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From the Shop Floor — The Week in Manufacturing (11/8/2013)

Writing in Bloomberg, author and blogger Gary Shilling says “Let’s not overstate the U.S. manufacturing revival.”

MoneyNews cites a study from that says U.S. manufacturing is running a race against a biological clock.

Fortune, writing about the same graying of the manufacturing workforce, calls the imminent retirement and departure of so many Boomers from our sector the “coming brain drain.”

Minnesota Public Radio offers this nice piece on the comeback of American manufacturing.

The head of Omron European, while offering a subtle but meaningful variation on the world “global,” tells his peers in the electronics industry, “Welcome to the new global.”

U.S. manufacturing output increased at its fastest clip in 2 1/2 years this past month.

Business Insider says something that we’ve been saying in this space for over a year, and something that must be viewed as good news for our sector of the economy but slightly disturbing news for the economy as a whole:  manufacturing jobs in this country remain at a 60-year low, even as manufacturing itself has returned to pre-crisis profits.

Apple is opening a manufacturing facility in, of all places, Arizona.

Business Week says that while China’s manufacturing is up, some weaknesses remain.

The Wall Street Cheat Sheet says U.S. manufacturing ended up in the recent crisis bruised but not broken.
The Mail Tribune, which covers Southern Oregon, says that U.S. manufacturing shrugged off the recent government shutdown.

Caterpillar’s CEO, speaking at a conference at George State University in Atlanta, said U.S. manufacturers are being hindered globally by high taxes, onerous regulations and a slowly decaying infrastructure, especially in a number of domestic ports.









On Jobs, Workers and the American Manufacturing Renaissance

Not too long ago I read an amazing (and frankly uplifting) story in the New York Times about the textile and apparel industries returning to the U.S. in the form of new (and renewed) small-to-midsize companies that just a few years ago had been off-shoring much if not all of their work.  Unfortunately, according to the story, the resurgence in those two industries, a phenomenon that remains concentrated in the Atlantic Coast, has come without a corresponding increase in American jobs.

In fact, manufacturing jobs are but a fraction of what they used to be only a few years ago.  Why?  One word:  automation.

A radical decrease in the amount of manpower required to make textiles and clothing products in this country, combined with increasing labor costs abroad, has leveled the playing field considerably for American manufacturing firms.

Toss in variables like worker safety in the third world, ever-increasing shipping costs and other logistical considerations, ease of supply chain management, and of course, the growing demand for “Made in the U.S.A.” products, and what you have is a perfect storm of circumstances, all of which have led to this new “renaissance” in manufacturing in the U.S.

There’s just one problem.  This renaissance remains in jeopardy as worker skills in this country continue to erode and as more and more of those handful of new manufacturing jobs out there remain unfilled for a lack of qualified candidates.

But before I go any further down that path, let me go back to this boom in the textile industry.  It is critical to understand that this revolution has been a product of supply and demand and has been entirely market driven.  It has not been because of good ol’ boys from the Carolinas started waving their red, white and blue banners and got all star-spangled in their decision-making.

No, this re-shoring of those industries was fueled by market factors that led managers and owners to a series of inevitable decisions.  In fact, as one conspicuously successful factory owner told the Times, “When I framed the business, I wasn’t saying, ‘From the cotton in the ground to the finished product, this is going to be all American-made,’ ” he said. “It wasn’t some patriotic quest.”

To the contrary, it was because global competition and the demands of the marketplace led to dramatic changes in those two industries, and it is those changes in things like factory air quality, production capability and plant efficiency that have made the textile and apparel industries stronger and far more profitable today.

And that competition for jobs and those world market influences are exactly what the American worker needs to come to understand and needs to adapt his thinking to.  These days, if you are an unemployed or hopeful factory/plant worker, you are not going to land a job in manufacturing simply because you know someone, or because you’re a U.S. citizen, or because you’ve filled out the necessary paperwork and maintained a clean record.

You’re going to get hired because, just like those textile and apparel firms in the Times story, you’ve made the kinds of enhancements to your own personal set of skills that have made it financially prudent for a manufacturer to hire you.

It is supply and demand taken down to its most-basic, most-personal level.

That’s why, as industry leaders and as people invested in the long-term economic viability of American manufacturing, we cannot leave it up to the individual worker to enhance his or her skills.  Some of the most motivated and forward-thinking, of course, will take it upon themselves to go back to school or get the training they’ll need to service, build and repair the sophisticated machinery that will drive the factories of tomorrow.  But we must also do what we can to systematically instill in our industries and job markets the kind of training/worker development programs needed today to keep us strong in the short term and will not put at risk all we’ve earned back over the past decade.

My take on the manufacturing job/renaissance dynamic, which remains complex and multi-dimensional, is maybe best summed up by a single paragraph from the Times story, which I found at a point deep into the piece.

“Now, companies that want to make things here often have trouble finding qualified workers for specialized jobs and American-made components for their products. And politicians’ promises that American manufacturing means an abundance of new jobs is complicated — yes, it means jobs, but on nowhere near the scale there was before, because machines have replaced humans at almost every point in the production process.”


From the Shop Floor — The Week in Manufacturing (10/10/2013)

Sam Asano, a first generation immigrant whose many inventions, among them the portable  fax machine and the data tablet, apparently led MIT to dub him one of the ten most important inventors of the 20th Century, writes that the U.S. needs a strong manufacturing base.

The Associated Press writes that investment in the Mexican auto industry has become a major challenge for China.

Here’s an interesting Q&A with Susan Brennan, VP of Manufacturing at Nissan’s much-heralded and highly productive auto plant in Smyrna, GA.

A new $470 million manufacturing center and lab may be opening on the campus of the State University of New York at Albany.

A Chinese floor manufacturer will soon be opening a new $15 million, 40K sq. ft. manufacturing facility in Danville, VA, which will mean more than 100 new jobs for the local economy.

One blogger opines why, with manufacturing contracts and global pricing competitiveness as the central reasons, China hopes to dump the U.S. dollar.

One industry exec takes on Obamacare’s perceived threat to U.S. manufacturing and asks, it is real or it is manufactured?

U.S. cutting tool consumption rose another 1.3% in August.

One report says that the U.S. plastics industry continues to boom.

Meanwhile, U.S. manufacturing technology orders shot up almost 5% in August.

It was announced this week that the State of Illinois, a number of the state’s manufacturers and key educators are going to be pooling their resources to help train interested U.S. military veterans for careers in manufacturing.

A group calling itself American Made Matters urges consumers to bring back American manufacturing one purchase at a time.

Great Lakes Cheese of Ohio is building a new $100 million processing plant in Tennessee, which will mean some 200 new local jobs.

We chanted this mantra many times, but here’s one more story about how automation is propelling U.S. manufacturing forward.

China is becoming increasingly concerned and weighed in this past week on America’s ongoing political gridlock and repeated calls to cap our debt ceiling.  As might be expected, one North Carolina manufacturer took exception to those comments and returned volley by criticizing China for what he calls the country’s hypocrisy and its “phony standards.”

If you think China is fast becoming a fading force in global manufacturing, Forbes profiles at least one billionaire who would beg to differ.

The U.S./China Manufacturing Symposium, which had been slated for next month, has been pushed back to a to-be-determined date in March, yet another victim of the government shutdown.

Mike Collins, the author of Saving American Manufacturing, offers these nine vital signs which point to the resurgence of the U.S. industrial sector.

And finally, this one bit a great news; one recent survey says that anticipated manufacturing hiring reached a five-year high this past month, as more and more manufacturers say they’ll be hiring in the coming months to keep up with demand.