What Does the Future Hold for American Manufacturing?

The state of US manufacturing is likely to become a major campaign issue - Getty Images

Written by: BBC North America editor, Mark Mardell 

Drew Greenblatt is an enthusiast: proud of his company, Marlin Steel, and proud of the factory floor packed with state-of-the-art equipment.

I watch, fascinated, as a little white robot squeezes out a wire, putting kinks and bends in it as it emerges.

Then it hands it over to a slightly larger yellow robot, which holds it steady for a twist in the end before turning it over for another twist at the other end.

Oddly, I find this cutting-edge equipment rather cute and cartoonish.

The question is whether this endearing duo are merely the remnants of America’s industrial past or the sort of equipment that will make the USA world-beaters once again.

The factory floor space at Marlin Steel is being doubled and there is no doubt the company is doing well, prospering even, during the bad years.

This Column Was 100% Made in America

A Hyundai ad that ran during Super Bowl coverage showed workers from the company's plant in Montgomery, Ala.

By STUART ELLIOTT  Published: February 15, 2012

BLUE-COLLAR workers in fields like manufacturing — particularly when they make products on American soil — are again becoming a favorite subject for white-collar workers on Madison Avenue.

The trend was born of the economic worries that followed the financial crisis in 2008. Recently, it is gaining steam — appropriate, since the ads often use blasts of steam to signal something is being built — with proposals in Washington to offer incentives to encourage the location or relocation of factories in the United States.

“We continue to see very heavy emotional response to anything that would leverage against the bad economy,” said Robert Passikoff, president at Brand Keys, a brand and customer-loyalty consulting company in New York.

Obama Takes Fresh Aim at China, Touts “Insourcing”

 

By Laura MacInnis | Reuters

MILWAUKEE (Reuters) – President Barack Obama kept up his attack on Chinese trade practices during a campaign-style visit on Wednesday to a Midwest factory, where his call to bring jobs back home was intended to resonate with voters in an election year.

The day after meeting China’s leader-in-waiting, Vice President Xi Jinping, at the White House, Obama cited America’s chief rival a number of times in a speech to promote the potential of “insourcing” jobs back to America from overseas.

“I will not stand by when our competitors don’t play by the rules,” he told workers at Master Lock, a company he lauded in his State of the Union address last month for having moved back about 100 union jobs from China since mid-2010.

“That’s why I directed my administration to create a Trade Enforcement Unit with one job: investigating unfair trade practices in countries like China,” he said in prepared remarks.

Obama took a firm line over trade on Tuesday during his Oval Office meeting with Xi, who is in line to assume the Chinese presidency in March 2013.

This tough stance should appeal to voters in election battleground states like Wisconsin, where Beijing is often blamed for killing American jobs.

Republican presidential hopeful Mitt Romney, a former private equity executive, accuses Obama of being too soft on China and lacking the executive or other leadership experience to steer the U.S. economy toward lasting recovery.

Master Lock, a unit of Fortune Brands Home & Security, is the world’s largest manufacturer of padlocks and related products to secure homes, cars and bicycles. Its story is a positive one for Obama, who must tout his economic leadership to secure another White House term.

The firm says its Milwaukee plant is running at full capacity for the first time in 15 years – an example the White House is eager to replicate as the November 6 election nears.

“They’re deciding that if the cost of doing business here is no longer much different than the cost of doing business in countries like China, they’d rather place their bets on America,” said Obama.

It was his first stop in a three day campaign-style swing when the Democrat will raise funds in California and stop at aircraft manufacturer Boeing in Washington state.

How to cope with a rising China – and compete against cheap Chinese exports – is one of the toughest challenges for Obama to navigate as the election approaches, particularly as opinion polls showing rising U.S. voter frustration with the Asian economic powerhouse.

(Reporting By Laura MacInnis; Editing by Peter Cooney and Cynthia Osterman)

GE to Hire 5,000 U.S. Veterans, Investing in Plants

WASHINGTON (Reuters) – General Electric Co plans to hire 5,000 U.S. military veterans over the next five years and to invest $580 million to expand its aviation footprint in the United States this year.

The largest U.S. conglomerate unveiled the moves ahead of a four-day meeting it is convening in Washington starting on Monday to focus on boosting the U.S. economy, which has been slow to recover from a brutal 2007-2009 recession.

“We should have the confidence to act and to restore American competitiveness,” Chief Executive Jeff Immelt, a top adviser on jobs and the economy to President Barack Obama, said in a statement.

The U.S. unemployment rate — seen as the main barrier to a move vibrant recovery — fell to a near three-year low of 8.3 percent in January, helped in part by the manufacturing sector adding about 50,000 workers. Even with that improvement, 23.8 million Americans remain out of work or underemployed, which is keeping the economy a key issue heading into November’s presidential elections.

The world’s largest maker of jet engines plans this year to open three new U.S. aviation plants, in Ellisville, Mississippi; Auburn, Alabama, and Dayton, Ohio. After cutting headcount significantly during the recession — as did its major peers including United Technologies Corp and Caterpillar Inc — GE has added about 9,000 U.S. workers since 2009, and has already announced plans to hire another 4,500 people.

The Fairfield, Connecticut-based company, whose operations range from making loans to mid-sized businesses to manufacturing railroad locomotives, plans to discuss these moves at the Washington meeting. Boeing Co CEO James McNerney and Dow Chemical Co CEO Andrew Liveris are also scheduled to speak.

(Reporting By Scott Malone; Editing by Muralikumar Anantharaman)

The New American Divide: American way of life is fading…

The ideal of an ‘American way of life’ is fading as the working class falls further away from institutions like marriage and religion and the upper class becomes more isolated. Charles Murray on what’s cleaving America, and why.

By CHARLES MURRAY

America is coming apart. For most of our nation’s history, whatever the inequality in wealth between the richest and poorest citizens, we maintained a cultural equality known nowhere else in the world—for whites, anyway. “The more opulent citizens take great care not to stand aloof from the people,” wrote Alexis de Tocqueville, the great chronicler of American democracy, in the 1830s. “On the contrary, they constantly keep on easy terms with the lower classes: They listen to them, they speak to them every day.”

Americans love to see themselves this way. But there’s a problem: It’s not true anymore, and it has been progressively less true since the 1960s.

People are starting to notice the great divide. The tea party sees the aloofness in a political elite that thinks it knows best and orders the rest of America to fall in line. The Occupy movement sees it in an economic elite that lives in mansions and flies on private jets. Each is right about an aspect of the problem, but that problem is more pervasive than either political or economic inequality. What we now face is a problem of cultural inequality.

When Americans used to brag about “the American way of life”—a phrase still in common use in 1960—they were talking about a civic culture that swept an extremely large proportion of Americans of all classes into its embrace. It was a culture encompassing shared experiences of daily life and shared assumptions about central American values involving marriage, honesty, hard work and religiosity.

Welcome to the Renaissance in U.S. Manufacturing

Click Below for the Video

Welcome to the Renaissance in U.S. Manufacturing

It pays, Cramer said Wednesday, to “Invest In America.”

Manufacturing in the U.S. is gaining ground where it had once lost its way, Cramer said. The performance of his “Invest In America” portfolio is evidence of that. Cramer introduced this collection of U.S. manufacturers, including Caterpillar , Deere,Honeywell , Boeing, Bucyrus,, Joy Global , Emerson Electric, 3M and PPG, last September. Since then, the portfolio has posted a 24 percent gain versus a 14 percent increase for the S&P 500.

Over and over again, Cramer said U.S. manufacturing shows signs of renewed strength.

Ford, for example, said Monday it plans to add 7,000 new U.S. jobs by 2012. Deere is making farming equipment, which enables farmers to better handle growing global demand for food. Through the Great Recession, Caterpillar took share by outsmarting its competitors. Eaton is making products needed for electric-powered cars. Honeywell, 3M and DuPont have proven themselves world leaders in health, safety, fire protection and energy conservation, he said. Apple , the second-largest U.S. company, is both a manufacturing company and successful retailer.

“The American manufacturing renaissance has arrived,” Cramer said. “Forget the naysayers.  Don’t get left behind. As I like to say, there’s always a bull market somewhere and right now it’s here in the good old USA.”

When this story was published, Cramer’s charitable trust owned Apple.

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Boeing Posts $1.56 Billion Loss

By JOAN E. SOLSMAN

Boeing Co. swung to a third-quarter loss on $3.5 billion of previously disclosed charges caused by the delay-plagued programs for the 747-8 Freighter and the 787 Dreamliner.

The commercial-aircraft manufacturer and defense contractor lowered its forecast for 2009 earnings to between $1.35 and 1.55 a share, down more than $4 from its July forecast. The Chicago-based company stuck with its outlook of $68 billion to $69 billion in revenue for the year.

Monday, rival Lockheed Martin Corp. posted a slight increase in profit but gave a grim view of next year because of belt-tightening at the U.S. Defense Department.

Boeing, which is the nation’s No. 2 government defense contractor, behind Lockheed, has leaned on strength in that business to offset weakness from commercial aircraft as airlines have put purchases on hold as they reduce capacity. Boeing also has tarnished its reputation with delays to both its Dreamliner and 747-8 programs, which resulted in the charges in the most recent period. Boeing last week reiterated that the Dreamliner is set to take its first flight by year-end.

Boeing didn’t say Wednesday that the Dreamliner has moved into a so-called forward-loss position, essentially meaning it is unprofitable, unlike the 747 program.

Chief Executive Jim McNerney said the company looks forward to getting the 747-8 in the air soon.

“The 787 cost reclassification and the 747 charge for increased costs and difficult market conditions clearly overshadowed what continues to be otherwise solid performance across our commercial production programs and defense business,” Mr. McNerney said in a prepared statement.

Boeing posted a loss of $1.56 billion, or $2.23 a share, compared with a year-earlier profit of $695 million, or 96 cents a share. The combined $3.5 billion in charges on the 747 and Dreamliner, the most Boeing has recorded in a single quarter, amounted to $3.59 a share.

Revenue increased 9.1% to $16.69 billion. A machinists strike damped revenue in the year-earlier period.

The commercial-aircraft segment swung to a loss. Sales rose 13% as higher deliveries offset lower services volume. Boeing received 96 gross orders for commercial planes, though 17 others were rescinded. Backlog fell 8% to $254 billion.

Defense-business revenue rose 3% as earnings increased 4%.

Write to Joan E. Solsman at joan.solsman@dowjones.com