LINCOLNTON, N.C. (AP) — When Bruce Cochrane’s family furniture company became an empty factory, he wouldn’t drive by the building, even though it was just a short ride from home. There were just too many memories of what was — and what he was sure would never be again.Five generations of Cochranes had been furniture makers, starting with his great-great grandfather, William, who built church pews in the 1850s. By the mid-1990s, though, the long, proud family tradition appeared to be at an end. Like so many other American industries, the furniture trade was moving to China, land of cheap labor.
Cochrane headed there, too, becoming a consultant to furniture makers there, making occasional trips to offer advice. Back in North Carolina, he saw globalization taking its toll. First, fewer and fewer workers in the plants. Then, shuttered factories. But it took a while to grasp the scope of the loss.”I didn’t give that a lot of thought at the time,” Cochrane says. “I was making so much money that I did not really dwell on the implications of what I was doing, of what other people were doing. … Later on, I saw how sad it was to see a $50 billion industry move offshore and all the thousands and thousands of jobs that were lost. And I was part of it.””That,” he says, “probably bothered me more than anything — seeing the jobs go away.”
More than three years after the factory closed its doors, Cochrane reopened them for a new venture, Lincolnton Furniture Co. Earlier this year, a small work force of about 55 — including several who’d toiled for his late father under the same roof — built the company’s first bedroom and dining room pieces, shipping them to stores with a flag-decorated “Made in America” tag.Lincolnton is part of a small but growing trend called “reshoring” — a reverse migration of U.S. manufacturers from the Far East (mostly China) to West. With rising labor and shipping costs in China, companies producing appliances, cookware, audio earphones, water heaters and other goods have decided it makes economic sense to move some (or all) of their operations back to U.S. soil.Cochrane knows he’s doing something risky, that some folks think he’s a bit crazy and believe the furniture business in the U.S. is mostly gone. He’s confident, though, this is a smart move, and not just because it feels good — which, by the way, it does.
“To do something like this HAS to be a business decision,” he says, “but it is emotional and it is sentimental to be able to come back and make something again and to impact people in such a positive way.”
What happens in the cavernous factory on Cochrane Road could bring economic security to workers in a state that, by one estimate, has hemorrhaged tens of thousands of jobs to China in the last decade.
But what happens here could also offer larger lessons about U.S. workers in a global market, the appetite for American-made goods and the future of an industry decimated by foreign competition.
___
Bruce Cochrane was in China, 8,000 miles away, when he first began thinking about reviving the family’s business three years ago.
Over a decade of consulting, he’d witnessed dramatic changes in China’s economy. Manufacturing workers’ wages — 58 cents an hour, on average, in 2001 — were approaching $3. The once abundant labor supply was drying up. Shipping costs were higher because of rising fuel costs. Quality was suffering because of high turnover. It could take three or more months to get a piece of furniture after it was ordered — compared with 30 days or less in the U.S. The clear-cut advantages of manufacturing in China were disappearing.
That same point was made in a 2011 report by The Boston Consulting Group that estimated that “reshoring” by companies could result in 2 to 3 million new jobs. About a quarter would be directly in manufacturing, and the rest would work for suppliers or service industries.
Furniture, the report said, is among the seven areas where this is most likely to occur. The costs of shipping bulky products and the ample supply of wood in the U.S. make it a prime candidate for domestic manufacturing; China has to import wood.
“The pendulum is swinging,” says Hal Sirkin, the report’s lead author. He says wages are rising 15-to-20 percent a year in China and U.S. workers are, on average, more than three times as productive
The report predicts that by 2015, these industries will likely reach a “tipping point” where the cost advantages of China will have shrunk to a point where U.S. companies may see it’s to their benefit to return production or set up a new base here.
“It’s still early,” Sirkin says. “We don’t know all this is going to happen, but companies are starting because the economics are starting to look favorable. I was surprised to see it happening as quickly as it is.”
It is happening at a time when Americans — historically proud of the nation’s manufacturing might — are showing frustration with the migration of those jobs to China and elsewhere. An ABC News/Washington Post poll in February found that nearly 75 percent of those surveyed favor raising taxes on businesses that move manufacturing jobs overseas.
In January, President Barack Obama hosted a White House forum on in-sourcing, featuring small and large companies that have invested in the U.S. And in his State of the Union speech, Obama called for an economy “built on American manufacturing.” He said the resurgence of the U.S. auto industry “should give us confidence.”
A March trade group survey found expansion in 15 of 18 manufacturing industries, including autos, steel and furniture.
The president’s Republican rivals, meanwhile, also have touted the value of manufacturing and talked tough about China. Mitt Romney has vowed to declare China a “currency manipulator” and impose tariff penalties. Rick Santorum, who has emphasized his blue-collar roots, proclaimed he wants to “got to war with China” to create the best business climate for America.
But predictions about a rebirth of manufacturing and muscular rhetoric about resolving trade imbalances are met with understandable skepticism.
Consider the numbers: More than 5.5 million manufacturing jobs were lost from 2000 to 2011, though there has been a modest recovery in recent years, There are economists who say some jobs are gone forever because of productivity and robotic gains. And U.S. multinationals eliminated more than 800,000 jobs in the U.S. while adding 2.9 million overseas from 2000 to 2009, according to federal figures.
The trade deficit with China — $295 billion last year — has cost nearly 2.8 million U.S. jobs from 2001 to 2010 and almost 70 percent have been in manufacturing, according to a 2011 report by the Economic Policy Institute.
The report’s author, Robert Scott, found that about a third of all displaced jobs were in the computer and electronic parts industry; other areas include textiles, apparel and furniture. North Carolina’s loss of nearly 108,000 jobs ranked it among the top 10 hardest-hit states.
Reshoring “is not only a drop in the bucket … it’s not making a dent in the growth of the trade deficit,” says Scott. “It’s a classic example of counting trees instead of focusing on the forest. You may see a few trees popping up but the forest is still falling down.”
___
Bruce Cochrane started learning the furniture trade as a teen. He worked with his father, Theo — also known as Sonny — who ran the company with his brother, Jerry
“He always instilled in me that it was OK to take chances,” Cochrane says. “He’d always say, ‘If you aren’t fishing, you aren’t catching anything.'”
Cochrane remembered those words when trying to decide whether to take the plunge. “I actually had a dream of him telling me that and he was in his fishing gear. At that point, I said, ‘Yep, I’m going to do it.'”
That decision came more than a decade after the Cochranes got out of the business. In 1997, the family sold the company to another U.S. manufacturer; the factory remained open and the workers continued to make furniture with the Cochrane name. Over the years, though, more and more work was done in China. The plant finally closed in late 2008, the building was sold and the equipment auctioned off.
Cochrane carefully developed a business plan, and by 2011, he was ready — thanks, in part, to financing from a local bank. The president turned out to be a former company worker.
Last spring, Cochrane — who has two partners — walked into the empty 300,000 square-foot factory.
He soon added family touches, among them an oil painting of his father, hung on the lobby wall. With their silver hair and Clark Kent glasses, father and son share an uncanny resemblance. His eyes mist when he mentions him. “I think about how much he would love this,” he says.
Starting over, Cochrane also looked to the past, recruiting former company workers.
When he phoned the first two — both weren’t working — he heard doubt in their voices.
“Both of them said, ‘I don’t think I can do that anymore,'” he recalls. “They had lost their confidence. It (joblessness) puts people in such despair. They think there’s something wrong with them rather than the circumstances.”
Karen Padgett was one of those first calls. She’d worked her way up from the shipping department to human resources manager, spending 35 years with Cochrane and its successor. When the factory closed, Padgett was adrift.
She was in her 50s, jobs were scarce and a lifetime of working with folks who’d become good friends was suddenly gone.
“It was such a loss,” she says. “If you have a death in the family, you feel like you just can’t pick up and go forward. That’s how I felt. … I knew I needed to work. I knew I was still vital enough to do something, but I didn’t know what I would do.”
Jerry Cochrane had urged her to return to school, so she enrolled in a nearby college to polish her skills.
She was just starting to scope out job prospects when Cochrane called. She knew immediately she wanted the job, but had a moment of hesitation. “Being out of work strips you of your confidence,” she says. “I felt, ‘Oh, gosh can I do this?’ I just needed somebody to reassure me.”
Cochrane described his plans to build American-made furniture. “He said, ‘I really believe it’s coming back and we can make some money doing this and we’ll have a good time, I promise.'”
Padgett is now on the other end of the job search, fielding calls and conducting interviews. She’s received about 1,400 applications for what eventually will be about 130 jobs. (Starting salaries range from $9 to $16 an hour.)
One caller had a particularly poignant story: He said he wanted to work for the company because as a boy, he’d lived down the road from the old Cochrane factory. His single mother had struggled to provide for her six kids, he said, and when times got tough, Sonny Cochrane made sure their utility bills were paid.
The man was eventually hired.
About two-thirds of Lincolnton workers have experience in the furniture industry. North Carolina lost nearly 60 percent of its furniture jobs from 1999 to 2010, as the percentage of imported furniture sold in the U.S. doubled.
It has been a slow-motion economic disaster. Padgett says everyone noticed how one factory, then another closed, and yet “it was like we just woke up and it was swept out from under us. It kind of slapped us in the face when it was all gone.”
It was so traumatic that when Cochrane asked Pat Hendrick to return as purchasing manager, she was thrilled but had one question: “‘Will you be importing anything?’ I didn’t want to be involved with anything like that,” she says, “because that’s how I lost my job.”
To Hendrick, her job offer was an answered prayer. Literally. Every day while she was unemployed, she says, she’d pray she’d find work. One day, she tried something a little different:
“I said, ‘God, I’m tired. You’re going to have to drop a job in my lap that you know I can do and have people there that I can get along with and work with. I’m just leaving it in your hands.'”
Cochrane called at 8:59 a.m. the next day.
Driving back into the parking lot for the first time, Hendrick says she felt as if she’d never left. But two years of unemployment aren’t easily forgotten.
“After losing your job of 32 years,” she says, “you do have reservations. I’m comfortable here, but I don’t think I’ll ever have that same sense of security that I thought I had.”
Dean Hoyle understands uncertainty. After nearly 30 years at the factory, he found himself out of work, too, scraping by doing yard work and mowing lawns.
His situation, he says, was even more agonizing because he was still recovering from the death of his wife from breast cancer, and work, he says, “had been a rock to me.” After 14 months, Hoyle was hired at another furniture company, only to be laid off last year.
Hoyle, who works in the packing department, is struck by how much has changed since he first walked into the factory as a fresh-faced Army veteran. “These places were all up and running when I got out of school,” he says. “Where are all the people going to go now and what are they going to do? Not everybody can be a computer programmer.”
Hoyle’s ruddy, mustachioed face breaks into a wide smile as he recalls going to the bank to deposit his first paycheck from the new job.
“I’m 57 years old and soon to be 58, and I’ve got enough sense to know this area is not full of opportunities for someone like me,” he says. “If I could sum it up in one word, it would be grateful.”
___
In January, Lincolnton’s first piece of furniture — a cherry-wood nightstand — came off the line. All the workers signed it.
That same month, Bruce Cochrane had two dates in Washington, D.C. The first was the White House conference on insourcing, where he met Obama. The other was an invitation to sit in the first lady’s box at the State of the Union speech, where the president spoke of a manufacturing renaissance. (For the record, Cochrane says he’s never voted for a Democratic president.)
Cochrane thinks there’s an appetite for U.S.-produced goods. He attaches a “Made in America” tag to each piece of his company’s furniture, with a message: “We take immeasurable pride in the fact that our furnishings are made of select solid American hardwoods,” he wrote, appending his name.
“I think people realize that made in America means jobs in America,” Cochrane says. “And they have experience with a loved one or a family member or a friend who lost a job so it becomes more and more personal to them.”
Bud Boyles, owner of the Carolina Furniture Mart in Lincolnton (where the nightstand is displayed), senses a similar mood.
“Timing is everything and he’s definitely got the timing right now,” Boyles says. “It might be a hard first year for him but people are saying, ‘We’re going to have to take a look at what we’re doing. We have to go back to our roots and help our neighbors.””
There have been small moments of satisfaction these first months, such as touring the factory with a friend, who said he thought he’d never again smell that earthy scent of fresh-cut wood. “It’s nostalgic,” Cochrane says.
But there have been problems, too. A malfunctioning machine needed fixing and the plant had to be rewired, a costly project. The technology has become so efficient that Cochrane says he’ll need half the workers he first expected — though of course that’s a mixed blessing, given the area’s struggle with unemployment.
Within thre
e years, Cochrane hopes to do $25 million in business a year. For now, he’s determined to prove the naysayers wrong.
“People in this industry still don’t believe this can be done,” he says. “I don’t have any doubt at all.”
___
by THE ASSOCIATED PRESS
Sharon Cohen is a national writer for The Associated Press, based in Chicago. She can be reached at features@ap.org
The Great Reversal: Playing the U.S. Manufacturing Boom
in Manufacturing & Sourcing/by MAM TeamJack Hough is a columnist at SmartMoney.com
Email: jack.hough@dowjones.com
Investors who have favored emerging markets like China in recent years should pay attention to another growing manufacturing center. It boasts plenty of skilled workers; cheap and abundant energy; stable institutions; and a large middle class that likes to shop.
It is the U.S., where a long industrial decline might be in reverse.
Manufacturing’s share of gross domestic product plunged to 11% in 2009 from 26% in 1947, according to the Commerce Department. In 2010, it rose to 11.7%—the biggest yearly gain in more than 50 years. The 2011 numbers will be released on April 26, and the anecdotal evidence is promising; companies like Caterpillar,CAT -2.17% Ford Motor F -2.00% and NCR say they are moving some operations back to the U.S.
Second, a weakening dollar makes U.S. goods more attractive to foreign buyers. The dollar has fallen by nearly one-third over the past decade against a basket of currencies including the euro, British pound and yen.
Third, energy production is booming in the U.S., and domestic natural-gas prices have recently plunged. That gives an edge to U.S. producers of fabricated steel, transportation equipment, machinery and chemicals, which use natural gas extensively, according to a recent report from Citigroup C -2.36% .
Of course, a sudden rise in the dollar or a spike in natural-gas prices or wages could slow U.S. manufacturing gains. But for now, at least, that scenario appears unlikely. Wall Street expects earnings for the S&P 500 industrial sector to rise 13% this year, versus 9% for the broader index.
There are several ways to invest in the U.S. manufacturing resurgence. An index fund that tracks the Standard & Poor’s 500-stock index has a 10.6% weighting for industrials. Investors should try to increase their allocations to about 16%, says Chuck Severson, a portfolio manager at Baird Investment Management.
Mr. Severson prefers U.S. companies that supply manufacturers, because they stand to gain from a broad rise in factory activity. His favorites include Danaher, a conglomerate with an industrial technology division; Roper Industries, whose pumps and valves are used in factories and refineries; and industrial suppliers W.W. Grainer and Fastenal.
BofA’s Mr. Dutta, meanwhile, favors U.S. companies whose goods and services are used to automate and monitor factories. Examples include Rockwell Automation and Emerson Electric.
U.S. Steel and Nucor are the largest U.S. steelmakers, and analysts say both can reduce their domestic production costs by switching from coal to natural gas where possible.
Jerry Swank, founder of Swank Capital, a Dallas investment firm specializing in energy, says U.S. chemical makers such as Dow Chemical and DuPont should profit from turning natural-gas liquids into materials used in fabrics, pipes, food packaging and other items.
Exchange-traded funds also offer easy exposure, notes Jeff Sica, president of Sica Wealth Management in Morristown, N.J. Vanguard Industrials and iShares Dow Jones U.S. Industrial Sector cost $19 and $47 a year per $10,000 invested, respectively, plus trading commissions. Both count General Electric as GE -1.49% their largest holding. The Guggenheim S&P 500 Equal Weight Industrials is more spread out among smaller companies. It costs $50 a year per $10,000 invested, plus trading commissions.
When it comes to U.S. manufacturing, says Kristina Hooper, head of portfolio strategies at Allianz Global Investors, “It’s time to stop looking in the rearview mirror and start looking ahead.”
3 Reasons America Is Having A Major Manufacturing Renaissance
in Manufacturing/by MAM TeamAmerica is making stuff again. The Wall Street Journal‘s Jack Hough wrote an article about the hot new idea economists are buzzing about: the American manufacturing boom.Hough spoke to Bank of America Merrill Lynch economist Neil Dutta who identified three trends that lay the foundation to a coming American manufacturing renaissance.
More Than 1 Million Manufacturing Jobs Could Be Created in USA if Americans Purchased More 'Made in USA' Goods – Economist Says
in Jobs/by MAM TeamAnd if Americans spent just $100 billion on U.S. goods instead of foreign goods – a gap that has widened the last few years – then that would create more than 1 million jobs in manufacturing in the United States.
Aliber was joined by Mark Schweitzer, senior vice president and director of research for the Federal Reserve Bank of Cleveland, and Charles Upton, professor emeritus of economics at Kent State University, who also taught at the University of Chicago and Rutgers University.
Schweitzer said the Federal Reserve is projecting economic growth of nearly 3 percent this year and about 3 percent next, with inflation remaining at low levels.
Upton, however, while he’s seeing some bright signs, said he has many fears about the future.
Near-term, he said, housing remains in disarray. Some estimates show that 29 percent of homeowners owe more than their homes are worth (although Upton said he thinks that’s a little high), and he believes foreclosures will remain a huge problem into next year. Economic recovery will be limited until housing settles down, he said.
Other worries Upton cited: many of those who are unemployed have skill sets that don’t match with demand, and many have skills that are no longer needed at the same levels. In addition, he fears what will happen when Social Security and Medicare run out of money.
Aliber agreed that the skills of the labor force remains a concern, saying there are 3 million to 4 million unemployed people that aren’t matched to demand. They will have to find jobs that pass less or will have to retire early, he said.
Despite all of that apparent gloom, Aliber said that housing is improving, consumer confidence is growing and the monthly jobs reports are consistently positive.
When asked about oil and gas costs, Upton said prices are likely to continue to increase, particularly as demand grows in countries like Brazil, Russia and China.
—–
To reach this Plain Dealer reporter:
tmurray@plaind.com,
On Twitter: @teresamurray
On Facebook: facebook.com/pdmoneymatters
Made in USA Making a Comeback – Furniture Company’s Revival Has Global Message
in American Made, Reshoring/by MAM Team“To do something like this HAS to be a business decision,” he says, “but it is emotional and it is sentimental to be able to come back and make something again and to impact people in such a positive way.”
What happens in the cavernous factory on Cochrane Road could bring economic security to workers in a state that, by one estimate, has hemorrhaged tens of thousands of jobs to China in the last decade.
But what happens here could also offer larger lessons about U.S. workers in a global market, the appetite for American-made goods and the future of an industry decimated by foreign competition.
___
Bruce Cochrane was in China, 8,000 miles away, when he first began thinking about reviving the family’s business three years ago.
Over a decade of consulting, he’d witnessed dramatic changes in China’s economy. Manufacturing workers’ wages — 58 cents an hour, on average, in 2001 — were approaching $3. The once abundant labor supply was drying up. Shipping costs were higher because of rising fuel costs. Quality was suffering because of high turnover. It could take three or more months to get a piece of furniture after it was ordered — compared with 30 days or less in the U.S. The clear-cut advantages of manufacturing in China were disappearing.
That same point was made in a 2011 report by The Boston Consulting Group that estimated that “reshoring” by companies could result in 2 to 3 million new jobs. About a quarter would be directly in manufacturing, and the rest would work for suppliers or service industries.
Furniture, the report said, is among the seven areas where this is most likely to occur. The costs of shipping bulky products and the ample supply of wood in the U.S. make it a prime candidate for domestic manufacturing; China has to import wood.
“The pendulum is swinging,” says Hal Sirkin, the report’s lead author. He says wages are rising 15-to-20 percent a year in China and U.S. workers are, on average, more than three times as productive
The report predicts that by 2015, these industries will likely reach a “tipping point” where the cost advantages of China will have shrunk to a point where U.S. companies may see it’s to their benefit to return production or set up a new base here.
“It’s still early,” Sirkin says. “We don’t know all this is going to happen, but companies are starting because the economics are starting to look favorable. I was surprised to see it happening as quickly as it is.”
It is happening at a time when Americans — historically proud of the nation’s manufacturing might — are showing frustration with the migration of those jobs to China and elsewhere. An ABC News/Washington Post poll in February found that nearly 75 percent of those surveyed favor raising taxes on businesses that move manufacturing jobs overseas.
In January, President Barack Obama hosted a White House forum on in-sourcing, featuring small and large companies that have invested in the U.S. And in his State of the Union speech, Obama called for an economy “built on American manufacturing.” He said the resurgence of the U.S. auto industry “should give us confidence.”
A March trade group survey found expansion in 15 of 18 manufacturing industries, including autos, steel and furniture.
The president’s Republican rivals, meanwhile, also have touted the value of manufacturing and talked tough about China. Mitt Romney has vowed to declare China a “currency manipulator” and impose tariff penalties. Rick Santorum, who has emphasized his blue-collar roots, proclaimed he wants to “got to war with China” to create the best business climate for America.
But predictions about a rebirth of manufacturing and muscular rhetoric about resolving trade imbalances are met with understandable skepticism.
Consider the numbers: More than 5.5 million manufacturing jobs were lost from 2000 to 2011, though there has been a modest recovery in recent years, There are economists who say some jobs are gone forever because of productivity and robotic gains. And U.S. multinationals eliminated more than 800,000 jobs in the U.S. while adding 2.9 million overseas from 2000 to 2009, according to federal figures.
The trade deficit with China — $295 billion last year — has cost nearly 2.8 million U.S. jobs from 2001 to 2010 and almost 70 percent have been in manufacturing, according to a 2011 report by the Economic Policy Institute.
The report’s author, Robert Scott, found that about a third of all displaced jobs were in the computer and electronic parts industry; other areas include textiles, apparel and furniture. North Carolina’s loss of nearly 108,000 jobs ranked it among the top 10 hardest-hit states.
Reshoring “is not only a drop in the bucket … it’s not making a dent in the growth of the trade deficit,” says Scott. “It’s a classic example of counting trees instead of focusing on the forest. You may see a few trees popping up but the forest is still falling down.”
___
Bruce Cochrane started learning the furniture trade as a teen. He worked with his father, Theo — also known as Sonny — who ran the company with his brother, Jerry
“He always instilled in me that it was OK to take chances,” Cochrane says. “He’d always say, ‘If you aren’t fishing, you aren’t catching anything.'”
Cochrane remembered those words when trying to decide whether to take the plunge. “I actually had a dream of him telling me that and he was in his fishing gear. At that point, I said, ‘Yep, I’m going to do it.'”
That decision came more than a decade after the Cochranes got out of the business. In 1997, the family sold the company to another U.S. manufacturer; the factory remained open and the workers continued to make furniture with the Cochrane name. Over the years, though, more and more work was done in China. The plant finally closed in late 2008, the building was sold and the equipment auctioned off.
Cochrane carefully developed a business plan, and by 2011, he was ready — thanks, in part, to financing from a local bank. The president turned out to be a former company worker.
Last spring, Cochrane — who has two partners — walked into the empty 300,000 square-foot factory.
He soon added family touches, among them an oil painting of his father, hung on the lobby wall. With their silver hair and Clark Kent glasses, father and son share an uncanny resemblance. His eyes mist when he mentions him. “I think about how much he would love this,” he says.
Starting over, Cochrane also looked to the past, recruiting former company workers.
When he phoned the first two — both weren’t working — he heard doubt in their voices.
“Both of them said, ‘I don’t think I can do that anymore,'” he recalls. “They had lost their confidence. It (joblessness) puts people in such despair. They think there’s something wrong with them rather than the circumstances.”
Karen Padgett was one of those first calls. She’d worked her way up from the shipping department to human resources manager, spending 35 years with Cochrane and its successor. When the factory closed, Padgett was adrift.
She was in her 50s, jobs were scarce and a lifetime of working with folks who’d become good friends was suddenly gone.
“It was such a loss,” she says. “If you have a death in the family, you feel like you just can’t pick up and go forward. That’s how I felt. … I knew I needed to work. I knew I was still vital enough to do something, but I didn’t know what I would do.”
Jerry Cochrane had urged her to return to school, so she enrolled in a nearby college to polish her skills.
She was just starting to scope out job prospects when Cochrane called. She knew immediately she wanted the job, but had a moment of hesitation. “Being out of work strips you of your confidence,” she says. “I felt, ‘Oh, gosh can I do this?’ I just needed somebody to reassure me.”
Cochrane described his plans to build American-made furniture. “He said, ‘I really believe it’s coming back and we can make some money doing this and we’ll have a good time, I promise.'”
Padgett is now on the other end of the job search, fielding calls and conducting interviews. She’s received about 1,400 applications for what eventually will be about 130 jobs. (Starting salaries range from $9 to $16 an hour.)
One caller had a particularly poignant story: He said he wanted to work for the company because as a boy, he’d lived down the road from the old Cochrane factory. His single mother had struggled to provide for her six kids, he said, and when times got tough, Sonny Cochrane made sure their utility bills were paid.
The man was eventually hired.
About two-thirds of Lincolnton workers have experience in the furniture industry. North Carolina lost nearly 60 percent of its furniture jobs from 1999 to 2010, as the percentage of imported furniture sold in the U.S. doubled.
It has been a slow-motion economic disaster. Padgett says everyone noticed how one factory, then another closed, and yet “it was like we just woke up and it was swept out from under us. It kind of slapped us in the face when it was all gone.”
It was so traumatic that when Cochrane asked Pat Hendrick to return as purchasing manager, she was thrilled but had one question: “‘Will you be importing anything?’ I didn’t want to be involved with anything like that,” she says, “because that’s how I lost my job.”
To Hendrick, her job offer was an answered prayer. Literally. Every day while she was unemployed, she says, she’d pray she’d find work. One day, she tried something a little different:
“I said, ‘God, I’m tired. You’re going to have to drop a job in my lap that you know I can do and have people there that I can get along with and work with. I’m just leaving it in your hands.'”
Cochrane called at 8:59 a.m. the next day.
Driving back into the parking lot for the first time, Hendrick says she felt as if she’d never left. But two years of unemployment aren’t easily forgotten.
“After losing your job of 32 years,” she says, “you do have reservations. I’m comfortable here, but I don’t think I’ll ever have that same sense of security that I thought I had.”
Dean Hoyle understands uncertainty. After nearly 30 years at the factory, he found himself out of work, too, scraping by doing yard work and mowing lawns.
His situation, he says, was even more agonizing because he was still recovering from the death of his wife from breast cancer, and work, he says, “had been a rock to me.” After 14 months, Hoyle was hired at another furniture company, only to be laid off last year.
Hoyle, who works in the packing department, is struck by how much has changed since he first walked into the factory as a fresh-faced Army veteran. “These places were all up and running when I got out of school,” he says. “Where are all the people going to go now and what are they going to do? Not everybody can be a computer programmer.”
Hoyle’s ruddy, mustachioed face breaks into a wide smile as he recalls going to the bank to deposit his first paycheck from the new job.
“I’m 57 years old and soon to be 58, and I’ve got enough sense to know this area is not full of opportunities for someone like me,” he says. “If I could sum it up in one word, it would be grateful.”
___
In January, Lincolnton’s first piece of furniture — a cherry-wood nightstand — came off the line. All the workers signed it.
That same month, Bruce Cochrane had two dates in Washington, D.C. The first was the White House conference on insourcing, where he met Obama. The other was an invitation to sit in the first lady’s box at the State of the Union speech, where the president spoke of a manufacturing renaissance. (For the record, Cochrane says he’s never voted for a Democratic president.)
Cochrane thinks there’s an appetite for U.S.-produced goods. He attaches a “Made in America” tag to each piece of his company’s furniture, with a message: “We take immeasurable pride in the fact that our furnishings are made of select solid American hardwoods,” he wrote, appending his name.
“I think people realize that made in America means jobs in America,” Cochrane says. “And they have experience with a loved one or a family member or a friend who lost a job so it becomes more and more personal to them.”
Bud Boyles, owner of the Carolina Furniture Mart in Lincolnton (where the nightstand is displayed), senses a similar mood.
“Timing is everything and he’s definitely got the timing right now,” Boyles says. “It might be a hard first year for him but people are saying, ‘We’re going to have to take a look at what we’re doing. We have to go back to our roots and help our neighbors.””
There have been small moments of satisfaction these first months, such as touring the factory with a friend, who said he thought he’d never again smell that earthy scent of fresh-cut wood. “It’s nostalgic,” Cochrane says.
But there have been problems, too. A malfunctioning machine needed fixing and the plant had to be rewired, a costly project. The technology has become so efficient that Cochrane says he’ll need half the workers he first expected — though of course that’s a mixed blessing, given the area’s struggle with unemployment.
Within thre
e years, Cochrane hopes to do $25 million in business a year. For now, he’s determined to prove the naysayers wrong.
“People in this industry still don’t believe this can be done,” he says. “I don’t have any doubt at all.”
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by THE ASSOCIATED PRESS
Sharon Cohen is a national writer for The Associated Press, based in Chicago. She can be reached at features@ap.org
The What Works Project – What do you love that is Made in America?
in Marketing Your Brand, Technology/by MAM TeamWhat Works Project Overview
General Electric (GE) and GOOD/Corps would like to honor your efforts by inviting you and your community to submit photos of people, things and innovations you love that’s made in America to Celebrate What Works!
By participating in the What Works Project, you’ll have a chance to win $500! Your participation will be turned into donations for non-profit partners across the country that support job creation and training. There are several ways to participate and donate to the Non-Profit of the Week:
2 Connecticut Shoreline Firms Collaborate on 'Buy American Act'
in Government/by MAM TeamCongresswoman Rosa DeLauro visited Engineering Specialties, Inc. in North Branford to see the manufacture of evacuated tube solar thermal collectors for Apricus, also a North Branford company. Left to right: Apricus Vice President Nigel Ruddell, Apricus engineer Eric Skiba, Rosa, ESI’s Vice President Carmen Ciardiello, ESI’s President Ronald Delfini, and Apricus marketing person Shannon Horsley.
Mara Lavitt/New Haven Register
By: Bridget Albert, Register Staff
balbert@newhavenregister.com / Twitter: @nhrbalbert
Apricus is a designer and manufacturer of solar hot water and hydronic heating products. Founded in 2003, Apricus is a global company with offices in the U.S., Australia and France and sales in more than 30 countries. Its North American headquarters is in Branford.
Engineering Specialties Inc. is a manufacturer of engineered metal stamping, mechanical assemblies, wire forms, springs, and other custom component parts. It is located in North Branford. It started in 1990 and now has 20 employees.
U.S. Rep. Rosa DeLauro, D-3, visited the factories Tuesday to learn more about their efforts to work together and meet the requirements of the American Recovery and Reinvestment Act and the Buy American Act.
The collector absorbs thermal energy from the sun and converts it into heat that can then be used for hot water, heating, cooling and industrial processes. Apricus also manufactures these units in China, which services Europe, Asia and Australia.
“This is how it should work,” DeLauro said, adding she hopes there are more such business ventures.
“We wanted someone local so we could grow the product together,” Ruddell said.
“We are a good fit and hope to bring more new products in the future,” he added.
“We jumped at the opportunity,” said Ronald Delfini, president of Engineering Specialties Inc.
“They had their blueprint but some things needed to change; being close was perfect,” said Carmen Ciardillo, vice president Engineering Specialties Inc.
To qualify under the “Buy American” act, at least 50 percent of the product must be made in the U.S.
Ruddell and Delfini said 61 percent of the AP-30C is made in North Branford, including all the stainless steel parts.
DeLauro said she could see the “ripple effect” of this type of collaboration, including the need for installation and maintenance of the systems.
Additionally, DeLauro said she could see the benefits to federal buildings that were getting updated with new heating and air conditioning systems.
Ruddell said Apricus has already been awarded several government contracts.
Delfini said since January, they have shipped 250 units, averaging production of 15 a day. A complete installed system will cost the average homeowner $8,000 to $12,000 and it will save 50 to 80 percent on heating costs.
Solar collector owners can qualify for a 30 percent federal tax credit and $2,000 tax credit in Connecticut, Ruddell said.
Delfini said the product has a life expectancy of 25 to 30 years.
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Call Bridget Albert at 203-789-5702. Follow her on Twitter @nhrbalbert.
The Promise of Today’s Factory Jobs
in Jobs, Sustainability/by MAM TeamE-mail: eporter@nytimes.com Twitter: @portereduardo
Mr. Bink’s enthusiasm has echoed from the factory floor all the way to Washington. During his State of the Union Message, President Obama wove Master Lock’s tale of repatriated jobs into a narrative of recovery that could serve him well in November. “We have a huge opportunity, at this moment, to bring manufacturing back,” the president said. “But we have to seize it.”
As much as the administration needs a jobs strategy, one narrowly focused on manufacturing is unlikely to deliver.
Much of the anxiety about factory jobs is based on the misconception that job losses have been due to a sclerotic manufacturing sector, unable to compete against cheap imports. Until the Great Recession clobbered the world economy, manufacturing production was actually holding its own. Real value added in manufacturing, the most precise measure of its contribution to the economy, has grown by more than two thirds since its heyday in 1979, when manufacturing employed almost 20 million Americans — eight million more than today.
American companies make a smaller share of the world’s stuff, of course. But what else could one expect? Thirty years ago China made very little of anything. Today its factory output is almost 20 percent of world production and about 15 percent of manufacturing value added.
What’s surprising is how little the United States lost in that time. American manufacturers contribute more than a fifth to global value added.
Manufacturers are shedding jobs around the industrial world. Germany lost more than a fifth of its factory jobs from 1991 to 2007, according to the United Nations Industrial Development Organization, about the same share as the United States. Japan — the manufacturing behemoth of the 1980s — lost a third.
This was partly because of China’s arrival on the world scene after it joined the World Trade Organization in 2001. Since then, China has gained nearly 40 million factory jobs. But something else happened too: companies across the developed world invested in labor-saving technology.
Consider Master Lock. Its Milwaukee plant is operating at capacity for the first time in 15 years, before it started sending work overseas. It is producing much more stuff than it did back then. But it is doing so with 412 workers — about 750 fewer than it had 15 years ago.
“They used to throw bodies at something to get the job done,” said Ron McInroy, the U.A.W.’s head for the region encompassing Milwaukee. “Now they look at the best utilization of manpower and the best utilization of machines.”
So it is across the economy. In his forthcoming book, “The New Geography of Jobs,” the University of California, Berkeley, economist Enrico Moretti points out that the average American factory worker makes $180,000 worth of goods a year, more than three times what he produced in 1978, in today’s dollars.
It may not matter to factory workers who lost their jobs. Whether forced out because an employer moved production to China or because a fancy new machine makes it easier to compete against a rival in China, the job is gone.
Still, the distinction is important. Without an understanding of the forces at work, policy makers’ attempts to bolster manufacturing could backfire.
One thing is clear. Most of the jobs lost to China and other poor countries cannot “come back.” They don’t pay anywhere near enough. And they don’t exist here anymore anyway.
The factory jobs we really want will be fewer and will require more education. But they will pay more.
Remember agriculture? In the 1960s, plant scientists at the University of California, Davis, developed an oblong tomato that ripened uniformly, and its engineers developed a machine to harvest it with one pass through the fields. By the 1970s the number of workers hired for the tomato harvest in California had fallen by 90 percent.
In the book “Promise Unfulfilled,” Philip Martin, an economist at the university, says that in 1979 the worker advocacy group California Rural Legal Assistance sued the university for using public money on research that helped agribusiness at the expense of farm workers. And in 1980, Jimmy Carter’s agriculture secretary, Bob Bergland, declared that the government wouldn’t finance any more projects aimed at replacing “an adequate and willing work force with machines.”
It’s hard to say that workers won this battle, however. After Mr. Bergland pulled the plug, research on agricultural mechanization came to a near-halt. Yet farm work today remains probably the worst paid, most grueling job in the United States.
A tricky thing to understand is that most jobs in the United States are created in areas of the economy not exposed to global competition. They are nannies and doctors, lawyers and roofers. In a recent study, the Nobel laureate Mike Spence and Sandile Hlatshwayo of New York University found that the part of the economy that does not have foreign competitors added 27.3 million jobs from 1990 to 2008. The sector that competes in global markets added virtually none.
This doesn’t mean the administration should ignore manufacturing. We need world-class, innovative industries that compete in global markets. They won’t add a ton of jobs precisely because they must stay lean to compete. But they will pay for those jobs.
The 33,000 Apple workers in Cupertino, Calif., sustain 171,000 additional jobs in the metropolitan area, Mr. Moretti estimates.
This pattern suggests, however, that a jobs strategy should take care not to blunt the edge of
our most competitive firms. If outsourcing sharpens their edge on world markets, punishing then for doing so could destroy American jobs.
More important, perhaps, manufacturing is not the nation’s only cutting-edge industry. Many of the most innovative firms are not manufacturers but service companies. Apple is very competitive. But so are the companies that design applications running on its iPhones and iPads. Hollywood studios and marketing companies are big exporters. These firms need highly trained workers and pay high wages.
Mr. Moretti says each job in an “innovation” industry, broadly understood, creates five other local jobs, about three times the number for an average job in manufacturing. Two of them are highly paid professional positions and three are low-paid jobs as waiters or clerks.
Innovation — not manufacturing —has always propelled this country’s progress. A strategy to reward manufacturers who increase their payroll in the United States may not be as effective as one to support the firms whose creations — whether physical stuff or immaterial services — can conquer world markets and pay for the jobs of the rest of us.
Manufacturing Jobs Still Matter, As Does the Dollar
in Government, Manufacturing & Sourcing/by MAM TeamMade in USA – All American Clothing Company Keeps True to Its Name
in American Made, Products/by MAM TeamIn an age where approximately 98 percent of all clothing worn by Americans is produced overseas, Nickol’s company is a true rarity. Furthermore, his ideas about how to run a clothing manufacturing company are a far cry from modern industry standards. No pep talks about profit and productivity here. Nickol’s company mantra is: “Creativity, implementation and progress.”
Inspired by a shocking discovery
Nickol co-founded the American Clothing Company with his son, B.J., in 2003. Prior to this venture, Nickol was employed by another blue jean manufacturer, who he declined to name. After decades of working as a salesman of American-made jeans, Nickol discovered that the company he had worked for had begun outsourcing its production to another country. That hallmark of American identity, the beloved blue jean, was now being made in Mexico.
“It’s about people and the enjoyment of a standard of living. We eat well and we know our job [is] going to be there tomorrow,” Nickol said.
Nickol predicts that he could be making 25 to 50 percent more profit if he were to outsource clothing production to Mexico or some other country. But outsourcing is not an option for his company, whose clientele appreciates the patriotism and ingenuity that the All American Clothing Company represents. Many of All American’s customers are veterans over the age of 50, a demographic that is nostalgic for the more self-sufficient America of decades past and wary of the outsourcing of so much American industry. His customers are as concerned with buying from a company whose emphasis lies not only in providing its customers with quality products but in caring for its employees.
Investing in America
Nickol said he wishes other companies would follow his lead and move production back to the United States. He added that he wouldn’t even mind the competition.
“We’re all here to help each other get through this,” he said.”I have a passion for the U.S., and I am so terribly sick of the situation we have right now, and what happens to honest, hard-working people.”
According to a recent study by the nonpartisan think tank Economic Policy Institute, the outsourcing of manufacturing and other jobs to China alone has cost the United States approximately 2.8 million jobs in the past decade. Many of these jobs come from within the apparel industry
Nickol said he considers this dependence on foreign labor to be unhealthy for the U.S. economy for many reasons, including the destruction of an income tax base to provide funding for public schools and other necessary services. He said his goal is to help restore health to the American economy through his role as an innovator in the apparel industry. To this end, he is often reminding himself and his employees that the time to fix the U.S.’s broken economy is now.
While others measure their progress in dollars, he tends to think of progress in terms of how well he can accomplish his goals. His advice to other entrepreneurs considering trying to change the way American businesses run: “Don’t let things happen to you,” he said. “Go make something happen.”
USA Manufacturing, Household Spending Probably Rose
in Manufacturing & Sourcing/by MAM Team“Manufacturers are benefiting from a variety of positive catalysts, including the need to replace a fleet of motor vehicles,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. “And we just haven’t got back to the previous peak in inventory that should benefit the sector and the national economy for some time.”
Regional DataRegional reports reinforce the strength of manufacturing. New York-area factories grew in March at the fastest rate since June 2010 and manufacturing in the Philadelphia region expanded the most in almost a year, figures from the Federal Reserve showed.
While companies are investing in new equipment, a stronger labor market is giving households the means to purchase big- ticket items, benefiting companies like motor-home maker Winnebago Industries Inc. (WGO)
“We’re beginning to see positive signs that the economy is improving,” Randy Potts, chief executive officer of the Forest City, Iowa-based company, said on a March 15 conference call. “Consumer confidence has been trending higher and the jobless rate is improving.”
Manufacturing shares have outperformed the market. The Standard & Poor’s Supercomposite Industrial Machinery Index (S15MACH), which includes Caterpillar Inc. and Deere & Co., advanced 16 percent since the end of 2011 through March 30, compared with a 12 percent increase in the broader S&P 500.
Auto SalesLight-vehicle sales in March, set for release tomorrow, may have run at a 14.6 million seasonally adjusted annual rate, the average estimate of analysts surveyed by Bloomberg. It would cap the strongest quarter since the first three months of 2008, according to Ward’s Automotive Group statistics.
A report last week showed orders for non-defense capital goods excluding aircraft — a proxy for business investment in items such as computers, engines and communications gear — increased 1.2 percent in February.
Business spending on equipment and software climbed at a 7.5 percent pace in the final three months of 2011 after a 16.2 percent surge in the prior quarter, according to the latest Commerce Department data on gross domestic product.
The growth helps explain why companies like Deere & Co. (DE) are expanding. The world’s largest maker of agricultural equipment said March 1 that it would invest $70 million to expand tractor production in Waterloo, Iowa.
Fed’s BernankeFederal Reserve Chairman Ben S. Bernanke said last week that while he was encouraged by the recent decline in the unemployment rate, a further reduction will probably require a quicker expansion of business production and consumer demand, which “can be supported by continued accommodative policies,” he said.
Recent “better news” on the U.S. economy has also included strength in manufacturing, Bernanke said. The improvement could contribute to higher consumer confidence and lead to a self-sustaining recovery, he said. “We haven’t seen that in a persuasive way yet,” Bernanke said in a speech in Arlington, Virginia.
USA Manufacturing, Household Spending Rose
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To contact the reporters on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz in Washington at cwellisz@bloomberg.net