Bucking a 30-year trend, more and more small businesses are manufacturing in the U.S., and exporting products abroad. The New York area leads the way.
For
Lumitec, a lighting product company in Delray Beach, Florida, manufacturing in the U.S. is essential, but so is exporting to clients overseas.
Lumitec’s products, which are designed for extreme environments, require exact specifications that need frequent product monitoring. So the lag time to make changes typically associated with manufacturing thousands of miles away in China is not an option. To accommodate these needs, Lumitec’s headquarters are in a 10,000-square foot facility that can handle the customization and assembly that clients require.
Lumitec is like an increasing number of small companies that are manufacturing in the United States, and bucking a 30-year trend of outsourcing such production overseas.
These companies find increased control, quality, and production standards domestically that may cancel out the cost savings that could come with manufacturing overseas. They are also turning the table on recent history in other ways, by exploiting sales in international markets, and uncovering opportunities by selling their goods to other countries in addition to domestically. They find the ‘Made in the U.S.A.’ stamp brings them unexpected cachet.
“We attend trade shows outside of the U.S. and people are always pleasantly surprised that we manufacture in the U.S.,” says John Kujawa, chief executive of Lumitec, which exports its lighting products to more than 30 countries. “it is understood that many products manufactured in the U.S. are greater quality than those from certain other countries.”
Manufacturing businesses have added 500,000 jobs in the United States since 2009, though the sector has a lot of ground to make up, having lost 2.3 million jobs since the start of the recession. States that led the way were Michigan, Ohio, Indiana, Texas, and Illinois, which combined added a quarter of a million of those jobs over the same period.
“You see manufacturers do more with less, as the unit labor cost goes down…[and] lean manufacturing has improved our overall competitiveness,” says Chad Moutray, chief economist for the National Association of Manufacturers.
About 40% of manufacturers are looking toward export trade as one of their primary growth vehicles today, the manufacturing association says.
At the same time, costs of labor, tariffs, and shipping overseas have risen. On average, it is still 20% more expensive to manufacture in the U.S. than it is with major trading partners overseas, excluding the cost of labor, according to the association.
The New York metropolitan area led the nation for exporting, shipping $105 billion of goods in 2011, according to the most recent numbers from the
International Trade Administration, an increase of 25% from the prior year.
Alex Stadler is one of the entrepreneurs who has succumbed to the allure of New York’s manufacturing and exporting trade renaissance.
Stadler is the founder and sole proprietor of
Stadler-Kahn, a textile manufacturer and retail store in Philadelphia. He manufactures hand-designed, high-end scarves in New York and exports them to Italy, in addition to selling in the U.S.
Because Stadler’s runs are so small, generally on the order of several hundred pieces at a time, he couldn’t work with the manufacturers he researched in China, he says. At the same time, Stoll, a German knitting machine company just establishing a foothold in Manhattan, jumped at the opportunity to help Stadler when he approached them.
And, in addition to Stoll, Stadler has found a whole cluster of businesses in New York City’s Garment District to work with him, including a manufacturer for his garment labels, and a distributor of the Merino wool he uses. These companies are all within walking distance of each other, Stadler says, so he can keep a close eye on things.
If Stoll ever has a question on his prototypes, Stadler says he can make it up to New York from Philadelphia in two hours.
Though Stadler admits that if he had the volume to engage a factory in China, he could make his product at a third his current cost, he says his customers feel good knowing they are paying for his American craftsmanship, not for middlemen, and extra shipping costs.
“People love to hear a product is made in the U.S., and those little letters `NYC’ hold a lot of glamour for customers,” Stadler says.
The decision to manufacture domestically depends primarily on your particular product, how easily and cheaply you can rent or buy space, and your ability to either hire or temporarily staff employees to do the work.
One thing manufacturers like about assembling products overseas is the ease at which they can quickly ramp up or down without having to hire full-time employees. Some U.S. manufacturers like Brian Kline, chief executive of lighting company MSi SSL, have gotten around this hurdle by hiring temporary employees to do the work when they have it in the U.S.
MSi, based in Deerfield Beach, Florida, manufactures specialized LED bulbs for things like miners helmets, power lamps, and track lighting. While it uses a factory in China for 90% of its production, it also does 10% of its manufacturing in the U.S.
In situations when limited size orders have to be shipped to the customer on an extremely compressed time schedule that its Chinese factory can’t accommodate, it uses a team of temps to assemble the products in the small plant MSi has created above its office headquarters.
“Ramping up and ramping down is harder to manage here” with full-time workers, Kline says.
Similarly, there are a number of important things manufacturers need to keep in mind before they export. One of the first places you should probably turn to is the U.S. Commercial Service, a division of the U.S. Department of Commerce charged with helping U.S. entrepreneurs figure out the vicissitudes of exporting. (It recommends the federal site
export.gov.)
But the Commercial Service also has staff in 108 markets around the world that can help with things like identifying market opportunities and locating distribution partners. It offers free consultations and low rates for consulting work, which can includes finding suitable partners overseas. It also operates something called ExporTech, a pseudo university for entrepreneurs considering exporting, that helps develop international growth plans.
One of the most important things to consider about exporting, says Tom Moore, deputy assistant secretary for international operations at the Commercial Service, is making sure you have a robust market for your goods in another c
ountry
; that requires research and knowledge of competitors. It’s also critical to find an overseas partner you can depend on and trust. Working with someone you haven’t vetted properly can cost time and money.
Other best practices: research the rules and regulations of the market you’ll be selling into. That includes national product standards, certification requirements, electricity regulations, and packaging and recycling laws, as well as quality standards.
Knowledge of tariffs and other overseas taxes, as well as tariff codes is also essential, as entering the wrong tariff code can be a costly mistake, says Moore. For example, Moore says the Commercial Service worked with a globe manufacturer recently that had been entering a toy code instead of an educational code for its product. This cost the company an additional 20% in tariffs overseas.
“That can really impact your ability to sell into a [new] market,” Moore says.
More Jobs Return To The U.S.: Is it a Trend?
in UncategorizedOctober 15, 2012
For some companies, one reason to return stateside is cost. According to a study by The Hackett Group, a management consultancy, manufacturing in China has been losing its cost edge. Labor is still cheaper, but the price of goods is also affected by other factors. For instance, there is the “landed cost,” to consider, which includes every expense to not only make products but also to get them to where they need to be.
Meanwhile, wages are creeping up in China as employers try to avoid the type of worker unrest that has plagued Foxconn, which makes Apple products. At the same time, U.S. wages have come down. Add the surging cost of fuel of shipping goods from Asia and other distant locations, the complexity of global logistics and other considerations, and what was a 35 percent price advantage in 2005 will, according to Hackett, drop to 16 percent next year. That’s the level at which companies question whether outsourcing even makes sense.
Raw costs aren’t the only consideration. Lenovo’s rational for putting a factory in the U.S. isn’t a sudden price break. In fact, the company will assemble hundreds of thousands, not millions, of units in North Carolina. Factories in China, Europe and Mexico aren’t going away.
Lenovo counts on two benefits from U.S. facilities, as director of global supply chain communications Mark Stanton explained to CNET’s Brooke Crothers. One is speed to market, including faster assembly of custom orders.
The other is the perception of customers, many of whom might prefer to see a “made in the U.S.A.” label on the company’s products. Lenovo competitors Apple and Hewlett-Packard outsource manufacturing overseas, which ironically could make the Chinese company look more American than the domestic ones.
Locating factories in the U.S. and playing up the local connection is an approach Japanese auto companies smartly used to help build their American market share. As companies from China and elsewhere in Asia compete to provide more than cheap commodity goods in the U.S., opening factories here might become a more common tactic.
Leading Manufacturing Companies Unveil Veteran Job-Training Program
in UncategorizedBy Kevin Freking
Associated Press
The effort to hire more veterans will also involve working with employers. General Electric and the Institute for Veterans and Military Families at Syracuse University are developing a reference guide that employers can use to help them more effectively recruit and mentor veterans. The reference guide will be made available to those companies participating in efforts by the U.S. Chamber of Commerce and the White House to help 100,000 veterans and their spouses obtain work by 2014.
Veterans of the wars in Iraq and Afghanistan have had a harder time finding work and the unemployment rate for those veterans is about 2 percentage points higher than the national rate of 7.8 percent.
The new program comes amid the presidential election campaign, in which both President Barack Obama and Republican challenger Mitt Romney have cited veterans’ joblessness as a top priority.
The companies launching the new training effort are General Electric, Alcoa Inc., Boeing and Lockheed Martin. They are providing about $6 million in seed money.
Moment of Truth Approaching for U.S. Manufacturers
in UncategorizedOctober 12, 2012
But that bit of management magic may have run its course – Wall Street expects manufacturers to report a sharp slowdown in earnings growth in the just-ended third quarter, as Europe’s deteriorating economy, slowing growth in Asia and the risk of the United States going over a self-imposed fiscal cliff cause customers to throttle back spending even further.
Warning signs abound. In recent weeks, Caterpillar, United Tech and FedEx Corp have noted that the world economy is slowing – and that they are bracing for an extended period of tepid growth.
FedEx, the world’s No. 2 package-delivery company, this week unveiled plans to cut costs at its air-express operation by about $1.7 billion over the next four years, because it no longer expects that business to maintain its prior growth rate, which was twice that of global GDP growth.
Despite those cost-cutting plans, analysts expect profit for FedEx’s 2013 fiscal year, which ends in May, to be roughly flat after rising about 40 percent in fiscal 2012 – suggesting that belt-tightening can only do so much to offset a weak economy.
“We are operating in the most tepid post-recession recovery in the modern era,” David Bronczek, who heads the company’s air express arm, told investors.
Others have been more bullish – GE late last month raised its full-year sales growth target, saying demand for jet engines, electric turbines and other heavy equipment has held up despite a tricky global economy.
Wall Street has ratcheted down its expectations for the manufacturing sector during the quarter and now looks for the industrial companies in the Standard & Poor’s 500 index <.SPX> to collectively report 1.9 percent earnings growth, down from a forecast of 3.7 percent as of July 1, according to Thomson Reuters I/B/E/S.
That would represent dramatically slower growth than the 14.8 percent growth notched in the second quarter and 17.4 percent increase recorded in the first quarter of 2012.
ON THE BRINK
Adding to CEOs’ worries is the U.S. fiscal cliff, Washington’s self-imposed deadline to agree on a plan to shrink the federal budget or trigger $600 billion in spending cuts and higher taxes to take effect the beginning of January.
While the spending cuts would pose the greatest challenge to companies with defense operations, such as Honeywell International Inc and Textron Inc , economists and investors fear the cutbacks could ripple across the economy, prompting businesses of all kinds to rein in spending.
“How our politicians handle that fiscal cliff can either be a potential opportunity or could be a disaster and I think could spark a global recession if it was handled really poorly,” Honeywell CEO Dave Cote said in an interview in Dhahran, Saudi Arabia this week. “I’d like to be more optimistic and say I don’t think that kind of a disaster will happen.”
Concerns about the fiscal cliff contributed to a third-quarter weakening of demand for a wide variety of industrial goods, from heating and cooling equipment to pumps, a survey of equipment distributors conducted by Barclays Capital found.
“Outlook for the remainder of the year remains highly uncertain,” said Barclays analyst Scott Davis. “We think this is a mid-cycle slowdown which is larger than we had expected but not the end of the cycle.”
RALLY REVERSAL?
Concerns about slowing profit growth have begun to weigh on industrial shares. After running up by about 24 percent in the six months spanning the fourth quarter of 2011 and first quarter of 2012, the S&P capital goods index <.GSPIC> has flattened out and is now up about 20 percent for the past 12 months, in line with the broader S&P 500.
Oliver Pursche, president of Gary Goldberg Financial Services, which manages about $600 million in assets, said he expects industrial shares to slump in the coming months.
“We’re not particularly bullish on material and industrial stocks at this point in time,” Pursche said. “If you look at the big rally that we saw in the fourth quarter of last year and the first quarter of this year, we think we’re more likely to see a selloff in part as a result of the global macro picture.”
(Additional reporting by Nick Zieminski in New York and Reem Shamseddine in Dharan, Saudi Arabia; Editing by Patricia Kranz)
Walmart Strikes Mark New Chapter In Labor's Fight With Mega-Retailer
in UncategorizedDave.Jamieson@huffingtonpost.com
October 15, 2012
“The events that took place this week had absolutely no impact on our business whatsoever, on our ability to staff our stores adequately or serve our customers,” noted David Tovar, Walmart’s vice president of communications. “The workers that have raised issues this week represent a very small, miniscule number of the total number of associates that work at Walmart.”
The 90-odd workers who walked out of stores comprise a fraction of one percent of Walmart employees, who now number around 1.3 million in the U.S. and 2.2 million worldwide. Even among participating stores, strike participation was small. But that’s not to say a coordinated, multi-store strike doesn’t mark a new chapter in the long-running fight between organized labor and America’s premiere mega-retailer, argued Dan Schlademan, director of the United Food and Commercial Workers union’s “Making Change at Walmart” campaign.
“All of this is a new beginning for the reality of Walmart and the reality of retailers,” Schlademan said. “You can’t change standards anywhere else until you change Walmart.”
If nothing else, a not-insignificant number of Walmart workers have proved willing to declare themselves activists or, at least, dissatisfied employees. It takes a certain boldness to invite bad publicity on one’s employer, particularly in a weak economy. (The workers may have the backing of a union, but not a union contract.) It also takes some financial sacrifice. Although a strike fund is currently in the works, the employees who went on strike last week forwent their wages for the day, according to a UFCW official.
According to the historian Nelson Lichtenstein, who chronicled Walmart’s rise in The Retail Revolution: How Wal-Mart Created a Brave New World of Business, the risks taken by the striking workers warrant a notch on the Walmart timeline.
“What is big is these workers have actually identified themselves as [union] supporters, and Walmart knows who they are,” Lichtenstein said. “As a labor historian, the crucial moment in organizing campaigns is the moment when [workers] can identify themselves publicly as unionists.”
Company-wide unionization remains little more than a pipe dream for labor activists, especially considering any contracts would have to be struck on a store-by-store basis. (Walmart currently has more than 3,000 supercenter stores in the U.S.) But the UFCW, which launched the non-union worker group OUR Walmart last year, has continued to invest in pressuring Walmart to boost wages and improve benefits. It argues that raising the bar at the largest company in the world would have broader effects on the retail sector and the economy at large.
Tovar said that Walmart’s internal surveys indicate the company’s marks with employees are actually improving. He said the average wage at Walmart is now $12.50 for a full-time employee, though he couldn’t provide wage statistics for part-timers. Making Change at Walmart, however, claims the average hourly wage of a sales associate is $8.81, about a buck and a half more than the federal minimum wage and well below most areas’ living wage standards.
Walmart often notes that more than half of its workers have health coverage through the company, but it doesn’t give specific numbers when pressed by reporters. Some Walmart workers say the plans that are offered are too expensive to afford.
Dan Hindman, 28, went on strike for one day at his Walmart in Paramount, Calif. Hindman told HuffPost that his company health plan swallows roughly half of his paycheck, and that he typically gets only two shifts per week, so by giving up one he effectively cut his week’s hours in half. Tovar said a majority of Walmart workers are full-time employees, but Hindman said he and many other workers at his store struggle to get enough shifts. A veteran of the retail world since high school, Hindman said he was striking to help improve conditions not just at Walmart but throughout the industry.
“There’s a lot of people that are afraid to stand up,” said Hindman, an OUR Walmart member. “It’s not just Walmart but Target and Bestbuy. We’re striking for everybody.”
Tovar said Walmart has reached out to the workers who went on strike last week, offering them the opportunity to sit down with management and discuss their issues. “We want everybody to have a good and positive experience working at Walmart,” he said.
But it isn’t just retail workers and their affiliates who’ve been criticizing Walmart lately. Union-backed groups in the shipping and food-processing industries have recently made a point of singling out the retailer, arguing that by its sheer size and influence it helps set low standards throughout the consumer economy.
Backed by the labor group National Guestworker Alliance, a group of guestworkers from Mexico recently walked out of the Louisiana seafood processor C.J.’s Seafood, which supplied seafood to Walmart’s Sam’s Club stores. The workers claimed they worked under abusive conditions, and the Labor Department fined the company roughly $250,000 for safety and wage violations. Walmart has dropped C.J.’s as a supplier.
Similarly, temp workers who handle goods in Walmart-contracted warehouses in California and Illinois launched their own strike preceding the Walmart store workers’ walkout. Striking warehouse workers in Elwood, Ill., eventually returned to work, winning full back pay as well as new safety amenities like kneepads and large cooling fans inside the warehouse, according to Phillip Bailey, one of the striking workers.
Although Walmart employs many workers directly at its warehouses around the country, it subcontracts much of its operations in the logistics hubs of Illinois and Southern
Califo
rnia, where workers tend to be low-paid temps. Warehouse workers from those areas plan on descending on Walmart’s Bentonville, Ark., headquarters to deliver petitions this week.
Bailey works for a company named RoadLink but moves goods bound for Walmart stores. He earns $10 an hour without benefits. He said he sees his own situation in that of the Walmart store employees who walked out. Even though Walmart does not employ Bailey, he said he blames the retailer for what he considers sub-par conditions at his warehouse.
“It’s all the same struggle,” said Bailey, who spent some of his time off last week passing out flyers outside a Walmart in the Chicago area. “It’s the same squeeze. Walmart puts the squeeze on the whole supply chain and on their store workers the same way. … The same patterns apply all throughout the chain.”
Warehouse workers like Bailey tend to have their busiest weeks of the year leading up to the shopping bonanza of Black Friday. Labor activists have long talked about warehouse workers’ potential to disturb retailers’ holiday plans through a walkout, and the Walmart store employees who went on strike last week have threatened to make Black Friday “memorable” for the retailer. It may require massive participation for striking workers to put a dent in the company’s operations, but it would take much less to usher in another round of negative publicity.
“This is really the beginning of a tipping point where workers in many aspects of Walmart’s company — whether warehouses or stores — are starting to understand that they do have a voice,” Schlademan said. “If I’m Walmart, I’m afraid of that.”
Hot Springs Manufacturing Company Alliance Rubber Reaching 90 Years
in Uncategorized“We do about 15 million pounds a year,” President Bonnie Swayze said.
Coming off the lines and into bins, rubber bands are one of the staple products at Alliance Rubber Company, which has become a staple business in Spa City.
“We’ve been here since 1944 and the next March 7th, we will celebrate our 90th anniversary,” Swayze said.
A big mile-stone, President Bonnie Swayze feels, comes from two main factors.
“It’s because of ingenuity and the perseverance of our great staff here in Hot Springs,” Swayze said.
In the past year and a half, the company’s introduced eight products, like wristbands the company designs for clients.
“These are the world’s first custom-imprinted, four-color imprint wristbands, we’re the only one in the world with it,” Swayze said.
There are new fragrance-wristbands too and more staples like lobster bands, all of originating from blocks of rubber shipped in from overseas.
“They’re 75 pounds apiece; this is the stuff that actually comes out of a tree,” Trevor Hamilton said.
Safety Training Coordinator Trevor Hamilton calls the longevity here unbelievable.
“When I came in 19 years ago, I walked in the doors and said I know there is no way that I could be here this long,” Hamilton said.
But he’s happy he has stayed here. And with the way things are going, he’s planning to stay, with innovation and company staples “banding” together.
Alliance Rubber ships its products around the country and to 28 countries. Swayze says the company’s also received national recognition for their innovation.
U.S. Will Place Tariffs on Chinese Solar Panels
in UncategorizedOctober 10, 2012
For one of the biggest panel makers, Suntech, the duties are slightly higher, moving to almost 36 percent from about 34 percent.
The trade case stemmed from a legal filing nearly a year ago by a coalition of manufacturers, led by SolarWorld, a German company with considerable manufacturing in the United States. The coalition contended that Chinese companies, which dominate global sales with a two-thirds market share, were competing unfairly in the American market.
“This is another important step in returning the solar marketplace in the United States to fair competition,” said Timothy C. Brightbill, a lawyer representing the companies that brought the case.
At the same time, Mr. Brightbill said, he was concerned that the Commerce Department did not expand the scope of the ruling, which applies to panels made up of Chinese-produced solar cells. That has allowed companies to sidestep the duties by assembling panels composed of cells produced elsewhere, even if their components come from China. “We are looking to the administration for an explanation on how they will close or address this loophole in the scope.”
The Chinese government had no immediate response to the decision, which was issued in the early hours of the morning Beijing time.
Some opponents of the tariffs said the ruling might not benefit the struggling United States manufacturers as much as SolarWorld and its supporters had hoped, given that Chinese firms could still make panels with cells produced in other countries.
“The fact that the Department of Commerce didn’t expand the scope means that those companies aren’t going to be banned from doing business in the U.S.,” said Jigar Shah, an entrepreneur representing a group of companies that opposed the tariffs. “We really think the Department of Commerce came down on the side of free trade.”
Shayle Kann, the head of GTM Research, a unit of Greentech Media, agreed. “There’s an impact there, but it’s not huge in terms of what it does to the market,” he said.
Wholesale prices have declined by nearly three-quarters since 2008 as Chinese companies expanded capacity and production much faster than the growth in worldwide demand. When China began the rapid expansion of its solar industry several years ago, many in the global industry expected that further technological breakthroughs would result in additional cost reductions.
But Chinese companies have driven costs down mainly through greater economies of scale from building ever-larger factories to produce conventional solar panels.
About a dozen panel makers in the United States, as well as a similar number in Europe, have gone bankrupt or closed factories since the start of last year. The European Union began the world’s largest antidumping case, covering solar panel imports from China that totaled $26.5 billion last year. The trade case has divided the American solar industry, with some manufacturers and installers siding with SolarWorld and others strongly opposing the tariffs.
The opponents argue that the duties would make it more expensive for American families and companies to install solar systems.
American manufacturers of factory equipment and raw materials have also expressed concern that the trade measures could imperil their sales to China, whose government began its own investigation into whether American and South Korean manufacturers of polysilicon, the main ingredient in the solar panels, were selling the material below cost.
Steve Ostrenga, chief executive of the panel maker Helios Solar Works USA of Milwaukee, who supported the trade case, said in a statement after Wednesday’s ruling that he was confident “that American manufacturers can compete with China on an equal footing.”
“Assuming an adequate response from the Obama administration on enforcement, we have some hope that there will continue to be a viable solar manufacturing base in the United States,” Mr. Ostrenga said.
Although the Commerce Department’s decision is final, the tariffs cannot go into effect unless the International Trade Commission finds that the Chinese pricing practices have actually harmed or threatened to harm the American industry, a determination that is not expected until November. But the commission issued a preliminary ruling that such injury had occurred, and reversals are uncommon, particularly if the domestic industry is in trouble.
The Commerce Department calculated separate penalties for unfair subsidies and dumping, reducing the antidumping penalties from the preliminary ruling for most of the manufacturers while sharply increasing the antisubsidy duties after finding that companies had benefited from additional subsidies.
But to avoid double-counting duties, the department reduced the rates importers will have to pay.
———-
This article has been revised to reflect the following correction:
Correction: October 10, 2012
A Breaking News headline posted online in advance of this article misstated the range of tariffs, and an earlier version of the article referred to the range imprecisely. It is 24 percent to 36 percent, not 31 percent to 47 percent, on most manufacturers of solar panels and cells imported from China.
U.S. Solar Industry Reacts to Commerce Department Decision on Solar Trade Case
in UncategorizedCommerce today set anti-dumping duties of 31.73 percent on imports of solar photovoltaic cells and panels from Suntech, 18.32 percent from Trina Solar, 25.96 percent from other companies that had requested but not received individual duty determinations and 249.96 percent from all other Chinese producers, including those controlled by the Chinese government. The preliminary numbers imposed in late May were 31.14 percent, 31.22 percent, 31.18 percent and 249.96 percent, respectively. In short, same or down.
In addition, Commerce found anti-subsidy duty percentages of 14.78 percent for imports from Suntech, 15.97 percent Trina Solar and 15.24 percent for all other Chinese manufacturers. Those increased significantly from preliminary anti-subsidy duties announced in March of 2.9 percent for Suntech, 4.73 percent for Trina and 3.59 percent for all other Chinese producers.
In a separate part of the decision, Commerce did not alter its preliminary determination on the product scope, which covered photovoltaic cells produced or assembled into panels in China but not panels made from cells produced in third countries. SolarWorld’s initial, broader scope had covered all cells and panels produced in China. This decision, according to CASM, leaves a significant loophole in the final ruling as it allows Chinese manufacturers to potentially avoid the duties by using non-Chinese cells in its solar panels.
“By leaving this ‘loophole’ as defined by Members of Congress in its enforcement decision, Commerce continues to expose U.S. manufacturers to Chinese unfair trade practices,” said Gordon Brinser, president of SolarWorld Industries America Inc. “This will undercut the positive impact of Commerce’s duties. Assuming the International Trade Commission rules in our favor next month, we plan to ask the Commerce Department and Customs and Border Protection to address the circumvention issue through strict enforcement actions. As 27 Members of Congress, including Sens. Ron Wyden (D-Ore.) and Sherrod Brown (D-Ohio), Leader Nancy Pelosi (D-Calif.) and Reps. Tammy Baldwin (D-Wisc.), Earl Blumenauer (D-Ore.), Sander Levin (D-Mich.), Edward Markey (D-Mass.) and many others, have pointed out in recent weeks, the loophole will make it difficult to enforce the Commerce decision. We will work with them to pursue remedies to close the loophole. Moreover, to date, we are unaware of a single member of Congress who urged the President to leave the loophole in place.”
Commerce also reiterated its finding of critical circumstances for all companies in the CVD determination, and for all companies except Suntech in the AD determination, which means that nearly of the duties remain retroactive 90 days from the day they were announced.
“We remain confident that American manufacturers can compete with China on an equal footing,” said Steve Ostrenga, CEO of Milwaukee-based Helios Solar Works USA, one of the founding members of CASM. “Helios, and the other manufacturing members of CASM, is in this battle to win it. Assuming an adequate response from the Obama administration on enforcement, we have some hope that there will continue to be a viable solar manufacturing base in the United States.”
“On behalf of the more than 18,000 workers who belong to the coalition, I want to thank the investigators at the Commerce Department for their hard work on this politically charged case and, especially, Sen. Wyden for taking up the cause of American solar manufacturing,” added Brinser. “Without Sen. Wyden’s efforts, the industry would have never gotten as far as we have. Today’s decision is one part of a solution that will help American solar manufacturers recover from China’s unfair trade practices.”
Over the two years, China’s predatory trade practices and huge overcapacity have pushed at least 14 crystalline silicon solar producers to close plants or lay off significant numbers of workers. The two most recent announcements are the closing of a Schott Solar facility in New Mexico and a Sharp Solar facility in Tennessee. Chinese trade practices have also harmed manufacturers in other countries. Earlier this year, a coalition of European manufacturers filed both anti-dumping and anti-subsidy duty cases in the European Union.
At the same time, Chinese manufacturers have endured hundreds of billions of dollars in losses over the past year and at least two – Suntech and LDK Solar – have received bailouts from Chinese provincial governments that have allowed them to continue operations.
The final step in the case will be the International Trade Commission’s final decision on Nov. 7 on whether the trade practices of the Chinese manufacturers and government is harming the U.S. industry. Last December, the commission voted affirmatively, 6-0, in a preliminary determination.
# # #
The Coalition for American Solar Manufacturing, founded by seven companies that manufacture solar cells and panels in the United States, has about 225 employers of about 18,000 workers who have registered their support for CASM’s case. The founding manufacturers have plants in nearly every region in the United States, including the Northwest and California, the Southwest, Midwest, Northeast and South and support several thousand U.S. manufacturing jobs. For details about CASM, go to www.americansolarmanufacturing.com; email media questions to media@americansolarmanufacturing.org; other questions or comments may be emailed to contact@americansolarmanufacturing.org.
CONTACT: Lauren Simpson
903-243-2201 (cell)
media@americansolarmanufacturing.org
If Obama Wins, You May Lose Your Job- CEO emails 7,000 employees: Defeat Obama or else
in UncategorizedOctober 10, 2012
On Monday he sent an e-mail to all 7,000 employees of privately-held Westgate Resorts, many of them in the battleground state of Florida, warning them their jobs are at risk if the president is re-elected.
“The economy doesn’t currently pose a threat to your job. What does threaten your job however, is another 4 years of the same Presidential administration,” he said in the e-mail. (Track economy under Obama)
“If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company,” he says in the nearly 1,400-word e-mail. “Rather than grow this company I will be forced to cut back. This means fewer jobs, less benefits and certainly less opportunity for everyone.”
Siegel doesn’t mention Romney’s name anywhere in the e-mail, and he writes he “certainly wouldn’t interfere with your right to vote for whomever you choose.” And he insisted Tuesday that he wasn’t threatening to fire employees if Obama is re-elected. But he proudly stands behind the e-mail.
“I wanted the employees to know what the situation is, and not listen to campaign commercials but hear it from the horse’s mouth,” he told CNNMoney.
Siegel actually has been hiring in recent years.
He said Westgate had 12,000 employees and $1 billion in annual revenue four years ago, before the financial meltdown caused credit markets to freeze up. “We were fat, dumb and happy,” he said.
Siegel based his e-mail on an anti-Obama letter that was widely circulated before the 2008 election, but he said he made many changes, adding many of his own views and personal history. He is particularly angry by what he sees as unfair attacks on the nation’s wealthiest by the Obama administration, which is seeking to raise taxes on top earners.
“What most people see is the nice house and the lavish lifestyle. What the press certainly does not want you to see, is the true story of the hard work and sacrifices I’ve made,” he wrote. “Now, the economy is falling apart and people like me who made all the right decisions and invested in themselves are being forced to bail out all the people who didn’t…We are being taxed to death and the government thinks we don’t pay enough.’
He acknowledged his 90,000-square foot home now under construction in the letter. The home is the subject of a critical documentary, “The Queen of Versailles.”
Siegel said he was forced to stop work on the home four years ago because he had to pour all his money back into the company during the lean years, but that he’s ready to start work on the home again — assuming Obama is defeated.
“If the wrong people stay in power, I’ll have to stop it again,” he told CNNMoney. “I don’t see a good future.”
Manufacturer Helps Vets Turn Military Skills Into Jobs
in UncategorizedOctober 10, 2012
“They have all these great skills and manufacturing is a perfect place for them to transition into,” said Holly Mosack, director of military recruiting for Advanced Technology Services, based in Peoria, Ill.
Whether U.S. manufacturing can thrive again is a perennial question. But recent economic data suggests sector improvement. The Institute for Supply Management (ISM) last week said the manufacturing sector expanded in September—shaking off three months of weakness as new orders and employment edged higher.
Advanced Technology Services helps factories improve productivity and profitability. Their clients include Caterpillar, Honeywell, Eaton and Textron.
Advanced Technology Services began focusing on military hiring in 2006. That emphasis was ramped up last year as more vets began returning home from conflicts in Iraq and Afghanistan.
But transitioning from the battlefield to private-sector work is challenging, as jobs data shows. The unemployment rate for veterans—who served on active duty in the U.S. Armed Forces at any time since September 2001—was 12.1 percent, the U.S. Bureau of Labor Statistics said earlier this year. (Read more: Veterans Face New Battle in Private-Sector Job Market)
Applying for the wrong jobs
Mosack said she noticed vets applying for the wrong jobs. “They were going for positions they were under or over qualified for.”
Other veterans need help on basic skills such as how to address supervisors. Some veterans “feel silly asking, ‘What am I supposed to call my boss?’ ” she said. Advanced Technology Services’ program helps veterans navigate these dilemmas and other tasks they’ve never managed before such as health-care forms and 401(k)s.
Roughly 25 percent or 650 of the company’s 2,600 U.S.-based employees are veterans. Brian Aschenbrenner, a former Air Force officer is among them. A military communications officer, Aschenbrenner handled radios, radars, satellites and other communication equipment at Air Force bases and in Iraq, Jordan and Qatar.
After nearly 24 years in the military, Aschenbrenner found himself looking for a civilian job for the first time in his life a few months ago. Advanced Technology Services caught his attention.
“Looking into what they did, I could see the relationship to maintaining factory equipment,” he said. Aschenbrenner now supervises maintenance activity on plant industrial equipment in Oklahoma. “The military is full of guys, who have a variety of technical skills.”
Why I, a Former GOP Senator, Will Vote for Obama
in PoliticsOctober 9, 2012
As a Vietnam vet, one of the reasons I support President Obama is because he has consistently shown he understands that our commitment to our servicemen and women may begin when they put on their uniform, but that it must never end.
This decision is not easy for any lifelong Republican. In 2008 I voted for Barack Obama, the first time I ever voted for a Democrat, because the Republican Party was drifting toward a dangerous path that put extreme party ideology above national interest. Mitt Romney heads a party remaining on that dangerous path, proving the emptiness of their praise as they abandon our service members, veterans and military families along the way.
What really set me off was Romney’s reference to 47% of Americans to be written off – including any veteran collecting disability like myself, as a post-traumatic stress disorder (PTSD) veteran.
Behind closed doors with his donors, Romney made clear he’d write off half of America – including service members and veterans – because, as he said “I’ll never convince them they should take personal responsibility for their lives.” But there’s no greater personal responsibility than to wear your country’s uniform and defend the rights we all enjoy as Americans. We don’t sow division between “us” versus “them.” The Commander-in-Chief sets the bar for all to follow and fight for the entire country. Mitt Romney fails that test. As a veteran I feel written off.
Just as revealing is what Romney actually says publicly. As a former Foreign Service Officer, I find it offensive that Romney, Congressman Paul Ryan and their Republican Party are politicizing the death of Ambassador Chris Stevens and three other brave Americans who lost their lives in Libya. Being Commander-in-Chief requires a resolve and steadiness that’s immune to politics and fear mongering. Mitt Romney fails that test.
And along with high-profile Republican surrogates, Romney and Ryan are pandering to election-year politics rather than focusing on pending cuts to military spending. Strategy should drive our military priorities, not party purity.
We are a nation at war – the longest war in our nation’s history – and we must remember the sacrifice that so many have given for the protection of our country and our values. That’s why it’s so surprising that Republican nominee Mitt Romney has given five speeches on foreign policy – and will be giving another one today – and has yet to outline any plan to end the war in Afghanistan or bring our troops home. That’s unacceptable for anyone running to be Commander-in-Chief.
President Obama ended one war, is ending another and meeting our national security needs with support of our military leaders. He’s laid out a clear plan that would reduce the deficit and prevent the mandatory military spending cuts that no one wants. But today’s Republican Party, including Ryan who voted for the deal that would trigger the cuts, is willing to bring our country’s defenses to the fiscal cliff – just so a multimillionaire doesn’t have to pay a single extra penny in taxes. And the real lack of leadership? Failing to own up to your role in racking up a record debt from two unpaid wars and two massive unpaid for tax cuts. Mitt Romney leads the party that fails this leadership test.
And as former member of the U.S. Senate Budget Committee, the Senate Finance Committee and Chairman of the then Commerce Committee, I came to know the federal budget in detail. I’m disappointed that just as our troops are returning home after a decade of war, Romney and Ryan might gut by up to 20 percent investments in the Department of Veterans Affairs – and even suggest privatizing the veterans’ health care. Again, they would short change our national security and the education, health care and employment benefits our veterans have earned and deserve just to cut taxes for the wealthiest Americans.
Let’s be clear, Romney and Ryan would be disastrous for America’s service members, veterans and military families. Public praise rings hollow when you fail to mention an ongoing war in accepting your party’s nomination to be president, or veterans in a speech to the Veterans of Foreign Wars, a so-called jobs plan or in a budget that should be a blue print of our nation’s values.
Meanwhile President Obama recognizes our sacred trust with those who serve starts when they take their oath and never ends. He’s enacted tax credits to spur businesses to hire unemployed veterans and wounded warriors. He implemented and improved the post-9/11 GI Bill, the largest investment in veterans education since the original GI Bill over sixty years ago. He’s proposing a Veterans Jobs Corps that would put returning service members to work as police officers, firefighters and first responders. As part of his achievable plan to keep moving our country forward, the President would use half the savings from ending the wars in Iraq and Afghanistan to help pay down our debt and invest in nation building here at home, putting Americans back to work – including our veterans – fixing our roadways and runways, bridges and schools.
And something that hits close to home, President Obama also secured the largest increase in VA investments in decades so our veterans get the care and benefits they earned, like treatment for PTSD and traumatic brain injury. As someone with service-related PTSD, I meet with younger veterans weekly to help them through the treatment and transition to a productive civilian life. It makes a difference for them knowing their President has their back.
That’s the difference in this election. In word and deed anywhere and every time, President Obama never forgets that standing by those who serve is the heart, soul and core value of this country. As a life-long Republican, I stand by him as he stands by all of us, putting national allegiance ahead of party affiliation. I endorse President Obama for reelection in 2012.
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Made in America, Again: Why Manufacturing Will Return to the USA
in Domestic Sourcing, Made in USA, Manufacturing, Production, ReshoringFor over a decade, deciding where to build a manufacturing plant to supply the world was simple for many companies. China was the clear choice with its seemingly limitless supply of low-cost labor, an enormous, rapidly developing domestic market, an artificially low currency, and significant government incentives to attract foreign investment. Read more
China Needs Its Own Dream
in Uncategorized“Success in the ‘American Dream,’ ” notes Peggy Liu, the founder of the Joint U.S.-China Collaboration on Clean Energy, or Juccce, “used to just mean a house, a family of four, and two cars, but now it’s escalated to conspicuous consumption as epitomized by Kim Kardashian. China simply cannot follow that path — or the planet will be stripped bare of natural resources to make all that the Chinese consumers want to consume.”
Liu, an M.I.T. graduate and former McKinsey consultant, argues that Chinese today are yearning to create a new national identity, one that merges traditional Chinese values, like balance, respect and flow, with its modern urban reality. She believes that the creation of a sustainable “Chinese Dream” that breaks the historic link between income growth and rising resource consumption could be a part of that new identity, one that could resonate around the world.
So Juccce has been working with Chinese mayors and social networks, sustainability experts and Western advertising agencies to catalyze sustainable habits in the emergent consuming class by redefining personal prosperity — which so many more Chinese are gaining access to for the first time — as “more access to better products and services, not necessarily by owning them, but also by sharing — so everyone gets a piece of a better pie.”
That means, among other things, better public transportation, better public spaces and better housing that encourages dense vertical buildings, which are more energy efficient and make shared services easier to deliver, and more e-learning and e-commerce opportunities that reduce commuting. Emphasizing access versus ownership isn’t just more sustainable, it helps ease friction from the differences between rich and poor. Indeed, Juccce translates Chinese Dream as “Harmonious and Happy Dream” in Mandarin. (“Green” doesn’t sell in China.)
Chinese are more open to this than ever. A decade ago, the prevailing attitude was, “Hey, you Americans got to grow dirty for 150 years. Now it is our turn.” A couple of weeks ago, though, I took part in the opening day of Tongji University’s Urban Planning and Design Institute in Shanghai and asked students whether they still felt that way. I got a very different answer. Zhou Lin, a graduate student studying energy systems, stood up and declared, with classmates nodding, “You can politicize this issue as much as you want, but, in the end, it doesn’t do us any good.” It is not about fairness anymore, he said. It is in China’s best interest to find a “cleaner” growth path.
To say China needs its own dream in no way excuses Americans or Europeans from redefining theirs. We all need to be rethinking how we sustain rising middle classes with rising incomes in a warming world, otherwise the convergence of warming, consuming and crowding will mean we grow ourselves to death.
China’s latest five-year plan — 2011-15 — has set impressive sustainability goals for cutting energy and water intensity per unit of G.D.P. All of these goals are critical to the greening of China, but they are not sufficient, argues Liu. With retail sales growing 17 percent a year since 2005 and urban incomes up 150 percent in the last decade, “the government must also have a plan to steer consumer behavior toward a sustainable path,” adds Liu. “But it doesn’t yet.”
So Xi Jinping has two very different challenges from his predecessor. He needs to ensure that the Communist Party continues to rule — despite awakened citizen pressure for reform — and that requires more high growth to keep the population satisfied with party control. But he also needs to manage all the downsides of that growth — from widening income gaps to massive rural-urban migration to choking pollution and environmental destruction. The only way to square all that is with a new Chinese Dream that marries people’s expectations of prosperity with a more sustainable China. Does Xi know that, and, if he does, can he move the system fast enough? So much is riding on the answers to those questions.
Madison Rising – The Star Spangled Banner
in UncategorizedCheck them out on Facebook and tell everyone you know about this amazing group!!!
Honda Announces Third Large Recall of Week – 268,000 CR-Vs
in UncategorizedOctober 6, 2012
In the CR-V recall, the automaker said rainwater or spilled liquids may enter an open driver’s window and drip onto the master power window switch. Over time, exposure to liquids can cause electrical resistance in the switch, making it overheat, melt and cause a fire. No crashes or injuries have been reported related to the problem but Honda said it knows of four switch fires.
On Thursday, Honda expanded a March headlight recall to include 820,000 model-year 2002-2003 Civic sedans and model-year 2004-2005 Pilot sport-utility vehicles in the United States.
The automaker said a problem with the wiring of the headlight switch could cause the low-beam headlights to not work. The loss of headlights could limit a driver’s ability to see the road and potential hazards and increases the risk of a crash. However, Honda said no crashes or injuries have been reported in connection with the problem.
In March, Honda recalled 550,000 CR-V small SUVs from the 2002 through 2004 model years and Pilots from 2003 because of the same problem.
On Monday, Honda said it would expand a recall of Acura TL sedans to include 572,000 model-year 2003-2007 Accord V6 vehicles in the United States.
But the automaker said the Accord recall, to fix leaking power steering hoses that could cause fires, will be delayed into next year because the automaker doesn’t have enough parts to fix the problem. The updated power steering hoses won’t be available until early 2013.
Honda is sending out a notice to Accord owners telling them of the problem and describing the symptoms. Drivers who think their cars are affected should take them into the dealership for an “interim” repair, the automaker said. The most commonly reported symptom is a smell from the seeping fluid.
Manufacturers Report Saving Millions by Reshoring
in UncategorizedLow-cost labor’s connection to the “cheapest price” for an end product is getting less play, according to Acorn. U.S. manufacturing and retail companies are now giving more attention to attaining the “lowest total price” or “net landed costs” to avoid the sting of rising wages for Chinese workers and a strengthening Chinese currency.
According to a recent report from The Hackett Group, the most important decision-driver in the sourcing strategy for manufacturing firms is net landed costs, which incorporates components historically overlooked, such as raw material costs, manufacturing costs, transportation and logistics, inventory carrying costs, taxes, duties, etc.
Other factors cited when considering the option to reshore include:
Product quality – For manufacturers, quality is always top of mind. Justin Rose, a principal with the Boston Consulting Group says, “You never know what’s being sourced from local suppliers and if it’s up to quality standards.” Rose also points out that extra-long supply chains add uncertainty to the shipping and distribution process, causing manufacturers to hold more inventory to ensure that retailers can be kept stocked.
Shorter product life expectancy and faster time-to-market:The life expectancy of products is shrinking so it is important for manufacturing firms to provide high-quality products as quickly as possible to stay ahead of the competition. A recent survey by Mitch Free, CEO and founder of MFG.com, indicated that locating production near a company’s engineering/marketing teams provides crucial collaboration for innovation and quicker time-to-market.
Nationalism/political pressure: According to a recent survey by Massachusetts Institute of Technology (MIT) engineering professor, Dr. David Simchi-Levi, 21 percent of manufacturers listed “pressure to increase jobs” as a factor in reshoring. Dr. Simchi-Levi reported that survey respondents “appear to feel both political and market heat to show that they make products in the U.S.”
“We are certainly addressing the topic of reshoring with our current U.S. manufacturing customers,” said Leland Putterman, CEO, Acorn Systems. “A growing number can see that, from a pure financial perspective, reshoring is the best business decision for them.”
President Barack Obama recently announced plans for new tax proposals that would reward companies for creating jobs in the U.S. and possibly eliminate tax advantages for moving them overseas. High-profile manufacturers such as Caterpillar, GE and Ford have already announced plans to reshore some products to the U.S.
Manufacturing May Be Coming Back to the U.S., Long-Term
in Uncategorized(This article is by Robert McCutcheon, the U.S. industrial products leader of PwC.)
PwC’s recent report A Homecoming for U.S. Manufacturing? evaluates the key factors that may lead to the U.S. becoming a more attractive manufacturing location. Many manufacturers are increasingly reevaluating their U.S. strategies, such as their separation of R&D and production, and their production abroad and importation back to U.S. buyers. Depending on the industry, they may find considerable benefits in establishing regionalized supply chains and R&D facilities in the U.S., including reducing costs, shortening lead times, protecting intellectual property, and avoiding many of the risk factors of developing markets. Localizing production can help reduce supply chain disruptions that cost American industrial manufacturers $2.2 billion last year, according to the PwC report. Bringing manufacturing production back to the U.S. generally holds greater advantage for some industries than others. Taking into account labor, materials, transportation, and energy costs, the chemicals, primary metals, and heavy equipment manufacturing industries stand to benefit most from maintaining or expanding facilities in the U.S. Companies in wood, plastic, and rubber products could also benefit significantly, but their lower net imports might limit their benefits from on-shoring.
The bull market in energy commodities has driven up transportation costs for manufacturers with global supply chains, leading some machinery companies to produce more in the U.S. for sale in North America. If transportation costs remain elevated, perhaps because of growing global demand for energy, production closer to home may grow more attractive. Also, it can cut down on lead times, reduce inventory levels, diminish some currency risks, increase control over intellectual property, and reduce supply chain disruption risks. In addition, progress in extracting natural gas from shale has created new opportunities for manufacturers in several industries, particularly chemicals and metals, thanks to more affordable energy and greater downstream demand.
Also, manufacturers are increasingly concerned about currency fluctuations. The depreciation of the dollar and rise of China’s currency has narrowed the cost gap between producing domestically and importing from China for domestic consumption. Moreover, the long-term decline in the dollar helps make the U.S. a potentially more competitive location for manufacturing for export, and there has been strong growth in the exports of goods since the end of the recession. The appreciation of the yuan relative to the U.S. dollar may continue longer-term as China’s economy grows, which could further help U.S. manufacturers.
U.S. demand remains supreme. Although China and other emerging markets are expected to keep having faster gross domestic product growth than the U.S., our advantage in wealth, in real GDP per capita, is expected to persist, dwarfing China and other emerging markets. This difference in standard of living, as well as the size of the U.S. market, supports investment in the domestic production of goods targeted for U.S. consumption. In addition, the U.S. labor force remains strong.
As for the availability of capital, although credit standards aren’t at the levels reached during the financial crisis, banks have resumed tightening their credit requirements. Borrowing in China and has become more difficult, too, though, so manufacturers may shy away from longer supply chains and the risks they carry, including getting inventory stuck in transit, particularly in industries with short product cycles or high spoilage.
The U.S. has the highest statutory corporate tax rate among developed countries. This has spurred talk of tax reform to boost economic growth and employment. Proposals include a lower statutory rate, tax incentives, and extending or making permanent the R&D tax credit. However, the tax and regulatory environments do bring uncertainty to the expansion of domestic manufacturing.
All these considerations, as well as labor costs, are affecting manufacturers’ decisions whether to establish production facilities in the U.S., closer to their domestic customers. Can we expect an increase in re-shoring as a result? Will “Made in USA” become more common? Only time will tell, but a wide range of signals now suggest a potential renaissance of the U.S. manufacturing sector.
Call Me Maybe – 2012 CT Manufacturers
in UncategorizedAmerica's Manufacturing Crisis: Finally Harvard Gets It
in UncategorizedThe only previous serious academic treatment I can remember was Manufacturing Matters by the Berkeley economist Stephen S. Cohen and his political scientist colleague John Zysman. Written as far back as 1987, this was an inspired book but precisely because it was so early, it was forgotten long before the future problems the authors so presciently identified became universally obvious.
Why is manufacturing so important? In my book In Praise of Hard Industries: Why Manufacturing, Not the Information Economy, Is the Key to Future Prosperity in 1999, I made three points:
1. Jobs. Manufacturing creates a much better mix of jobs than advanced services — jobs for everyone from ordinary blue collar workers to capable engineers, brilliant scientists, and resourceful and far-sighted top managers.
2. Wages. Those who in the 1970s began dismissing America’s manufacturing base as the “Rust Belt” displayed deep ignorance of modern First World manufacturing. Such manufacturing has long been highly capital-intensive, which means that each worker’s productivity is greatly leveraged by sophisticated production machinery. This creates plenty of room for employers to pay high wages. Advanced manufacturers moreover require great accumulations of secret production knowhow – typically knowhow acquired over generations of “learning by doing” – and this powerfully shields them from low-wage foreign competition.
3. Exports. I have calculated that, per unit of output, manufacturing businesses are nearly ten times stronger exporters on average than services. Thus America’s investment in postindustrial activities (such as computer software, internet development, finance, and legal services) cannot hope to bridge the trade gap opened up by the decline of manufacturing. One reason for manufacturing’s superior export prowess is that manufactured products generally require little adaptation to sell around the world. By contrast services have either to be performed in a customer’s home country or at least – in the case of computer software, for instance – have to be expensively adapted to meet different cultural needs in different foreign markets. Thus the net receipts transmitted back to the United States are often minimal.
What explains the American establishment’s complacency in the face of the near collapse of the national manufacturing base? The answer is mainly a misplaced faith in laissez-faire. American opinion leaders have trusted to the theory that if a factory closes, this is dictated by the “wisdom of the market.” In reality free markets have next to nothing to do with it. American manufacturers are competing in a globalized marketplace that is comprehensively rigged to hollow them out. If other advanced nations protect their domestic markets (Japan and Germany come to mind in the case of car industry, for instance) , their home producers enjoy greatly enhanced retained profits to plough back into improving their production technologies. After five decades of such unequal trade, this begins to add up. It is hardly surprising that Japan and Germany are now the leaders not only in cars but all sorts of advanced producers’ goods that once defined American leadership of the world economy.
As for the Pisano/Shih book, detailed comment must await its official publication later this month. In the meantime Pisano is making an appearance at a reception in Washington tomorrow hosted by, among others, the Kearny Alliance and Asia Policy Point at the offices of the King & Spalding law firm.
The key question is what America should do. Judging by the Amazon.com page for the book, the Pisano/Shih answer is a bromidical call to government and business to work more closely together on basic and applied research. This is little more than hot air and will do nothing to address the real issue, which is an unfair world trade system. The fact is that almost as soon as American corporations invent new, more efficient production technologies, they come under pressure from foreign governments to transfer these out of the United States. If they don’t do so, they face non-tariff barriers in the foreign markets concerned. By definition, given their single-minded focus on profits (and their acknowledged lack of concern for the American job base and wider national interest), they cave. They suffer no penalty for doing so. Quite the reverse: they improve their access to key foreign markets while they can continue, of course, to sell unhindered into the American market. This sort of economic blackmail has been taken to a high art by China in particular, with results that are now redefining the world’s future. Virtually every major American corporation has been persuaded — often under duress — to transfer key production technologies to China. Just some of the more notable names include General Electric, Ford, General Motors, and Motorola. Ultimately the fault does not lie with these companies. Rather they are creatures of an economic environment that was wished upon them by others — not least generations of Ivy League economists who thought that free trade and the resulting move to postindustrial services would bolster American competitiveness.
MFGpartners 'Buy American Movement' Meets Washington Precision Machine Shops
in UncategorizedOctober 3, 2012
Gagne, a 25 year veteran in made-to-order metal and plastic parts and publisher of numerous technical articles related to product design, lean manufacturing, CNC machining and other processes said AMSN is actively reaching out to companies in Seattle, Spokane, Bellevue, Vancouver, Tacoma, Everett, Yakima, Bellingham, Kent, Everett, Federal Way and across the Evergreen State to join in its job creation ‘Buy American’ campaign founded to help increase the global competitiveness of U.S. Manufacturers.
“Whether it be precision metal machining, CNC grinding, lapping, honing, tool making, OD/ID grinding, sheet metal work, custom fabrication, mold-making, CAD/CAM design, prototyping, tool repair, machine rebuild, or any other manufacturing need, companies nationwide and beyond continue to return to MFGpartners.net to explore and compare US-based vendors capable of providing such solutions,” said Gagne. He continued, “AMSN is pleased to gain the trust and support of businesses throughout the state of Washington, and will remain committed to the movement pioneered by its founder (Don LaBelle) to buy America back and once again be proud to say Made-In-USA.”
About MFGpartners / AMSN
MFGpartners.net is owned and operated by American Machine Shops Network (AMSN). The company specializes in promoting US-based manufacturers of machined parts, fabricated components, precision products and molds. AMSN is the largest network of custom manufacturers in the USA designed to help companies, engineers and others find the most suitable vendors specializing in CNC machining, fabrication, molding, prototyping and other contract manufacturing services.
Manufacturing Matters – 1st National Manufacturing Day
in NewsOctober 4, 2012
Here in Massachusetts, “manufacturing is alive and well, and has a healthy future,” according to a recent report, “Staying Power II: A Report Card on Manufacturing in Massachusetts,” by professor Barry Bluestone and his team at Northeastern University.
Some of its key findings about Massachusetts manufacturing today:
Manufacturing employment has stabilized after a sharp decline in the recession
Manufacturing is the state’s six-largest employment sector — and the second-largest (after health care) in terms of payroll
Manufacturing’s share of gross state product has risen for the past two years, to 12.2 percent
The number of manufacturing firms actually increased in 2011, for the first time in decades
Manufacturing is more technologically intense than ever; in 1970 employment in low-tech sectors was twice that in high-tech, in 2006 they were equal, and by 2010 high-tech was 27 percent larger
Most Massachusetts manufacturing companies are small, and most are family-owned
The manufacturing workforce is more diverse than the overall state workforce
Although most jobs in manufacturing are now “white collar,” only about one position in five requires a college degree
While cost issues and global competition are challenges, the study finds, the skills and work ethic of the state’s workforce are powerful reasons to stay in Massachusetts. But employers are already experiencing difficulty in hiring skilled workers, and an upcoming wave of retirements will create up to 100,000 job vacancies over the next 10 years. The 70 percent of manufacturing firms foreseeing expansion of employment in the state over the next five years must face up to this “recruitment challenge” by focusing on workforce development and promoting manufacturing careers.
In this election year, candidates across the country, from President Obama and Governor Romney on down, have jumped onto the manufacturing bandwagon. Beacon Hill has cut the corporate excise tax, passed bills to control medical and energy costs, strengthened the Workforce Training Fund Program and the community colleges, and created the industry-led Massachusetts Advanced Manufacturing Collaborative. Nationally, however, the reality has been not bipartisan consensus but partisan deadlock.
If Congress really cares about manufacturing, there are issues that demand immediate action. Most urgent is heading off about $500 billion in tax increases that will hit the U.S. economy on January 1, along with huge automatic spending cuts. The top tax rate on dividends will almost triple, the top tax rate on capital gains will increase by more than half, and many small and mid-size manufacturers will see their top marginal tax rate rise, because nearly 70 percent of manufacturers file taxes at individual rates. The Research and Development tax credit expired for the 15th time at the end of 2011. And the U.S. corporate tax rate is the highest in the developed world. Action in other areas is equally vital, if less pressing; for example, the future of workforce development programs, largely shaped by federal policy, remains up in the air.
America’s manufacturing sector, historically the backbone of our economy and of upward mobility in our society, is entering a period of renewed opportunity. We need congressional action, now, to ensure that future expansion takes place here rather that abroad.
Richard Lord is president and CEO of Associated Industries of Massachusetts headquartered in Boston.
'Made in the U.S.A.' Has Unexpected Cachet
in UncategorizedOctober 3, 2012
Lumitec’s products, which are designed for extreme environments, require exact specifications that need frequent product monitoring. So the lag time to make changes typically associated with manufacturing thousands of miles away in China is not an option. To accommodate these needs, Lumitec’s headquarters are in a 10,000-square foot facility that can handle the customization and assembly that clients require.
Lumitec is like an increasing number of small companies that are manufacturing in the United States, and bucking a 30-year trend of outsourcing such production overseas.
These companies find increased control, quality, and production standards domestically that may cancel out the cost savings that could come with manufacturing overseas. They are also turning the table on recent history in other ways, by exploiting sales in international markets, and uncovering opportunities by selling their goods to other countries in addition to domestically. They find the ‘Made in the U.S.A.’ stamp brings them unexpected cachet.
“We attend trade shows outside of the U.S. and people are always pleasantly surprised that we manufacture in the U.S.,” says John Kujawa, chief executive of Lumitec, which exports its lighting products to more than 30 countries. “it is understood that many products manufactured in the U.S. are greater quality than those from certain other countries.”
Manufacturing businesses have added 500,000 jobs in the United States since 2009, though the sector has a lot of ground to make up, having lost 2.3 million jobs since the start of the recession. States that led the way were Michigan, Ohio, Indiana, Texas, and Illinois, which combined added a quarter of a million of those jobs over the same period.
“You see manufacturers do more with less, as the unit labor cost goes down…[and] lean manufacturing has improved our overall competitiveness,” says Chad Moutray, chief economist for the National Association of Manufacturers.
About 40% of manufacturers are looking toward export trade as one of their primary growth vehicles today, the manufacturing association says.
At the same time, costs of labor, tariffs, and shipping overseas have risen. On average, it is still 20% more expensive to manufacture in the U.S. than it is with major trading partners overseas, excluding the cost of labor, according to the association.
The New York metropolitan area led the nation for exporting, shipping $105 billion of goods in 2011, according to the most recent numbers from the International Trade Administration, an increase of 25% from the prior year.
Alex Stadler is one of the entrepreneurs who has succumbed to the allure of New York’s manufacturing and exporting trade renaissance.
Stadler is the founder and sole proprietor of Stadler-Kahn, a textile manufacturer and retail store in Philadelphia. He manufactures hand-designed, high-end scarves in New York and exports them to Italy, in addition to selling in the U.S.
Because Stadler’s runs are so small, generally on the order of several hundred pieces at a time, he couldn’t work with the manufacturers he researched in China, he says. At the same time, Stoll, a German knitting machine company just establishing a foothold in Manhattan, jumped at the opportunity to help Stadler when he approached them.
And, in addition to Stoll, Stadler has found a whole cluster of businesses in New York City’s Garment District to work with him, including a manufacturer for his garment labels, and a distributor of the Merino wool he uses. These companies are all within walking distance of each other, Stadler says, so he can keep a close eye on things.
If Stoll ever has a question on his prototypes, Stadler says he can make it up to New York from Philadelphia in two hours.
Though Stadler admits that if he had the volume to engage a factory in China, he could make his product at a third his current cost, he says his customers feel good knowing they are paying for his American craftsmanship, not for middlemen, and extra shipping costs.
“People love to hear a product is made in the U.S., and those little letters `NYC’ hold a lot of glamour for customers,” Stadler says.
The decision to manufacture domestically depends primarily on your particular product, how easily and cheaply you can rent or buy space, and your ability to either hire or temporarily staff employees to do the work.
One thing manufacturers like about assembling products overseas is the ease at which they can quickly ramp up or down without having to hire full-time employees. Some U.S. manufacturers like Brian Kline, chief executive of lighting company MSi SSL, have gotten around this hurdle by hiring temporary employees to do the work when they have it in the U.S.
MSi, based in Deerfield Beach, Florida, manufactures specialized LED bulbs for things like miners helmets, power lamps, and track lighting. While it uses a factory in China for 90% of its production, it also does 10% of its manufacturing in the U.S.
In situations when limited size orders have to be shipped to the customer on an extremely compressed time schedule that its Chinese factory can’t accommodate, it uses a team of temps to assemble the products in the small plant MSi has created above its office headquarters.
“Ramping up and ramping down is harder to manage here” with full-time workers, Kline says.
Similarly, there are a number of important things manufacturers need to keep in mind before they export. One of the first places you should probably turn to is the U.S. Commercial Service, a division of the U.S. Department of Commerce charged with helping U.S. entrepreneurs figure out the vicissitudes of exporting. (It recommends the federal site export.gov.)
But the Commercial Service also has staff in 108 markets around the world that can help with things like identifying market opportunities and locating distribution partners. It offers free consultations and low rates for consulting work, which can includes finding suitable partners overseas. It also operates something called ExporTech, a pseudo university for entrepreneurs considering exporting, that helps develop international growth plans.
One of the most important things to consider about exporting, says Tom Moore, deputy assistant secretary for international operations at the Commercial Service, is making sure you have a robust market for your goods in another c
ountry
; that requires research and knowledge of competitors. It’s also critical to find an overseas partner you can depend on and trust. Working with someone you haven’t vetted properly can cost time and money.
Other best practices: research the rules and regulations of the market you’ll be selling into. That includes national product standards, certification requirements, electricity regulations, and packaging and recycling laws, as well as quality standards.
Knowledge of tariffs and other overseas taxes, as well as tariff codes is also essential, as entering the wrong tariff code can be a costly mistake, says Moore. For example, Moore says the Commercial Service worked with a globe manufacturer recently that had been entering a toy code instead of an educational code for its product. This cost the company an additional 20% in tariffs overseas.
“That can really impact your ability to sell into a [new] market,” Moore says.
Igloo Adds Workers, 130 Items, Brings Rotomolding In-house
in JobsOctober 2, 2012
The company — best known for its line of coolers — is also adding rotational molding to its in-house capabilities this year with five new manufacturing lines and 20 more employees in Katy, where it is based. Igloo currently has 85 percent of its products made in the U.S.
“Obviously, made in America is the right vibe to connect with a lot of consumers right now, but what we’ve also been able to prove is that if you have an efficient manufacturing base, you can not only build in America, you can build a product at a lower cost,” said Gary Kiedaisch, CEO and chairman, in a Sept. 17 telephone interview.
Igloo was already a familiar consumer name when private equity group JH Whitney & Co. of New Canaan, Conn., bought the firm in 2008 from Westar Capital of Costa Mesa, Calif.
The company estimates that 90 percent of U.S. homes have some kind of a cooler, and Igloo products make up 75-80 percent of them.
However, prior to the buyout, the company’s sales were flat, according to Kiedaisch. The new owners set out to change that through an emphasis on new and improved products.
While the privately owned company does not release specific sales data, official said sales were up by nearly 50 percent at the start of 2012. In 2011, workers in Katy made 19 million hard-sided coolers alone.
As those new products caught on, Kiedaisch said, Igloo needed more — and more-efficient — capacity in-house.
Executive Vice President David Thornhill has helped lead the improvements at Katy, with more-efficient equipment, better production layouts and vertical manufacturing. The company estimates its efficiency has climbed by 30 percent since 2008.
Igloo already had its own injection molding, blow molding and foam molding operations. Even more processes could come on line with the right business case, Thornhill said.
Igloo also has non-plastics operations such as cut-and-sew for soft-sided coolers and additional outdoor recreation items including chairs and tents.
Those investments in products and manufacturing came at the same time that costs were increasing outside the United States, which helped highlight the benefits of vertical manufacturing in-house
“When you look at our manufacturing strategy, it’s to bring as many processes as possible inside,” Kiedaisch said. “For us, the picture has been that near-shoring is much more favorable than it was even 18 months ago.”
Thornhill and Kiedaisch look to one of Igloo’s new products as an example of how its business outlook has developed since 2008 and is continuing to impact the company’s strategy.
Igloo introduced the Yukon Cold Locker cooler at the start of 2012. The high-end cooler is marketed at sports enthusiasts and professionals who will spend days — if not weeks — out in the woods or on a fishing expedition.
“These are the guys who will spend thousands of dollars on a gun or a thousand dollars on a scope,” Thornhill said.
The Yukon was designed with extra insulation, capable of retaining ice for up to 14 days, compared to seven for a typical cooler. That is the kind of performance needed to keep swordfish or elk fresh during a long fishing or hunting trip.
The hard plastic outer shell and heavy-duty latches and handles also stand up to rough usage. Thornhill boasts that in tests, a bear spent an hour trying to break in before it gave up.
The Yukon also sells at a premium price, retailing at more than $300 for a 50-quart container and more than $700 for the 250-quart model. By comparison, Igloo’s 50-quart MaxCold hard-sided cooler lists for $65.99
Yukon coolers are rotational molded, so when orders for the Yukon took off and tripled the expected production capacity, Igloo knew it was time to bring rotational molding in-house. It currently contracts for rotomolding from outside suppliers that use a combination of domestic and international production.
Igloo has cleared 15,000 square feet of space in Katy for rotomolding and Thornhill is looking at additional production that could use the process. There is also space for future growth, while adding rotational molding is now allowing the company to list the Yukon as “Made in America.”
“We’re tooling up for this in a big way,” Thornhill said. “We’re looking forward to getting that group up and running.”
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'Insourcing' Jobs To U.S. Can Be Driven By Tax Incentives, Production Quality
in UncategorizedOctober 1, 2012
Princeton Tec, which has three factories in New Jersey, moved half of its manufacturing jobs to China five years ago to cut costs. While there were some savings, Princeton Tec executives grew uneasy with the lack of control regarding the production and delivery schedule. As a result, Princeton Tec started bring those jobs back to New Jersey, and now 90 percent of the 1 million flashlights and other portable light fixtures are once again made here.
“We need to bring back a renaissance in manufacturing — creating products that we can sell to compete with other countries and businesses abroad,” U.S. Secretary of Labor Hilda Solis said during a visit to Princeton Tec’s factory in Mansfield. “I just have to commend the owner of this plant for keeping the faith and making sure his product was made here.”
Federal officials recently announced an initiative dubbed “Make it in America” to provide tax incentives the help encourage more insourcing.
The return of jobs to the U.S. has led Princeton Tec to double its staff to 160 employees, and more hires are expected, company officials said.
“We’ve seen a small increase in profits since we got back. Nothing drastic,” Princeton Tec Vice President David Cozzone said. “I believe our quality got better, we could control output, and we kind of won people back. The ‘Made in USA’ thing is a big sell.”
As the U.S. continues to recharge its struggling economy, a resurgence of the “Made in the USA” commitment by consumers would help embolden companies like Princeton Tec to bring jobs back home. Federal and state tax incentives like those touted by Solis also provide a needed financial boost to companies that might otherwise opt to send jobs overseas.
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Obama Administration Announces $40 million Initiative to Challenge Businesses to 'Make it in America'
in UncategorizedPhone Number: (202) 693-6587
“More and more businesses are choosing to invest, create jobs and make things here in America, and this new initiative represents the latest effort by the Obama administration to build on that trend,” said acting Secretary of Commerce Rebecca Blank. “This administration’s top priority is creating American jobs, and through the Make it in AmericaChallenge, we will be supporting businesses’ efforts to expand here at home. By making competitive investments, the challenge will help communities across the U.S. accelerate economic growth, attract business investment and create jobs.”
“The modern global manufacturing landscape has changed the way companies do business, but it has also changed the way companies do training,” said Secretary of Labor Hilda L. Solis. “This initiative will provide comprehensive assistance to those companies and those communities committed to ‘make it in America’ through innovative training programs that lead to industry-recognized credentials and arm our workforce with the skills employers want to see from day one.”
Today’s announcement builds on the administration’s efforts to encourage companies — large and small, foreign and domestic, manufacturers and services firms — to increase investment in the United States. The president’s plan includes eliminating tax incentives for companies that ship jobs overseas and providing tax credits for companies that bring jobs back, investing in American workers to ensure they have the skills they need, modernizing our infrastructure and taking action to ensure that American businesses and workers are competing on a level playing field.
The national competition announced today will help provide the critical infrastructure, strategic planning, capacity building, technical assistance and workforce skills training necessary for American communities to be the desired home for more businesses.
The challenge is expected to give out approximately 15 awards, depending on the number of eligible applications.
To be eligible for an award, projects must encourage insourcing through onshoring of productive activity by U.S. firms, fostering increased foreign direct investment or incentivizing U.S. companies to keep their businesses and jobs here at home, as well as train local workers to meet the needs of those businesses.
A federal funding opportunity will be published by early 2013, which will provide detailed guidelines for submitting an application, including the deadline.
Obama Blocks Chinese Wind Farms Purchase Near Navy Base
in Uncategorized9/28/2012
Obama’s decision was likely to be another irritant in the increasingly tense economic relationship between the U.S. and China. It also comes against an election-year backdrop of intense criticism from Republican presidential challenger Mitt Romney, who accuses Obama of not being tough enough with China.
In his decision, Obama ordered Ralls Corp., a company owned by Chinese nationals, to divest its interest in the wind farms it purchased earlier this year near the Naval Weapons Systems Training Facility in Boardman, Ore.
The case reached the president’s desk after the Committee on Foreign Investments in the United States, known as CFIUS, determined there was no way to address the national security risks posed by the Chinese company’s purchases. Only the president has final authority to prohibit a transaction.
The administration would not say what risks the wind farm purchases presented. The Treasury Department said CFIUS made its recommendation to Obama after receiving an analysis of the potential threats from the Office of the Director of National Intelligence.
The military has acknowledged that it used the Oregon Naval facility to test unmanned drones and the EA-18G “Growler.” The electronic warfare aircraft accompanies U.S. fighter bombers on missions and protectively jams enemy radar, destroying them with missiles along the way.
At the Oregon site, the planes fly as low as 200 feet and nearly 300 miles per hour.
The last time a president used the law to block a transaction was 1990, when President George H.W. Bush voided the sale of Mamco Manufacturing to a Chinese agency.
In 2006, President George W. Bush approved a CFIUS case involving the merger of Alcatel and Lucent Technologies.
The Treasury Department said in a statement that Obama’s decision is specific to this transaction and does not set a precedent for other foreign direct investment in the U.S. by China or any other country.
China’s trade advantage over the U.S. has emerged as a key issue in the final weeks of the presidential campaign. Romney accuses Obama of failing to stand up to Beijing, while the president criticizes the GOP nominee for investing part of his personal fortune in China and outsourcing jobs there while he ran the private equity firm Bain Capital.
Both campaigns are running ads on China in battleground states, especially Ohio, where workers in the manufacturing industry have been hard-hit by outsourcing.
Obama, in an interview Wednesday with The Plain Dealer of Cleveland, said the U.S. must push hard against Beijing but “not go out of our way to embarrass” China.
“We’re not interested in triggering an all-out trade war that would damage both economies,” Obama said.
The president has the power to void foreign transactions under the Defense Production Act. It authorizes the president to suspend or prohibit certain acquisitions of U.S. businesses if there is credible evidence that the foreign purchaser might take action that threatens to impair national security.
CFIUS is chaired by the treasury secretary. The secretaries of state, defense, commerce, energy and homeland security are also on the committee. The director of national intelligence is a non-voting member.
Earlier this month, Ralls sued the national security panel, alleging CFIUS exceeded its authority when it ordered the company to cease operations and withdraw from the wind-farm developments it bought. Ralls asked for a restraining order and a preliminary injunction to allow construction at the wind farms to continue. The firm said it would lose the chance for a $25 million investment tax if the farms were not operable by Dec. 31.
But Ralls dropped the lawsuit this week after CFIUS allowed the firm to resume some pre-construction work.
Ralls’ legal team includes Paul Clement and Viet Dinh, two top law veterans of President George W. Bush’s administration. Both men were key players in Bush’s aggressive national security operation.
Clement, who was solicitor-general and argued administration positions before the Supreme Court, has since opposed the Obama administration’s health care plan and defended the Defense of Marriage Act before the top court.
Dinh, a former assistant attorney general who was the main architect of the Bush administration’s anti-terror USA Patriot Act, has lately served as a director and legal adviser to Rupert Murdoch’s News Corporation.
A second Chinese firm stymied by CFIUS urged U.S. authorizes this week to investigate their firm to quell fears of ties to China’s military. Huawei Technologies Ltd. announced in early September that it would unwind its purchase of U.S.-based computer firm 3Leaf Systems after the deal was rejected by CFIUS.
Huawei, one of the world’s largest producers of computer network switching gear, has repeatedly struggled to convince U.S. authorities that they can be trusted to oversee sensitive technology sometimes used in national security work.
Not Without My American Car
in UncategorizedHearing all of this was a buzz kill for me, because while the car size and color were important to my wife, having an American-made car was important to me. This is primarily due to three main factors.
First, American cars were quite popular while I was growing up in Dubai in the late ’80s. They were everywhere and almost everyone was talking about the ‘muscle’ cars that were coming in from America. (Ok, they love their Benz too.) So I grew up coveting American-made cars and goods.
Second, I have made frequent trips to Michigan, to the city of Dearborn particularly, and I know how prideful Arab-Americans are about their American made cars. Everyone in that town loves to talk about Ford and how it was the reason many immigrants ended up there working in the car industry and building American engines. Many Lebanese flocked to the area in the early 1900’s seeking jobs at Henry Ford’s Model T plant, as the pioneering automobile entrepreneur was offering a whopping $5 a day. That kind of pride left an imprint on me. I have had dinner at the home of an engineer who works for Ford and was part of the team that worked on the Sync technology. You cannot match this kind of pride, not even in Japan. Notable Arab Americans have played significant roles in the car industry, like Jacques Nasser, who was formerly the president and CEO of Ford Motor Company. Another Arab American is credited with creating “the ‘revolutionary’ 1949 Ford car design, a design that some credit with saving the company.” You have Richard Caleal to thank for that.
Third, I live in the States, a place that has given me a refuge — a home away from home. I went to school here and work here. I live here and I know that in these tough economic times, people need to stick together. We cannot always look for what’s best for ourselves, like better car mileage, and ignore the ghost towns around the county. This was the same mentality of an Arab American physician that limited himself to buying only American cars. The same sentiments were echoed by my good friend Sarah — a native of Michigan who got on my case until I finally bought our car. It might be loyalty, or some might call it patriotism, but either way it’s a choice people here are free to make.
My wife and I settled for a Chevy Aveo LS — a nice compact car that meets our needs. My wife Roa has even given it a name after her own mother. She loves the little car. We have learned that American-made cars tend to have cheaper parts and there is no shortage of mechanics who are well-versed in American cars. One doesn’t need to hop in a time machine to find good American-made cars.
I once worked for a former member of Congress, a native of Cleveland, and she told me that she will only drive American cars to show support to the hard working men and women working in local car plants.
But the cynics and skeptics are not all bad. In fact I think those who criticize the American car industry do it a huge a favor; they pressure automakers to innovate and make better cars. We cannot all take whatever the car industry makes — they have to be responsive to their customer base. This is what makes a free market and this certainly makes better cars. If all customers were content with mediocre cars, then no one wins.
The Return of 'Made in USA'
in UncategorizedSeptember 25, 2012
Dave Schiff, chief creative officer at Made Movement, a website that markets and sells only American-made products, said the trend is beginning to spread, and that it could be a major influence on the success of American manufacturing companies.
Earning that iconic tag, however, is no easy feat. The Federal Trade Commission has drafted a 44-page book that discusses exactly what it takes to gain “Made in USA” status.
The timing may be just right for us manufacturers to boast their American factories, considering Robert McCutcheon, the U.S. industrial products leader of PwC, recently wrote in Forbes that there are a number of signs that domestic manufacturing could soon surge again.
'Made in The USA' Can Save Manufacturing Costs
in UncategorizedSeptember 28, 2012
With clients shopping online and in stores, it’s important to manage inventory wisely and be able to quickly increase or pull the plug on certain products. When a product isn’t selling well, a management team doesn’t want to be stuck with a massive amount of inventory that has yet to be shipped from across the globe. When production facilities are located in the U.S., it’s easier for businesses to move through the product quickly and make room for goods that will sell well.
While a product can arrive in days, or even hours, from across the country, it can take weeks for products to be shipped from overseas. Asking clients to wait a day before receiving their item is easier than asking them to wait three weeks while it is shipped from Asia. Managing inventory and stock is much easier when a company doesn’t have to worry about shipping time, complicated logistics and miscommunications that can lead to serious delays.
Trend forecasting
When your products are made at home, it’s easy to take advantage of local trends. When certain goods become more popular, it’s easy to have them made quickly and ready to sell in no time. Consumer demand may rise sharply if a product becomes particularly popular, and it’s much easier to manage production levels when a company’s manufacturing is close by. It’s easy to predict a trend when a business owner is local, and an L.A. company may be able to determine what they need before their supplier in China does.
Cutting costs
Moving production back to the U.S. doesn’t just help with inventory management and make it easier to change orders quickly. It’s also saving companies money on their production.
Many countries in Asia used to be known for their cheap labor and inexpensive supplies, which made it common for business to move their manufacturing facilities there. In the past few years, the cost of doing business in these traditionally inexpensive countries has been rising. This has made the U.S. a more attractive place to do business, and companies are noting the decreased costs and slowly moving their production back to the U.S.
Cities Leading An American Manufacturing Revival
in Uncategorized5/24/2012
Certainly how long this expansion can last is an open question, particularly given weakness in Europe and the slowdown in formerly fast-growing developing countries. But one thing is clear: the industrial resurgence is reshaping the economic and employment map in often unexpected ways.
Now rather than being pulled down by manufacturing, our Best Cities For Jobs survey, conducted by Pepperdine University’s Michael Shires, found that many industrial regions are benefiting from their prowess.
From 2010 through March, manufacturers added 470,000 jobs and enjoyed a rate of job growth 10% faster than the rest of the private economy. In the past many areas suffered from having too many industrial workers. Now it looks like we will have too few skilled ones, even in hard-hit sectors like the auto industry. In 2011 there were 50,000 unfilled U.S. job openings in industrial engineering, welding, and computer-controlled machine tool operating, according to the forecasting firm EMSI. If the revival continues, this shortage could worsen.
To determine the cities that are leading the manufacturing revival, we assessed manufacturing employment growth in the 65 largest metropolitan statistical areas. Rankings are based on recent growth trends, as well as job growth over the past five and 10 years, and the MSAs’ momentum.
Where Technology Meets Manufacturing
In an era of excitement over the Internet, it is often forgotten that a majority of the country’s scientists and engineers work for manufacturers, and that industrial companies account for 68% of business R&D spending, which in turn accounts for about 70% of total R&D spending.
Nowhere is this linkage between technology and industry more evident than in the Seattle-Bellevue-Everett area, which ranks first on our list of the metropolitan areas leading the manufacturing revival. Over the past year the region was No. 2 in the nation in manufacturing growth, with employment expanding 7.9%. The aerospace sector, led by Boeing, accounted for roughly half this expansion.
The growth in aerospace and high-tech employment creates precisely the kinds of high-wage jobs, including for blue-collar workers, that are lacking in many parts of the country. In 2010 the average factory wage in the area was $64,925, up 9% from 2007. Most critically, manufacturing activity drives growth in other sectors of the economy. About one in six of all private-sector jobs depend on the manufacturing sector, and every dollar of sales of manufactured products generates $1.40 in output from other sectors, the highest of any industry.
As manufacturing employment overall has dropped, the percentage of higher-wage, skilled industrial jobs has been climbing over the last decades, particularly in high-technology related fields Overall, according to EMSI data, the average American factory worker earned $73,000 in 2011, $20,000 more than the average job.
Seattle is not alone in creating high-tech-oriented industrial jobs. Over the past two years Salt Lake City, Utah, which ranks third on our list, has seen significant growth in both electronics and aerospace employment, including a new Northrop Grumman facility. Firms connected to the medical device industry such as Biomerics are also expanding in the area.
Manufacturing is also rebounding in Austin-Round Rock-San Marcos, Texas, which ranks eighth on our list and No. 1 on our overall list of Best Big Cities For Jobs. Last year industrial employment in the Texas state capital area jumped 5%. Semiconductor firms are a big force, employing over 10,000 workers. Although more known for its high-tech electronics, Austin has also enjoyed an expansion in automobile-related employment as well as medical devices.
Energy Capitals
The largest grouping of manufacturing stars have emerged from the Texas-Oklahoma energy belt. With the shale drilling boom unlocking ample supplies of natural gas and lowering prices, petrochemical companies have undertaken major expansions. The rise in drilling and exploration has also sparked greater demand for industrial products such as pipes, drill rigs and other machinery. No surprise that the biggest backers of shale gas exploration are prominent CEOs of industrial firms. A recent study by PwC suggests that shale gas could lead to the development of 1 million industrial jobs.
The shale drilling revolution is making an impact across the country, in places like North Dakota and Youngstown, Ohio, but the epicenter of this boom remains firmly in the oil patch. The Thunder you hear in Oklahoma City is not just on the basketball court — energy growth has propelled a 1,500 person jump in manufacturing employment, a 6.1% increase, with another 1,000 new jobs expected this year. Oklahoma City ranks second on our list.
Other energy capitals are also thriving on the industrial front, including Houston (fourth place), San Antonio (seventh) and Ft. Worth-Arlington (ninth). Although energy is the main driver, manufacturing has been on the rise in a broad array of areas, including aerospace, biomedical and food processing. The surging export economy — Texas is easily the nation’s number one export
er —
has further bolstered this growth.
Rustbelt Rebounders
The high-tech and energy economies may be fast-breaking in terms of industrial growth, but manufacturing’s comeback has put some new bounce in the step of many long forlorn parts of the nation’s “rustbelt.” Warren-Troy-Farmington Hills, Mich., epitomizes this trend. Unlike Detroit, which has suffered mass disinvestment, this more suburban area a half hour drive away has become the epicenter of a new, more tech-oriented auto industry.
The Warren-Troy area’s rich concentration of skilled tradespeople and industrial engineers has been described as America’s “automation alley.” It continues to attract high-industrial firms from abroad such as Brose, a German car parts manufacturer, which has recently announced a $60 million investment in the area. Even housing is on the rebound, with rents rising at the fourth highest clip in the country, just behind such standouts as San Francisco and Miami.
Nor is the Midwest manufacturing rebound limited to Michigan. Over the past year sixth-ranked Cincinnati enjoyed 5.4% growth in industrial employment. Manufacturing growth was also strong in Milwaukee-Waukesha-West Allis, Wisc., a center for the production of machine tools and other precision equipment that ranks 10th on our list.
Who’s Falling Behind
Of course not all regions have benefited from the industrial resurgence. For example, the nation’s largest industrial area, Los Angeles, ranks a miserable 49th. The area lost some 20% of its industrial jobs since 2006, and the losses continued over the past year. This goes a long way to explain the area’s continued underperformance before, during and, now, in the early days of recovery from the financial crisis.
Some other large regions did even worse, including such one-time industrial powerhouses as Philadelphia (55th) and New York (59th). Some may argue that these, and other areas, which have been losing manufacturing jobs for decades, no longer need to engage in the messy business of making stuff. But that long fashionable way thinking may be outdated itself, as seen by the improving fortunes of our industrial top 10.
Full List: The 10 Cities Leading The U.S. Manufacturing Revival
Hershey Invests $300 Million In Future Of American Manufacturing… And Consumption
in Uncategorized9/25/2012
I talked with JP Bilbrey, President and CEO and Terry O’Day, SVP of Global Operations about the investment. Both say that the plant is an homage the company’s roots and founder, which is a warm, nice thought. More tangibly, what it does is reaffirm Pennsylvania’s role in the company’s chocolate manufacturing for North America. The plant employs technology never before seen in candy manufacturing, O’Day says, including highly automated IT systems designed to keep Hershey’s Kisses rolling off the lines 24 hours a day.
And while automation means fewer workers in the plant,(Hershey is training 700 of its 4,800 Pennsylvanian employees to run it) the company estimates that it will still produce $1 billion in economic gains for Pennsylvania over the course of five years — coming in the form of supplier contracts, payroll and related spending.
It may be cheaper to manufacture in other countries — and Hershey does, its playing a big game in emerging markets like India, China and Brazil — but when it comes to making chocolate there are other things to consider. For Hershey, that means access to fresh milk. Their West Hershey plant consumes between 300,000 and 350,000 gallons of milk a day — mostly from a 90-mile radius surrounding the plants. And they want short commutes for products to retailers.
The new plant isn’t the only way Hershey is employing technology. Come candy seasons (Valentine’s Day, Halloween, Christmas) they now use a proprietary system to place orders for retailers — so they know how much of each Hershey’s product they should purchase. This alone would be unremarkable, but retailers have come to trust the system so thoroughly that Hershey now uses the system to order competitors’ products for retailers too. The combination of trust and efficiency has reaped the company serious rewards — their market cap that has doubled in the past five years, growing 20% in the past 12 months.
Bilbrey affirms that 80-90% of Hershey products consumed in the US are made in the US, and the company boasts more than a 40% share of the American chocolate market. In that sense, the new plant is part of Hershey’s broader strategy — to maintain, if not grow, share in the US, where it already has a prominent presence, while more or less ignoring another behemoth established market — Western Europe, where they see low growth, established competitors, loyal customers and high price of entry.
“We have outperformed our peer group in North America,” Bilbrey says. “And we see North America as a growth story. We worry about a lot of things, but we are optimistic about what is possible.”
That includes upping advertising, Bilbrey says that Hershey spends as much on advertising now as their entire category did in 2008 — Hershey now reinvests about 7% of net sales into advertising. More proof, he says, that the company believes that brighter days lie ahead for America and that Americans will be spending more of their disposable income on candy.