Why one CT producer is investing time, millions to reshore

Why one CT producer is investing time, millions to reshore

Mar 16, 2017

By Gregory Seay, Hartford Business Journal Cromwell factory owner Jack Carey saw the threat looming several years ago, and began steps to protect his product source, employees and the future of family-run Carey Manufacturing Inc. Well before this sitting president’s “America First” campaign and mounting public support for boosting jobs at home, Carey, whose company supplies metal latches, catches and handles to commercial, industrial and military customers, sought to end its reliance on heavily subsidized Chinese raw materials and manufacturers of hardware found on everything from office desks to missile containers. So by early 2018, Carey says his $8 million company will have invested $2.5 million in Connecticut-sourced laser cutters, a new quality-inspection station and up to eight new jobs, to produce in-house the more than 300 varieties of latches and handles listed in its catalog. Chinese suppliers’ unpredictable pricing and uneven quality were Carey’s principal reasons for home-shoring his hardware production. “We’re trying to compete in a world where … we’re competing against governments that give things away. It’s tough,” said Carey, a former Pratt & Whitney Co. machinist who launched his company in 1998. His move, one of Connecticut’s and the nation’s growing examples of the “reshoring” trend to bring certain manufacturing and technology back to America, offers plenty of benefits, including a secure, stable supply of product and more production overtime for his shop-floor workers, Carey says. But even more important, says Carey, is that America can recapture production of some obscure but vital components such as the metal missile-case fasteners Carey supplies to the U.S. military. According to industry observers, reshoring of manufacturing and related technology to America has been underway since the Great Recession but is still in its infancy. The trend dipped in 2015 due to the strong dollar and rising oil prices, which favored overseas production, according to the Reshoring Initiative, a Midwest nonprofit advocate of restoring well-paying manufacturing jobs and vital goods production to the U.S. From 2010 to 2015, it’s estimated that Connecticut added 575 new jobs and eight new companies as a result of reshoring and foreign direct investment, according to the Reshoring Initiative. Many of the jobs are coming back to America from...

Why Universities are Important to Rebuilding US…

Why Universities are Important to Rebuilding US…

Mar 14, 2017

“Why Universities are Important to Rebuilding US Manufacturing” By Michele Nash-Hoff, President, ElectroFab Sales, IndustryWeek The United States needs more engineers to rebuild American manufacturing, and universities play a key role in providing this education. The fact that more and more manufacturers are returning manufacturing to the U. S. or keeping manufacturing here instead of moving to Mexico or Asia is good news, but on February 23, 2017, President Trump met with two dozen manufacturing CEOs at the White House. While they “declared their collective commitment to restoring factory jobs lost to foreign competition,” some of the CEOs “suggested that there were still plenty of openings for U.S. factory jobs but too few qualified people to fill them. They urged the White House to support vocational training for the high-tech skills that today’s manufacturers increasingly require…The jobs are there, but the skills are not,” one executive said during meetings with White House officials that preceded a session with the president.” “We were challenged by the president to … come up with a program to make sure the American worker is trained for the manufacturing jobs of tomorrow,” Reed Cordish, a White House official, said after Thursday’s meetings.” Training today’s workers in the skills they will need for the jobs of the future in manufacturing is important, but we also need to educate the next generation of manufacturing workers. We need more engineers to rebuild American manufacturing, and universities play a key role in providing this education. Recently, I had the opportunity to interview Dr. David B. Williams, executive dean of the Professional Colleges and dean of The College of Engineering at The Ohio State University, located in Columbus, Ohio, to discuss the role universities are playing in rebuilding manufacturing and educating the next generation of manufacturing workers. His official biography on the university website states, “Williams is involved in many university-industry economic development partnerships. He serves on the boards of ASM International, the State of Ohio’s Third Frontier Advisory Board, Lightweight Innovations for Tomorrow (formerly American Lightweight Materials Manufacturing Innovation Institute), Columbus 2020, Metro Early College STEM School, EWI, Ohio Aerospace & Aviation Council, and the Transportation Research Center.” Dean Williams said, “Ohio State University...

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...