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.

FDA Says Brazil’s Orange Juice Is Safe, But Still Illegal

 

Antonio Scorza/AFP/Getty Images Oranges for sale at a market in Rio de Janeiro.

      by DAN CHARLES  February 22, 2012

If you happen to notice sometime later this year that you’re suddenly paying a lot more for orange juice, you can blame America’s food safety authorities. The U.S. Food and Drug Administration, after several weeks of deliberation, has blocked imports of frozen, concentrated orange juice from Brazil, probably for the next 18 months or so, even though the agency says the juice is perfectly safe.

The FDA’s explanation is that its hands are legally tied. Its tests show that practically all concentrated juice from Brazil currently contains traces of the fungicide carbendazim, first detected in December by Coca-Cola, maker of Minute Maid juices. The amounts are small — so small that the U.S. Environmental Protection Agency says no consumers should be concerned.

The problem is, carbendazim has not been used on oranges in the U.S. in recent years, and the legal permission to use it on that crop has lapsed. As a result, there’s not a legal “tolerance” for residues of this pesticide in orange products.

How to Save U.S. Manufacturing Jobs

By Howard Wial @CNNMoney February 23, 2012: 5:34 AM ET

Howard Wial is a fellow for the Brookings Institution Metropolitan Policy Program.

At first glance, manufacturing jobs would appear to be a dying breed.

The United States lost 6 million manufacturing jobs between early 2001 and late 2009. And despite small gains during the last two years, the trend in manufacturing employment for the last 30 years has been downward.

That has led some to argue that long-term job loss in the industry is inevitable. But our research shows otherwise.

There are two common versions of the “inevitability” argument. One holds that U.S. manufacturing wages are too high to be internationally competitive. The other maintains that manufacturing job losses are the result of productivity growth. Both arguments are wrong.

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.

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)

Can Manufacturing Jobs Come Back? What We Should Learn From Apple and Foxconn

David Paul – President, Fiscal Strategies Group  –  Posted: 02/13/2012 8:30 am

Apple aficionados suffered a blow a couple of weeks ago. All of those beautiful products, it turns out, are the product of an industrial complex that is nothing if not one step removed from slave labor.

But of course there is nothing new here. Walmart has long prospered as a company that found ways to drive down the cost of stuff that Americans want. And China has long been the place where companies to go to drive down cost.

For several decades, dating back to the post World War II years, relatively unfettered access to the American consumer has been the means for pulling Asian workers out of deep poverty. Japan emerged as an industrial colossus under the tutelage of Edward Deming. The Asian tigers came next. Vietnam and Sri Lanka have nibbled around the edges, while China embraced the export-led economic development model under Deng Xiaoping.

While Apple users have been beating their breasts over the revelations of labor conditions and suicides that sullied their glass screens, the truth is that Foxconn is just the most recent incarnation of outsourced manufacturing plants — textiles and Nike shoes come to mind — where working conditions are below American standards.

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)

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!