How To Invest For Jobs Coming Back To U.S.

Brian Sozzi, Contributor   2/16/2012

The grand theme I want to put on the table is the concept of onshoring, sometimes called reshoring, which is the bringing back of U.S. jobs from overseas supply chains.

U.S. businesses have started to realize that while workers in far away lands garner miniscule wages compared to their U.S. counterparts, having operations outside of the country can be a strategic disadvantage.  The speed and structure in which information is consumed has caused U.S. consumers to demand top quality products and to want to buy them whenever they please.

Having a manufacturing plant domestically aids in the quicker movement of goods from design table to sales floor.  Furniture maker Ethan Allen is great example of a manufacturer producing most of its products in the U.S. and doing customization for clients, setting itself apart from price-point focused competitors.

Corporate managers are simply getting over their infatuation with cheap international labor and analyzing the total costs of doing business in the U.S. compared to say, China or India.

There is a dollop of icing on the cake here as well.  The topic of focusing on onshoring to boost employment levels seems to be an area of agreement between bickering Republicans and Democrats.  Republican presidential hopeful Rick Santorum, for example, wants to zero out the U.S. corporate tax for manufacturers.

Anytime the major political parties agree on anything, even the slight thing, it’s cause to sit up and take notice from an investment standpoint.  The Donkeys and Elephants may be a little apart on how to precisely shepherd along the corporate onshoring interest, but at least they are talking the same language.  It’s high time they do find common ground if the following is to be reversed:

• Manufacturing employment has fallen by approximately 37% since 1980.
• According to a survey done by the Manufacturing Institute and Deloitte, some 600,000 manufacturing jobs are currently unfilled due to a mismatch between job requirements and experience.

I have read a fair number of columns bantering about onshoring.  Is it overhyped?  Do we really need more jobs in the service sector U.S. economy?  The debates are almost endless.  Unfortunately, though, I have failed to stumble upon investment strategies to profit from onshoring, which has already begun to a certain extent, and could likely gain steam in the years ahead.

Buy-and-hold investors, this should be right in your wheelhouse: a highly probable future event to build positions around in companies with durable competitive advantages.

A few names that come to mind:

• Waste Management: Owns 260 plus landfills and is the largest waste management business in the U.S.  More manufacturing production means more waste to be piled into the company’s green bins.

• ADP: Benefits in two manners.  First, workers are hired to run new domestic manufacturing plants (hopefully by people that used the downturn to attain new technological skills).  Second, there should be a trickle down effect in the overall employment sector via a ramp in higher paying manufacturing jobs.

• Dunkin Brands: “America Runs on Dunkin” as the brand’s slogan goes.  The company’s moat is not as wide as an ADP or Waste Management, but more U.S. manufacturers should mean more egg sandwiches (which Starbucks does not do superbly) and coffee.  Store penetration is increasing in areas of the country that are manufacturing oriented.

Made in USA: 30 Day Journey

"We're willing to DIE for our country, but are we willing to BUY for it?"

Josh Miller of ‘Made in USA: 30 Day Journey‘ is asking us one simple question.

“We’re willing to DIE for our country, but are we willing to BUY for it?”

Josh and his film crew will set out on a journey in which he will live off USA made products for 30 days. During his travels, he will speak and interview business-owners, homeowners, politicians, economists and American consumers to find out, among other things, what ‘Made in America’ means to them.  We will help Josh and his crew verify the made in USA claim with the help and support of Made in USA Certified.

Their goal is to raise $5,000 for the film during this campaign.  A $10 donation will get your name in the rolling credits of the film under “Minutemen”.  How cool will that be!

We believe Josh and his crew are a part of the Made In America Movement.  This film will help gain more exposure for this Movement.  This is why we are asking for your support.

Diane Sawyer & David Muir of World News with Diane Sawyer made everyone across the nation aware of this Movement last year with their ‘Made in America’ segments on ABC News, asking you all if you are “IN”.  Now we are asking you, are you in?

Let’s help Josh Miller on his journey.  Go to the link below. Donate your $10 (or more!) and let them know you are a proud supporter of the Made in America Movement.  Your support and donations really do matter!

Made in USA: 30 day Journey donation page I’M IN!

In China, Human Costs Are Built Into an iPad

An explosion last May at a Foxconn factory in Chengdu, China, killed four people and injured 18. It built iPads. (Color China Photo, via Associated Press)

By NYT  CHARLES DUHIGG and DAVID BARBOZA  Published: January 25, 2012

The explosion ripped through Building A5 on a Friday evening last May, an eruption of fire and noise that twisted metal pipes as if they were discarded straws.

When workers in the cafeteria ran outside, they saw black smoke pouring from shattered windows. It came from the area where employees polished thousands of iPad cases a day.

Two people were killed immediately, and over a dozen others hurt. As the injured were rushed into ambulances, one in particular stood out. His features had been smeared by the blast, scrubbed by heat and violence until a mat of red and black had replaced his mouth and nose.

“Are you Lai Xiaodong’s father?” a caller asked when the phone rang at Mr. Lai’s childhood home. Six months earlier, the 22-year-old had moved to Chengdu, in southwest China, to become one of the millions of human cogs powering the largest, fastest and most sophisticated manufacturing system on earth. That system has made it possible for Apple and hundreds of other companies to build devices almost as quickly as they can be dreamed up.

“He’s in trouble,” the caller told Mr. Lai’s father. “Get to the hospital as soon as possible.”

In The Era of Big Boxes, a Day For The Little Guy

Rob Schwind shovels the sidewalk in front of the Chagrin Hardware in Chagrin Falls, Ohio. (AP Photo/Amy Sancetta)

  By AMY SANCETTA  – Wed, Jan 25, 2012 7:33 AM EST

CHAGRIN FALLS, Ohio (AP) — It began quietly, as an email to 40 friends.

But when a steady stream of customers began coming through the door before the family-owned Chagrin Hardware had even opened for the day on Saturday, it was clear that it had turned into much more than that.

The idea started with Jim Black, a resident of Chagrin Falls, a close-knit village in Cleveland’s eastern suburbs that is part artist colony and part bedroom community. Black posted the email to a group of his friends. “Let’s show our support for one of our local businesses,” he wrote. “I challenge everyone to spend AT LEAST $20 at the hardware on the 21st.”

Although his email referred to the idea of a “Cash Mob” or the notion to “Occupy CF Hardware,” he really had no political agenda. And it wasn’t meant as a protest against the big-box stores that have created an ever-tightening circle around the community.

It was just a way to thank Chagrin Hardware’s owners for a beloved shop that has been a fixture in the village since 1857.

“These are good people who needed our support,” Black said. “It’s just that simple.”

The store, overlooking meandering Riverside Park and the Chagrin River in the middle of town, has been run by the Shutts family for the last 72 years. It passed from uncle to father to older brothers Rob and Kenny and the three youngest, Steve, Susie and Jack, who run the store today.

Black’s note was forwarded and forwarded and forwarded again. Calls started coming in from folks out of state who wanted to make a purchase over the phone.

And when the day came, so did the shoppers — one by one, with dogs on leashes and children in tow, hour after hour until the hardware was teeming with customers.

“This is small-town America,” said resident Martine Scheuermann, a bag of pet-safe ice melt in her arms and her Springer Spaniels tapping their toes on the worn wooden floor at her feet. “This is a special family business in a town where everybody knows you.”

The store has seen its share of tough times. Road construction on Main Street at the store’s front door some years back crippled business for a time. More recently, the weakened economy and the big boxes have stolen away customers.

On this day, though, those storylines were forgotten.

By 10 a.m. the place was jammed. By 1:30 p.m., the credit card machine was overloaded and had to be reset. “This is so cool,” said Steve Shutts, a mix of joy, wonder and happy exhaustion spread across his face. “I’ve seen people today I haven’t seen in years.”

The line at the checkout stretched in two directions as people with snow shovels and light bulbs and fireplace grates and vintage movie posters and horse shoe caulk — yes, horse shoe caulk — waited to pay.

Chad Schron, 38, came with his 8-year-old son Robert. “We didn’t have anything we had to get, but we found things we had to get,” he said. As he spoke, Robert clutched an Ohio State desk lamp and two flying monkey toys to his chest.

“When I was a kid, my Mom would send me down here with a note to let me buy BB’s,” Schron recalled. “Lots of kids did that back then. The notes still are in a drawer over there,” he said as he pointed past the register to a wall of wooden drawers containing everything from old springs to screws. In the drawer still labeled “BBs” were stacks of crumpled notes dating to the ’50s, from mothers just like Schron’s

When the final customer had finally left well after closing time with her fuzzy dice and floodlights, Schwind and Steve Shutts tallied the day’s receipts. Shutts shook his head at the wild and unexpected ride.

He wouldn’t say how much the store made that day, but was clearly pleased with the outcome.

“Thanks to Jimmy Black,” he said. “Thanks to everyone. Thanks to Chagrin Falls.

“What a place to live.”

Come On, China, Buy Our Stuff!

A Gap Inc. store in Shanghai, China.

By NYT ADAM DAVIDSON    Published: January 25, 2012

The first time I visited China, in 2005, an American businessman living there told me that the country was so huge and was changing so fast that everything you heard about it was true, and so was the opposite. That still seems to be the case. China is the fastest-growing consumer market in the world, and American companies have made billions there. At the same time, Chinese consumers aren’t spending nearly as much as American companies had hoped. China has simultaneously become the greatest boon and the biggest disappointment.

It wasn’t supposed to be this way. In 2000, the United States forged its current economic relationship with China by permanently granting it most-favored-nation trade status and, eventually, helping the country enter the World Trade Organization. The unspoken deal, though, went something like this: China could make a lot of cheap goods, which would benefit U.S. consumers, even if it cost the country countless low-end manufacturing jobs. And rather than, say, fight for an extra bit of market share in Chicago, American multinationals could offset any losses because of competition by entering a country with more than a billion people — including the fastest-growing middle class in history — just about to buy their first refrigerators, TVs and cars. It was as if the United States added a magical 51st state, one that was bigger and grew faster than all the others. We would all be better off.

More than a decade later, many are waiting for the payoff. Certainly, lots of American companies have made money, but many actual workers have paid a real price. What went wrong? In part, American businesses assumed that a wealthier China would look like, well, America, says Paul French, a longtime Shanghai-based analyst with Access Asia-Mintel. He notes that Chinese consumers have spent far less than expected, and the money they do spend is less likely to be spent on American goods.

Ford Salaried Workers to Get Raises & Bonuses

Associated Press – Thu, Jan 19, 2012

DEARBORN, Mich. (AP) — Ford Motor Co. is showing confidence in its turnaround and the U.S. economy by giving pay raises and bonuses to 20,000 white-collar workers mainly in the U.S. and Canada.

Workers got letters from President of the Americas Mark Fields last week saying they’ll get 2.7 percent base pay increases on April 1. They’ll also get bonuses this year based on their individual performances, spokeswoman Marcey Evans said.

Ford made $6.6 billion in the first three quarters of last year. It will report fourth-quarter earnings later this month. The company’s U.S. sales rose 11 percent last year. It has made a huge turnaround since 2006, when it lost $12.6 billion and had to borrow more than $20 billion to stay in business.

Salaried workers didn’t get pay raises last year, but many were granted performance bonuses. They got only merit pay in 2010 and no raises or bonuses were given in 2009, Evans said.

The raises are necessary to keep Ford’s pay competitive with other Fortune 100 companies, Evans said. Each year, Ford studies pay at competitors and other companies, she said.

Ford also raised its matching contribution to the salaried employees’ 401(k) retirement plan. The company now pays 60 cents for every dollar an employee contributes, up to 5 percent of their salary. This year the contribution will rise to 80 cents, Evans said.

She would not say how much the raises, bonuses and additional contributions will cost the company.

The raises rankled some United Auto Workers members because they did not get annual pay raises in a new four-year contract negotiated with the company last year. During the contract talks, the company told union negotiators that it didn’t want to give raises to avoid recurring annual expenses.

But the workers got signing bonuses and lump-sum profit sharing payments that are worth at least $16,700 over the four-year contract. Workers at General Motors Co. and Chrysler Group LLC agreed to similar contracts with payments smaller than those given to Ford workers.

“I’m disappointed to hear that,” Mark Caruso, president of a UAW local at a factory in Saline, Mich., said of the white-collar raises. Caruso said morale already is bad among workers at his plant west of Detroit. A Ford holding company is trying to sell the factory to an auto parts supplier.

A UAW spokeswoman in Detroit said Thursday that she would check with her superiors to see if the union will comment on the white-collar raises.

The pay raise announcement was reported early Thursday by the Detroit Free Press.

Ford compensation records obtained by The Associated Press last year show that UAW-represented hourly workers have seen larger increases in pay and benefits over the last decade than many white-collar workers.

The UAW, according to the records, was able to protect longtime factory workers from changes to health care, overtime and other benefit cuts that salaried workers were forced to take. The average hourly worker at Ford received wages, benefits and overtime totaling $109,020 in 2010, up 17 percent from 1999. But the average salaried factory supervisor made $99,760 in wages and benefits, up just 2 percent in the same period, the records showed.

Only in America with Larry the Cable Guy

Larry the Cable Guy – Premieres Tuesday, Feb. 8 at 9/8c Polo veteran Rick Bostwick lets Larry in on the perils of playing polo both to your body and your bank account.

History Channel Trailer: Larry the Cable Guy 

DELRAY BEACH, FL., (Business Wire) —  Made in USA Certified, USA-C Polo Team is featured in a segment for The History Channels new series “Only in America with Larry the Cable Guy” (the official working title) which is set to premier in the third Quarter. The series will feature “Blue Collar Comedy” star Larry The Cable Guy exploring the United States revealing bits of US history, while also immersing himself in the jobs, hobbies, and lifestyles of the locals that “celebrate the American experience.”

In one of the segments slated for the series, Larry explores Wellington, FL, home of  The International Polo Club, Palm Beach (IPC) and the Museum of Polo & Hall of Fame.  Larry recently was filmed at the Bostwick Family Stables in Wellington and is featured learning how to play the game of Polo against the Made in USA Certified USA-C Polo Team.

Made in USA Certified USA-C Polo Team is a perfect partner for the “Only in America with Larry the Cable Guy” series as the company is the leader in independent third party assurance verification for genuine “Made in USA” products and services.  Made in USA Certified is a strong advocate for US Business, US Manufacturing and the American workforce which is most definitely part of the whole American Experience.

About Made in USA Certified, Inc. (www.usa-c.com)

Made in USA Certified, Inc. is the leader in independent third party assurance verification for genuine “Made in USA” products and services. Our Seal of Certification assures the consumer that the “Made in USA” or “Product of USA” claim is true– keeping you and your family safe, giving consumers peace of mind and helping to support and promote products and services Made in USA, one factory, one business at a time.

Trust but Certify! ™

Premieres Tuesday, Feb. 8 at 9/8c Polo veteran Rick Bostwick lets Larry in on the perils of playing polo both to your body and your bank account.

History Channel Trailer: Larry the Cable Guy 

State Of The Union Speech Text 2012

Below, Obama’s prepared remarks as released by the White House.

As Prepared for Delivery –Mr. Speaker, Mr. Vice President, members of Congress, distinguished guests, and fellow Americans:

Last month, I went to Andrews Air Force Base and welcomed home some of our last troops to serve in Iraq. Together, we offered a final, proud salute to the colors under which more than a million of our fellow citizens fought — and several thousand gave their lives.

We gather tonight knowing that this generation of heroes has made the United States safer and more respected around the world. For the first time in nine years, there are no Americans fighting in Iraq. For the first time in two decades, Osama bin Laden is not a threat to this country. Most of al Qaeda’s top lieutenants have been defeated. The Taliban’s momentum has been broken, and some troops in Afghanistan have begun to come home.

The State of the Union 2012

Watch it here tonight at 9PM ET.  State of The Union Address

“On Tuesday night, I’m going to talk about how we’ll get there. American Manufacturing – with more good jobs and more products stamped with Made in America. American Energy – fueled by homegrown and alternative energy sources. Skills for American Workers – getting people the education and training they need so they’re ready to take on the jobs of today and tomorrow. And most importantly, a Return to American Values – of fairness for all, and responsibility from all.” – POTUS

Kudos to President Obama for promoting manufacturing.  As Scott Paul said in a recent Huffington Post op-ed “now is the ideal time for the president to promote manufacturing: “If the president really wants to see “Made in America” stamped on products shipped all over the world, he needs to be bold. We’ll be watching. And so will voters.”

Will you be watching?

RAILEAN® Handcrafted American Rum™ 1st to Become Made in USA Certified®

American consumers now have an American choice.

LEAGUE CITY, TEXAS- Railean Distillers, LLC (RAILEAN) announced today that their portfolio of RAILEAN® rum spirits is the first rum to be MADE IN USA CERTIFIED® in accordance with the Federal Trade Commission requirements under federal law.

Qualifying for the MADE IN USA CERTIFIED® Seal signifies that a manufactured product has gone through a rigorous supply chain audit and certification process to confirm compliance with U.S. laws and regulations in regards to the ‘Made in USA’ claim.

RAILEAN® received official notice of their successful completion of Made in USA Certified Inc.’s proprietary independent audit process and received license to use the Made in USA Seal of Certification. The MADE IN USA CERTIFIED® seal guarantees that a company bearing these trust marks has gone through a rigorous supply chain audit to verify compliance withU.S. laws and regulations. Consumers know that when they see this seal, the “The Made in USA” claim has been verified, tested and true.

“Americans are fed up with tax subsidies and bailouts of imported products making it hard for small American businesses to compete, and the rum industry is no exception” said Kelly Railean, President and Founder. “With this elite certification, we are now able to differentiate our rum from every other imported rum on the market. Americans now have a choice between imported mass produced rum and higher quality Handcrafted American Rum™. We are fully committed to providing products Made in theUSA; thus providing jobs, fueling our American economy and aiding in the recovery of our economic system.”

Although additional costs are incurred to meet the stringent Made in USA regulations, a recent Gallup Poll found that 72% of Americans are paying heightened attention to the country of origin of the products they buy and nearly 94% of Americans would pay more for foods grown or produced in the United States of America. American consumers want companies to adhere to strict US labor laws, OSHA safety standards, and the EPA environmental regulations, and they want a guarantee of quality for raw materials, packaging and final product.

Railean Distillers, LLC, founded in 2005 in League City, Texas is a woman-owned business and is the only rum distillery to be certified with the Made in USA Certified seal.

Contacts
Railean Distillers, LLC
Kelly Railean
713-545-2742
info@railean.com

Made in USA Certified
Julie Reiser
561-279-2855
Julie@USA-C.com