By: Steve Minter, IndustryWeek Leaders from NCR and Jarden offer insights at the IW Best Plants conference into why manufacturing operations were brought back to the U.S. Though it has been heralded for a significant U.S. reshoring action, that decision fit firmly in NCR’s commitment to a global structure to serve its markets, Rick Marquardt, senior vice president of global operations, told attendees at the IndustryWeek Best Plants Conference in Greenville, S.C. Marquardt joined Patricia Gaglione, senior vice president of Business Operations and Supply Chain at Jarden Corp., to share their experiences with reshoring in an executive panel moderated by Harry Moser, founder and president of the Reshoring Initiative When Marquardt joined NCR in 2006, he had toured the company’s facilities, found them antiquated and decided it would be best to sell them and outsource production. He closed factories in Scotland, Brazil, Canada and Dallas. He decided to improve the facilities in China so that they could be sold. However, he hired new managers for the plants and told them that if they could improve productivity, he would keep them open. At the same time, he outsourced a large amount of work to a contract manufacturer. “After two years, my internal plants were beating them so handily in costs, speed and delivery that we decided to bring it all back in,” said Marquardt. In 2009, NCR decided to produce ATMs at a new facility in Columbus, Ga. Marquardt recalled that he had been on a whirlwind tour of possible sites when he landed in Columbus. Unlike the indifferent reception he had received in some other cities, Columbus officials pulled out all the stops to impress him. He was met by the mayor and the chamber of commerce, as well as representatives from three companies that had already relocated to Columbus and from Duke Energy. Within 15 minutes, the site that had been last on his list had convinced him to locate there. Since it opened, the Columbus facility has grown to 600 employees and NCR has opened two more sites in Columbus. The plant enables NCR to serve its U.S. core customers – big box retailers and banks – with innovative products that it can deliver...

By: Phil LeBeau, CNBC Walk onto the shop floor at Prince Industries in Shanghai, China and it looks like most other manufacturing plants in this country. It’s busy running two shifts, cranking out components that will be shipped to major manufacturers like Caterpillar, Siemens, and Honeywell. But change is in the air. The cost of manufacturing in China is going up and rising quickly. “It’s something that we anticipated when we went to China, we just didn’t know how quick it would happen,” said Mark Miller, CEO of Prince Industries. China and US Costs Even by ’15 China is no longer a slam dunk for manufacturers looking for the lowest cost for operations. In fact, a new study by the consulting firm AlixPartners estimates by 2015 the cost of outsourcing manufacturing to China will be equal to the cost of manufacturing in the U.S. “The Chinese manufacturing cost advantage has eroded dramatically in the last few years,” said Steve Maurer, AlixPartners managing director. “If you go back to 2005, it was pretty common for landed cost from China to be 25 to 30 percent less than the cost of manufacturing in the United States. Based on our analysis, two-thirds of that gap has closed.” Maurer said higher labor wages, the rising value of China’s currency, and the cost of shipping goods from China to points around the world have made manufacturing in China more expensive. “If trends continue, the China cost is going to be on par with U.S. cost in the next four to five years,” said Maurer. Higher Wages, Rising Currency Since Prince Industries opened its plant in Shanghai a decade ago, wages have increased an average of 12 percent annually, while China’s currency, the RMB, has appreciated 25 percent vs. the U.S. dollar. The rising value of the RMB was expected and has made it more costly to ship goods built in China around the world. Meanwhile, hourly wages have been going up steadily due to China raising minimum wages, while competition for labor has forced manufacturers to pay more to attract skilled workers and keep them. Pulling Out of China or Moving Further Inland? As the cost of manufacturing in...

By: Marcus Wohlsen, Wired Bayard Winthrop gets emotional about yarn. Outside the workshop just south of San Francisco where a platoon of women behind sewing machines assembles his company’s coveted American Giant sweatshirts—you know, the ones that have been sold out for months since being called the greatest hoodie ever made—Winthrop recalled a recent visit to Gaffney, South Carolina. The small town nestled off I-85 among rolling hills adorned with peach orchards was a hub of the South’s textile industry decades ago, back when Americans still wore American-made clothes. These days, Gaffney is better known for its peaches (and as the hometown of Francis Underwood, the conniving congressman played by Kevin Spacey in Netflix’s House of Cards). But Winthrop says his favorite place in Gaffney is one nondescript building edged by an anonymous parking lot. “You walk inside the walls of that place and it’s probably the most modern yarn facility in the world,” he says. At that factory, he says about 250 highly trained, technically skilled workers are spinning Carolina cotton into yarn for fabric that the Northern California factory where we’re standing will transform into what has become one of the most desired articles of clothing in Silicon Valley and beyond. The American Giant hoodie became a viral sensation after Farhad Manjoo in Slate gushingly praised the sweatshirt, Winthrop and his strategy for making better clothes in the U.S. for which people would willingly pay a premium. Winthrop describes the overwhelming demand, which continues more than four months later, as resembling a “python swallowing a dog.” The desire for American Giant hoodies doesn’t just exhaust the supply of sweatshirts, he says, but sucks the company’s whole supply chain dry, all the way back to the cotton in the ground. But the internet hasn’t just served up a conventional marketing bump for American Giant. As Winthrop explains, the internet makes possible the kind of business he wants American Giant to be. If he’s right, it’s also the kind of business that could reboot U.S. manufacturing. Winthrop started his working life as a financial analyst. But an urge to make products, as opposed to just figuring out how to finance them, led him to ditch Wall...

By: Reuters New York: US manufacturing grew in April at its most sluggish pace in six months as demand from domestic customers fell, suggesting the American economy was losing momentum in the second quarter, a survey showed on Tuesday. Financial data firm Markit said its “flash,” or preliminary, US Manufacturing Purchasing Managers Index (PMI) fell to 52.0 this month from 54.6 in March. That was the slowest reading since October 2012. Output slipped to 53.6 from 56.6, its weakest rate of growth since last November. While new export orders rose, demand at home increased at its slowest pace in six months, with the new orders component coming in at 51.8 after hitting 55.4 last month. The data “raises concerns that the US manufacturing expansion is losing momentum rapidly as business and households worry about the impact of tax hikes and government spending cuts,” said Chris Williamson, chief economist at Markit. The results suggest output growth slowed from an annual pace of nearly 8.0 per cent earlier this year to 2.0 per cent at the start of the second quarter, Williamson said. Gross domestic product due on Friday is likely to show the US economy expanded at 3.0 per cent annualised rate in the first quarter, rebounding from a weak performance in the final three months of 2012. But the slowdown in manufacturing suggests “the picture looks to have already began to darken again, with growth set to weaken in the second quarter,” Williamson said. The “flash” reading is based on replies from about 85 per cent of the US manufacturers surveyed. Markit’s final reading will be released on the first business day of the following month....

By: Dale Buss, BrandChannel There remain obstacles in doing it, but there’s no denying the strong rush of foreign upscale automakers that are announcing plans to expand production in the United States these days. Toyota is expected to confirm on Friday morning that it is moving production of its Lexus ES from southern Japan to Georgetown, Ky.; Nissan is looking to build a second US plant for its Infiniti brand, which already makes the JX SUV in Tennessee; and German luxury automakers each in their own ways are expanding American manufacturing footprints that used to be mainly afterthoughts. Mainstream players are participating in the trend too, such as Subaru, which is set to expand US production, presumably at its existing plant in Indiana. For Toyota, one of the keys to its Lexus decision was several years of appreciation in the value of the yen, which made Japan manufacturing cost-prohibitive. Another key in the Lexus decision was recognition that, after decades of closing the gap, the quality standards apparent in US manufacturing by all brands, and by American workers, finally rivaled those established by Japan in the 80s. For Nissan, one factor contributing to the decision to aggressively expand production in the US was its expansive plans to acquire more sales and market share under new chief Johan de Nysschen, who recently came over from Audi of America. The German companies have been persuaded by currency differentials, by the continuing deterioration of their home European markets, by the relative continued robustness of US vehicle sales and by opportunities to integrate American plants into their global production systems. So BMW, Mercedes-Benz and Audi are looking abroad even more eagerly for opportunities for sales and production in the United States and other promising “local” markets, also including China. Such rewards appear to be offsetting what they perceived as the traditional benefits for their brands of “German engineering” that presumably segued into positive perceptions of “German manufacturing.” Thus BMW already has become among the largest US car exporters and will begin producing the new X4 crossover at its factory in South Carolina, in addition to three other SUVs it makes there. Daimler is expanding the Mercedes-Benz plant in Alabama and Audi is building a $1.3-billion factory in Mexico. Huge risks remain for a...