time workers need the public safety net to put food on the table or keep a roof overhead, we are actually subsidizing the unrealistically low wages paid mostly by big highly profitable corporations. This perverts capitalism and is lousy public policy.
For example, in my state, according to the MO Healthnet Employer Report, in the first quarter of 2012 (latest data available) Walmart alone cost $6,247,032 in Medicaid costs. McDonalds cost $4,050,360 and Casey’s General Stores cost $1,473,094. Subway, Pizza Hut, Taco Bell and Sonic Restaurants cost more than $1 million dollars each. Together, these seven low-wage companies cost more than $16 million in Missouri taxpayer money in just three months.
A crucial part of my job as CEO is prediction and planning. Part of that is predicting costs and demand. Indexing the minimum wage to inflation, as Missouri and nine other states do now, would make it easier for businesses to predict and plan for labor costs. It would mean the buying power of our customers would not be hollowed out by an eroded wage floor.
Indexing is good for our tax base and our school systems, which are so dependent on property taxes. The most local small business is landlord. Most rental units are locally owned. The vast majority of low-wage workers are renters. A decent minimum wage helps maintain healthy property values and tax revenues.
The evidence that trickle-down economics doesn’t work is all around us. People are falling out of the middle class instead of rising into it. Putting money in the hands of people who desperately need it to buy goods and services will give us a trickle-up effect. Raising the minimum wage is a really efficient way to circulate money in the economy from the bottom up where it can have the most impact in alleviating hardship and boosting demand at businesses.
The American Dream isn’t functioning when the pie gets bigger, but the share for working people shrinks. Decent wages at the lowest rungs lets workers make ends meet while giving them a taste of the rewards of work.
Let’s keep the American Dream in sight for those farthest from experiencing its sweetest fruits.
Lew Prince is co-owner and CEO of Vintage Vinyl in St. Louis, Mo., and member of Business for a Fair Minimum Wage.
Written by: Lewis Prince
Re-Shoring Jobs With The Moto X
in UncategorizedRecent news in and around the smartphone space points to an increasingly challenging environment:
After rattling those data points off, one would think the smartphone market is on a downward spiral, yet the latest figures from Strategy Analytics confirm the market continues to grow. In the June quarter, the third party research firm tabulated more than 229.6 million smartphones were shipped, up 10% from the March quarter and 47% compared to the year ago quarter. Looking at data from the GSM Association, there are more than 3.2 billion unique mobile subscribers as of August 2013 and that firm forecasts continued growth to 3.9 billion by 2017.
While there may be slower growth ahead, there is still growth to be had as smartphones continue to take share from basic and feature mobile phones. That shift is best seen in Nokia, which reported a sequential 4% drop in mobile phone shipments in the June quarter. On a year over year basis, the shift is far more evident as Nokia’s mobile phone shipments dropped nearly 27%.
PowerTalk with Motorola Mobility MMI NaN% on the Moto X and bringing jobs back to the U.S. One company that is doubling down on the smartphone opportunity is Motorola Mobility, which is now owned by Google, the company behind the Android mobile operating system. This past week the two companies introduced their first jointly developed smartphone – the Moto X – and I was fortunate enough to speak with Mark Randall, Motorola’s Senior Vice President of Supply Chain and Operation, about the Moto X and what it means for job creation here in the U.S. Mark was formerly of Amazon and as he tells me he helped design the Fort Worth plant where the Moto X will be assembled, back when he worked with Nokia.
During our conversation, Mark talks about the high degree of customization that is possible with the Moto X and while he is tight lipped about what may be next for Motorola Mobility he does point out the size of the Fort Worth, Texas facility. At roughly 500,000 square feet, Motorola and its partner Flextronics International aim to employ 2,200 people when the Moto X ramps to full production. Reading between the lines, it sounds like the Fort Worth facility could be the home for more products and potentially more jobs.
Given the market share gains by Chinese mobile phone and smartphone vendors like Huawei, ZTE and Lenovo, many are concerned about the about the ability to compete with those vendors and be profitable while manufacturing in the U.S. Given the high degree of customization that Motorola Mobility is offering with the Moto X, Mark points out it would have been far more difficult doing this with China based manufacturing partners. He also tells me the closeness of the design team and the manufacturing-assembly team was also crucial and that the labor costs between manufacturing in the U.S. and China were not as far off as many might think.
Moto X will be available in the US, Canada and Latin America starting in late August/early September at AT&T, Sprint Nextel, Verizon Communications, T-Mobile and other carriers as well as at Best Buy stores and Motorola.com.
Given the not only lower than expected job creation numbers reported in the July Employment Report from the Bureau of Labor Statistics but also the low quality nature of the report, the re-shoring of jobs by Motorola is welcome news.
While I am all for re-shoring jobs back to the U.S., as investors we have to wonder how successful the Moto X will be. The smartphone space is crazy competitive, and a single product can carry you only so far. Longtime followers of Motorola remember the RAZR craze, but without a killer follow-up product, Motorola soon began to lose its way. Time will tell how successful the Moto X will be and if there will be follow on products, but given its association with Google, Motorola Mobility now has some deep pockets to fall back on and that means it is far from out of the smartphone race. Those deep pockets are making a good sized bet on the Moto X given the $500 million in marketing and advertising that Google is going to spend on the new smartphone.
Because the Moto X will have a little more than one month of availability at best in the current quarter, that marketing and advertising blitz likely means even greater losses at Motorola for the near term. In the June quarter, Motorola Mobility lost more than $200 million on the operating line on $998 million in revenue. Some quick math shows that an incremental $500 million will sap $1 per share in earnings for Google in the coming quarters, but that’s small potatoes compared with the better than $43 per share that Google is expected to earn this year. If the product receives positive buzz, it will be a positive for Google shares.
Crumbling American Dreams
in UncategorizedMy hometown — Port Clinton, Ohio, population 6,050 — was in the 1950s a passable embodiment of the American dream, a place that offered decent opportunity for the children of bankers and factory workers alike.
But a half-century later, wealthy kids park BMW convertibles in the Port Clinton High School lot next to decrepit “junkers” in which homeless classmates live. The American dream has morphed into a split-screen American nightmare. And the story of this small town, and the divergent destinies of its children, turns out to be sadly representative of America.
Growing up, almost all my classmates lived with two parents in homes their parents owned and in neighborhoods where everyone knew everyone else’s first name. Some dads worked in the local auto-part factories or gypsum mines, while others, like my dad, were small businessmen. In that era of strong unions and full employment, few families experienced joblessness or serious economic insecurity. Very few P.C.H.S. students came from wealthy backgrounds, and those few made every effort to hide that fact.
Half a century later, my classmates, now mostly retired, have experienced astonishing upward mobility. Nearly three-quarters of them surpassed their parents in education and in that way advanced economically as well. One-third of my classmates came from homes with parents who had not completed high school and, of that group, nearly half went to college.
Low costs at public and private colleges across Ohio were supplemented by locally raised scholarships — from the Rotary Club, the United Automobile Workers, the Junior Women’s Club and the like. Although the only two black students in my class encountered racial prejudice in town and none of their parents had finished grade school, both reached graduate school. Neither for them nor for our white classmates was family background the barrier to upward mobility that it would become in the next century.
J’s rise from a well-knit but modest working-class family to a successful professional career was not atypical, as a recent survey of my classmates revealed. My classmates describe our youth in strikingly similar terms: “We were poor, but we didn’t know it.” In fact, however, in the breadth and depth of the social support we enjoyed, we were rich, but we didn’t know it.
As we graduated, none of us had any inkling that Port Clinton would change anytime soon. While almost half of us headed off to college, those who stayed in town had reason to expect a steady job (if they were male), marriage and a more comfortable life than their parents’.
But just beyond the horizon a national economic, social and cultural whirlwind was gathering force that would radically transform the life chances of the children and grandchildren of the graduates of the P.C.H.S. class of 1959. The change would be jaw dropping and heart wrenching, for Port Clinton turns out to be a poster child for changes that have engulfed America.
The manufacturing foundation of Port Clinton’s modest prosperity in the 1950s and 1960s began to tremble in the 1970s. The big Standard Products factory at the east end of town provided nearly 1,000 steady, good-paying blue-collar jobs in the 1950s, but the payroll was more than halved in the 1970s. After two more decades of layoffs and “give backs,” the plant gates on Maple Street finally closed in 1993, leaving a barbed-wire-encircled ruin now graced with Environmental Protection Agency warnings of toxicity. But that was merely the most visible symbol of the town’s economic implosion.
Manufacturing employment in Ottawa County plummeted from 55 percent of all jobs in 1965 to 25 percent in 1995 and kept falling. By 2012 the average worker in Ottawa County had not had a real raise for four decades and, in fact, is now paid roughly 16 percent less in inflation-adjusted dollars than his or her grandfather in the early 1970s. The local population fell as P.C.H.S. graduates who could escape increasingly did. Most of the downtown shops of my youth stand empty and derelict, driven out of business by gradually shrinking paychecks and the Walmart on the outskirts of town.
Unlike working-class kids in the class of 1959, many of their counterparts in Port Clinton today are, despite toil and talent, locked into troubled, even hopeless lives. R, an 18-year-old white woman, is almost the same age as my grandchildren. Her grandfather could have been one of my classmates. But when I went off to college on a scholarship from a local employer, he skipped college in favor of a well-paid, stable blue-collar job. Then the factories closed, and good, working-class jobs fled. So while my kids, and then my grandchildren, headed off to elite colleges and successful careers, his kids never found steady jobs, were seduced by drugs and crime, and burned through a string of impermanent relationships.
His granddaughter R tells a harrowing tale of loneliness, distrust and isolation. Her parents split up when she was in preschool and her mother left her
alone an
d hungry for days. Her dad hooked up with a woman who hit R, refused to feed her and confined R to her room with baby gates. She says her only friend was a yellow mouse who lived in her apartment. Caught trafficking drugs in high school, R spent several months in a juvenile detention center and failed out of high school, finally eking out a diploma online. Her experiences left her with a deep-seated mistrust of anyone and everyone, embodied by the scars on her arms where a boyfriend injured her in the middle of the night. R wistfully recalls her stillborn baby, born when she was 14. Since breaking up with the baby’s dad, who left her for someone else, and with a second fiancé, who cheated on her after his release from prison, R is currently dating an older man with two infants born to different mothers — and, despite big dreams, she is not sure how much she should hope for.
R’S story is heartbreaking. But the story of Port Clinton over the last half-century — like the history of America over these decades — is not simply about the collapse of the working class but also about the birth of a new upper class. In the last two decades, just as the traditional economy of Port Clinton was collapsing, wealthy professionals from major cities in the Midwest have flocked to Port Clinton, building elaborate mansions in gated communities along Lake Erie and filling lagoons with their yachts. By 2011, the child poverty rate along the shore in upscale Catawba was only 1 percent, a fraction of the 51 percent rate only a few hundred yards inland. As the once thriving middle class disappeared, adjacent real estate listings in the Port Clinton News Herald advertised near-million-dollar mansions and dilapidated double-wides.
The crumbling of the American dream is a purple problem, obscured by solely red or solely blue lenses. Its economic and cultural roots are entangled, a mixture of government, private sector, community and personal failings. But the deepest root is our radically shriveled sense of “we.” Everyone in my parents’ generation thought of J as one of “our kids,” but surprisingly few adults in Port Clinton today are even aware of R’s existence, and even fewer would likely think of her as “our kid.” Until we treat the millions of R’s across America as our own kids, we will pay a major economic price, and talk of the American dream will increasingly seem cynical historical fiction.
Do you agree with the writer? Can you relate with the story? Please comment below.
A version of this article appeared in print on 08/04/2013, on page SR9 of the National edition with the headline: Crumbling American Dreams.
Admit it. You love cheap clothes. And you don't care about child slave labour
in UncategorizedUntil three years ago I did not believe in magic. But that was before I began investigating how western brands perform a conjuring routine that makes the great Indian rope trick pale in comparison. Now I’m beginning to believe someone has cast a spell over the world’s consumers.
This is how it works. Well Known Company makes shiny, pretty things in India or China. The Observer reports that the people making the shiny, pretty things are being paid buttons and, what’s more, have been using children’s nimble little fingers to put them together. There is much outrage, WKC professes its horror that it has been let down by its supply chain and promises to make everything better. And then nothing happens. WKC keeps making shiny, pretty things and people keep buying them. Because they love them. Because they are cheap. And because they have let themselves be bewitched.
Last week I revealed how poverty wages in India’s tea industry fuel a slave trade in teenage girls whose parents cannot afford to keep them. Tea drinkers were naturally upset. So the ethical bodies that certified Assam tea estates paying a basic 12p an hour were wheeled out to give the impression everything would be made right.
For many consumers, that is enough. They want to feel that they are being ethical. But they don’t want to pay more. They are prepared to believe in the brands they love. Companies know this. They know that if they make the right noises about behaving ethically, their customers will turn a blind eye.
So they come down hard on suppliers highlighted by the media. They sign up to the certification schemes – the Ethical Trading Initiative, Fairtrade, the Rainforest Alliance and others. Look, they say, we are good guys now. We audit our factories. We have rules, codes of conduct, mission statements. We are ethical. But they are not. What they have done is purchase an ethical fig leaf.
In the last few years, companies have got smarter. It is rare now to find children in the top level of the supply chain, because the brands know this is PR suicide. But the wages still stink, the hours are still brutal, and the children are still there, stitching away in the backstreets of the slums.
Drive east out of Delhi for an hour or so into the industrial wasteland of Ghaziabad and take a stroll down some of the back lanes. You might want to watch your step, to avoid falling into the stinking open drains. Take a look through some of the doorways. See the children stitching the fine embroidery and beading? Now take a stroll through your favourite mall and have a look at the shelves. Recognise some of that handiwork? You should.
Suppliers now subcontract work out from the main factory, maybe more than once. The work is done out of sight, the pieces sent back to the main factory to be finished and labelled. And when the auditors come round the factory, they can say that there were no children and all was well. Because audits are part of the act. Often it is as simple as two sets of books, one for the brand, one for themselves. The brand’s books say everyone works eight hours a day with a lunch break. The real books show the profits from 16-hour days and no days off all month.
Need fire extinguishers to tick the safety box? Hire them in for the day. The lift is a deathtrap? Stick a sign on it to say it is out of use and the inspector will pass it by. The dark arts thrive in the inspection business. We, the consumers, let them do this because we want the shiny, pretty thing. And we grumble that times are tight, we can’t be expected to pay more and, anyway, those places are very cheap to live in.
This is the other part of the magic trick, the western perception of the supplier countries, born of ignorance and embarrassment. India, more than most, knows how to play on this. Governments and celebrities fall over themselves to laud India for its progress. India is on the up, India is booming, India is very spiritual, India is vibrant. Sure, the workers are poor, but they are probably happy.
No, they are not. India has made the brands look rank amateurs in the field of public relations. Yes, we know it is protectionist, yes, we know working conditions are often diabolical, but we are in thrall to a country that seems impossibly exotic.
Colonial guilt helps. The British in particular feel awkward about India. We stole their country and plundered their riches. We don’t feel able to criticise. But we should. China still gets caught out, but wages have risen and working conditions have improved. India seems content to rely on no one challenging it.
Last week India’s powerful planning commission claimed that poverty was at a record low of 21.9% of the population. It did so on the basis that people could live on 26 rupees (29p) a day in rural areas (33 rupees in urban areas). Many inside India baulk at this. Few outside the country did so.
But times are tough, consumers say. This is the most pernicious of the ideas the brands have encouraged. Here’s some maths from anObserver investigation last year in Bangalore. We can calculate that women on the absolute legal minimum wage, making jeans for a WKC, get 11p per item. Now wave your own wand and grant them the living monthly wage – the £136 the Asia Floor Wage Alliance calculates is needed to support a family in India today (and bear in mind that the women are often the sole earners). It is going to cost a fortune, right? No. It will cost 15p more on the labour cost of each pair of jeans.
The very fact that wages are so low makes the cost of fixing the problem low, too. Someone has to absorb the hit, be it the brand, supplier, middleman, retailer or consumer. But why make this a bad thing? Why be scared of it?
Here is the shopper, agonising over ethical or cheap. What if they can do both? What if they can pluck two pairs of jeans off the rail and hold them up. One costs £20. One costs £20.15. It has a big label on it, which says “I’m proud to pay 15p more for these jeans. I believe everyone has the right to a decent standard of living. My jeans were made by a happy worker who was paid the fair rate for the job.”
Go further. Stitch it on to the jeans themselves. I want those jeans. I want to know I’m not wearing something stitched by kids kept locked in backstreet godowns, never seeing the light of day, never getting a penny. I want to feel clean. And I want the big brands and the supermarkets to help me feel clean.
I want people to say to them: “You deceived us. You told us you were ethical. We want you to change. We want you to police your supply chain as if you care. Name your suppliers. Open them to independent inspection. We want to trust you again, we really do, because we love your products. Know what? We don’t mind paying a few pennies more if you promise to chip in too.”
And here’s the best part: I think they would sell more. I think consumers would be happier and workers would be happier. And if I can spend less time trawling through fetid backstreets look
ing
for the truth, I’ll be happier.
August 2010
We revealed how factories supplying some of the biggest names on the British high street were making workers put in up to 16-hour days. Marks & Spencer, Gap and Next all launched inquiries and pledged to end excessive overtime.
November 2010
We revealed how Monsoon, the fashion chain that pioneered ethical shopping, used suppliers in India who employed child labour and paid workers below the minimum wage. Its global ethical trading manager urged the Indian government to tackle the issue. The company insisted it had a “long-lasting and passionate commitment to ethical trade”.
April 2011
We revealed how workers in China making iPhones and iPads for Apple suffered from illegal working hours and were made to write confession letters for minor misdemeanours. Foxconn, the Apple supplier, said it was trying to improve working conditions.
March 2012
Working with War on Want, we revealed how Bangladeshi workers producing sportswear for Olympic sponsors Adidas, Nike and Puma werebeaten, verbally abused, underpaid and overworked. The companies promised action
August 2012
The Observer, working with Indian anti-trafficking group Bachpan Bachao Andolan, revealed how boys as young as seven were sold to slave traders for work in the sweatshops of Delhi. Soon after the investigation, India’s government introduced new laws against child labour.
November 2012
We revealed claims that women in India who failed to hit impossible targets while making clothes for British high street names were berated, called “dogs and donkeys”, and told to “go and die”.
Daytona State offers manufacturing training
in UncategorizedDaytona Beach News-Journal – DAYTONA BEACH — The purpose of the course, according to a flier from the college, is to help students “develop technical skills that can lead to certifications, internships and job interviews” at area manufacturers who have agreed to be partners in the program.
Jayne Fifer, CEO of the VMA, the Ormond Beach-based trade alliance that represents manufacturers throughout the Volusia-Flagler area and surrounding counties, has said in recent interviews that several of her members have been unable to fill available jobs because of a lack of skilled workers.
The classes will be held at Daytona State’s Advanced Technical College at 1770 Technology Blvd. in Daytona Beach.
For more information, call 386-506-3317.
July Jobs Report: Only 162,000 Jobs Added
in UncategorizedMany economists expected the addition of 175,000 to 185,000 jobs in July and the average workweek to remain unchanged at 34.5 hours. The average workweek fell by 0.1 hour in July to 34.4 hours.
The monthly jobs report is closely watched by investors for signs that the Federal Reserve will soon taper its bond-buying efforts that have boosted the economy, perhaps leading to a new downturn. The Fed has indicated that it will pull back those purchases, but hasn’t said exactly when that will begin. Job additions have been moderate this year, but not at the level that will cause the jobless rate to fall substantially.
As interest rates edge up from record lows as the Fed reduces its stimulus, there is concern that bond investors will see more losses and the real estate market may cool.
“The report is disappointing, with weaker job growth in July compared to the first half of 2013,” PNC senior economist Gus Faucher said. “Despite the drop in the unemployment rate, the softer job growth in July, combined with the downward revisions to May and June, makes the Federal Reserve slightly less likely to reduce its purchases of long-term assets when it next meets in mid-September.”
Last month, the Labor Department reported a higher-than-expected addition of 195,000 jobs for June, though part-time work increased over 350,000 from May to June, reflecting weakness in the quality of jobs available. Friday’s report included revisions for previous months, lowering the number of jobs added in May to 176,000 from 195,000, and in June to 188,000 from 195,000.
Stephen Bronars, senior economist with Welch Consulting, said the unemployment rate has fallen, in part, because people are giving up their job searches and leaving the labor force.
The report indicated the labor force participation rate, which measures the percentage of adults who are either employed or jobless but actively looking for work, fell to 63.4 percent in July from 63.5 percent in June.
“Even more troubling is that the participation rate is down 0.3 percent from one year ago,” Bronars said.
Another concern, Bronars said, is that over the past two months, half of the gain in employment has been due to an increase in part-time jobs. In addition, there has been a substantial increase over the past two months in the fraction of full-time workers who are working part-time due to slack work and business conditions, he said.
The employment-population ratio was unchanged at 58.7 percent.
“This leaves us in a bit of a no man’s land, not quite close enough to taper, but a bit close enough to expectations that it looks like we have one more month of speculation about the Fed’s intention,” said Joe “JJ” Kinahan, chief strategist with TD Ameritrade.
The economy has been adding jobs for 34 straight months, since October 2010.
On Thursday, the Labor Department’s jobless claims report indicated the number of Americans applying for unemployment benefits fell 19,000 to 326,000, the fewest since January 2008.
On Wednesday, private payroll provider ADP reported employers added 200,000 jobs in July, the fastest pace since December.
And the Commerce Department’s GDP report showed the U.S. economy grew at an annual rate of 1.7 percent in the second quarter of this year, better than what most economists expected but showing only mild growth. In the first quarter, GDP rose only 1.1 percent.
“These rates of growth are about half of what is needed historically to support job gains of 200,000 per month,” said Robert Murphy, an economics professor at Boston College. “The reason for the higher level of job creation may be that employers postponed hiring early in the recovery until they were sure the expansion was on track. If so, then the recent level of job gains simply reflects postponed hiring that is not sustainable. Alternatively, the estimates of economic growth for this year may be revised upward in coming months as more complete data are compiled, supporting the job growth numbers.”
Carol Hartman from DHR International, an executive search firm, is especially concerned about the long term unemployed who are no longer counted in jobs reports.
“Steady job growth, while not robust, defies the tax increases, regulatory environment and large scale changes to healthcare,” she said. “Whether this anemic ‘recovery’ can pick up steam with more business and consumer costs and the financial distress of local municipalities remains to be seen.”
Written by: SUSANNA KIM (@skimm)
ABC News’ Zunaira Zaki contributed to this report.
The Price of ‘Made in China’
in Made in USAReposted from The New York Times:
How did this happen? The Metropolitan Transportation Authority says a Chinese fabricator was picked because the two American companies approached for the project lacked the manufacturing space, special equipment and financial capacity to do the job. But the United Steelworkers claims it quickly found two other American bridge fabricators, within 100 miles of New York City, that could do the job.
The real problem with this deal is that it doesn’t take into account all of the additional costs that buying “Made in China” brings to the American table. In fact, this failure to consider all costs is the same problem we as consumers face every time we choose a Chinese-made product on price alone — a price that is invariably cheaper.
Consider the safety issue: a scary one, indeed, because China has a very well-deserved reputation for producing inferior and often dangerous products. Such products are as diverse as lead-filled toys, sulfurous drywall, pet food spiked with melamine and heparin tainted with oversulfated chondroitin sulfate.
In the specific case of bridges, six have collapsed across China since July 2011. The official Xinhua news agency has acknowledged that shoddy construction and inferior building materials were contributing factors. There is also a cautionary tale much closer to home.
When California bought Chinese steel to renovate and expand the San Francisco-Oakland Bay Bridge, for a project that began in 2002, problems like faulty welds by a Chinese steel fabricator delayed the project for months and led to huge cost overruns. Those delays eroded much of the savings California was banking on when it opted for the “cheap” Chinese steel.
There is a second reason not to buy “Made in China” products: jobs. The abiding fact is that steel production is heavily subsidized by the Chinese government. These subsidies range from the massive benefits of a manipulated and undervalued currency to the underwriting of the costs of energy, land, loans and water.
Because of China’s subsidies — most of which are arguably illegal under international trade agreements — its producers are able to dump steel products into America at or below the actual cost of production. This problem is particularly acute now as China is saddled with massive overcapacity in its steel industry.
Of course, every job China gains by dumping steel into American markets is an American job lost. Each steelworker’s job in America generates additional jobs in the economy, along with increased tax revenues. With over 20 million Americans now unable to find decent work, we could certainly use those jobs as we repair the Verrazano Bridge.
The M.T.A. has ignored not only the social costs but also the broader impact on the environment and human rights. Chinese steel plants emit significantly more pollution and greenhouse gases per ton of steel produced than plants in the United States. This not only contributes to global warming but also has a direct negative impact on American soil, since an increasing amount of China’s pollution is crossing the Pacific Ocean on the jet stream.
Finally, when American companies and government agencies opt for Chinese over American steel, they are tacitly supporting an authoritarian regime that prohibits independent labor unions from organizing — one of many grim ironies in today’s People’s Republic. As a result, American workers are forced to compete against Chinese workers who regularly work 12-hour days, six or seven days a week, without adequate safety gear. Both Chinese and American steelworkers wind up as victims.
The bottom line here is this: Buying “Made in China” — whether steel for our bridges or dolls for our children — entails large costs that most consumers and, sadly, even our leaders don’t consider when making purchases. This is hurting our country — and killing our economy.
Peter Navarro, a professor of economics and public policy in the University of California, Irvine business school, directed the documentary film “Death by China.”
Small Manufacturers Bet on Detroit Brand Despite Bankruptcy
in UncategorizedMaking products ranging from bicycles to luxury watches and “sleeping bag” coats designed for the homeless, these small firms have tapped into a surprising amount of demand for goods made in a city more commonly associated today with failure and decline.
“Our customers come from all walks of life and are looking for a little bit of soul and something that is authentically Detroit,” said Eric Yelsma, founder of Detroit Denim Co., which produces hand-made jeans. “We can’t make them fast enough.”
Unlike deep-pocketed Dan Gilbert, co-founder of online mortgage provider Quicken Loans who has helped spur a downtown boom here by moving in 9,000 employees and spending $1 billion in the process, Detroit’s new entrepreneurs are winging it.
“None of us have ever done this before,” said Zak Pashak, who has invested $2 million in Detroit Bikes, which will start production of its “urban bike” model in August and aims to build 40,000 bicycles a year.
“We just jumped in with both feet,” said Pashak, who started out as a bar owner in his native Calgary and wound up in Detroit, a city he had admired since childhood for its Motown music. “America needs jobs, which is a good reason to start making stuff here again.”
Detroit’s manufacturing startups have yet to have much impact on a city unemployment rate that stood at 11.7 percent in June. As a whole, they have created only a few hundred jobs, just a fraction of the 7,700 manufacturing jobs created in the sector from March 2012 to March 2013 in the Detroit metropolitan area, according government data.
Small as they are, Detroit’s manufacturing startups offer faint signs of economic diversification after decades of reliance on the automakers or grand schemes to revitalize Detroit such as casinos. They are also making relatively expensive niche goods in a city where consumer spending power has been battered for years.
“I think these small firms offer better hope for Detroit than any big answer,” said Margaret Dewar, an urban planning professor at the University of Michigan. “The city has always looked for a big solution to its problems, which hasn’t worked.”
The auto industry built Detroit, drawing hundreds of thousands of jobs here. But as U.S. automakers shifted production elsewhere, the city’s population fell from a peak of 1.8 million in 1950 to around 700,000, and only one large-volume auto plant still makes cars in the city. Detroit has long-term debt of more than $18 billion and on July 18 the state-appointed emergency manager, Kevyn Orr, filed for Chapter 9 bankruptcy protection, the largest ever U.S. municipal bankruptcy.
Detroit’s new entrepreneurs have come despite the city’s strained finances, undaunted by the lack of street lights in many neighborhoods and patchy basic services like police and emergency services.
“Most of the people who have set up here are family and friends who have done so regardless of poor services,” said David Egner, executive director of the New Economy Initiative, a $100 million fund to aid entrepreneurs in Detroit.
They are encouraged by Orr’s plans to invest in services and infrastructure as part of the city’s restructuring. “Once services improve, I think we’ll see growth from companies outside that group of family and friends,” Egner said.
The largest of the city’s small newcomers is a watch maker called Shinola, a Depression-era brand name purchased in 2011 when the company set up shop. Dallas-based Bedrock Manufacturing, a venture capital firm backed by Tom Kartsotis, founder of accessory firm Fossil Inc., decided to take advantage of Detroit’s underutilized workforce and resonant Made-in-America mystique.
“When we came here we found a lot of dynamic young people who were not focused on Detroit’s past, but were looking to the future,” said Bedrock CEO Heath Carr. “There is a movement in the United States for Made in America goods, but our question was would they support it with their wallets, because most things made here are more expensive.”
Recent consumer research, including a November 2012 Boston Consulting Group survey, indicates around 80 percent of U.S. respondents are willing to pay a premium for American-made goods.
Bedrock spent an undisclosed sum on equipment and on months of training for workers to assemble Shinola watches in a clean environment not far from downtown Detroit. The parts mostly come from Switzerland or China, but the company has two certified watchmakers on staff who can modify designs.
“It means a lot to me to be able to make these watches here in Detroit,” said Jalil Kizy, a Detroit native and one of Shinola’s two watchmakers. Until Shinola came along, Kizy was like many Michigan natives who have felt they would need to leave the state to find work.
Shinola’s 75-person workforce has the capacity to produce 500,000 watches a year. The first batch of 2,500 watches, priced from $475 to $800 each, sold out in days early this year to buyers across the United States. The company has had teething problems delivering products, Carr said, in part because Shinola underestimated demand.
“It’s a good problem to have,” Carr said. “But we are working to manage customer expectations.”
Shinola also assembles Shinola bikes here, competing with at least two other small-scale bike makers: Detroit Bicycle Company and custom bike builder Slingshot Bikes, which is relocating from Grand Rapids in western Michigan. Pashak’s Detroit Bikes will employ 30 people when production begins in August.
“CRAZY OLD”
The city’s new manufacturers face challenges common to many new businesses: managing consumer expectations while struggling to meet demand, finding qualified workers to ramp up production, or bearing the cost of training new ones.
Eric Yelsma formed Detroit Denim after losing his job selling specialty printing chemicals once oil hit $100 a barrel in 2008. Yelsma wants to expand Detroit Denim’s four-person payroll, but few Americans know how to make jeans anymore.
“The labor pool for this business is pretty much minimal,” he said. “So far, we’ve come up dry.”
A local veterans’ group is considering a plan to fund a six-month training course for three veterans to become “jean smiths” on what Yelsma describes as “crazy old” sewing machines, one more than a century old. Detroit Denim’s jeans sell for $250.
Detroit Denim shares space with the non-profit Empowerment Plan, which makes sleeping bag coats for the homeless. Backed by Quicken Loans’ Gilbert and Spanx founder Sara Blakely, Empowerment Plan makes coats from donated materials – insulation from General Motors and material from workwear brand Carhartt.
Veronika Scott, a 24-year-old graduate of Detroit’s College for Creative Studies who founded Empowerment Plan, said most of the nine formerly homeless women she employs have found places to live since getting a job. Demand for the coats is strong enough that Scott is planning a “buy one, give one” program this fall: for $200, customers will get a coat and have one donated to a homeless person.
Andrew Pierce, U.S. president of marketing consultancy Prophet, said Detroit’s new manufacturers are tapping into Detroit’s reputation much as U.S. automake
r Chry
sler has with its “Imported from Detroit” commercials.
“The Detroit brand is very authentic and a little bit gritty in a good way,” Pierce said. Beyond a growing desire for American-made goods, the attraction of Detroit “is that part of the American dream is all about the rebuild out of a crisis.”
(Reporting By Nick Carey; Editing by David Greising and Claudia Parsons)
iPhone 6 Could Be First ‘Made In USA’ iPhone
in UncategorizedThey have come under the eye for their labour practices in the past. The Fair Labour Association audit revealed that they had excessive overtime and unfair wages. Of course Foxconn said that they would address these issues and apparently they have done just that as they are addressing these concerns.
On a side note, the latest supply checks show that Apple is finally getting closer to keeping up with demand for the iPhone 5.
iPhone 6 Release Date Could Happen On Labor Day 2013
in UncategorizedThe life cycle of Apple could be late summer or very early fall. The invitations from Apple generally go out the week before the event, and this is usually on a Tuesday or Wednesday. IOS 7 could be revealed at the same time and pre-orders for the device could start on the Friday. ISO 7 could be then available for download on the same day.
It has been said that the Apple iPhone 6 may have the quad core processor and this would be faster than the processor of the iPhone 5. If so it would work great with iOS 7 as iOS 7 comes with many new features.
It’s also been said that the iPhone 6 may be coming choices of 16 GB, 32 GB, 64 GB and 128 GB.
Playing ‘The Game’ Of U.S. Clothing Manufacturing
in UncategorizedWhen it came to first looking into the business case of manufacturing in the U.S., Stillwell says, “Given what our country has been through over the past few years, we sensed a groundswell of demand for ‘made in the USA’ product.” Given that his company is producing apparel for what is generally considered an “American” sport — baseball — the demand for locally-produced apparel is understandable. Patriotism aside, athletes expect high quality from their clothing, and American-made is often most closely associated with some of the highest quality in the world.
Stillwell says that based on the current situation between American manufacturing and that in Asia, “We may be a bit ahead of the curve in the move back to the U.S. Though the cost gap is shrinking, it’s not ‘closed,’ but our sense of patriotism won out in the end. We’re glad to offer a made in the USA product line and we believe the cost sacrifice will not harm the business.” Still, he believes that gap is bound to close in the coming months, given the rising labor rates in Asia, increased competition cost and continued legislative posturing over unfair currency manipulation.
Textile manufacturing in the U.S. isn’t easy, and clothing is another story altogether. Many have said that the industry was dead — forever — and would continue to bounce between the next low-cost economy rather than ever return to the U.S. Stillwell says, “I think the general challenge with apparel manufacturing in the U.S. is that there is simply a price point where people walk away. An item manufactured in China may cost a consumer $18.99 — but if made in America, may cost $29.99. That’s often too large a price gap for consumers to bear.”
At The Game, Stillwell is actually finding a number of benefits due to manufacturing in the U.S. Yes, prices are higher, and those will be reflected in the retail price of these new products. But the company is manufacturing the line in non-union shops in North Carolina — very close to the company’s headquarters in South Carolina.
Stillwell says, “My favorite business benefit of the move was demonstrated just this past week. I left my office in Alabama mid-morning and was inspecting product in North Carolina by mid-afternoon. That is a far cry from a trip to Shanghai.”
The price gap is changing, too, and despite his company’s own experiment, Stillwell does believe that certain textile and apparel products will see an American-made resurgence. He says that U.S. labor costs are still quite high, particularly in comparison to those in Asia, but that for simple goods, like towels, labor costs are a small portion of the overall cost. Today, those labor-free products can often be automated with new equipment, mitigating most of the labor costs. In many situations, that makes American manufacturing a cost-friendly option, even, and that landscape may change for more complex textile-based products in the near future.
Finding exactly the right way to sell American-made goods is still a bit of a mystery as well. It’s one thing to slap a “Made in America” label on the packaging and hope consumers will respond, but The Game is trying out some different, more unique approaches in order to emphasize how the current line depends entirely upon a U.S.-based supply chain. Stillwell says his favorite slogans, which the company is testing out as it announces the product line, borrow from the “farm-to-fork” movement in the food processing world. “Cotton field to game field,” or, “from farmer to fan,” are among his favorites.
The American Threads collection will be available starting in the fall of 2013, which means the current initiative is still an experiment to The Game, and hasn’t yet been fully proven, despite that up-front demand for American-made goods. Stillwell isn’t quite ready to commit to manufacturing more of his company’s products in America, but he hopes it becomes a reality. Like any good businessman, he’s waiting to see where the dollars lay. He says, “Ideas are always great in theory, but until you see them successful in the cold, hard ‘real world’ there’s always a bit of anxiety.”
Detroit: Gold mine for China
in UncategorizedDetroit is still Motor City – at least to Chinese automotive companies doing business here.
In the past decade, dozens of them have been drawn to the area, not just because of its existing infrastructure, supply network, abundance of skilled workers or tax benefits, but because of Detroit’s pivotal role in automobile history.
“It is the center of modern vehicle technology,” proclaims John Yang, chief metallurgist with ZYNP International, the US distribution arm of engine cylinder-maker ZYNP China Manufacturing. The facility is located in Romulus, Michigan, about 25 miles southwest of Detroit. “This area still has its strength in technology and talent,” Yang said in an interview.
Overwhelmed by a debt of at least $18 billion, Detroit filed for Chapter 9 bankruptcy protection last week, the largest such filing in US history. A legal muddle created by a county judge’s ruling that the filing was unconstitutional was lifted on Wednesday when a federal bankruptcy judge cleared the way for the case to go forward without legal challenges.
As China’s leadership boosts research and development for auto parts, mandated by the latest five-year plan (2011-15), Chinese automotive companies have stepped up their activity around Detroit, doing everything from R&D on behalf of parent companies back home to making parts exclusively for US auto makers.
Their arrival is welcomed by the state government, led by Republican Governor Rick Snyder, former chairman of California computer-maker Gateway Inc, and ex-chairman and CEO of Michigan venture-capital firm Ardesta LLC. The first-term Snyder administration sees China’s interest in learning more about automobile production as a chance to create jobs for a hard-hit region.
Michigan was in the grip of a deep, decade-long recession through 2010. The state, whose economy is disproportionately affected by the automotive industry, lost nearly 218,000 manufacturing jobs from 2000 to 2005. It suffered further near the end of the decade when auto sales at General Motors, Ford and Chrysler plunged because the Detroit Three couldn’t compete against fuel-efficient Japanese cars at a time of high gas prices. The US industry’s woes were symbolized by the Chapter 11 bankruptcy filings of GM and Chrysler in 2009, moves now seen as necessary steps in the auto industry’s recent resurgence.
More and better jobs
Last year, the Great Lakes State, struggling to recover from the economic slump, exported $3.2 billion of goods and services to China, a 25 percent jump from 2011 and lagging behind only Canada and Mexico. Michigan received more than $917 million in capital from China in 2012 to become one of its top 10 direct-investment states.
“More and better jobs are created both by promoting Michigan exports to China and by attracting Chinese companies to locate operations in Michigan,” said Michael Finney, president and CEO of the Michigan Economic Development Corp, a public-private partnership that provides grants, loans and other economic assistance to businesses that make investments or create jobs in the state.
Finney calls China’s economic growth “an opportunity” for Michigan. Chinese officials feel the same way. During a recent visit to the Detroit Chinese Business Association in Troy, about 40 kilometers north of the city, Zhao Weiping, China’s Chicago-based consul general to the Midwest, called Michigan “an important business partner of China”.
The Chinese auto industry’s increasing presence in the Detroit suburbs continues a pattern of auto-production decentralization that started in the 1920s and shifted into high gear in the 1940s and 1950s, when GM, Ford and Chrysler expanded into new facilities around Detroit. That move helped push auto production into a truly national industry, responsible, at the city’s height at mid-century, for one in every six US jobs.
Detroit’s connection with a golden age of American automobile manufacturing fascinates Chinese automotive executives.
“Here in Detroit, we have a tradition,” said Jerry Xu, president of the Detroit Chinese Business Association, a nonprofit business network that fosters bilateral business relationships between US and Chinese companies. “We have a lot of history and experience that no other place can have. That is why Detroit is always respected by the Chinese as the place for the automotive industry.”
The business association estimates that about 100 Chinese firms, mostly in the auto industry, are active in the region. Those who come here typically aim to make a name for themselves in the global marketplace via Detroit, which has retained its legacy as a model for American innovation, notwithstanding its long decline and financial problems, Xu said.
Understanding that the path to success is through the Motor City, “they have to find a way to push through and come to the US, to the Michigan area, to realize that aspiration,” Xu said.
Sometimes, he said, large companies come with abundant talent and experience in doing business in the US. But “there are a lot of Chinese medium and small businesses that need help when they come”, Xu said.
The area’s abundant engineering talent is a magnet for Chinese auto-related companies looking to increase their knowledge of automobile production.
Hong Su, vice-president in charge of research at the United States R&D center for Chinese automaker Changan, in Plymouth, Michigan, about 40 km west of Detroit, said he has hired about 20 engineers with US auto industry experience in the last few years because of their expertise in developing vehicles.
“In China, at original equipment manufacturers, the senior people – even managers and directors in engineering – have fewer than 10 years, 15 years of experience,” Su said. “And most of that experience is in reverse-engineering, or copying. They don’t have vehicle-development experience.” Su chuckled as he said the youngest engineer at the US R&D center, which focuses on chassis design, has 19 years of Detroit industry experience, which is more than some senior managers in China. By contrast, his most senior employee, retired, had 35 years of experience.
China has reverse-engineered many cars, but even creating a copy requires vehicle-development know-how, Su said. “Vehicles have copyright issues; sometimes you are forced to modify. If you don’t know the principles of how to modify, you can’t do it.”
Most important, you need vehicle-development expertise to make automobiles to the performance and quality specifications demanded by today’s buyers, he said.
finis
hed, the car will target prosperous buyers with families who also crave a big, luxurious vehicle.
Frank Yang, managing director at ZYNP International in Romulus, said the combination of the Detroit area’s existing transportation and manufacturing infrastructure, talent pool and cost-efficiency, along with government tax breaks, allow that US unit to pursue its plan to be a one-stop, full-service company in the engine cylinder industry. ZYNP International’s ability to offer customers R&D, engineering, supply chain management, manufacturing and financing under one roof “differentiates us from competitors, either locally or internationally”, Yang said.
A wide range
“All this is hard to find in other areas of the country,” he said. “Detroit is the hub.”
Showing that being Chinese doesn’t guarantee a job here, ZYND’s Romulus-based engineering staff hail from a range of countries, including China, the US, Brazil, Mexico and Canada. The company employs 50 to 80 people, including seasonal workers. Most are Americans or US residents. The staff include one or two Chinese nationals and very few Chinese Americans because the company emphasizes US industry experience.
“We only have visitors from our China operation to do troubleshooting, to undertake training, to give training, and to receive whatever knowledge they can take from the US,” Yang explained.
He said the company used its flexible pay system and entrepreneurship programs to lure valuable laid-off engineers “to grow together with us”.
At ZYNP, workers repackage engine cylinder liners in returnable containers, or “dunnage”, made in China for direct shipment to customers that include GM, Ford, Chrysler, Volvo, Nemak and Cummins.
ZYNP’s history dates back more than 50 years in Mengzhou, China, where it has its manufacturing operations. The company, which employs 3,500 people in China and North America, started ZYNP North America in two Romulus locations in 2005.
Program development manager Leslie Santos said Detroit’s bankruptcy “does not impact ZYNP’s business or plans. Although ZYNP is in the metropolitan Detroit area, that does not mean we are located in the city. We are not connected to Detroit as far as our administration or anything like that. We just say we’re in Detroit because Detroit is so well known as the automotive capital of the world,” she said.
Despite Motown’s well-publicized woes, the Chinese automotive companies’ arrival has triggered an influx of companies from other fields. The new arrivals are “looking for clean technologies, environmental and water solutions” as directed by China’s latest Five-Year Plan, according to Milan Stevanovich, business community development officer with the Detroit Chinese Business Association.
“We’ve had such an overabundance of automotive engineers here over the last five years. A lot of these engineers here are now either working with angel capitalists or are just starting new startups in all these new emerging sectors,” Stevanovich said. “It’s quite an exciting time to be here in Michigan.”
Some observers see China eventually joining Japan, Germany, South Korea and other foreign countries in making and selling vehicles in the US. A March report by the US Congressional Research Service said the Chinese government ultimately is “seeking to develop vehicles that will be built in China and exported more widely to other markets, as the Japanese and Koreans did earlier”.
China already is a major importer of US auto parts. Last year it imported about $1.6 billion parts, according to United States International Trade Commission statistics. The Congressional Research Service report says recent acquisitions of US parts companies will help Chinese parts makers “target technology and product innovations to enhance their operations” back home while “also permitting a shift from supplying low-margin parts to more profitable activities, such as integrating parts into component systems”.
Joint venture
China’s recent acquisitions include Chinese auto-parts conglomerate Wanxiang Group’s $250 million acquisition early this year of US battery maker A123 Systems Inc; the purchase by Pacific Century Motors, a joint venture between the Beijing municipal government and another Chinese partner, of Nexteer Automotive from GM in 2010 for $450 million, the largest Chinese acquisition of a US auto parts company; and the purchase by Beijing West Industries, a joint venture of two Chinese State-owned enterprises, of the suspension and brake units of Delphi Corp in 2009 for $100 million.
Making and selling vehicles in the US would cap off the Chinese auto industry’s 30-year effort to develop globally, which reached a milestone in 2009 when it overtook the US to become the world’s largest producer of and market for motor vehicles.
Jerry Xu says the days of China making and selling cars in the US could happen.
“China is not the first group to come here to do business,” Xu said. “There’s Korean, Japanese, there’s German.
“As long as you have good quality and service, the American market is open for you.”
But the Chinese firms “have to better themselves. They have to make sure they provide value to get business market share here,” he said. “They have to continue to prove themselves, make sure they have a long-term plan to grow here. To be successful, they have to make themselves a citizen of their community.”
Changan’s Su says the US may have to wait five to 10 years to see the first Chinese car sold here, given the engineering techniques typically demanded by developed nations, including pollution-control and safety features. He cites the slow rise of Japan’s Toyota Motor Corp as an example of how emerging nations can eventually break through in the fiercely competitive global market.
“Twenty-five years ago, the Japanese came here and tried to study the US market,” Su said. Now Toyota can match strides with GM and Ford in the world market. But even Toyota is a relative newcomer to the US marketplace compared with one particular Detroit icon that still continues to have its world headquarters in the Motor City.
“General Motors,” he said, “is more than 100 years old.”
Contact the writer at michaelbarris@chinadailyusa.com
"Made in America": The Competitiveness Imperative
in UncategorizedDon’t get me wrong, it’s worth negotiating trade agreements that will open markets abroad and provide effective enforcement for rules-based trade, if they guarantee a level playing field for American workers, farmers, ranchers, and businesses. But the administration and perhaps Congress apparently haven’t learned from the mistakes of the past: Before we negotiate, we must get our own house in order, and we must seek far tougher trade terms. We have leverage, after all, as we remain the gold-standard consumer market in the world.
Our goal should be to cut the U.S. goods trade deficit in half by 2017. This can be accomplished by tackling Japanese and Chinese currency manipulation and by ensuring our workers and businesses aren’t forced to compete with state-supported industries abroad.
But even the best trade policy can’t hide the fact that our manufacturing sector receives little, if any, domestic policy support from Washington. First, look at the tax code: Our exports are taxed overseas through value-added taxes in over 150 countries, leaving us at a competitive disadvantage that trade agreements cannot erase. Those nations’ imports to the U.S. are effectively subsidized through VAT rebates while the meager tax support that manufacturing receives in the U.S. is under attack by Wall Street and importers.
American manufacturers are forced to work around a substandard infrastructure desperately in need of repair, yet public construction expenses as a percentage of GDP are dropping like a rock. Our chief competitors, meanwhile, have modern ports, passenger rail, and transportation hubs. And despite the president’s assurances that these jobs can’t be outsourced, major projects like New York City’s Verrazano-Narrows Bridge rehabilitation and the new San Francisco-Oakland Bay Bridge include massive amounts of Chinese steel — work that could have gone to U.S. factories.
We’re also under-investing in human capital. To be sure, community colleges are slowly scraping the rust off of the manufacturing talent pipeline, and some communities are putting vocational educational opportunities back into place for high school students. But the response so far from D.C. has been completely inadequate to meet the needs of the manufacturing sector, particularly if re-shoring becomes more of a trend and as retirements from an aging workforce begin to pile up. Our high-road competitors abroad possess mature, seamless programs to train young people, provide them with apprenticeships, and place them in high-wage jobs in modern factories.
Finally, public investment in innovation is strong in the United States, but it focuses entirely too much on ideas that end up in products made overseas. Taxpayer-financed research made MP3 player technology possible, but none of those devices are currently made in America. Investing in manufacturing innovation and engineering is essential, so that the production of the next idea — the one that hasn’t even been imagined yet — is done here. Otherwise, America will be known as the 21stcentury high-unemployment incubator of fascinating ideas.
Our era is defined by a breathtaking “app” economy but a collapsing real-world economy. Two more trade deals as they’re currently constituted won’t change that equation. Making American manufacturers and their workers more competitive, on the other hand, will allow Democrats and Republicans to fulfill their “made in America” promises and boost our economy.
Scott Paul is president of the Alliance for American Manufacturing.
Moto X: All the Details About Motorola's Made-in-America Smartphone
in Uncategorized“We started to think about smartphones, and the main thing we realized was they weren’t very smart,” Motorola Senior Vice President of Product Management Rick Osterloh said at the phone’s unveiling. “We see a lack of innovation because we think there is a lack of imagination.”
Motorola has put its imagination into making the Moto X a highly customizable phone with a few unique software tricks.
Colorful and Customizable Hardware
The 4.7-inch, 1280×720-resolution Moto X is a big-screened smartphone like many other Android phones, but the hardware differences are in the shape of the device and in the colors you can get it in. The phone has a very comfortable curved back with a small dimple in the center of the back to rest your finger in.
But if you order your Moto X through Motorola’s Moto Maker website you can customize the color of the back of the phone, the edges and even the color of the volume and power buttons and the ring around the camera. There 2,000 color combinations to choose from and the company is even working on a back made of wood.
In addition you can engrave a message or name on back of the phone. You can upload your contacts and a photo for the wallpaper before the phone ships out of the Fort Worth facility within four days of placing the order. However, to start, the color-customized versions of the phone will be available only with AT&T service. The other carriers, including Verizon and Sprint, will have black and white versions of the phone in stores and on their websites.
The phone is powered by 2GB of RAM and Motorola’s Moto X Mobile Computing system, which the company says includes a series of chips. (A Snapdragon S4 Pro processor, quad-core Adreno 320 GPU, a contexual computing processor and a natural language processor, if you’re interested in the details.)
That power is important though for the new Android software tricks. Similar to some of the features available in Motorola’s new Droid phones for Verizon, the Moto X has what the company calls “Touchless Controls” and an “Active Display” features. The touchless control works similarly to Google Glass, without having to touch the phone your phone can listen to you. After training it, you should be able to say “OK Google Now call mom,” without ever tapping or lifting the phone.
The Active Display feature aims to solve checking your lockscreen for the time or new messages. You don’t have to wake the screen, instead, periodically the phone will flash the time and if you have any new messages. Even with those notifications, the company promises up to 24 hours of battery life.
Motorola also doesn’t want you to spend too long trying to get at your camera. The phone has a 10-megapixel camera that you can get to by just shaking the phone, launching the viewfinder in under three seconds. You can take a photo by just tapping on the screen; the phone will auto focus for you. You can customize all the camera settings, however, if you’d prefer to manually turn on the camera and take the photo. The phone will ship with Android 4.2.2 and will be updated to Android 4.3 soon.
Availability and Pricing
The Moto X will be available at the end of this month or at the beginning of September, through AT&T, T-Mobile Verizon, Sprint, US Cellular and Best Buy. The 16GB model will cost $199 and the 32GB version $249. The company says it might eventually offer a version directly through the Google Play Store.
And don’t worry, if you order one through the Moto Maker in different colors and don’t like it, you can redesign or return it within 14 days of purchase.
Motorola's New Smartphone: Made in the U.S.A., but Not for Much Pay
in UncategorizedToday, Google-owned Motorola is officially announcing the new Moto X, an Android-powered device that, as its ads remind us, will be the first smartphone actually manufactured in the United States. Motorola is teaming with Flextronics to assemble the handsets at a former Nokia factory in Fort Worth, Texas, which will eventually employ somewhere around 2,000 workers.
In other words, we’re all finally about to see what happens when a tech company actually tries to bring production back to the U.S. of A. from low-wage Asia, much as Apple is planning to do with some of its Macs, and how much the resulting new jobs will actually pay.
In some cases, it appears, the answer is not much. Flextronics seems to have kept mum about wages. But after a little bit of surfing around jobs boards, I was able to find some help wanted ads from a staffing company that don’t leave a whole lot of questions about what factory they were headhunting for. (Here’s a link to the one below.)
None of this should be particularly shocking. The generous manufacturing wages of mid-century America are mostly a memory at this point. Even the United Auto Workers have negotiated a two-tiered wage system that start’s new assembly hands at about $14 an hour, half of what their older colleagues make. Meanwhile, we are, in the end, talking about smartphone manufacturing, an industry where the vast majority of the supply chain exists in Asia, right alongside plentiful cheap labor. Chinese wages have been rising fast, but anybody looking to compete while making handsets in the U.S. is still going to need to minimize costs.
We’re also talking about Fort Worth, where the living wage for a single adult is $9.27, according to MIT’s living wage calculator. I doubt that that’s an accident. It makes sense that Motorola would look for a location where it wouldn’t have to pay its workers highly.
The new factory won’t just lead to production jobs. Flextronics also appears to be hiring engineers, for instance. But in general, I think this is a reminder that even if the United States really is on the verge of bringing back loads of manufacturing work from overseas, as many believe, we have to temper our expectations for what that will mean.
UPDATE 6:19 PM: In an email, a Flextronics spokeswoman confirmed that the advertised wages were indeed accurate: “Please be advised that the posted wages you inquired about are reflective of some of the positions Flextronics is hiring for in Fort Worth and are competitive market wages. Please note that Flextronics is also hiring for managerial and other positions and those job postings can be found at flextronics.com.”
Obama's Amazon Economy
in UncategorizedAmericans have fantastic, otherworldly tech gadgets to play with at home but 70,000 structurally deficient, real-world bridges over which we drive every day. Last year we could tweet news instantly about Hurricane Sandy’s effects on New York City but we could not find any Made-in-America electrical transformers to supply power to those in need. As taxpayers we have financed breathtaking research that has led to extraordinary devices like MP3 players, but good luck finding one that’s made in America today.
While the consumption slice of our economy is doing better, the productive sector is barely treading water. And it should be no surprise; this is exactly the way our economic policy is skewed today.
President Obama said he was going to change all that. But he hasn’t.
In 2009, President Obama said that the world could no longer depend on American consumers as an engine of growth, and that we should bring our economy more into balance — exporting and saving more, while reducing our reliance on borrowing and imports.
During the 2012 election, President Obama pledged to add one million new manufacturing jobs and get tough on China’s trade cheating. So far in his second term, though, we’ve added only 13,000 new factory jobs and our trade deficit with China, $315 billion last year, is breaking records.
What would be helpful is a real-world focus on the economy from Washington. We see lots of finger-pointing, but little action. And Obama’s speeches thus far have reflected that: Lots of promises of action and exhortations that he gets it, but little in the way of policy. But there are steps right now that President Obama could be taking without Congress:
There’s a lot that Congress could do… but that’s another blog post.
Perhaps more than anything else, the President could rally Americans behind these ideas. Trade policy needs to be a dinner-table topic in this country, because trade policy puts manufacturing jobs at stake. These jobs are worth fighting for. And it’s time that manufacturing workers felt so valued around the clock, not just at election time.
About Scott Paul:
Scott N. Paul is President of the Alliance for American Manufacturing (AAM), a partnership established in 2007 by some of America’s leading manufacturers and the United Steelworkers union. Mr. Paul and AAM have worked to make American manufacturing a top-of-mind issue for voters and our national leaders through effective advocacy, innovative research, and a savvy public relations strategy.
CLICK HERE FOR MR. PAUL’S FULL BIO
Bangladesh Garment Workers Set Fire to Factory over Benefits
in UncategorizedFirefighters battled to control the blaze which gutted the warehouse on the ground floor of the factory at Mouchak, 40 kilometres (25 miles) north of Dhaka.
“The workers angrily protested at the amount of bonus they got from the owners for the upcoming Eid al-Fitr festival,” local police chief Omar Faruq said.
“At one stage they walked out of the factory and set the godown (warehouse), which was on the ground floor of the factory, on fire,” Faruq told AFP from the site.
Protests over poor wages and benefits have hit Bangladesh’s garment industry, the country’s economic mainstay, since April when a factory complex collapsed and killed more than 1,100 people.
The fire, which started at about 2.30 pm at the five-storey Libas Textiles factory, was now under control, said a police officer, Sanwar Hossain.
The April disaster highlighted appalling conditions in Bangladesh’s 4,500 garment factories, where workers toil for 10-12 hours a day for basic monthly wages of around $40.
Fearing large-scale protests ahead of Eid al-Fitr, the government has asked factory owners to pay salaries and bonuses early.
The holiday marking the end of the holy month of Ramadan is due on August 10. About 90 percent of Bangladesh’s 153 million people are Muslims.
According to local media, some factories have told their workers that they might not be able to make payments on time because of shipment delays and non-payment by buyers.
The country is the world’s second largest garment manufacturer after China, with the bulk of its $21.5 billion annual shipments going to top Western retailers such as Walmart, H&M and Inditex.
In Bankrupt Detroit, Shinola Puts Its Faith In American Manufacturing
in Uncategorized“You come in clean and you get to leave clean,” said the 35-year-old suburban Detroit resident, who spent nine and a half years working for an automotive supplier. In that job, she said, “there was grease everywhere.”
Watch-making in the United States is a lost art, save for a handful of high-end custom watch builders. The last American watch company, Hamilton, was bought by a Swiss watchmaker in 1971 and moved from Pennsylvania to Switzerland in 2003. Indeed, most watches today come from Asia or Switzerland.
But here in bankrupt Detroit, Tom Kartsotis, a wealthy entrepreneur who thinks American manufacturing still has a future, is creating a watch company from scratch in a city that knows a thing or two about manufacturing.
The company says it expects to produce 45,000 watches this year, and up to 500,000 annually by 2014 or 2015. With an average price of $600 apiece, Shinola watches are now sold at Barney’s, Saks, Neiman Marcus, Bloomingdales and Nordstrom. Besides watches, Shinola also sells $2,000 custom-built bicycles and leather goods, all with an American pedigree. It’s also producing limited edition watches under licensing agreements with other brands, such as Ford Motor, which plans to sell a Shinola-built watch to commemorate next year’s launch of the 50th anniversary Ford Mustang.
Last month Shinola opened two retail locations, one in Detroit’s vibrant Midtown neighborhood and another in New York’s Tribeca neighborhood.
There have been growing pains, however. Shinola’s first batch of 2,500 watches – a special edition priced at $550 — sold out on the web in eight days. Unfortunately, many of those customers are still waiting for their watches because of early production snafus.
Shinola, which now has more than 100 employees, admits it has gotten a little ahead of itself in launching the brand, which included a recent full page ad in The New York Times. “This early demand is applying a tremendous amount of pressure on a young company that is trying to do something that’s never been done quite like this before, and we have to ask for your patience,” according to a blog post on Shinola’s web site this week. “At some point we are certain we will be able to catch up with demand but, for now, this is a pretty wild ride.” The company says those limited edition watches are being shipped this month.
Kartsotis, 53, is best known for founding Fossil, the popular accessories brand. He was CEO from the start in 1984 until 2000, and remained chairman until 2010 while gradually reducing his stake to less than 5 percent. His brother, Kosta, now runs the Richardson, Texas, company.
Since then, Tom Kartsotis, whose last-reported Fossil holdings are worth an estimated $320 million, has been pouring most of his resources into his venture capital firm, Bedrock. It invests in U.S.-based manufacturers like Seattle-based Filson, the 116-year-old outdoor clothing company it bought last year.
In the case of Shinola, however, Kartsotis is launching a new company under a brand made famous for shoe polish. The original Shinola brand was founded in 1907, and gained notoriety during World War I, when a disgruntled young soldier was said to have shined his commander’s boots with feces. The rumor led to the popular colloquialism, “You don’t know sh*t from Shinola.”
After one of Bedrock’s managers made the crack to an office colleague, the joke turned to a serious discussion about restoring the long-idled Shinola brand, whose trademark, it turned out, was available.
“We wanted to create an accessory company – mostly watches and leather goods – and create a ‘Made in the USA’ story,” said Bedrock chief executive Heath Carr, who left Fossil to run the investment company for Kartsotis a year and a half ago. “We’re very bullish on the U.S., first off, and two, it would be a differentiator in the marketplace.”
But why Detroit, a city so broke it can’t afford to provide even the most basic services to its shrunken population? Carr says a better question is, “Why not?”
“I don’t pretend Detroit doesn’t have challenges,” said Carr, who remains based in Dallas while leaving Shinola’s day-to-day management to CEO Steve Bock. “There’s no hiding that. But there’s such an energy there. It’s wildly contagious.”
And with no established workforce for watch-making in the U.S., Detroit was as good a place as any to start the company, he said. Its manufacturing heritage would lend a degree of authenticity to Shinola products, the company figured.
To see if that hunch was right, Bedrock commissioned a focus group and asked participants whether they preferred a $5 pen from China, a $10 pen made in the USA or a $15 pen made in Detroit. People preferred the cheaper Chinese pen, but were willing to pay the higher premium for one made in Detroit. That was a signal that consumers would pay for an authentic American-made watch and that Detroit’s reputation as an industrial leader was still intact, despite its well-publicized woes.
So in late 2011, Bedrock officials visited Detroit to search for a manufacturing site. Their trip included a visit to the Industrial Design school at the College for Creative Studies, which took over GM’s former research lab a few years ago. By chance, the elevator in the 12-story building stopped unexpectedly on the fifth floor, which was vacant. “We stuck our heads out and said, ‘What about this space?’” Carr recalled. “We had seen buildings earlier in the day but it would have been a multi-year process to do all the remodeling. This space was fairly clean and ready to go and so we were able to advance our timeline pretty significantly.”
Bedrock knew nothing about watch-making, however, so it sought help from Ronda, a Swiss watch-maker, to design the factory, install the equipment and teach employees the fine points of watch assembly.
Shinola’s watch movements require 46 individual pieces – tiny coils, springs and wheels – that are so small that employees sitting inches from their work must use magnifying loupes and tweezers, vacuum styluses and micro-screwdrivers to assemble them. Using a kit of parts made by Ronda in Switzerland, each Shinola technician adds a few parts to the movement before passing it to the next station. Along the way, workers perform multiple quality checks to make sure the parts are well-lubricated and working together properly. Each batch of movements is checked for precision by a certified watchmaker.
Once the movement is built, the remainder of the watch takes shape: setting the dial and the hands, assembling the watch case, adding the crown, closing the case back or crystal and adding the leather straps. Then, each watch is tested again for time-keeping accuracy, quality and waterproofing.
Carr said Shinola relies on the help of a small band
of
American craftsmen, who were not easy to find. “We were naïve about the manufacturing process in the U.S.,” said Carr. “A lot more manufacturing had gone overseas than we originally anticipated.”
Eventually, however, Bedrock was able to identify a handful of suppliers still manufacturing handcrafted materials in the U.S. Chicago’s last leather tannery, Horween, for example, supplies the vegetable-tanned leather for Shinola’s products. That leather is then sewn into watchbands, journals and other leather goods by a small manufacturer in Saint Genevieve, Mo., called Eric Scott. Edwards Brothers Malloy, a specialty paper manufacturer in Ann Arbor, Mich., makes recycled paper for the journals. Bicycle frames are made by hand by a Wisconsin company called Waterford Precision Cycles, then shipped to Detroit for assembly.
Even hiring a master watchmaker proved difficult until Shinola found Stefan Mihoc, a Romanian immigrant who had been working as a machinist in the Detroit area for more than a decade because there were no watch-making jobs in America when he arrived in the late 1980s. Now Shinola has two master watchmakers.
The city’s bankruptcy filing is only a minor concern, said Carr. “I think it’s difficult for people to live in a bankrupt city. If people are not living there, you don’t have a workforce,” he said. But Shinola didn’t take a penny of incentives to locate in the city. “We’re in Detroit because we fell in love with Detroit,” he said. “You can’t wait for city government to give you better direction. As a business, you’ve got to move. Detroit has a lot of challenges, but that makes it an interesting place to be. It’s almost like it drives the business folks harder. That’s the energy.”
All American Clothing Invites Shoppers to Make It an American-Made School Year
in NewsThe trend of losing American jobs in the clothing industry will continue if consumers are not buying American. Roger Simmermaker of WND reported in March of 2013 that 97 percent of the clothing purchased in the United States is foreign made (http://www.wnd.com/2013/03/getting-apparel-from-that-important-3/). This school season is a perfect time to be mindful of shopping habits. Not everything purchased should be American made in those shopping carts but a few items will certainly help create jobs.
About All American Clothing Co.
At the All American Clothing Co. shoppers can actually trace items back to the American workers they are supporting with the All American Clothing Co. That`s right, consumers can trace All American-made jeans back to the American farmer who grew the cotton with an interactive feature called traceability technology. One purchase falling under traceability technology can ultimately support over 12,000 American farmers who grew the cotton used in their USA made jeans according to the All American Clothing Co.
The company was founded in 2002 when Lawson Nickol made a shocking discovery. To his surprise, his previous blue jean employer began to outsource. After he confirmed this with ownership, Nickol quickly turned in his resignation and started the All American Clothing Co. just a few weeks later with his son BJ. Since, the All American Clothing Co. has become a household name as they only carry USA made clothing items.
American Made products may seem difficult to shop for. They are often hard to find and afford. With this being said, the All American Clothing Co. has always been dedicated to making the American-made shopping experience easy and affordable.
“Sometimes shopping American made is not always easy. But when it is…it`s All American.”
Made in America Trend Drives Industrial Demand
in UncategorizedAs manufacturers continue to weigh the costs of moving goods in today’s market, increases in labor, shipping, and fuel expenses are driving many global companies to bring production back to North America. The result is an increasing demand for industrial real estate in Southern California.
Manufacturers and distributors are now increasingly seeking factory, warehouse and distribution space in Los Angeles, Orange County, and the Inland Empire in order to utilize local ports, as well as expanding class one double track rails from L.A. to the East coast.
While lower-end consumer products, such as apparel and toys, are still manufactured overseas, production of other items, such as instrumentation, devices, machinery and equipment, is moving closer to end users in the US. Much of this is because there is a lower tolerance for error when it comes to these products, which require process manufacturing. For example, the production of surgical equipment, such as laser technology for cataract surgery, must be extremely precise, or the repercussions could be enormous.
This is especially important in the current market, in which ecommerce fulfillment has become the norm. Traditionally, manufacturers would build a distribution center and analyze palate positions, then ship product to 10 customers in 200 locations, with perhaps 100 unique products. Today, manufacturers are tasked with same day and next day fulfillment for anywhere from 10,000 to a million unique products, often shipping to up to 25 million customers per year.
For these manufacturers, it’s imperative to have a real estate professional who can assist with analyzing technology and locational considerations against inbound and outbound customer bases in order to make the right decisions.
The fact is, if we as commercial real estate professionals are doing are jobs well, we actually want to reduce the footprint of our industrial clients. This may appear counterintuitive to what people in our industry usually strive to do, which is to sell more square footage. However, by developing a deeper understanding of global logistics, we can advise our clients on innovative ways to minimize on-hand inventory, which reduces their need for fixed real estate assets.
In addition to advising clients, commercial real estate professionals who are well educated on supply chain issues will also be better able to identify the benefits and detriments of each location, specifically as they relate to moving inbound goods into the supply chain for the end customer.
Depending on the product being manufactured or distributed, there are various modalities to transport goods, and by deepening our knowledge of ocean, air, and intermodal transport, we are better able to establish the right solutions, depending on the service metrics our clients are trying to achieve.
This leads to better alignment with all who are involved in real estate deal making, including the executive management team, the operations team on both the transportation and distribution side, and the manufacturing team.
As manufacturing and distribution continues to expand and return to North America, industrial real estate professionals should seek educational opportunities to better understand our clients’ business from raw products to manufacturing to finished goods. With that understanding, we will ultimately be able to deliver better solutions.
Kevin Turner is a SVP and global logistics specialist at Voit Real Estate Services. The views expressed in this column are the author’s own.
Can Fashion Clean Up Its Act?
in UncategorizedRead more at The Nation: http://www.thenation.com/article/175317/can-fashion-clean-its-act#ixzz2aScp91p1
Follow us: @thenation on Twitter | TheNationMagazine on Facebook
Written by: Elizabeth Cline
Elizabeth Cline is a New York–based journalist and the author of Overdressed: The Shockingly High Cost of Cheap Fashion.
Apple’s Supplier, Pegatron Group, Violates Workers’ Rights
in NewsIn short, the Pegatron factories are violating a great number of international and Chinese laws and standards as well as the standards of Apple’s own social responsibility code of conduct.
In May 2013, Apple heralded that its suppliers had achieved 99 percent compliance with Apple’s 60-hour workweek rule, this despite the fact that 60 hours is a direct violation of China’s 49-hour statutory limit. This “accomplishment” is further discredited by the fact that average weekly working hours in the three factories probed by CLW are approximately 66 hours, 67 hours, and 69 hours, respectively. For instance, in Pegatron Shanghai, our investigation uncovered that workers were forced to sign forms indicating that their overtime hours were less than the actual levels.
Indeed, a number of Apple’s social responsibility promises are being broken, including those related to worker safety, protecting the environment, and more. None of the Pegatron factories investigated here, for example, provide sufficient safety training to workers. At Riteng and AVY, waste water is disposed of directly into the sewage system, polluting the local water source.
Conditions at these factories are so poor that most workers refuse to continue working for long. In a period of two weeks, 30 of 110 new recruits at AVY left.
Apple continues to source from Pegatron factories despite serious labor rights violations. That Apple has made promises on the conduct of its suppliers means that Apple is complicit in the persistence of violations at these factories.
Apple has zero tolerance for lapses in the quality of its products. If a quality issue arises, Apple will do everything it can to have it corrected immediately. But a lower level of urgency apparently applies in responding to labor rights abuses. Despite its professed high standards for the treatment of Apple workers, serious labor violations have persisted year after year. Apple must prioritize its efforts into halting the abuse of the workers making Apple products.
CLW executive director Li Qiang said, “Our investigations have shown that labor conditions at Pegatron factories are even worse than those at Foxconn factories. Apple has not lived up to its own standards. This will lead to Apple’s suppliers abusing labor in order to strengthen their position for receiving orders. In this way, Apple is worsening conditions for workers, not improving them.”
The report brings this issue into sharp relief by comparing 17 social promises that Apple has made with 17 corresponding realities uncovered during CLW’s investigation.
From March to July 2013, CLW sent investigators into the three Pegatron Group factories to carry out undercover investigations and conduct nearly 200 interviews with workers outside the factories. The factories included Pegatron Shanghai (producing the iPhone), Riteng (a Pegatron subsidiary in Shanghai producing Apple computers), and AVY (a Pegatron subsidiary in Suzhou producing iPad parts). Together, these three Pegatron factories have more than 70,000 employees.
A PDF file of the full report can be downloaded here.
Check out this short film produced by China Labor Watch.