Manufacturing Monday: Week of 11.17.08
by johnny venom, Mon Nov 17, 2008 at 10:03:28 AM EST
Greetings ladies and gentlemen and welcome to a new installment of Manufacturing Monday. Now I would like to do something a tad different this week. You see today we get two important economic indicators released. So, instead of waiting a whole week for me to reprise them here, I would go ahead and write about then today! I will still go over last week's indicators, but figured you deserve to get something more up to date as well. The numbers get released around 9:30 Eastern, so they will be covered first, then last week's stuff.
Beyond the Numbers section, this week we'll be covering Green Manufacturing again. We haven't touched this in a while, what with all the GM related business. Yet there have been some very interesting developments in the green collar world. So before you, for your pleasure, is some stuff that may or may not put a smile on your face. Either way, it looks as if, thankfully, we are turning a new leaf (sorry, couldn't help it) on manufacturing!
This morning we received mixed or perhaps I should say "interesting" figures today. First the Empire State Manufacturing Survey, which is a study conducted with 175 New York state executives in manufacturing industry. Any figure below 0 is considered negative operating conditions for the sector. The latest numbers reflect the current economic malaise afflicting the country. For November, the survey came in at - 25%, which was lower than the previous month's figure of - 24.6%. Still things could have been worse, as the consensus range was between - 40% and - 14%. The survey tends to reflect conditions in other mid-Atlantic states like Pennsylvania, indeed figures for the survey covering the latter tend to go in tandem with New York.
The other two figures released today were Industrial Production and Capacity Utilization Rate, which are often released together. Industrial Production, an index that measures the rate of stuff coming out of our factories or mines, came in at a surprising positive number. For the month of October, we saw a 1.3% increase in output in our nation's factories. This contrasts to September's contraction of 2.8%. Consensus for October was a - 3% to a fraction above zero but under 1%. Perhaps this is the mark of a recovery, but I'm not too sure on that. The only thing I can think of is that the sudden jump reflects a return to production in Boeing following the closure of the Machinists strike. Overall conditions still point to a downward trend in our economy.
Capacity Utilization, which simply means how much of our available industrial resources we are using, came in flat. Like the previous month, the Cap Util' numbers came in 76.4%. The range was between 75.5 and 77.7%.
Last week we got the International Trade and Import Export Prices. To no one's surprise, the latest figures reflect a drop in demand for imports. Our trade deficit "improved" (I'll be honest, it ain't really an improvement until I see that number omit a minus sign) compared to the previous figure. Now really quick, the International Trade number is one of those delayed month deals, so the figure you get now reflects September and not October. So it's one of those rear-view mirror indicators. The latest came in at - $56.5 Billion, that means we imported that amount more than we exported. The previous month (August) was - $59.1 Billion. One thing that helped in shrinking the deficit has been the drop in the price of oil. I suspect that October's deficit number to shrink as well when it's reported in December.
Finally, finishing off our Numbers section, we have Import & Export Prices. This is pretty self-explanatory, figures show an increase (or decrease) of the price what's coming in or leaving our shores. Export prices of our goods continued their decline, coming in at - 1.8% for October. This reflects the deflationary pressures manufacturers are facing. On the other side import prices also declined dramatically, continuing September's 3% drop, imports for October fell another 4.7%. Now please keep this in mind, when they say "Imports", this also includes petroleum. Since July/August, oil has been on a downward swing falling from about $150/barrel to below $60.
The return of Made in Massachusetts?
We start off our green manufacturing theme with some very interesting, and I almost dare say, good news from our friends in the Bay State! Massachusetts seems to becoming a starting ground for various green collar/alt energy developments. The Journal for New England Technology is reporting, for example, that a new factory for the production of fuel cells has opened up and creating 700 jobs. But it gets more interesting, as that is only the start of things!
Once upon a time, "Made in Massachusetts" was a familiar slogan. But with the rise of the technology and biotechnology sectors, many products became "innovated in Massachusetts" but made elsewhere.
This year, however, even as economic instability has forced some technology companies to execute layoffs, the clean-tech industry has been building new production and manufacturing facilities at a rapid pace. With three local clean-tech companies launching new, multi-million dollar facilities this year and a number of smaller production plants being built, it seems the green technology movement may be bringing manufacturing back to the Bay State.
Last week, Cambridge-based Great Point Energy Inc., a developer of a clean coal gasification process, announced the details of a new pilot-scale facility at East Coast power utility Dominion Resources Inc.'s Somerset research facility. While the plant is expected to take 12 months to complete, when all is said and done, the $25 million plant will add 100 jobs to the region, executives said.
- excerpt from "Green manufacturing jobs sprouting in Mass.", Masshightech.com, 2008.
And if clean coal isn't your thing, as mentioned a fuel cell company has started up. Also in development or already in operation is a solar energy company.
Add to those projects the well-documented Evergreen Solar Inc. manufacturing plant, which opened last July in Devens and which eventually will bring 700 jobs to the area-- along with a second such plant for Evergreen planned in the near future -- and you have more than 1,000 new manufacturing jobs over the next two years from just three projects.
- excerpt from "Green manufacturing jobs sprouting in Mass.", Masshightech.com, 2008.
The article then goes on to highlight how the state is also seeing the development of ancillary industries to support the solar power sector. One particular point that has lead to the growth, they highlight, is the state's rebate program which has helped spur growth in demand. I ask, what if we were to implement such measures nationally?
I know in Germany, they have a similar program for homes. Now please correct me if I'm wrong here, but from what I can gather, homeowners get a subsidy of some sort to put up solar panels on their homes. That this was also the start of other similar initiatives for businesses, to go more along an alternative energy plan. I see no reason why we cannot endorse similar measures to get homes more "off the grid" per say.
Staubli likes Duncan, South Carolina
David Anderson and his fantastic blog site, The Green Jobs Report, is reporting that Swiss machinery and robotics concern, Staubli will be opening up a new facility in the town of Duncan, South Carolina. The company, which has divisions on 5 continents, is an old line Swiss firm dating back over 100 years in the textile industry is now into electronic components and robotics (they still maintain a textile division). Yet it should be noted that the site is also home to an already existing sales division for the company.
Staubli, a Switzerland-based company, recently announced plans to create 30 to 50 new green manufacturing jobs in Duncan, South Carolina.
The jobs will be at a new manufacturing facility that will produce electrical systems for the solar power industry. Production is slated to begin by the middle of next year.
- excerpt from "Staubli To Create New Green Manufacturing Jobs In Duncan, South Carolina", The Green Jobs Report, 2008.
For the upstate town, which has a poverty rate that is one-fifth of the population, the expansion is a major plus. The town also also seen expansion of another firm, BP Barber, a Columbia-based civil engineering firm and one of the oldest in the Southeastern United States, has also began expansion in that town. This are looking up for the town of Duncan!
When dead factories ARISE from their graves
Alternet has a very interesting article about what to do when old factories are decommissioned and torn. Now frankly, I wish they would simply replace the factory with a new one in sign of expanded industrial operations. But we can't always have what we want. Yet the closure of a plant should not be, as the group highlighted in this article, the end of the world for blue collar folks.
Indeed, the closure of a plant could entail it's reincarnation into a new type of industrial place. A chance and investment in transforming blue-collar jobs into green-collar jobs. That is what the Alliance to Reindustrialize for a Sustainable Economy (ARISE) hopes to accomplish.
Yet something unusual is in the works that could change the future of this 140-acre manufacturing site and convert it into a model for green manufacturing. A coalition of the local UAW 879, McAllister University students, and affordable housing and environmental groups have formed the Alliance to Reindustrialize for a Sustainable Economy (ARISE) to design a green manufacturing site. The ARISE project is currently being considered by the Minnesota Legislature under Senate File 607 as a way to transition workers into a mixed-use facility for green manufacturing.
ARISE is re-envisioning how people look at industry, which historically has collided with the environmental movement. Their reindustrialization plans serve as an opportunity for industry to play a key role in the green economy.
"It is becoming increasingly clear to people in the union movement that our job security is dependent upon the new energy economy," states Hinkle. "If you're about family sustaining jobs, you have to connect global warming solutions and jobs otherwise you're going to have neither."
- excerpt from "How Closing Manufacturing Plants Can Be Transformed into Community-Saving Business Ventures", Alternet, 2008.
I will tell you why I find this fascinating. Here we have a possible blue print to provide the foundation of new industries. One need only look on a map of America (or Canada, particularly Ontario or Quebec) and find cities and townships hit hard by factory closures. Folks who have worked there for years, or just started but (unfortunately) at the wrong time, still have skills and experience for industrial work. Too many times, we have forsaken our industrial heritage. where entire industrial parks have been demolished and uprooted in favor of new shopping centers or residential planning areas littered with "McMansions." Currently, near me we used to have the Revell-Monogram factory which used to build those toy model kits that everyone loved. A year or so ago the place was demolished (the work I suspect going to China) and a new "condo park" was built in its place. Suffice it to say, the place is an eyesore in a bad location and barely enough units have been sold to keep the developer solvent (well that's what I've been hearing).
Yet here we have plans on encouraging capital development in new green manufacturing firms. Initiatives to retraining pertaining to a relavent industrial field versus something entirely different. Area rehabilitation programs to deal with past environmental destruction. Not to mention the maximization of usage of existing facilities still deemed useful. In a way, it's "industrial recycling."