NEW DELHI — India, the second-largest exporter of over-the-counter and prescription drugs to the United States, is coming under increased scrutiny by American regulators for safety lapses,
falsified drug test results and selling fake medicines.
Dr. Margaret A. Hamburg, the commissioner of the United States Food and Drug Administration, arrived in India this week to express her growing unease with the safety of Indian medicines because of “
recent lapses in quality at a handful of pharmaceutical firms.”
India’s pharmaceutical industry supplies 40 percent of over-the-counter and generic prescription drugs consumed in the United States, so the increased scrutiny could have profound implications for American consumers.
F.D.A. investigators are blitzing Indian drug plants, financing the inspections with some of the roughly $300 million in annual fees from generic drug makers collected as part of a 2012 law requiring increased scrutiny of overseas plants. The agency inspected 160 Indian drug plants last year, three times as many as in 2009. The increased scrutiny has led to a flood of new penalties, including half of the warning letters the agency issued last year to drug makers.
Ranbaxy, one of India’s biggest drug manufacturers, pleaded guilty to felony charges and paid a $500 million fine last year. Adnan Abidi/Reuters
Dr. Hamburg was met by Indian officials and executives who, shocked by recent F.D.A. export bans of generic versions of popular medicines — like the acne drug Accutane, the pain drug Neurontin and the antibiotic Cipro — that the F.D.A. determined were adulterated, suspect that she is just protecting a domestic industry from cheaper imports.
“There are some people who take a very sinister view of the F.D.A. inspections,” Keshav Desiraju, India’s health secretary until this week, said in a recent interview.
The F.D.A.’s increased enforcement has already cost Indian companies dearly — Ranbaxy, one of India’s biggest drug manufacturers, pleaded guilty to felony charges and paid a $500 million fine last year, the largest ever levied against a generic company. And many worry that worse is in store.
“If I have to follow U.S. standards in inspecting facilities supplying to the Indian market,” G. N. Singh, India’s top drug regulator, said in a recent
interview with an Indian newspaper, “we will have to shut almost all of those.”
The unease culminated
Tuesday when a top executive at Ranbaxy — which has repeatedly been caught lying to the F.D.A. and found to have conditions such as flies “too numerous to count” in critical plant areas — pleaded with Dr. Hamburg at a private meeting with other drug executives to allow his products into the United States so that the company could more easily pay for fixes. She politely declined.
India’s drug industry is one of the country’s most important economic engines, exporting $15 billion in products annually, and some of its factories are world-class, virtually undistinguishable from their counterparts in the West. But others suffer from serious quality control problems. The World Health Organization
estimated that one in five drugs made in India are fakes. A 2010
survey of New Delhi pharmacies found that 12 percent of sampled drugs were spurious.
In one recent example, counterfeit medicines at a pediatric hospital in Kashmir are now suspected of playing a role in
hundreds of infant deaths there in recent years.
One widely used antibiotic was found to contain no active ingredient after being randomly tested in a government lab. The test was kept
secret for nearly a year while 100,000 useless pills continued to be dispensed.
More tests of hospital medicines found dozens more that were substandard, including a crucial intravenous antibiotic used in sick infants.
“Some of the fake tablets were used by pregnant women in the post-surgical prevention of infections,” said Dr. M. Ishaq Geer, senior assistant professor of pharmacology at the University of Kashmir. “That’s very serious.”
Investigations of the deaths are continuing, but convictions of drug counterfeiters in India are extremely rare.
Satish Reddy, president of the Indian Pharmaceutical Alliance, said Indian drug manufacturers were better than the F.D.A. now contends. “More rigorous enforcement is needed, for sure, but this impression that India is overrun with counterfeits is unjustified,” Mr. Reddy said.
But Heather Bresch, chief executive of Mylan, which has plants in the United States and India, said regulatory scrutiny outside the United States was long overdue. “If there were no cops around, would everyone drive the speed limit?” Ms. Bresch asked. “You get careless, start taking risks. Our government has enabled this.”
Dr. Margaret A. Hamburg, the head of the Food and Drug Administration, is in India this week to express her concerns. Associated Press
For Dr. Hamburg, the trip is part of a long-running effort to create a global network of drug and food regulators to help scrutinize the growing flood of products coming into the United States, including 80 percent of the seafood consumed in the United States, 50 percent of the fresh fruit, 20 percent of the vegetables and the vast majority of drugs.
She has gone to conclaves of regulators from Europe and elsewhere to coordinate policing, but Indian officials have so far not attended such meetings.
Many of India’s drug manufacturing facilities are of top quality. Cipla, one of the industry’s giants, has 40 plants across the country that together can produce more than 21 billion tablets and capsules annually, and one of its plants in Goa appeared just as sterile, automated and high tech on a recent tour as those in the United States.
Cipla follows F.D.A. guidelines at every plant and on
every man
ufacturing line, and the company exports more than 55 percent of its production, said Yusuf Hamied, the company chairman.
But Benjamin Mwesige, a pharmacist at the Uganda Cancer Institute in Kampala, said in an interview in July that the institute had stopped buying cancer drugs from India in 2011 because it had received shipments of drugs that turned out to be counterfeit and inactive, with Cipla labels that Mr. Mwesige believed were forged.
He became suspicious when doctors began seeing chemotherapy patients whose cancer showed none of the expected responses to the drugs — and who also had none of the usual side effects. The drugs that had been prescribed were among the mainstays of cancer treatment — methotrexate, docetaxel and vincristine. Laboratory tests confirmed that the drugs were bogus, and Mr. Mwesige estimated that in 2011 20 percent of the drugs that the institute bought were counterfeit.
Enforcement of regulations over all is very weak, analysts say, and India’s government does a poor job policing many of its industries. Last month, the United States Federal Aviation Administration
downgraded India’s aviation safety ranking because the country’s air safety regulator was understaffed, and a global safety group
found that many of India’s best-selling small cars were unsafe.
India’s Central Drugs Standard Control Organization, the country’s drug regulator, has a staff of 323, about 2 percent the size of the F.D.A.’s, and its authority is limited to new drugs. The making of medicines that have been on the market at least four years is overseen by state health departments, many of which are corrupt or lack the expertise to oversee a sophisticated industry. Despite the flood of counterfeit drugs, Mr. Singh, India’s top drug regulator,
warned in meetings with the F.D.A. of the risk of overregulation.
This absence of oversight, however, is a central reason India’s pharmaceutical industry has been so profitable. Drug manufacturers estimate that routine F.D.A. inspections add 25 percent to overall costs. In the wake of the 2012 law that requires the F.D.A. for the first time to equalize oversight of domestic and foreign plants, India’s cost advantage could shrink significantly.
Some top manufacturers are already warning that they may leave, tough medicine for an already slowing economy.
“I’m a great nationalist, an Indian first and last,” Dr. Hamied said. “But companies like Cipla are looking to expand their businesses abroad and not in India.”
American businesses and F.D.A. officials are just as concerned about the quality of drugs coming out of China, but the F.D.A.’s efforts to increase inspections there have so far been frustrated by the Chinese government.
“China is the source of some of the largest counterfeit manufacturing operations that we find globally,” said John P. Clark, Pfizer’s chief security officer, who added that Chinese authorities were cooperative.
Using its new revenues, the F.D.A. tried to bolster its staff in China in February 2012. But the Chinese government has so far failed to provide the necessary visas despite an announced agreement in December 2013 during a visit by Vice President Joseph R. Biden Jr., said Erica Jefferson, an F.D.A. spokeswoman.
The United States has become so dependent on Chinese imports, however, that the F.D.A. may not be able to do much about the Chinese refusal. The crucial ingredients for nearly all antibiotics, steroids and many other lifesaving drugs are now made exclusively in China.
Riverside To Close Cut/Sew Factory, Laying Off 140 People
by MAM Team“We worked diligently for many months to secure new contracts that required ‘Made in USA’ garments. However, a recent volume reduction in our largest federal government uniform program made the costs of domestic production unsustainable,” said Lisa V. Zeanah, Riverside chief executive officer.
The news was broken to employees Tuesday.
Zeanah said the closing will complete the transition of Riverside’s production of uniforms and apparel to contractor partners.
“We have decided to close our remaining domestic production facilities and move this volume to our established contractor partners. We value the dedication and long-term commitment our employees have shown over the years, but at present we have exhausted our options to keep Riverside employees sewing garments in he USA,” she added.
Zeanah, daughter of former Riverside CEO Jerry Vereen, said senior management, customer service, website design, product development, supply chain management, marketing, accounting and quality control laboratory testing will continue at the Moultrie headquarters at 301 Riverside Drive.
Zeanah said it was a difficult decision but that the company felt that consolidating production into fewer facilities will improve “our ability to manage our supply chain and will position Riverside for solid growth for many years to come.”
She added, “We hope that the community will support the affected employees as they transition into other work. We are coordinating with our local Department of Labor to provide assistance.”
Darrell Moore, executive director of the Colquitt County Development Authority, said, “Riverside has been a cornerstone of the Colquitt County community for more than 100 years. They have provided stable employment opportunities for our citizens and have been a model corporate citizen. Our community will do everything we can to support Riverside as they work through this transition and will be there to help them maintain their operations in Moultrie.”
Founded by and managed by the Vereen family for over a century, Riverside has provided work wear and protective apparel in the U.S. In addition to Moultrie, Riverside owns and operates facilities in Atlanta and the Dominican Republic. Additional information about Riverside can be found at www.RiversideUniforms.com and www.RiversideFR.com.
Medicines Made in India Set Off Safety Worries
by MAM TeamIndia’s pharmaceutical industry supplies 40 percent of over-the-counter and generic prescription drugs consumed in the United States, so the increased scrutiny could have profound implications for American consumers.
F.D.A. investigators are blitzing Indian drug plants, financing the inspections with some of the roughly $300 million in annual fees from generic drug makers collected as part of a 2012 law requiring increased scrutiny of overseas plants. The agency inspected 160 Indian drug plants last year, three times as many as in 2009. The increased scrutiny has led to a flood of new penalties, including half of the warning letters the agency issued last year to drug makers.
“There are some people who take a very sinister view of the F.D.A. inspections,” Keshav Desiraju, India’s health secretary until this week, said in a recent interview.
The F.D.A.’s increased enforcement has already cost Indian companies dearly — Ranbaxy, one of India’s biggest drug manufacturers, pleaded guilty to felony charges and paid a $500 million fine last year, the largest ever levied against a generic company. And many worry that worse is in store.
“If I have to follow U.S. standards in inspecting facilities supplying to the Indian market,” G. N. Singh, India’s top drug regulator, said in a recent interview with an Indian newspaper, “we will have to shut almost all of those.”
The unease culminated Tuesday when a top executive at Ranbaxy — which has repeatedly been caught lying to the F.D.A. and found to have conditions such as flies “too numerous to count” in critical plant areas — pleaded with Dr. Hamburg at a private meeting with other drug executives to allow his products into the United States so that the company could more easily pay for fixes. She politely declined.
India’s drug industry is one of the country’s most important economic engines, exporting $15 billion in products annually, and some of its factories are world-class, virtually undistinguishable from their counterparts in the West. But others suffer from serious quality control problems. The World Health Organization estimated that one in five drugs made in India are fakes. A 2010 survey of New Delhi pharmacies found that 12 percent of sampled drugs were spurious.
In one recent example, counterfeit medicines at a pediatric hospital in Kashmir are now suspected of playing a role in hundreds of infant deaths there in recent years.
One widely used antibiotic was found to contain no active ingredient after being randomly tested in a government lab. The test was kept secret for nearly a year while 100,000 useless pills continued to be dispensed.
More tests of hospital medicines found dozens more that were substandard, including a crucial intravenous antibiotic used in sick infants.
“Some of the fake tablets were used by pregnant women in the post-surgical prevention of infections,” said Dr. M. Ishaq Geer, senior assistant professor of pharmacology at the University of Kashmir. “That’s very serious.”
Investigations of the deaths are continuing, but convictions of drug counterfeiters in India are extremely rare.
Satish Reddy, president of the Indian Pharmaceutical Alliance, said Indian drug manufacturers were better than the F.D.A. now contends. “More rigorous enforcement is needed, for sure, but this impression that India is overrun with counterfeits is unjustified,” Mr. Reddy said.
But Heather Bresch, chief executive of Mylan, which has plants in the United States and India, said regulatory scrutiny outside the United States was long overdue. “If there were no cops around, would everyone drive the speed limit?” Ms. Bresch asked. “You get careless, start taking risks. Our government has enabled this.”
She has gone to conclaves of regulators from Europe and elsewhere to coordinate policing, but Indian officials have so far not attended such meetings.
Many of India’s drug manufacturing facilities are of top quality. Cipla, one of the industry’s giants, has 40 plants across the country that together can produce more than 21 billion tablets and capsules annually, and one of its plants in Goa appeared just as sterile, automated and high tech on a recent tour as those in the United States.
Cipla follows F.D.A. guidelines at every plant and on
every man
ufacturing line, and the company exports more than 55 percent of its production, said Yusuf Hamied, the company chairman.
But Benjamin Mwesige, a pharmacist at the Uganda Cancer Institute in Kampala, said in an interview in July that the institute had stopped buying cancer drugs from India in 2011 because it had received shipments of drugs that turned out to be counterfeit and inactive, with Cipla labels that Mr. Mwesige believed were forged.
He became suspicious when doctors began seeing chemotherapy patients whose cancer showed none of the expected responses to the drugs — and who also had none of the usual side effects. The drugs that had been prescribed were among the mainstays of cancer treatment — methotrexate, docetaxel and vincristine. Laboratory tests confirmed that the drugs were bogus, and Mr. Mwesige estimated that in 2011 20 percent of the drugs that the institute bought were counterfeit.
Enforcement of regulations over all is very weak, analysts say, and India’s government does a poor job policing many of its industries. Last month, the United States Federal Aviation Administration downgraded India’s aviation safety ranking because the country’s air safety regulator was understaffed, and a global safety group found that many of India’s best-selling small cars were unsafe.
India’s Central Drugs Standard Control Organization, the country’s drug regulator, has a staff of 323, about 2 percent the size of the F.D.A.’s, and its authority is limited to new drugs. The making of medicines that have been on the market at least four years is overseen by state health departments, many of which are corrupt or lack the expertise to oversee a sophisticated industry. Despite the flood of counterfeit drugs, Mr. Singh, India’s top drug regulator, warned in meetings with the F.D.A. of the risk of overregulation.
This absence of oversight, however, is a central reason India’s pharmaceutical industry has been so profitable. Drug manufacturers estimate that routine F.D.A. inspections add 25 percent to overall costs. In the wake of the 2012 law that requires the F.D.A. for the first time to equalize oversight of domestic and foreign plants, India’s cost advantage could shrink significantly.
Some top manufacturers are already warning that they may leave, tough medicine for an already slowing economy.
“I’m a great nationalist, an Indian first and last,” Dr. Hamied said. “But companies like Cipla are looking to expand their businesses abroad and not in India.”
American businesses and F.D.A. officials are just as concerned about the quality of drugs coming out of China, but the F.D.A.’s efforts to increase inspections there have so far been frustrated by the Chinese government.
“China is the source of some of the largest counterfeit manufacturing operations that we find globally,” said John P. Clark, Pfizer’s chief security officer, who added that Chinese authorities were cooperative.
Using its new revenues, the F.D.A. tried to bolster its staff in China in February 2012. But the Chinese government has so far failed to provide the necessary visas despite an announced agreement in December 2013 during a visit by Vice President Joseph R. Biden Jr., said Erica Jefferson, an F.D.A. spokeswoman.
The United States has become so dependent on Chinese imports, however, that the F.D.A. may not be able to do much about the Chinese refusal. The crucial ingredients for nearly all antibiotics, steroids and many other lifesaving drugs are now made exclusively in China.
Manufacturing Renaissance Real, Maybe Not What You Think
by MAM TeamBy 2010, the manufacturing dominance America had relied on since the late 1800s was officially over; that year China supplanted the U.S. as the world’s largest manufacturing nation in terms of output, producing goods worth $1.92 trillion compared to America’s $1.86 trillion, according to United Nations data.
Yet in the years since the financial crisis, U.S. manufacturing has begun reinventing itself and rising again. There is indeed a renaissance in American manufacturing, economists say, and one that can still be a source of pride. But the sector looks far different from the past, offering fewer jobs and demanding higher skills than ever before.
Since 2010, the U.S. has regained a net 568,000 factory jobs. The Reshoring Initiative, an organization aiming to “return manufacturing home,” estimates that about 150 companies have “reshored,” or moved positions from overseas to the U.S. since 2010, contributing about 80,000 jobs or 15 percent of the total manufacturing jobs added.
“Jobs are coming back, and there is a renaissance,” said Claude Barfield, a scholar at American Enterprise Institute and former consultant to the Office of the U.S. Trade Representative. “There are jobs in widgets you would never have thought of before, but that’s not always translated into lots and lots of jobs.”
There are several reasons why more and more companies want to manufacture in the U.S. now. Energy costs have declined, and American labor productivity has increased. International transportation is still costly, and shortening a supply chain can save a company money while giving it more control over production. And wages in China and surrounding areas are starting to rise, along with political unrest in East Asia, Barfield said.
The expansion of the last four years is continuing. Durable goods manufacturing contributed more than any other sector to U.S. economic growth in 2012, according to the most recent data available from the Bureau of Economic Analysis. The durable goods output rose 9.1 percent in 2012, after increasing 6.8 percent in 2011. By comparison, the private services-producing sector grew 2.7 percent in 2012.
Manufacturing’s dollar-share of gross domestic product increased in 2012 for the third consecutive year to 12.5 percent, its highest share of GDP since 2007, though still less than half its contribution during the 1950s.
David A. Rosenberg, chief economist for Gluskin Sheff + Associates Inc., said Monday that the Chicago Purchasing Managers Index for January shows that “manufacturing activity in the industrialized heartland has been expanding for nine months in a row.”
Even though U.S. manufacturing has contracted sharply since the mid-20th century and prospects that it will ever return to its former size are virtually nil, American manufacturing remains one of the most productive in the world, contributing $1.87 trillion to the nation’s economy in 2012, according to the Bureau of Economic Analysis. Though China is producing slightly more output than the U.S, its production takes about 10 times more workers.
In other words, American factories are producing more than ever with fewer workers. And unlike the low-end goods with thin profit margins produced in China and other developing nations (toys, shoes, consumer electronics, etc.), the expensive and complicated goods many American factories now produce — medical equipment, computer chips, commercial and military jets and oil and gas equipment, to name a few — require specialized skills.
“The U.S. has always been a leader in manufacturing,” Veronique de Rugy, senior research fellow at the Mercatus Center of George Mason University, said. “While it’s seen a slight decline in the past few years, it’s clear that it’s going through a renaissance right now. It is still not only leading, but really gigantic.”
De Rugy is quick to clarify that no one can know how much U.S. manufacturing will grow or for how long. But she believes the shift in global manufacturing taking place, with developing countries producing low-end goods and developed countries producing high-end goods, will make U.S. manufacturers increasingly attractive to American and foreign companies.
“I think what a lot of companies are realizing is that it may not be that cheap to produce abroad,” she said.
Chad Moutray, chief economist for the National Association of Manufacturers, said he’s seeing increased investment in American manufacturing.
“We keep hearing about manufacturers that are increasing production here,” he said. “There’s been a lot of investment from companies using natural gas, plastic, fertilizers.”
A lot of that investment is coming from abroad, he added.
According to a national poll conducted in early January and released Monday by the Alliance for American Manufacturing, Americans cite manufacturing job loss as a top economic concern, above taxes, income inequality, education and retirement security.
The White House has launched two hubs for high-tech manufacturing in Raleigh, N.C., and Youngstown, Ohio, connecting businesses to universities that can help the U.S. in advanced technologies. In his State of the Union address, President Barack Obama promised to launch six more hubs this year.
Stuart Hoffman, chief economist of PNC Financial Services Group, explains in a late-January report that the manufacturing sector seems well-positioned to continue growing this year, with recovery in Europe driving exports, job and income gains driving consumer spending, and a budget agreement between Obama and Congress that has reduced policy uncertainty and will likely increase business investment in equipment. “Manufacturing will continue to expand in 2014,” Hoffman wrote.
Senate Bill Would Benefit Manufacturing
by MAM TeamThe pilot program laid out in Senate Bill 6515 would allow five new manufacturing facilities statewide to receive a tax credit for a portion of each of their construction costs. At least two would have to be in Eastern Washington.
The goal, Young said, is to address Washington’s lack of incentives for attracting businesses. And when it comes to bringing in new and expanding businesses, it’s a competition with the rest of the U.S.
Each company would get a tax credit equal to their state and local retail sales taxes on the construction. The credit will max out after a project reaches $10 million.
The project must be a new building or multiple new buildings at a single site that are used primarily for manufacturing.
Today at 5 p.m. is the cutoff for voting on bills in their house of origin. The bill for the pilot program has passed the Trade & Economic Development committee and the Senate Committee on Ways & Means but still needs to be taken to a floor vote.
Businesses would have the flexibility to invest some of their business and occupation tax back into the company to hire more employees or to expand, Brown, R-Kennewick, told the Trade & Economic Development committee.
“This is just smart economic development which results in jobs,” she said.
Young said the proposal came out of an idea to have zones where business could locate and be exempt from paying business and occupation taxes as long as they reinvest that money to expand their business.
For example, New York has created tax free zones where businesses can open and expand. According to the Start-Up NY initiative, those businesses can be free from business, corporate, state, local, sales and property taxes for a decade.
Young said Washington can’t go quite that far because the state does not have an income tax.
But “we needed to have something that gave us an incentive to get businesses in here.”
The Tri-Cities needs to stop relying on Hanford and work on creating the future of the local economy, Young said. Bringing in more manufacturing also means bringing in jobs that pay well enough to support a family.
As mayor, Young’s goal is to see 1,000 new jobs created in Kennewick’s urban growth area. The city is in the process of getting that area expanded by 1,263 acres south of Interstate 82 and west of Highway 395 specifically for industrial development.
Benton County commissioners have not voted on the proposal yet. And Young said the city still will need to put in infrastructure to the area. City officials are in discussions with the state Department of Transportation on adding an interchange to connect Hildebrand Boulevard across I-82.
The pilot program was supported by the Tri-City Development Council, the city of Kennewick and the Tri-City Regional Chamber of Commerce.
Carl Adrian, TRIDEC’s president and CEO, told the Trade & Economic Development committee that it represents a measured approach that is a good step forward to addressing what the state needs to encourage businesses to choose Washington communities.
— Kristi Pihl: 582-1512; kpihl@tricityherald.com
Foxconn To Begin Manufacturing TVs in U.S. Soon?
by MAM TeamFoxconn already has a silent presence in the US; a partnership sees the Taiwanese company manufacture many of Vizio’s panels in Asia. Last month, Vizio and Foxconn demonstrated a 120-inch 4K TV at CES, and it appears that Foxconn’s chairman believes the only way that TV and similar models will make it to US stores will be if they’re made in the country.
A new TV plant in the US would represent a major investment in the country’s marginalized electronics manufacturing industry. Foxconn previously announced plans to open a $30 million facility in Pennsylvania that will employ 500. That plant is focused chiefly on research and development, an area that should be bolstered by a partnership with a further $10 million investment in research at Pittsburgh’s Carnegie Mellon University. Foxconn has also been meeting with Google recently to discuss a partnership in advanced manufacturing robotics, something that could be important for the creation of electronics in a country with relatively expensive labor when compared to China.
Foxconn Chairman Hopes to Step Back from Role
by MAM TeamHe outlined imminent plans for expanding manufacturing in the U.S. and producing 120-inch television sets. He also spoke about his hopes of passing on the baton to younger leaders by spinning off parts of his sprawling electronics empire. Gou said his aspirations have expanded beyond making gadgets to broader goals, such as assisting young entrepreneurs in Taiwan and creating higher-value jobs.
“I believe I can work for another decade, but even if I do, I want to change the type of work I am doing,” said the 63-year-old executive, adding that he wants to spend more time on medical research and public service, but has no plans to retire.
“I am trying to decrease the influence of Terry Gou at Foxconn.”
As proof, Gou asked different department heads — all clad like Gou in dark blue, Foxconn jackets — to speak in turn, although he frequently chimed in.
It was an unusual press event by any standards — held in an unheated warehouse with corrugated metal walls that housed the company’s annual internal science fair of sorts, where different departments showcased their best gadgets. These included a smart motorcycle that sends driving data to the cloud, and a wireless smartphone charger, both of which will be launched in Taiwan within months by Foxconn’s clients, executives of those departments said.
The display of cutting-edge technology hidden in a shabby warehouse is fitting for Foxconn — a company still largely known as a low-margin factory, but which harbors far greater ambitions.
While still dependent on its business of making iPhones and other gadgets for other companies, Foxconn has been expanding aggressively into businesses ranging from telecom services to software.
The company is also increasingly focused on building highly automated factories based not in China, but in the backyard of Foxconn’s customers.
“We are building factories in the U.S., in Indonesia, because we want to cater to customers there,” Gou said.
Gou said a two-hour conversation last November with a representative of U.S. investment promotion organization SelectUSA had spurred his interest in investing in the U.S. beyond the plant in Harrisburg, Pa., that has already been announced.
“We have many big projects in the U.S. coming up,” said Gou. “For instance, is it possible to make our 120-inch TVs in Taiwan and ship them over? It’s impossible. We have to make them on site.”
Gou has previously said the company was studying the feasibility of building an advanced large-screen panel factory in the U.S. Foxconn will begin mass-producing 120-inch TVs for Vizio in the fourth quarter, Gou said, although he did not specify where they would be produced.
Gou also said that he believed a strong manufacturing sector was a crucial underpinning for a country’s economy.
“Why is the U.S.’s middle class shrinking?” Gou asked. “It is because the manufacturing sector has left…I can’t agree with any economists who say that a bigger share of the service sector is always better.”
Gou also said the company is looking to hire 15,000 new engineers in Taiwan this year. “The problem is we can’t find so many,” he said.
Getting Back To Work
by MAM TeamUnlike unsuccessful government attempts to stimulate the economy through pet projects, the Wal-Mart initiative has the potential to lift a wide variety of U.S. manufacturers through its massive global distribution network. The Boston Consulting Group predicts the $250 billion investment will create 1 million jobs.
In an era when there are as many disincentives to work than incentives, the ad’s pro-production narratives are uplifting.
“At one time, I made things,” the voice of Rowe says during the “I Am a Factory” ad that starts with the image of a closed manufacturing site, complete with a padlocked gate. “I was mighty and then one day, the gears stopped turning.
“But I am still here, and I believe I will rise again. We will build things, and build families, and build dreams. It’s time to get back to what America does best.”
The ad then closes out with the sponsor’s message: “Over the next 10 years, we’re putting $250 billion to work to help create new manufacturing jobs in America.” And that’s followed by Rowe saying, “Because work is a beautiful thing.”
It’s an encouraging sign that the world’s largest retailer is making such an enormous investment in the world’s largest economy, which, until overtaken by China in 2010, also boasted the world’s largest manufacturing sector.
Perhaps America could reclaim that title if more companies followed Wal-Mart’s lead and the government made it less onerous to make products on our own soil.
We simply cannot get by with a service-based economy alone. It’s Economics 101: A country that produces little of what it consumes eventually will lack the wealth to consume anything. As the saying goes, we all can’t press one another’s pants for a living.
Some of us actually need to make the pants.
Bill Encourages US-Made Flags For Veterans' Graves
by MAM TeamMichigan now requires local governments to furnish a U.S. flag and holder for graves of local veterans upon the request of a veterans’ organization or five voters.
The bill requires local governments to post on their website that they bought foreign-made flags and flag holders because competitively priced and comparable-quality products made in the U.S. weren’t available.
Local governments not in compliance could have to pay up to $500 in fines.
8 Star Automobiles Made at American UAW Plants
by MAM TeamThat’s a great deal of venom directed the UAW’s way. A glance at the award-winning automobiles produced at UAW plants in the U.S. tells quite another story. From sports cars that pace the auto industry to compacts that sell more than any other model on the planet, union plants have countless feathers in their caps. Here are eight world-class cars and trucks made at America’s UAW plants.
The slick-looking Ford Fusion injected a considerable dose of style into the midsize segment known for its blandness. U.S. auto consumers responded to the new Fusion in kind, making it No. 11 in the list of top-selling vehicles of 2013. In fact, the Fusion’s 27 percent gain over its prior year sales was the biggest boost of any automobile in the top 15.
Good news about the Fusion became great news for Detroit when Ford announced it was bringing production of the car to its Flat Rock, Michigan, plant in August 2013. UAW officials joined Ford corporate officers in celebrating the arrival of the Fusion. As Volkswagen learned from its entirely unionized German plants, the road to automotive success is often paved with cooperation between workforce and management. In bringing production of its world-class car back to Michigan, Ford clearly agrees.
GM’s top-shelf sports car is cleaning up automotive awards. Fresh off its win as North American Car of the Year, there appears to be nothing capable of stopping it. The new iteration of the sports car legend improves upon both the horsepower and fuel efficiency of the previous model. How did Chevy pull off that feat? It’s one triumph of engineering that has industry observers suggesting Detroit is in the midst of a true revival.
UAW workers at the GM plant in Bowling Green, Kentucky, assemble the Corvette, where enthusiasts can tour the facilities. There may be no better example of craftsmanship on the auto market today.
Jeep may be part of Chrysler, which is part of Italian automaker Fiat, but the Jefferson North Assembly Plant where UAW Locals 7, 412, and 889 make the 2014 Grand Cherokee is pure Detroit. In August 2013, the plant celebrated the completion of its five-millionth vehicle — a Billet Silver 2014 Jeep Grand Cherokee.
Consumers are on board, too. The Grand Cherokee took twenty-first place among all vehicles sold in the U.S. in 2013 while winning Most Loved SUV in America from Strategic Vision. Critics agree as well. Autobytel.com named the Grand Cherokee 2014 SUV of the Year.
The one foreign-branded car on this list belongs to Japan’s Mitsubishi Motors Corporation. UAW workers at the Mitsubishi Motors North America plant in Normal, Illinois, make the Outlander Sport SUV that won Top Safety Pick designation from the Insurance Institute for Highway Safety (or IIHS) for 2014. If those laurels weren’t enough, the Automotive Science Group (or ASG) honored the Outlander Sport for Best All-Around Performance in 2013.
If the evidence points to any conclusion, it’s that United Auto Workers have no problem racking up awards for their automobiles — whether working for the Detroit Three or a foreign car company at an Illinois plant.
Talk about being on a roll. The Ford Focus is the best-selling car in China, which helped it become the best-selling car on earth for the second straight year when the stats were tallied in January 2014. The One Ford global approach is winning on many levels, but it all starts on the automaker’s home turf in Michigan.
UAW employees who assemble the Focus at the Wayne, Michigan, plant are the only Ford team that builds electric vehicles, plug-ins, hybrids, and old-fashioned gas-powered automobiles in the same facility. Milestone for 2013: Ford sold well over one million Focus models across the globe on the year.
The 2014 Motor Trend Car of the Year is — you guessed it — union-made at the GM Lansing Grand River plant. UAW Local 652 members assembled their millionth vehicle at the Lansing, Michigan, plant in 2013. Fittingly, it was the same 2014 Cadillac CTS that Motor Trend said took the fight to the top German luxury cars and won. Is it a coincidence that these elite vehicles are all union-made in the U.S. and Germany?
Perhaps, but the union crew will get a new task in the coming months when the 2015 Chevy Camaro is assigned to Lansing Grand River. In other words, the good times will continue to roll at this facility for years to come.
UAW members don’t shy away from “supercars,” either. At the Conner Avenue Assembly Plant in old Detroit, the union crews put together the blazing SRT Viper, a monster that houses an 8.4-liter V10 engine capable of producing 640 horsepower on 600 lb-ft of torque. Clear a lane.
In fact, the SRT
Viper is so lethal that
dealers were reportedly afraid to let test drivers behind the wheel of the Viper. Specimen of such a high level of style and performance are rare anywhere. In Detroit, only union hands make them run.
Ford is starting to crank out high volumes of its 2015 Mustang in anticipation of a warm reception to the stud pony car. As much a symbol of America as any automobile in history, the muscle-bound Mustang retains its brawn while maintaining much of its aggressive look.
Tasked with producing the new version of the iconic Mustang is the crew at the Flat Rock Assembly Plant, where production moved in 2004. In April 2013 UAW teams assembled the one-millionth Mustang in Ford’s history. Judging by the enthusiasm for the 2015 model, they can expect to be making many more muscle cars in the years to come.
Honorable Mentions on this list go to the Ford F-150, Chevy Impala, Cadillac ATS, and Ford Escape — just a few more of the winning brands union members produce.
Why ‘Made In The USA’ Is Making A Comeback
by The Made in America Movement TeamBut those bright K’NEX toys are trendsetters. Like most plastic toys sold in the United States, K’NEX building sets were made in China. But in 2009 the company began on-shoring much of its manufacturing and kit assembly to the eastern Pennsylvania region.
K’NEX, part of the Rodon Group, a maker of close-tolerance injection molded plastics, is one of the many companies returning manufacturing operations to the U.S. for one simple reason: it makes sense.
In fact, more than half of U.S.-based manufacturing executives at companies with sales more than $1 billion plan re-shore production to the U.S. from China or are actively considering it, according to a 2013 survey by The Boston Consulting Group.
Caterpillar, Ford, NCR and Whirlpool, to name only a few, have brought manufacturing back from over seas, and even Frisbee molding from Wham-O has left Mexico for the U.S. Walmart has committed to stocking $50 billion of domestically sourced products in the next 10 years.
Apple has contracted with a Flextronics America plant in Texas to assemble its new Mac Pro computer, using domestically sourced parts. Gorilla Glass, found in the iPhone display, comes from a small-town factory in Kentucky.
Rising wage rates in China and higher shipping rates are partly behind the on-shoring moves, as are lower U.S. energy prices. But closing the gap between the local market and U.S.-based engineering and marketing staff also pays off.
When GE brought back production of its hybrid water heater to Appliance Park in Louisville, Ky., it also re-designed the product. The company cut 20% of the parts and 25% of materials costs and sells the product for $300 less than the version made in China. Now the shipping time from factory to distribution center is 30 minutes instead of a month.
In the past five years, K’NEX moved 95% of its toy production back to Hatfield, Pa., and uses two nearby plants to print packaging and assemble the components into kits.
Before, the company made the rods, connectors, gears, wheels and other components in the Pennsylvania plant, then shipped them to China for finishing and packaging. The round-trip time was about three months. That lag made it impossible for the company to react to short-term market shifts, such as booming popularity of a licensed product.
With a long supply chain K’NEX had to make bets on which property would be hot six months or more ahead of the holiday shopping season, says CEO Michael Areten.
Building a domestic supply chain gives the company a competitive advantage.
“We got a call from a retailer a few weeks before Christmas that they had shelf space to fill, and I told them we’ll make the products this week and fill the shelves next week,” Araten says. “You can’t do that if you’re bringing it in from Asia.”