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787 Grounding Puts Boeing’s Outsourcing in Focus

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A US Federal Aviation Administration technical advisor inspects a Boeing 787 Dreamliner plane. Photo: Reuters

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January 18, 2013
Boeing’s woes with its new 787, grounded worldwide after a series of incidents, shine the spotlight on its bold but risky strategy to source parts for the innovative aircraft from scores of plants and contractors around the world.
Breaking with its former largely in-house production practice, the US aerospace giant decided to outsource a lot of what went into its 787 Dreamliner, with its pioneering electrical systems and heavy use of carbon-fibre composite materials.

Parts came into Boeing’s Seattle, Washington and Charleston, South Carolina assembly plants from 135 other sites and 50 suppliers.

Those include Japan’s GS Yuasa, which made the batteries linked to at least two of the problems that led to the grounding this week, and France’s Thales, which assembled the batteries for delivery to Boeing.

No other aircraft around the world is put together from so many disparately-sourced pieces.

Fifty per cent of the Dreamliner is made from composite materials, including much of the fuselage and wings, which come from manufacturers in Japan, Italy, South Korea, the United States and elsewhere.

Some 70 per cent of the plane is outsourced, said Richard Tortoriello, an analyst at Standard and Poor’s.

“That creates a potential for more problems to occur than if production is centralized, because quality control can be better managed” in a centralized process, he said.

Tortoriello said the outsourcing strategy was partly to blame for the delays in delivering the first planes, which entered service in October 2011.

But he emphasised that so far there was “no indication” that the approach was behind the problems that began to surface two weeks ago among Japanese operators of the 787.

These include a tarmac fuel leak in a 787 and battery fires in two others, which led the US Federal Aviation Administration to ground the plane Wednesday, effectively taking it out of business globally.

Hans Weber, an independent security and defence expert, said Boeing had been too optimistic about its strategy.

“Boeing has admitted that it underestimated the level of management oversight and engineering support it needed to provide to its suppliers to make the highly distributed supply chain work,” he told AFP.

“If Boeing had done a better job at that, it would not have experienced the technical problems it has, in my opinion.”

He added: “I think the technologies on the 787 are sound, but the execution of the program could have been better.”

Since the 787 program kicked off in 2004, it has been dogged by numerous problems that delayed its first delivery, to Japan’s ANA, by three and a half years.

Michael Boyd, an independent aeronautical industry analyst, said the production system was not the 787’s problem.

Rather, “it’s the batteries — the quality control would have been the same” whatever the production strategy, he said.

A Boeing spokesperson told AFP that, for the moment, there has been no slowdown of production.

One of the largest industrial groups in the United States, Boeing currently completes about five aircraft a month and aims to reach a pace of 10 a month by the end of this year.

Tortoriello said he thought the new problem would slow 787 turnout.

“Given the amount of thought that went into the current battery system, we think a fix may take some time to develop and implement, and expect this focus will likely slow production,” he said.

“We continue to have confidence in BA’s engineering staff, see other issues with the 787 as non-critical, and view its value proposition to customers as high.”

Small U.S. Manufacturers Give Up on 'Made in China'

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David Rocks and Nick Leiber
When Sonja Zozula and Jerry Anderson founded LightSaver Technologies in 2009, everyone told them they should make their emergency lights for homeowners in China. After two years of outsourcing to factories there, last winter they shifted production to Carlsbad, Calif., about 30 miles from their home in San Clemente. “It’s probably 30 percent cheaper to manufacture in China,” Anderson says. “But factor in shipping and all the other B.S. that you have to endure. It’s a question of, ‘How do I value my time at three in the morning when I have to talk to China?’ ”
As costs in China rise and owners look closely at the hassles of using factories 12,000 miles and 12 time zones away, many small companies have decided manufacturing overseas isn’t worth the trouble. American production is “increasingly competitive,” says Harry Moser, founder of the Reshoring Initiative, a group of companies and trade associations trying to bring factory jobs back to the U.S. “In the last two years there’s been a dramatic increase” in the amount of work returning.
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LightSaver executives no longer spend hours on the phone with China | Photograph by Michael Schmelling for Bloomberg Businessweek
An April poll of 259 U.S. contract manufacturers—which make goods for other companies—showed 40 percent of respondents benefited this year from work previously done abroad. And nearly 80 percent were optimistic about 2012 sales and profits, according to the survey by MFG.com, a website that helps companies find manufacturers. “A decade ago you just went to China. You didn’t even look locally,” says Ted Fogliani, chief executive officer of Outsource Manufacturing, the San Diego company working with LightSaver. “Now people are trying to come back. Everyone knows they’re miserable.”

For LightSaver, the decision was simple. Neither of the founders has ever been to China, which made communicating with manufacturers difficult. Components that were shipped from the U.S. sometimes got stuck in customs for weeks. And Anderson had to spend hours on the phone to explain tweaks in the product. “If we have an issue in manufacturing, in America we can walk down to the plant floor,” Anderson says. “We can’t do that in China.” Anderson says manufacturing in the U.S. is probably 2 percent to 5 percent cheaper once he takes into account the time and trouble of outsourcing production overseas.

Dana Olson makes a living convincing small manufacturers that it pays to produce domestically. About 10 percent of the roughly 60 companies that his Minneapolis firm, Ecodev, has worked with have moved manufacturing to the U.S. or decided not to send it overseas, and another half-dozen are considering similar moves. “There’s a growing sense, with the economy doing what it’s doing, of U.S. companies wanting to produce in the United States,” says Olson. “It’s very important to them to have ‘Made in the U.S.A.’ on their label again.”

Since 2008, Ultra Green Packaging, one of Olson’s clients, has used manufacturers in China to make compostable plates and containers from wheat straw and other organic materials. By yearend, Ultra Green expects to start producing the bulk of its wares at a plant in North Dakota to cut freight costs and protect its intellectual property. “They’re infamous over there for knocking [products] off,” says Phil Levin, chairman of the 10-employee company. “All anybody needs to do is find a different factory and make a mold.”

For Unilife, moving production to the U.S. helped it win regulatory approval for an important product: prefilled syringes with retractable needles that make it almost impossible for medical personnel to accidentally stick themselves. Although the company used Chinese manufacturers for earlier offerings, syringes preloaded with medications are subject to stringent U.S. Food and Drug Administration rules. So in March 2011, Unilife began making its syringes at a $32 million, 165,000-square-foot plant it built in York, Pa. “The very thing in the U.S.A. that oftentimes we complain about—the complexity of the rules and the regulations—works for us,” says CEO Alan Shortall. “FDA compliance is the main reason we’re here.”

Even with strong Mandarin skills, Brian Bethke grew frustrated with manufacturing in China. The co-founder of Pigtronix, which makes pedals that create electric guitar sound effects, discovered that he couldn’t adequately monitor quality at Chinese factories. The original idea for the company was to develop products in the U.S. and make them in China, where Bethke was living. But after several years of finding technical glitches in as many as 30 percent of pedals, the company decided to move production to Port Jefferson, N.Y. At its small factory in a Long Island office park, the company can run multiple tests on its products and even has a guitarist play each of the 500 to 1,000 pedals it sells monthly before they’re packed and shipped.
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U.S. production lets Pigtronix more extensively test its guitar pedals | Photograph by William Mebane for Bloomberg Businessweek
Pigtronix’s move back, completed three years ago, has helped improve cash flow. While manufacturing pedals in the U.S. can cost anywhere from three to six times as much as it does in China, Bethke says Pigtronix benefits from not having capital tied up in products that spend weeks in transit and then pile up in inventory. “In China, you have high minimum quantities you have to order, so you’re building a couple thousand of every guitar pedal,” Bethke says. “Your carrying costs start to get huge.” Today the company only makes those pedals it’s confident it can sell quickly.

While goods for U.S. consumers are less likely to be made in China these days, overseas production may still make sense for companies that plan to target foreign markets. “What we’re seeing is regionalization, buying stuff from manufacturers in the region where you’re going to sell it,” says Michael Degen, CEO of Nortech Systems, a contract manufacturer based in Wayzata, Minn., that has eight factories in the U.S. and one in Mexico. “It’s very noticeable. … We’ve seen movement in terms of manufacturing in country for country.”

The bottom line: Although manufacturing in China can cost a third what it does in American factories, small companies are bringing production back to the U.S.

What The Surge In Manufacturing Means For Skilled Labor

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Ryan Galloway
January, 2013
While almost every economic sector in the U.S. is either engaged in a slow slog out of the recession or still floundering outright, two sectors are indicating healthy — and unexpected — growth.

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Grinding glass stoppers for glass bottles, 1936
Housing and manufacturing have both shown marked improvements over the past year, surprising market watchers who believed that housing was well into a long period of dormancy and that manufacturing in the U.S. had permanently decamped for cheaper pastures. This is generally good (or great) news … unless your particular housing or manufacturing concern is looking to hire skilled workers anytime soon.

Skilled labor is at crisis-level shortages both at home and abroad, with over 10 million skilled labor jobs remaining vacant worldwide.That shortage is not likely to abate in the near term, and in fact, it’s likely to get significantly worse. A global study by McKinsey & Company predicts a need for 95 million skilled workers by 2020, while simultaneously anticipating a surplus of low-skill workers that reaches the same heady number.

From White Collar to Blue Collar

It would seem that a dramatic re-skilling is in order.

The past several decades have seen the United States and most other developed nations engaged in a breakneck race to funnel as many young people into four-year baccalaureate programs as possible. The goals for this frantic pursuit were varied, but in an era of increased automation — and increased consumption — the proverbial chickens have come home to roost.

In 2012 the U.S. boasted that a record 30% of its adult population held a bachelor’s degree. In the coming decade, it’s likely that many in that 30% will be looking to abandon the search for increasingly rare white-collar jobs and repackage their skill sets to take advantage of the need for savvy blue-collar talent.

The Push for Trade Education

Of course, some companies and educational institutions are ahead of the curve. A recent survey by ThomasNet.com demonstrates that nearly half of 1,600 manufacturing companies surveyed are having difficulty filling open positions for skilled labor. As a result, many companies are helping educators create job training programs for young people that will prepare a new generation for the demands of a skilled industrial workforce.

But these aren’t your grandfather’s trade- and tech-schools. As Ira Wolfe, owner of Success Performance Solutions, recently told Bloomberg Business News, “The trades are not just about swinging a hammer any more; they involve applying brainpower and advanced education.”

Indeed, technical education has become more specialized and demanding than ever before. At a time when highly technical machines like CNC tools are standard — and would have baffled even the most skilled workers a generation ago — working in the trades is no longer about having a strong back. Instead, it requires combining considerable technical acumen with the wherewithal to get one’s hands dirty, a sensibility that isn’t always so easy to find.

For the American manufacturing investor or owner , establishing a skills and training program for the next generation of workers is akin to sowing your seeds before the harvest season arrives. It’s necessary, it’s forward-thinking, and it just plain makes sense.

SOURCE:  Forbes

Worker Shortage? Teach Teens Manufacturing Skills

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Photograph by Dean Berry/Getty Images

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Karen E. Klein
During her sophomore year at Kettle Moraine High School in Wales, Wis., about 30 miles outside Milwaukee, Tara Britten ditched class and was in danger of expulsion. “They thought I was stupid,” Britten says. “Nobody would challenge me at the level I needed to be challenged at, so it made me angry and bored.”
Her attitude changed last fall when the 16-year-old junior started participating in a nonprofit program called Second Chance Partners that teaches high schoolers skills they can use for manufacturing jobs. Britten, who was not expecting to graduate, is now earning $8 an hour working for a local manufacturer and completing her high school curriculum. She’s also learning such skills as welding and reading blueprints and is confident she can get a shipyard welding job that pays $15 an hour and offers benefits when she graduates next year.

A recent survey of 1,600 manufacturing companies in the U.S. shows that nearly half have openings for line workers, skilled trade workers, and engineers, but many have trouble filling the positions. The survey, released by industrial product sourcing and supplier selection website ThomasNet.com, echoes other reports of skilled labor shortages. Instead of lamenting the problem, manufacturers are helping educators establish training programs for prospective employees, says Linda Rigano, executive director of strategic services at Thomas Industrial Network, which runs ThomasNet.com. She estimates that there are dozens of similar partnerships in the U.S. and says, “we’re seeing more pop up every day.”

Training partnerships are the only way for domestic manufacturers to rebound, says Ira S. Wolfe, whose Success Performance Solutions in Lancaster, Pa., helps small businesses recruit and hire employees. Criticism that vocational training leads to exploitation of low-paid, nonunion labor is outdated and unrealistic, Wolfe says. “The trades are not just about swinging a hammer any more; they involve applying brainpower and advanced education.”

Five years ago, label and adhesives maker Tailored Label Products, which is near Britten’s high school, joined the Second Chance Partners program she attends. In 2009, TLP, which has 75 employees, turned a 2,000-square-foot office area in its facility into a classroom, taking on the cost of outfitting the space for students. Each semester, 10 to 15 students do two hours of classwork on site every day and then work as apprentices at TLP and other local factories.

At TLP they rotate through departments with a mentor, learning both unskilled and skilled tasks such as digital printing and finishing. TLP has hired two former students as full-time employees, where they can earn between $10 and $20 an hour and get medical and dental benefits as well as employer-matching 401(k), profit-sharing, and wellness plans, says Tracy Tenpenny, TLP’s vice president for sales and marketing.

Since its inception in 2000 (it grew out of an earlier program founded in 1996), 158 students have completed the 21-month Second Chance program, which has had a 90 percent graduation rate, according to Executive Director Stephanie Borowski. More than half of the graduates continue to work at one of program’s business partners, with 62 percent going on to full-time employment, 29 percent enrolling in post-secondary education, 5 percent continuing in apprenticeship programs, and 4 percent joining the military. Second Chance is funded by local school districts and the 70 Wisconsin businesses that participate, along with grants and donations.

In Pennsylvania’s Bucks and Montgomery counties, 50 manufacturing companies have formed a separate entity, BuxMont Manufacturing Consortium, which partners with two-year colleges and trade schools to hire and train their graduates. Its programs target young people interested in science and engineering and good at working with their hands, says Michael Araten, third-generation president and chief executive of The Rodon Group, a plastic components maker in Hatfield, Pa.

Although the family-owned, 100-employee business sends some of its parts overseas for assembly, it manufactures all its products in the U.S. Many of its competitors moved production off shore over the past 30 years, Araten says. Now he sees many returning due to supply chain complications and shipping expenses. “We’re in year three of what I think will be a 10-year transition back to U.S. manufacturing as a world leader,” he  says.

Skilled workers at companies in the Pennsylvania consortium typically make $35,000 to $50,000 annually, plus overtime pay, health care, and employer-matching 401(k) accounts, Araten says. That future sounds pretty good to Brody Kolpin, 17, who says he “kind of gave up” on school after his freshman year at Mukwonago High School, also about 30 miles from Milwaukee, until he joined a Second Chance Partners program in  September 2011.

He now works in maintenance at a Mukwonago manufacturer and is taking classes at program partner Waukesha Generac Power Systems. “I’m very mechanically inclined. I love to take things apart and see how they work and then put them back together,” he  says.

FDA Reports 500 Dog Deaths From Chicken Jerky Treats

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Kara Ogushi
January, 2013
Several varieties of Nestlé Purina and Milo’s Kitchen chicken jerky dog treats are being recalled in the U.S.
The U.S. Food and Drug Administration (FDA) now reports that 500 dogs have died after eating jerky treats manufactured in China.

According to NBC News, “A new tally of reports filed with the FDA show the agency has received 2,674 reports of illness involving 3,243 dogs, including 501 deaths. The agency also has received reports of nine illnesses in cats, including one death.”

The FDA has reminded pet parents that jerky treats are not necessary for your dog’s diet and can be safely eliminated. The agency will continue to investigate the claims of pet deaths and illnesses.

“The agency last spring inspected five Chinese plants that made jerky treats,” NBC News reported. “Officials weren’t allowed to take samples for testing. Now, inspection reports released about the fifth site, Yantai Aska of Yantai, China, show that plant officials falsified records regarding imports of glycerin, a key component in the jerky treats. Officials with China’s regulatory agency, the General Administration of Quality Supervision, Inspection and Quarantine, suspended the firm’s export certificate as a result of the March 2012 inspection.”

Two more companies have announced recalls of these tainted products. Cadet Brand Chicken Jerky Treat Products and Publix Chicken Tenders Dog Chew Treats are being recalled because they may contain trace amounts of antibiotic residue.

According to Publix, “The UPC, located on the back right-hand corner of the product, is 41415-18527and the product comes in a 3.5 ounce bag. This product was sold in Publix grocery stores in Florida, Alabama, Georgia, South Carolina and Tennessee.”

The Publix jerky treats can be returned to the place of purchase for a full refund. For more information, call the Publix consumer relations department at 800-242-1227 Monday through Friday from 8 a.m. to 7 p.m., or visit their website.

As for Cadet, although the company was initially only requested to recall their tainted treats from retail locations in New York, it is voluntarily recalling the jerky treats worldwide. If you purchased the recalled Cadet products, call IMS Pet Industries at 800-394-4467 or file a claim here.

SOURCE:  FindaVet.us

Wal-Mart 'Jump Start' Is an Admission There Is a Problem

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Greg Autry
01/17/2013
Wal-Mart, the retail leader in the outsourcing American jobs, has clearly been feeling the pressure of the growing Made in USA movement. Today, the Arkansas based firm announced a “jump start” plan that promises it will buy more American goods — $50 billion over 10 years. Wal-Mart also propose to hire 100,00 veterans and move more part time employees to full time positions.
These are actually three seriously good ideas to move our economy forward. Taken together, they represent a better rendition of “Happy Days Are Here Again” than the tune Washington keeps humming: borrow more money from China to loan to our already debt loaded consumers so they can buy more stuff stamped “made in China.”

However, to be honest, for a firm with nearly $450 billion in annual revenue, buying a mere $5 billion more a year of Made in America stuff is chump change. That will only account for about 1.5 percent of their wholesale purchases. While it is clearly not enough, the fact that America’s biggest importer has made such an announcement is very important in itself.

The Wal-Mart plan follows fast on the heels of Apple CEO, Tim Cook, announcing that some Macintosh production would be moved back to the U.S. this year. Apple has been the other iconic driver of Chinese GDP via American consumption supporting a process of declining real wages for the middle class, rising levels of long-term unemployment and a national calamity of under-employment (college grads working two shifts in retail stores).

Together, these announcements show that even top CEOs can no longer whitewash their lack of corporate patriotism with blather about the “benefits of free trade” and promises of “access to the world’s largest market” that will come to America, someday. The public has finally figured out that someday never comes. Corporate America is beginning to worry that the American public has caught on to the real source of their collective misery — a disastrously naive trade policy that benefits a growing plutocracy in China and the U.S.

In the last 18 months, I’ve seen this awareness in a completely new level of response to my lecturers about trade and China. It doesn’t matter if I’m in a college classroom, a union hall or a Tea Party meeting. Business leaders are also more attentive and I’ve had several very positive discussions with enlightened members of Congress from both parties. A somber determination is building to throw out the rascals who have negotiated the transfer of America’s wealth to Communist China. In fact, almost nobody outside of a few diehard faculty in our top business schools and their fans in the business press still holds on to the belief that America will actually benefit from a continuation of the trade policy status quo.

A lot of the credit for this awakening belongs to small group of brave, non-partisan economists, writers, bloggers, organizers, business owners, and even politicians that have been serving on the front lines of this battle. Through the dark years, they’ve worked together, despite disagreeing on many other things. They’ve often endured insults and sustained injuries in the fight for restoring American strength and prosperity. A lot of them have spoken out on the issue of workers and human rights in China as well. They have carried on, because they cared more about the real world outcomes than the beauty of theory. I’ve been proud to be a minor player in this effort and I’d like to thank a few of these daring Americans for a job very well done, but not yet finished. The following, incomplete list, provides a good starting point for those interested in learning more about trade reform.

Governor Buddy Roemer
Peter Navarro, economist, professor, writer and mentor 
Ian Fletcher, economist and writer
Alan Tonelson, economist and writer
Thea Lee, labor economist
Bob Baugh, Industrial Union Council
Michele Nash-Hoff, businesswoman, writer 
Richard McCormack, Manufacturing Technology News 
Pat Choate, economist and policy analyst 
Leo Hindrey, businessman and writer
Dylan Ratigan, TV personality and writer 
Pat Mulloy, dedicated public servant, speaker
Andy Grove, visionary business leader
Peter Morici, economist, professor and writer
Ralph Gomory, mathematician, business executive, and writer 
Bob Hall, writer and aspiring U.S. president 
Harry Moser, businessman and advocate 
Brian O’ Shaughnessy, businessman and patriot
Michael Stumo, Coalition for a Prosperous America
Clyde Prestowitz, economist, author 
Den Black, American Jobs Alliance 
Joel Joseph, Made in USA Foundation
Charles Blum, diplomat and consultant
Gil Kalpan, Renaissance for American Manufacturing conferences, 
Beri Fox, Business Woman
Nanette Lepore & Robert Savage, Save the Garment Center
Congressman Tim Ryan (D,OH-17)
Congressman Dana Rohrabacher (R, CA-48) 
Congressman Chris Smith (R,NJ-4) 
And if you want more, follow: 
Mike Tamulis, American Made Heroes

While I know I didn’t get e
veryon
e (sorry) and I’ve left out some really hard workers who generally don’t want publicity, you know who you are. Let’s celebrate this crack in the fortress of multinational corporate resolve and then get back to work so Americans can get back to work!

SOURCE:  The Huffington Post

Greg Autry is the author of Death by China and serves as Senior Economist for the American Jobs Alliance and Economist with the Coalition for a Prosperous America. He has taught at the Merage School of Business, UC Irvine and is joining the faculty at the Argyros School of Business and Economics at Chapman University. You can find him on Facebook.

Reshoring: American Manufacturers Are Coming Back Home

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The Whirlpool water tower is a powerful symbol of the heart of Clyde’s economy.

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Kim Gittleson
January, 2013
Visitors to Clyde are greeted with the view of a water tower presiding over the flat landscape, carrying a large Whirlpool logo.  The tower is a clear symbol of the small Ohio town’s economic heart.
Whirpool’s 2.5 million sq ft (232,000 sq m) washing machine factory dominates the main drag here, and the businesses along this stretch, such as Gary’s Diner and Pizza House, are often filled with the appliance manufacturer’s workers.

On the factory floor, the din is overwhelming. More than 3,000 workers – half the population of Clyde – are busy testing, screwing, welding, and painting the hundreds of pieces that make up the company’s washing machines.

This is the largest washing machine plant in the world, with 30 miles (50km) of overhead conveyor belts that clatter along, carrying assorted barrel drums and metal doors.

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Assembly worker Sonny Workman says Whirlpool is “the family business”

But stop for the time it takes to make one machine – approximately four seconds – and a few things will become apparent that differ from factories past.

Those carts driving by, filled with grey fabric? They have no driver. They are automated to follow an orange line on the ground.

And those LED screens at each assembly line? They monitor each worker’s productivity to the second and can give instant feedback about how to improve production.

Such details make the plant one of Whirlpool’s most productive, and it is one reason why the company, when it was looking to move production from a plant in Mexico, decided to bring jobs back to Ohio.

“There’s been a lot of focus both by the company and the employees to become more efficient, more effective,” says Whirlpool vice president Jeff Noel.

“That’s made making products in the US more competitive than it has been in the past.”

Homecoming

American manufacturing lost more than two million jobs during the recession, accelerating a decline that had begun long ago in the 1970s.

Yet since then, manufacturing has been one of the biggest drivers of job growth in the US, adding more than 500,000 jobs.

While much of that job growth could be attributable to post-recession pent-up demand, that is not the whole story.

According to the Reshoring Initiative, a group of companies and trade associations trying to bring factory jobs back to the US, about 10% of those job gains – 50,000 jobs – were created by companies bringing back manufacturing from overseas.

Last March, the GE’s chief executive, Jeffrey Immelt, wrote an article in the Harvard Business Review where he announced that GE planned to add more than 1,000 manufacturing jobs at its Louisville, Kentucky, facility – a manufacturing plant the company tried to sell only a few years ago during the depths of the recession.

“We can bring manufacturing back to the United States and be profitable,” Mr Immelt said.

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These days, making washing machines in the US is competitive

Better, faster, more productive

There are many reasons why the corporate accounts are once again favouring the American worker.

Higher labour costs abroad, coupled with cheap natural gas as a result of the fracking boom in the US and workers who are willing to work for lower wages, have made it more economical than it once was to produce back in America.

Moreover, changing consumer behaviour means customers often want products immediately and with varying specifications, so “it’s better to be closer to your customers”, according to Mr Noel.

Finally, newer factories with increasingly automated technology require a more highly educated workforce, which the US has as a result of its manufacturing past. Besides, automation costs are roughly the same wherever in the world a company operates.

With all these factors combined, by 2015 a variety of manufacturing industries, from appliances to tyres, will find it more cost effective to produce goods in the United States, according to a recent report by the Boston Consulting Group.

This could add an estimated two to three million jobs and more than $20bn in output to the American economy – a striking reversal from years past.

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Clyde is a small town that relies heavily on one manufacturer

First comes a breeze

But 2015 is a long way off, and some remain sceptical.  

“The best data we have shows us that nothing like a manufacturing reshoring wave is happening now,” says manufacturing expert Alan Tonelson, of the US Business and Industry council.

With headwinds from Europe, dysfunctional politics in Washington, and US trade policy that continues to encourage overseas production, the growth in manufacturing job creation appears to be slowing down, Mr Tonelson adds.

And even if all of these factors were to disappear, it would be unlikely that the jobs added would ever be able to replace the more than eight million jobs that have been lost since the 1970s.

‘Family business’ 

For Clyde’s workers and others in the local community, Whirlpool’s commitment has allowed them to breathe easy for the first time in a while.

“It’s very important for us, especially since they’re the largest manufacturer in our county,” says Kay Reiter, executive director of the Sandusky County Economic Development Corporation.

“If you look at all the suppliers that we have already locally, it’s huge.”

The hope is that Clyde can continue as it has been since Whirlpool first came to the town in 1952; as a place once described in American literature by Sherwood Anderson as the quintessential American small town.

For this community, “Made in America” is not a fading sentiment. It is a rallying cry.

“I’ve been with Whirlpool for 26 years,” says Sonny Workman, who works on the Alpha assembly line in the plant.

“My dad worked here, my aunts and uncles too. It’s the family business.”

SOURCE:  BBC News

Offshore Wind: Enormous Potential, Huge Challenges

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Peter Kelly-Detwiler
Contributor
January 2013

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Photo: Blade Dynamics

Last month I visited the Wind Technology Testing Center in Charlestown, MA, just outside of Boston.  With me were executives from American Superconductor (AMSC) and Blade Dynamics (BD).  They were in Charlestown to observe the testing process of a new blade design that BD is working to commercialize.  As we watched the blade  being bent back and forth – we saw perhaps a few thousand of the two million movements the blade would undergo this month – these two execs gave me a good insight into the continually developing world of windpower and some of the trends we should expect to see in the near future.

What is clear is that we have come a long, long way from the 1980s, when Zond was developing the first big wind farm in Tehachapi,California, where 500 turbines generated a total of 40 MW.   Today, the same amount of energy can be produced by approximately eight 2.5MW wind turbines.

The following table from AMSC gives one a good idea of the progress made in the last three decades, as well as the huge gains expected in the next three or four years:

While costs per kW have increased by a factor of twenty, productivity has increased nearly a thousand-fold, greatly reducing the kilowatt-hour costs.  As a result, in the best onshore wind regimes in the US, southwestern Kansas, and the Texas panhandle, wind now costs less than three cents per kilowatt-hour.

The onshore resources are abundant in such locations, but they are far from energy-hungry populations.  It has proved politically very difficult and costly to pass through the regulatory hoops to build transmission lines from the wind hotspots to the demand centers.  For one $7 billion line being built to bring West Texas wind from to Dallas and other large cities, easement payments have ranged between $3,000 and $10,000 per acre, and there has been significant and time-consuming local opposition.  Many of the high voltage transmission lines being proposed in other parts of the country to update our antiquated electricity grid could take decades to build.  The federal, state, and local regulatory thicket is nearly impossible to navigate, and one failure in the process can kill the entire endeavor.  This transmission constraint contributes further to the push to develop offshore.

Today, the typical onshore machine averages somewhere between 1 and 3 MW, and offshore machines are in the 3-4 MW range and getting significantly larger.  The economics of offshore wind development necessitate scale.  Constructing and maintaining turbines in remote and difficult offshore marine environments requires specialized technology, including specialized construction ships costing as much as $100 mm.  As a consequence, the machines being built to harvest the steady offshore winds must have huge blade sweeps and big turbines to be economic.

The DOE is pushing a National Offshore Wind Strategy initiative to bring the costs of offshore wind to ten cents per kilowatt-hour for 10 gigawatts (GW – a thousand megawatts) of power by 2020, with an ultimate goal of 54 GW at a cost of seven cents by 2030.  However, this won’t happen without a few major economic and technological developments.  Both blades and turbines will have to get bigger and better.

Let’s start with blades.  The bigger the swept area of the rotor blades, the more energy one can harness from the turbine.  The relationship between the rotor size and the swept area is not linear.  For instance, to increase the rotor diameter from 150 m (today’s largest blades) to 200 m (being developed by BD for AMSC’s 10MW offshore turbine) the blades will increase in length by 33%, but the swept area, which captures the wind energy, will increase by 78 (πR2) If you’re offshore then, you are looking at deploying blades that are as long as a football field.  By way of comparison, a Boeing 747 is 64.4 m from wing-tip to wind-tip, less than one-third the size of a 10MW offshore turbine.

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The technology challenge is obvious: these blades need to survive for decades in a highly punishing marine environment.  Downtime is expensive.  According to Tom Feiler of AMSC, the vessels and crews needed to repair out-of-service equipment can cost from $2,500 per day to upwards of $25,000 per day depending on the size and weight of the spare parts, and the conditions they have to deal with.  Failure really is not a palatable option, as maintenance cost can destroy the economics of a wind farm.

This creates an interesting economic and technological challenge.  In order to make wind energy cost-effective, one has to keep initial component costs as low as possible.  Sandia Labs put it very well in a 2011 report on blade manufacturing: “Wind turbine blades have near aerospace quality demands at commodity prices; often two orders of magnitude less cost than a comparable aerospace structure. Blade failures are currently (listed) as the second most critical concern for wind turbine reliability.”  The experience of Suzlon was eye-opening in this regard.  Blade cracking issues resulted in a six-month remediation program costing in the tens of millions of dollars.

Here’s where Blade Dynamics eyes the future and believes they have a competitive advantage.  Owned 20% by Dow Chemical and 20% by AMSC, and more recently, also by Energy Technologies Institute (ETI) a public-private partnership between companies including Rolls Royce, Shell, E.On, and the UK government, BD has a different approach to building blades.  The typical approach is to lay out sheets of glass in an enormous mold and infuse it with resin.  One challenge is to ensure that the application is uniform and without bubbles or dry areas which would result in ensuing weakness of the blade. The bigger the blade, the greater the potential challenge.

The second step, once you have created half the blade in the mold is to take the one “clamshell” and join it to the other with special adhesives, with a spar in the middle to improve strength.  Since the development of these blades is essentially a process done by hand, the two clamshells are never exactly identical opposites.  Thus, the joining often has imperfections as well.  Just about every blade requires fixes of one sort or another.

In looking at the issue, Sandia Labs comments: “While the design and manufacturing of blades has improved, it is not clear that it has done so at a rate necessary to ensure a 20-year design life. Many of the blade suppliers are using technologies and techniques that were developed for structures with much lower design loads and criteria. While these methods are inexpensive, they are thought to offer questionable reliability.”

Sandia points to the issue of size as likely creating more failure, all other things being equal: “thick composite laminates have an increased likelihood of hidden flaws and multiple fla
ws being groupe
d in the same local area. A number of production related flaws may occur in larger structures which are more easily avoided in smaller structures…Other factors which are more likely in larger blades include fiber waviness, large scale porosity, large resin rich areas, and resin cure variations through the thickness…Moreover…larger structures have a greater probability of a critical flaw.”

Addressing this concern that bigger may not be better, Blade Dynamics brings a different logic to the game.  Their goal is to bring quality control down to the micro level.  Instead of laying out the blades as two single large components which are then glued together, with a spar in the middle, they create a series of smaller structures – in a more controlled environment – which they can quality check and then join together.  The clamshells are not built as whole units that are joined, but rather as a series of modular pieces which wrap around a modular central spar as they go.

BD believes this not only gives them strength and consistent and reliable quality – which is what they were at the Wind Technology testing Center to prove – but flexibility as well.  With the joined clamshell approach, a blade exceeding 50 yards is exceeding ponderous to move.  On land there have been cases where highway exit ramps have been built just to accommodate wind turbine blades.  In the case of Blade Dynamics, the sections can be moved in any specified length.  Currently, the default standard is 40 feet – the length of a standard truck container.  Backed by Dow Chemical, they hope to use this technology to challenge the big and established wind energy giants (Siemens, Vestas, Enercon, Gamesa, GE, and a small number of other highly capitalized players) in the offshore frontier.

ETI’s nearly $25 mn investment in BD, announced just this week, will add more wind to BD’s sails.  ETI took a stake specifically to advance development of enormous carbon fiber blades (compared with traditional fiberglass construction) of between approximately 90 and 100 yards, for turbines in the 8-10 MW range.  By comparisons, the largest blades currently turning offshore are just over 80 yards long in 5-6 MW machines.  The goal is to accelerate development of prototypes and put them into production by the end of next year, with a reduction in weight of up to 40%.  The lower weight reduces costs throughout the rest of the system, improving overall economics.  BD’s smaller D49 Blade just won recognition as The Best of the Best Blade of the Year by Windpower Magazine, among established competitors like Siemens and Vestas, so they may just have something here.

Now let’s address turbines.  American Superconductor, for its part, sees a different and complementary challenge worth addressing.  Bigger machines transmit more energy.  However, big gusts of wind can transmit too much energy into the critical components (gearbox and generator), essentially destroying them.  Gearboxes have traditionally been used to speed up the RPM from the rotor to the generator, but they are the weak link in the chain as you get larger.  As a consequence, many manufacturers are going to wind turbines without gearboxes.  However, torque then becomes a problem, requiring huge generators with heavy copper windings that may scale out in the 3-4 MW range.  As AMSC’s Thomas Feiler puts it “you essentially have a locomotive on top of a very high tower.”

AMSC sees an advantage for their technology in this area, as their lightweight, superconducting ceramic wire can allow them to build machines which are both simpler and lighter.  They are betting on their experience in designing and building electric motors for ship propulsion systems for the US Navy.  For the sake of comparison, AMSC indicates in their literature that a 10 MW superconductor generator would have a nacelle-generator combination weighing approximately 420 tons, compared with a conventional direct-drive machine weighing over 800 tons.  This reduction in size and weight would lower overall wind development costs, resulting in a lower overall delivered cost of electricity.  They believe that the simpler more efficient design will also significantly reduce operations and maintenance costs.  Modern wind turbines are designed to operate 24/7 for 20 years.  A car, if designed for a similar duty cycle, would have to operate for more than 3 million miles.

Blade Dynamics and American Superconductor are two of a small number of US players competing for an industry estimated to be worth in excess of $100 bn annually until 2020, and getting even larger after that.  The World Wind Energy Association estimates that there is currently 250,000 MW of installed wind capacity in operation today, growing at 15 – 20% annually.

Of this 250,000 MW, only a few thousand MW has been developed offshore, in Europe.  There, 3,300 MW has been installed, 5,600 MW is under construction, 17,300 has been permitted, and an additional 115,000 MW is planned.  Asia is also eyeing a huge push offshore. Pretty soon, wind developments will occur off US shores as well.  The total estimated offshore wind potential for the US is 4,100 Gigawatts (GW), or approximately four times the size of the total US power system.  The New England and Mid-Atlantic resource is estimated at just over 1,000 GW.  There are still technical hurdles to be overcome in developing the massive blades and generators necessary to cost-effectively harness wind in the ocean.  But for the wind industry, this may be the biggest prize yet to come.

SOURCE:  Forbes

Walmart to Boost Sourcing of US Made Products: Hiring 100k Veterans

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Walmart announced bold commitments to increase domestic sourcing of the products it sells and help veterans find jobs when they come off active duty. Speaking at the National Retail Federation’s annual BIG Show, Walmart U.S. President and CEO Bill Simon also announced the company is helping part-time associates who want to be full time, make that transition.  Read more

Walmart to Boost US-Made Products

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Walmart to Boost US-Made Products

Walmart today announced bold commitments to increase domestic sourcing of the products it sells and help veterans find jobs when they come off active duty. Speaking at the National Retail Federation’s annual BIG Show, Walmart U.S. President and CEO Bill Simon also announced the company is helping part-time associates who want to be full time, make that transition.

Read more

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