Twenty-five percent is an unacceptable failure rate for a crucial farm machinery part.
But that’s what Lancaster County-based
Pequea Machine Inc. faced when it tested gear boxes received from China: 25 percent failed due to substandard metals, owner and President Dennis Skibo said.
“That’s not good when you’re making a huge pile of gear boxes under warranty,” he said. “After years of getting crappy quality, we decided to bring the gear box manufacturing back to the United States.”
Pequea Machine manufactures farm equipment in Earl Township. Five years ago, it contracted to have its gear boxes for tedders — machines that fluff hay for drying — made in China to save some production cost, Skibo said. Two years ago, it began bringing the job back to the U.S. after receiving substandard quality from China. Now Pequea makes its gear boxes alongside the rest of the tedder and this month completed its first run, he said.
Pequea is part of a growing “reshoring” trend among manufacturers that have brought parts and products back to the U.S. to control quality, prevent supply disruptions and be closer to clients. Surveys suggest more companies will bring production back to the U.S. in coming years, and reviews of known reshoring suggest it’s a significant part of manufacturing’s recovery, supporters said.
Pequea Machine’s first run of 80 gear boxes is just the start, Skibo said. A normal run of the parts is 200 units.
“And for about the same price as we were paying for parts from China without the reliability problems,” Skibo said.
It costs about $900 to produce the gear boxes here in the U.S. and between $800 and $900 to produce them in China, he said.
Skibo touches on a significant issue in reshoring: When labor, transportation, stocking, customs, waste and other risks are factored in, the costs are nearly identical for many products, said Harry Moser, president of the Reshoring Initiative, an Illinois-based nonprofit that promotes reshoring.
Many manufacturers look at the near-term labor cost savings of producing overseas, and they look at transportation costs, but they forget the other factors, like rising wage rates, quality control issues and risks to intellectual property rights, Moser said. At some point, for some industries, the cost begins to level out, he said.
Reshoring Initiative offers companies a total-cost calculator on its website to research the economics of reshoring.
“We try to get enough attention to the subject so companies see there are people doing it, and they’re seeing significant numbers … but they’ll make the decision on reshoring based on the economics,” Moser said.
The economics of the decision were good for more than just Pequea.
The gear box reshoring meant work for two other companies, Skibo said. Providence Township-based Buck Co., a metal foundry, produced castings for parts, and Illinois-based Circle Gear & Machine Co. Inc. cut the gears for Pequea, he said.
York-based Mantec, Central Pennsylvania’s industrial resource center, has been aware of Pequea’s example and wants to help other companies reshore if possible, Director of Operations Fred Botterbusch said. The efficiencies of local manufacturing clusters can be a great pull for many companies, he said.
“It’s hard to operate a just-in-time manufacturing environment when your parts are coming from the other side of the world,” he said.
Pequea’s reshoring hasn’t created more jobs, Skibo said, but he expects it could add as many as 20 in the future depending on sales, as well as what spinoff his orders have on other companies. For now, the existing workforce is making the gear boxes.
In an economy where state and national unemployment are more than 7 percent, jobs creation is important to many people. Reshoring job-creation prospects are better or worse depending on whom you speak to.
“I think it’s coming,” Botterbusch said. “I sense we’re turning over into a more aggressive attitude.”
Moser agrees. His group has collected hundreds of stories about reshoring companies, such as tech giant Apple and appliance maker Whirlpool. The jobs tally from known reshoring over the past three years is 50,000, or 10 percent of the 500,000 manufacturing jobs the U.S. economy created in the same time, Moser said.
“We say it’s more than trickle but less than a flood,” he said.
Others are skeptical about reshoring’s ability to generate significant job growth. Small companies bringing production back is good, but it won’t produce thousands of new jobs for Pennsylvania’s economy, said David Taylor, executive director of Harrisburg-based Pennsylvania Manufacturers’ Association.
“The thing we hope will be most transformative on manufacturing will be the natural-gas industry,” he said.
With natural gas comes the petrochemical industry, such as the ethane cracker that Shell Chemical has proposed for Western Pennsylvania, he said. That could produce raw products for thousands of jobs making solvents, glazes and plastics.
Pequea’s Skibo said he’s confident from his discussions with other companies, large and small, that reshoring will have a significant impact in coming years. Either way, he’s happy with the decision.
“You’re going to see more and more of it,” Skibo said. “It’s a good feeling to bring back (production) and manufacture stuff yourself.”
Buying U.S. Made Goods Will Help Create U.S. Jobs
in Uncategorized/by MAM TeamHalf of the automobiles sold in the U.S. today are made in other countries. Toyota of Japan has been the number one auto seller in the world for the past several years. They hit a glitch with the nuclear accident that shutdown production for several months but statistics tell us they are rapidly catching up. Where are American owned General Motors and Ford? GM and Ford have been in second and third place in the U.S. auto market and are almost non-factors in the world marketplace.
How could this happen to us? How, indeed. Take a walk around your neighborhood and count the number of American-made cars in the driveways. A recent shopping trip to a clothing store yielded tags from Peru, Indonesia, China, Korea and several more. Shop your favorite stores from Wallmart to Belk, from Lowe’s to Home Depot and see what you can find that says “Made in America”. I don’t think you will have any better luck than I did finding home grown products.
Most of the country suffered major job losses between the 1960s and the 1990s. The South lost its textile manufacturing base. The northeast and north mid-west where steel was king became the rust belt. The secret to jobs is manufacturing. Each manufacturing job generates five support jobs. Thus, one manufacturing job lost means six jobs gone.
If we buy American products, however, the money stays in America and we create jobs for Americans. Yes, I know it’s more complicated than that. Some foreign made cars have American made components and some foreign owned firms manufacture in the U.S. Still, where does the money for management go and who banks the profit?
Who has the power to create jobs? It isn’t the president or Congress. It is the American consumer, you and me. The issue is consumer choice. The more we buy “Made in America” products the more jobs will be available for our friends and neighbors. Will it cost a bit more? Probably. But, if we are lucky enough to have a job, we shouldn’t notice it so much. Check the labels on what you buy. The job you save may be your own.
Dr. Mark L. Hopkins writes for GateHouse News Service and Scripps Newspapers. He is past president of colleges in universities in four states and currently serves as executive director of a higher-education consulting service. Contact him at presnet@presnet.net.
Pequea Machine Joins the Reshoring Movement: Reshores Part Production For Better Quality
in Uncategorized/by MAM Team“That’s not good when you’re making a huge pile of gear boxes under warranty,” he said. “After years of getting crappy quality, we decided to bring the gear box manufacturing back to the United States.”
Pequea Machine manufactures farm equipment in Earl Township. Five years ago, it contracted to have its gear boxes for tedders — machines that fluff hay for drying — made in China to save some production cost, Skibo said. Two years ago, it began bringing the job back to the U.S. after receiving substandard quality from China. Now Pequea makes its gear boxes alongside the rest of the tedder and this month completed its first run, he said.
Pequea is part of a growing “reshoring” trend among manufacturers that have brought parts and products back to the U.S. to control quality, prevent supply disruptions and be closer to clients. Surveys suggest more companies will bring production back to the U.S. in coming years, and reviews of known reshoring suggest it’s a significant part of manufacturing’s recovery, supporters said.
Pequea Machine’s first run of 80 gear boxes is just the start, Skibo said. A normal run of the parts is 200 units.
“And for about the same price as we were paying for parts from China without the reliability problems,” Skibo said.
It costs about $900 to produce the gear boxes here in the U.S. and between $800 and $900 to produce them in China, he said.
Skibo touches on a significant issue in reshoring: When labor, transportation, stocking, customs, waste and other risks are factored in, the costs are nearly identical for many products, said Harry Moser, president of the Reshoring Initiative, an Illinois-based nonprofit that promotes reshoring.
Many manufacturers look at the near-term labor cost savings of producing overseas, and they look at transportation costs, but they forget the other factors, like rising wage rates, quality control issues and risks to intellectual property rights, Moser said. At some point, for some industries, the cost begins to level out, he said.
Reshoring Initiative offers companies a total-cost calculator on its website to research the economics of reshoring.
“We try to get enough attention to the subject so companies see there are people doing it, and they’re seeing significant numbers … but they’ll make the decision on reshoring based on the economics,” Moser said.
The economics of the decision were good for more than just Pequea.
The gear box reshoring meant work for two other companies, Skibo said. Providence Township-based Buck Co., a metal foundry, produced castings for parts, and Illinois-based Circle Gear & Machine Co. Inc. cut the gears for Pequea, he said.
York-based Mantec, Central Pennsylvania’s industrial resource center, has been aware of Pequea’s example and wants to help other companies reshore if possible, Director of Operations Fred Botterbusch said. The efficiencies of local manufacturing clusters can be a great pull for many companies, he said.
“It’s hard to operate a just-in-time manufacturing environment when your parts are coming from the other side of the world,” he said.
Pequea’s reshoring hasn’t created more jobs, Skibo said, but he expects it could add as many as 20 in the future depending on sales, as well as what spinoff his orders have on other companies. For now, the existing workforce is making the gear boxes.
In an economy where state and national unemployment are more than 7 percent, jobs creation is important to many people. Reshoring job-creation prospects are better or worse depending on whom you speak to.
“I think it’s coming,” Botterbusch said. “I sense we’re turning over into a more aggressive attitude.”
Moser agrees. His group has collected hundreds of stories about reshoring companies, such as tech giant Apple and appliance maker Whirlpool. The jobs tally from known reshoring over the past three years is 50,000, or 10 percent of the 500,000 manufacturing jobs the U.S. economy created in the same time, Moser said.
“We say it’s more than trickle but less than a flood,” he said.
Others are skeptical about reshoring’s ability to generate significant job growth. Small companies bringing production back is good, but it won’t produce thousands of new jobs for Pennsylvania’s economy, said David Taylor, executive director of Harrisburg-based Pennsylvania Manufacturers’ Association.
“The thing we hope will be most transformative on manufacturing will be the natural-gas industry,” he said.
With natural gas comes the petrochemical industry, such as the ethane cracker that Shell Chemical has proposed for Western Pennsylvania, he said. That could produce raw products for thousands of jobs making solvents, glazes and plastics.
Pequea’s Skibo said he’s confident from his discussions with other companies, large and small, that reshoring will have a significant impact in coming years. Either way, he’s happy with the decision.
“You’re going to see more and more of it,” Skibo said. “It’s a good feeling to bring back (production) and manufacture stuff yourself.”
Are Virtual Factories the Future of Manufacturing?
in Uncategorized/by MAM TeamThis flagship virtual factory will enable visitors to learn about the “Green Carbody Technologies – InnoCaT” innovation alliance, supported by the German Federal Ministry of Education and Research. The alliance has set itself the goal of significantly improving the resource and energy consumption of the entire manufacturing process, and of organizing it to be more easily planned and monitored, by using the automotive body-shop as an example.
The virtual environment will be based on an automotive plant, and will show attendees the numerous potential resource and energy savings in the tool-shop, press-shop, vehicle body-shop or paint-shop. The “factory of the future” will function with spontaneously networked and real-time-capable software.
These systems give visual feedback from the entry on a monitor displaying a 3-D reconstruction of an automotive component, such as a bumper. Using a non-contact, gesture-recognition system (think Tom Cruise in the movie Minority Report) developed by BMW Group, a quality assurance professional can examine and document flaws in a component simply by pointing. This allows the professional to remain at his desk and virtually interact with any testing object, saving time and effort.
As futuristic as this sounds, the hardware requirements are surprisingly common: a standard computer and two Microsoft Kinect systems – comprising a camera and 3-D sensors – are enough.
“Until now testers have to note all detected flaws, leave their work station to go to the computer terminal, navigate several screens and then enter the flaw location and type. This is laborious, time-consuming and prone to error,” says Alexander Schick, a scientist at the Fraunhofer Institute for Optronics, System Technologies, and Image Exploitation in Karlsruhe, Germany.
Gesture control significantly improves testers’ working conditions and saves time – employees can remain at their workstation and interact directly with the testing object. “If the bumper is fine, they swipe across it from left to right. In case of a flaw, they point to its location,” Schick explains.
The factory virtualization process is finding greater popularity worldwide, as large-scale operations begin adopting the technology to streamline production. Last year, Ford Motor Company announced its European facilities will be implementing virtual factory systems to improve assembly-line efficiency.
“Virtual factories will enable Ford to preview and optimize the assembly of future models at any of our plants, anywhere in the world. With the advanced simulations and virtual environments we already have at our disposal, we believe this is something Ford can achieve in the very near future,” José Terrades, simulations engineer at Ford of Spain, explained.
Various Fraunhofer Society innovations and exhibits will be part of Hannover Messe’s theme of Integrated Industry. Solutions for intelligent data processing in crisis management systems will also be a subject at the Fraunhofer exhibit in Hall 2, which looks at early detection of impending damage in deep-sea drillings, a new broadband sensor system for monitoring drinking water quality, and a sensor network with mobile robots for disaster management, triggered by earthquakes, floods, or industrial accidents.
Employers Add a Stunning 236,000 Jobs in Feb
in Uncategorized/by MAM TeamAnalysis: Report shows economy’s strengths
Analysis: A warning for investors
The consensus forecast of economists had estimated the economy added about 160,000 jobs in February.
Businesses added 246,000 jobs, while federal, state and local governments cut 10,000. Professional and business services, construction and health care led broad-based job gains.
The Labor Department revised down job gains for December and January by 15,000. December’s net payroll jobs were revised up to 219,000 from 196,000, while January’s were revised down to 119,000 from 157,000.
Some economists had been looking for strong gains after a report Thursday showed the number of Americans applying for unemployment benefits for the first time fell 7,000 to 340,000 in the latest week, and the four-week average of claims dipped to the lowest level in five years. Also, private payroll processor ADP estimated that businesses added 198,000 jobs last month.
Monthly job gains of 200,000 or more are typically needed to quickly bring down the unemployment rate. Job growth picked up last year to an average monthly pace of 181,000.
“We’re slowly and steadily accelerating,” says economist Joel Naroff of Naroff Economic Advisors. “The private side of the economy is in good shape. It’s the public sector that’s holding up” even stronger payroll growth.
Naroff expects average monthly job gains of 200,000-plus this year if the White House and Congress can agree to put off the budget cuts. If all the reductions occur, it likely would mean monthly gains of about 165,000, he says.
Business sentiment remains mixed amid the uncertainty in Washington. Thirty-three percent of executives plan to grow their staffs this year, 38% plan to reduce them and 29% expect no change, according to a first-quarter survey released this week by business consulting firm CEB.
In February, a broader gauge of distress in the job market — the underemployment rate — which includes discouraged Americans who have stopped looking for work and part-time workers who want full-time jobs, also fell to 14.3% from 14.4%.
Other signals were positive, too. The average workweek edged up to 34.5 hours from 34.4 hours in January. Employers often increase hours for existing employees before hiring. And average hourly earnings rose 4 cents to $23.82
Employers added 16,000 temporary workers. They typically add contingent workers before bringing on more permanent staff.
Less encouraging was an increase in the number of Americans out of work at least six months; that number rose to 4.8 million from 4.7 million. They now make up 40.2% of all those unemployed.
Professional and business services led job gains, with 73,000. Construction added 48,000 jobs and has added 151,000 since September on the housing-industry rebound. Health care added 39,000 jobs.
Leisure and hospitality, meanwhile, added 24,000 and manufacturers added 14,000.
Some economists still expect payroll additions this year could be slowed by Washington’s recent failure to renew a payroll tax cut, plus $85 billion in across-the-board federal spending cuts that started to take effect March 1.
But the economy has proved resilient so far. Measures of manufacturing and service-sector activity both showed growth in February.
And the housing rebound is sparking job gains in a range of industries, from construction to furniture sales and mortgage lending. Rising home and stock prices are making consumers feel wealthier, helping offset the effects of the payroll tax increase and higher gasoline prices.
'Made in USA' sees an uptick
in Uncategorized/by MAM Team“We are just the first of many to come,” said Mr. Schiffer, who has committed $2.6 million to the project. “We’ll keep growing.”
The Made in USA movement is gaining steam, as retailers from Brooks Brothers to Walmart push to manufacture their wares in the United States to appeal to patriotic consumers and avoid costly overproduction as overseas labor and shipping costs rise. Surprisingly, the trend is playing out on a smaller scale in the city.
For an area that has seen apparel-making plummet—last year, on average, there were 14,900 apparel manufacturing workers in New York City, and two decades ago, there were more than 80,000, according to the New York State Department of Labor—new factories are welcome additions.
Mr. Schiffer’s factory, Keff NYC, has eight knitting machines (each costs $100,000), and he has ordered a dozen more. Though the company is currently making samples, Mr. Schiffer expects to engage in production of up to thousands of units. The company has already signed Abercrombie, Opening Ceremony and Burt’s Bees Baby as clients. It’s also producing uniform accessories, including hats, gloves and scarves, for the 2014 Winter Olympic Games.
Orders up by 30%
“Up until now, no one was around where designers could get samples done,” said Marcus Kirwald, product development manager. “They had to send them out, and there was lot of time and frustration involved.”
Brooks Brothers has made a name for itself in local production—it has manufactured its ties at a Long Island City, Queens-based factory for decades, for example, and operates two additional East Coast facilities—and is working to strengthen its capabilities. In its neckwear factory, which last year produced 1.5 million cravats, Brooks Brothers employs 300 workers, up 10% since early 2011. Three years ago, the brand overhauled its operations from assembly line to “module,” or manufacturing by team, to become more efficient, and it began producing apparel for other brands, such as Club Monaco and Jack Spade.
The clothier now promotes its American-made wares through a special section on its website and specific catalogs—recognizing that consumers are paying attention to the origin of their clothing. (Ralph Lauren was criticized last summer for making the U.S. Olympic team’s uniforms in China.)
“It’s really critical as part of our heritage and our culture that we maintain and actually increase American manufacturing,” said Paulette Garafalo, president of international and manufacturing at Brooks Brothers.
Asia’s rising middle class also has altered the landscape. Asian shoppers are beginning to covet U.S.-made brands, according to some designers. New York-based designer Patrik Ervell, who launched his eponymous menswear business seven years ago and manufactures 95% of his goods in the U.S., has noticed that buyers from Japan, China and South Korea are looking to stock only apparel manufactured in the U.S. If it doesn’t carry that label, they’re not interested, he noted. Currently, Asia represents 25% of his wholesale business.
Shifting pattern”People have started to fetishize this ‘Made in USA’ thing; it has an aura around it,” said Mr. Ervell, who sells to upscale stores such as Barneys New York and Opening Ceremony. “That period of churning stuff out of China and shipping it here is shifting.”
Domestic production is pricier—by as much as 40%—but the gap has been narrowing in recent years. In addition, manufacturing here means that retailers can get smaller batches of products into stores more quickly, reducing the need for end-of-season markdowns.
“It’s the unsold portion which becomes the albatross around their necks,” said Andy Jassin, head of retail consultancy Jassin Consulting Group. “It’s a matter of what’s efficient, and we’re beginning to see the efficiency of ‘Made in USA.’ “
And Americans appear increasingly willing to pay for it. About 75% of consumers said they would shell out more for American-made goods, up from 50% in 2010, according to America’s Research Group. Typically, U.S.-made products have been limited to small high-end designers, but now larger mainstream retailers, like Ohio-based Abercrombie, are investing in U.S. manufacturing.
“A lot of these stores are strategizing how they can do a ‘Made in USA’ product now because they think the country is ready for it,” said Mr. Schiffer.
Even so, manufacturing locally, whether in New York’s garment district or Garland, N.C.—where Brooks Brothers operates a factory—continues to present challenges. Most apparel sellers buy fabrics overseas, because Environmental Protection Agency rules for printing with dyes make local sourcing difficult. Meanwhile, when brands began outsourcing manufacturing and shuttering their local factories decades ago, younger workers, especially in the garment district, started abandoning the field for more lucrative industries.
So far, the return of some factories has not been enough to reverse the loss of manufacturing jobs in the city, where fashion jobs have steadily declined from 200,000 in the heyday of the 1960s.
“You don’t see the kids of the kids in the factories anymore,” said Alex Garfield, who has been in the apparel industry for more than two decades, currently as a founder of women’s pants brand Peace of Cloth. “A whole generation is missing.”
Still, the dynamic is shifting.
“Ten years ago, it was six times cheaper to manufacture in China,” said Ms. Garafalo. “Today, it is about three times less expensive, so the opportunity for better margins [there] is reducing.”
Bill demands American-made steel in state projects: Requirement could benefit Iron Range, workers
in Uncategorized/by MAM TeamThe effort to boost U.S.-made steel would directly benefit Minnesota iron ore mining industry, which supplies most of the raw material — taconite — to make domestic steel.
“Eighty percent of the first-pour steel made in the U.S. comes from iron ore from Minnesota’s Iron Range,” Craig Pagel, president of the Iron Mining Association of Minnesota, told the News Tribune. “More steel means more iron ore and more jobs. … This helps us compete with the (below-cost) steel-dumping by China and other nations that cost us jobs here.”
The requirement would apply to virtually all types of steel — rolled, forged, extruded, drawn, cast, fabricated or other — in nearly all types of public works projects, from bridges to buildings, roads, airports, rail and waterways.
State and local government agencies would be required to include the U.S.-made requirement in all contracts with private builders.
Not only are the nation’s largest blast furnaces using Minnesota ore to make steel, but more Minnesota products, such as iron nuggets, are being developed to feed so-called mini-mill electric arc furnaces.
John Rebrovich, a Steelworker officer whose family has mined iron ore on the Range for more than 70 years, said the bill will “promote growth and expand the tax base.” The bill also has support of the new Iron Ore Alliance of U.S. Steel workers and management at the company’s two Minnesota taconite plants. No one testified against the bill on Wednesday.
The bill is sponsored by state Rep. Carly Melin, DFL-Hibbing, with most Iron Range lawmakers as co-sponsors.
“This levels the playing field for steel and iron ore here at home, where we have labor laws and environmental laws and pay a living wage,’’ Melin said after the hearing. “This is about jobs. And we have both labor and management at the table in support.”
The Senate version, SF 318, is sponsored by state Sen. Dave Tomassoni, DFL-Chisholm.
The bill does have exceptions, including if there isn’t enough U.S.-made steel product available or if the American-made products are more expensive by 15 percent or more than the foreign competition.
The bill now goes on the House Capital Investment Committee.
The steel requirement would follow a state law approved last year requiring the majority of all steel used in the proposed Minnesota Vikings stadium to be made in the U.S.
Chisholm-Hibbing Airport
Melin sponsored another bill heard in the same committee Wednesday that would provide $5 million in state bonding money for improvements at Range Regional Airport shared by Chisholm and Hibbing. The state money would be used to match federal and IRRRB grants for airport improvements.
The airport hopes to make improvements to the terminal, including security checkpoints and adding a covered entryway for passengers to board planes.
Shaun Germolus, executive director of the Chisholm-Hibbing Airport Authority, told the committee that “we’ve outgrown our facilities” and that the airport was key to regional economic development.
No vote was taken, but the provision could be added to the Legislature’s bonding construction package later in the session – if a bonding bill is approved.
Made in the USA: More Shoppers Buying American
in American Made, Consumer Products, Economy, Made in USA/by MAM TeamChris Rank | Bloomberg | Getty Images
A curious thing is happening among American shoppers. More people are taking a moment to flip over an item or fish for a label and ask, is it “Made in the USA?” Walmart, the nation’s largest retailer, earlier this year announced it will boost sourcing of U.S. products by $50 billion during the next 10 years. General Electric is investing $1 billion through 2014 to revitalize its U.S. appliances business and create more than 1,500 U.S. jobs.
Mom-and-pops are also engineering entire business strategies devoted to locally made goods — everything from toys to housewares. And it’s not simply patriotism and desire for perceived safer products which are altering shopping habits.
The recession, and still flat recovery for many Americans, have created a painful realization. All those cheap goods made in China and elsewhere come at a price — lost U.S. manufacturing jobs. A growing pocket of consumers, in fact, are connecting the economic dots between their shopping carts — brimming with foreign-made stuff — and America’s future.
They’re calculating the trade-offs of paying a little more for locally-made goods.”The Great Recession certainly brought that home, and highlighted the fact that so many jobs have been lost,” said James Cerruti, senior partner for strategy and research at consulting firm Brandlogic. “People have become aware of that.”
‘Made in the USA’ is known for one thing, quality,” said Robert von Goeben, co-founder of California-based Green Toys. All of their products from teething toys to blocks are made domestically and shipped to 75 countries.
“We are reaching a tipping point, where Americans are relearning its competitive advantage,” von Goeben said. “It’s not about the cheapest product, but the best quality product.”
For many consumers, affordability has driven the bulk of purchasing decisions. Businesses in turn have ventured abroad for cheap labor and specific manufacturing skills to keep prices down.
So what’s driving big and small businesses to increase sourcing of U.S. products — beyond the obvious good PR?
In short, a shift in global manufacturing that’s in the early stages. A combination of factors including rising labor costs are eroding China’s cost advantage as an export platform for North America.
Mexico, meanwhile, is rebounding as a manufacturing base, and wages there will be significantly lower than in China, according to a Boston Consulting Group report. By 2015, BCG forecasts that for many goods destined for North American consumers — manufacturing in some parts of the U.S. will be just as economical as manufacturing in China.
For years, the main attraction of China outsourcing has been access to low-cost labor. But pile on related business costs such as transportation of goods, duties and industrial real-estate expenses, and the global manufacturing landscape is no longer China-dependent.
Domestic manufacturing, meanwhile, is on the mend. The pace of growth in the U.S. manufacturing sector picked up to its fastest rate in more than a year and a half in February, as new orders continued to accelerate.
And imported goods — at least in footwear and apparel — are retreating slightly. While more than 97 percent of apparel and 98 percent of shoes sold in the U.S. are made overseas, U.S. imports in those two categories in 2011 declined for the first time ever since such data has been tracked by the American Apparel & Footwear Association.
“The cost competitiveness of U.S. manufacturing is on the rise,” said Cerruti of Brandlogic.
Of course, plenty of goods are still made abroad. And many Americans are broke, jobless or underemployed four years after the 2008 economic crisis. An unemployment measure that factors in those who have quit looking for jobs, as well as those working part-time for economic reasons, is at 14.4 percent. For many, buying “Made in the USA” is a luxury they can’t afford.
Sarah Wagner was inspired by a road trip including tours of US companies to create USA Love List, a website devoted to American-made goods.
USA Love List[p][/p]
Despite many shoppers’ thin wallets, there’s a growing appetite for domestically-made goods.
Blogger Sarah Wagner has turned her passion for “Made in USA” products into a successful website. USA Love List is devoted to sourcing and showcasing where to buy domestically-made items, ranging from lip gloss to pet food. She regularly scans the aisles of big retailers such as Costco and Target for American-made goods.
Site traffic has mushroomed since USA Love List launched in November 2011. “There’s clearly a hunger for this sort of information,” said Wagner, based in Philadelphia. “Companies have no idea how much Americans want to support American companies. They want to get behind their neighbors and communities to make sure those jobs stay there. It’s struck a nerve with a lot of people,” she said.
American-Made Green Products
Among the growing piles of American-made goods, many are green with recycled materials. Turns out it’s easier to manufacture green products domestically because sourcing of recycled materials including recycled plastic is particularly plentiful and transparent in the U.S., said Jenna Sellers Miller, president of Architec Housewares, a 9-employee housewares business, based in Delray Beach, Fl.
Some of Architec’s EcoSmart line of products are sourced domestically. The products are available at Target, Macy’s and Bed Bath & Beyond. “We’re getting appointments with retailers who just want to see our ‘Made in the USA’ products,” Miller said.
Domestically sourced recycled materials and a broader commitment to the environment shape Green Toys business strategy as well. With their factory and warehouse 10 miles apart in northern California, they also cut transportation costs and related emissions.
The 12-employee company also creates a ripple effect of jobs including supporting local drivers, shipping and packaging companies and testing labs. “We could not have started this company anywhere else,” von Goeben said. “This is a uniquely American company.”
Later this year, Green Toys will ship its first batch of toys from northern California to China. Said von Goeben, “It’s the irony of all ironies.”
All American Clothing Growing with Demand for USA-Made Goods
in Uncategorized/by MAM TeamThe company rose to national prominence with the U.S. Olympic team uniform uproar and revelations that designer Ralph Lauren, who built an image on an all-American look, had the garments made in China. Subsequently, Lauren said he would lead a discussion about bringing clothing manufacturing back to the U.S.
The purchase of the El Paso facility, a deal sealed in the past few weeks, gives the company greater leverage. Even with the purchase, the company’s three-year-plan remains in place to build production in Arcanum, said owner Lawson Nickol.
Buying the manufacturer could mean employment for 70 people at the Texas location, and more jobs in Arcanum. “We can get more competitive,” Nickol said.
There’s room for expansion. The complex once employed 200. Nickol, who runs the online retailer with his family including son B.J. and wife Mary Ann, puts annual growth at double digits.
The future looks bright. Nickol said he has fielded inquiries from 300 companies large and small that would like to work All American products into their lineups. Because his business sells direct to the online purchaser, All American can match or beat the higher-end clothing catalogs on price.
All American is the latest success in the direct-to-consumer, made in USA, clothing segment. There’s San Francisco’s American Giant Clothing, a sweatshirt/hoodie hit that sold out over the holiday season. There’s also American Apparel, which advertises as “sweatshop free.” And old standbys like Stormy Kromer or Ironwood, Mich., have expanded from a line of wool hats to outerwear. The industry lost 80 percent of its jobs since 1990 and the companies are trying to build employment back.
At All American, about $50 gets a pair of jeans. For a couple dollars more, there’s a traditional blue jean jacket. For those who insist on clothing that’s cheaper and foreign made, Nickol responds that his competitive edge is item quality and durability. Now, it’s style, too.
His new ladies jean line has fancy retro pocket stitching and offers three different shaped jeans to match body types. The show room is intended for large order buyers and includes fitting booths. But local customers can stop by, too.
“We’ve never turned anyone away,” Nickol said. Customers still have to order online, but they can pick the product up in Arcanum to save on shipping.
Nickol sources every thread that goes into his wear from the U.S., all the way from those growing the cotton to the cut-and-sew operation. The company offers an online “traceability” system. Buyers can track the origin of the products all the way back to the U.S. cotton field and farmer.
A survey this month of 1,845 adults by www.CouponCodes4u.com, one of the leading coupon websites in the U.S., found that even among the bargain-hunting coupon crowd, a large contingent want U.S. products. When asked if they paid attention to whether goods they purchased were made and produced in the U.S., the majority, 39 percent, said that they did, while 25 percent said it depended on the product and 36 percent said they did not care where their goods were made.
When asked which items they looked for, 77 percent said American meat, 51 percent said clothes, and 39 percent said U.S.-made gadgets. Asked why they preferred to purchase U.S. products, the majority, 42 percent, said they wanted to help boost the economy any way they could.
“There is a huge market for USA made,” Nickol said.
Intel’s First Factory Customer Touts Made-in-USA Chips
in Uncategorized/by MAM TeamIntel believes it can make smaller and more sophisticated transistors than other foundries. Achronix, which makes a variety of programmable chips that use lots of transistors, says its bet on Intel has paid off as advertised.
The chips, which include models with a whopping six billion transistors, consume half the power of competing chips and cost about half as much, Achronix says. It is shipping sample quantities to customers now and, when extended testing is completed, will be shipping them in volume in the third quarter, says Robert Blake, the company’s president and chief executive officer.
Most foundry factories are in Taiwan or other parts of Asia. Achronix is quick to point out that the entire process of making its chips is handled in the United States.
An Intel factory in Oregon fabricates the Achronix chips on silicon wafers. They are then shipped to facilities Arizona for packaging.
Though U.S. makers of computers and other devices have long relied on foreign suppliers, government agencies and companies that sell to them often express a preference for hardware produced domestically. Achronix expects many of chips will be used to companies that make gear used in applications like high-performance computing, networking, security and encryption.
In those kinds of products, government officials want to make sure where key components are made–and that they don’t include secret “back doors” or other features that could be exploited by foreign intelligence agencies. Such concerns may be fueled further by a growing number of reports about cyber attacks on U.S. institutions that some experts link to Asia and Europe.
Asked if the idea of domestic manufacturing is resonating with hardware makers, Achronix Chairman John Lofton Holt “absolutely.”
Blake added: “It comes up quite often with customers. They would like to source devices that are manufactured in the U.S. and they’ve never had that choice before.”
Not that Achronix, or Intel, are likely to exclusively use that selling point. Rival Globalfoundries has new manufacturing facilities near Albany, N.Y., that it has cited as a key selling point.
Besides Achronix, Intel has identified another programmable-chip startup, Tabula, as a customer of its foundry services. It also says it has other customers who choose not to be identified yet.
The chip giant is frequently asked–and declines to talk about–about rumors that it might one day serve larger customers, such as Apple. It has only made clear that it won’t serve companies that include its direct customers.
If Intel ever does want to serve high-volume customers, Achronix believes that it could. “They’ve become a real foundry,” says Holt.
National Farmers Union (NFU) Releases Analysis on COOL Compliance
in Uncategorized/by MAM TeamThe analysis essentially concluded that an effective way of complying with the WTO decision is to simply provide more information and more accurate details to consumers. It would not require producers or processors to collect additional information; it would merely require strengthening the regulations so that the information is provided to the consumer.
The WTO recently required the U.S Department of Agriculture (USDA) to adjust its rules requiring American retailers to label certain foods with the country (or countries) in which the animals are born, raised, or slaughtered. The WTO said that while the United States can require meat labeling, current U.S. COOL rules do not meet WTO standards. The WTO has given the United States until May 23, 2013 to bring its COOL rules into compliance.
“Based on the analysis, we stand in support of tightening U.S. COOL regulations,” said USCA President Jon Wooster. “USCA is proud of our U.S. raised products and remain committed to this issue, while continuing to vigorously advocate for U.S. cattle producers as well as every consumer’s right to information regarding where their meat products originate and are raised.”
COOL was passed as a part of the Farm Security and Rural Investment Act of 2002 and amended in the 2008 Farm Bill, going into effect in 2008, with regulations being put forward in 2009.
Click here to view the report.
National Farmers Union has been working since 1902 to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.
Contact:
Melisa Augusto
202-314-3191
maugusto@nfudc.org
Dan McEvily
202-314-3104
dmcevily@nfudc.org