Manufacturing
The president has touted the resurgence of manufacturing in America in two SOTU speeches. He has stated among other things that our manufacturing sector is adding jobs, 620,000 new manufacturing jobs over the last four years, for the first time since the 1990s. This resurgence is fueled by abundant natural gas production, which the President stated in a trip to the Marcellus Shale region outside Pittsburgh on January 30th. At this event, President Obama and US Steel CEO Mario Langhi provided some much-needed context into how the steel manufactured there is used in our daily lives. More specifically, the steel made at this facility is being used to manufacture pipelines needed to bring natural gas to our homes. And while the steel industry manufactures and provides pipelines, the natural gas industry has supplied steel plants with cheap natural gas, which keeps production costs down. Interesting that the President takes credit for increased manufacturing that largely comes from natural gas derived from fracking which he and his supporters abhor via pipelines that he does not approve. He says his administration has launched two hubs for high-tech manufacturing. One is in Youngstown, Ohio and is focused on 3-D printing and one focused on energy-efficient electronics in Raleigh, North Carolina. He has announced the next two advanced manufacturing hubs. One is in the Detroit area, and the other is in Chicago, Illinois. All these hubs are partnerships that bring together companies and universities to develop cutting-edge technology, train workers to use that technology, and then make sure that the research is translated into real-world products made by American workers. Sound good? Well it is supposed to sound good. But doe sit make a difference or just spend money? We will have to wait and see.
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The U.S. South Rises as a Manufacturing Hub

9/6/14
from Bloomberg Businessweek,
9/4/14:

Made In Memphis

Just before the recession hit in 2007, Electrolux (ELUXA:SS), the Swedish home-appliance maker, was trying to decide what to do about an aging plant outside Montreal. The building was more than 100 years old and the line of high-end stoves and ovens produced there needed a refresh. The factory’s 1,300 union workers earned around $20 an hour. Rather than sink more money into the old plant, Electrolux decided to move where it could operate more cheaply. In Europe, it was shifting work from Sweden, England, and Denmark, to Hungary, Poland, and Thailand, where workers are paid less. In North America, Electrolux settled on another low-cost region: the American South. Alabama, North Carolina, and Tennessee—along with Mexico—all competed for the plant, offering generous incentive packages. The winner was Tennessee, which together with the city of Memphis and Shelby County, assembled an offer that, according to Electrolux, was worth $182 million, including public infrastructure funds, tax breaks, and, crucially, worker training. The company committed $100 million to build the plant. In December 2010, Electrolux announced that a site just eight miles from Graceland would be home to its most advanced factory. “We don’t just grab at every project that comes through here,” says Memphis Mayor A C Wharton Jr. “But this one was particularly appealing.” Manufacturing is slowly returning to the U.S.—and much of the action has been below the Mason-Dixon line. With its low tax rates and rules that discourage unionization, the South has for decades been seen as business-friendly, which helped the region attract service companies that rely on low-skilled workers, such as call centers and warehouses. Now industries such as autos and aerospace are moving in.

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