'A small bit of good news'

June 29, 2011

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Among the headlines on msnb.com today was one that stood out as some very positive news for manufacturing: 'Manufacturing companies returning to U.S.' The linked article title, “Surging China costs forces some U.S. manufacturing companies back home," had me fist pumping a la Maria Sharapova at Wimbledon.

The article began by describing a recent morning at Master Lock's 90-year-old factory in Milwaukee where "a cluster of machinery was whirring, every 2 seconds spitting out one of the combination locks used by American high schoolers as the company readied for the back-to-school rush.

"The seven-day-a-week, three-shift-per-day whirlwind of activity marked a change from two years ago, when the machine normally ran for just a few hours a day because the unit of Fortune Brands Inc. was ordering more padlocks from suppliers in China instead of making them." 

Why the turnaround?

Efficiency reportedly was the primary reason for moving production from the world's low-cost workshop back to a unionized U.S. factory where wages are six times higher than in China. "The machine in Milwaukee is about 30 times as fast as the Chinese factories the company had been buying from, more than making up for the difference in wages." 

Quoted in the article was Bob Rice, a senior vice president at Master Lock, who said, "I can manufacture combination locks in Milwaukee for less of a cost than I can in China." 

This factory has added about 78 workers over the past few years and now has a workforce of 440. The article suggested that this is "a small bit of good news for the long-suffering U.S. manufacturing sector, which shed about 2 million jobs, or some 14.6 percent of its employees, in the last recession. It has not recovered since and now employs 11.7 million people, down 34,000 from the recession’s official end in June 2009." 

The article also mentioned General Electric Co. and Boeing Co. as other companies boosting production at U.S. factories. Among the reasons cited for driving the shift were "rising wages in parts of Asia, surging fuel prices, and the complexity of transporting goods across the Pacific." 

Whether moving jobs back home from China, initiating new production, or ramping up to handle increased business, companies across the U.S. are adding workers.

Alcoa's aerospace hub in the Quad Cities, the setting for President Obama's Tuesday speech on manufacturing jobs, has hired 237 workers since December, reported the desmoinesregister.com. "We're very successful right now," said Joe Hesse, plant finishing manager, who supervises work on the thick sheets of aluminum that make airplane wings, railroad cars, ship hulls and gas containers.

As reported on daytondailynews.com, Dayton Progress Corp., West Carrollton, Ohio, "has hired more people lately than it has in decades—about 100 in the past year—and plans to hire more as orders continue to climb." 

Robert Hedrick, marketing director who has been with the company for 41 years, was quoted as saying, "I’ve never seen hiring like this." 

Alliant Techsystems Inc. has nearly finished its $100 million aircraft component manufacturing plant in Clearfield, Utah. The plant, which will serve as the headquarters for ATK Aerospace Structures, is expected to create about 800 high-paying jobs over the next 20 years and generate almost $1 billion in wages. 

Work is coming back, factories are hiring, and I'm primed to fist pump every time I hear one of these small bits of good news. Taking lessons from the tennis pros.

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