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Why U.S. Manufacturing Is Poised for a Comeback (Maybe)

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Photo Credit: Lincoln Agnew

 

Some Say a Renaissance Is Already Under Way. Here’s the Case They Make—and the Skeptics’ Response
Manufacturing in the U.S. is starting to make a comeback, and is poised for even bigger gains in the years ahead.That, at least, is the way the optimists see it.Driven partly by more competitive labor and energy costs and companies’ desire to produce goods closer to their customers, the number of factory jobs has started to rise after plunging for decades, edging up by about 600,000 over the past four years to more than 12 million. Some U.S. companies are bringing jobs back home, and foreign businesses are setting up shop. Newspapers are trumpeting investments in American production, and advertisements—such as the nostalgia-drenched Chrysler TV ad shown during the Super Bowl and featuring Bob Dylan —celebrate a resurgent U.S. manufacturing sector.”The economics of the world are changing in favor of U.S. manufacturing,” says Hal Sirkin, a Chicago-based senior partner of Boston Consulting Group.

That’s the case made by the bulls, but plenty of skeptics argue that there are lots of reasons to doubt it. For all the positive trends and statistics, they cite numbers pointing the other way. And, the skeptics argue, the U.S. government needs to overhaul its policies and industry must invest more heavily before any real change can happen.

With that in mind, here are four reasons to bet on U.S. factories—and four reasons to be cautious.

THE OPTIMISTS’ CASE, PART 1: U.S. costs are getting more competitive

While wages soar at double-digit rates in China and some other emerging countries, they have stayed roughly level in the U.S. in recent years, narrowing the gap between America and Asia. Boston Consulting Group estimates that China’s overall manufacturing-cost advantage has shrunk to just 4%. When wages are adjusted for productivity and the costs of shipping and inventories are included, it can be more economical to make some products in the U.S. than in Asia.

Meanwhile, the surge in U.S. production of oil and natural gas, made possible by hydraulic fracturing, or fracking, has pushed down energy costs in the U.S. In 2012, German industrial companies paid more than twice as much for electricity as their U.S. counterparts and four times as much for natural gas, according to International Energy Agency data.THE REBUTTAL: It isn’t just about costs. It’s also about workers’ skills and the availability of suppliersBoth atrophied over the past two decades as U.S. companies shifted production to Asia. U.S. manufacturers complain they can’t find enough people skilled in operating or repairing sophisticated machinery, and U.S. students do poorly in international comparisons of math and science skills.Euro-Pro Operating LLC, based in Newton, Mass., designs its Shark vacuum cleaners and Ninja blenders in the U.S., but it has them made by partners in China. The issue isn’t labor costs, says Mark Rosenzweig, Euro-Pro’s chief executive officer. It’s about the profusion of suppliers in China for such things as small motors and electronic parts, and the speed with which Chinese factories and suppliers can gear up to make new or redesigned products.

Replicating those skills and supply chains in the U.S. is conceivable, but it would require many years of heavy investment. The big question is whether U.S. companies, which are typically focused on pleasing Wall Street with quarterly results, will make those long-term investments.

As for cheaper energy, sure, low-cost natural gas is spurring huge investment in some U.S. industries, such as petrochemicals and fertilizers. But energy costs aren’t the decisive factor for most manufacturers.

In an August 2013 survey of 216 U.S.-based manufacturing executives, Boston Consulting Group found that only 7% ranked energy costs as being among the most important factors in deciding whether to locate production in the U.S., behind factors like access to skilled labor.

THE OPTIMISTS’ CASE, PART 2: Companies are more eager to produce near their customers
These days, companies are increasingly focused on reacting quickly to changes in demand—such as, say, a sudden fad for orange sunglasses instead of pink ones. Being nimble reduces the risk that companies will be stuck with excess stocks of unsalable items or a shortage of items they could sell.It’s a lot easier for companies to act quickly when they’re making their products close to the customer. Manufacturing in the U.S. can reduce the time needed to obtain goods to days or weeks from the two months or so needed to ship goods across the Pacific and get them through customs. Whirlpool Corp. cited such advantages when it moved assembly of hand mixers from China to Ohio three years ago.Manufacturers also got a lesson from nature in 2011, when an earthquake in Japan and flooding in Thailand temporarily halted production of vital parts for cars, electronic goods and other products. That shock reinforced the desire to reduce dependence on supply chains stretching across the Pacific.THE REBUTTAL: China and India have more consumers

Most companies still see their greatest long-term growth opportunities in Asia, Latin America and Africa, as hundreds of millions of poor people move up to the middle class. Emerging markets are likely to remain a higher investment priority than the slower-growing markets of North America and Europe.

Just look at where corporations are increasing their investments. In 2011, according to the latest data, U.S. multinational manufacturers did $116 billion in capital spending overseas—up 68% from a decade before, according to the federal government. During the same period, their capital spending in the U.S. declined 2% to $189 billion.THE OPTIMISTS’ CASE, PART 3: The political climate for manufacturing in the U.S. has improvedAmerican manufacturers have often grumbled that government subsidies and incentives are more generous overseas. But state and local governments in the U.S. now are competing fiercely for investments and offering some rich packages. Electrolux AB of Sweden received more than $180 million of incentives, including tax breaks, to build a $190 million cooking-appliance plant in Memphis, Tenn., that opened last year. Politicians are so eager to talk about jobs that they will show up to celebrate even minor expansions: In April, Missouri Gov. Jay Nixon attended a ceremony to hail the creation of 22 jobs in an expansion of a 3M Co. plant that makes graphic films.The declining power of U.S. unions also encourages some manufacturers to set up in the U.S. rather than Europe or elsewhere. Caterpillar Inc. closed a railroad-locomotive plant in Lon
don, Ontario, in 2012 after union members there refused to accept pay cuts of about 50%. Production moved to a new nonunion plant in Muncie, Ind.

THE REBUTTAL: The political climate still isn’t that great

The top federal income-tax rate for U.S. corporations, 35%, is the highest among major industrial countries. U.S. tax rules also give American firms an incentive to keep large amounts of cash invested overseas rather than at home.

Meanwhile, political gridlock in Washington leaves companies highly uncertain about future taxes, health-care costs and repairs to the nations’ crumbling roads, bridges and ports. Caterpillar says capacity constraints and outdated technology at U.S. ports have prompted it to use Canadian ports for about 40% of the company’s imports and exports.

THE OPTIMISTS’ CASE, PART 4: Foreign companies are betting on U.S. manufacturing

Germany’s BMW AG  in March announced a $1 billion expansion of its car plant in Spartanburg, S.C., aimed at increasing production capacity 50%. Michelin of France last year opened a plant in South Carolina to make giant tires for earth-moving equipment. China’s Lenovo Group is making personal computers in North Carolina.

Even the U.S. footwear industry, after decades of decline, is showing signs of life. Merchant House International Ltd., headed by Hong Kong entrepreneur Loretta B.H. Lee, has been making work boots in China and selling them in the U.S. since the early 1980s. In May, the company started producing some of its boots at a new plant in Jefferson City, Tenn.

China remained the No. 1 destination for foreign direct investment in 2013, according to estimates from the Organization for Economic Cooperation and Development. But China’s total last year rose just 2% from a year earlier to $258.2 billion. The U.S. attracted $193.4 billion, up 16%, to rank No. 2.

THE REBUTTAL: The flow of jobs goes both ways

Harry Moser, president of the Reshoring Initiative, a nonprofit that encourages companies to consider bringing production back to the U.S., estimates that such moves are creating at least 40,000 U.S. jobs a year. But he says the number of jobs moving from the U.S. to other countries is probably around the same level.

Briggs & Stratton Corp. moved all its production of horizontal-shaft motors for portable generators from the U.S. to China last year. Todd Teske, the Milwaukee-based company’s chief executive officer, says production costs for that type of motor were lower in China. (Briggs still makes more than 85% of its motors in the U.S., a spokeswoman says.)

Critics also point to some other numbers that aren’t so rosy. Trade figures, for instance, don’t back up the idea that the U.S. has become much more competitive. U.S. manufacturing exports—excluding agricultural items, petroleum and coal—rose just 1.6% last year to $1.16 trillion, according to data from Global Trade Information Services Inc., a Geneva-based data provider. China’s manufacturing exports increased 7.7% to $2.06 trillion. Meanwhile, U.S. imports of manufactured goods also grew 1.6% last year, reaching $1.63 trillion.

Nor is there any sign of a U.S. factory-building boom. Daniel Meckstroth, chief economist at the Manufacturers Alliance for Productivity and Innovation, a research organization in Arlington, Va., says his analysis of government data shows that there are about 304,000 manufacturing plants in the U.S., down from 375,000 in 1998. The good news is that the number appears to be leveling off after a long fall.

Experts who are more sanguine about manufacturing say the statistics need to be put in context.

Boston Consulting Group’s Mr. Sirkin says the U.S. manufacturing recovery he sees is “just in the beginning stages” and should start improving the trade performance in 2015 and beyond.

As for factories, one reason the number isn’t rising is that the U.S. still has plenty of spare capacity at underused or vacant plants, says Mr. Moser of the Reshoring Initiative.

All in all, says Mr. Meckstroth of the Manufacturers Alliance, it is too early to say whether the U.S. will have a major recovery in manufacturing. “The potential is there,” he says, but the U.S. needs to do a lot more—including a more competitive tax code and better vocational training. He also thinks the U.S. needs to try to get other countries to reduce trade barriers and let their currencies float freely instead of keeping them artificially weak.

Mr. Hagerty is a Wall Street Journal news editor in Pittsburgh. He can be reached at bob.hagerty@wsj.com.

SOURCE:  Wall Street Journal

Surprise! The U.S. is Poised To Be a Rising Star in Manufacturing

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made in america

After years of hand-wringing about the expense of making things in America, a new report from the Boston Consulting Group says that’s all changing. The shift is due in part to stagnant wages — at least that’s potentially good for something — and to a greater extent, the abundance and declining cost of natural gas.
In fact, there’s a bit of a role reversal underway.Five economies generally regarded as low-cost bases for manufacturing — China, Brazil, Czech Republic, Poland and Russia — are getting relatively more expensive. The reasons: wage increases, slowing productivity growth, currency swings and steep increases in energy costs. The U.S. is getting cheaper, along with Mexico. The reasons: wage stability, increasing productivity, a stable currency and, most dramatically, a sharp decline (50 percent) in the cost of natural gas since 2005, a result of the boom in shale gas. In a press release accompanying the report, BCG’s Michael Zinser said:

While labor and energy costs aren’t the only factors that influence corporate decisions on where to locate manufacturing, these striking changes represent a significant shift in the economics of global manufacturing.

There are few signs that the news has caught up with U.S. companies that continue to shun the U.S. for supposedly cheaper nations. According to a recent report by the Congressional Research Service:

China displaced the United States as the largest manufacturing country in 2010, as the United States’ share of global manufacturing activity declined from 30% in 2002 to 17.4% in 2012.

“Many companies are making manufacturing investment decisions on the basis of a decades-old worldview that is sorely out of date,” wrote Harold L. Sirkin, a BCG senior partner and a coauthor of the analysis. “They still see North America and western Europe as high cost and Latin America, eastern Europe, and most of Asia — especially China — as low cost. In reality, there are now high- and low-cost countries in nearly every region of the world.”
SOURCE:  Washington Post

Brand Building on Made in America Foundation

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Single’s “Janessa” jumpsuit

STRONG SELLER: Single’s “Janessa” jumpsuit

 

When Gala Inc. founders Galina and Michael Sobolev began shifting their production for their contemporary line,Single, back to the United States about six years ago, there were several compelling reasons to bring manufacturing home.

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FAMILY BUSINESS: Galina & Michael Sobolev, pictured with their sons, Evan (far left) and Julian (far right). Daughter Sara not pictured.

 

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LA LABEL: Every piece in the Single collection has a label that reads “Single Los Angeles,” and the company’s hangtags read “Made in USA.”

 

Domestic production gave them the ability to produce quickly and fill reorders. There is an existing production base in the region and the move could help retain U.S. jobs, which was important for the Ukrainian-born Sobolevs, who both emigrated as children from the former Soviet Union, meeting many years later in Los Angeles.“I’m from Odessa and Michael is from Donetsk,” said Galina Sobolev, the designer behind Single. “We’ve lived in this country for 37 years. We both felt very strongly about giving back to the community and giving back to this country.”

The company had always kept a portion of its production local to allow for quick turn and reorder business. “The majors really loved that we could do that,” Galina Sobolev said. “[But] at one point when the production of all our silks got really huge, we were doing maybe 60 percent domestically and our China production went up to 40 percent.”

The husband-and-wife team began investigating what it would take to move all production back to America.

“We started pricing some of the product,” Galina Sobolev said. “The difference was so insignificant that we decided to absorb it into the cost. [We said,] ‘For the amount of profit that we’re going to lose by producing in the U.S., we’d rather forgo the extra money and create jobs here for local factories.’”

These days, 100 percent of the Single collection is produced in the United States with the exception of a few labor-intensive items in the Holiday collections, such as beaded dresses made in India. And the move has paid off—particularly among Single’s international retailers.“We have a lot of Canadian customers who are very interested in the fact that the product is made in the USA,” Sobolev said. “And we have a lot of European customers. In Belgium and Germany, they are very adamant. If the whole collection is made in USA, they triple their orders.”

Domestic manufacturing has allowed the company to fill reorders when a style suddenly takes off for a retailer. “Our edge is the fact that we can turn goods in two to three weeks, which nobody in China can do,” Sobolev said. “For clients such as some of the onliners, they can chase business.”

That was the case recently for one retailer that purchased a few stock inventory pieces from a previous collection to sell online. The retailer bought 18 units of one dress style—“That’s all we had in stock,” Sobolev said—and oversold it by 390 units. Fortunately, Sobolev was able to secure the fabric from the original local vendor and quickly put the reorder into production.

“From the day of the order to the day it [left] our door it was 11 days. And we just got another reorder from them for, I think, 460 pieces of the same dress,” she said.

Neiman Marcus’ Cusp department had a similar situation with Single’s “Janessa” jumpsuit, Sobolev said.

“They had an 83 percent sell-through, and they even sold out of it online,” she said. “We were able to do a quick reorder for them for 60 or 80 units. Just the fact that we can do this so quickly and they’re able to reorder, it’s very exciting for them. This is the kind of edge domestic manufacturing allows us.”

Spread The Word
Every piece in the Single collection has a label that reads “Single Los Angeles.” Each item has a hangtag that reads “Made in USA,” although Sobolev said she’s planning to change that to read “Proudly Made in USA.” The linesheets, lookbook and website will also soon have “Made in USA” prominently displayed. At the Single showroom in Atlanta, the sales staff display signs that read “This Collection Is Made in USA.”

“The buyers get very excited when they find out that the collection is Made in USA—especially in our Midwest territories and in the South and Southeast,” Sobolev said. “At the regional markets, it’s the first thing my sales team tells every buyer that walks in.”

Sobolev frequently attends the regional markets in Dallas and Atlanta, as well as the New York Market five times per year.

“In New York, nobody cares where things are made, honestly. It’s all about the price,” she said. “I’m getting the most support for made in USA from Texas, from Louisiana, from specialty stores in the Carolinas.”

Much of the Single collection is made using European fabrics, but Sobolev looks for domestic resources, as well. “We have one lace that we have been running for about 10 years now. It’s a very vital part of our Holiday collections,” she said. “It’s made in this little factory in New Jersey. The machine itself is about 200 years old [and] imported from England. And it’s a beautiful re-embroidered lace. It looks like [a high-end Italian] lace, but it’s a lace that can be worked into our contemporary price points.”

Sobolev said some retailers ask if the company will source a style overseas to reduce the price.

“Of course, everyone is price-sensitive these days,” she said. “But sometimes we have to put our foot down and say, ‘Sorry, we can’t make it at that price. However, we can do it at this price, and you can have a product in your store that says ‘Made in USA.’”

California Sportswear
Founded in 1994, Single sells in higher-end department stores such as Saks Fifth Avenue and Neiman Marcus, as well as higher-end specialty stores and boutiques around the world such as Tootsies in Texas, Montmartre in New York and Mendocino and Want in Canada. Although the company started as a sportswear maker, over the years it became well known as a dress resource. For Fall, Sobolev is returning to the brand’s sportswear roots with a collection of luxe separates Sobolev calls “California dress-up casual.”

“If you look at the way people are dressing today, it’s a lot easier for a girl when she’s going on a date to run in and buy two new blouses to wear with her favorite leather legging or skinny jean,” she said. “Unless she needs a dress for a specific occasion, I’m seeing more of a turn to an easy, casual kind of dressed-up sportswear. It doesn’t mean we’re not doing dresses anymore. There’s still two or three dresses in every group, and we still have
our assortment for our customers that are very much into dressing that career gal.”

Private-label businessIn addition to Single, the company has a strong private-label business manufacturing for a handful of brands and retailers.

The company also produces exclusive Single collections for retailers such as the White Single Dress label, which sells at Rue La La.

“We do thousands of structured dresses for Boston Proper, and we have for the last 15 years,” Sobolev said. “That’s the beauty of being able to turn a 600-unit reorder in three to five weeks domestically.”

The Sobolevs’ private-label business has grown organically as word gets out that the company is a resource for brands looking for domestic production. “We have become kind of like the Intelof the fashion community,” Sobolev said. “[People will say,] ‘You want to make something domestically? Call the people at Single. They can turn things in two to three weeks.’”

New Brand Extensions
The company recently added plus sizes for Saks and has since expanded the offering to other retailers, such as e-tailer Madison Plus. Although still in the early stages, the plus-size capsule collection fills a void in the contemporary market for plus sizes.

“There aren’t a lot of choices for the [contemporary plus-size] consumer,” Sobolev said. “We really invested in developing the blocks, and we got a great fit model.”

Sobolev hopes to expand Single’s plus-size offerings into a stand-alone collection.

“I would love to turn this into more of a proper business—have it not just be a small capsule segment but really expand it on various levels,” she said.

Another new concept in the works is the Single men’s underwear line developed by the Sobolevs’ 24-year-old son, Julian. Still in the test stages, the collection features the Single name and an American flag on the elastic waistband.

Just as Single is committed to domestic production, Galina Sobolev said she wishes more manufacturers and retailers would commit to Made in America product. Retailers, in particular, could highlight American-made products in their stores, she said.

“Why not have a section for Made in USA?” she said. “The manufacturers today have a responsibility—we all, as Americans, have a responsibility—to this country and the security of its economy and the future for our children.”

SOURCE:  Apparel News

Polo Ralph Lauren Clothing Line to be Made in Rochester

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Before a throng of cheering Hickey Freeman Co.employees, company officials and Sen. Charles Schumer Monday announced a $1 million manufacturing deal with Polo Ralph Lauren and declared that there are more such deals to come.
“We’re no longer interested in survival,” said Stephen Granovsky, CEO of Toronto-based Grano Retail Holdings, which bought the famed Rochester clothing company last year. “Now we’re interested in growth.”Schumer said, “We were looking for quite some time for the right parent (for Hickey Freeman). Now we’ve found it. We’ve come home, in a sense.”

Under the contract with Polo Ralph Lauren, Hickey Freeman will manufacture the company’s “Blue Label” line of tailored suits and sport jackets. The work — which could lead to more Polo contracts for Hickey, Granovsky said — is expected to begin next month.

The deal will increase Hickey’s revenue by at least 10 percent, Schumer said.

Granovsky said the deal was worth about $1 million. He said there will be at least two other such contracts with major clothing labels in the coming weeks.

“There is stability now at Hickey Freeman,” Granovsky said.

Schumer said, “To be able to bring together two dynamic, trailblazing American clothing brands is a huge step forward for Hickey Freeman.”

Officials declined to provide details about the pending contracts, but said the additional work will help Hickey achieve its goal of full factory employment by 2015. The workforce now numbers 415.

Schumer said Hickey’s fortunes improved when Grano bought it in part because Grano also owns the Canadian high-end men’s clothier, Samuelsohn, and understands the importance of quality tailoring over quick returns on investments.

The new deal, and the stability Schumer and Granovsky cited, is in contrast to Hickey’s tumultuous business life over the past several years.

After longtime owner Hartmarx Corp. filed for bankruptcy in 2009, the British private equity firm Emerisque Brands and SKNL, an Indian clothing manufacturer, bought Hartmarx’s assets. Then the holding company they formed, HMX Acquisition Corp., itself filed for bankruptcy in 2012.

Months later, Authentic Brands Group LLC bought Hickey Freeman and turned running Hickey Freeman and sister clothier Hart Schaffner Marx over to W Diamond Group Corp., a private company created by HMX CEO Doug Williams and his wife.

W Diamond Group then sold the Hickey to Grano.

Granovsky said his company is committed to Rochester. “Hickey Freeman isn’t going anywhere,” he said.

The move to Hickey is part of Polo Ralph Lauren’s “Made in America” initiative whereby some of its production will be brought back to the United States, Schumer and Grano company officials said Monday.

The Blue Label brand has been manufactured in Italy. The deal and others to come could boost production and add up to 50 jobs in the next three years.

No one from Ralph Lauren attended Monday’s news conference at the factory on North Clinton Avenue in Rochester.

Granovsky said Lauren is bringing the jobs back from Italy because of the preference American shoppers have shown for products made in this country.

“When Ralph Lauren made the uniforms for the U.S. Olympic team, he became aware of the importance of American-made,” Granovsky said.

Lauren designed and made the uniforms and other clothing for the U.S. Winter Olympics team that competed this year in Sochi, Russia.

New York Manufacturing Soars for 2014 Start

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Made In America- New York Manufacture

Comprised of surveys from around 100 New York executives, The Empire State Manufacturing Survey attempts to determine whether certain components of manufacturing have experienced growth (positive number), or contraction (negative number). Investors watch New York manufacturing (and other regions, as well) as a possible signal of larger economic upswings or downturns.
For January, the survey’s general business conditions index clocked in at 12.5 points, up from December’s revised 2.2 reading. . Analysts were pleasantly surprised by the index, having expected only a slight uptick in growth to 3.3.
Made In America- General Business Conditions

Source: New York Federal Reserve

 

Digging deeper, new orders made a major turnaround, bouncing back to 11.0 from December’s -1.7 contraction. As a sign of longer-term confidence and growth potential, the “number of employees” component headed from 0.0 in December to 12.2, while average workweek numbers flipped from -10.8 to 1.2 this month.Manufacturers’ six-month outlook remains solid, little changed at 37.5 compared to December’s 39.0 reading. New orders added on nine points to reach 39.1.

SOURCE:  The Motely Fool

POTUS announces Manufacturing Innovation Institute

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Made In America

RALEIGH– Air Force One landed at RDU Wednesday afternoon, kicking off President Barack Obama’s visit to the Triangle.
His visit began with a stop in RTP to tour Vacon, a company that designs drives used to power everything from elevators to exhaust fans. President announced the Manufacturing Innovation Institute, a new manufacturing venture for the country. The announcement is being made at NC State University, which is the school he has picked to lead his initiative.
(Entire speech, 21 minutes long, is linked at the end of this article) “I’m here to act, to help make Raleigh-Durham, and America, a magnet for the good, high-tech manufacturing jobs that a growing middle class requires and that are going to continue to keep this country on the cutting edge,” he said. The President said the institute’s goal will be to create new energy solutions using wide bandgap semiconductors to improve efficiency, reduce size and improve reliability. He also said two more “innovation hubs” will be launched in the coming weeks. Wednesday’s speech centered around strengthening advanced manufacturing and attracting good paying jobs. The idea is to do this through a public private partnership that will include 18 companies and 6 universities. NCSU will be the lead university in this venture, known as the “next generation power electronics innovation institute.” It will focus on energy efficient, high power electronic chips. “NC State couldn’t be more proud to have been selected to lead this new institute, which truly embodies everything that our university stands for – from our think and do mentality, to our collaborative spirit and unending commitment to solve to the grand challenges of society,” NC State Chancellor Randy Woodson said in a statement released Wednesday. Chancellor Woodson will travel back to Washington with President Obama on Air Force One. Woodson, along with UNC Chapel Hill Chancellor Carol Folt will attend an event hosted by the president and first lady Thursday on making college more accessible. They are part of a group of university leaders from across the country selected to attend. President Barack Obama is traveling the country over the next few weeks highlighting some of the ideas we will hear in his State of the Union Address at the end of the month. Watch the entire 21 minute speech.
SOURCE:  NEWS 14

Maker’s Row and Cotton Incorporated Partner to Bring Back "Made in USA"

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Maker’s Row and Cotton Incorporated have announced their partnership that aims to further educate and connect textile brands with U.S. cotton suppliers and manufacturers. Through the efforts of their partnership, Maker’s Row, an online platform providing product-based businesses direct access to domestic manufacturers, and Cotton Incorporated, the research and marketing company representing America’s cotton producers and importers, will be able to reach and inform a far larger, more diverse audience on the cotton production process and associated benefits with domestic sourcing.
“The partnership with Cotton Incorporated was a natural choice. This partnership provides brands with a deeper understanding of one of the principal materials used in apparel today. With that understanding, brands have a greater opportunity to push the boundaries of their own products with our manufacturers on Maker’s Row.” said Matthew Burnett, CEO, Maker’s Row. Maker’s Row and Cotton Incorporated Bring Back Made in USA.
To steward their efforts, Maker’s Row and Cotton Incorporated have created a video titled, American Cotton Part 1, designed to assist businesses in the understanding of cotton production as it moves through the supply chain. By revealing the production process, businesses–from first-time entrepreneurs to big brands–are now able to make more informed decisions which will ultimately curate a better product.
“There are more than 70 cotton producing countries in the world and the United States is the third largest. And in the United States, we have more than 10,000 cotton farmers committed to high standards of cotton production. That starts at the farm and continues all the way through the grading and classing systems that exists for every pound and every bale of US cotton.” – Mark Messura, Senior Vice President, Cotton Incorporated.”This is such a great collaboration and we are very excited to finally launch the campaign.  What we loved about the Maker’s Row team is their passion and enthusiasm for American manufacturing coupled with the fact that they are great storytellers through their video documentaries. We have a great story to tell about U.S. cotton and you will see from American Cotton Part 1how passionate the cotton farmers are about their crop and the many things the U.S. cotton industry is doing to produce the most responsible and traceable cotton in the world.  Everyone who sees this campaign should feel good about using American cotton as an ingredient in the products they create or source.” – David Earley, Sr. Director, Supply Chain Marketing, Cotton Incorporated.

Maker’s Row has also launched a page (makersrow.com/cottoninc) which features over twenty domestic cotton mills and suppliers of cotton-based materials that all comply with Cotton Incorporated’s stringent quality and responsibly-produced cotton requirements. The added platform will generate a larger community for businesses to discover and communicate with cotton-based suppliers and manufacturers across the United States.

Maker’s Row

Maker’s Row (makersrow.com) is an online marketplace that connects American manufacturers with  product-based businesses. Their mission is to make U.S. manufacturers universally accessible, and the production process simple to understand. Maker’s Row has created a community of makers, entrepreneurs, designers and businesses that are collectively coming together to bring back American manufacturing.

Cotton Incorporated

Cotton Incorporated (cottoninc.com), funded by U.S. growers of upland cotton and importers of cotton and cotton textile products, is the research and marketing company representing upland cotton. The program is designed and operated to improve the demand for and profitability of cotton.

For more information on the Maker’s Row and Cotton Incorporated partnership, or more information on Maker’s Row, please contact Matthew Burnett, CEO, Maker’s Row.

Media Contact: Matthew Burnett, Maker’s Row, 347-860-9333, matthew@makersrow.com

10 States Where Manufacturing Still Matters

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manufacturing, made in usa, made in america, american made movement, made in america movement

Factory manufacturing output increased for the second straight month. Overall industrial production has increased 0.8%. (Photo: Mike De Sisti, AP)
While some experts are predicting a revival, manufacturing has lagged the economy for years. The country has lost nearly 2.5 million manufacturing jobs in the past 10 years.

Last year, the manufacturing sector was responsible for 12% of the nation’s total economic output. In Indiana, the state where manufacturing contributes most, the figure was 28.2%. 24/7 Wall St. reviewed the 10 states where manufacturing represented the largest total share of the state economy.

The states with the biggest manufacturing economies specialize in different industries. In Oregon, nearly $38 billion of the state’s $50 billion manufacturing sector came from computer and electronic product manufacturing. In Louisiana, more than 10% of the state’s entire economic output in 2011 came from the manufacturing of petroleum and coal-based products. Michigan and Indiana both have sizable auto industries, with Michigan’s auto industry accounting for slightly less than a third of all its manufacturing output in 2011.

During the recession, and in many cases before the recession even started, many states’ manufacturing employment faced steep job losses. Between January 2007 and mid-2009, Indiana lost more than 100,000 manufacturing jobs. In Michigan, nearly 125,000 manufacturing jobs were lost between January 2008 and January 2009 alone.

Now, many of these states have seen employment rebound. Michigan had the fastest job growth in the nation from the end of 2009 to the end of 2011. According to Chad Moutray, chief economist at the National Association of Manufacturers, “the auto sector has been one of the driving sectors in the economy, pardon the pun, over the course of the last couple of years.”

In addition to Michigan, many parts of the Midwest benefited as well, he added. In Indiana, employment has risen more than 3.5% a year for each of the past three years, especially impressive in the context of the nation’s slow job growth overall.

While some believe that the benefits of a potential manufacturing renaissance are largely a myth, Moutray told 24/7 Wall St. that investments in the sector have a positive impact on the economy overall. He also noted that the prospect of added jobs may appeal to many Americans because it jobs pay well.

To identify the 10 states where manufacturing matters, 24/7 Wall St. used state gross domestic product (GDP) figures published by the Bureau of Economic Analysis. We determined from these data which states had the largest percentage of output attributable to manufacturing. Data on specific industries within the manufacturing sector from 2011 represent the most recent available figures. Employment figures for each state come from the Bureau of Labor Statistics and are seasonally adjusted.

Seasonally adjusted manufacturing job totals were not available for Alabama and Oklahoma.

These are the 10 states where manufacturing matters.

10. Alabama

  • MFG share of output: 16.3%
  • MFG output 2012: $30 billion (22nd highest)
  • 2012 Unemployment rate: 7.3%

More than 16% of Alabama’s $183 billion worth of total output in 2012 came from manufacturing industries, about $30 billion. Last year, much of this output — $16.6 billion worth — came from the manufacturing of durable goods, which in 2012 accounted for 9.1% of total GDP, the ninth-highest percentage in the country. This includes the manufacturing of wood products, nonmetallic mineral products and so forth. News reports suggest a strong tradition of manufacturing in Alabama. Mobile County, for example, will now be the site of Airbus’s new A320 jetliner final assembly line, which will likely be the company’s first U.S.-based production facility. The project, which is scheduled to begin in 2015, is expected to create thousands of jobs, a welcome prospect in the wake of declining manufacturing industries this past decade.

9. Michigan

  • MFG share of output: 16.5%
  • MFG output 2012: $66.2 billion (8th highest)
  • 2012 Unemployment rate: 9.1%

Each of the “Big Three” U.S. auto manufacturers — Chrysler, Ford and General Motors — is based in Michigan, and car sales are trending upward. This likely will be critical for the state: motor vehicle manufacturing accounted for nearly 5% of the state’s total GDP in 2011, far more than any other state. Michigan also led the nation with $18.8 billion in motor vehicle manufacturing output in 2011. The resurgence in the auto industry has not only boosted output but also led to job growth. Manufacturing employment in Michigan rose 7.9% between the ends of 2010 and 2011, leading all states, and then by an additional 3.9% between the ends of 2011 and 2012, also among the most in the nation. But this did little to help Detroit avoid a bankruptcy filing since extremely few auto manufacturing jobs exist within the city limits.

8. Iowa

  • MFG share of output: 16.7%
  • MFG output 2012: $25.4 billion (25th highest)
  • 2012 Unemployment rate: 5.2%

Iowa had the 30th largest state economy in the nation last year. However, relative to its GDP, Iowa is still one of the nation’s largest manufacturers. This is especially the case for non-durable goods, which accounted for 8.4% of the state’s total output in 2012, the fifth-highest percentage in the nation. In 2011, when non-durable goods manufacturing accounted for 8.3% of Iowa’s output, nearly half of this contribution came from food, beverage and tobacco manufacturing. At 4% of state GDP, this was more than any other state except North Carolina. Despite low crop yields due to drought, Iowa was the leading producer of both corn and soybeans in 2012, according to the USDA.

7. Ohio

  • MFG share of output: 17.1%
  • MFG output 2012: $87.2 billion (5th highest)
  • 2012 Unemployment rate: 7.2%

Ohio is a major manufacturer of a range of products. In 2011, it was one of the largest manufacturers of both primary and fabricated metals products, which together accounted for about 3% of the state’s output that year. The state was also the nation’s leader in producing plastics and rubber products, which accounted for more than $5.3 billion in output in 2011, or 1.1% of Ohio’s total output. Likely contributing to Ohio’s high output of manufactured rubber products, the state is home to Goodyear Tire & Rubber, a Fortune 500 company. At the end of 2012, Ohio was one of the top states for manufacturing employment, with roughly 658,000 jobs, trailing only far-larger California and Texas.

6. Kentucky

  • MFG share of output: 17.1%
  • MFG output 2012: $29.75 billion (23rd highest)
  • 2012 Unemployment rate: 8.2%

In 2011, Kentucky manufactured nearly $4 billion worth of motor vehicles, bodies, trailers and parts, the fifth-largest output in the nation. As of 2011, this manufacturing industry was worth 2.4% of Kentucky’s GDP, the third-largest percentage in the country. In 2011, electrical equipment, appliance, and component manufacturing had an output of only about $1.3 billion the 15th highest, but this may be expected to improve. Louisville is home to the GE Appliance Park, where the company has recently built two new assembly lines. The assembly lines, which cost more than $100 million, will produce high-efficiency washing machines and will create about 200 jobs, in addition to the thousands of jobs GE has created in the region over the past few years with its opening of several other factories.

5. Wisconsin

  • MFG share of output: 19.1%
  • MFG output 2012: $49.98 billion (12th highest)
  • 2012 Unemployment rate: 6.9%

Wisconsin led the nation in paper manufacturing in 2011, with nearly $4 billion in output, which was 1.5% of the state’s total GDP and the third-greatest portion of total output. In 2012, Wisconsin was a large producer of durable goods, which accounted for 11.3% of its GDP, up from 10.7% the previous year, holding on to its fourth place position. In spite of Wisconsin’s high output in the paper industry, the state’s Chamber of Commerce has expressed concerns regarding the implementation of government regulations that may hurt current and future job prospects. Officials in Wisconsin claim the new Boiler MACT regulations, for example, will have a negative economic impact on pulp and paper industry jobs in the state.

4. North Carolina

  • MFG share of output: 19.4%
  • MFG output 2012: $88.25 billion (4th highest)
  • 2012 Unemployment rate: 9.5%

Last year, North Carolina was the fourth-largest manufacturing economy in the country, losing the third-place position to Illinois. In 2011, of the state’s $84 billion manufacturing output, nearly $24 billion alone came from chemical manufacturing.Roughly 5.5% of the state’s GDP arose from chemical manufacturing alone. Another close to $20 billion came from the food, beverage, and tobacco product industry, more than any state but California. North Carolina’s tobacco economy is one of the second-largest in the country, and R.J. Reynolds, the second-largest tobacco company by sales in the U.S., is based in the state.

3. Louisiana

  • MFG share of output: 22.6%
  • MFG output 2012: $55.10 billion (11th highest)
  • 2012 Unemployment rate: 6.4%

None of the nation’s manufacturing leaders produced less output from durable goods manufacturing than Louisiana, at $7.7 billion. Similarly, in 2011, the state produced just $7.1 billion in manufactured durable goods. Louisiana was among the nation’s largest manufacturers of chemicals, as well as petroleum and coal products, that year, helping the state’s totals. As of 2011, more than 10% of the state’s GDP came from petroleum and coal manufacturing, by far the highest percentage in the nation. The state remains one of the nation’s leading oil refiners. According to the U.S. Energy Information Administration, “the Louisiana Offshore Oil Port (LOOP) is the only port in the U.S. capable of offloading deep draft tankers.”

2. Oregon

  • MFG share of output: 27.8%
  • MFG output 2012: $55.16 billion (10th highest)
  • 2012 Unemployment rate: 8.7%

Oregon manufactured nearly $38 billion worth of computer and electronic products in 2011, up from the year before, and second in the nation. That output is behind California, but its percentage of total GDP was 20%, surpassing by far second place Idaho, where computer and electronic manufacturing accounts for only about 5.8% of total output as of 2011. Recent outside investments in the state reinforce the tech-heavy industries in Oregon. In the first half of this year, for example, AT&T invested nearly $80 million in its Oregon network to improve performance for Oregon residents, according to the Portland Business Journal.

1. Indiana

  • MFG share of output: 28.2%
  • MFG output 2012: $84.15 billion (6th highest)
  • 2012 Unemployment rate: 8.4%

Indiana has added manufacturing jobs at one of the fastest rates in the nation over the past several years, with year-over-year growth in manufacturing at or above 3.7% at the end of each of the past three years. Some of this growth came from companies like Honda expanding their factories and adding thousands of jobs, which made headlines in 2011. Developments like these are critical for the economy of the state, which depends on manufacturing more than anywhere else in the nation. In 2012, Indiana had just the nation’s 16th largest economy, while its output from manufacturing exceeded all but a handful of states. In 2010 and 2011, Indiana was one of the leading states in total output from both motor vehicle-related and chemicals manufacturing. Manufacturing of chemical products accounted for 7% of the state’s GDP in 2011, at least partly due to the presence of pharmaceutical giant Eli Lilly, which has vendors throughout the state.

24/7 Wall St.com is a financial news and commentary website. Its content is produced independently of USA TODAY.

Sell More Shoppers on Buying Made in USA Clothing

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Made in USA

Photograph by David Paul Morris/Bloomberg

 

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Karen E. Klein
Question: How can I successfully promote my made-in-the-USA children’s clothing line both domestically and overseas?
Answer: There is plenty of evidence that marketing your company under the Brand U.S.A. banner can boost sales, both domestically and overseas. And with a string of tragedies involving overseas garment workers in the news recently, more customers may be checking labels to see where their kids’ clothing is made.Just waving the flag, however, is no shortcut to success, particularly in the domestic market, says Tom Barnes, chief executive of Mediathink, an Atlanta marketing firm. “People are more loyal to their pocketbooks than their country when it comes to making that final purchase decision,” he says. “So stay away from jingoism and thinly veiled appeals to patriotism.”

Succeeding as a small business involves identifying your company’s unique value proposition and articulating it, he notes. Shama Kabani, chief executive of Marketing Zen Group, a Dallas marketing business, agrees. “You have to be careful in [the] marketing of anything [of] becoming a one-trick pony. There’s got to be more about your products that make them sell. For instance, if your customer service and shipping [are] not worked out, being made in the U.S.A. won’t help at all,” she says.

What you can do is reinforce customers’ interest in and loyalty to your clothing line by emphasizing that you are employing American workers to produce durable, well-made goods that meet the high standards of U.S. consumers.

“Tell your employees’ stories and have them tell the story of your brand,” Barnes suggests, making sure your message is honest and authentic, not “fabricated by some PR contractor.” You might come up with a video featuring your employees thanking customers for supporting them, their families, and their communities, for instance. “People are more likely to pay $10 extra for something if they see the impact their support makes,” Barnes says.

Something that showcases local craftsmanship could also tap into the artisanal buying trend that has consumers favoring small local businesses.

Transparency and integrity will be extremely important in such a marketing campaign, Kabani says: “You don’t want to say, ‘Buy from us because we’re made in the U.S.’ and then have someone find out you’re using illegal workers in a sweat shop. You have to have a true sense of why it matters to you, or eventually it looks like a gimmick.”

Once your message is perfected, send it out over social media and video-sharing sites and to bloggers who write about your industry and its products. “Make sure you’re telling the story, giving them a link, and making it easy for them to share it,” Kabani says.

That means putting “like” or “share” buttons on all your Web pages, including your shopping cart if you’re selling online. Making it easy for your customers to let their Facebook (FB) friends and Twitter contacts know they have just purchased clothing from you is a simple way to boost your visibility, but it’s a step often overlooked by smaller companies, she says.

Why Tech Manufacturing Jobs Are Coming Back To America

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Ted Samson
Companies are moving manufacturing closer to high-tech hubs to better protect intellectual property, serve customers
For the first time in more than a decade, technology manufacturing jobs are on the rise in the United States, according to new research from Jones Lang LaSalle. The jobs aren’t surging back, per se; the research company predicts job growth at a rate of around 0.7 percent through 2018, up from around 1.1 million jobs at the end of 2012. Cities with a large concentration of highly educated tech workers — such as Silicon Valley and Austin, Texas — will see the greatest influx of manufacturing jobs.
JLL cited several reasons that American tech companies see greater value in creating tech jobs in the States, despite the relatively low real estate and labor costs in popular offshore locales.

To start, offshoring isn’t as cheap as it used to be. For example, wages of around 60 cents an hour during the height of the technological migration to Asia have risen to as high as $6 per hour in China’s eastern manufacturing centers, according to JLL. Increasing oil prices also play a role.

Second, as tech companies see increasing global competition, they need to protect their intellectual capital in new product manufacturing, and keeping production of new products within the United States makes it easier.

Third, keeping operations in close proximity to executives, designers, and engineers helps the product launch teams stay on task and during critical early-stage production.

Fourth, tech companies with U.S. locations are better equipped to quickly address end-user needs.

Finally, companies are more likely to find the workers with the technical skills necessary to operate complex systems in today’s highly automated manufacturing facilities.

“This regionalization of high-tech manufacturing is characterized by the creation of jobs requiring strong technological skills — think engineers on production lines — as opposed to reshoring where similar job functions are imported back to the United States from overseas,” said Greg Matter, vice president at Jones Lang LaSalle. “Having access to this talent is one of the reasons that manufacturing facilities for technology firms are often located in tier-one locations where labor and real estate are generally more expensive.”

Indeed, about 79 percent of moderately high-tech manufacturing jobs and 95 percent of very high-tech manufacturing jobs were located in the 100 largest American metropolitan areas in 2010, according to JLL. More than one-third of the most high-tech positions reside in companies on the West Coast. Lower-level technology jobs, meanwhile, are most concentrated in the southern states.

JLL expects that through 2018, high-tech manufacturing jobs will proliferate further in Silicon Valley. Austin, too, is becoming a magnet for high-tech manufacturing growth. Other cities poised to attract these jobs include Los Angeles; Binghamton, N.Y.; Portland, Ore.; Boulder, Colo.; Phoenix, Az.; Boston; and Boise, Idaho.

SOURCE:  InfoWorld

This article, “Why tech manufacturing jobs are coming back to America,” was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest business technology news, follow InfoWorld.com on Twitter.

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