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Gene Ellis

After Bangladesh, Seeking New Sources - NYTimes.com - 0 views

www.nytimes.com/...adesh-seeking-new-sources.html

shared by Gene Ellis on 16 May 13 - No Cached
  • Dozens of impoverished countries make T-shirts and other very basic clothing. But only a few countries — really just China, Bangladesh, Vietnam, Indonesia and to some extent Cambodia and Pakistan — have developed highly complex systems for producing and shipping tens of thousands or even hundreds of thousands of identical, high-quality shirts, blouses or trousers to a global retailer within several weeks of receiving an order.
  • The clothing needs to be labeled correctly so that it travels smoothly through a large retailer’s distribution centers
  • The process requires formidable numbers of skilled workers who can oversee quality control as well as labeling and shipping of garments.
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  • Big retailers and fashion companies have repeatedly tried and failed to develop alternatives, experimenting in India, Africa and Latin America, only to run into infrastructure bottlenecks and shortages of skilled managers or workers.
  • India was not organized for large-scale, timely production,
  • Africa did not have enough workers with the right skills for high-volume labeling and shipping,
  • and Latin America did not have enough workers interested in operating sewing machines.
  • What may save Bangladesh from a sharp, immediate drop in export orders is simply that most Southeast Asian factories are already fully booked with orders from multinationals fleeing China’s ever-rising costs.
  • In Guatemala, the quality was excellent, he said, but, “They can’t handle big orders and they’re slow on delivery.”
  • “For this year, it’s impossible — we’re already full,”
  • Indonesia’s national training center for seamstresses — women make up 98 percent of the students — is here in Semarang, producing 12,000 graduates a year. But even that isn’t enough. Four factories with a combined employment of 30,000 are to open in the next year in Semarang, and many more factories are being built nearby.
  • “It’s going to take time, but it’s going to eventually filter out all over the place,” he said. “It’ll take two or three years.”
  • Newly opened factories have started competing for scarce seamstresses by offering free meals and free health insurance
  • Dozens of impoverished countries make T-shirts and other very basic clothing. But only a few countries — really just China, Bangladesh, Vietnam, Indonesia and to some extent Cambodia and Pakistan — have developed highly complex systems for producing and shipping tens of thousands or even hundreds of thousands of identical, high-quality shirts, blouses or trousers to a global retailer within several weeks of receiving an order.
  • He said that he and a couple of other suppliers of elite retail chains always worried about Bangladesh’s reliance on high-rise factories,
Gene Ellis

Why Apple Got a 'Made in U.S.A.' Bug - NYTimes.com - 0 views

bits.blogs.nytimes.com/...-apple-got-a-made-in-u-s-a-bug

apple u s location economics mncs

shared by Gene Ellis on 11 Dec 12 - No Cached
  • Today, rising energy prices and a global market for computers are changing the way companies make their machines.
  • Hewlett-Packard, which turns out over 50 million computers a year through its own plants and subcontractors, makes many of its larger desktop personal computers in such higher-cost areas as Indianapolis and Tokyo to save on fuel costs and to serve business buyers rapidly.
  • “It’s important that they get an order in five days,
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  • there is a pride for the local consumer to see a sticker that says ‘Made in Tokyo,’
  • Cook is looking to give Apple some good news.
  • A Dell factory in Winston-Salem, N.C., for which Dell received $280 million in incentives from the government, was shut in 2010 (Dell had to repay some of the incentives).
  • In 1998, President Bill Clinton visited a Gateway Computer factory outside Dublin to cheer the role of American manufacturers in the rise of a “Celtic Tiger” in technology.That plant was shut in 2001, when Gateway elected to save costs by manufacturing in China
  • As cheap as a Chinese assembly worker may be, an emerging trend in manufacturing, specialized robots, promises to be even cheaper. The most valuable part of the computer, a motherboard loaded with microprocessors and memory, is already largely made with robots. People do things like fitting in batteries and snapping on screens.
  • The labor cost on a notebook, which is about 4 to 5 percent of the retail price, is only slightly higher than the cost of shipping by air. Soon even that is likely to change because of the twin forces of lower manufacturing costs from automation and higher transportation costs from rising global activity.
  • Intel, which makes most of the processors, has plants in Oregon, Arizona, New Mexico, Israel, Ireland and China.
  • Many other chip companies design their own products and have them made in giant factories, largely in Taiwan and China. Computer screens are made in Taiwan and South Korea, for the most part.
  • The special glass used for the touch screens of Apple’s iPhone and iPad, however, is an exception. It comes primarily from the United States.
  • More recent products, laptops and notebook computers, were in many cases originally assembled in China, and they are still largely made there. So are most smartphones and tablets. Every week, H.P. sends a group of cargo containers filled with notebooks to Europe.
  • That plant was shut in 2001, when Gateway elected to save costs by manufacturing in China. Dell, which made its mark by developing lean manufacturing techniques in Texas, closed its showcase Austin factory in 2008 as part of a companywide move to manufacturing in China. A Dell factory in Winston-Salem, N.C., for which Dell received $280 million in incentives from the government, was shut in 2010 (Dell had to repay some of the incentives).
Gene Ellis

Steel Industry Feeling Stress as Automakers Turn to Aluminum - NYTimes.com - 0 views

www.nytimes.com/...detroits-aluminum-diet.html

steel industry stress aluminum feeling

shared by Gene Ellis on 25 Feb 14 - No Cached
  • Steel Industry Feeling Stress as Automakers Turn to Aluminum
  • These are headed for Mexico, to Navistar’s stamping plant there.Continue reading the main story
  • Now, they are trying to respond, making lighter, stronger steel in a bid to retain one of their most important customers, the automakers.
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  • chief executive of Severstal North America, the United States subsidiary of Russia’s Severstal Group, which now owns the Rouge steel operations.
  • At Severstal’s Dearborn factory, for example, carmakers including Ford and others account for 70 percent of sales,
  • The shift to aluminum is gaining momentum. Automakers are under increasing pressure to meet strict new fuel-economy standards by 2025
  • United States Steel has invested $400 million in a joint venture with Kobe Steel of Japan to make advanced high-strength steel in a Leipsic, Ohio, factory expected to produce 500,000 tons annually.
  • Inside Severstal’s steel mill on a cold January day, hissing heavy machinery removed oxides from steel sheets, reducing their thickness to the equivalent of five human hairs.
  • For nearly a century, Ford’s River Rouge factory and its neighboring steel mill have worked in close harmony
  • Steel makers argue that they still have advantages in price — aluminum can cost as much as three times more — and flexibility, both for the manufacturer and the mechanic who will be fixing the car.“When you build a mass-produced vehicle, you really need to think about the consequences of the supply chain and repair and insurance costs,” Mr. Dey said.
  • new federal fuel-efficiency standards that will require a fleetwide average of 54.5 miles per gallon by 2025, a significant boost from the roughly 25 m.p.g. that vehicles average today.
  • “Sometimes there is a push from the aluminum side, and they win over with a particular model, and steel tends to be the comeback kid, with more innovation,” said Felix Schuler, a Munich-based partner in the Boston Consulting Group’s metals and mining practice.
  • What seems certain is that ordinary steel is likelier to lose out to its new and improved cousin than to aluminum, Mr. Schuler said.
  • Novelis is investing nearly $550 million to upgrade plants in Oswego, N.Y., and Nachterstedt, Germany, and to build a new factory in Changzhou, China, to triple its capacity from a year ago to 900,000 tons annually.
  • Alcoa, the country’s biggest aluminum producer, is investing about $670 million in its Iowa, Tennessee and Saudi Arabia facilities.Continue reading the main story
  • “Henry Ford was a control freak, and he wanted to control as much of the manufacturing as possible,” Mr. Casey said. “He made the steel, he made the glass, he made the tires.”
  • Gene Ellis on 25 Feb 14
     
    "said"
Gene Ellis

Ford Pays a High Price for Plant Closing in Belgium - NYTimes.com - 0 views

www.nytimes.com/...-plant-closing-in-belgium.html

factory closing Belgium

shared by Gene Ellis on 09 Jan 14 - No Cached
  • In Genk, a city of 65,000 people, many of them descendants of Italians, Turks or Moroccans who came decades ago to dig coal, an estimated 10,000 jobs will be lost at the end of next year when Ford closes the factory.
  • And Genk was among the European factories with the most excess capacity.
  • In 2012, Ford lost $1.8 billion in Europe for the full year.
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  • The relocation of some production to Spain has already created 1,300 new jobs in a region that is in far worse economic shape than the area around Genk, although Ford said labor costs in Valencia are not significantly lower.
  • Like many in Genk, Mr. Maurina and his wife, Sabrina Gattanella, who have two young boys, are descendants of Italians who migrated to the region decades ago to work in the coal mines. But the last mine closed in the 1980s.
Gene Ellis

The Insourcing Boom - Charles Fishman - The Atlantic - 1 views

www.theatlantic.com/...3

shared by Gene Ellis on 26 Jan 14 - No Cached
  • Both Bowman and Calvaruso knew something about “lean” manufacturing techniques—the style of factory management invented by Toyota whereby everyone has a say in critiquing and improving the way work gets done, with a focus on eliminating waste. Lean management is not a new concept, but outside of car making, it hasn’t caught on widely in the United States. It requires an open, collegial, and relentlessly self-critical mind-set among workers and bosses alike—a mind-set that is hard to create and sustain.
  • Levi Strauss used to have more than 60 domestic blue-jeans plants; today it contracts out work to 16 and owns none, and it’s hard to imagine mass-market clothing factories ever coming back in significant numbers—the work is too basic.
  • If the people who design dishwashers sit at their desks in one building, and the people who sell them to retailers and consumers sit at their desks in another building, and the people who make the dishwashers are in a different country and speak a different language—you never realize that the four screws should disappear, let alone come up with a way they can.
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  • All that said, big factories have a way of creating larger economies around them—they have a “multiplier effect,” in economic parlance
Gene Ellis

Perils in Trade Deals When Factories Close and Towns Struggle - NYTimes.com - 0 views

www.nytimes.com/...g-factory-still-resonates.html

towns struggle

shared by Gene Ellis on 18 May 15 - No Cached
  • Perils in Trade Deals When Factories Close and Towns Struggle
Gene Ellis

Where Apple Products Are Born: A Rare Glimpse Inside Foxconn's Factory Gates | Re/code - 0 views

recode.net/...-inside-foxconns-factory-gates

shared by Gene Ellis on 07 Apr 15 - No Cached
  • Where Apple Products Are Born: A Rare Glimpse Inside Foxconn’s Factory Gates
  • The 1.4 mile-square Longhua complex, with its 140,000 employees, speaks to Shenzhen’s identity as a global manufacturing hub. The city, once a fishing village in the Pearl River Delta region, was designated as a special economic zone in 1980. Its population swelled from 30,000 to more than 10 million as rural workers migrated to the fast-growing city in search of opportunity.
  • Though Woo notes, by way of context, that 12 suicides per one million employees is lower than the U.S. suicide rate of 13 per 100,000
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  • It’s a nod to the average age of the Foxconn employee, which is 18 to 25
  • Woo said some 1.5 million students have completed their trade education at the school since 2007.
  • Foxconn has raised its base wage from a reported $153 a month to a starting salary of $306 for a 40-hour week — with pay increasing to $402 after a three-month probationary period.
Gene Ellis

Suntech Power on Financial Brink - NYTimes.com - 0 views

www.nytimes.com/...-power-on-financial-brink.html

shared by Gene Ellis on 13 Mar 13 - No Cached
  • Suntech announced Tuesday that it was closing its factory in Goodyear, Arizona, at the cost of 43 jobs there. The factory put aluminum frames and electrical junction boxes on solar cells imported from China, so that the fully assembled solar panels would qualify for “Buy American” programs.
  • But China’s approach to renewable energy has proved ruinous, both financially and in terms of trade relations with the United States and the European Union. State-owned banks have provided $18 billion in loans on easy terms to Chinese solar panel manufacturers, financing an increase of more than tenfold in production capacity from 2008 to 2012. This set off a 75 percent drop in panel prices over the same period, which resulted in Chinese companies’ losing as much as $1 for every $3 in sales last year.
  • he United States has responded with tariffs of about 40 percent on solar cells and solar panels from China,
Gene Ellis

Ceiling Collapse at Shoe Factory in Cambodia Kills 2 - NYTimes.com - 0 views

www.nytimes.com/...ctory-in-cambodia-kills-2.html

shared by Gene Ellis on 16 May 13 - No Cached
    • Gene Ellis
      Gene Ellis on 16 May 13
       
      Why do you think this is a Hong Kong-based company?
  • “We visually always inspected them, but you need true engineers,” he said.
    • Gene Ellis
      Gene Ellis on 16 May 13
       
      Noe that he says that they always visually inspected the sites... are they the owners?  the managers?  To what degree are they responsible?  And to whom?
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  • Multinationals have been looking to Cambodia as one of several countries that could be alternatives to Bangladesh. Cambodia has some of the lowest pay in Asia, with workers earning $120 a month in salary and benefits before overtime. That compares with just $37 in Bangladesh.
  • Bruce Rockowitz, the group president and chief executive at Hong Kong-based Li & Fung, one of the world’s largest sourcing companies,
Gene Ellis

Car Factories Offer Hope for Spanish Industry and Workers - NYTimes.com - 0 views

www.nytimes.com/...nish-industry-and-workers.html

car offer hope spanish industry workers

shared by Gene Ellis on 28 Dec 12 - No Cached
  • Four years of economic turmoil and the euro zone’s highest jobless rate have made the Spanish labor market so inviting — an estimated 40 percent less expensive than those of Europe’s other biggest car-making countries, Germany and France — that Ford and Renault recently announced plans to expand their production in Spain.
  • Some experts say such gains in competitiveness and investment are exactly what Spain needs for its economy to recover and to remove any doubts about whether the country can remain in the euro union.
  • Because Spain no longer has its own currency to devalue as a way to lower the price of its exports, it is having to find its competitive advantage in lower labor costs. Many economists have argued that societies cannot survive such painful downward adjustments.
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  • That is the lowest level since 1972.
  • Its trade deficit has been shrinking — down 28 percent for the first 10 months of this year,
  • “From 2008, we suddenly realized that we had lost a lot of competitiveness and needed to work very hard to improve things, particularly in terms of labor issues and logistics,
  • Over all, Spain’s unit labor costs — a measure of productivity — are down 4 percent since 2008, according to Eurostat, the European statistics agency.
  • In a related measurement, the most recent Eurostat data put Spain’s average hourly labor cost at 20.60 euros which was well below Germany’s 30.10 euros and France’s 34.20 euros.
  • Unlike most other Spanish industries, car manufacturing has no sectorwide collective bargaining agreement with unions. As a result, each carmaker has been able to adjust working hours with its own employees, in response to changing demand.
  • In return, the companies have promised workers that they will not be subjected to the huge layoffs made in other parts of the economy,
  • I don’t want to give lessons to anybody. But at such a delicate moment for Spain, showing that we believe in flexibility and consensus has certainly been highly valued by the carmakers.”
  • The car sector employs 280,000 people in Spain, including parts suppliers, and accounts for a tenth of the country’s economic output. About 85 percent of the industry’s workers are on long-term contracts.
Gene Ellis

Where Factory Apprenticeship Is Latest Model From Germany - NYTimes.com - 0 views

www.nytimes.com/...latest-model-from-germany.html

learning apprenticeship germany us

shared by Gene Ellis on 09 Jan 14 - No Cached
  • European companies are major employers in the state, with more than 28,000 workers for German companies alone.
  • School officials were wary of allowing a private company to dictate the curriculum.
  • Richard Morris, vice president for assembly and logistics, identifies one of the company’s biggest problems: a serious shortage of medium-skilled workers who specialize in mechatronics, or repairing robots and metal presses when they break down and operating the computers that dot the paint shop, body shop and assembly shop. Not only do these jobs pay better than typical assembly-line positions, they also open up avenues for advancement.
Gene Ellis

The Insourcing Boom - Charles Fishman - The Atlantic - 0 views

www.theatlantic.com/...309166

insourcing manufacturing industry

shared by Gene Ellis on 26 Jan 14 - No Cached
  • The Insourcing Boom
  • But in 2011, Appliance Park employed not even a tenth of the people it did in its heyday.
  • By 1955, Appliance Park employed 16,000 workers. By the 1960s, the sixth building had been built, the union workforce was turning out 60,000 appliances a week,
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  • On February 10, Appliance Park opened an all-new assembly line in Building 2—largely dormant for 14 years—to make cutting-edge, low-energy water heaters. It was the first new assembly line at Appliance Park in 55 years—and the water heaters it began making had previously been made for GE in a Chinese contract factory.
  • In the 1960s, as the consumer-product world we now live in was booming, the Harvard economist Raymond Vernon laid out his theory of the life cycle of these products,
  • Amana, for instance, introduced the first countertop microwave—the Radarange, made in Amana, Iowa—in 1967, priced at $495. Today you can buy a microwave at Walmart for $49 (the equivalent of a $7 price tag on a 1967 microwave)—and almost all the ones you’ll see there, a variety of brands and models, will have been shipped in from someplace where hourly wages have historically been measured in cents rather than dollars.
  • Even as recently as 2000, a typical Chinese factory worker made 52 cents an hour.
Gene Ellis

U.S. Textile Plants Return, With Floors Largely Empty of People - NYTimes.com - 0 views

www.nytimes.com/...-textile-factories-return.html

shared by Gene Ellis on 29 Oct 13 - No Cached
  • The problems in India were cultural, bureaucratic and practical.
  • Mr. Winthrop says American manufacturing has several advantages over outsourcing. Transportation costs are a fraction of what they are overseas. Turnaround time is quicker. Most striking, labor costs — the reason all these companies fled in the first place — aren’t that much higher than overseas because the factories that survived the outsourcing wave have largely turned to automation and are employing far fewer workers.
  • In 2012, the M.I.T. Forum for Supply Chain Innovation and the publication Supply Chain Digest conducted a joint survey of 340 of their members. The survey found that one-third of American companies with manufacturing overseas said they were considering moving some production to the United States, and about 15 percent of the respondents said they had already decided to do so.
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  • Between 2000 and 2011, on average, 17 manufacturers closed up shop every day across the country, according to research from the Information Technology and Innovation Foundation.
  • yes, it means jobs, but on nowhere near the scale there was before, because machines have replaced humans at almost every point in the production process. Take Parkdale: The mill here produces 2.5 million pounds of yarn a week with about 140 workers. In 1980, that production level would have required more than 2,000 people.
  • But he was frustrated with the quality, and the lengthy process.
  • “We just avoid so many big and small stumbles that invariably happen when you try to do things from far away,” he said. “We would never be where we are today if we were overseas. Nowhere close.”
  • Time was foremost among them. The Indian mill needed too much time — three to five months — to perfect its designs, send samples, schedule production, ship the fabric to the United States and get it through customs. Mr. Winthrop was hesitant to predict demand that far in advance.
  • There were also communication issues.
  • like moving half-finished yarn between machines on forklifts.
  • The North American Free Trade Agreement in 1994 was the first blow, erasing import duties on much of the apparel produced in Mexico.
Gene Ellis

The iEconomy - Nissan's Move to U.S. Offers Lessons for Tech Industry - NYTimes.com - 0 views

www.nytimes.com/...lessons-for-tech-industry.html

nissan u s offers lessons tech

shared by Gene Ellis on 29 Oct 13 - No Cached
  • Japanese and other foreign companies account for more than 40 percent of cars built in the United States, employing about 95,000 people directly and hundreds of thousands more among parts suppliers.
  • The United States gained these jobs through a combination of public and Congressional pressure on Japan, “voluntary” quotas on car exports from Japan and incentives like tax breaks that encouraged Japanese automakers to build factories in America.
  • The government could also encourage domestic production of technologies, including display manufacturing and advanced semiconductor fabrication, that would nurture new industries. “Instead, we let those jobs go to Asia, and then the supply chains follow, and then R&D follows, and soon it makes sense to build everything overseas,” he said. “If Apple or Congress wanted to make the valuable parts of the iPhone in America, it wouldn’t be hard.”
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  • Last year, Brazilian politicians used subsidies and the threat of continued high tariffs on imports to persuade Foxconn — which makes smartphones and computers in Asia for dozens of technology companies — to start producing iPhones, iPads and other devices in a factory north of São Paulo.
  • “Closing our border is a 20th-century thought, and it will only weaken the economy over the long term,”
Gene Ellis

U.S. Offshore Wind Farm, Made in Europe - NYTimes.com - 0 views

www.nytimes.com/...-wind-farm-made-in-europe.html

shared by Gene Ellis on 19 Feb 15 - No Cached
  • On Germany’s coast, for example, an estimated $1.3 billion went into revitalizing ports and factories to serve the industry, creating about 10,000 jobs. But demand frequently drops off when projects stall, at times leaving factories in coastal towns like Cuxhaven, on Germany’s North Sea, sitting idle with hundreds of workers laid off.
  • But a major setback came around 2009, when G.E. decided to back away from the offshore wind business, saying it was still too expensive to compete with land-based wind power.
Gene Ellis

Where Factory Apprenticeship Is Latest Model From Germany - NYTimes.com - 0 views

www.nytimes.com/...latest-model-from-germany.html

shared by Gene Ellis on 19 Feb 15 - No Cached
  • Working with five local high schools and a career center in Aiken County, S.C. — and a curriculum nearly identical to the one at the company’s headquarters in Friedrichshafen — Tognum now has nine juniors and seniors enrolled in its apprenticeship program.
  • Since 2008, the number of apprentices has fallen by nearly 40 percent, according to the Center for American Progress study.
  • Some 330 types of apprenticeships are accredited by the government in Berlin, including such jobs as hairdresser, roofer and automobile electronics specialist. About 60 percent of German high school students go through some kind of apprenticeship program, which leads to a formal certificate in the chosen skill and often a permanent job at the company where the young person trained.
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  • In South Carolina, apprenticeships are mainly funded by employers, but the state introduced a four-year, annual tax credit of $1,000 per position in 2007 that proved to be a boon for small- to medium-size companies.
  • “The European influence is huge,”
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