WASHINGTON — “The state of our union is strong,” President Obama will tell the country tonight, echoing a sentiment shared by nearly every executive before him. But just how strong is it for the country’s working people, particularly those on the lower end of the income scale?
The number of workers living in poverty exploded during the Great Recession and its aftermath, as people were hobbled by part-time work, temporary employment and the disproportionate growth of low-wage jobs. Most workers have endured at least a decade of wage stagnation, with their pay being well outstripped by corporate profits. A McDonald’s executive may now earn $8.75 million a year, but a McDonald’s worker still earns $8.25 an hour.
Below are just some of the wages and working conditions faced by tens of millions of workers in the U.S. — and how those conditions are determined in part by policy set in Washington.
Warehouse Workers
Warehouse work is the hidden engine of the U.S. retail sector, but many of the so-called “lumpers” who load trucks bound for major retailers earn poverty wages on a contingent basis. The companies whose products are being moved prefer to outsource the warehouse responsibilities to third parties, which in turn outsource the work to other third parties. While it saves the companies plenty of money, the byzantine contracting arrangements tend to blur the lines of corporate accountability, leading to widespread allegations of wage theft and other abuses by temp firms at the bottom of the contract chain. As one expert put it to The Huffington Post, “All of these companies, wherever they possibly can, they want to create a workforce that doesn’t work for them.”
Dollar Store Employees
Dollar stores — Dollar General, Dollar Tree and Family Dollar — are one of the fastest-growing sectors of the retail economy. By one measure, a new dollar store is opening every six hours in the United States. But much of that growth, as HuffPost reported, is underwritten by dubious labor practices by the big chains that collectively employ over 100,000 people. Even though managers spend their days doing grunt work — like unloading trucks and stockings shelves — their designation as “managers” excludes them from basic protections in federal labor law, like a guaranteed minimum wage and time-and-a-half for overtime. Some of them work so hard physically that they get hurt, but at the end of the day, they don’t earn much more than the workers they oversee. Managers throughout the country are now suing the chains over these practices.
Meatpackers
Working on a poultry processing line is a dangerous and low-paying job, full of repetitive motion and muscle pain. A recent government study found that four in ten workers at one chicken plant in South Carolina showed signs of carpal tunnel syndrome, the painful hand-and-wrist condition. Despite such findings, federal regulators are now considering a proposal to raise the maximum line speed even higher — a move that has the wide backing of the poultry industry. One poultry worker told HuffPost that the men and women who eviscerate and debone chicken carcasses can barely keep up at current speeds. Faster line speeds, he said, were nearly unimaginable: “It’s a job where you don’t get any relief.”
Repo Agents
While auto repossession has always been difficult and dangerous work, big banks have recently found new ways to make it low-paying as well. The lenders who underwrite auto loans have recently pushed auto repossession agents into working on a “contingency” basis — meaning if they don’t find the car, they don’t get paid a dime. Not only has that squeezed agents’ wages, it’s also encouraged them to put their lives and others’ in danger by making risky repossessions. HuffPost reported the story of one agent working on contingency who ran over a car owner during an altercation. As the owner of one repo outfit said, the lenders’ stinginess is “turning good people into bad, making them do things they wouldn’t normally do.”
Fast-Food Workers
The quintessential image of a fast-food worker is a high school kid looking for spare cash at night and on the weekends. In reality, many fast-food workers are now grownups with families to support; 40 percent are now 25 years or older, according to the National Employment Law Project. But despite the growing age and experience of its workforce, the fast-food industry is about as low-paying as its ever been when adjusted for inflation, with a median wage under $9. HuffPost has interviewed fast-food workers whose most recent raises were granted not by their employers but by the U.S. Congress, when the federal minimum wage was last hiked in 2009. For minimum wage workers in states that don’t adjust the wage floor each year for inflation — and that would be the majority of states, including pricy New York — the wait between raises can be years.
Taxi and Sedan Drivers
A lot of sedan and taxi drivers aren’t technically employed by the companies they work for. Like other folks in the transport industry, they’re instead classified as “independent contractors” working on their own. Many of them aren’t independent in any real sense. The companies set the terms of employment — where the drivers work, when they must be available, and even what they wear while on the job. But the companies reap major benefits by classifying the workers as independent — like not having to pay workers’ comp or unemployment taxes, and not having to worry about their drivers unionizing. Since they’re technically not employees, the drivers can’t expect health coverage or other basic workplace benefits. In some cases, they don’t even get to keep the “gratuities” that the companies charge their clients.
Walmart Workers
Earlier this month, officials at the National Labor Relations Board formally accused the world’s largest private-sector employer of retaliating against workers who spoke out about working conditions. The general counsel for the board charged Walmart with violating the rights of more than 60 workers in 14 states surrounding the Black Friday strikes that became
national news for the r
etailer.
Coal Miners Who Take A Stand
Coal mining remains one of the most dangerous jobs in the world. Even though U.S. miners have strong whistleblower protections written into federal law, those who speak out about mine hazards or refuse to do risky work still have a way of getting demoted or fired. The official investigations into the Upper Big Branch mining disaster, which killed 29 people, showed that miners who dared question the dubious orders coming from management were threatened with their jobs. Such coercion can be routine in some mines. Charles Scott Howard, a Kentucky miner, has been reinstated on the job at least three times after being retaliated against for his whistleblowing on safety issues. Reuben Shemwell, another Kentucky miner, was hit with a lawsuit by his own company merely for filing a whistleblower complaint with the feds.
Restaurant Workers Who Try To Unionize
With few exceptions, the restaurant industry is a union-free world. Chains and franchisees can usually rely on the work’s high turnover rate to keep unions naturally at bay, but in recent cases, owners have taken a much more proactive approach. A Jimmy John’s sandwich shop franchisee in Minnesota fired pro-union workers during a heated unionization battle. Similarly, a major Panera franchisee in Michigan has declined to accept the successful union election of its bakers. The federal labor board has issued a raft of union-busting charges against the company, but the bakers still don’t have a contract. “I came into this thinking we had the right to bargain collectively,” one baker told HuffPost.
Housekeepers
At a lot of U.S. hotels, the men and women who clean guests’ rooms are no longer even employed by the hotels. Instead, they work for temp staffing agencies on a day-to-day basis. This arrangement has obvious benefits for large hotel chains; by outsourcing the work, they don’t have to worry about offering a living wage, health care coverage or other benefits to the housekeepers who clean their hotels. But for workers, the outsourcing comes at a steep cost. Previously in-house workers can be rehired through the temp firms at substantially lower wages, and many of them enjoy no job stability whatsoever as temporary employees. “It’s everywhere now,” an Indianapolis janitor said of the hotel outsourcing. “The housekeepers, the restaurant, the stewards, laundry, room service …”
Home Care Workers
The roughly 2 million home care workers who clean, cook and care for the elderly and disabled earn some of the lowest wages in the health care sector. Part of their low earnings can be traced directly to federal law. Decades ago, Congress carved these workers out of basic labor protections through the so-called “companionship exemption,” which equated home health workers with casual babysitters. As a result, these workers still don’t have the minimum wage and overtime protections enjoyed by other hourly workers in the U.S. That will
finally change in 2015, courtesy of a new rule issued by Obama’s Labor Department. After being excluded for years, workers who log as much as 80 hours a week may actually get some overtime pay.
SOURCE: Huffington Post
8 Star Automobiles Made at American UAW Plants
in Uncategorized/by MAM TeamThat’s a great deal of venom directed the UAW’s way. A glance at the award-winning automobiles produced at UAW plants in the U.S. tells quite another story. From sports cars that pace the auto industry to compacts that sell more than any other model on the planet, union plants have countless feathers in their caps. Here are eight world-class cars and trucks made at America’s UAW plants.
The slick-looking Ford Fusion injected a considerable dose of style into the midsize segment known for its blandness. U.S. auto consumers responded to the new Fusion in kind, making it No. 11 in the list of top-selling vehicles of 2013. In fact, the Fusion’s 27 percent gain over its prior year sales was the biggest boost of any automobile in the top 15.
Good news about the Fusion became great news for Detroit when Ford announced it was bringing production of the car to its Flat Rock, Michigan, plant in August 2013. UAW officials joined Ford corporate officers in celebrating the arrival of the Fusion. As Volkswagen learned from its entirely unionized German plants, the road to automotive success is often paved with cooperation between workforce and management. In bringing production of its world-class car back to Michigan, Ford clearly agrees.
GM’s top-shelf sports car is cleaning up automotive awards. Fresh off its win as North American Car of the Year, there appears to be nothing capable of stopping it. The new iteration of the sports car legend improves upon both the horsepower and fuel efficiency of the previous model. How did Chevy pull off that feat? It’s one triumph of engineering that has industry observers suggesting Detroit is in the midst of a true revival.
UAW workers at the GM plant in Bowling Green, Kentucky, assemble the Corvette, where enthusiasts can tour the facilities. There may be no better example of craftsmanship on the auto market today.
Jeep may be part of Chrysler, which is part of Italian automaker Fiat, but the Jefferson North Assembly Plant where UAW Locals 7, 412, and 889 make the 2014 Grand Cherokee is pure Detroit. In August 2013, the plant celebrated the completion of its five-millionth vehicle — a Billet Silver 2014 Jeep Grand Cherokee.
Consumers are on board, too. The Grand Cherokee took twenty-first place among all vehicles sold in the U.S. in 2013 while winning Most Loved SUV in America from Strategic Vision. Critics agree as well. Autobytel.com named the Grand Cherokee 2014 SUV of the Year.
The one foreign-branded car on this list belongs to Japan’s Mitsubishi Motors Corporation. UAW workers at the Mitsubishi Motors North America plant in Normal, Illinois, make the Outlander Sport SUV that won Top Safety Pick designation from the Insurance Institute for Highway Safety (or IIHS) for 2014. If those laurels weren’t enough, the Automotive Science Group (or ASG) honored the Outlander Sport for Best All-Around Performance in 2013.
If the evidence points to any conclusion, it’s that United Auto Workers have no problem racking up awards for their automobiles — whether working for the Detroit Three or a foreign car company at an Illinois plant.
Talk about being on a roll. The Ford Focus is the best-selling car in China, which helped it become the best-selling car on earth for the second straight year when the stats were tallied in January 2014. The One Ford global approach is winning on many levels, but it all starts on the automaker’s home turf in Michigan.
UAW employees who assemble the Focus at the Wayne, Michigan, plant are the only Ford team that builds electric vehicles, plug-ins, hybrids, and old-fashioned gas-powered automobiles in the same facility. Milestone for 2013: Ford sold well over one million Focus models across the globe on the year.
The 2014 Motor Trend Car of the Year is — you guessed it — union-made at the GM Lansing Grand River plant. UAW Local 652 members assembled their millionth vehicle at the Lansing, Michigan, plant in 2013. Fittingly, it was the same 2014 Cadillac CTS that Motor Trend said took the fight to the top German luxury cars and won. Is it a coincidence that these elite vehicles are all union-made in the U.S. and Germany?
Perhaps, but the union crew will get a new task in the coming months when the 2015 Chevy Camaro is assigned to Lansing Grand River. In other words, the good times will continue to roll at this facility for years to come.
UAW members don’t shy away from “supercars,” either. At the Conner Avenue Assembly Plant in old Detroit, the union crews put together the blazing SRT Viper, a monster that houses an 8.4-liter V10 engine capable of producing 640 horsepower on 600 lb-ft of torque. Clear a lane.
In fact, the SRT
Viper is so lethal that
dealers were reportedly afraid to let test drivers behind the wheel of the Viper. Specimen of such a high level of style and performance are rare anywhere. In Detroit, only union hands make them run.
Ford is starting to crank out high volumes of its 2015 Mustang in anticipation of a warm reception to the stud pony car. As much a symbol of America as any automobile in history, the muscle-bound Mustang retains its brawn while maintaining much of its aggressive look.
Tasked with producing the new version of the iconic Mustang is the crew at the Flat Rock Assembly Plant, where production moved in 2004. In April 2013 UAW teams assembled the one-millionth Mustang in Ford’s history. Judging by the enthusiasm for the 2015 model, they can expect to be making many more muscle cars in the years to come.
Honorable Mentions on this list go to the Ford F-150, Chevy Impala, Cadillac ATS, and Ford Escape — just a few more of the winning brands union members produce.
Why ‘Made In The USA’ Is Making A Comeback
in Uncategorized/by The Made in America Movement TeamBut those bright K’NEX toys are trendsetters. Like most plastic toys sold in the United States, K’NEX building sets were made in China. But in 2009 the company began on-shoring much of its manufacturing and kit assembly to the eastern Pennsylvania region.
K’NEX, part of the Rodon Group, a maker of close-tolerance injection molded plastics, is one of the many companies returning manufacturing operations to the U.S. for one simple reason: it makes sense.
In fact, more than half of U.S.-based manufacturing executives at companies with sales more than $1 billion plan re-shore production to the U.S. from China or are actively considering it, according to a 2013 survey by The Boston Consulting Group.
Caterpillar, Ford, NCR and Whirlpool, to name only a few, have brought manufacturing back from over seas, and even Frisbee molding from Wham-O has left Mexico for the U.S. Walmart has committed to stocking $50 billion of domestically sourced products in the next 10 years.
Apple has contracted with a Flextronics America plant in Texas to assemble its new Mac Pro computer, using domestically sourced parts. Gorilla Glass, found in the iPhone display, comes from a small-town factory in Kentucky.
Rising wage rates in China and higher shipping rates are partly behind the on-shoring moves, as are lower U.S. energy prices. But closing the gap between the local market and U.S.-based engineering and marketing staff also pays off.
When GE brought back production of its hybrid water heater to Appliance Park in Louisville, Ky., it also re-designed the product. The company cut 20% of the parts and 25% of materials costs and sells the product for $300 less than the version made in China. Now the shipping time from factory to distribution center is 30 minutes instead of a month.
In the past five years, K’NEX moved 95% of its toy production back to Hatfield, Pa., and uses two nearby plants to print packaging and assemble the components into kits.
Before, the company made the rods, connectors, gears, wheels and other components in the Pennsylvania plant, then shipped them to China for finishing and packaging. The round-trip time was about three months. That lag made it impossible for the company to react to short-term market shifts, such as booming popularity of a licensed product.
With a long supply chain K’NEX had to make bets on which property would be hot six months or more ahead of the holiday shopping season, says CEO Michael Areten.
Building a domestic supply chain gives the company a competitive advantage.
“We got a call from a retailer a few weeks before Christmas that they had shelf space to fill, and I told them we’ll make the products this week and fill the shelves next week,” Araten says. “You can’t do that if you’re bringing it in from Asia.”
The Real State Of The Union For Workers
in Uncategorized/by MAM TeamBelow are just some of the wages and working conditions faced by tens of millions of workers in the U.S. — and how those conditions are determined in part by policy set in Washington.
Warehouse Workers
Dollar Store Employees
Meatpackers
Repo Agents
Fast-Food Workers
Taxi and Sedan Drivers
Walmart Workers
national news for the r
etailer.
Coal Miners Who Take A Stand
Restaurant Workers Who Try To Unionize
Housekeepers
Home Care Workers
Wanted: A Job-Creating Manufacturing Policy
in Uncategorized/by MAM TeamBut the rest of the president’s manufacturing plan could still use some work. Most of what the administration would call its manufacturing strategy is just creative data interpretation.
Take a look at Exhibit A: our growth in exports. Much of this is due to America’s boom in energy production and is benchmarked by a historic export low during the Great Recession. The president is fond of touting this figure, since it implies a healthy, productive economy. But imports in manufactured goods have grown much faster, particularly from China, resulting in a bilateral trade deficit that sets records every year.
Now consider Exhibit B: manufacturing employment. Obama told the crowd in North Carolina, “Our manufacturers have added over the last four years more than 550,000 new jobs, including almost 80,000 manufacturing jobs in the last five months alone.” But that selective reading of the numbers doesn’t acknowledge that the country lost roughly 5 million factory jobs since the year 2000, and has seen only a net increase of 77,000 since January 2013.
Job growth in manufacturing is also way off the target that the president himself set. During his re-election campaign, he pledged to create 1 million new manufacturing jobs by the end of his second term. That will require more than 25,000 new jobs a month until 2017 if he’s to meet his own expectations, and getting there will take more than an upward swing in the business cycle.
So imagine if, during Tuesday’s State of the Union address, the president unveiled a new, job-creating manufacturing strategy for America. What should the strategy include?
First: Guarantee enough new infrastructure investment to repair and upgrade our roads, bridges, ports, and energy grid. Doing so wouldn’t be politically impossible. The spending bill just passed by Congress includes a sizable increase for water infrastructure investment.
Second: Ensure the government is spending our tax dollars on American-made steel, iron, and manufactured goods instead of outsourcing those projects to China. In short, buy American.
Third: Increase tax incentives for reshoring (the return of jobs from overseas), and only consider reforming corporate taxes in a way that retains and expands incentives for domestic research, hiring, production, and capital expenses.
Fourth: Build clear career pathways for young people and the long-term unemployed to ensure a dynamic workforce for American manufacturing.
Fifth: Set a trade agenda that emphasizes reciprocity and balance, starting with China. We should aim to halve our record trade deficit with Beijing, and we could do so in part by passing bipartisan legislation to deter currency manipulation.
If President Obama took even half of these steps, we’d have the basis for a manufacturing policy that helps to expand our middle class.
If 2014 is to truly be a year of action, we need more than half-measures. We need more good-paying manufacturing jobs. Will the president commit to supporting them in his State of the Union address?
Scott Paul is president of the Alliance for American Manufacturing.
President Raises Minimum Wage For Federal Contractors
in Uncategorized/by MAM TeamThis means that new contracts for construction workers, the people who wash dishes on military bases, and janitors who would have made less than $10.10 will be hired at a higher rate.
“A higher minimum wage for federal contract workers will provide good value for the federal government and hence good value for the taxpayer,” a release announcing the move said. “Boosting wages will lower turnover and increase morale, and will lead to higher productivity overall.”
It is the latest executive order the president has used to accomplish some of his goals without the approval of Congress; prominent Republicans have criticized the president for what Sen. Marco Rubio of Florida called an abuse of power.
When a White House spokesman said that more executive orders were in the works for 2014,Kentucky Republican Sen. Rand Paul retorted that “it sounds vaguely like a threat.”
“I think it also has a certain amount of arrogance in the sense that one of the fundamental principles of our country were the checks and balances,” Paul said on CNN.
But the release argues that the president is “using his executive authority to lead by example, and will continue to work with Congress to finish the job for all Americans by passing the Harkin-Miller bill.”
The existing minimum wage bills, proposed by Sen. Tom Harkin and Rep. George Miller in both chambers, would raise the minimum wage to $10.10 for all workers in $0.95 increments and tie it to inflation. It would raise the minimum wage for tipped workers as well.
A Washington Post poll out on Monday found that a slim majority, 52% of Americans, approve of the president’s Congress-bypassing executive orders. (The sampling error is +/- 3.5 points.)
Jay Carney Says Obama Will 'Bypass Congress' In 2014
in Uncategorized/by MAM Team“I think what we saw last year in 2013 was a Washington that did not deliver for the American people,” Carney said. “The president sees this as the year of action, to work with Congress where he can, and to bypass Congress where necessary.”
Bypassing Congress will likely mean taking executive action in certain areas. In the past, Obama has halted the deportations of certain young, undocumented immigrants and ordered modest changes to the federal background check system for gun purchases, among other actions. Progressives are currently pushing the president to raise the minimum wage for federal contractors.
“We’re not just going to be waiting for legislation in order to make sure that we’re providing Americans the kind of help they need. I’ve got a pen and I’ve got a phone,” Obama said at a Jan. 14 cabinet meeting.
Carney did not go into specifics on what the president might do. But he expressed hope that further executive action will not be necessary on one key part of the president’s second-term agenda.
“We’re actually optimistic that 2014 will be the year Congress delivers to the president’s desk a bipartisan, comprehensive immigration reform,” he said.
Separately, Carney was asked whether passing Obamacare would have been worth it if the Democrats lose control of the Senate in the 2014 elections. “It is absolutely worth it, no matter what happens politically,” Carney said.
Watch full clip below.
Congressman Thompson's Provision for American Flags Passes
in Uncategorized/by MAM TeamThompson’s provision applies the Berry Amendment to the American Flag. The Berry Amendment, originally passed in 1941, prohibits DOD funds from being used to acquire food, clothing, military uniforms, fabrics, stainless steel and hand or measuring tools that are not grown or produced in the United States, except in rare exceptions. Thompson’s provision applies the same rules for the DOD’s acquisition of American Flags, which previously were not listed as a covered item.
Precedent already exists for such a provision. The Department of Veterans Affairs is required to only purchase U.S.-made American Flags for servicemembers’ funerals.
Thompson’s provision passed as part of H.R. 3547, the Fiscal Year 2014 omnibus appropriations bill.
Thompson represents California’s 5th Congressional District, which includes all or part of Contra Costa, Lake, Napa, Solano and Sonoma counties. He is a senior member of the House Ways and Means Committee and the House Permanent Select Committee on Intelligence. He is also a member of the fiscally conservative Blue Dog Coalition and chairs the bipartisan, bicameral Congressional Wine Caucus.
Honda Exports More U.S. Cars Than it Imports
in Uncategorized/by MAM TeamWith assembly, engine and transmission plants in Ohio, Indiana, Alabama and Georgia, Honda exports such models as the Accord, Civic, CR-V, Odyssey, Acura RDX and MDX to 50 countries in Central America, South America, Africa and the Middle East.
By exporting more vehicles than it imports from Japan to the U.S., Honda rebuts the argument that Japanese automakers benefit from the lower value of the yen. The growth of Asian and European automakers in the U.S. further complicates the eternal debate about what is an American-made vehicle.
“This is really a significant milestone for our North American operations — it is really one that has been 30 years in the making,” said Rick Schostek, senior vice president of Honda in North America. “For a long time our goal has been self-reliance in North America.”
Honda began manufacturing cars in Ohio in 1982 when its plant in Marysville plant opened. The automaker now operates 14 manufacturing plants in the U.S., Canada and Mexico.
They are mostly supported by a U.S.-based automotive parts supply chain. Honda also makes lawn mowers and motorcycles in North Carolina.
In 2013, nearly 95% of the vehicles Honda and Acura sold in the U.S. were produced in North America, including factories in Alliston, Ontario, and El Salto, Mexico. Honda will open another plant in Celaya, Mexico, next month to make its Fit subcompact.
Honda invested $12.3 billion in the U.S. between 1982 and 2013, and employs more than 26,000 Americans.
In recent years, as the value of the yen has declined, some automakers have said Honda and other Japanese automakers have an unfair trade advantage.
After falling to more than 130 yen to the dollar in 2012, the Japanese currency has rebounded to about 100 to the dollar. When the yen is weak, the dollars Honda, Toyota and Nissan collect from U.S. sales translate to more yen, the currency in which they report financial results. But the dollars they spend on American workers and technology also raise yen-based costs.
“It is really hard for us to fathom that we have an unfair advantage,” Schostek said, because the vast majority of the vehicles it sells in the U.S are made in North America.
Foxconn in Talks With Multiple U.S. States for Manufacturing
in Uncategorized/by MAM TeamFoxconn, the world’s largest custom manufacturer of electronics, may expand in its largest market as clients including Apple seek to have their products made in the U.S. Its Foxconn Interconnect Technology unit has announced an expansion in Pennsylvania, which will create about 500 jobs.
Getting support and purchase commitments from customers will be a key consideration in building the plants and Foxconn is still in talks about what products clients want from U.S. facilities, Hsing said, declining to identify the customers.
Arizona Governor Jan Brewer met Foxconn’s founder and Chairman Terry Gou in November, while officials from Colorado, Texas, New York, New Jersey and Louisiana have all made contact with the company, Hsing said.
Lucy Nashed, a spokeswoman for Texas Governor Rick Perry, declined to comment on “potential ongoing negotiations.” Colorado officials declined to comment in an e-mailed response to Bloomberg News. Representatives of the other states didn’t immediately reply to e-mails.
Hon Hai Precision Industry Co. (2317), the biggest company in the Foxconn group, in November announced plans to spend $30 million in Pennsylvania through Foxconn Interconnect, a division which develops connectors used in computers and smartphones.
Carnegie Mellon
Foxconn will also invest $10 million in a venture with Carnegie Mellon University for research in robotics and manufacturing.
Any U.S. investment would not be for labor-intensive manufacturing such as assembling smartphones and tablet computers, Gou told reporters in Taipei on Jan. 26. Instead, the company would seek to build facilities that focus on knowledge and content-based skills, he said.
Liquid-crystal display panels are an example of capital intensive work better-suited to the U.S., Gou said. The company has no current plans to build an LCD factory in the U.S., he said.
Closer Proximity
Closer proximity to supply chain partners, such as Applied Materials Inc.and Corning Inc., are among the benefits of being in the U.S., Gou said.
In addition to iPhones and iPads for Apple, Foxconn also makes game consoles for Microsoft Corp., tablets for Amazon.com Inc. and PCs for Dell Inc. and Hewlett-Packard Co., mostly at its China facilities which employ more than one million workers. Foxconn also has more than 20,000 people at plants in Mexico.
Foxconn is investing in automation to convert its employees from production workers to engineers, helping the company avoid an impending labor shortage in China while boosting profit margins.
Gou said he met Tesla Motors Inc. Chairman and Chief Executive Officer Elon Musk this month, telling the 42-year-old that Foxconn’s background in stamping and molding can help the Palo Alto, California-based company make its electric cars cheaper.
To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net
To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net
Not Just Patriotic, U.S. Manufacturing May Be Smart
in Uncategorized/by MAM TeamIt’s not just a matter of publicity, either. As the December 2012 issue of The Atlantic reports, companies are seeing real economic advantages to “insourcing,” a reversal of the outsourcing trends that sent U.S. manufacturing overseas.
A New Approach
General Electric opened Appliance Park in Louisville, Ky., in 1951, but lately it has been making some changes there. In August, the company announced an $800 million investment in jobs, products and the manufacturing process itself.
Back in 2008, Rich Calvaruso gathered his team at Appliance Park and told them they had to rethink the dishwasher. As a “Lean” leader, Calvaruso’s job is to figure out how to make things more efficiently. So he asked a team of factory workers, designers and marketers to put their heads together. They managed to cut down the time it takes to build the dishwasher by one-third.
The dishwasher’s orientation was the key. When it was set up a certain way, operators down the line could do their work without spending time manipulating the washer itself.
Even though it now takes fewer people to make that dishwasher, not a single person was laid off. Calvaruso tells Guy Raz, host of weekends on All Things Considered, that those employees were freed up to work in other parts of the company.
That process set in motion a company-wide re-evaluation of how GE should operate. The new philosophy was simple: It might make more business sense to have everyone involved in a product work in the same place. That thinking led to a change that couldn’t have happened if some workers were in China, others in Mexico and some in the U.S.
GE holds up another example of improved efficiency. The marketing team wanted to eliminate four visible screws to improve the dishwasher’s design. A diverse group of workers found a way to do that, making the manufacturing process quicker as a result.
With workers in different departments physically sharing the same space, Calvaruso says, these cross-interest conversations can happen more easily.
Where’s The Incentive?
Reporter Charles Fishman, who wrote about Appliance Park in the issue of The Atlantic, doesn’t think it’s a blip. He sees the four-screw story as a metaphor for this insourcing boomlet.
“To me the power of the four-screws story is no one ever would have known, in the old method, a year and a half ago, that anybody wanted the screws to disappear,” he says, “that they could have been made to disappear, that making the screws go away makes the door cheaper, easier to make and a better product.”
Fishman says companies are finally seeing the economic advantages of doing things differently.
“What I discovered is it’s not clear this huge wave of outsourcing was done for really smart, rational business reasons,” he says.
Companies started moving jobs overseas when they calculated how much cheaper the labor was, Fishman says, but they weren’t factoring in other kinds of costs.
“This stuff turns out to be really complicated,” he says. “And you have to sit down and ask a whole set of questions before you understand that you’ve been making a mistake for a year, or two years, or four years.”
One of those factors that businesses are starting to take into account is intellectual property, Fishman says. Specialized technology can make products more competitive, but if they’re made overseas, it’s easier for others to make knockoffs.
Another incentive is energy prices, he says. Manufacturing in the U.S. cuts down on transportation costs. Plus, he says, the factories themselves can run on natural gas, which is cheaper in the U.S.
All of these variables put together make the difference, Fishman says.
“I don’t think you can say just wages, or just energy prices, or just transportation time,” he says. “But when you stack them up, it really gets to be incredible.”
Re-Evaluting The Model
But U.S. manufacturing jobs aren’t exactly erupting in a boom.
“There haven’t been this few people working in factories in the United States since 1941. There were a third fewer people in the country then,” Fishman says.
However, the output of the workers that are in the industry is high.
“Because of the recession, we’re not quite at the highest dollar value the country’s ever produced in manufactured goods, but we’re very close,” he says.
And as more companies like GE make big investments in U.S. manufacturing, others could start to follow.
Fishman says the U.S. manufacturing industry won’t ever look exactly like it used to, but that different kinds of manufacturing will start happening in different places. However, he says, the notion that the U.S. will never make anything again is “dramatically overstated.”
“I think smart companies will see it isn’t an act of patriotism or charity,” he says. “It’s smart business to make stuff here.”
Original article posted December 8, 2012