Always on the look out for slivers of good news; perhaps the administration's goal is to lower the value of the US peso to the point that the country will return to its roots as low wage, very cheap place to locate manufacturing ;)- This is a town manufacturing once deserted -- and is now reviving. On a blustery January afternoon in 2003, nearly 900 workers at the town's second-largest manufacturer, a cookware factory, switched off their machines and were told the company was moving operations to Mexico.
- Today, many of those workers are back at the same plant making pots and pans for new bosses. At a factory next door, workers are churning out energy-efficient industrial light fixtures. Across town, one company is using a former shipyard to produce 250-foot-tall steel towers used for wind turbines.
- Sons and daughters who had abandoned the town are returning with business degrees and breathing new life into old factories. Among them is Tim Martinez, who left Manitowoc to study economics and business in Milwaukee. He bought the pots-and-pans plant, reopened the aluminum foundry and later brought in Brazilian cookware maker Tramontina to restart the assembly lines.
- "America got tired of manufacturing," Mr. Martinez says. "But it remains a great way to make money." A rugged cadre of producers like these in Manitowoc have survived a decades-long shakeout of American manufacturing -- and are now leading a largely overlooked revival.
- The economic forces working in favor of U.S. manufacturing include a weaker dollar, which is helping drive sales for exporters and their suppliers. Rising transportation costs are encouraging companies to buy and produce more goods closer to home. An infrastructure and mining boom abroad is boosting orders for the huge cranes made by Manitowoc Co., one of the town's oldest companies. At the same time, rising labor costs in some countries are starting to make outsourcing less attractive. [Econ 101 - all themes we've been pointing to]
- To be sure, American manufacturing has deep problems. Inflation and a sharp slowdown in the U.S. economy are hurting a wide array of producers. Nationally, only about 10% of the U.S. work force is currently employed in manufacturing. That's down from a peak of about 42% in the early 1940s, and about 18% in the 1980s.
- Last year, the U.S. exported about $1 trillion worth of goods, up 39% from 2002, when the dollar started its decline.
- The comeback has been helped in part by what Manitowoc doesn't make: Few companies here are tied to cars or home construction, two ailing sectors. Instead, its diversified base churns out parts for Israeli smart bombs, the ice-cream machines found at most Dairy Queens, and the pipes that carry oil to shore from offshore platforms. Not to mention malt for beer, sausages, and air horns for ships. (you can never go wrong servicing sausages hah)
- Like many global producers, Manitowoc Co. sets prices in Europe in euros. Each time the dollar drops, the price tag on a crane sold there translates into more dollars. With demand for cranes red hot, the company says it has no incentive to offer discounts. Last year, Manitowoc saw its sales grow 37% to $4 billion. The company recently reported its backlog of orders for cranes had climbed to $3.3 billion, up 72% from the same time a year ago.
- As the largest private employer in town, Manitowoc Co.'s success has rippled through the local economy. Manufacturing tends to have a larger economic "footprint" than other sectors, meaning strong orders for one company foster strong orders for its suppliers.
[May 21: Who is the World's Largest Merchandise Exporter? Not China. Or the U.S.]
