manufacturing resurgence: is it happening?
The answer is “Absolutely yes.” My 40 years of experience convinces me that the next 10 years will be some of the best years for manufacturing, specifically for the U.S. foundry in- dustry. One of the most positive signs is that people and our governments are once again talking about the importance of manufacturing to our economy.
According to an article in the January 19, 2011 “Wall Street Journal:”
“As the economy recovered and big companies began upgrading old factories or building new ones, the number of manufacturing jobs in the U.S. last year grew 1.2%, or 136,000, the first increase since 1997, government data
show...The economists’ projections for this year—call- ing for a gain of about 2.5%, or 330,000 manufacturing jobs—won’t come close to making up for the nearly six million lost since
1997...After a steep slump during the recession, manufacturing is “the shining star of this re- covery,” says Thomas Runiewicz, an economist at IHS. “Manufacturing is going to be a significant source of job growth over the next decade,” says Mark Zandi, chief economist at Moody’s Analytics. He says U.S. manu- facturers that survived the brutal 2008-09 recession are now very competitive, with much lower labor costs and debt burdens, and so can afford to expand. While they will keep building factories overseas to address demand in emerging markets, they also will invest in U.S. plants, Mr. Zandi says. He expects manufacturing job growth to average about 2% a year through 2015.”
Likewise, the January 14, 2011 “Kiplinger Letter” reports that 76% of cars sold in North American were made in North America, up 2 points from 2009.
Reshoring export Harry Moser believes that, “Reshoring is bringing back work, parts or tools that will finally be used in North America.” His easy-to-use, total cost of ownership tool (
www.reshoringmfg.com) uses 30 factors from freight to end-of-life costs to come up with the true cost of offshore purchasing.
Even the foundry industry is starting to purchase new equip- ment. In the past year we have seen more and more stories such as these, which headlined in “Modern Casting” magazine:
· LA Aluminum Casting, Hayden, Idaho, adds perm mold and machining capacity and announces in Jan 2010. Cost $1 million.
· GM Defiance, Defiance, OH, announces $59 million investment in precision sand casting in Feb. 2010.
· GM announces in April 2010 another $115 million investment for blocks and crankshafts to Defiance plant, plus $111 million in Bedford, Indiana for cylinder heads.
International Journal of Metalcasting/Fall 2011
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Chrysler announces $43 million investment in Kokomo plants, including Kokomo casting, for transmission components in May 2010. In June, the firms announced $300 million for same plants, some to casting.
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In June 2010, John Deere, Waterloo, Iowa, an- nounces $100 million investment into foundry for molding and other investments.
· URV facility in Michigan for wind castings an- nounced in July 2010. Greenfield Foundry to pro- duce 80,000 tons.
· ·
Lethbridge Iron Works, Lethbridge, Canada, com- petes $9 million molding expansion in August 2010.
In August 2010, Chrysler announces $27 million investment in Etocicoke casting plant in Toronto for front and rear cross members.
· Chromalloy—New investment casting plant, $27 million, opened in 2010.
· · · · · ·
Manitowoc Grey Iron Foundry, Manitowoc, WI, completes $0.5 million energy efficiency invest- ments in August 2010.
In October 2010, Waupaca announces $36.5 mil- lion investment in Tell City, Indiana Plant for melt and automation improvements.
In November 2010, Fort Recovery Industries an- nounces $4.5 million expansion at new die casting plant in Portland, Indiana.
In December 2010, Chrysler announced another $843 million expansion at Kokomo plants, includ- ing casting.
In December 2010, GM announces another $12 investment in Defiance, Ohio plant for block and crankshaft production.
In December 2010, Chromalloy announces an ad- dition of a $5 million ceramic core room to a new casting plant.
Most of these are very large companies, but the smaller foundries, according to CISA members, are requesting quotes on new equipment purchases, which should soon turn into improvement projects.
Breakthrough not incremental
An advantage that Japan had after World War II and that China has today is that new plants are being built that take advantage of the best and most productive engineering avail- able. “Industry Week/MPI Census of U.S. Manufacturing” reported that 50% of the plants in China are less than 10 years old (22% are less than 5 years old) while in the U.S., only 10% are less than 10 years old and 70% are more than 20 years.
More than 350 years ago, our foundry industry was responsi- ble for the breakthrough in manufacturing in North America. In 1647, the Saugus Iron Works started as the new world’s
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