Manufacturing Jobs Loss To Stop, Says Study
(MoneyWatch) COMMENTARY
The net loss of manufacturing jobs from the U.S. to China may have finally come to an end, according to a study by strategy and operations consultancy The Hackett Group. And because of changing conditions in the U.S. and Chinese labor markets, the net shift of jobs may move back to domestic facilities.
The net loss of manufacturing jobs from the U.S. to China may have finally come to an end, according to a study by strategy and operations consultancy The Hackett Group. And because of changing conditions in the U.S. and Chinese labor markets, the net shift of jobs may move back to domestic facilities.
However, there’s bad news as well. The number of manufacturing jobs in the U.S. is unlikely to ever return to former levels, and service jobs will continue to move offshore for years to come until there are simply no more left to send.
The reason manufacturing jobs moved to China from the U.S. in the first place was because of money. It simply cost less to make products there than here. Even though shipping goods back thousands of miles was expensive and there were the accompanying expenses of carrying the two months of inventory that would take 60 days or more to make the journey, lower costs of labor and materials more than made up the additional expenses.
The so-called “total landed costs” that take into account every expense occurred was lower for Chinese-manufactured goods. According to Hackett chief research officer Michel Janssen, products from China were 35 percent cheaper in 2005 than the American equivalent.
Times have changed. Because of domestic unrest and unfavorable publicity like the focus on labor conditions in Apple’s outsourced factories, salaries have risen in China. Rising oil prices have contributed to more expensive transportation costs. Some manufacturers have begun to bring jobs back to the U.S.
The reason manufacturing jobs moved to China from the U.S. in the first place was because of money. It simply cost less to make products there than here. Even though shipping goods back thousands of miles was expensive and there were the accompanying expenses of carrying the two months of inventory that would take 60 days or more to make the journey, lower costs of labor and materials more than made up the additional expenses.
The so-called “total landed costs” that take into account every expense occurred was lower for Chinese-manufactured goods. According to Hackett chief research officer Michel Janssen, products from China were 35 percent cheaper in 2005 than the American equivalent.
Times have changed. Because of domestic unrest and unfavorable publicity like the focus on labor conditions in Apple’s outsourced factories, salaries have risen in China. Rising oil prices have contributed to more expensive transportation costs. Some manufacturers have begun to bring jobs back to the U.S.
“For a long time we’ve been losing jobs,” Janssen says. “Now we’re reaching a point I call net zero.” That is, the number of manufacturing jobs returning has finally balanced the ones leaving.
A tipping point
“The expectations are that by 2013, [the difference in landed costs] will be 16 percent,” Janssen says. Coincidentally, 16 percent is the threshold at which U.S. companies say that they would consider moving manufacturing jobs out of China, according to a Hackett survey of major corporations. The chances are that within a few years, the U.S. could see a net gain in manufacturing jobs.
However, there are significant downsides to the news. One is that jobs won’t return in the same volume. U.S. manufacturers have continued to use technology to make factories more efficient and the jobs that return will likely be to highly automated facilities that don’t need as many people as they once might have.
Also, not all the jobs that are “reshored” will return. Many that depend on lower cost wages and other manufacturing expenses will move to other areas in Asia like Vietnam, South Asia locations like India, and even South America. Also, the move to the U.S. depends on the “implicit deflation in wages here,” Jenssen says. So even if jobs that were once well-paying with good benefits return, they may offer significantly less to workers.
Services still hurting
The change in manufacturing jobs has had no impact on the move of service jobs in accounting, IT, human resources, customer service, technical support, and similar areas. According to another Hackett study, the net number of general and administrative overhead service jobs moving out of the U.S. this year will likely hit 285,000, continuing a long-standing trend.
But by 2016, the number of service jobs that companies could outsource will have dropped to a million. “We’re not going to run out of labor arbitrage opportunities. We just run out of low cost jobs to move,” Jenssen says.
SOURCE: CBS News
Manufacturing’s Role in The U.S. Economy
We’re all aware of how critical manufacturing has been to the U.S. economy over the past several decades. Most of us are equally aware that it still plays a huge role. But do you realize how big a role it still plays?
If you add up all the offshoring that took place over the past two decades and subtract some portion of that to account for the decent stream of re-shoring that’s been going over the past few years, what do you have?
I don’t know either, but I do know that accounting for the current value of manufacturing in terms of past offshoring and recent re-shoring is a difficult, if not impossible, task. Regardless, that’s exactly what many discussions on the state manufacturing in the U.S. are based.
A more dependable estimate of the value of manufacturing to the U.S. economy is data from the U.S. Census Bureau, which recently released some new data from its 2011 County Business Patterns and Survey of Manufacturers projects.
I don’t know either, but I do know that accounting for the current value of manufacturing in terms of past offshoring and recent re-shoring is a difficult, if not impossible, task. Regardless, that’s exactly what many discussions on the state manufacturing in the U.S. are based.
A more dependable estimate of the value of manufacturing to the U.S. economy is data from the U.S. Census Bureau, which recently released some new data from its 2011 County Business Patterns and Survey of Manufacturers projects.
The first thing I found interesting in this release is that number of manufacturing facilities in the U.S. still hovers around 300,000 — which is pretty much where it was in 1990. While it’s clear that offshoring impacted millions of jobs and lead to the shut down of numerous manufacturing facilities, the overall number of manufacturing facilities in the U.S. has remained fairly stable over the past 20 years. Some will argue that this number should have grown significantly if it weren’t for all the offshoring, but what happened happened. What’s important now is the current state of the industry and forward-looking trends.
While it’s clear that offshoring impacted millions of jobs and lead to the shut down of numerous manufacturing facilities, the overall number of manufacturing facilities in the U.S. has remained fairly stable over the past 20 years.
Looking at some of the key figures reported in the Census Bureau’s release, manufacturing is currently the fourth largest employer in the U.S., employing 11 million people. This means that manufacturing trails only healthcare, retail and hotel/food services industries in terms of employment.
The average annual salary of a U.S. manufacturing worker was $52,300 in 2012—27 percent higher than the average U.S. worker’s salary in 2011 (which was $41,211 in 2011, according to the Social Security Administration).
Considering the importance of exports to the economy, it’s notable that manufacturing still accounts for more than half of our export dollars—6 in 10 of U.S. export dollars were generated by manufacturing in 2011.
Of course, exporting is only half the economic equation, with consumption being the other half. According to the 2011 Annual Survey of Manufacturers, U.S. manufacturers spent $3.2 trillion on materials in addition to spending $147 billion on capital expenditures.
Sectors of the manufacturing industry that are performing the best, in terms of shipment value, are: petroleum and coal products ($837 billion), chemical ($777 billion), food ($710 billion), and transportation equipment ($690 billion). From there, the size of the industry sectors, in terms of shipments, are considerably smaller, with the next category—machinery—clocking in with $366 billion in shipments, about half of the shipment value total of the equipment sector.
In terms of energy management, data from the 2011 Annual Survey of Manufacturers shows that manufacturers—the largest industrial consumers of energy—are getting more savvy about generating power and making money from it. According to the survey, manufacturers generated 119 billion kilowatt hours of energy and sold nearly 35 billion kilowatt hours of energy.
All in all, it seems like the increasing focus put on U.S. manufacturing over the past several years by both entrepreneurs and government looks to be paying off.
The average annual salary of a U.S. manufacturing worker was $52,300 in 2012—27 percent higher than the average U.S. worker’s salary in 2011 (which was $41,211 in 2011, according to the Social Security Administration).
Considering the importance of exports to the economy, it’s notable that manufacturing still accounts for more than half of our export dollars—6 in 10 of U.S. export dollars were generated by manufacturing in 2011.
Of course, exporting is only half the economic equation, with consumption being the other half. According to the 2011 Annual Survey of Manufacturers, U.S. manufacturers spent $3.2 trillion on materials in addition to spending $147 billion on capital expenditures.
Sectors of the manufacturing industry that are performing the best, in terms of shipment value, are: petroleum and coal products ($837 billion), chemical ($777 billion), food ($710 billion), and transportation equipment ($690 billion). From there, the size of the industry sectors, in terms of shipments, are considerably smaller, with the next category—machinery—clocking in with $366 billion in shipments, about half of the shipment value total of the equipment sector.
In terms of energy management, data from the 2011 Annual Survey of Manufacturers shows that manufacturers—the largest industrial consumers of energy—are getting more savvy about generating power and making money from it. According to the survey, manufacturers generated 119 billion kilowatt hours of energy and sold nearly 35 billion kilowatt hours of energy.
All in all, it seems like the increasing focus put on U.S. manufacturing over the past several years by both entrepreneurs and government looks to be paying off.
SOURCE: Automation World
David Greenfield has been covering industrial technologies, ranging from software and hardware to embedded systems, for more than 20 years. His principal areas of coverage for Automation World focus on technologies deployed for factory and process automation. Contact David at dgreenfield@automationworld.com or follow him on Twitter @DJGreenfield.
Effort Afoot To Make Blue Laces a Symbol of Support For U.S. Goods
A new Kickstarter campaign,launched by the founder of Flint and Tinder, wants to make blue shoelaces a symbol of American manufacturing. (The Blue Lace Project)
The Bluelace Project, which launched on Tuesday via a Kickstarter campaign, wants to make blue shoelaces a symbol of support for American manufacturing that is as visible and instantly recognizable as the yellow ribbon symbolizes support for U.S. troops.
The effort, spearheaded by Jake Bronstein (founder and chief executive of the made-in-America Flint and Tinder underwear brand) aims to raise $25,000 by Dec. 19 so that it can fire up the machines and manufacture a run of blue-hued, 51-inch shoelaces — and inspire some enthusiasm for made in America merchandise.
According to the press materials sent our way — including a video of a fellow pulling a 13,000-pound truck with a pair — these aren’t going to be your run-of-the-mill laces.
“[T]o do it, we’ve partnered with one of the last shoelace manufacturers left in America,” Bronstein says in the announcement. “We challenged them to develop the very best product they’ve ever created. They came back with a lace unlike any we’d seen — a braided, high density, waxed canvas piece tipped in aluminum.
“This is about more than re-setting expectations and supporting an American factory on the ropes,” the announcement continues. “It’s about giving American manufacturing its own yellow ribbon: a wearable way to show support for the war they’re waging daily. A symbol that retailers can see that lets them know that if they start stocking the right domestically produced product, their customers will care. It’s time to support each other again. It’s time to try harder again.”
According to the Bluelace Project page at Kickstarter.com, the funds from each $5 pledge will be allocated as follows:
“$1 goes to Processing fees (10% of all money received is paid directly to New York City-based Kickstarter and Amazon for processing the transaction)
$2 goes directly to our shoelace factory in Portsmouth, Ohio, for manufacturing the laces using American materials and shipping them to our warehouse.
$1 covers shipping, this includes the stamps purchased from USPS and the envelope bought in bulk from our Texas-based manufacturer.
$1 is paid to our Henderson, Nevada, warehouse for packing each individual order (likely a set of BLUELACES plus whatever additional goodies we decide to throw in the pouch).”
We must get 100 emails a month pitching a new made-in-the-U.S. product, project, Web clearinghouse or the like – and even more that tout the latest in crowd-funded fashion. But what really appeals to us about this (apart from the fact that it combines both) is the sheer simplicity and straightforwardness of the item and the symbolism behind it.
Yes, a $5 pledge gets you a pair of high-quality, eye-catching laces. It also sends a message that you’ve, in one small way, very visibly voted with your feet.
And if these blue shoelaces manage to lift the enthusiasm for buying American-manufactured goods — even the tiniest bit? Well, we’d consider that a far more impressive feat of strength than pulling a 13,000-pound truck.
As of this writing it appears that Bornstein might be well on his way to tying this one up in a big shoelace-appropriate bow — the first four hours of the campaign generated 1,120 backers pledging $16,387 toward the $25,000 goal.
At this rate, we won’t be surprised if The Bluelace Project is fully funded in time to tie one on for happy hour.
According to the press materials sent our way — including a video of a fellow pulling a 13,000-pound truck with a pair — these aren’t going to be your run-of-the-mill laces.
“[T]o do it, we’ve partnered with one of the last shoelace manufacturers left in America,” Bronstein says in the announcement. “We challenged them to develop the very best product they’ve ever created. They came back with a lace unlike any we’d seen — a braided, high density, waxed canvas piece tipped in aluminum.
“This is about more than re-setting expectations and supporting an American factory on the ropes,” the announcement continues. “It’s about giving American manufacturing its own yellow ribbon: a wearable way to show support for the war they’re waging daily. A symbol that retailers can see that lets them know that if they start stocking the right domestically produced product, their customers will care. It’s time to support each other again. It’s time to try harder again.”
According to the Bluelace Project page at Kickstarter.com, the funds from each $5 pledge will be allocated as follows:
“$1 goes to Processing fees (10% of all money received is paid directly to New York City-based Kickstarter and Amazon for processing the transaction)
$2 goes directly to our shoelace factory in Portsmouth, Ohio, for manufacturing the laces using American materials and shipping them to our warehouse.
$1 covers shipping, this includes the stamps purchased from USPS and the envelope bought in bulk from our Texas-based manufacturer.
$1 is paid to our Henderson, Nevada, warehouse for packing each individual order (likely a set of BLUELACES plus whatever additional goodies we decide to throw in the pouch).”
We must get 100 emails a month pitching a new made-in-the-U.S. product, project, Web clearinghouse or the like – and even more that tout the latest in crowd-funded fashion. But what really appeals to us about this (apart from the fact that it combines both) is the sheer simplicity and straightforwardness of the item and the symbolism behind it.
Yes, a $5 pledge gets you a pair of high-quality, eye-catching laces. It also sends a message that you’ve, in one small way, very visibly voted with your feet.
And if these blue shoelaces manage to lift the enthusiasm for buying American-manufactured goods — even the tiniest bit? Well, we’d consider that a far more impressive feat of strength than pulling a 13,000-pound truck.
As of this writing it appears that Bornstein might be well on his way to tying this one up in a big shoelace-appropriate bow — the first four hours of the campaign generated 1,120 backers pledging $16,387 toward the $25,000 goal.
At this rate, we won’t be surprised if The Bluelace Project is fully funded in time to tie one on for happy hour.
SOURCE: LA Times
Walmart Collecting Food For Employees Who Can't Afford Thanksgiving Dinner.
The Walmart on Atlantic Boulevard in Canton is collecting food for employees who can’t afford Thanksgiving dinner. The company said this is proof that employees look out for one another. The group of employees who have held national strikes against the world’s largest retailer says the food drive is proof Walmart doesn’t pay associates enough to survive. The Organization United for Respect at Walmart, or OUR Walmart, is holding strikes against the chain at stores in Dayton and Cincinnati on Monday, Nov. 18. (courtesy of OUR Walmart)
CLEVELAND, Ohio — The storage containers are attractively displayed at the Walmart on Atlantic Boulevard in Canton. The bins are lined up in alternating colors of purple and orange. Some sit on tables covered with golden yellow tablecloths. Others peer out from under the tables.
This isn’t a merchandise display. It’s a food drive – not for the community, but for needy workers.
“Please Donate Food Items Here, so Associates in Need Can Enjoy Thanksgiving Dinner,” read signs affixed to the tablecloths.
The food drive tables are tucked away in an employees-only area. They are another element in the backdrop of the public debate about salaries for cashiers, stock clerks and other low-wage positions at Walmart, as workers in Cincinnati and Dayton are scheduled to go on strike Monday.
Is the food drive proof the retailer pays so little that many employees can’t afford Thanksgiving dinner?
Norma Mills of Canton, who lives near the store, saw the photo circulating showing the food drive bins, and felt both “outrage” and “anger.”
“Then I went through the emotion of compassion for the employees, working for the largest food chain in America, making low wages, and who can’t afford to provide their families with a good Thanksgiving holiday,” said Mills, an organizer with Stand Up for Ohio, which is active in foreclosure issues in Canton. “That Walmart would have the audacity to ask low-wage workers to donate food to other low-wage workers — to me, it is a moral outrage.”
Kory Lundberg, a Walmart spokesman, said the food drive is proof that employees care about each other.
“It is for associates who have had some hardships come up,” he said. “Maybe their spouse lost a job.
“This is part of the company’s culture to rally around associates and take care of them when they face extreme hardships,” he said.
Lundberg said holding the food drive at the Canton Walmart was decided at the store level. However, the effort could be considered in line with what happens company-wide. The Associates in Critical Need Trust is funded by Walmart employee contributions that can be given through payroll deduction. He said employees can receive grants up to $1,500 to address hardships they may encounter, including homelessness, serious medical illnesses and major repairs to primary vehicles. Since 2001, grants totaling $80 million have been made.
But an employee at the Canton store wasn’t feeling that Walmart was looking out for her when she went to her locker more than two weeks ago and discovered the food drive containers. To her, the gesture was proof the company acknowledged many of its employees were struggling, but also proof it was not willing to substantively address their plight.
The employee said she didn’t want to use her name for fear of being fired. In a dozen years working at the company, she had never seen a food drive for employees, which she described as “demoralizing” and “kind of depressing”. The employee took photos of the bins, and sent them to the Organization United for Respect at Walmart, or OUR Walmart, the group of associates holding the strikes in Cincinnati and Dayton.
Vanessa Ferreira, an OUR Walmart organizer, said she “flipped out” when she first saw the photos taken by the Canton worker.
“Why would a company do that?” she said. “The company needs to stand up and give them their 40 hours and a living wage, so they don’t have to worry about whether they can afford Thanksgiving.”
The strikes against Walmart, which have been staged in the last several weeks across the country, including at stores in California, Florida and Illinois, are focusing on three issues: ensuring that no associate makes less than $25,000 a year, offering employees more full-time work and “ending illegal retaliation” against employees who speak out against pay and working conditions.
The first strike occurred last Black Friday at Walmart stores throughout the country. Though most associates remained on the job, many credit the event with being the public launch of the low-wage workers’ movement. Efforts to raise the minimum wage would follow, including a bill pending before Congress to raise the federal hourly minimum wage from $7.25 to $10.10. (The minimum wage in Ohio is $7.85.) In the time since, fast-food workers also have staged strikes, demanding the minimum wage be raised.
OUR Walmart won’t say what is planned for this Black Friday, but the group has a news conference scheduled Monday afternoon in Washington, D.C. AFL-CIO President Richard Trumka and Joseph Hansen, international president of the United Food and Commercial Workers union, are scheduled to announce organized labor’s commitment to Black Friday efforts.
Lundberg said taken in this context, OUR Walmart had incentive to first misinterpret and then blow out of proportion the food drive at the Canton store as fodder for the campaign.
“Please Donate Food Items Here, so Associates in Need Can Enjoy Thanksgiving Dinner,” read signs affixed to the tablecloths.
The food drive tables are tucked away in an employees-only area. They are another element in the backdrop of the public debate about salaries for cashiers, stock clerks and other low-wage positions at Walmart, as workers in Cincinnati and Dayton are scheduled to go on strike Monday.
Is the food drive proof the retailer pays so little that many employees can’t afford Thanksgiving dinner?
Norma Mills of Canton, who lives near the store, saw the photo circulating showing the food drive bins, and felt both “outrage” and “anger.”
“Then I went through the emotion of compassion for the employees, working for the largest food chain in America, making low wages, and who can’t afford to provide their families with a good Thanksgiving holiday,” said Mills, an organizer with Stand Up for Ohio, which is active in foreclosure issues in Canton. “That Walmart would have the audacity to ask low-wage workers to donate food to other low-wage workers — to me, it is a moral outrage.”
Kory Lundberg, a Walmart spokesman, said the food drive is proof that employees care about each other.
“It is for associates who have had some hardships come up,” he said. “Maybe their spouse lost a job.
“This is part of the company’s culture to rally around associates and take care of them when they face extreme hardships,” he said.
Lundberg said holding the food drive at the Canton Walmart was decided at the store level. However, the effort could be considered in line with what happens company-wide. The Associates in Critical Need Trust is funded by Walmart employee contributions that can be given through payroll deduction. He said employees can receive grants up to $1,500 to address hardships they may encounter, including homelessness, serious medical illnesses and major repairs to primary vehicles. Since 2001, grants totaling $80 million have been made.
But an employee at the Canton store wasn’t feeling that Walmart was looking out for her when she went to her locker more than two weeks ago and discovered the food drive containers. To her, the gesture was proof the company acknowledged many of its employees were struggling, but also proof it was not willing to substantively address their plight.
The employee said she didn’t want to use her name for fear of being fired. In a dozen years working at the company, she had never seen a food drive for employees, which she described as “demoralizing” and “kind of depressing”. The employee took photos of the bins, and sent them to the Organization United for Respect at Walmart, or OUR Walmart, the group of associates holding the strikes in Cincinnati and Dayton.
Vanessa Ferreira, an OUR Walmart organizer, said she “flipped out” when she first saw the photos taken by the Canton worker.
“Why would a company do that?” she said. “The company needs to stand up and give them their 40 hours and a living wage, so they don’t have to worry about whether they can afford Thanksgiving.”
The strikes against Walmart, which have been staged in the last several weeks across the country, including at stores in California, Florida and Illinois, are focusing on three issues: ensuring that no associate makes less than $25,000 a year, offering employees more full-time work and “ending illegal retaliation” against employees who speak out against pay and working conditions.
The first strike occurred last Black Friday at Walmart stores throughout the country. Though most associates remained on the job, many credit the event with being the public launch of the low-wage workers’ movement. Efforts to raise the minimum wage would follow, including a bill pending before Congress to raise the federal hourly minimum wage from $7.25 to $10.10. (The minimum wage in Ohio is $7.85.) In the time since, fast-food workers also have staged strikes, demanding the minimum wage be raised.
OUR Walmart won’t say what is planned for this Black Friday, but the group has a news conference scheduled Monday afternoon in Washington, D.C. AFL-CIO President Richard Trumka and Joseph Hansen, international president of the United Food and Commercial Workers union, are scheduled to announce organized labor’s commitment to Black Friday efforts.
Lundberg said taken in this context, OUR Walmart had incentive to first misinterpret and then blow out of proportion the food drive at the Canton store as fodder for the campaign.
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Erica Reed, an associate at the Canton store, agrees. She said food drives have been going on at the store for a few years, so she questions why they are becoming an issue now. Reed said past food drives helped her cope with her own problems, not caused by low wages but because of losing $500 a month in child support when the father of her four children went to jail. She declined to give her salary.
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“It took a burden off me. I didn’t have to worry about how I was getting my turkey to feed them Thanksgiving dinner,” she said.
Reed said it was “ignorant” to question efforts to help people in need or blame Walmart for the economic realities of the labor force nationally.
“You can’t find a decent job anywhere,” she said.
Scott Stringer, a Dayton associate who said he intends to go on strike, said Walmart bears blame because of its dominance. He makes $9.30 an hour after five years with the company.
“Walmart sets the precedent for everybody, so if they make changes, everyone would follow suit,” he said. “The economy and the United States, in general, would be a better place.”
A question of salaries
Lundberg said nationally that associates make $12.87 an hour. The company considers those working at least 34 hours to be full time. He said the average full-time employee works 37 to 38 hours a week. That comes to an annual salary of about $25,000.
OUR Walmart places the average salary at between $8 and $10 an hour, based on glassdoor.com and other websites that compile salaries, often without company participation. Based on that range,
th
e average associate’s salary is roughly between $15,000 and $20,000 a year.
For example, after about a dozen years on the job, the Canton employee who took the photos makes nearly $12 any hour. But the hourly rate is misleading, she said. Though officially a full-time worker, the associate said she only made about $17,000 last year because the company has had a common practice in recent years of cutting hours.
Lundberg said this isn’t true and that the company is committed to having full-time employees. For example, he said company-wide, 35,000 associates are scheduled to be promoted from part time to full time between September and January.
Ricki Hahn, a Dayton associate who intends to strike Monday, said poor working conditions — and not money — motivated her to speak out. She said supervisors consistently berating employees — often in public — is part of Walmart’s culture. So is failing to address unsafe working conditions, such as unsecured shelving in a stock room that could fall on employees, she said.
The company says it has good working conditions, in terms of safety and employee relations.
Hahn, who makes $11.70 an hour after 7½ years, describes her salary as “pretty good” since she knows it is hard for her to get credit for experience in her industry, and she would be back earning near minimum wage should she take a similar job at another retailer. Hahn said she is realistic about the salaries low-skilled workers should make. For example, she supports the federal bill to raise the minimum wage to $10.10, but believes the fast-food workers demand of $15 is too high.
While the Walmart strike isn’t just about wages, it always seems to come back to money. Hahn is constantly reminded of this during the work day.
“Personally, it is difficult for me to stock groceries that I can’t afford at the end of the day,” she said.
Symbols both in food drive and strike
While Walmart officials and many employees see the food drive bins as a symbol of generosity, others see it differently.
“That captures Walmart right there,” said Kate Bronfenbrenner, director of labor education research at Cornell University’s labor school. “Walmart is setting up bins because its employees don’t make enough to feed themselves and their families.”
Mills, the Canton community activist, said the issue of the food drive drew her in because for her it represented another case of corporations behaving irresponsibly and then leaving the less fortunate to “clean up the mess.” She said if employees can’t afford Thanksgiving, then Walmart should pay for turkey dinners “with all the fixings and all the sides.”
Reed said it was “ignorant” to question efforts to help people in need or blame Walmart for the economic realities of the labor force nationally.
“You can’t find a decent job anywhere,” she said.
Scott Stringer, a Dayton associate who said he intends to go on strike, said Walmart bears blame because of its dominance. He makes $9.30 an hour after five years with the company.
“Walmart sets the precedent for everybody, so if they make changes, everyone would follow suit,” he said. “The economy and the United States, in general, would be a better place.”
A question of salaries
Lundberg said nationally that associates make $12.87 an hour. The company considers those working at least 34 hours to be full time. He said the average full-time employee works 37 to 38 hours a week. That comes to an annual salary of about $25,000.
OUR Walmart places the average salary at between $8 and $10 an hour, based on glassdoor.com and other websites that compile salaries, often without company participation. Based on that range,
th
e average associate’s salary is roughly between $15,000 and $20,000 a year.
For example, after about a dozen years on the job, the Canton employee who took the photos makes nearly $12 any hour. But the hourly rate is misleading, she said. Though officially a full-time worker, the associate said she only made about $17,000 last year because the company has had a common practice in recent years of cutting hours.
Lundberg said this isn’t true and that the company is committed to having full-time employees. For example, he said company-wide, 35,000 associates are scheduled to be promoted from part time to full time between September and January.
Ricki Hahn, a Dayton associate who intends to strike Monday, said poor working conditions — and not money — motivated her to speak out. She said supervisors consistently berating employees — often in public — is part of Walmart’s culture. So is failing to address unsafe working conditions, such as unsecured shelving in a stock room that could fall on employees, she said.
The company says it has good working conditions, in terms of safety and employee relations.
Hahn, who makes $11.70 an hour after 7½ years, describes her salary as “pretty good” since she knows it is hard for her to get credit for experience in her industry, and she would be back earning near minimum wage should she take a similar job at another retailer. Hahn said she is realistic about the salaries low-skilled workers should make. For example, she supports the federal bill to raise the minimum wage to $10.10, but believes the fast-food workers demand of $15 is too high.
While the Walmart strike isn’t just about wages, it always seems to come back to money. Hahn is constantly reminded of this during the work day.
“Personally, it is difficult for me to stock groceries that I can’t afford at the end of the day,” she said.
Symbols both in food drive and strike
While Walmart officials and many employees see the food drive bins as a symbol of generosity, others see it differently.
“That captures Walmart right there,” said Kate Bronfenbrenner, director of labor education research at Cornell University’s labor school. “Walmart is setting up bins because its employees don’t make enough to feed themselves and their families.”
Mills, the Canton community activist, said the issue of the food drive drew her in because for her it represented another case of corporations behaving irresponsibly and then leaving the less fortunate to “clean up the mess.” She said if employees can’t afford Thanksgiving, then Walmart should pay for turkey dinners “with all the fixings and all the sides.”
Mills successfully worked toward getting Canton to pass a law requiring banks and other financial institutions to put up bonds so the city wouldn’t be left paying to maintain the homes on which these institutions foreclosed. Many of these foreclosures were the result of subprime and predatory loans, she said.
“I call it the reverse Robin Hood effect,” she said.
Walmart sees the strikes as a symbol without substance. For example, during the highly publicized strikes in Los Angeles earlier this month, the company said no more than 20 associates participated, though there were about 275 demonstrators.
Bronfenbrenner said the company is misinterpreting the low numbers of workers on strike.
“There were many work places, that when the striking workers returned, many workers inside stood up and clapped,” she said.
Both Dayton strikers Hahn and Stringer say they have strong support, even if fellow workers won’t join them on the picket line.
“A lot of friends of mine at work want to go out on strike, but they fear that they won’t be able to support their families if something happens,” Hahn said.
That something could mean losing a job, said Ferreira, the OUR Walmart organizer. She said she got fired after participating in the 2012 Black Friday strikes. Ferreira was terminated some time after the strike on trumped up charges of staying on break too long, she said.
Lundberg said Walmart has a very strong anti-retaliation policy.
Hahn and Stringer see themselves at the beginning of a movement that they believe will mushroom.
“We’ll be speaking out for other areas, like Cleveland, that aren’t striking,” Hahn said. “Just because they aren’t striking Monday, doesn’t mean it can’t happen there soon.”
SOURCE: Cleveland.com
Chinese Labor Camp Inmate Tells of True Horror of Halloween 'SOS'
Tree leaves were turning yellow and red in Damascus, Oregon, in late October. Competing with fall foliage for attention were Halloween decorations, which adorned almost every house in this sleepy middle-class suburb of Portland on America’s Pacific West Coast.
SECRET LETTER FOUND INSIDE HALLOWEEN TOY
A few pumpkins sat on the steps leading to Julie Keith’s house, while three fake tombstones greeted visitors in the front porch — as they did last year.
“I feel obligated to use them every year now because I feel they need to have some worth,” said Keith, 43, who lives here with her husband and their two young children. “I am sad for the people who have to endure torture to make these silly decorations.”
The decorations came in a $29 “Totally Ghoul” toy set that Keith purchased in a local Kmart store in 2011. When she opened the package before Halloween last year, a letter fell out.
In broken English mixed with Chinese, the author cried for help: “If you occasionally (sic) buy this product, please kindly resend this letter to the World Human Right Organization. Thousands people here… will thank and remember you forever.”
“I feel obligated to use them every year now because I feel they need to have some worth,” said Keith, 43, who lives here with her husband and their two young children. “I am sad for the people who have to endure torture to make these silly decorations.”
The decorations came in a $29 “Totally Ghoul” toy set that Keith purchased in a local Kmart store in 2011. When she opened the package before Halloween last year, a letter fell out.
In broken English mixed with Chinese, the author cried for help: “If you occasionally (sic) buy this product, please kindly resend this letter to the World Human Right Organization. Thousands people here… will thank and remember you forever.”
An excerpt of the letter sent by labor camp inmate Mr. Zhang contained within the Halloween decoration.
Long hours, abuse
The letter went on to detail grueling hours, verbal and physical abuses as well as torture that inmates making the products had to endure — all in a place called Masanjia Labor Camp in China.
“It was surprising at first and I didn’t know if it was a hoax,” recalled Keith, a program manager at a company that runs a chain of thrift stores and donation centers. “Once I read the letter and researched on the Internet, I realized that this may be the real deal.
“I knew there are labor camps in China, but this slammed me in the face. I had no idea if this person was still alive or dead or in the camp — it’s extraordinary that it was able to come all the way from China.”
Keith heeded the writer’s call by reaching out to human rights groups but received no response. She then posted the letter on Facebook, which prompted the local Oregonian newspaper to run a front-page article.
As word of Keith’s unusual Halloween discovery spread, her story turned into international news, throwing a spotlight on one of China’s most notorious labor camps — and the controversial system behind them.
Strange discovery
Then one morning recently, some 6,000 miles away from Damascus, a bespectacled middle-aged Chinese man walked into the CNN office in Beijing to talk to us about this strange discovery half a world away. His voice was soft and calm but from time to time it would betray a hint of both agony and force.
“I saw the packaging and figured the products were bound for some English-speaking countries,” he said. “I knew about Christmas but we were making skulls and the like — I really didn’t know much about Halloween.
The letter went on to detail grueling hours, verbal and physical abuses as well as torture that inmates making the products had to endure — all in a place called Masanjia Labor Camp in China.
“It was surprising at first and I didn’t know if it was a hoax,” recalled Keith, a program manager at a company that runs a chain of thrift stores and donation centers. “Once I read the letter and researched on the Internet, I realized that this may be the real deal.
“I knew there are labor camps in China, but this slammed me in the face. I had no idea if this person was still alive or dead or in the camp — it’s extraordinary that it was able to come all the way from China.”
Keith heeded the writer’s call by reaching out to human rights groups but received no response. She then posted the letter on Facebook, which prompted the local Oregonian newspaper to run a front-page article.
As word of Keith’s unusual Halloween discovery spread, her story turned into international news, throwing a spotlight on one of China’s most notorious labor camps — and the controversial system behind them.
Strange discovery
Then one morning recently, some 6,000 miles away from Damascus, a bespectacled middle-aged Chinese man walked into the CNN office in Beijing to talk to us about this strange discovery half a world away. His voice was soft and calm but from time to time it would betray a hint of both agony and force.
“I saw the packaging and figured the products were bound for some English-speaking countries,” he said. “I knew about Christmas but we were making skulls and the like — I really didn’t know much about Halloween.
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“But I had this idea of telling the outside world what was happening there — it was a revelation even to someone like me who had spent my entire life in China.”
After months of searching, through a trusted source and with some good luck, CNN found the man who says he wrote the letter that Keith found in her Halloween decorations. Released from the labor camp but afraid to be sent back, he agreed to his first television interview on the condition that CNN concealed his identity. “Mr. Zhang” — as he would be called — is a follower of the Falun Gong spiritual movement, branded by the Chinese government as an evil cult and outlawed since 1999. He claims he was detained by police several months before the 2008 Summer Olympics in Beijing and sentenced to two and a half years in the Masanjia labor camp in northeastern China. |
“For people who have never been there, it’s impossible to imagine,” he said. “The first thing they do is to take your human dignity away and humiliate you.”
Zhang recounted the systematic use of beatings, sleep deprivation and torture, especially targeting those like him who refused to repent. Some gruesome details are too specific to him to be reported.
“Making products turned out to be an escape from the horrible violence,” he said. “We thought we could protect ourselves, and avoid verbal and physical assaults as long as we worked and did the job well.”
Zhang recounted the systematic use of beatings, sleep deprivation and torture, especially targeting those like him who refused to repent. Some gruesome details are too specific to him to be reported.
“Making products turned out to be an escape from the horrible violence,” he said. “We thought we could protect ourselves, and avoid verbal and physical assaults as long as we worked and did the job well.”
The male inmates’ quarters at the Masanjia labor camp stand behind fields covered in haystacks.
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Broken by China’s labor camps
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Secret messages
Moving forward with his plan to expose the horror in the camp, he secretly tore off pages from exercise books meant for political indoctrination sessions as inmates were barred from having paper. He also befriended a minor criminal from his hometown — a monitor for the guards — who managed to get him another banned item: a ball pen refill. “I hid it in a hollow space in the bed stand — and only got time to write late at night when everyone else had fallen asleep,” he recalled. “The lights were always on in the camp and there was a man on duty in every room to keep an eye on us.” “Writing in English was very hard for me. I had studied the language but had never practiced speaking or writing much. That’s why I included some Chinese words to make sure the message would not be misunderstood because of my English mistakes.” |
Inside the camp
In late October, the autumn colors were fading fast in Masanjia Township as temperatures plunged to barely above freezing overnight. Driving towards town, the landscape was a mixture of barren farmland and mothballed factories with banners advertising cheap rent.
The town itself sits outside Shenyang, the provincial capital of Liaoning and an industrial base of eight million residents. If not for the labor camp infamy, it would be just another backwater in China’s northeastern rust belt.
A national emblem and two signs adorned an unguarded entrance in the center of town. One displayed “Liaoning Province Masanjia Labor” with the final word of “Camp” missing; the other read “Liaoning Province Ideological Education School.”
Inside the complex, which seemed to be closed — though officials would not confirm this — fields covered with haystacks and dried corn separated three clusters of low-rise buildings. Administrative offices were painted white, female inmates’ quarters mostly red and male’s largely beige. High blue concrete walls or green fences glinted with barbwire surrounding the inmate areas, as guard towers loomed above each corner.
In late October, the autumn colors were fading fast in Masanjia Township as temperatures plunged to barely above freezing overnight. Driving towards town, the landscape was a mixture of barren farmland and mothballed factories with banners advertising cheap rent.
The town itself sits outside Shenyang, the provincial capital of Liaoning and an industrial base of eight million residents. If not for the labor camp infamy, it would be just another backwater in China’s northeastern rust belt.
A national emblem and two signs adorned an unguarded entrance in the center of town. One displayed “Liaoning Province Masanjia Labor” with the final word of “Camp” missing; the other read “Liaoning Province Ideological Education School.”
Inside the complex, which seemed to be closed — though officials would not confirm this — fields covered with haystacks and dried corn separated three clusters of low-rise buildings. Administrative offices were painted white, female inmates’ quarters mostly red and male’s largely beige. High blue concrete walls or green fences glinted with barbwire surrounding the inmate areas, as guard towers loomed above each corner.
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“Wow, they’ve removed the sign in front the men’s camp,” marveled Liu Hua, pointing at an unmarked gate. “Look, that warehouse-looking building over there was where men like Zhang used to work.”
As the van carrying her and the CNN crew stopped near the women’s quarters, powerful memories rushed back to this 50-year-old farmer from a nearby village. |
Last inmates
Liu only dared to return here after hearing that authorities had released the last group of inmates in mid-September — an apparent step toward shutting the facility down.
She had landed in Masanjia twice for petitioning against local officials over what she calls illegal land grabs. In total, she spent two and a half years in the labor camp. Her first stint overlapped with Zhang’s, but the two only met after both were released. Unlike Zhang, Liu didn’t see work as an escape. Remembering making down jackets bound for Italy and shirts sold to South Korea, she still shivers at the heavy workload that almost ruined her health.
“I had to do everything from matching fabrics to sorting materials and cutting loose threads,” she said. “Every day, I had to repeat seven work steps — for about 2,400 steps in total.”
Suffering from high blood pressure and malnutrition, Liu said she once fainted on the job but was denied medical care. For her defiant attitude, she said guards also ordered fellow inmates to beat her twice — their assaults with plastic stools and basins so vicious that she lost consciousness. “But I still had to work after I regained consciousness,” she added. “This place was Hell on Earth.”
Horror exposed
Last April, Masanjia’s fear-striking reputation was cemented when Lens, a Chinese magazine, published a lengthy article about the horrors inside its walls. Based on interviews with a dozen former female inmates including Liu, the story — titled “Leaving Masanjia” — detailed appalling working and living environments as well as frequent use of torture in the camp.
The Chinese journalists also spoke to two former officials at the camp who said Masanjia housed more than 5,000 inmates as free laborers at its peak and created annual revenues of nearly 100 million yuan ($16 million) — including those generated from exports.
Liu only dared to return here after hearing that authorities had released the last group of inmates in mid-September — an apparent step toward shutting the facility down.
She had landed in Masanjia twice for petitioning against local officials over what she calls illegal land grabs. In total, she spent two and a half years in the labor camp. Her first stint overlapped with Zhang’s, but the two only met after both were released. Unlike Zhang, Liu didn’t see work as an escape. Remembering making down jackets bound for Italy and shirts sold to South Korea, she still shivers at the heavy workload that almost ruined her health.
“I had to do everything from matching fabrics to sorting materials and cutting loose threads,” she said. “Every day, I had to repeat seven work steps — for about 2,400 steps in total.”
Suffering from high blood pressure and malnutrition, Liu said she once fainted on the job but was denied medical care. For her defiant attitude, she said guards also ordered fellow inmates to beat her twice — their assaults with plastic stools and basins so vicious that she lost consciousness. “But I still had to work after I regained consciousness,” she added. “This place was Hell on Earth.”
Horror exposed
Last April, Masanjia’s fear-striking reputation was cemented when Lens, a Chinese magazine, published a lengthy article about the horrors inside its walls. Based on interviews with a dozen former female inmates including Liu, the story — titled “Leaving Masanjia” — detailed appalling working and living environments as well as frequent use of torture in the camp.
The Chinese journalists also spoke to two former officials at the camp who said Masanjia housed more than 5,000 inmates as free laborers at its peak and created annual revenues of nearly 100 million yuan ($16 million) — including those generated from exports.
Former Masanjia inmate Liu Hua (right) walks across the field outside the female inmates’ quarters and talks to a CNN reporter.
Although the officials acknowledged poor living and labor conditions, they denied the use of torture. They admitted some officers may have used excessive force in dealing with disobedient inmates.
The story mentioned the discovery of an accusatory letter about Masanjia in a Halloween decoration package in the United States — and that the news caused a big stir in the labor camp. When asked, one official confirmed the letter indeed came from the Masanjia men’s camp.
The article’s publication surprised many observers, as domestic Chinese media — all state-run — had long shunned the sensitive subject.
Less than two weeks after the issue hit newsstands, the official state news agency, Xinhua, ran a response from the local autho
rit
ies. Calling the article “seriously inaccurate,” provincial officials in Liaoning said their thorough investigation at Masanjia turned up no evidence of any torture or mistreatment of the interviewed inmates during their confinement.
The story mentioned the discovery of an accusatory letter about Masanjia in a Halloween decoration package in the United States — and that the news caused a big stir in the labor camp. When asked, one official confirmed the letter indeed came from the Masanjia men’s camp.
The article’s publication surprised many observers, as domestic Chinese media — all state-run — had long shunned the sensitive subject.
Less than two weeks after the issue hit newsstands, the official state news agency, Xinhua, ran a response from the local autho
rit
ies. Calling the article “seriously inaccurate,” provincial officials in Liaoning said their thorough investigation at Masanjia turned up no evidence of any torture or mistreatment of the interviewed inmates during their confinement.
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Officials also rejected accusations of horrid living and working conditions in the camp, blaming the journalists for buying into “smear campaigns” launched by overseas Falun Gong movements. They did not address the Halloween letter in their rebuttal.
Lens magazine suspended publication for several months after its Masanjia issue. Despite CNN’s repeated efforts, officials with Liaoning’s police department and press office declined to comment for this story. |
Hundreds of camps
By all accounts, Masanjia is but one of hundreds of labor camps in China borne under the laojiao — or “re-education through labor” — scheme.
Set up in 1957, the system allows the police to detain petty offenders — such as thieves, prostitutes and drug addicts — in labor camps for up to four years without a trial. China’s judicial process itself is already controlled by the ruling Communists in a one-party regime. In a 2009 report to a United Nations human rights forum, the Chinese government acknowledged 320 such facilities nationwide holding 190,000 people. Other estimates have put the number of inmates much higher.
Critics have long accused of the authorities of misusing the camps to silence so-called trouble makers, including political dissidents, rights activists and Falun Gong members.
By all accounts, Masanjia is but one of hundreds of labor camps in China borne under the laojiao — or “re-education through labor” — scheme.
Set up in 1957, the system allows the police to detain petty offenders — such as thieves, prostitutes and drug addicts — in labor camps for up to four years without a trial. China’s judicial process itself is already controlled by the ruling Communists in a one-party regime. In a 2009 report to a United Nations human rights forum, the Chinese government acknowledged 320 such facilities nationwide holding 190,000 people. Other estimates have put the number of inmates much higher.
Critics have long accused of the authorities of misusing the camps to silence so-called trouble makers, including political dissidents, rights activists and Falun Gong members.
“The continued existence of laojiao signifies China remains a police state,” said Pu Zhiqiang, a prominent Beijing-based lawyer known for defending government critics in court and a vocal opponent of the labor camp system. “It’s against China’s own constitution and laws, as well as international conventions it has signed.
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“The danger is really about unrestrained police power at a time when they are under increasing pressure to maintain social stability.”
Two of Pu’s cases last year generated a massive backlash against laojiao, forcing the government to re-examine the thorny issue. In one case, a mother was sentenced to one and a half years in a labor camp for “disrupting social order” after she repeatedly petitioned officials to execute men convicted of raping her 11-year-old daughter. In another case, a young village official was sent to a labor camp for two years for retweeting posts deemed seditious. |
Signs of change
Since the change of top leadership a year ago and despite mixed signals, the government may finally be ready to scrap the controversial system.
Li Keqiang, the new premier, said in his first press conference as head of the government that officials were “working intensively to formulate a plan” to reform the laojiao system and it may be announced before the year’s end. A senior Chinese diplomat repeated Li’s statement recently when addressing a U.N.-organized human rights forum.
While some activists have expressed concerns over the official term of “reform” instead of “abolition,” Pu, the lawyer, feels the strong tide of public opinions against the laojiao system has forced the government’s hands.
Already, provinces around China — including Liaoning — seem to be preparing for the inevitable. State media has cited examples of officials stopping accepting new inmates, changing camp names to drug rehabilitation centers and reducing staff on site.
And an empty Masanjia seems to be the ultimate testimony there is no going back.
Back in Oregon, Julie Keith is still awaiting the next move from her government. She contacted U.S. customs officials after finding the letter, as federal law prohibits the import of goods made by forced labor. She said officials admitted there was little they could do other than adding her report to their file. She hasn’t heard from them since.
Contacted by CNN, a spokeswoman with U.S. Immigration and Customs Enforcement (ICE) declined to confirm the existence or status of an investigation.
“These allegations are very serious and are an investigative priority for ICE,” she said. “These activities not only negatively impact the competitiveness of American businesses, but put vulnerable workers at risk.”
Supplying the West
Sears, the company that owns Kmart, also responded when asked how products in a labor camp in China ended up on its store shelves. “We found no evidence that production was subcontracted to a labor camp during our investigation,” it said, but added it no longer sources from this company.
Keith believes Sears “must know” but “would rather this be swept under the rug.”
Her skepticism is shared by human rights activists who have long called for stricter supervision of supply chains by multinational corporations. “A lot of these camps are run like businesses and, if you look online, there are a lot of them advertising,” said Maya Wang, a Hong Kong-based researcher for Human Rights Watch. “One would question how they get in touch with Western companies and whether or not Western companies have done due diligence when they procure services.”
For consumers, though, Wang says the only sure bet to avoid forced labor products from China is to push for legislation in their own countries and ensure strict implantation by their governments.
Even if China abolishes the labor camp system, experts like Wang and Pu point out that convicted criminals often work under similar labor conditions in prisons.
Freed from Masanjia but still haunted by the nightmare, Zhang has lived quietly in Beijing. When his long-forgotten letter was discovered by Keith and made news last year, he was as surprised as everyone else. He sent a new letter to Keith through a friend, thanking her profusely for her “righteous action that helped people in desperation achieve a good ending,” while reminding her that “China is like a big labor camp” under the Communist Party’s rule.
“It is quite ironic that it was a bloody graveyard kit that I purchased — knowing that the people who made these kits were desperate and bloody themselves,” Keith reflected.
“Now I check the labels and try not to buy things I don’t necessarily need, especially if it is made in China,” she added.
SOURCE: CNN
More Jobs Announced From Wal-Mart Onshoring Effort
The push by Wal-Mart Stores to return manufacturing to the U.S. has gathered more momentum with the global retailer announcing that three companies will support manufacturing operations in Georgia, South Carolina and Pennsylvania.
Wal-Mart officials announced on Jan. 15, 2013, a pledge to purchase in the next 10 years an additional $50 billion in U.S.-made goods. Company officials have said they hope to boost U.S. manufacturing – often referred to as “onshoring” – by purchasing more sporting goods, apparel basics, storage products, paper products, textiles, furniture and higher-end appliances.
Bentonville-based Wal-Mart sponsored the “U.S. Manufacturing Summit” in Orlando, Fla., that was held Aug. 22-23. The event connected economic development officials from 34 states with about 500 Wal-Mart suppliers and retail vendors.
Arkansas Gov. Mike Beebe was one of eight state governors to attend. The effort has already produced one success for Arkansas. Redman & Associates announced Oct. 7 a $6.5 million investment to relocate its ride-on toy manufacturing business from Shanghai to Northwest Arkansas over the next three years.
The announcement Thursday was held at the SelectUSA 2013 Investment Summit with Walmart U.S. President and CEO Bill Simon joining U.S. Department of Commerce Secretary Penny Pritzker to discuss the manufacturing moves to the U.S.
More than 1,200 attendees from nearly 60 countries around the world attended the SelectUSA event held in Washington, D.C., and coordinated by the U.S. Department of Commerce.
According to a statement from Wal-Mart, Elan-Polo, Louis Hornick & Company and EveryWare Global will produce footwear, curtains and glassware, respectively. The three suppliers will create a combined 385 jobs with the new manufacturing operations.
“Today’s announcement is a great example of the progress that’s being made, and it highlights opportunities that exist for manufacturers to invest in the USA by re-shoring or expanding their manufacturing in America,” Simon said in the statement. “Companies, government officials and industry leaders are working together to increase manufacturing, and these efforts are helping more Americans get into good-paying jobs and more businesses reinvest in the U.S. economy.”
The statement provided the following details about the three companies.
Bentonville-based Wal-Mart sponsored the “U.S. Manufacturing Summit” in Orlando, Fla., that was held Aug. 22-23. The event connected economic development officials from 34 states with about 500 Wal-Mart suppliers and retail vendors.
Arkansas Gov. Mike Beebe was one of eight state governors to attend. The effort has already produced one success for Arkansas. Redman & Associates announced Oct. 7 a $6.5 million investment to relocate its ride-on toy manufacturing business from Shanghai to Northwest Arkansas over the next three years.
The announcement Thursday was held at the SelectUSA 2013 Investment Summit with Walmart U.S. President and CEO Bill Simon joining U.S. Department of Commerce Secretary Penny Pritzker to discuss the manufacturing moves to the U.S.
More than 1,200 attendees from nearly 60 countries around the world attended the SelectUSA event held in Washington, D.C., and coordinated by the U.S. Department of Commerce.
According to a statement from Wal-Mart, Elan-Polo, Louis Hornick & Company and EveryWare Global will produce footwear, curtains and glassware, respectively. The three suppliers will create a combined 385 jobs with the new manufacturing operations.
“Today’s announcement is a great example of the progress that’s being made, and it highlights opportunities that exist for manufacturers to invest in the USA by re-shoring or expanding their manufacturing in America,” Simon said in the statement. “Companies, government officials and industry leaders are working together to increase manufacturing, and these efforts are helping more Americans get into good-paying jobs and more businesses reinvest in the U.S. economy.”
The statement provided the following details about the three companies.
- Elan-Polo, a global footwear and 35-year Walmart supplier, will start production of injection-molded footwear in March 2014 at a factory in Hazelhurst, Ga., as part of a joint venture with McPherson Manufacturing. Once at full capacity, this new facility will create 250 jobs and produce 20,000 pairs of shoes per day. Previously, the company manufactured the shoes overseas.
- EveryWare Global manufactures bakeware, beverageware, tabletop and household glassware. The company will produce Mainstays Canning Jars for Walmart in its Monaca, Pa., facility. The company is investing $1.8 million to expand factory capacity and establish a new product line made in the U.S. The agreement will create new manufacturing jobs in the Monaca facility. Founded in 1905, Anchor Hocking, an EveryWare Global brand, has been supplying products to Walmart for over 25 years and has 1,811 employees in the United States.
- Louis Hornick & Company makes window coverings and home textiles. The company will invest $2.5 million to establish a new manufacturing facility in Allendale County, S.C. The investment is expected to create 125 new jobs over the next three years. The company has been supplying Walmart for 40 years.
Wal-Mart said in the statement that as a result of their onshoring effort “manufacturers have committed to create more than 1,600 jobs and invest more than $100 million in industries that include socks, televisions, light bulbs and hardware. Factoring in today’s announcement, more than 600 of those job commitments have been announced since Walmart’s U.S. Manufacturing Summit.”
In addition to the Redman move to Rogers, the new operations include:
- Tailor Made Products, a kitchen utensil manufacturer, is making a $2 million investment that will add 12 new manufacturing jobs in Wisconsin.
- Korona Candles will invest $18.5 million that will generate 170 jobs in Virginia to produce Mainstays Tealight Candles.
It will take many more announcements to boost the U.S. and Arkansas manufacturing sectors.
Historically, U.S. manufacturing sector employment has ranged between 19 million and 17 million. It reached a high of 19.553 million jobs in June 1979. Sector employment has been stuck below 12 million since May 2009. Prior to May 2009, the last time sector employment was below 12 million was May 1941. The sector employed an estimated 11.963 million as of September, up slightly over the 11.925 million in September 2012.
The U.S. Bureau of Labor Statistics estimated there were 154,700 manufacturing jobs in Arkansas during August 2013. Employment in the sector is down 24.2% compared to August 2003, and is down more than 37% compared to the sector high of 247,300 set in February 1995.
SOURCE: The City Wire
Toy Firm To Invest $6.5 Million, Add 74 Jobs in Rogers
Rogers is famous for Daisy BB guns but it will soon be home to another toy maker, Redman & Associates, who announced a $6.5 million investment to relocate its ride-on toy manufacturing business from Shanghai to Northwest Arkansas over the next three years.
Gov. Mike Beebe, Walmart U.S. CEO Bill Simon and officials with Redman made the announcement Monday (Oct. 7) in Rogers.
Mel Redman, a former Wal-Mart executive and Redman CEO, told a room full of economic leaders that his firm had been looking at on-shoring its small manufacturing center as the economics are now favoring “Made in the USA.”
“This would not have happened if Wal-Mart had not made its $50 billion commitment to source American-made products over the next 10 years. That gave me the guts to step out and do it,” Redman said during Monday’s press conference.
Wal-Mart officials announced on Jan. 15, 2013, a pledge to purchase in the next 10 years an additional $50 billion in U.S.-made goods. Company officials have said they hope to boost U.S. manufacturing – often referred to as “onshoring” – by purchasing more sporting goods, apparel basics, storage products, paper products, textiles, furniture and higher-end appliances.
Beebe was one of eight state governors to attend the “U.S. Manufacturing Summit” in Orlando, Fla., that was held Aug. 22-23. The event connected economic development officials from 36 states with about 600 Wal-Mart suppliers and retail vendors.
Redman said he attended the recent supplier/manufacturing conference held in Orlando by Wal-Mart.
“We met with the state economic team about shared our plans and they took off like a freight train after that,” Redman said.
This is the first score for Arkansas since Wal-Mart’s manufacturing conference which brought together suppliers and state economic teams to discuss bringing manufacturing jobs back to the U.S.
Redman said he operates a sales office in Bentonville that employs 16 people. But moving the manufacturing here will create 17 jobs the first year, ramping up to 74 by the time the entire operation comes online in Rogers.
A study by the University of Arkansas estimates the $18.55 per hour average wage created from this business will pump $3 million back into the local economy once it’s fully operational. The UA study found that every new manufacturing job created will support four other jobs that provide services to the toy maker.
“We buy a lot of cardboard boxes and print lots of labels. Local companies here will get that business,” Redman said.
He said when the Rogers plant is fully operational and shipping from Northwest Arkansas instead of Long Beach, Calif., his firm will save 2.2 million inland miles and slash $7 million in ocean freight expenses, by far its largest annual expense. It will also cut seven days out of the supply chain, making for a more efficient overall operation.
Gov. Beebe said there is not a better story than seeing a local entrepreneur who could have retired long ago but instead invests in creating new jobs.
“This is just the tip of the iceberg. We are going to see other companies follow this lead because people do want to buy American-made products if the price and quality are comparable,” Beebe said.
Beebe also credited Wal-Mart for stepping out to help facilitate suppliers and economic teams to make success stories like this happen.
“I have said for a long time that a country can’t be great unless it makes things, we are seeing these jobs come back because consumers want to buy manufactured goods made in America,” Beebe said.
“Wal-Mart’s commitment to restoring U.S. manufacturing jobs and Redman & Associates’ decision to bring these jobs to the U.S. allow more Americans to do just that. With rising business costs overseas, Arkansas has the ideal location and workforce for companies looking to manufacture and distribute products throughout the U.S. and the world,” he said.
Rogers Mayor Greg Hines said the new facility will be located at 1300 N. Dixieland Road in an existing 275,000 square-foot building.
“Mel Redman told me after touring the building that he could not have built one more suitable for his manufacturing needs,” Hines said.
Redman will produce 6-volt battery powered ride on toys and believes they can source all of the raw products in the U.S. The battery itself is the most challenging. Redman will relocate its plastic molding business to Rogers, which makes the main body of these ride-on toys.
The toys made locally will feature characters from Disney and Marvel franchises including Disney Princess, Classics, Disney•Pixar and Spider-Man. Production should begin in early 2014. Redman is licensed by Marvel Characters B.V., and Redman produces Disney character ride-on toys for Wal-Mart under Wal-Mart’s license with Disney.
Simon said the response he and other Walmart officials are hearing from their supplier community about this initiative has been overwhelmingly positive.
“It is making economic sense. We continue to hear about smaller suppliers adding a few U.S. jobs here and there, but this is the first of we hope are several announcements for manufacturing onshoring,” Simon said.
He said this region like many others could become clusters for certain like types of manufacturing. For instance Redman requires plastic molding, which could open the door for others in that business. Or, when a textile company that makes socks comes back onshore, other garment companies could also cluster there because of shared sourcing power.
Grant Tennille, executive director for the Arkansas Economic Development Commission, said the state did give Redman a few incentives to move their manufacturing operation from Shanghai to the Natural State. Those incentives included $2 million that goes toward building and equipment costs for Redman, and the Arkansas Advantage 1% state tax credit on wages paid for five years. In addition, Redman will also get a sales tax rebate on manufacturing equipment purchases relating to its startup.
Mel Redman, a former Wal-Mart executive and Redman CEO, told a room full of economic leaders that his firm had been looking at on-shoring its small manufacturing center as the economics are now favoring “Made in the USA.”
“This would not have happened if Wal-Mart had not made its $50 billion commitment to source American-made products over the next 10 years. That gave me the guts to step out and do it,” Redman said during Monday’s press conference.
Wal-Mart officials announced on Jan. 15, 2013, a pledge to purchase in the next 10 years an additional $50 billion in U.S.-made goods. Company officials have said they hope to boost U.S. manufacturing – often referred to as “onshoring” – by purchasing more sporting goods, apparel basics, storage products, paper products, textiles, furniture and higher-end appliances.
Beebe was one of eight state governors to attend the “U.S. Manufacturing Summit” in Orlando, Fla., that was held Aug. 22-23. The event connected economic development officials from 36 states with about 600 Wal-Mart suppliers and retail vendors.
Redman said he attended the recent supplier/manufacturing conference held in Orlando by Wal-Mart.
“We met with the state economic team about shared our plans and they took off like a freight train after that,” Redman said.
This is the first score for Arkansas since Wal-Mart’s manufacturing conference which brought together suppliers and state economic teams to discuss bringing manufacturing jobs back to the U.S.
Redman said he operates a sales office in Bentonville that employs 16 people. But moving the manufacturing here will create 17 jobs the first year, ramping up to 74 by the time the entire operation comes online in Rogers.
A study by the University of Arkansas estimates the $18.55 per hour average wage created from this business will pump $3 million back into the local economy once it’s fully operational. The UA study found that every new manufacturing job created will support four other jobs that provide services to the toy maker.
“We buy a lot of cardboard boxes and print lots of labels. Local companies here will get that business,” Redman said.
He said when the Rogers plant is fully operational and shipping from Northwest Arkansas instead of Long Beach, Calif., his firm will save 2.2 million inland miles and slash $7 million in ocean freight expenses, by far its largest annual expense. It will also cut seven days out of the supply chain, making for a more efficient overall operation.
Gov. Beebe said there is not a better story than seeing a local entrepreneur who could have retired long ago but instead invests in creating new jobs.
“This is just the tip of the iceberg. We are going to see other companies follow this lead because people do want to buy American-made products if the price and quality are comparable,” Beebe said.
Beebe also credited Wal-Mart for stepping out to help facilitate suppliers and economic teams to make success stories like this happen.
“I have said for a long time that a country can’t be great unless it makes things, we are seeing these jobs come back because consumers want to buy manufactured goods made in America,” Beebe said.
“Wal-Mart’s commitment to restoring U.S. manufacturing jobs and Redman & Associates’ decision to bring these jobs to the U.S. allow more Americans to do just that. With rising business costs overseas, Arkansas has the ideal location and workforce for companies looking to manufacture and distribute products throughout the U.S. and the world,” he said.
Rogers Mayor Greg Hines said the new facility will be located at 1300 N. Dixieland Road in an existing 275,000 square-foot building.
“Mel Redman told me after touring the building that he could not have built one more suitable for his manufacturing needs,” Hines said.
Redman will produce 6-volt battery powered ride on toys and believes they can source all of the raw products in the U.S. The battery itself is the most challenging. Redman will relocate its plastic molding business to Rogers, which makes the main body of these ride-on toys.
The toys made locally will feature characters from Disney and Marvel franchises including Disney Princess, Classics, Disney•Pixar and Spider-Man. Production should begin in early 2014. Redman is licensed by Marvel Characters B.V., and Redman produces Disney character ride-on toys for Wal-Mart under Wal-Mart’s license with Disney.
Simon said the response he and other Walmart officials are hearing from their supplier community about this initiative has been overwhelmingly positive.
“It is making economic sense. We continue to hear about smaller suppliers adding a few U.S. jobs here and there, but this is the first of we hope are several announcements for manufacturing onshoring,” Simon said.
He said this region like many others could become clusters for certain like types of manufacturing. For instance Redman requires plastic molding, which could open the door for others in that business. Or, when a textile company that makes socks comes back onshore, other garment companies could also cluster there because of shared sourcing power.
Grant Tennille, executive director for the Arkansas Economic Development Commission, said the state did give Redman a few incentives to move their manufacturing operation from Shanghai to the Natural State. Those incentives included $2 million that goes toward building and equipment costs for Redman, and the Arkansas Advantage 1% state tax credit on wages paid for five years. In addition, Redman will also get a sales tax rebate on manufacturing equipment purchases relating to its startup.
Tennille said the tax credits occur retroactively. Redman said the incentive package helped to seal the deal.
Tennille said there are plenty of other companies like Redman that have the relationship with Wal-Mart but have been outsourcing their manufacturing arm. Those are some of the companies the state is targeting for onshore efforts.
Raymond Burns CEO of Rogers Lowell Chamber of Commerce, said Monday’s announcement is symbolic of what is happening across the country as manufacturers across many segments are finding economic incentives to make their products in the U.S.
“We hope to see more of it here, that’s for sure,” Burns said.
Redman & Associates is a family-owned business founded in 1995. The company started as a consulting firm, and now has a diversified portfolio that includes production through all stages of product design, production, logistics, store planning, and into the hands of the consumer. The company produces Monster TRAX ride-on toy vehicles, Zumu three-in-one bike trailer/jogg
er/
strollers and a variety of six-volt ride on toys licensed through Disney.
SOURCE: The City Wire
Industry Expert: Economy Turning A Corner
A job-seeker, right, talks to a prospective employer at a job fair earlier this year at Prairie State College in Chicago Heights. Jeff Korzenik, chief investment strategist at Fifth Third Bank, said there was not a lot of hiring of young people during the recession, but that has changed. Their unemployment rate was above the national average but now it’s below.
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HOBART │ Manufacturing returning to the U.S., a housing and construction comeback and “getting junior out of the house” are some of the reasons the country is on an economic journey to normal, according to an industry expert.
On Wednesday at Avalon Manor, the Northwest Indiana Forum and Fifth Third Bank welcomed Jeff Korzenik, chief investment strategist at Fifth Third Bank, for an economic outlook and review.
Korzenik, a 27-year industry veteran and a frequent guest on CNBC’s “Closing Bell” program, said the economic downturn of 2008-09 might not have been “your grandfather’s recession, but it was your great- great-grandfather’s recession”
“The kind of financial disaster that we weathered in 2008 and 2009 used to occur in the United States every 10 or 12 years,” he said “But it primarily occurred in the 19th century and parts of the 20th century. Economists called it a financial panic. What was abnormal in ’08 and ’09 was that we had a 19th century recession.”
That said, Korzenik thinks we are turning a corner.
“There have been some structural changes in the U.S. workforce,” he said.
If you lose your job in a recession it takes you longer to get back to work, Korzenik said. Usually it takes 15 to 20 weeks on average for people to get back in the workforce but in this recession, people stayed out of work for 40 weeks or more.
“We’re starting now to get some resolution from this because we’re through the pipeline of people exhausting their unemployment benefits and making tough choices to return into the workforce,” Korzenik said. “This is the essence of the journey to normal.”
Housing and construction market is also on a comeback and the acceleration is continuing, Korzenik said.
Children of baby boomers are moving out of their parent’s homes. It was delayed during 2008-09 downturn. Korzenik called it “getting junior out of the basement.”
Some of those “juniors” may only be renting but others are buying homes. Korzenik also said there was not a lot of hiring of young people during the recession, but that has changed. Their unemployment rate was above the national average but now it’s below.
“This group has seen enormous gains,” he said.
Korzenik said another driver of economic growth is the reshoring of manufacturing in the United States. The days of sending jobs overseas is changing and makers of heavier items are moving back to the U.S. Korzenik said Whirlpool has opened its first manufacturing plant in the U.S. in 30 years.
“It’s important for the creation of new jobs,” he said. “Manufacturing jobs may not pay what they paid at their peak, but they still pay more than service sector jobs.”
Korzenik said manufacturing jobs have what Congress calls “a high multiplier effect,” which means they tend to create other jobs in the economy.
Additionally, there has been a profound energy revolution to extent that the U.S. has overtaken Russia as the largest energy producer of the world.
“Ten years ago this was unthinkable,” Korzenik said. “It’s one of the drivers of manufacturing because energy in the United States is cheaper.
Korzenik also talked about the movement to natural gas in vehicles – something that’s becoming widespread with trucking fleets across the country.
Despite the apparent journey to normal, Korzenik was reminded of the proverb “a man plans and God laughs” – which means things can go wrong. Those things include inflation risks, currency debasement and inflation.
Korzenik, a 27-year industry veteran and a frequent guest on CNBC’s “Closing Bell” program, said the economic downturn of 2008-09 might not have been “your grandfather’s recession, but it was your great- great-grandfather’s recession”
“The kind of financial disaster that we weathered in 2008 and 2009 used to occur in the United States every 10 or 12 years,” he said “But it primarily occurred in the 19th century and parts of the 20th century. Economists called it a financial panic. What was abnormal in ’08 and ’09 was that we had a 19th century recession.”
That said, Korzenik thinks we are turning a corner.
“There have been some structural changes in the U.S. workforce,” he said.
If you lose your job in a recession it takes you longer to get back to work, Korzenik said. Usually it takes 15 to 20 weeks on average for people to get back in the workforce but in this recession, people stayed out of work for 40 weeks or more.
“We’re starting now to get some resolution from this because we’re through the pipeline of people exhausting their unemployment benefits and making tough choices to return into the workforce,” Korzenik said. “This is the essence of the journey to normal.”
Housing and construction market is also on a comeback and the acceleration is continuing, Korzenik said.
Children of baby boomers are moving out of their parent’s homes. It was delayed during 2008-09 downturn. Korzenik called it “getting junior out of the basement.”
Some of those “juniors” may only be renting but others are buying homes. Korzenik also said there was not a lot of hiring of young people during the recession, but that has changed. Their unemployment rate was above the national average but now it’s below.
“This group has seen enormous gains,” he said.
Korzenik said another driver of economic growth is the reshoring of manufacturing in the United States. The days of sending jobs overseas is changing and makers of heavier items are moving back to the U.S. Korzenik said Whirlpool has opened its first manufacturing plant in the U.S. in 30 years.
“It’s important for the creation of new jobs,” he said. “Manufacturing jobs may not pay what they paid at their peak, but they still pay more than service sector jobs.”
Korzenik said manufacturing jobs have what Congress calls “a high multiplier effect,” which means they tend to create other jobs in the economy.
Additionally, there has been a profound energy revolution to extent that the U.S. has overtaken Russia as the largest energy producer of the world.
“Ten years ago this was unthinkable,” Korzenik said. “It’s one of the drivers of manufacturing because energy in the United States is cheaper.
Korzenik also talked about the movement to natural gas in vehicles – something that’s becoming widespread with trucking fleets across the country.
Despite the apparent journey to normal, Korzenik was reminded of the proverb “a man plans and God laughs” – which means things can go wrong. Those things include inflation risks, currency debasement and inflation.
SOURCE: NWI Times
It Takes More than Economics 101 to Compete With China
We have heard a great deal this year about manufacturing coming back to the United States. We hear about the diminishing wage gap in some Asian countries and the possibility of lower U.S. energy prices. In addition, a few small examples of goods currently made in China, but now being planned for U.S. manufacture, are pointed to as a harbinger of great things to come.
Written by: Ralph Gomory
Yet these discussions, as well as the reports and studies they often cite, are almost always purely economic cost analyses. They estimate future wages here and abroad, worker productivity and transportation costs, and they conclude that the manufacturing differences between the United States and Asia are diminishing. They then extrapolate these trends far enough into the future that going to Asia seems no longer worth the trip.
Non-market factors are given at most a minimal mention in many arguments that favor reshoring, as it is called, of Chinese manufactured goods. But China’s exchange rates, as we know, are set by its government, not by markets. The massive government subsidies of land, energy and technology, in addition to low- or no-cost loans, are barely mentioned. These are, however, the levers that have catapulted Chinese industries into global prominence in a very short span of years. And these government actions are not going away; if anything, they are increasing.
Americans are assured, based on flawed analysis, that when U.S. companies find it cheaper to make certain goods domestically, they will do so. What is overlooked in reaching that much-wished-for conclusion is that the Chinese, following the example of other Asian nations, simply do not allow important outcomes to be determined in that way.
China did not get to where it is today by allowing natural economic forces to decide the outcome. The reality is much closer to the exact opposite. An industry is targeted, and then the economic forces needed to obtain a dominant position — including subsidies, special tax rates, exchange rates and technology agreements — are put in place. This fundamental reality cannot be ignored.
One report I am particularly fond of, from the respected Boston Consulting Group, is powerfully titled “Made in America, Again.” The cover is a pleasure for any patriot to see: It is simply a large red, white and blue American flag with small figures unrolling the red stripes, while others check the stripes’ exact locations before fixing them into place. The cover graphically and dramatically suggests the glorious return of U.S. manufacturing.
However, what is inside the report is much less colorful but far more realistic. It concludes that if the United States maintains a “flexible” labor force and a good investment climate, it will become “increasingly attractive” for those who want to stop manufacturing goods in China that are consumed in the United States — attractive, that is, for those who, for one reason or another, find other countries in Southeast Asia unattractive.
This is the feeble manufacturing renaissance promised in the report. To get to this rather wishy-washy conclusion, all sorts of leaps of faith are required both in this specific report and in many similar analyses. One must accept that there will be double-digit yearly increases in Chinese wages. One must accept that American workers will remain more productive than Chinese workers. One must be willing to equate U.S. subsidies — few and far between and tiny as they are — with those employed by the Chinese government. And one must believe that the relatively few small manufacturing plants planning to move back to the United States show that forces are in place to close a yearly manufacturing trade gap measured today in the hundreds of billions of dollars.
But most of all, despite the evidence of recent history, there is a tacit assumption that the Chinese government would simply stand by and let these happy outcomes happen. This is unlikely; the Chinese government does not share our pure and simple faith in the unguided operation of markets.
That China adheres to its system is not surprising; its system has been working for it. What is more surprising is that our faith in our own system is so ingrained that we continue to believe in its benign results even in the absence of the free markets and free trade conditions on which those conclusions are based.
A real manufacturing renaissance in America — at least one based on reshoring from China — is not something we can expect. Forecasts that reach that much-desired conclusion by simply extrapolating cost analyses into the future are not realistic. There is far too much that China and other countries can do to shape the outcome. We would do better to consider what we can realistically do in today’s mercantilist world rather than continue to act as if we were living in a textbook world, a world shaped only by market forces.
About the writer:
Ralph Gomory
Research Prof. NYU, Pres. Emeritus, Alfred P Sloan Foundation, Former IBM SVP Science-Tech
Ralph Gomory
Research Prof. NYU, Pres. Emeritus, Alfred P Sloan Foundation, Former IBM SVP Science-Tech
Ralph Gomory was born May 7, 1929, in Brooklyn Heights, New York. He graduated from Williams College in 1950, studied at Cambridge University, and received his Ph.D. in mathematics from Princeton University in 1954. Gomory then served in the Navy (1954-57) and then was a Higgins Lecturer and Assistant Professor of Mathematics at Princeton before joining IBM’s newly formed Research Division in 1959 as a research mathematician.
In his student and graduate student years (Williams, Cambridge, Princeton), Gomory did research on nonlinear differential equations, but his years in the Navy turned his attention to the applied mathematics of operations research. Back at Princeton he obtained the first general cutting-plane algorithms, which established the field of integer programming. It remains an active area of research today.
At IBM Research in the early 1960’s, Gomory published papers with Paul Gilmore on the knapsack, traveling salesman and cutting-stock problems, and with T. C. Hu on flows in multi-terminal networks and continua. In the late 1960’s, he developed the asymptotic theory of integer programming and introduced the concept of corner polyhedra. In the early 1970’s, he collaborated with Ellis Johnson in investigating subadditive functions related to corner polyhedra that could also play a role in producing cutting-planes.
Gomory served as Chairman of IBM Research’s Mathematical Sciences Department from 1965-67 and 1968-70 during an important period of its growth and evolution. This period saw the beginning of Samuel Winograd’s work on limits of algorithms and of Benoit Mandelbrot’s work on fractals.
Gomory became Director of Research for IBM in 1970, with line responsibility for IBM’s Research Division. During his 18 years as Director of Research the Research Division made a wide range of contributions to IBM’s products, to the computer industry, and to science. The Zurich Research Laboratory did the work that resulted in two successive Nobel Prizes in physics, Yorktown Heights Research was the birthplace of what is now known as RISC architecture, and San Jose was the birthplace of the concept, theory and first prototype of relational databases.
Gomory, who had become the IBM Senior Vice President for Science and Technology retire
d f
rom IBM in 1989 and became President of the Alfred P. Sloan Foundation. During his tenure as President he led the foundation into a long list of fields relevant to major national issues. The foundation pioneered in the field of on-line learning supporting this work before there was even a public Internet, and then supported its growth to more than three million people taking courses for credit. They started the now widespread program of industry studies, and engaged a major program advocating a more flexible workplace. The foundation developed a novel and successful approach to the problem of producing minority PhD’s in scientific and technical fields. The foundation was early in perceiving the threat of bioterrorism and was active in that area for years before the events of 9/11. On the scientific side the foundation supported the widely recognized Sloan Sky Survey, which has made major contributions to the problem of dark energy and initiated a major worldwide effort to survey life in the oceans known as the Census of Marine Life. In December 2007, after 18 years as President, Gomory retired from the foundation and became a Research Professor at New York University’s Stern School of Business.
Gomory has served in many capacities in academic, industrial and governmental organizations. He was a Trustee of Hampshire College from 1977-1986 and of Princeton University from 1985-1989. He served on the President’s Council of Advisors on Science and Technology (PCAST) from 1984 to 1992, and again from 2001 to 2009. He served for a number of terms on the National Academies’ Committee on Science, Engineering and Public Policy (COSEPUP). He has recently joined STEP, the Board on Science Technology and Economic Policy of the National Academies.
Gomory has been a director of a number of companies including the Washington Post Company and the Bank of New York. He is currently a director of Lexmark International, Inc., and a small start-up company. He was named one of America’s ten best directors by Director’s Alert magazine in 2000.
Gomory has been elected to the National Academy of Sciences, the National Academy of Engineering, and the American Philosophical Society. He was subsequently elected to the Councils of all three societies. He has been awarded eight honorary degrees and many prizes including the Lanchester Prize in 1963, the Harry Goode Memorial Award of the American Federation of Information Processing Societies in 1984, the John von Neumann Theory Prize in 1984, the Medal of the Industrial Research Society in 1985, the IEEE Engineering Leadership Recognition Award in 1988, the National Medal of Science awarded by the President in 1988, the Arthur M. Bueche Award of the National Academy of Engineering in 1993, the Heinz Award for Technology, the Economy and Employment in 1998, the Madison Medal Award of Princeton University in 1999, the Sheffield Fellowship Award of the Yale University Faculty of Engineering in 2000, the International Federation of Operational Research Societies’ Hall of Fame in 2005, and the Harold Larnder Prize of the Canadian Operational Research Society in 2006.
While continuing his research on integer programming Gomory has written on the nature of technology development, research in industry, and industrial competitiveness, and on models of international trade involving changing technologies and economies of scale. He is the author, with Professor William Baumol, of the book Global Trade and Conflicting National Interests (MIT Press 2001).
