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The Walt Disney Company pulls out of Bangladesh: Will that make workers safer?

By Peter Grier
Staff writer

The Walt Disney Company pulls out of five developing countries – including Bangladesh, site of a devastating building collapse of a garment factory – telling licensees of Disney-brand items of its decision to phase out production there. Critics say pulling out is not the best response.

The Walt Disney Co. is pulling out of Bangladesh and several other developing countries, in part because of fatal accidents in factories that produced branded merchandise for Western firms. Announcement of the move follows last week’s collapse of a Bangladesh garment factory building, a tragedy that may be the worst such accident in world history. The official death toll is now more that 500 and keeps climbing as rescue workers continue the slow process of working through building rubble.

A Bangladeshi woman looks at a wall filled with portraits of missing persons near the site of a garment factory that collapsed last week in Savar near Dhaka, Bangladesh, Friday. Disney pulls out of Bangladesh and several other developing countries, in part because of fatal accidents in factories that produced branded merchandise for Western firms. | Ashraful Alam Tito/AP

Disney officials said their pull-out decision was actually made in March, after a fire in a Bangladesh factory last November that killed more than 100. The company has told licensees that it wants to phase out production of Disney-brand items made in Bangladesh, Pakistan, Belarus, Ecuador, and Venezuela.Disney said it relied on World Bank Governing Indicators, which measure rule of law, corruption, and other national characteristics, to help make its decision.

“After much thought and discussion we felt this was the most responsible way to manage the challenges associated with our supply chain,” said Bob Chapek, president of Disney Consumer Products, according to a CNN report.

Are Western firms such as Disney, the Gap, and Benetton in part responsible for the conditions that lead to these tragedies in low-wage nations? Disney’s move shows that some feel their reputations are at risk, at the least, if they are tied too closely to foreign workplace tragedies.

Customers may avoid brands they suspect of abetting worker abuse. And a number of international nongovernment organizations today stand ready to publicize poor conditions found in factories linked to major nation retail brands.

But these NGOs don’t necessarily want their pressure to result in pull-outs. They want corporations to use their economic muscle to improve conditions.

The Washington-based Workers Rights Consortium, for instance, says it works with big companies and their foreign licenses to try to remedy problems before issuing public reports.

“The WRC views ‘cutting and running’ from a factory as a serious abrogation of a licensee’s responsibilities,” says the group in a statement.

Worker groups often want foreign firms to stay to preserve jobs and economic development. Some experts say the blame for tragedies such as the Bangladesh building collapse should be directed at local and national authorities who have the responsibility to protect their workers.

“By misassigning the responsibility for the recent tragedies to global retailers, western media and consumer movements allow the real culprits to get away scott-free and further diminish the likelihood of governance reform in poor countries,” wrote Jagdish Bhagwati, senior fellow for international economics at the Council on Foreign Relations, and Amrita Narlikar, director of the Centre for Rising Powers at the University of Cambridge, last month in the British magazine Prospect.

Other experts put the problem in a larger political frame. The real problem in Bangladesh has been the complex trade apparatus erected by the US, which consumes most of the cheap clothing produced in developing nations, wrote Mallika Shakya, an assistant professor of sociology at South Asian University in Delhi, in the Indian newspaper The Hindu.

Between 1974 and 2004, the US Multi-Fiber Arrangement virtually dictated, item by item, the amount of clothing that third-world countries could export to the US, according to Ms. Shakya. Potential rivals to America such as China got small quotas, while Bangladesh and other unprepared nations got large ones.

The result was that Bangladeshi authorities could not keep up with the explosive growth of their country’s garment industry.

“That is a reason why most factory buildings are found to be built haphazardly, without acquiring the necessary clearance from state agencies,” wrote Shakya.

SOURCE: The Christian Science Monitor

Gallup Poll: Americans Want American Made Goods

in American Made, Product reviews

BY: Jeffrey M. Jones

Patriotism, Jobs Primary Motivations for ‘Buying American’. Six in 10 say they would pay more to buy U.S.-made products

PRINCETON, NJ — Forty-five percent of Americans say they recently made a special effort to buy products made in the United States. When asked why, these shoppers mainly cited patriotic or altruistic goals related to the national economy, including creating and keeping jobs in the U.S., rather than product-specific considerations such as quality, safety, or cost.

More specifically, the most common reasons for “buying American” were to support the U.S. or to be patriotic, mentioned by 32% of adults who sought out U.S.-made products in recent months, and to keep or create jobs in the country, mentioned by 31%. Additionally 20% said that buying U.S.-made products is good for the U.S. economy in general.

Fewer Americans in the April 11-14 poll mentioned specific attributes of U.S. versus foreign products as reasons for buying American, including the perception that U.S. products are better quality (13%) or concerns about the safety or quality of products made overseas (3%).

Though a substantial percentage of Americans, 45%, say they have made a special effort to buy U.S.-made products in recent months, more, 54%, have not made an attempt to do so.

There are wide generational differences in U.S.-centric shopping habits, with older Americans (61%), aged 65 and older, much more likely than younger Americans (20%), aged 18 to 29, to actively search for products made in the U.S. Younger Americans may be more accustomed to getting their products from overseas, and with international free trade agreements increasingly common, they may not have been exposed to as much pressure to “buy American.”

In addition to differences by age, there are differences by race and place of residence, with whites and those living in rural areas showing a greater propensity to favor American-made products. There are at best modest differences by gender, income, and party identification.

Americans Willing to Pay More for U.S.-Made Products

Sixty-four percent of Americans say they would be willing to pay more to buy a U.S.-made product than a similar product made in other countries. This includes the vast majority, 88%, of those who make a special effort to buy U.S.-made products, but also nearly half of those, 44%, who do not.

Given that 45% of Americans say they are making a special effort to buy U.S.-made products, and 64% say they are willing to pay more for American-made products, there is a group of about 20% of Americans who are not actively “buying American” but who seem willing to do so, even if they end up spending more.

The question did not specify how much more consumers would have to pay for U.S.-made products than for foreign-made products, but Americans may be less willing to pay significantly more for products made in the U.S. Thus, the 64% willing to pay more for American-made products may be an upper boundary estimate.

Nearly half of young adults, 43%, say they are willing to pay more for U.S. products. However, that figure is much smaller than the 70% of Americans aged 30 and older who are willing to do the same.

Americans Believe U.S. Quality Improving, but Attitudes Unchanged Since 1990

Most Americans believe that U.S. products are better now than they were a few years ago — 71% say they are a lot or a little better, while 16% say they are a lot or a little worse. However, those views are no more prevalent than they were more than 20 years ago, the last time Gallup asked the question in 1990.

Meanwhile, 52% say the U.S. has gained ground on Asian countries in terms of the quality of goods the country produces. But again, little has changed in Americans’ views on the topic since 1990.

One thing that has changed since 1990 is the rise of Chinese-made goods sold in the U.S. The 1990 question did not specify China as an Asian competitor, and Gallup did not include China in the 2013 update to ensure the current measurement is comparable with the past.

Implications

“Buy American” behavior is far from universal in the U.S., but nearly half of Americans say they actively try to buy U.S. products, and even more say they are willing to pay more for U.S. products.

Patriotism and concern for the health of the U.S. economy are major reasons behind people’s shopping for American-made products, but those attributes may be in shorter supply among younger Americans who find less appeal in U.S.-made goods. In fact, Gallup has found younger people in the U.S. ranking among the least patriotic subgroups of Americans.

If younger consumers continue to be less interested in buying U.S.-made products as they get older and future generations show a similar weak commitment to buying American, the wide generational divide in U.S. product shopping behavior could be a concern for the future market of U.S. products.

At the same time, there does seem to be a sizeable latent market for U.S. products that could be tapped, exemplified by the roughly one in five Americans who are not actively shopping for American-made goods but who say they are willing to pay more for U.S. products.

Survey Methods

Results for this Gallup poll are based on telephone interviews conducted April 11-14, 2013, with a random sample of 1,012 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

For results based on the total sample of national adults, one can say with 95% confidence that the margin of sampling error is ±4 percentage points.

Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample of national adults includes a minimum quota of 50% cellphone respondents and 50% landline respondents, with additional minimum quotas by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cellphone numbers are selected using random digit dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.

Samples are weighted to correct for unequal selection probability, nonresponse, and double coverage of landline and cell users in the two sampling frames. They are also weighted to ma
tch the national demographics of gender, age, race, Hispanic ethnicity, education, region, population density, and phone status (cellphone only/landline only/both, cellphone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2012 Current Population Survey figures for the aged 18 and older U.S. population. Phone status targets are based on the July-December 2011 National Health Interview Survey. Population density targets are based on the 2010 census. All reported margins of sampling error include the computed design effects for weighting.

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

View methodology, full question results, and trend data.

For more details on Gallup’s polling methodology, visit www.gallup.com.

SOURCE: Gallup

Made in America Label Stages Comeback At Stores

in American Made, Products

Mitch Lipka May 3, 2013

(Reuters) – When Roger Simmermaker went shopping for clothes at a Florida mall in the mid-1990s, he wanted to buy American, but to his frustration, he couldn’t find anything made in the U.S.A.

The experience motivated Simmermaker, an electronics technician by trade, to write “How Americans Can Buy American” – a guide to finding products manufactured in the United States, which were a scarce commodity at the time. Nearly 20 years after writing the book, he has seen a big change, with the pendulum in full swing back toward a wider choice of American-made products. They are often available without the expected higher price tag. “It’s definitely easier,” says Simmermaker, 47, who lives in Orlando and works for a defense contractor. “Especially in the last year or so, things have really changed.” Those who believe in buying American-made goods from U.S.-owned companies say it creates jobs and boosts the economy through reinvested profits and taxes. Profit-driven U.S. companies have their own reasons for locating factories, but manufacturers of goods ranging from refrigerators and dishwashers to laptops and tablets are starting to bring some of their production home, affording more opportunities for consumers with the patriotic conviction that Americans ought to buy American. Better still, that “Made in the U.S.A.” label may no longer carry such a premium price tag. That’s because production and shipping costs in China and other foreign manufacturing centers are rising. Shifting some manufacturing back to the United States doesn’t necessarily mean manufacturers have to raise prices to compensate for higher labor costs. To be sure, many industries are still dominated by imports – toys and textiles, for example. Still, Simmermaker and others who believe in buying American are seeing a broad shift. “Reshoring” advocates were thrilled earlier this year when Wal-Mart Stores Inc., the world’s largest retailer, announced it was throwing its weight behind the movement. In January, the chain – known for its extensive selection of imported goods – said it would spend an additional $50 billion over the next 10 years on American-made products, “helping to onshore U.S. production in high-potential areas like textiles, furniture and higher-end appliances.” Likewise, Apple Inc. said it planned to build some of its iMac line in the United States instead of China. Ford Motor Co., Coleman Co. (part of Jarden Corp.) and Master Lock Co. (part of Fortune Brands Home & Security Co.) all have said they’re returning some manufacturing to the United States. The list goes on. WHAT IT MEANS FOR CONSUMERS While few companies will move production for patriotic reasons alone, the public relations boost that goes with a decision to bring jobs back to the United States is gravy. “They run the numbers and say ‘We can deliver just as cheaply from a U.S. operation as we can from, say, China.’ It has some nice extra benefits,” says Dan Seiver, chief economist for Reilly Financial Advisors, a wealth management firm in San Diego, California. “Whatever credit goes with it is fine” With little pricing difference, the impact on U.S. consumers might not be that obvious. But Simmermaker and other advocates also contend that products made in the United States are often higher-quality and safer than those made elsewhere. There is a decided upside for the companies, too. Making products closer to their end-market allows them to be more nimble in terms of customizing and delivering products. That was the case with Spreadshirt, a Germany-based custom shirt maker that recently opened a plant in Nevada to supplement the output of its existing facility in Pennsylvania. In 2011, the company was running its Pennsylvania plant around the clock. To keep up with holiday demand, it was forced to send some work to a plant in Poland, said Mark Venezia, vice president of global sales and marketing for North America. But the company quickly realized that the distance hurt overall costs and speed – to the tune of about $2 more per unit. “We didn’t lose money, but, obviously, it hurt our bottom line,” Venezia said. Hunting for a new location led Spreadshirt to Henderson, Nevada, where facilities that met specifications were available at favorable terms, along with a pool of prospective workers. “We just got this incredible deal that provided us so many benefits,” Venezia said.

SOURCE: Reuters

The End of Outsourcing?

in American Made, Manufacturing & Sourcing

After years of building what they hoped would boost profits by enhancing overseas operations, many U.S. manufacturers have become disillusioned by the lack of return on investment they had anticipated. Instead of finding cost-saving benefits overseas through outsourcing, they are finding headaches, which have spurred a growing number of American companies to head home and build upon the sturdy and sure bedrock of American stability and predictability.

This trend has come to be known as “nearsourcing.” It has been defined in professional publications as “producing products closer to where they are ultimately sold” or “the practice of getting work done or services performed in neighboring countries rather than in your own country.”Jimmy Alyea, writing for Supply Chain Analysis, provides an overview of some of the advantages American companies accrue when they move operations back home:

“The advantages of reversing low-cost supply chain strategies and embracing nearsourcing are many, including: no time-zone differences or lag time that prevents real-time communication and collaboration, fewer language and cultural barriers, lower business traveling costs to plan and oversee projects and work, shorter time to market in the case of manufacturing and reduced inventory holdings because of shortened transit times. Nearsourcing also supports the increased focus by firms on the importance of customer accommodation and fulfillment in order to achieve a strategic competitive advantage. Ultimately, a well-run, shortened supply chain is in large part dependent upon a firm’s logistical expertise.”

Many American manufacturers that have moved operations abroad have experienced a rude awakening.

American manufacturers that have moved operations to countries such as China and India have found themselves in for some rude awakenings, according to Jack Stack of The New York Times.“These countries usually require importers to pay for their goods up front and wait 90 days for the product. It also takes about 90 days to receive payment once an importer sells its product to a retailer. By the time the retailer sells the product and remits payment to the importer, it may take nine months or longer for a business to receive payment for outsourced goods. On the other hand, domestic manufacturers usually produce goods first and allow the client 60 days to remit payment. Thus, the company using nearsourcing receives an interest-free loan and payment from customers right about the time it pays the manufacturer.”

Then there is the realization by American manufacturers that were lured to foreign countries in search of cheap labor that while labor rates are rising (wiping out any labor cost advantages), they face the scourge of corruption, gripping poverty, hostile labor unions, crony courts, runaway intellectual property theft, inefficient labor, massive infrastructure deficiencies, skewed investment laws, security concerns, environmental meltdowns and host governments that expect strict adherence to their unfair and onerous rules and regulations.I recently reviewed a copy of Drewry Shipping Consultants’ Insight publication, which predicts that nearsourcing will increase, greatly tied to the uncertain growth rate of Internet shopping, for which consumers will soon demand same-day delivery. This will make it nearly impossible for companies that don’t have a domestic operational source to meet these shipping demands.

In its report, Drewry notes that after speaking to many shippers, the anecdotal evidence points to a significant increase in nearsourcing. “The trend is escalating for reasons that are easy to understand. Retailers need to offer more ‘made to measure’ goods that can be delivered to market a lot faster than from Asia. For example, a car or computer with a limited range of options doesn’t sell as well as models that can be sourced from closer to home with a wider range of cheap extras.”

American manufacturers and retailers are getting the message about the benefits of nearsourcing. U.S. retailers, in particular, are finding that they need to decrease cycle times, making it easier to constantly refresh merchandise. This keeps customers coming back into the store more often because they’re afraid of missing out on a new product.

Retailers from Target to The Children’s Place have discovered the advantages of nearsourcing. And in January of this year, Wal-Mart announced that it is increasing the sourcing of U.S. products by $50 billion over the next 10 years, hoping to boost U.S. manufacturing and jobs.

Manufacturers are also being reminded that U.S. labor is very flexible with a wide range of technical skills. This is accentuated by America being by far the choice destination of highly skilled immigrants. We must remember that legal immigration has always been essential to keeping America strong and vibrant. Attracting the world’s best talent must remain an important component of our economic growth strategy.

America is finding its sea legs when it comes to restoring our economy by boosting domestic manufacturing. A survey of 750 senior business executives worldwide, conducted in late 2012 by Ernst & Young, showed the number of executives that plan to nearsource previously outsourced activities will more than double in the next three years, from 14 percent to 35 percent.

For the American economy to recover and create jobs for 26 million unemployed or under-employed Americans, we all need to pull together. And that means U.S. manufacturers must demonstrate a commitment of reducing outsourcing and adopting nearshoring approaches to their businesses. There still is no stronger seal of approval throughout the world than when a product can proudly carry the stamp: Made in America.

SOURCE: The Manzella Report

A Return to Made in America: Why Manufacturing is Making a Comeback

in Economy, Manufacturing & Sourcing

By Brad Plumer

It’s hardly news when a U.S. firm moves its manufacturing operations abroad to China. But what about when a Chinese company sets up a factory in the United States?

That happened in January, when Lenovo, a Beijing-based computer maker, opened a new manufacturing line in Whitsett, N.C., to handle assembly of PCs, tablets, workstations and servers.The rationale? The company is expanding into the U.S. market and needs the flexibility to assemble units for speedy delivery across the country, says Jay Parker, Lenovo’s president for North America.But also — and this was crucial — the math added up. While it’s still cheaper to build things in China, those famously low Chinese wages have risen in recent years. “We reached the point where we could offset a portion of those labor costs by saving on logistics,” Parker says.

U.S. firms that have long operated abroad are making similar moves: Caterpillar, GE and Ford are among those that have announced that they’re shifting some manufacturing operations back to the United States. And economists are debating whether these stories are a blip — or whether they signal the beginning of a major renaissances for American manufacturing.

It’s easy to be skeptical. So far, the effect on jobs has been modest. Since January 2010, the United States has added 520,000 manufacturing jobs — and of those, 50,000 have come from overseas firms moving here, according to the Reshoring Initiative, an industry-led group. (That includes 115 in the new Lenovo plant.) That’s a decent number, but it pales beside the 6 million factory jobs that the Bureau of Labor Statistics says vanished between 2000 and 2009.

Yet the optimists counter that the logic of a coming renaissance is impeccable. Besides the shrinking wage gap between China and the United States, the productivity of the American worker keeps rising. And the surge in shale gas drilling gives the United States a wealth of cheap domestic energy to bolster industries such as petrochemicals.

All that could combine to make U.S. factories more competitive in the years ahead, not just with Europe and Japan, but with the manufacturing behemoth inChina. This shift likely won’t mean the United States will have 19 million manufacturing workers again, the way it did in the 1980s. For one thing, automation is still a powerful force. And the types of jobs that come back will be different from the ones that vanished. Still, any significant uptick in domestic manufacturing after a decades-long decline could bolster the economy and spur innovation.

“I think it’s fair to say this hasn’t all registered in the data just yet,” says Scott Paul, the president of the Alliance for American Manufacturing. “But we’re starting to lay the groundwork where we’ll start to see a real effect three to 10 years from now.”

Laying the groundwork

So what does that groundwork look like? For many analysts, the narrowing of the wage gap between China and the United States is the most significant factor.China has been getting wealthier, and its factory workers are demanding ever-higher wages. Whereas the gap in labor costs between the two countries was about $17 per hour in 2006, that could shrink to as little as $7 per hour by 2015, says Dan North, an economist with Euler Hermes, a credit insurer that works with manufacturers.

“If you’re a U.S. company and the advantage is only $7 per hour, suddenly it may be worth staying home,” North says. “If I stay here, I have lower inventory costs, lower transportation costs. I’m closer to my market, I can have higher-quality production and I can keep my technology.”

This notion appears to be catching on. In February 2012 survey from the Boston Consulting Group (BCG), 37 percent of U.S. manufacturers with sales above $1 billion said they were considering shifting some production from China to the United States. The factors they pointed to were not only that wages and benefits were rising in China, but the country is also enacting stricter labor laws and experiencing more frequent labor disputes and strikes.

“Companies are realizing it’s not as easy to do things in China as they thought,” says Hal Sirkin, a senior partner at Boston Consulting Group who has been predicting the convergence of labor costs since 2011.

The flip side is that American workers are becoming more attractive — for a mix of reasons. Worker productivity has been rising steadily over the years. Also, BCG says, the decline of U.S. organized labor is luring companies home, particularly to the nonunion South. Unions, for their part, have often responded by allowing wages to fall in order to keep jobs in the United States. Ford started bringing back production from China and Mexico after an agreement with the United Auto Workers let the company hire new “second-tier” workers at lower wages.

As a result, Sirkin’s research at BCG suggests that some industries could slowly migrate back from China. That includes industries such as plastic and rubber, machinery, electrical equipment and computers and electronics.

Nor is it just China. BCG also found that the United States is on pace to have lower manufacturing costs than Europe and Japan by 2015. Already, companies in those regions have been moving production here. Nissan, Honda, and Toyota are ramping up their exports from the United States. In 2008, Ikea opened a new furniture factory in Danville, Va., to cut shipping costs. The European aerospace company Airbus has just broken ground for a new factory in Mobile, Ala.

America’s glut of cheap natural gas from shale fracking is also attracting its subset of industries. Factories being built in Texas and Pennsylvania will convert natural gas into ethylene, a key ingredient in plastics and antifreeze. An Egyptian company, Orascom Construction, is building a $1.4 billion fertilizer plant in Iowa near a natural-gas pipeline.

Most of the evidence that “reshoring” is happening is anecdotal, and there’s a limit to how far it is likely to go. For one thing, North says, the industries most reliant on cheap labor — including textiles and mass-produced clothing — will likely never return to the United States. Moreover, China has built up a formidable manufacturing infrastructure that will keep many companies there, even as labor costs shift.

“Chinese suppliers have now developed dense supplier networks that now have their own capabilities for introducing new products,” says Suzanne Berger, a political science professor at the Massachusetts Institute of Technology who studies manufacturing. “And, of course, China is a market that’s growing extremely rapidly — so many companies will want to stay in close proximity to those customers.”

But the early signs are notable. Sirkin points out that his model of labor costs didn’t predict that companies would start coming back to the United States until 2015: “We’ve already seen more movement than we expected.”

Industry has changed

Policymakers’ efforts to bolster domestic manufacturing, however, will have to take into account how dramatically the industry has changed since the 1980s.

In a recent report, an MIT task force described how the U.S. manufacturing landscape is no longer dominated by large firms such as Dupont, IBM and Kodak that could handle every aspect of production themselves. Instead, the future of manufacturing will consist of smaller firms that may not always have enough money to train workers, commercialize new products and procure financing on their own.

“There are these holes in the ecosystem, and we have to think of another way to provide all these capabilities if we want to see manufacturing revived,” says Berger, a co-author of the report.

Some firms have partnered with local universities or governments to develop these capabilities, she says. In Rochester, N.Y., for instance, the demise of Kodak meant that there was no longer a dominant company paying to train new skilled workers. So smaller firms in the optics industry banded together to plan new community college curricula and fill the gap.

In New York, the state government has tried to support semiconductor manufacturing by bringing together private firms, research labs and degree programs to share common facilities, expensive equipment, training and research.

The Obama administration is spending $1 billion to fund similar hubs around the country. The first is the National Additive Manufacturing Innovative Institute in Youngstown, Ohio, which will focus on the development of 3-D printing and other processes for manufacturing objects from digital models.

According to the MIT report, such partnerships have the potential to be far more effective than the old model of handing out tax breaks for manufacturers. That’s because they don’t leave a state or locality at the mercy of a single firm that could leave at any time.

How many jobs will return?

There’s also the key question of how many jobs are likely to come back. The United States has 11.9 million manufacturing employees, and experts tend to agree we’re unlikely to see a return even to the much-diminished levels of the 1990s, when there were more than 17 million factory positions.

President Obama has set a more modest goal of 1 million new manufacturing jobs by the end of his second term. But Paul of the Alliance for American Manufacturing says the country is behind pace to achieve even that “reasonable goal.”

The new manufacturing jobs, meanwhile, will also be different from the jobs of old. For one, many plants are now setting up in the nonunion South, and organized labor has largely been shut out of the manufacturing renaissance. On balance, all of the job gains since 2009 have been nonunion. And, unlike 30 years ago, manufacturing jobs no longer have higher average annual earnings than the typical private-sector worker.

At the same time, technological advances will continue to displace factory jobs in the United States and elsewhere. Germany and China — two manufacturing titans — are slowly losing positions because of automation. A report last fall by the McKinsey Global Institute found that the price of robots relative to the cost of human labor has fallen 40 to 50 percent since 1990, and that trend is expected to continue.

Paul, however, points out that Germany has lost jobs at a much slower pace than the United States over the past decade, which suggests that there’s room for improvement. “There’s nothing inevitable about the sort of steep declines we’ve seen here.”

What’s more, experts point out that there are still plenty of other advantages to bringing manufacturing back home. Manufacturing firms tend to spend more on research and development than other businesses, and recent research has focused on the fact that the act of building things can lead to key innovations. Procter & Gamble and Gillette are two companies known for their run-of-the-mill products — diapers and razors — that have turned innovations in the manufacturing process into a key part of their business.

What’s more, the MIT report says, manufacturing can be a potent driver of other service-industry jobs. A small company in Ohio that makes protective sleeves for pipelines, say, will be in a good position to offer technical support for oil platforms and other companies.

“We have the wrong picture if we think on the one hand there’s manufacturing and on the other hand services,” Berger says. “And the idea that we’re going to just go from one to the other is wrong. Almost all valuable things are some bundle of manufactured goods plus services attached.”

SOURCE: Washington Post

The Anti-Manufacturing Forces in Washington

in Uncategorized

Gilbert B. Kaplan
Former Deputy Assistant and Acting Assistant Secretary of the U.S. Department of Commerce

Hard as it may be to believe, there are forces in Washington that oppose the revival of the U.S. manufacturing sector. Who are they, and how do we counter their efforts? I think — roughly — they fall into five groups.

First, we have the people who are making big money by moving manufacturing off-shore. This includes some retailers that make no bones about buying everything from the lowest price source possible, even if that means closing down U.S. plants and buying from producers that ignore even rudimentary environmental and labor laws. It also includes major U.S. multinationals that find it in their interests to move U.S. jobs abroad because of lower wages and because many foreign countries will give them big subsidies to abandon their U.S. roots and obligations. These companies fight against any law or policy change that will keep manufacturing here, or that seeks to incentivize bringing it back.

Second, are the people who believe without reservation in free trade — no matter what. To them, any changes in trade law or policy to toughen our stance violates some basic philosophical belief and will never be countenanced. Certainly open trade has helped world growth and the development of many countries, such as Korea and Brazil. But it is almost impossible to talk to these people about our manufacturing decline. What they do not understand is that the U.S. is fighting, so to speak, a two-front war when it comes to trade. On the one hand, we are seeking reasonable market opening and regulatory changes to expand the benefits of free trade — such as the effort to create a U.S./EU Free Trade Agreement. But on the other hand, we are dealing with blatantly mercantilist export machines that are seeking to harm the U.S. economy, or at least certainly couldn’t care less if they do. We see this kind of conduct in China. We cannot treat both kinds of foreign trading partners (or should we say competitors) the same. It would be like saying we must — in our foreign policy — have totally consistent rules of the road with every other country no matter who they are — for example the same policy toward North Korea that we have toward Italy. No one would even propose something so absurd. But classic free trade proselytizers want us to treat every country with the same set of rules, no matter how different their systems or motivations.

Third, we have the people who believe that trade is less important than foreign policy, and so any time we might want to take a position in support of U.S. manufacturing — a position that may rub one of our trading partners the wrong way — they are usually against it for foreign policy reasons. One example is our continual reluctance to take very strong, fast action against currency undervaluation, despite the clear evidence of the harm it is causing us. This appalling lack of action is brought about by a number of factors, one of them being the concern that our diplomatic relationships are more important than dealing with trade problems.

Fourth, there are the people who have undercut our ability to apply the trade laws to unfair trade practices. We used to have a robust body of trade laws, but years of negative decisions at the World Trade Organization (“WTO”) — which now has the right to oversee the application of our trade cases — have cut back on their efficacy. Most recently the WTO, in a truly astounding decision, said that even when a company in China is owned by the Chinese government that does not mean the company is following the directives of the Chinese government in terms of subsidizing or assisting its customers. A rudimentary knowledge of the Chinese Communist system shows the fallacies in this thinking; a more thorough knowledge shows it is totally absurd. These WTO bureaucrats are in Geneva, but many in the U.S. government have failed to stand up strongly enough against these wrong-headed WTO decisions.

Finally, many conventional economists have long argued that there is no reason to have manufacturing in the U.S. It is just as good to have service jobs, they say. But that argument, at its root, makes no sense. Service jobs do not spin off other jobs to nearly the same extent that a major manufacturing plant does. They are also generally lower paid, and they don’t spawn critical innovation and research and development.

We need to counter these arguments, and look more broadly at the problem of manufacturing decline. To that end, I would like to see the creation of a Center for United States Manufacturing Revival at a major U.S. university. The revival of U.S. manufacturing — looked at from an academic perspective — will be a multidisciplinary effort requiring expertise in economics, law, engineering, business, public policy, and education, among other disciplines. An academic center bringing together these different perspectives would be very helpful. Scholars should analyze the real costs of the enormous manufacturing trade deficit, of the decimation of United States families and communities, and of the destruction of R&D capacity in our country — all the result of harm to the manufacturing base. I have begun to talk with universities and funding sources about this idea.

The U.S. problem with manufacturing was a central issue in the Presidential campaign and numerous Congressional races. Both Democrats and Republicans took up the issue. But progress in this area remains incremental. Why? The simple fact is that there are political and policy groups arrayed on the other side of the issue. Some people in Washington do not believe it is in the U.S. interest to take the actions we need to take to correct this problem. It is not that we have just made a mistake or lack the wisdom to find solutions. Nor is it the case that manufacturing base deterioration is a natural evolution that we cannot control. Rather, in the past, and in the present, we are adopting policies that are undercutting the manufacturing base. We need to confront the nay-sayers and turn this ship around.

SOURCE: The Huffington Post

Loose Oversight of ‘Made in USA’ Export Certificates Undermines U.S. Business, Experts Warn

in Uncategorized

John D. Oravecz and Andrew Conte

To avoid always having to stamp documents to verify shipments originated in the United States, a chamber of commerce near Chicago’s O’Hare airport leases its seals to busy exporters for $250 a year.

It would be too much work for a chamber employee to stamp each document, said Shirlanne Lemm, president of the Greater O’Hare Association of Industry and Commerce. Besides, she asked, how much would chamber employees know about the shipments?

“We don’t necessarily do that all the time,” Lemm told the Tribune-Review. “If someone is doing (exports) a lot, we’ll talk to them about it. Someone has to sign for it, and they’re taking responsibility.”

Experts on international shipments warn that the United States’ loose system of having unregulated chambers of commerce verify the origins of exports undermines the credibility of the nation’s foreign shipments and threatens American producers.

Moreover, the practice could harm unsuspecting consumers if a substandard product makes its way into the marketplace.

“In the U.S., there is zero oversight or enforcement because it’s not considered to be a health or safety issue,” said Doug Jacobson, a Washington attorney who specializes in trade compliance. “A lot of this stuff is below the radar screen. Nobody likes to talk about it, but it’s definitely there. It renders the entire U.S. certificate of origin process meaningless.”

Exporters and shippers are supposed to prepare a commercial invoice that details what they export and the certificate of origin, which typically receives an embossed stamp or seal that’s signed, dated and notarized. U.S. chambers stamp an estimated 4 million certificates of origin each year.

Although chambers are supposed to closely examine export paperwork, critics said they do not always do so.

Unlike many countries, the United States does not limit who can start a chamber of commerce and doesn’t closely regulate who stamps products to verify their origin, said Gary Toebben, president of the Los Angeles Chamber of Commerce. Nothing would stop a shipping company from starting a “chamber of commerce” and stamping documents, he said.

Other critics say it’s common practice for some chambers to sell pre-stamped pads of blank certificates that exporters fill out. Lemm said her chamber does not do that.

“The concern is that some countries would decide they would no longer accept shipments from the United States because they identified shipments with certificates of origin that were not validated the way they expected them to be,” Toebben explained.

The U.S. Trade Representative’s Office declined to comment but referred to World Trade Organization negotiations with trading partners that identified certificates of origin and other required export approvals as barriers to trade, and said the government has taken a position against them.

Lisa Burgess, spokeswoman for the U.S. Chamber in Washington, declined to comment, saying its expert on the subject was overseas and unavailable.

The International Chamber of Commerce, based in Paris, has said its members should verify shipment paperwork before stamping it.

International agreements govern trade worldwide, starting with the Geneva Convention of 1923 and more recently the Kyoto Convention of 2005.

Many countries require a certificate of origin for imports, and the international agreements say chambers should do the verification. The certificates can be used to set import duties and tariffs, which vary by nation.

WEALTH OF DISCREPANCIES

The international implications of failing to properly verify certificates can be serious, said Alaa Issa, consul general for Egypt in Houston. His office started looking at certificates of origin more closely when beef that supposedly came from the United States turned out to be Brazilian and past its expiration date.

“What we found were quite a number of discrepancies,” Issa said.

His office identified documents stamped by fictitious chambers of commerce and others from legitimate chambers that had unauthorized signatures. In two cases, he said, papers were signed by individuals who had left their chambers of commerce more than five years earlier.

In the beef case, Issa said a U.S. certificate of origin eased its entry into Egypt and then complicated authorities’ ability to trace the source. A similar but separate case involved a shipment of powdered milk, he said.

American trade officials and chamber executives often are surprised that the rest of the world takes the practice seriously, said Carman Rossi, president of E-Certify, an electronic certification company based in Adelaide, Australia. His company allows chambers to issue electronic certificates of origin.

“I’ve had quite a few people tell me they’ve lent out their seal,” Rossi said. “I was astounded to find that chambers in U.S. were doing that and admitting it.”

Importing countries rely on the certificates, he said, adding that it is fraudulent for an exporter or freight forwarder to acquire and use a chamber seal.

“It’s like Dracula in a blood bank,” Rossi said. “Who’s to know whether the freight-forwarder is rubber-stamping whatever the papers say? … They have a vested interest in getting the goods overseas without getting involved in the details.”

WATCHFUL IN PITTSBURGH

The 109-year-old Pittsburgh Airport Area Chamber of Commerce in Moon has issued certificates of origin since at least the 1990s, said Doug Keeter, membership director, who oversees the process.

The chamber stamps its embossed seal on shippers’ documents if they’re in order. Then a staff member who processes the paperwork signs the certificate in blue ink.

Typically, the chamber issues about 130 paper-based certificates each month and about 50 electronic ones. The chamber charges members $10 per page and nonmembers $17, generating about $30,000 a year in revenue, said Bernadette Puzzuole, interim CEO.

“It’s a nice item in our budget,” she said.

An employee of R.L. Swearer, a shipping company in Moon, goes to the chamber at least once a week to get a certificate of origin stamp, said Chas Watson, vice president. Although his company follows the rules closely, he said not everyone does — if only to eliminate a step in the process.

“If someone could cut a corner, they generally will,” Watson said. “If you’re going to import from China, slap a ‘Made in the USA’ sticker on it and certify it was made in the USA, then you’re committing fraud on many levels. Most people are not doing that; they’re doing it because it’s convenient.”

SOURCE: TribLIVE.com

Eight-Story Building Collapses in Bangladesh: Who Really Pays For Our Cheap Clothes?

in Manufacturing

Eight-story building collapses in Bangladesh

Anna McMullen
Special for CNN

(CNN) — The sad fact behind the building collapse in Bangladesh in which hundreds died is that it isn’t an isolated problem. The story will leave the headlines at the end of this week but on Monday hundreds of thousands of workers will return to factories that are frankly further tragedies waiting to happen, and will keep producing clothes for high street brands.

Seven hundred workers have died in factory collapses and fires in this very small region outside Dhaka alone in the last decade.

Savar, where the building collapse took place, is a swampland (yes, swampland…) north of the Bangladeshi capital which has seen mass growth in recent years
.

This same region was the site of a horrific factory fire in November last year, when 112 workers burned alive in a building with no fire exits.

Hundreds of factories are being thrown up in a short space of time, with limited building regulations, to meet the growing demand from western brands for cheap export clothing. And it is cheap. Wages for Bangladeshi workers are the lowest in Asia, aside from the recently opened Myanmar industry, at $37 a month.

As the demand for cheap clothing grows in the west, brands continue to look for ways to race to the bottom on prices, and sadly this involves cutting corners on health and safety. Brands will by no means admit to this.

The prices that they pay, they assure us, are enough to pay workers enough to live on and keep factories in tip top condition. But, faced with constantly decreasing incomes, factory owners inevitably let things slide, like replacing faulty machinery or fixing worrying building subsidence…

When garment factories were still mainly based in retail countries, consumers knew people who held jobs in factories, and had a personal connection with those who had been injured or put at risk in the workplace.

But with globalization has come consumer apathy. Who cares about people who make clothing? As long as it is cheap we will buy it.

Especially in a recession, cheap clothing is a welcome industry for many. People in western countries living on the poverty line need to buy clothes for their children.

Jobs in Bangladesh are also vital for a country where hundreds of thousands of people live below the poverty line. It isn’t the responsibility of the consumer to feel guilty about buying what is readily available in shops.

Business must stop just holding up its hands to say: “It is not our fault — they bought it.” The responsibility for ensuring that a product was made with human rights in mind has to fall somewhere, and the United Nations guiding principles on business and human rights says that it falls jointly to states and mass corporate businesses to “protect, respect and remedy” human rights.

In short, the brands, not the consumer, are the ones who must take responsibility for the endemic problems that this industry faces.

So what can be done? Many western brands rely on audits and in-house checks to monitor whether conditions in their factories are up to scratch. In a country where a little hand shake and a small exchange of money gets the job done, this process often fails to give an accurate picture of factory conditions, building and fire safety.

The brands, not the consumer, are the ones who must take responsibility for the endemic problems that this industry faces.
Anna McMullen

It is common for fire extinguishers to be borrowed for inspection day, for workers to be schooled in what answers they have to give when asked questions.

The Clean Clothes Campaign together with local and global unions and labor rights organizations, has developed a program that hopes to solve this. The Bangladesh Building and Fire Safety Agreement is a proposal for a sector-wide initiative that includes independent building inspections, worker rights training, public disclosure and a long-overdue review of safety standards.

The crucial element of this is that unions and worker led committees take a central role in monitoring and reporting back on improvements that need to be made, in a public way.

This transparent and practical agreement is unique in that it is supported by all key labor stakeholders in Bangladesh and internationally. So far, U.S. company PVH, owner of Calvin Klein and Tommy Hilfiger, and German retailer Tchibo have signed up to the program, but it needs a critical mass of brand support to be implemented.

Joint memorandam of understanding on fire and building safety:

Labour Behind the Label and others are calling on all brands sourcing from Bangladesh to publicly sign up to take part in the building and fire safety scheme to make transparent, worker-led improvements to the industry.

In the wake of tragedies such as yesterday’s building collapse, the Tazreen fire in November, and the nearby Spectrum factory collapse some years ago, something must be done to make a change. This proposal is the best on the table by far.

How many more deaths will it take to move brands from making CSR statements of regret, to investing in a sustainable and safe industry? We hope none.

SOURCE: CNN

Editor’s note: Anna McMullen is a campaigner for Labour Behind the Label which calls itself a group “that supports garment workers’ efforts worldwide to improve their working conditions.” She works with global partners on campaigns around poverty wages in the fashion industry, and has co-authored research reports on labor rights. Follow @labourlabel on Twitter. The opinions expressed in this commentary are solely those of Anna McMullen.

Making Manufacturing “Cool” for our Youth

in Uncategorized

If we want to attract today’s youth to manufacturing careers, We need to make manufacturing “cool,” so they will choose to be part of the modern advanced manufacturing. We need to show them what great career opportunities exist in the industry and expose them to the variety of career opportunities in manufacturing.

Most outsiders have no idea of the variety of management jobs available at manufacturing companies. Besides the usual executive jobs, other management jobs available at medium and large manufacturers are in these areas: operations, plant and facilities, manufacturing and production, purchasing and procurement, sales and marketing, quality, supply chain, lean manufacturing and continuous improvement, human resources, R&D and product development, and safety and regulatory compliance.

In an article in July 2, 2008 issue of Industry Week magazine, John Madigan, a consultant with Madigan Associates, observed, “Jobs paying $20 per hour that historically enabled wage earners to support a middle-class standard of living are leaving the U.S. Public sector aside; only 16 percent of today’s workers earn the $20-per-hour baseline wage, down 60 percent since 1979.

We need to help our youth realize that manufacturing careers, and particularly the advanced manufacturing that now dominates the U.S. industrial sector, creates more wealth than any other industry. Moreover, manufacturing pays higher wages and provides greater benefits, on average, than other industries. For example, in 2010, the average U.S. manufacturing worker earned $77,186 annually, including pay and benefits. The average non-manufacturing worker earned $56,436.

The Society of Manufacturing Engineers Education Foundation (SME) is working to change the image of manufacturing and make it “cool” by sponsoring the ”Manufacturing is Cool” award winning, interactive website, which challenges and engages students in basic engineering and science principles and provides interesting and useful educational resources for teachers. This fun and information rich website was recently “re-engineered” (updated) and marketed around the country. SME has received positive feedback from teachers, parents, and students about its usefulness.

“The explosion of technology and advanced manufacturing processes are evolving faster than it can be learned and applied,” says Bart A. Aslin, CEO, SME Education Foundation. “We designed the Manufacturing is Cool website to inspire, prepare and support young people for careers in advanced manufacturing without patronizing them. We’re giving them access to real-world – people, jobs and technologies, all critical to them finding their place in a global economy.”

The site engages students in basic engineering and science principles and provides interesting and useful educational resources for parents and teachers. Today’s tech-savvy K-12 audience can explore the exciting world of advanced manufacturing engineering 24/7 to learn about the careers it offers and how its advanced technologies affect their daily lives.

In 2011, the SME Education Foundation initiated PRIME® (Partnership Response in Manufacturing Education) as a major national initiative to take a community-based approach to advanced manufacturing education and create strong partnerships between exemplary schools, businesses and organizations. Through its advanced manufacturing education program, SME is re-tooling and building the pipeline with technically skilled workers as business, industry and academia form partnerships and accelerate their collaborative efforts to provide funding, equipment, mentoring, teacher training and co-op programs for high school students to begin manufacturing products in the classroom. The manufacturing sector is on the upswing and public perception of manufacturing as a career is more positive as students see first-hand the kinds of things they are capable of making.
Since 2011, the following schools have been designated as PRIME®schools:

ALABAMA:
Calera High School provides an enrollment of approximately 900 students, grades 9-12, provides a pre-engineering program offers opportunities for student scholastic achievement with science, technology, engineering and math (STEM) curriculum.

CALIFORNIA:
Hawthorne High School, Los Angeles, CA – the School of Engineering and Manufacturing has 347 students and has a rigorous educational program built on the Project Lead the Way (PLTW) curriculum

Esperanza High School, Anaheim, California – a comprehensive four-year public high school serving an enrollment of 1808 students in the northeast part of Orange County.

Petaluma High School, Petaluma, CA – a public high school in which students can self-select a pathway leading to certification at graduation, leading to post-secondary opportunities, credit enhancement, or directly to the workforce.

ILLINOIS:
Wheeling High School, Wheeling, Il – is a public, culturally diverse, four-year comprehensive high school with a STEM providing college credit bearing courses and entry level career certifications including information technology, engineering, architecture and advanced manufacturing. It has a newly equipped fabrication, prototyping lab rivaling local manufacturing companies and a team of engineering students who are quickly becoming advanced manufacturing savvy. The lab includes a 3D printer for rapid prototyping, HAAS CNC lathes and mill, CNC Plasma Cutter, CNC training stations, robotic workstation, surface grinder and more.

“Our students graduate with more than a diploma in hand,” says Dr. Lazaro J. Lopez, principal, Wheeling High School. “Students have an opportunity to leave here with 14 college credits and be on their way to securing an associate degree in manufacturing technology as well as NIMS certification in two or three areas, plus all four MSSC safety certifications. Students who want to work after graduation will be able to meet the expectations of the hiring manufacturer.”

INDIANA:
McKenzie Center for Innovation and Technology, Indianapolis, IN. The McKenzie Center for Innovation and Technology houses state-of-the art equipment, materials and curriculum. A high concentration of student population is involved with PLTW courses in pre-engineering and biomedical science. Students receive dual college credit and national certifications in their fields of study.

Walker Career Center, Indianapolis, IN offers 24 career and technical education programs equipped with state-of the-art technology. Each program offers excellent instruction and most programs lead to an industry certification or college dual credit which in most cases, is free to their students.

The Walker Center also provides Computer Integrated Manufacturing (CIM) using Chris and Jim’s CIM, a web resource that makes it possible for students, teachers and even industry pros to find solutions to problems they migh
t enco
unter with this technology. This resource site, created by CIM educators Jim Hanson of Walker Career Center and Chris Hurd of Cazenovia High School in New York, started as a tool to help their students continue to learn outside of the classroom but developed into a knowledge, research and exploration instrument used by many industry professionals. Chris and Jim’s CIM is another way to help educate and train a new generation of engineers to deal with state-of-the-art technology in designing, manufacturing, maintaining, selecting, and procuring manufacturing engineering systems.

IOWA:
Cedar Falls High School provides courses that satisfy elective requirements for World Studies, Personal Economics, Health, Practical Arts, and General Administrative. Because of a partnership with Hawkeye Community College, students may enroll in college-level courses taught during the regular school day. Upon successful completion of the course, students will earn both high school and college credit.

MASSACHUSETTS:
Westfield Vocational Technical High Schoolrecognizes career and technical education as an integral part of the public school system. Westfield students are prepared for careers which are common in modern industry and offer an abundance of job opportunities upon graduation.

MICHIGAN:
The Jackson Area Career Center provides its students with career and technical educational classes, industry certifications, and free college credit, and guidance counseling services. More than 38,000 students have experienced Career Center CTE opportunities and possibilities through hands-on and applied learning.

MISSOURI:
Summit Technology Academy, Kansas City – located on the campus of the Summit Technology Center in Lee’s Summit. It is an off-campus pre-professional learning opportunity for high school students seriously interested in the course technology-based courses of study. Professional IT certifications and dual college credit is offered through Metropolitan Community College, University of Central Missouri, Missouri University of Science and Technology, and the University of Missouri-Kansas City.

OHIO:
Centerville High School in Dayton provides a curriculum that includes vocational courses in the Performing Arts, Music, Preparatory College-Career, and the School of Possibilities offering an alternative educational pathway. It also offers 25 Advanced Placement tests in 18 courses in science, mathematics, history, government, language, economics, and psychology.

Kettering Fairmont High School is a public four-year comprehensive high school with a STEM (Science, Technology, Engineering and Math) based education. A majority of students move on to higher education or specialized training. Kettering is an industrial first-ring suburb of Dayton, Ohio that has a local manufacturing base and is in close proximity to Wright-Patterson Air Force Base. The curriculum supports these industries with PLTW manufacturing curriculum.

OKLAHOMA:
Francis Tuttle Technology Center in Oklahoma City encompasses six public school districts serving 11,780 students who may attend Francis Tuttle tuition-free while in high school. The Center works closely with business and education partners with specific focus on workforce needs of the marketplace with the delivery of on time, just-in-time, customized training.

WISCONSIN:
Lynde & Harry Bradley Technology and Trade School is the premier technology and trade school of Milwaukee and offers a broad range of scholastic options, including clear pathways for students into four-year universities, tech/trade education, and apprenticeships.

During the previous recession, the National Association of Manufacturers heard from its members that they were still having trouble attracting employees with the right mix of skills in certain job functions despite layoffs. To learn more, NAM and Deloitte & Touche conducted extensive quantitative and qualitative research across the U.S. They found that an estimated 80 percent of manufacturers reported a moderate-to-serious shortage of qualified job applicants during the recent recession, a problem growing increasingly urgent with the increase in global competition and retirement of Baby Boomers.

They also found that manufacturing has an outdated image, filled with stereotypes of assembly line jobs, that has kept young people from pursuing careers in it. The “Dream It. Do It TM” campaign was created because these perceptions are out-of-step with manufacturing’s broad range of interesting and financially rewarding careers. Examples include an electrical engineer for a private jet manufacturer, a product developer for a candy manufacturing plant, or a designer at an MP3 manufacturing company.

NAM’s Manufacturing Institute/Center for Workforce Success received almost $500,000 in November 2004 from Elaine Chao, Secretary of Labor, for this campaign. Over a period of 36 months, the campaign created, tested, and disseminated a growing set of creative materials. These include radio advertising spots, billboard designs, newspaper and magazine ads, student and parent brochures, and a style-branding guide. The materials are ready to use and provide the national brand to local users.

The campaign has formed strong and committed coalitions with local civic, political, education, and business entities; launched a focused advertising campaign; created a world-class website on the array of highly paid manufacturing jobs; and formed local partnerships with community colleges, technical schools and universities for students pursuing manufacturing careers.

NAM’s “Dream It. Do It TM” Manufacturing Careers Campaign is currently operating in the following regions:

Phoenix, Arizona
Connecticut
Florida

Will County, Illinois
Indiana
Southeast Indiana
Kentucky
Western Michigan
West Central Minnesota
Kansas City, Missouri
Mississippi
Nevada
Chautauqua County, NY
Northeast Ohio
Pennsylvania
Upstate South Carolina
The Tennessee Valley
North and South Central Texas
Virginia
Southwest Virginia
Washington State
Wisconsin

The SME and NAM programs described above will help expose our youth to the modern manufacturing environment and change the image of manufacturing to one that is “cool” and full of exciting career opportunities for our youth.

SOURCE: Saving US Manufacturing

Senators Appeal For Military To Buy American Made Athletic Footwear For Soldiers

in Uncategorized

WASHINGTON, April 23, 2013 /PRNewswire via COMTEX/ — The following is being released by New Balance Athletic Shoe, Inc.:

Senators are asking President Obama to apply the Berry Amendment to athletic footwear so that manufacturing jobs can be created in the United States and military trainees receive American-made goods rather than foreign products.

In an April 19th letter to the President, a bi-partisan group of 15 Senators wrote that they shared the President’s objective outlined in his State of the Union Address to encourage manufacturers to create more jobs in America.

“We can increase American footwear manufacturing jobs at no cost to the federal government simply by your directing the Department of Defense (DOD) to align its athletic footwear procurement policies to those it has already adopted for other footwear, such as combat boots, service shoes, and other uniform items,” the letter said. It urged the President “to insist that footwear worn by our troops is top quality and made in America in keeping with the intent of the law known as the ‘Berry Amendment.'”

Written by Senators Susan Collins (R-ME) and Angus King (I-ME), the letter was signed by Sen. Sherrod Brown (D-OH), Sen. Jack Reed (D-RI), Sen. Lindsey Graham (R-SC), Sen. Sheldon Whitehouse (D-RI), Sen. Jeanne Shaheen (D-NH), Sen. Roy Blunt (R- MO), Sen. John Boozman (R-AR), Sen. Richard Blumenthal (D-CT), Sen. Kelly Ayotte (R-NH), Sen. Elizabeth Warren (D-MA), Sen. Mo Cowan (D-MA), Sen. Robert Casey Jr. (D-PA) and Sen. Chris Murphy (D-CT).

The Berry Amendment was enacted in 1941 to ensure that American soldiers trained and operated in American-made materials whenever possible. As required by the law, the Defense Department purchases combat boots, service shoes, and other uniform apparel that is made in America for military recruits. For decades, American-made footwear was treated the same way.

But under new polices enacted over the last 11 years, the acquisition process no longer directly procures American-made athletic footwear for incoming recruits and other personnel. Now, military personnel receive a cash allowance to “purchase” the athletic footwear of their choice regardless of where it is manufactured.

The cash allowances for athletic shoes are valued at about $15 million annually, which far surpasses the minimum acquisition threshold of $150,000 that triggers compliance under the Berry Amendment. In their letter, the Senators noted that the Defense Logistics Agency has awarded more than $36 million since October 2012 to domestic companies for other footwear such as combat boots and shoes.

The Defense Department’s policy shift has placed jobs in jeopardy in states, such as Maine and Massachusetts, where New Balance Athletic Shoe, Inc. has offices and plants. New Balance is the last surviving American athletic footwear manufacturer.

“Maine has a long and proud shoemaking history, and the men and women who work in the New Balance factories in our state are part of that legacy,” said Sen. Collins. “The Department of Defense can make a sound investment in American factories, providing good-paying manufacturing jobs in Maine, and at no added cost to the government.”

Added Sen. King: “Maine’s shoemakers, including the talented workforce at New Balance, produce some of the highest quality footwear in the United States and can undoubtedly meet the diverse needs of our servicemen and women. The Department of Defense needs to support our highly competitive, domestic athletic shoe manufacturers in the same way it does combat boot and shoe manufacturers, just like the Berry Amendment always intended.”

Matt LeBretton, Director of Public Affairs for New Balance, said the language in the Defense Department’s Acquisition Regulations System (DFARS) clearly includes footwear among the clothing covered by the Berry Amendment. He said that athletic footwear should be made in America whether it is purchased by the military for its personnel or is purchased through cash allowances.”

“The Berry Amendment should apply,” said Mr. LeBretton. “Our industry has come together to request that the DOD simply follow their own rules and allow for a competitive environment where companies that are committed to manufacturing in the United States are encouraged to do so. We are hopeful that the Administration will correct this inequity and support domestic manufacturers.”

Of the company’s more than 1350 manufacturing associates, about 900 are located in Maine.

In October, Representatives Mike Michaud (D-ME) and Duncan Hunter (R-CA) sent a bipartisan letter signed by 50 Members of Congress to the Defense Department, asking that athletic footwear be included under the Berry Amendment.

“Our effort is gaining momentum. Americans take pride in what’s produced on our soil,” Mr. LeBretton said. “We believe the White House will agree that it is important to produce jobs for Americans and to outfit our armed forces with American-made goods.”

SOURCE New Balance Athletic Shoe, Inc
Media Contacts:Michael K. Frisby 202.625.4328 Paula Gates 617.488.2853

SOURCE: MarketWatch

Has China's Economy Hit a ‘Dead End’?

in Uncategorized

Getty Inages

Ansuya Harjani
Assistant Producer, CNBC Asia

China’s disappointing economic growth that came in at 7.7 percent in the first quarter, when the market was expecting an expansion of 8 percent, is leading to a loss of confidence in the outlook for the world’s second largest economy.

“Slowing first quarter 2013 GDP [gross domestic product] growth despite massive credit expansion, much of it off balance sheet, spells bad, bad news for the Chinese economy,” Patrick Chovanec, chief strategist at Silvercrest Asset Management tweeted following the release of the data.

When “exploding” credit growth is met by slower economic growth, this equates to a “dead end,” he added on Twitter.

Despite stabilization in the global economy, support from the government’s $157 billion infrastructure stimulus package unveiled in the second half of 2012 and strong credit issuance, China’s economy has failed to live up to expectations in the first three months of the year, said experts.

Robust credit issuance – which rose by almost 60 percent in the first quarter from a year earlier – is no longer able to generate the same level of growth as it did compared to a decade ago, said analysts.

Back in the mid-2000s, one yuan of credit generated around one yuan of nominal GDP. In 2012, three yuan of credit generated around 1 yuan of nominal GDP, according to financial analysis firm IHS.

“It’s shocking. The fact that growth slowed from the fourth quarter is concerning. One now has to question forecasts that assumed improvements in the global economy are going to translate into higher Chinese growth,” said Tim Condon, head of research for Asia, ING, who had expected 8.1 percent growth for the first quarter.

“We have lost confidence in a robust recovery,” added Alistair Thornton, senior China economist at IHS. “Another year of propped-up growth via state spending and a credit deluge would, we fear, push China dangerously close to proving Wen Jiabao correct – that the current economic model is ‘unsustainable’.”

In his final speech as Premier in March, Wen Jiabao said the country lacks a sustainable growth model, noting that in the domestic economy, “unbalanced, uncoordinated and unsustainable development remains a prominent problem.”

Slowdown in Industrial Output Worrying
Of the data released on Monday, economists say the most telling indicator of weakness in the economy is the deceleration in industrial production in March to 8.9 percent from an expected increase of over 10 percent. In August 2012 when hard landing fears were running high industrial production also grew at the same pace.

“While August 2012 proved the bottom for last year’s downturn, we doubt March will be the turning-point for 2013, given macro policy has shifted to a tighter stance with renewed controls on the housing market, local government financing vehicles and wealth management products,” Thornton said.

Confirming sluggish activity in the industrial sector, China’s electricity consumption rose by 4.3 percent in the first quarter – much slower than the 6.8 percent seen in the same period last year.

Growth Bad Enough for Stimulus?
Some experts including Vasu Menon, vice president of wealth management at OCBC, believe the lower-than-expected growth numbers could prompt the government to unveil fresh measures to support the economy.

“You might see modest action out of the authorities, they could come out with a mini stimulus package to kick start the economy. They want to see even distribution of growth, at the same time the government wants to make sure China doesn’t fall off the cliff you need to ramp up domestic demand,” Menon said.

ANZ’s chief China economist Liu Li-gang expects GDP growth to pick up to around 8 percent in the second and third quarters. “With external side risks diminishing and domestic credit picking up strongly we should have an upturn in the second quarter.”

SOURCE: CNBC

Is The Successor To Manufacturing Jobs … Manufacturing?

in Uncategorized

Can “strategic plans” for different communities help a manufacturing renaissance? (AP)

Jim Tankersley

When the factory jobs disappear, what comes next?

That’s one of the most important economic questions America has confronted over the last decade-plus – where are the new industries, the new big ideas, the new jobs that should be springing up to replace the millions of manufacturing jobs lost to outsourcing and automation?

President Obama hasn’t had much success cultivating a big new sector to fill that vacuum. Now, his administration is trying something small. It’s a pilot program to encourage new industry development in cities that have shed factory jobs. And the new industry it seeks to develop is – yep – manufacturing.

Obama’s acting commerce secretary, Rebecca Blank, announced a small-bore program Wednesday that hopes to plant the seeds of new, advanced manufacturing activity in cities across the country. (If the goal sounds familiar, it is – Obama has been preaching the virtues of advanced manufacturing since he first ran for president, like so many other American politicians.)

This year, the program will offer grants to 20 to 25 communities, of about $200,000 each, to write “strategic plans” for their advanced manufacturing futures. The plans are supposed to say what each region is good at, what sort of product it might become a manufacturing hub for, and what federal help the region needs to make that happen. Blank calls that investing in “industrial ecosystems.”

“What we’re trying to do is give communities an incentive to change their thinking – to think, how do we attract new investment? – instead of coping with the loss of manufacturing,” she said. 2014 budget proposes giving five or six of those communities grants of about $20 million each, to help make their manufacturing infrastructure dreams come true.

It’s a relatively small amount, and Blank didn’t exactly raise expectations that it will lead to millions of new factory jobs, especially because manufacturing today is far less labor-intensive than it used to be.

But she hopes the proposals will set off a happy chain of activity in cities that have been beset by job losses, with new factory work driving more business activity (and job creation) to support it, along with new research that could lead to new industries.

“There are a lot of reasons to want more advanced manufacturing located in the United States beyond just job creation,” she said. “And the most important one is, advanced manufacturing is often on the cutting edge of research and development.”

Problem is, America is staring at a huge factory employment void – and needs a lot of job creation to fill it. University of Chicago economists recently found that manufacturing employment declines explain half of the increase in joblessness among men without college degrees in the past 10 years.

The dominant industry that replaced those jobs, in the mid-2000s, was housing. And that was driven by a bubble, which popped.

SOURCE: Washington Post

New Study Finds China Manufacturing Costs Rising to US Level

in Uncategorized

Philip LeBeau
CNBC Auto and Airline Industry Reporter

Walk onto the shop floor at Prince Industries in Shanghai, China and it looks like most other manufacturing plants in this country. It’s busy running two shifts, cranking out components that will be shipped to major manufacturers like Caterpillar, Siemens, and Honeywell

But change is in the air..

The cost of manufacturing in China is going up and rising quickly.

“It’s something that we anticipated when we went to China, we just didn’t know how quick it would happen,” said Mark Miller, CEO of Prince Industries.

China and US Costs Even by ’15
China is no longer a slam dunk for manufacturers looking for the lowest cost for operations.

In fact, a new study by the consulting firm AlixPartners estimates by 2015 the cost of outsourcing manufacturing to China will be equal to the cost of manufacturing in the U.S.

“The Chinese manufacturing cost advantage has eroded dramatically in the last few years,” said Steve Maurer, AlixPartners managing director. “If you go back to 2005, it was pretty common for landed cost from China to be 25 to 30 percent less than the cost of manufacturing in the United States. Based on our analysis, two-thirds of that gap has closed.”

Maurer said higher labor wages, the rising value of China’s currency, and the cost of shipping goods from China to points around the world have made manufacturing in China more expensive.

“If trends continue, the China cost is going to be on par with U.S. cost in the next four to five years,” said Maurer.

Higher Wages, Rising Currency
Since Prince Industries opened its plant in Shanghai a decade ago, wages have increased an average of 12 percent annually, while China’s currency, the RMB, has appreciated 25 percent vs. the U.S. dollar.

The rising value of the RMB was expected and has made it more costly to ship goods built in China around the world.

Meanwhile, hourly wages have been going up steadily due to China raising minimum wages, while competition for labor has forced manufacturers to pay more to attract skilled workers and keep them.

Pulling Out of China or Moving Further Inland?
As the cost of manufacturing in China has risen, so have reports of companies pulling their plants out of the country to find cheaper locations.

Some have re-shored facilities to the U.S., where cost differences are offset by higher productivity of American workers.

But few expect a mass exodus of manufacturers in China.

“I don’t think companies are going to pull out of China,” said Hal Sirkin with the Boston Consulting Group. “Because of Chinese domestic demand which is growing at 8 or 10 percent a year, even if they decide to pull out their export plants they will then convert those plants, basically re-tool them into Chinese consumption because there is a great market in China given all that growth.”

Sirkin said manufacturers squeezed by higher costs in more expensive cities on the coast of China like Shanghai will increasingly look to move plants to inner or western China where labor costs are lower.

“Some companies have found success in inner China and others have decided it is not worth it for them because they cannot get the productivity that they need,” said Sirkin.

Made in China and the US
Even with manufacturing costs rising in China, Prince Industries has benefited from expanding its operations outside Chicago to include a plant in China. Since making the move into China, the firm’s annual revenue has doubled to $40 million.

Much of that growth is spurred by the Prince Industries plant in Shanghai supplying customers who are manufacturing in China.

Given the changing market, would CEO Miller still expand to China?

“I think for us it made sense, it doesn’t make sense obviously for every U.S. manufacturer,” he said. “Once we announced that we were going to China, we had to convince our U.S. workforce that we weren’t going to move all of our manufacturing to China and just become a shell over here. Fortunately for us it worked out.”

SOURCE: CNBC

$147 Million Tax Break Yields US Made Lexus

$147 Million Tax Break Yields US Built Lexus

in Automotive, Jobs, Production

The incentive helped seal a deal with Toyota to move nearly all production of the Lexus ES luxury vehicle to Kentucky. Read more

Congressman Calls for American Made Clean Energy Equipment

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The goods and equipment used in clean energy projects purchased or paid for by federal taxpayer dollars would have to contain 85 percent American-made content, if a bill proposed by Central Valley Rep John Garamendi, D-Fairfield, makes it into law.

“We know that clean energy is an absolutely essential part of our future, yet under current law, much of our tax dollars are directly shipped to China, the European Union, and other competitors to purchase equipment manufactured abroad,” says Mr. Garamendi.

“Our government is directly offshoring too many American jobs, and that must change,” he says.

The bill sets a three-year phase-in schedule for the policy, with American content requirements set at 50 percent in the first fiscal year after enactment and 60 percent in the second. H.R. 1524 would also set an 85 percent American content requirement for companies that use the Investment Tax Credit and the Production Tax Credit.

“I think most American taxpayers would agree that it is a rather moderate expectation when we’re using their money – money that will create jobs somewhere,” Mr. Garamendi says. “When we make it in America, we provide pathways to the middle class and encourage our best and brightest to reinvent America’s economy for the better.”

SOURCE: Central Valley Business Times

Is “Buy American” a Domestic Growth Tool or Hindrance?

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Al Bredenberg

Many feel that having U.S. consumers and businesses and especially the government buy exclusively American-made products would support domestic jobs and bolster the U.S. economy. But many others argue that “Buy American” policies are restrictive and could do more harm than good.

Critics of “Buy American” often refer to such policies as protectionist efforts that seek to give preference to domestic manufacturers, as opposed to “free trade” policies that support unrestricted trade internationally and allow procurers to seek out the lowest-cost suppliers for goods.

The Buy American issue recently reheated due to Texas House Bill 558, which is now in committee in the state’s legislature. It would require the purchase of iron, steel, and manufactured goods made in the United States for certain state, state-aided, and governmental entity construction projects.

Lobbyist Perry Fowler, who represents construction companies working on water and wastewater plants, says it’s a bad idea. “Well-intentioned ‘Buy American’ measures have unintended costs, consequences, and liabilities,” he told the Dallas Business Journal. “This won’t level the playing field for U.S. companies who stand to benefit more from selling their goods across the U.S. and abroad.”

Fowler explained that construction companies’ costs would go up if they were required to source materials only from domestic manufacturers. The way engineering specifications are written makes these restrictions unfeasible, he claimed.

State Representative Yvonne Davis (D-Dallas), who filed the bill, argued, “Is it protectionism when Texans want to promote and support Texas businesses? Over the past few years, we have witnessed a number of Texas manufacturing companies close, and some companies have even moved overseas.” Spending Texas tax money on U.S.- and Texas-made products supports domestic business, she asserted.

In exploring the long history of Buy American laws, it’s important to keep in mind that there are two primary laws that apply: the Buy American Act of 1933 and the Buy American provision of the Surface Transportation Assistance Act of 1982. These laws limit some federal-funded purchases of certain materials to domestic sources or create a price preference for domestic products. The American Recovery and Reinvestment Act of 2009 (ARRA) also contains Buy American provisions.

The Alliance for American Manufacturing (AAM) claims that domestic sourcing requirements, such as those in the ARRA, are “the most effective way to ensure taxpayer dollars are used to create and maintain jobs and manufacturing capacity to the maximum extent possible, thereby vastly improving the stimulative effect of government spending.” The group calls Buy American “a proven job creation tool that is broadly supported by Congress, the American people, and hundreds of local governments throughout the United States.”

The AAM cites a number of examples of U.S. companies that gained from Buy American provisions. Pennsylvania steel manufacturer ArcelorMittal benefited from public rail transportation projects funded in part by ARRA. AAM makes the point that “ArcelorMittal’s Steelton plant is one of three rail-producing plants in the U.S. that compete with imported products.” Because of the Buy American provisions of the 1982 legislation, United Streetcar of Clackamas, Ore., won a contract to build streetcars for new public transit projects in Oregon and Arizona.

The U.S. Chamber of Commerce says Buy American rules are counterproductive and expensive. In fact, the Chamber maintains that such rules “invite foreign retaliation and threaten U.S. access to export markets and the American jobs they support.” The organization says that Chinese officials frequently cite Buy American rules “as a justification for their own discriminatory policies.”

Fox Business commentator John Stossel bluntly said that “’Buy American’ is a dumb idea.” In a column on Reason.com, he quoted Hoover Institution economist David R. Henderson, who told him that “almost all economists say it’s nonsense, and the reason is: We should buy things where they’re cheapest. That frees up more of our resources to buy other things, and other Americans get jobs producing those things.”

Buy American advocate Todd Lipscomb, of MadeinUSAForever.com, presents some additional arguments for purchasing American-made products. He points out that many other countries do not have the worker-safety, minimum-wage, and environmental-protection laws in the U.S. that make manufacturing costlier. Lipscomb argues that “no Western nation can ultimately compete on price with a country willing to massively exploit and pollute its own people. When you buy only American-made products, you insist on a higher standard.”

Henderson counters this point, saying that while working conditions might be difficult for people in developing nations, they’re still better off taking those jobs: “The mistake Americans make is they think they would never work in a sweatshop and therefore say these people shouldn’t. They’re choosing their best of a bunch of bad options. And when you take away someone’s best of a bad option, they’re worse off.”

SOURCE: Industrial Market Trends

Reshoring: Beware the Hype

in Uncategorized

Everette Phillips

Reshoring is getting a great deal of hype. Some see it as evidenceof a new renaissance of American manufacturing. Some see it as hope for reducing long term unemployed. Some see it as a business opportunity to sell manufacturing-related equipment, software, and services in the US. And some see it as a business opportunity for managing extended supply chains.

I have participated in some successful reshoring activities,and I have found that the most successful are actually a rebalancing between existing manufacturing plants – one or more in Asia and one or more in the US. Rarely can reshoring be justified on manufacturing savings alone. In most cases where it is successful, reshoring works because it delivers competitive advantage through differentiation.

A review of products, profitability, and market demand will sometimes help management determine that some products are better made in the US, and some products are better made in Asia from a total cost standpoint.This is especially true when the company gets revenue from sales in Asia and, experience suggests, has expectations of 25% or more of its revenue coming from Asia.

Cold start reshoring is more difficult. The first step tends to be US assembly of components imported from Asia and seems to be most successful when the US market wants near-customized selection or a made-to-order product. Zero Motorcycles in Santa Cruz, CA, has been cited in media as a reshoring hero. In fact, Zero would be a good example of reshoring-to-assemble in the US to customer orders. For companies such as Zero, it is too wasteful to guess the market and have the wrong inventory in transit for six weeks. It is better to have basic building blocks in transit and to assemble those building blocks to order. The customer gets quick delivery on a built-to-spec product,and the company has adequate inventory with little waste.

While reshoring heroes are easy to find in the media, reshoring false-starts, failures, and disasters are something people do not broadcast. I was recently involved with a false start. The team was assembled, and the announcements were made with a speech I have heard many, many times: “We are tired of the hassles of an overseas supplier who is unable to meet our promise of quality and on-time delivery. We have capacity in the US, so let’s join our fellow Americans in reshoring our product. Let’s employ Americans, manufacture with a focus on quality, and deliver what we promise on time.”

Staff were pulled from their regular duties, drawings were updated, and new BOM item vendors were solicited, some in Asia and some in the US.

Then the numbers were put together and presented to management, and…management did not like the numbers. Instead of ordering one part number from a contract manufacturer in Asia, reshoring meant they needed to order more than 40 parts from a number of vendors. When added together, these costs were higher than the original SKU. In addition there was more overhead needed to support so many new vendors and logistics and new employees for assembly, etc. In the end, they chose to stay with the lower prices and higher hassles involved with offshore outsourcing.

The outcome was predictable. They put too much hope in the media hype that China manufacturing costs are rising and becoming nearly on par with US manufacturing costs. Local media has found that people buy newspapers to read about positive reshoring stories. Just like people buy newspapers to read about their favorite team winning a championship.

In order to justify reshoring on savings, one needs to have a highly automated process making something in high volumes where the competitive forces drive pricing near the cost of materials. At that point, energy costs and not labor costs are the greatest influence of success. The US has a competitive advantage at the moment regarding energy costs.

Managers considering reshoring need to be able to put a price on the market value of the quick response that local manufacturing allows. They need to be able to put a price on the market value of assembly that is close to the customer. They need to be able to put a price on service and repairs and determine if local assembly can provide some competitive advantage there.

Author Michael Porter suggests that companies can only makea profit with one of two strategies: cost advantage or differentiation. He suggests that every business decision can be boiled down to impacting one of these strategies. Reshoring is almost always a differentiation play. It is rarely a cost advantage play. But too many managers are buying into the media hype regarding cost trends. These supposed trends have not been fully realized, and it is still unclear if they ever will be.

Every company should consider reshoring, but they should view it from the perspective of competitive advantage related to differentiation. Reshoring has costs. Reshoring means more vendors and increased management overhead related to extended supply chains. The challenge is to make your company better and more competitive through reshoring, so increased profits can cover increased costs.

EverettePhillips is CEO and president of Global Manufacturing Network, a provider of contract manufacturing, sourcing, and logistics services for products and components with a focus on items with special engineering requirements.

SOURCE: Manufacturing Executive

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New Successes Still Can Be Forged From Manufacturing, Tech and Innovation

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In the nine years of the Michigan 50 Companies to Watch awards program, the manufacturing sector has played a leading role, although its numbers fluctuated. In recent years, it is back with a vengeance, accompanied by successful companies in technology and other industries.

In the early years, manufacturing companies made up about 10-15 of the 50. In 2008, the number dropped to four. Then in 2011, the number jumped to 18, followed by 24 last year and 21 this year.

“We’ve been hearing for the past three years that manufacturing is down. With the organizations I work with, we do see that manufacturing is very active. It shows that manufacturers are learning how to diversify,” said Jennifer Deamud, associate state director for the Michigan Small Business & Technology Development Center and managing partner for the Michigan Celebrates Small Business awards, which includes the 50 Companies to Watch.

“These are second-stage companies,” Deamud said, “and they’ve found the resources and capital here in Michigan not only to stay alive but to grow.”

Manufacturers are healthier, and state support from programs such as Pure Michigan Business Connect has helped, Deamud said.

To be considered for the program, businesses must be privately held, second-stage companies facing issues of growth — not survival. They must be based in Michigan, employ six to 99 full-time people and have between $750,000 and $50 million in annual revenue or working capital in place from investors or grants. There also must be a growth trend over the past three years.

Collectively, the 2013 class of Michigan 50 Companies to Watch generated $333 million in revenue and employed 1,284 Michigan workers in the past year, according to data collected by the program organizers. The 50 companies project 46 percent revenue growth and a 25 percent increase in employees for 2013.

An example of manufacturing’s comeback in Michigan can be seen in one of the highlighted company profiles that are linked from the list below.

Panther Global Technologies in Wixom makes engine parts for lawn equipment. In 2004, it began manufacturing parts in China to compete on cost with Asian competitors.

“We had to do that because we went from 200 people in Wixom to 15 or 20. That broke my heart,” said the founder of the company, Don Leith. “I vowed to myself we would someday rise again in the U.S.”

On May 2, small and second-stage businesses will be honored for their achievements at the ninth annual Michigan Celebrates Small Business event. The event is a collaborative effort of the U.S. Small Business Administration, Small Business Association of Michigan, MSBTDC, Michigan Economic Development Corp. and the Cassopolis-based Edward Lowe Foundation. PNC Bank is the founding sponsor.

Michigan’s 50 Companies to Watch
Here is the list of 50 companies to watch. There are profiles of all 50 companies:

NITS Staffing Inc., dba NITS Staffing Solutions Inc., Farmington Hills
Phoenix Environmental Inc., Green Oak Township
LinTech Global Inc., Farmington Hills
Panther Machine Inc, dba Panther Global Technologies, Wixom
Resource Recycling Systems Inc., Ann Arbor

Also in Southeast Michigan:

Check Corp., Troy
Cirrus Group LLC, dba Daycare Works, Rochester Hills
Constructive Eating Inc., Ann Arbor
Edibles Rex Inc., Detroit
Embedded Logix Inc., Shelby Township
Innovative Surgical Solutions LLC, dba Sentio LLC, Southfield
Kyyba Inc., Farmington Hills
Marvel Technologies Inc., Novi
MatchRXchange LLC, dba MatchRX, Royal Oak
Mills Pharmacy & Apothecary LLC, Birmingham
OPS Solutions LLC, Novi
Preferred Solutions Inc., Northville
Prolim Global Corp., Farmington Hills

Companies outside Southeast Michigan

906 Technologies LLC
Air Advantage LLC
Altus Brands LLC
Automated Process Equipment Corp., dba APEC USA
BGL Asset Services LLC
Cadillac Culvert Inc.
Cherry Capital Foods LLC
Critter Control Inc.
Ferrier Brand LLC, dba Mindscape at Hanon McKendry
Gazelle Sports Inc.
Genemarkers LLC
Global Lift Corp.
Grand Traverse Distillery LLC
Gravity Works Design LLC, dba Gravity Works Design & Development
H&H Wildlife Design and Fur Dressing Inc.
Ideomed Inc.
ITB Packaging LLC
Jollay Orchards LLC
M22 LLC
M&S Extrusions Inc., dba Vintech Industries
MPF Acquisitions Inc., dba Marshall Plastic Film
Micron Mfg. Co.
Moomers Homemade Ice Cream LLC
Newmind Group Inc.
NobisAgri Service Inc., dba NobisAgri Science Inc.
Northern Fab & Machine LLC
Pro-Vision Inc., dba Pro-Vision Video Systems
QST Consultations Ltd.
Supermercado Mexico – Division Inc., dba Supermercado Mexico
WizWheelz Inc., dba TerraTrike
Uckele Health & Nutrition Inc.

SOURCE: Crain’s Detroit Business

Bill Seeks To Help Manufacturing In Florida

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TALLAHASSEE, Fla. (AP) — A bill touted as a way to boost Florida’s manufacturing sector by extending a sales tax break passed its first test in a state House panel Wednesday, overcoming scattered objections that it amounts to a giveaway without guarantees it would stimulate job growth.

The measure seeks to exempt Florida manufacturers from paying the 6 percent sales tax on equipment purchases. The proposal reflects one of Republican Gov. Rick Scott’s top legislative priorities this year.Supporters said manufacturing has lagged in a state that relies on a vast services industry tied to its sunshine, beaches and theme parks to generate much of its economic activity.

As for manufacturing, “we are woefully behind compared to the rest of the nation in producing those jobs,” said Rep. MaryLynn Magar, R-Tequesta.

Her measure (HB 391) was approved by the House Economic Development and Tourism Subcommittee. It was opposed by three of the panel’s Democrats.

“I’m not against manufacturing, but I’m not for giving away everything to one industry,” said Rep. Hazelle Rogers, D-Lauderdale Lakes. “They need to pay something, and there needs to be some accountability.”

Rep. Bruce Antone, D-Orlando, questioned whether such tax breaks actually attract jobs and investment. Rep. Betty Reed, D-Tampa, said the revenue lost from the tax break could go to help Florida’s neediest residents.

The tax break could cost the state more than $100 million in revenue by the second year, according to forecasts. A similar measure is being considered in the Senate.

But Magar and other supporters said the tax incentive would result in a net gain in revenues by encouraging manufacturers to hire more workers and boost investment in the Sunshine State. The result would be more workers paying taxes, they said.

Afterward, Magar sounded upbeat about the chances of eliminating the sales tax charged on equipment purchased by manufacturers.

But the proposed tax cut has drawn a lukewarm response from some Republican legislative leaders.

House Speaker Will Weatherford recently said the governor’s push for the tax cut was still alive but added that it’s not cheap.

Senate President Don Gaetz said Wednesday he supports the idea of the manufacturing tax break, but said he would like to see it tied to job creation.

The effort to assist manufacturers comes amid signs of an economic rebound in Florida.

Florida’s seasonally adjusted unemployment dipped to its lowest level in more than four years in February to 7.7 percent, and officials have pointed to the state’s rising tax revenue.

The tax break legislation seeks to capitalize on a sector that flexes plenty of economic muscle.

The state’s manufacturers employ more than 300,000 workers. Those workers earn $53,000 per year on average, well above many other private-sector jobs, Magar said.

Every manufacturing job created spins off more than two other jobs to handle such tasks as shipping and logistics, she said, and every $1 spent in manufacturing generates another $1.43 in economic activity.

But Florida has failed to capitalize on its manufacturing potential, ranking just 43rd nationally in manufacturing employment, she said.

Supporters said the tax break would enhance Florida’s bargaining position in competing with regional states for manufacturers.

“We cannot create wealth or improve our standard of living by cooking each other a hamburger or washing each other’s car or washing each other’s clothes or mowing each other’s lawn,” said Rep. Neil Combee, R-Polk City.

The sales tax exemption on equipment purchases already exists, Magar said, but many manufacturers have been unable to capitalize on it. The bill seeks to remedy that situation.

One company that hasn’t benefited is The Ronco Group, which designs and builds manufacturing equipment at its operations in Florida and Pennsylvania.

Ron Avery, the company’s chairman, said the tax break on equipment purchases would be an incentive to do more of the work in Florida.

His company generally purchases new equipment whenever it develops new product lines, he said. Those equipment purchases range from $250,000 to $1 million each year.

SOURCE: Business Week

Associated Press Writers Gary Fineout and James L. Rosica in Tallahassee contributed to this report.

Small Companies Cashing In On Consumers Desire To Buy American Made Furniture.

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Peggy Farabaugh was inspired to sell American-made furniture seven years ago after reading about animal habitats with her children. In the process, she discovered that the wood used to make most of the furniture sold in the U.S. is harvested from rainforests. A desire to raise awareness about wood sources, sustainability and forest conservation led her to found Vermont Woods Studio, which boasts a selection of furniture handmade in Vermont.”We [in Vermont] have this 250-year-old tradition of furniture made with local wood. I thought this could be a good way to accomplish my environmental goal, as well as helping Vermont furniture makers,” she says. The company sells tables, chairs and beds in solid cherry, walnut, maple and oak and more artistic, one-of-a-kind pieces.

Farabaugh, who promotes the made-in-America products on the company website and in a blog, has sold products across the country.

This Astrid bedroom collection, with its dramatic legs and defined edges, is made by Copeland Furniture. (Photo: Vermont Woods Studio)

Customers are drawn more to the simple, natural designs of the furniture than its pedigree. “People are mostly going for style. Made in America isn’t a requirement—it’s a bonus,” she says.Her company’s sales were up 60 percent in 2012. Though she can’t fully attribute the growth to a made-in-America trend, she has seen increased traffic to her site from Google searches for that phrase.

This dining room set by Ernest Thompson is a good example of the company’s handcrafted workmanship. (Photo: Ernest Thompson Furniture)

In Jamestown, N.Y., El Greco Woodworking purchases local hardwoods from companies that practice responsible and sustainable forestry. The company makes baby cribs for Land of Nod and modern/contemporary furniture for Room & Board home furnishings. Sales of their American-made baby cribs have grown steadily for the last six years—even during the recession.

El Greco also uses domestic finishes and coatings. “These things we care about—it’s not possible unless we do them here, which is why we ended up being made-in-America in the first place,” explains vice president Alexis Singleton.

And in Albuquerque, N.M., Mike and Doreen Godwin own Ernest Thompson Furniture, one of four companies they now own that represent New Mexico’s 400-year history of woodworking. With 24 employees, the company produces cabinets and alder and pine furniture with hand-carved details.

The company sells to homeowners and hotels, and the Godwins have noticed that more customers have an interest in made-in-America products. “Even in a recovering economy where price is a factor, people are willing to pay more money for furniture that is made in America,” Mike says.

Doreen notes that a few high-end hotel clients have contracts that require the seller to confirm that their products are made in America. “The five-star properties are doing it more because they are already in that price point,” she says. Though some luxury hotels like the cache of European furnishings, others tell her they plan to promote their made-in-America furniture in ads.Sittin’ Easy has been making white oak outdoor gliders, rockers, porch swings and tables in Eagle Spring, N.C., for 35 years. Owners Walter and Kim Harper promote the products at a circuit of home and garden shows along both coasts.

Plant manager Arthur Morfin says sales declined when products from China came on the market, but they are now picking back up. Orders from one of the company’s clients, Plow & Hearth, which had declined during the recession, are increasing again. The furniture is pricier than outdoor pieces sold at Lowe’s or Walmart, but “the longevity makes it a good return on investment,” Morfin says.

Annie O’Carroll of Annie O’Carroll Interior Design, Santa Fe, N.M., is working on a remodel with a client who wants to use made-in-America products. She’s sourcing furniture, iron and tin products from local artisans. Many of these artisans are more conscious of pricing and working harder to be competitive in today’s difficult economy.

SOURCE: USA Today

New Gillette Store Fights To Sell Only Made in USA Goods

in News

Small American flags are displayed April 11 at the My Made in America Store in Gillette. All of the products sold from the store are 100 percent made in America. The store opened in November 2012 after owners Rod and Susan Mathis had conceptualized it earlier in the year. Rod came up with the idea after visiting a boot shop where he requested a shoe made 100 percent in America and had trouble finding the right kind.

GILLETTE — Selling merchandise that’s made in America involves sending a lot of it back to the manufacturer.

Store owners Rod and Susan Mathis, owners of My Made in America Store in Gillette, ordered American flags from Annin Flagmakers of Roseland, N.J. But Rod had to send back some of the poles because they were outsourced to a foreign country. He now sells poles from EZPole Flagpoles of Eastlake, Ohio.

They ordered cast iron cookware from Lodge Manufacturing Co. of South Pittsburg, Tenn. But Rod had to send some glass lids back because they were made in China. He also cannot sell the company’s cookbook because it’s printed outside the United States.

Rod Mathis has discovered labels can be deceiving. Companies will list products as made in the United States when sometimes nearly half of the product was made elsewhere.

For instance, he planned to sell mugs with logos for each branch of the U.S. military. But he had to give up the idea when he learned that, while the mugs were made in the United States, the logos were going to be made elsewhere.

Rod Mathis poses April 11 in front of a 100 percent cotton, 100 percent made-in-America flag at the My Made in America Store he co-owns with his wife, Susan, in Gillette. All of the products sold from the store are 100 percent American-made. The store opened in November 2012 after Rod and Susan had conceptualized it earlier in the year. Rod came up with the idea after visiting a boot shop where he requested a shoe made in America and had trouble finding the right kind. PHOTO CREDIT: Leah Mills/Star Tribune

Sometimes, buying American-made can be more expensive. After all, labor costs are higher in the United States than in China. But Rod held up an Annin flag and showed the quality. The materials were heavier. He believes the flag is worth the value.

“It’s hard to find an American-made flag,” he said.

The store is a place where you can find items of all kinds — including patriotic gear such as American flags, prisoner of war “Never Forgotten” wall hangings, fierce-looking eagles stitched on clothing, organic soap and raw honey.

Appealing to the camo-wearing biker daddy with some stuff for the earth goddess and people in between, Rod and Susan Mathis named their store for the obvious demographic: Shoppers who want to buy goods made in the United States.

“People are unemployed,” Mathis said. “Yet we’re buying stuff made in China.”

It’s not easy to find products made in the United States anymore. It’s even harder to stock a 900-square-foot retail space with solely U.S.-made goods, Mathis said.

Shoppers who want to support local businesses will find baskets and silvery jewelry made in Upton, wall art made in Moorcroft and Cheyenne, coffee tables from Hulett, soaps and lip balms from Douglas, tissue-box holders made in Gillette.

Five percent of the store’s profits will go in an account to assist wounded veterans, Rod said.

Military veterans receive a 10 percent discount at the store.

Recently, when the Star-Tribune visited the store, no one stopped by. But business is “good when they can find us,” Rod Mathis said. They’re located in a building at 203 Carey Ave., Suite 3, where Rod, who also owns Gillette-based D&P Electric, did electrical work in exchange for three months of free rent.

“We’re not quite six months into it,” he said. “It’s an experiment still.”

SOURCE: Casper Star-Tribune

Most American Made Cars

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GMC – The 2013 GMC Acadia, Buick Enclave, and Chevrolet Traverse share first place for most ‘American made.’

Index uses expanded criteria to score 253 vehicles.

Domestic brands have the most American-made content in the United States according to a new index released by American University’s Kogod School of Business. Professor Frank DuBois, a global supply chain management expert, led the analysis, which considered not only where each vehicle’s parts were produced, but also the location of the manufacturer’s headquarters and other details, all in an effort to help consumers buy American.

“If you break down a single ‘American-made’ transmission, you’ll find many smaller parts, each stamped with its own country of origin. You may well find 80 percent of the parts inside that transmission didn’t come from the U.S.,” said Dubois.

To narrow down the options, DuBois’ team collected data from several sources, including recent American Automobile Labeling Act reports. The AALA was enacted in 1992 to inform consumers about the percentage of American content which comprises each car. AALA data specifies the percentage of U.S./Canadian parts content for each vehicle, including where the engine and transmissions were built.

DuBois’ index used these details as well as each vehicle’s overall AALA score, but also factored in:

— Profit margin; Where the automaker’s global headquarters is located

— Where research and development took place

— Location of production for the body, interior, chassis, electrical

Below, we’ve listed the top-five most American-made 2013 models from DuBois’ index. Several vehicles ended up with tied scores, resulting in multiple winners for each position. View the complete list here.

1. GMC Acadia, Buick Enclave, Chevrolet Traverse

2. Dodge Avenger, Ford F-Series pickup

3. Chrysler 200

4. Jeep Compass, Patriot, and Wrangler

5. Chevrolet Corvette, Chevrolet Equinox, Ford Mustang, and GMC Terrain

How Walmart Plans to Bring Back ‘Made in America’

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Bill Saporito

Walmart doesn’t make anything. But the giant retailer could play a part in the manufacturing rebound that is taking place in the U.S. with its promise to buy $50 billion more U.S. made goods over the next decade for its Walmart and Sam’s Club stores.

It’s a bit ironic, given Walmart’s vast global sourcing organization. But the same forces that are making the U.S. a more hospitable place for manufacturing —higher shipping costs and wage rates overseas among them—have prompted the company to reevaluate its sourcing on a variety of products. “This is a commitment around manufacturing and more economic renewal. We see it as a critical issue for us in the American economy,” says Duncan Mac Naughton chief merchandising and marketing officer for Walmart U.S.

What Walmart sees is a way to lower costs while smoothing its supply cycle by looking more broadly at its distribution system. Although the company may be able to buy an item cheaper from China, the price it pays per piece doesn’t always reflect what it spends to get the product to the shelves. “When we buy from overseas, we may buy more than we need to fill the container,” says Mac Naughton. “We’re looking at carrying costs through the system in addition to landed costs.” (Walmart has recently been criticized for being out of stock on items, due to a lack of store employees, but the company says its in-stock position is at record levels and that it hasn’t cut employee hours.)

Walmart is also hitting some unexpected supply snags as local demand increases in the developing countries where it buys goods. Recently, it found itself short of memory foam for mattress toppers and had to add a U.S. supplier, Sleep Studio, to augment its foreign source. That need to increase capacity can only increase as the middle class grows in India, China and elsewhere. The company will still likely rely on foreign suppliers for those products, such as cut-and-sew garments, that have a very high labor input. But given the more robust regulatory environment in the U.S., domestic suppliers are far less likely to run shoddy plants that endanger workers, as some of Walmart’s overseas subcontracters have been accused of doing.

Which suppliers stand to benefit from Walmart’s strategy? The company says that products with a “high cube” (supply-chain speak for big and/or bulky, such as furniture) are candidates. So are products that have more highly-automated production, meaning lower direct labor, or products that have a less predictable sales curves and might have to be produced quickly to meet a sharp rise in demand. The company says items such as sporting goods, storage products, games and paper products are likely categories.

One of the first companies to benefit is 1888 Mills in Griffin, Georgia, which makes better-quality towels. Walmart’s version will be labeled “Made Here.” 1888 Mills had some spare manufacturing capacity, but since the size of Walmart’s orders can distort any vendor’s production, 1888 Mills needed a longer-term deal to be able to make the investment required to produce the needed quantities. “We made a commitment that was longer term than we would normally do. There’s transparency on the part of both parties: we worked with collaboratively with them,” says Michelle Gloeckler, Walmart’s senior vice president of home.

Camping, throwing knives and outdoor goods company Coleman is another participant. The firm, owned by Jarden Corp. is manufacturing its hard-sided coolers and personal flotation devices in the U.S., adding 160 jobs according to Walmart. Jarden, whose brands range from Quickie mops to K2 skis, has been ahead of Walmart on domestic manufacturing. Jarden has been on a reshoring kick for about two years.

Some of Walmart’s vendors will get a chuckle out of the idea that Walmart is willing to become more transparent. Walmart has a reputation for getting vendors into its buying rooms and beating the hell out of them on price, essentially leaving them with little margin. But Mac Naughton says that Walmart has to start thinking longer term, rather than season-to-season and that this kind of collaboration will reduce costs for both parties over time, paving the way for lower prices for consumers. For instance, a U.S. manufacturer can bypass Walmart’s distribution centers and deliver directly to stores, so-called “no touch” distribution.

Although $50 billion is a lot of goods, it’s about 10% of what Walmart will sell this year at retail. The company says the $50 billion is just a starting point, and that if other retailers joined the party the figure could be much, much higher, perhaps $500 billion. Walmart’s U.S. president, Bill Simon, suggested in a speech to fellow retailers that the power of their order books can help reshore U.S. production in textiles, furniture, pet supplies, some outdoor categories, and higher end appliances.

This isn’t Walmart’s first crack at a Made in America program. An earlier one fizzled, amid some bad publicity, because Walmart couldn’t get enough low-priced merchandise to sell. Americans may love their country, but they will buy Chinese if the price differential is too high. This time Walmart says consumers won’t have to pay up to buy domestic. “I hope the American consumer values this and we’ll make it easy for them,” says Mac Naughton. If not, consumers won’t make it easy for Walmart.

SOURCE: Time

Is U.S. Manufacturing Really Back?

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Rana Foroohar

Is America in the middle of a manufacturing job revival? The latest numbers would make it seem so. The U.S. has added more net manufacturing jobs since the start of 2010 than the rest of the G7 nations put together, with only two other economies, Germany and Canada, increasing factory employment at all.

The jump is due to a number of factors, including American productivity growth (which has outpaced Europe as a whole), compressed wages, and higher energy costs (which make it more costly to ship products back from locations with cheaper labor, like Asia). As the FT recently reported, from 2002-10, U.S. manufacturing unit labor costs in dollar terms fell 11 percent, compared with rises of 3 percent rise in Japan and 41 percent in Germany. Companies that are now bringing jobs back home include some of America’s largest blue chip multinationals, like Ford, GE, and United Technologies.

Does this mean the end of the shrinking middle? After all, decently paid manufacturing positions were the core of the middle income jobs bracket since the 1950s; the hollowing out of the manufacturing sector is a key reason that workers in rich countries haven’t gotten a real raise since the 1970s. Democrats would like us to think so. With jobs and the economy still the major campaign issue, the Obama administration has been making hay with the numbers in various speeches and press releases. The rhetoric will likely increase if Mitt Romney gets the Republican nomination, and Obama tries to position himself as the defender of the 99% in comparison to the former Bain “quarter billionaire.”

ARIANA LINDQUIST / BLOOMBERG VIA GETTY IMAGES

A worker inspects the body of a vehicle on the production line at the Bayerische Motoren Werke AG (BMW) manufacturing plant in Spartanburg, South Carolina, U.S., on Wednesday, Jan. 11, 2012. Bayerische Motoren Werke AG (BMW), the world’s largest maker of luxury autos, will invest about $900 million in its South Carolina factory to expand capacity and prepare the facility to produce a new sport-utility vehicle.

As much as I’d like to believe that the insourcing trend has legs, and that manufacturing is coming back to American en mass, I think there are two important caveats to remember. First, as the McKinsey Global Institute’s James Manyika wrote in a recent report, “History shows that recessions—particularly those that follow a financial crisis—accelerate the growth or decline already underway in industries. In this [last] recession, for example, the auto, financial-services, and residential-real-estate industries have contracted significantly and won’t regain their peak employment anytime soon.” Yes, some jobs are being insourced, but so far it’s a trickle. The numbers look very good in comparison to other rich countries because investors and factory owners alike are afraid to put money into Europe right now. One CEO of a major European multinational industrial firm that I spoke with recently says he’s thinking of moving factories out of the Continent, because he’s worried about continuing social unrest due to the debt crisis, and permanently dampened consumer demand.

The bigger issue is that the displacement of human workers by technology (arguably the largest factor in the shrinking middle) is far from over – in fact, it may have only just begun. A number of big thinkers I’ve talked with recently, including not only the folks at McKinsey Global, but scientists at MIT, Stanford, and macro-economists like Ken Rogoff, have spoken of a growing digital economy that will have profound changes on labor markets. Machines have already replaced humans in many factory jobs, and an increasingly number of white collar gigs, too (computers can now do journalism, write music, and come up with trading algorithms). The real seismic shift will be when they start talking to each other; refrigerators bypassing purchasing officers to order more milk directly from factories, air traffic controllers made obsolete by interconnected web based systems, etc., etc. It’s been the stuff of heady articles in tech magazines for years, but it’s starting to happen. Brian Arthur, an economist at the Sante Fe Institute, estimates that the activity generated by the digital economy (that is, the economy created by machines alone) could equal that of the $62 trillion real world economy within two decades. The shift would shake manufacturing and service jobs alike.

So where does that leave manufacturing, and more importantly, all of us? Optimists like Rogoff would argue that all this innovation will inevitably create new positions that we can’t even dream up right now. There will be a period of great disruption, but then, some time later, we’ll all be happier and more prosperous for it. But pessimists (which may be greater in number) are worried that we need to start circling the wagons, focusing on more self-interested trade policies to keep decently paid jobs at home. I’m hearing the word “industrial policy” a lot these days, and not just in hyper-liberal circles. The Council on Foreign Relations recently put out a report calling for a rethinking of global trade rules and enforcement as countries like the U.S. struggle to hold their own against emerging market giants like China. Bottom line: (1) the corporate giants that have brought jobs back to the U.S. can send them abroad again just as quickly; and (2) we’re at the beginning of some very interesting policy discussions about how the global economy should be structured and policed in the 21st century.

SOURCE: Times

How ‘Made in the USA’ is Making a Comeback

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“Manufacturing represents a whopping 67% of private-sector R&D spending as well as 30% of the country’s productivity growth”

The U.S. economy continues to struggle, and the weak March jobs report — just 88,000 positions were added — briefly spooked the market. But step back and you’ll see a bright spot, perhaps the best economic news the U.S. has witnessed since the rise of Silicon Valley: Made in the USA is making a comeback. Climbing out of the recession, the U.S. has seen its manufacturing growth outpace that of other advanced nations, with some 500,000 jobs created in the past three years. It marks the first time in more than a decade that the number of factory jobs has gone up instead of down. From ExOne’s 3-D manufacturing plant near Pittsburgh to Dow Chemical’s expanding ethylene and propylene production in Louisiana and Texas, which could create 35,000 jobs, American workers are busy making things that customers around the world want to buy — and defying the narrative of the nation’s supposedly inevitable manufacturing decline.

The past several months alone have seen some surprising reversals. Apple, famous for the city-size factories in China that produce its gadgets, decided to assemble one of its Mac computer lines in the U.S. Walmart, which pioneered global sourcing to find the lowest-priced goods for customers, said it would pump up spending with American suppliers by $50 billion over the next decade — and save money by doing so. And Airbus will build JetBlue’s new jets in Alabama.

Some economists argue that the gains are a natural part of the business cycle, rather than a sustainable recovery in the sector. But I would argue that the improvements of the last three years aren’t a blip. They are the sum of a powerful equation refiguring the global economy. U.S. factories increasingly have access to cheap energy thanks to oil and gas from the shale boom. For companies outside the U.S., it’s the opposite: high global oil prices translate into costlier fuel for ships and planes — which means some labor savings from low-cost plants in China evaporate when the goods are shipped thousands of miles. And about those low-cost plants: workers from China to India are demanding and getting bigger paychecks, while U.S. companies have won massive concessions from unions over the past decade. Suddenly the math on outsourcing doesn’t look quite as attractive. Paul Ashworth, the North America economist for research firm Capital Economics, is willing to go a step further. “The offshoring boom,” Ashworth wrote in a recent report, “does appear to have largely run its course.”

Today’s U.S. factories aren’t the noisy places where your grandfather knocked in four bolts a minute for eight hours a day. Dungarees and lunch pails are out; computer skills and specialized training are in, since the new made-in-America economics is centered largely on cutting-edge technologies. The trick for U.S. companies is to develop new manufacturing techniques ahead of global competitors and then use them to produce goods more efficiently on superautomated factory floors. These factories of the future have more machines and fewer workers — and those workers must be able to master the machines. Many new manufacturing jobs require at least a two-year tech degree to complement artisan skills such as welding or milling. The bar will only get higher: Some experts believe it won’t be too long before employers will expect a four-year degree — a job qualification that will eventually be required in many other places around the world too.

Understanding this new look is critical if the U.S. wants to nurture manufacturing and grow jobs. There are implications for educators (who must ensure that future workers have the right skills) as well as policy-makers (who may have to set new educational standards). “Manufacturing is coming back, but it’s evolving into a very different type of animal than the one most people recognize today,” says James Manyika, a director at McKinsey Global Institute who specializes in global high tech. “We’re going to see new jobs, but nowhere near the number some people expect, especially in the short term.”

Still, if the U.S. can get this right, though, the payoff will be tremendous. Manufacturing represents a whopping 67% of private-sector R&D spending as well as 30% of the country’s productivity growth. Every $1 of manufacturing activity returns $1.48 to the economy. “The ability to make things is fundamental to the ability to innovate things over the long term,” says Willy Shih, a Harvard Business School professor and co-author of Producing Prosperity: Why America Needs a Manufacturing Renaissance. “When you give up making products, you lose a lot of the added value.” In other words, what you make makes you.

SOURCE: Time

Boeing Planning $1 Billion Expansion in S.C.

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A Boeing 787 Dreamliner accelerates down the runway while taking off on its long-waited first flight Dec. 15, 2009 at Paine Field in Everett, Wash. (Photo: Stephen Brashear Getty Images)

Bruce Smith

CHARLESTON, S.C. (AP) — Boeing announced Tuesday it is expanding in South Carolina, investing another $1 billion and creating 2,000 new jobs over eight years.

“Boeing is now a part of the fabric of South Carolina. So this is family and when family does well, we all get excited,” Gov. Nikki Haley said at an aerospace conference along with Boeing and state officials.

The state is providing $120 million in incentives for upfront expansion costs such as utilities and site preparation at Boeing’s North Charleston manufacturing complex that now employs about 6,000.

The first of the company’s 787 Dreamliners built in South Carolina rolled off the assembly line about a year ago. The plant assembles one of the planes a month and within six weeks will be assembling two a month, said Jack Jones, the vice president and general manager of Boeing South Carolina.

The Boeing plant also builds mid- and aft-body assemblies for 787s that are made in South Carolina and Everett, Wash. Jones said seven assemblies are put together each month and the number will increase to 10 this fall.

“We feel that with the Boeing commitment for a billion bucks and an additional 2,000 jobs created, the incentive the state is offering is commensurate with our commitment,” he said.

“With unprecedented demand for commercial airplanes — including a forecast of another 34,000 airplanes required over the next 20 years — Boeing is positioned for significant and sustained growth in the years ahead,” said a statement released by company spokeswoman Candy Eslinger.

Incentive bills were introduced in both the state House and Senate in Columbia on Tuesday.

Senate Finance Chairman Hugh Leatherman said he’s in awe of Boeing’s expansion plans. “Our state could very well become the aerospace hub, when you bring all these suppliers in here to supply not only Boeing but possibly Airbus in Alabama,” he said.

House Speaker Bobby Harrell issued a statement saying the state and Boeing have been good partners from the start.

“As a Legislature, it’s our job to create an environment that fosters economic growth so the private sector can do what government can’t, create sustainable new jobs,” he said.

Commerce Secretary Bobby Hitt said the incentives are similar to those granted to BMW when its plant in Greer, S.C. expanded after opening in the 1990s.

“BMW made a big move about the same value we’re talking about here. You had to be able to improve the infrastructure to be able to grow and expand,” he said.

News of the expansion was first reported in The Post and Courier. Jones said the hiring will be spread over the eight years.

Last year, the Charleston County Aviation Authority began the process of selling 320 acres near the North Charleston assembly site. The agency also voted to give Boeing first rights of refusal on nearly 500 more acres, as well as an option to buy another 265 acres. Last year Boeing also bought the South Carolina Research Authority office site near its assembly plant.

“A lot of people are reading into that that it means we’re going to bring other programs on down,” Jones said. “There’s no commitment to that. What it does open up is flexibility. We don’t want to be landlocked.”

The 787 has been grounded since mid-January because of a problem with smoldering lithium-ion batteries. The company has proposed a fix to federal regulators and last week conducted a final test on the new design that includes more heat insulation and a battery box designed so that any meltdown of the battery vents hot gases outside of the plane. None of the 787s that reported battery problems were built in South Carolina.

SOURCE: USA Today

U.S. Border Patrol Uniforms Manufactured in Mexico

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A Customs and Border Protection Border Patrol agent pats down a man before he is returned to Mexico. (Photo: CBP/Gerald L. Nino)

Elizabeth Harrington

(CNSNews.com) – U.S. Customs and Border Protection (CBP) has granted uniform contracts to VF Imagewear, Inc., an apparel company that relies on manufacturing sites in Mexico for a “significant percentage” of its occupational garments.

The latest contract with the company was awarded on Dec. 20, 2012, to make “uniform and insignia items” for the CBP at an estimated cost of $6,157,997.57, and a ceiling of $8 million.

The CBP, which is responsible for protecting America’s borders, told CNSNews.com that items from VF Imagewear, a subsidiary of VF Corporation, are manufactured in a number of locations, “including Mexico.”

“There are no domestic preference regulations or statutes applicable to DHS/CBP that would prohibit the manufacture of uniform items in Mexico,” the CBP said. “In fact, United States obligations under International Agreements require that the Agency accept items manufactured in Mexico.”

“Consistent with the foregoing, VF is permitted to provide items manufactured in Mexico under the current contract,” the agency said.

According to the company’s 2012 annual report filed with the Securities and Exchange Commission (SEC), “VF operates manufacturing facilities in Mexico, Central and South America, the Caribbean, Europe and the Middle East.”

“A significant percentage of denim bottoms and occupational apparel are manufactured in these plants, as well as a smaller percentage of footwear,” the report says. Occupational apparel refers to uniforms made by VF Imagewear. The company supplies uniforms for a variety of industries, including transportation, hospitality, food service and for the NFL, MLB and Harley-Davidson.

Manufacturing for Major League Baseball uniforms, however, occurs in the United States, according to the annual report.

VF Imagewear also maintains websites for the uniform programs for the CBP, the Fire Department of New York City, the Transportation Security Administration (TSA), and the National Park Service. “These websites provide the employees of our customers with the convenience of shopping for their work and career apparel via the Internet,” the report states.

According to VF Imagewear’s 2011 annual report, the manufacturing facilities located in Mexico, Central America and the Middle East are responsible for “cutting, sewing and finishing” of denim garments and uniforms.

The CBP said that they have recently concluded two contracts with VF Imagewear for uniforms, “a limited contract to provide uniforms for training academies and hardship and disaster situations and a contract to provide quartermaster services at the training academies.”

Currently, VF Imagewear has a contract for the short-term manufacture of uniforms and insignias, awarded in December. The contract is a result of the continuing resolution (CR) passed by Congress last year, which mandated the CBP to maintain specific levels of Border Patrol Agents, Field Officers and Air and Marine Agents.

The CBP estimated that it needed to enroll an additional 850 students in its academies to comply with the mandate, which would require 3,400 uniforms.

The agreement will also allow the CBP to replace uniforms for border patrol agents, according to the agency’s justification and approval for the contract.

“[B]order patrol agents are often called upon to chase illegal aliens into contaminated waters, such as the Rio Grande River,” it reads. “In these situations, CBP’s protocol provides that uniforms worn in those situations must be destroyed because they are considered hazardous materials.”

“This interim uniform contract will allow the uniformed personnel to replace ruined uniforms so that they may continue to perform their duties in the event of a disaster and/or hardship.”

The CBP adds, “This interim contract will ensure new agents and officers have properly fitted uniforms and therefore can assume their assigned mission-critical work without weakening our national security.”

VF Imagewear also recently secured a $50-million uniform contract with the TSA, which will be manufactured in the United States and Mexico.

Rep. Jackie Speier (D-Calif.) has said manufacturing government uniforms in Mexico poses a threat to national security.

“There are also national security concerns,” Speier said in a press release in 2011, regarding a prior contract between the TSA and VF Imagewear. “Uniforms have a greater potential of being stolen in Mexico where it is more difficult to provide oversight of factories and cargo.”

The company does have concerns with its manufacturing sites abroad, according to its annual report, including “political or military conflict” and “heightened terrorism security concerns,” which “could subject imported or exported goods to additional, more frequent or more lengthy inspections, leading to delays in deliveries or the impoundment of goods for extended periods.”

VF Imagewear declined to comment about its dealings with CBP and the manufacture of items in Mexico, saying “VF does not discuss the specifics of its agreements.”

SOURCE: CNS News

Artists Revitalize Rural Manufacturing

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Sculptor Hoss Haley (left) and glass-artist Rick Beck experiment with the patented materials of Floorazzo, a tile manufacturer in Siler City, NC. An innovative economic development project is bringing artisans into local industries to collaborate with manufacturers, training workers and expanding into new lines of production. – Courtesy of Art-Force

By Janet Kagan and Jean Greer

The manufacturing base in many rural towns of the U.S. has dwindled, but in North Carolina, combined public and private support has spurred an innovative approach: combining the creative talents of seasoned artists with the skills of local workers.

Like many rural communities, Siler City, North Carolina (population 7,887), retells its stories, honoring its tradition of manufacturing and its history of agriculture in contemporary terms. The town’s residents also recognize the value and necessity of strong public-private leadership and initiative, enabling local prosperity. Located in Chatham County in the Central Piedmont of North Carolina, Siler City has since the late 1990s experienced a dramatic increase in its Hispanic population (now almost 50%). In this same period, the town has benefitted from the North Carolina Rural Economic Development Center’s financial support and from partnerships with the Chatham County Economic Development Corporation.

But setting it apart from most other rural communities its size, Siler City is in the midst of a turn-around, one propelled by the arts, where redevelopment of its historic downtown has put artists and artisans at the core of local enterprise.

Because of the town’s commitment to creative individuals, the ability of its municipal leadership to accomplish community goals, and county and state resources that have been able to provide support and expertise, Art-Force’s Artist + Manufacturer Strengthening Place Program elected to work in Siler City.

Art-Force’s core tenet is that artists are highly trained and underutilized creative thinkers, visionaries, and problem-solvers. We believe America’s small cities and towns desperately need artists’ imagination to retool manufacturing and assist communities in their economic and social transformation. People build lives where there are jobs and where they feel a sense of belonging, and creative people, through both innovation and sensitivity to local heritage, can serve as community change-agents: their work demonstrably affects local economies.

Read the rest of the story at Daily Yonder:
http://www.dailyyonder.com/artists-revitalize-rural-manufacturing/2013/04/02/5749

New Showroom Opens Up World Of The All American Clothing Co. To Public.

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Visitors can tour and try on USA made items with the companies` showroom opening.

All American Clothing Co., the premier online location for USA made clothing items, announces the debut of its new concept with the opening of a showroom in its Arcanum, Ohio location. Located at 1 Pop Rite Rd, just south of Arcanum, Ohio, the showroom will feature the many American made items that All American Clothing Co. has to offer. It will also feature an All American theme with its coloration, pictures, and objects. The showroom will officially open on Friday April 5th and Saturday April 6th.

“For made in America supporters and enthusiasts, the showroom will create a unique experience into the world of All American Clothing Co. and its belief in supporting the American worker.,” said Logan Beam, Director of Marketing and Communications at All American Clothing Co. “All American Clothing Co. has always cared about the United States and the people in it. Our founders started manufacturing USA made jeans with a passion to never trade USA jobs for foreign profits. We are now able to showcase our passion, products, and services while creating a strong relationship with our customers.”

Are you an ‘All American?’ Click here to subscribe to the All American newsletter.

A patriotic destination, the All American Clothing Co. showroom will provide customers the opportunity to discover the unique experiences they have to offer, like Traceability. Traceability is all about the truth of where jeans come from and offers some recognition to the hard working Americans who are involved in making jeans. All American Clothing Co. is one of the first jean companies in the world that allows customers to trace their jean all the way back to the American farmers who grew the cotton used. Each jean comes with a ‘Certificate of Authenticity’ that includes a traceability number. Enter the traceability number on the All American Clothing Co. website and they will tell you exactly which farmers and mill were involved in producing that jean.

How Does Traceability Work? Watch the video below:

The showroom will be open on Fridays and Saturdays from 10:00 AM – 2:00 PM Est. A knowledgeable and passionate team of customer service experts will be available to help deliver the ‘All American’ experience.

About All American Clothing Co:
All American Clothing Co. produces high-quality jeans and apparel that are Made in USA Certified™. All American Clothing is a made in America success story in today’s economy. The entire company supports a “USA made passion” as they strive to foster loyalty among customers. All American Clothing Co. is proof that small business can grow and succeed in America today. To find out more about the passion and effort it takes to build a business in today’s economy go to http://www.allamericanclothing.com and read the tab “Our Story.”

CONTACT ALL AMERICAN CLOTHING CO.
Logan Beam
Director of Marketing and Communications
888-937-8009

Making Manufacturing Cool

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JOHN GUENTHER

It doesn’t take a fictional ad guru like Don Draper to let you know working in manufacturing has a branding problem with younger generations. The good news for the California economy is there’s a new image already being crafted.

“Manufacturing is cool. It’s not smokestacks anymore,” said Adam Hansel, president of DTL. At a recent meeting-of-minds, Hansel held up his iPhone to boast about how his company’s machines helped build the latest Apple smartphone.

And that was one of the big rallying cries at the event: find ways to tell the new story of manufacturing.

The place was the Advanced Manufacturing Summit hosted last week in Sacramento by the governor’s economic development office, GO-Biz, and the point was to get everyone on the same page about pumping up California’s advanced manufacturing sector.

“It’s never happened before: a meeting where all the universities, industry and agencies came together to talk about advanced manufacturing,” said Doug Henton, attendee and also Chairman and CEO of Collaborative Economics.

Advanced manufacturing, briefly put, means using high-tech methods to make specialized or high-tech products, hence the “no smokestacks” comment.

The forum was prompted by a White House competition to create advanced manufacturing centers around the country and drop on them the funding that goes along with winning one in your state, almost $70 million.

“California raised its hand and said ‘We’re going to take the lead,'” said Kish Rajan, director of GO-Biz, AKA the Governor’s Office of Business and Economic Development. “We’re going to be in the pole position.”

That seems like no-brainer, since California is the largest manufacturing state in the country with 1.2 million jobs in that sector. Rajan added that manufacturing as a whole contributes $230 billion to the state’s economy.

While story of manufacturing shown in the news lately has been how it’s on the decline, shown in colorful chart after colorful chart, boosters see a big opportunity for California.

“This is a different type of manufacturing,” said Henton. “A lot of these are things that we do better. We’re good at it, such as in aerospace. These are industries using advanced tools, like making biomedical devices. We’re a leader in that.”

California’s aerospace industry is still one of the state’s strengths and is represented in its top 10 exports. While the sector might not return to the good old post-WWII or Cold War days, some see an opening in the unmanned vehicle market, of the land, sea and air variety.

“I think that’s a big place for California to play because, since it’s a knowledge-based economy, it’s about retraining workers that were already in the aerospace industry or bringing in new people to the aerospace industry around this new technology,” said Louis Stewart, deputy director of Innovation and Entrepreneurship at GO-Biz.

But California has ahead of it–maybe not a cliff–but a bit of a workforce hill to climb: Older workers are retiring out of manufacturing and it’s difficult to find the youngsters with the right skills to replace them, thus the comments about making manufacturing cool to the kids these days.

One panelist jokingly mentioned creating an “MTV Cribs” to show off homes of CEO’s of advanced manufacturing companies.

Brandon Cardwell, VP of Programs at the i-GATE Innovation Hub, noted that boomers are now moving out of manufacturing workforce and workforce training isn’t keeping up with the changing labor market. Census figures from 2011 showed that 2.8 million manufacturing workers, or one-quarter of all manufacturing workers, were 55 or older.

“We need bring back shop class in high school,” said Gene Russell of the non-profit Corporation for Manufacturing Excellence.

A big bullet point was the need to get more students interested early and make a clear pathway for them to go from high school all the way to the advanced manufacturer floor. Of course, it might not hurt to let them know manufacturing jobs can make an average of 39 percent more than the overall California average wage.

“I think now is the time that we need to start connecting the stories from industry and academia so that we understand what kind of workforce needs to be come about for these future trends and then basically rebranded and tell why this new wave of advanced manufacturing is where the students should be looking at, as opposed to looking at traditional manufacturing which is not necessarily the most appealing to the younger generation,” said Stewart.

On top of getting students interested, there’s the issue of getting them trained with the right skills for these high-tech jobs. Tim Rainey, the executive director of California’s Workforce Investment Board, said most training is still modeled for big, industrial manufacturing, but the sector is now made of clusters of smaller companies.

Getting people trained up has also been made difficult by employers decreasing spending on training as an employee benefit.

To do it right, panelists said it will be vital to convince employers to invest into training partnerships with schools with funding, donation of equipment and providing more apprenticeships.

Finally, attendees broke into smaller groups for brainstorming and Rajan wrapped up the day with some words on the new effort.

“If you keep this spirit going, California, as I said this morning, is unstoppable.”

SOURCE: California Economic Summit

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