Opinion: How the U.S. could bring back up to half…

Opinion: How the U.S. could bring back up to half…

Mar 9, 2017

“Opinion: How the U.S. could bring back up to half the manufacturing jobs moved overseas” By Harry Moser and Sandy Montalbano, Reshoring Initiative, MarketWatch Many companies that offshored manufacturing didn’t really do the math For decades, U.S. companies have been chasing cheap labor offshore and then importing products to sell in the U.S. market. Now, Trumponomics, a broader focus on Total Cost of Ownership (TCO quantifies all relevant costs, risks and strategic factors) and advanced manufacturing together have the potential to end the manufacturing stagnation of the last 30 years and create millions of manufacturing jobs in the U.S. Over the last 20 years, the boom in offshoring drove our goods trade deficit up by about $640 billion a year, costing us three to four million manufacturing jobs. The most direct way to reduce the trade deficit, as President Trump has said he wants to do, is to substitute domestic production for imports, i.e. via reshoring and foreign direct investment (FDI) in the U.S. The result of eliminating the trade deficit would be a rapidly growing manufacturing workforce for the first time in 40 years, a rise in average wages and a 25% to 30% increase in manufacturing output and jobs. Many companies that offshored manufacturing didn’t really do the math. An Archstone study revealed that 60% of offshoring decisions used only rudimentary cost calculations, typically just price or labor costs and ignored other costs such as freight, duty, carrying cost of inventory, delivery and impact on innovation. Most of the true risks and cost of offshoring were being ignored. Now is a good time to re-evaluate the cost of domestic vs. offshore production, and not just because of the risk of an angry tweet from the president. Chinese wages have been rising by about 15% a year since 2000. As a result, the Chinese labor cost in dollars per unit of output is now about four times what it was in 2000. We estimate that about 25% of what is now offshore would come back if companies quantified the total cost. These products would generally have characteristics such as high freight cost vs. labor cost, frequent design changes, volatility in demand, intellectual property risk,...

We just got more proof that American manufacturing…

We just got more proof that American manufacturing…

Mar 7, 2017

“We just got more proof that American manufacturing is making a comeback” By Lucia Mutikani, Reuters New orders for U.S.-made goods increased for a second straight month in January, suggesting the manufacturing sector recovery was gaining momentum as rising prices for commodities spur demand for machinery. Factory goods orders rose 1.2 percent, the Commerce Department said on Monday after an unrevised 1.3 percent jump in December. Economists polled by Reuters had forecast factory orders advancing 1.0 percent in January. Factory orders were up 5.5 percent from a year ago. Total shipments of manufactured goods increased 0.2 percent after surging 2.5 percent in December. Manufacturing, which accounts for about 12 percent of the U.S. economy, is regaining its footing after being buffeted by lower oil prices, a strong dollar and an inventory overhang. The nascent recovery was underscored by a survey last week showing a gauge of national factory activity jumped to a 2-1/2-year high in February. The Commerce Department also said orders for non-defense capital goods excluding aircraft – seen as a measure of business confidence and spending plans – slipped 0.1 percent in January instead of the 0.4 percent drop reported last month. Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the gross domestic product report, fell 0.4 percent in January. They were previously reported to have declined 0.6 percent. The weakness in shipments points to continued sluggish growth in business spending on equipment, which increased at a 1.9 percent annualized rate in the fourth quarter. That was the first rise in over a year. In January, orders for transportation equipment accelerated 6.2 percent, reflecting a 62.2 percent surge in defense aircraft orders. There was also a 69.8 percent jump in orders for civilian aircraft. Outside transportation, orders for machinery increased 0.9 percent. Orders for computers and electronic products fell 1.9 percent and bookings for electrical equipment, appliances and components declined 2.6 percent. Orders for fabricated metal product rose 2.3 percent. (Reporting by Lucia Mutikani; Editing by Paul Simao)...

How ‘Made in the USA’ can see a renaissance, and…

How ‘Made in the USA’ can see a renaissance, and…

Mar 6, 2017

“How ‘Made in the USA’ can see a renaissance, and what will (and won’t) change” By Trent Gillies, CNBC President Donald Trump has promised to bring jobs back to America, but the number of U.S. manufacturing jobs has been on a 30-year decline. Can that entrenched trend be reversed? A growing number of market experts believe the answer is yes. “I’m very optimistic,” small businessman Drew Greenblatt told CNBC’s “On The Money” in an interview. “We’re going to see an American manufacturing renaissance” Greenblatt, chair of the National Association of Manufacturers and president of Baltimore-based Marlin Steel Wire Products, pointed to policies that Trump wants to enact as a potential catalyst to new hiring. “We’re talking about reducing regulations by 75 percent, cutting our tax rate from 40-something percent to 15 percent,” he said. “It’s just going to make America more attractive to bring back opportunities to our country,” he added. However, in industries such as apparel, more than 97 percent of clothing and shoes are made overseas. Given the entrenched economic realities, others are skeptical that any government policy can spark a manufacturing rebound “There’s not much that can bring most of those jobs back, ” retail consultant Jan Kniffen told CNBC in an interview. “We haven’t made patterns in America, we haven’t made the product in America forever,” he said.   Kniffen added that the U.S. “would need factories, but those factories would have to be so automated, the jobs would be maintaining the equipment not producing the product.” That is because “the cost of producing abroad is so low and shipping not that much,” he said. Greenblatt remained optimistic that at least some sectors could see a resurgence. ” I acknowledge some industries are not coming back here, it makes more sense to do it elsewhere. But things like making airplanes and bulldozers and cars, it’s going to grow here, it’s going to thrive here.” Greenblatt’s Marlin Steel exports to 39 countries from its Maryland factory. He told CNBC that the company designs and fabricates wire baskets for automotive clients including Toyota Motor and General Motors. “We make baskets for Caterpillar and Boeing,” he said. “These companies are building factories in...

Technologies Point to New Possibilities for Automotive…

Technologies Point to New Possibilities for Automotive…

Mar 3, 2017

“Technologies Point to New Possibilities for Automotive Manufacturing” By Design-2-Part Magazine Divergent 3D’s environmentally efficient manufacturing platform and Toyota’s wireless EV charging system receive special recognition at R&D 100 Awards  OXON HILL, Md.—A manufacturing platform that reduces the amount of capital, materials, and energy needed to build vehicles, and a wireless electric vehicle charging system that enables batteries to be charged while driving were among the technologies awarded special recognition at the 2016 R&D 100 Awards, announced in November by R&D magazine. In selecting what are judged to be the “100 most technologically significant products introduced into the marketplace over the past year,” the international awards competition recognizes excellence across a wide range of industries, including telecommunications, optics, materials science, and biotechnology.     Divergent 3D, a Los Angeles-based startup with a radical new approach to automotive manufacturing, took top honors in the Special Recognition: Green Tech category, receiving the Gold Award for its environmentally efficient Divergent Manufacturing Platform™. Meanwhile, Toyota Engineering and Manufacturing North America, headquartered in Erlanger, Kentucky, received the Bronze Award in the Special Recognition: Green Tech category for the Wireless Power Transfer Based Electric and Plug-in Vehicle Charging System. Toyota co-developed the technology with a team of researchers from Oak Ridge National Laboratory (ORNL) and support from Cisco Systems and the International Transportation Innovation Center. Divergent 3D is attempting to greatly reduce the materials and energy used to manufacture vehicles, along with the associated costs and pollution, through a software-hardware platform known as the Divergent Manufacturing Platform. The platform is said to enable people to design and build a strong, very light chassis for vehicles ranging from a two-seat sports car to a pickup truck.  Its key building blocks are 3D-printed metal Node™ connectors, aluminum-alloy joints that connect pieces of aerospace-grade carbon fiber tubing to form the chassis. The Nodes reduce the amount of time, material, and actual 3D printing required to build the chassis, making it much lighter and far less costly and energy-intensive than those used on traditional vehicles. And instead of making expensive changes to hard tooling, manufacturers can use the software to rapidly iterate the hardware design. Divergent 3D is hoping that small entrepreneurial teams will use its manufacturing platform...

LG Electronics Building New Manufacturing Plant In Tennessee

LG Electronics Building New Manufacturing Plant In Tennessee

Mar 2, 2017

By Business Facilities The home appliance manufacturer will invest $250 million, create 600 new jobs in Clarksville, TN at its first U.S. washing machine manufacturing operation. After a lengthy site selection process that considered eight states, LG Electronics Inc. has decided to build its first washing machine manufacturing operation in the United States in Clarksville, TN. The South Korean manufacturer of appliances, electronics and mobile devices will invest $250 million in the facility, creating at least 600 new jobs in Montgomery County. “LG is proud to make further investments in America, to create jobs and to bring state-of-the-art home appliance production technology to the great state of Tennessee,” said Dan Song, president of the LG Home Appliance and Air Solutions Company. “Over the past six years, LG studied eight states for the location of this facility. Tennessee is the clear choice for LG’s latest major investment in America, due to the state’s excellent business climate, quality workforce and central location for distribution to our U.S. customers.” LG’s new Tennessee facility is expected to be the world’s most advanced production plant for washing machines. Construction on the 829,000-square-foot facility will begin later this year. Starting in 2019, the factory will initially  produce front- and top-load washing machines. Longer term, the 310-acre site offers the potential to expand for production of other home appliances. “We are proud to welcome LG to Tennessee and thank the company for creating 600 valuable, new jobs in Clarksville,” said Gov. Bill Haslam. “LG’s decision to establish new manufacturing operations in Tennessee is a testament to the business-friendly environment, ideal location and highly-skilled workforce we offer to companies around the globe. Tennessee is the top state in the nation for advanced industry job growth, an accomplishment that would not be possible without the many successful companies that choose to do business here. I look forward to building a lasting partnership with LG in the years ahead as we work together to make Tennessee the No. 1 location in the Southeast for high quality jobs.” Tennessee was ranked No. 1 among all U.S. states for foreign direct investment (FDI) job commitments in 2015, according to the 2016 IBM Global Locations Trends report. South Korea is among the top...

US manufacturing surges to a 3-year high in February

US manufacturing surges to a 3-year high in February

Mar 1, 2017

By Akin Oyedele, Business Insider US manufacturing expanded more than expected in February, according to the Institute of Supply Management.  The monthly purchasing manager’s index jumped to 57.7, the highest since December 2014 and more than economists’ forecast for 56.2.  According to ISM, orders rose at the fastest pace since February 2013.  Earlier regional manufacturing surveys, including those from Philadelphia and New York, had also pointed to an overall improvement in the sector. “Growth is being driven by robust domestic demand, stemming in turn from buoyant consumers and increased investment spending by the energy sector in particular,” said Chris Williamson, the chief business economist at IHS Markit.  Markit Economics’ monthly PMI was 54.2, lower than economists’ forecast for 54.5 according to Bloomberg.  “Manufacturing is far from booming, however, as the strong dollar means near-stagnant exports continue to act as a drag on growth,” he added....