Yet strength of ISM index might be overstated, some say
U.S. manufacturers are still expanding at a rapid pace, unlike most foreign rivals.
Manufacturers in the U.S. barely slowed down in November even as major competitors around the world continued to scale back production. Read more
Yet again another food scandal is among us as the U.S. Department of Agriculture recently agreed to allow four chicken processing plants in China to raise and slaughter their chickens in the U.S., export them to China for processing, and them ship them back to the U.S. These chickens will then be sold on every grocery store shelf in the United States with no country of origin labeling. What’s worse is that U.S. inspectors will not be on site at the processing plants in China before the processed chicken will be shipped to the U.S. Again, chicken from China labeled “Made In America”?
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Manufacturers of products made with recycled materials can’t claim offerings were “Made In USA” unless they can show that the materials originated domestically, according to the Federal Trade Commission (FTC) making it the “Made in USA” claims tricky for recycled materials. Read more
Ford Adding 850 New Jobs To Build 2015 F-150. Ford announced today it will add 850 new jobs in Dearborn to build the all-new 2015 F-150 pickup that is the automaker’s most advanced pickup in 66 years.
The new hires will be sprinkled among the various facilities that make up the Ford Rouge Center in Dearborn. About 500 of the jobs will be at the Dearborn Truck Plant that assembles the pickup with three crews rotating over two shifts each day. Nearly 300 workers are for Dearborn Stamping and more than 50 will work at Dearborn Diversified, which also does stamping.
Ford is not taking new applications. The automaker has identified the new hires from its large pile of applications, and some have already begun training. All will be clocking in over the next couple months.
“This is one of the proudest moments I have had in my life,” said Jimmy Settles, head of the Ford department of the UAW, and a third-generation Rouge complex worker.
The $2 billion spent to revitalize the Rouge complex that consists of five plants makes it possible to do things never before done in the auto industry, said Bruce Hettle, vice president of North America manufacturing, at an event this morning announcing the additional employees.
- About 500 of the jobs will be at the Dearborn Truck Plant that assembles the pickup on three shifts. Nearly 300 workers are for Dearborn Stamping and more than 50 will work at Dearborn Diversified which also does stamping.
The Dearborn Truck Plant just finished gutting and rebuilding its body shop to make the 2015 model with an aluminum body instead of the steel bodies used since 1948. Pre-production models are running through the body shop now and are scheduled to run down the full line starting Oct. 20, but that date might be moved up to this week.
The carefully orchestrated launch is on track, said Joe Hinrichs, Ford president of the Americas. Production vehicles will start “in a matter of weeks,” but Hinrichs would not say when Job One will be. Trucks will start arriving in showrooms by the end of the year.
The plant runs with three crews but more workers are needed because this next-generation pickup has more features and technology. And building a body from aluminum instead of steel requires all new processes — such as adhesives instead of welding — as well as new manufacturing equipment.
Additionally, some of the stamping work has been brought to the complex, work that had been done by suppliers or other Ford facilities, said Bernie Ricke, president of UAW Local 600, who is pleased with the additional jobs.
Ford has pledged to quickly get production up to full speed because of the sheer volume and importance of the truck. Ford sold 763,400 F-Series last year and analyst Adam Jonas of Morgan Stanley estimates Ford’s trucks generate more than 90% of the automaker’s global auto profits.
Ford built up its inventory of outgoing 2014 models to bridge the gap until there are enough 2015 models to satisfy dealers. That will take a while because just as Dearborn Truck hits its production stride, the Kansas City plant in Claycomo, Mo., will go down for six weeks in the first quarter of 2015 to rebuild its body shop to switch to the new truck.
Jonas has written a number of reports expressing concern about the impact of the changeover on Ford’s profitability, but Hinrichs said today the launch is going according to plan, processes are being validated and people are being trained. In the end, Wall Street will be won over by the vehicle itself, he said of the truck that sheds 700 pounds, which will improve its fuel economy.
As part of the national contract negotiated with the UAW in 2011, Ford pledged to create 12,000 hourly jobs in the U.S. by 2015. The automaker has already exceeded that commitment: Last month’s announcement of a second shift of 1,200 workers at the Kansas City plant to make the Transit commercial van brought the total to more than 14,000. More than 3,000 have been added in 2014. Factoring in salaried workers as well, Ford has hired more than 23,000 employees since 2011.
The signs of health are not going unnoticed by the UAW, which has a new contract to negotiate next year.
“It’s always nicer negotiating with a company making lots of money than a company in distress,” Ricke said. Priorities for a new contract in 2015 include economic gains, looking after retirees and continued investment in jobs, he said.
“Ford’s announcement is more positive news for the citizens of Michigan and a further sign of the comeback of Michigan, manufacturing and the auto industry,” said Michigan Gov. Rick Snyder in a release.
Ford will have added almost 5,000 jobs in southeastern Michigan since 2011 including:
■ 850 at Ford Rouge Center including the Dearborn Truck Plant
■ 1,800 at Michigan Assembly Plant
■ 1,700 at Flat Rock Assembly Plant
■ 250 at Rawsonville Plant
■ 240 at Van Dyke Transmission Plant
■ 150 at Livonia Transmission Plant
Jobs are slowly making their way back into the U.S.A. Do you see this happening in your area? Let us know your thoughts in the comments below.
The assembly line at a New Balance factory in Boston in 2012. Associated Press
New Balance—the iconic U.S. sneaker maker—has long marched to its own drummer on “Made in USA” labels. Read more
Lincoln Logs, the popular building toy created nearly a century ago by a son of architect Frank Lloyd Wright, is coming home to the U.S. Read more
Training shoes, the last part of U.S. military uniforms that isn’t required to be 100 percent U.S.-made and -sourced, could soon go all-American. How New Balance could be set to profit.
An “Assembled in the USA” stamp is seen at the side of a box containing a 32-inch television set in the warehouse of Element Electronics, in Winnsboro, South Carolina. Element’s 315,000-square-foot plant in South Carolina has six assembly lines making 32- and 40-inch TVs that are now available in all of Walmart’s more than 4,000 U.S. Stores. REUTERS/Chris Keane
Walmart has pledged to buy an additional $250 billion in US-made products. But finding quality, low-cost US made goods is proving a challenge. How Walmart is acting as a catalyst for ‘Made in the USA’ manufacturing.
Picture Eugene Hoshiko, File/Associated Press
U.S. manufacturing becoming low cost over the past decade compared with factories in China, Brazil and most of the world’s other major economies.
So says a new private study, which found that rising wages and higher energy costs have diminished China’s long-standing edge over the United States. So has a boom in U.S. shale gas production. It’s reduced U.S. natural gas prices and slowed the cost of electricity.
The Boston Consulting Group is issuing a report on its study of manufacturing costs in the 25 biggest exporting countries. Only seven of those countries had lower manufacturing costs than the United States did this year. And since 2004, U.S. manufacturers have improved their competitiveness compared with every major exporter except India, Mexico and the Netherlands.In 2004, for example, manufacturing in China cost 14 percent less than manufacturing in the United States. By this year, the China advantage had narrowed to 5 percent. If the trends continue, Boston Consulting found, U.S. manufacturing will be less expensive than China’s by 2018.
Over the past decade, labor costs, adjusted to reflect productivity gains, shot up 187 percent at factories in China, compared with 27 percent in the United States. The value of China’s currency has risen more than 30 percent against the U.S. dollar over the past decade.
The higher Chinese currency made goods produced in China and sold abroad comparatively more expensive. And foreign goods became comparatively more affordable in China.
Chinese electricity costs rose 66 percent, more than double the United States’ 30 percent increase. The start of large-scale U.S. shale gas production in 2005 has helped contain electricity bills in the United States and neighboring Canada and Mexico.
China, too, has reserves for shale gas. But it will need years to develop them.
“This is not something you can turn on overnight,” said Justin Rose, a partner at Boston Consulting and co-author of the study.
Brazil has lost even more ground than China. In 2004, manufacturing was 3 percent cheaper in Brazil than in the United States. By 2014, Brazil was 23 percent more expensive. Brazilian factories didn’t improve efficiency enough to offset rising energy and labor costs.
The countries where manufacturing was cheaper than in the United States are Indonesia, India, Mexico, Thailand, China, Taiwan and Russia.
Australia was the most expensive country for manufacturing. Its costs were 30 percent higher than those in the United States.
The survey doesn’t include transportation costs, which vary depending on where goods are shipped. Several countries also face obstacles not captured by Boston Consulting’s manufacturing cost index — from corruption to inefficient government bureaucracies.
SOURCE: Washington Post
