Made-in-USA label pays off for investors

April 1, 2013 by Leave a comment

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Adam Shell, USA TODAY

NEW YORK — The benefits of the Made-in-the-USA marketing tag now apply to stocks as well as shoes, SUVs and software.

How so? With Europe hobbled by debt, white-hot China cooling and emerging markets slowing, stocks of U.S. companies that get most of their revenue from U.S.-based sales are performing better than companies that do 50% or more of their sales abroad, where things aren’t going as well.

The part of the world where a company makes most of its money can be the difference between a great investment and an OK one. In the past 12 months, U.S. stocks that generate all sales at home are up an average of 18.6%, vs. a gain of 6.2% for American firms that get more than half their revenue from abroad, Bespoke Investment Group says.

“A major theme of 2013 has clearly been a preference for U.S.-centric stocks,” says Paul Hickey, Bespoke’s co-founder. Why? “The U.S., relative to the rest of the world, is the strongest economy.”

That trend helped drive the Standard & Poor’s 500 index to an all-time closing high Thursday and a 10% first-quarter gain.

Domestically focused companies are also sporting better earnings growth, as well as benefiting from inflows of capital from foreign investors that view the U.S. as a haven, Hickey says.

One of Wall Street’s biggest winners this year is media subscription service Netflix, which gets less than 3% of its sales outside the U.S., says S&P Dow Jones Indices. Netflix shares are up 104%. In contrast, tech player Qualcomm, which gets nearly 97% of revenue from abroad and recently warned of slowing growth in Asia, is up 8.2%.

 Nearly half, or 46%, of sales of companies in the S&P 500 occur overseas, says Howard Silverblatt, an analyst at S&P Dow Jones Indices.

Analysts also see positives in the All-American story, as they’ve been issuing more positive earnings revisions than negative ones in the past four weeks.

The U.S. market, and particularly, domestically focused names, have held up better than foreign stock markets recently following the “Cyprus Surprise,” the latest bailout in the eurozone to spook global investors. Also driving the better performance is the spate of better-than-expected economic data this month, which prompted Barclays to raise its first-quarter U.S. GDP estimate to 2.6% from 1.6%.

While U.S. shares have performed better than a broad index of foreign stocks for more than two years, the outperformance has been particularly acute since late 2012, when the U.S. averted a fiscal crisis and election-related political gridlock weighed on sentiment.

“Once the ‘fiscal cliff’ negotiations were settled, U.S. stocks rebounded and haven’t looked back,” Hickey says.

 

source: 
http://www.usatoday.com/story/money/markets/2013/03/31/american-centric-stocks-sport-big-gains/2022159/

Filed under Aerospace, Automotive, Business, COOL Country of origin labeling, Currency Manipulation, Made in USA Tagged with , , , , ,

Will shale gas decimate China’s toy makers?

March 29, 2013 by Leave a comment

reuters

By Clyde Russell Reuters

LAUNCESTON, Australia (Reuters) – Such is the impact of the shale gas revolution in the United States that it’s quite possible that babies born today will no longer play with plastic dolls and cars made in China.

It’s almost become a fait accompli that China is the world’s factory, but the early warning signs that this may be changing are starting to show.

The advent of cheap natural gas in the U.S. is threatening to displace expensive naphtha in the production of petrochemicals, the key building blocks for plastics, synthetic fibres and solvents and cleaners.

While the shale gas boom is certainly no longer a secret, up to now its main impact has been in displacing coal in power generation in the U.S., and making inroads as both a heating and transport fuel.

While the U.S. is planning to export some of its shale bounty as liquefied natural gas, in effect it is already exporting more energy in the form of coal, which has helped keep Asian prices soft even in the face of record Chinese and Indian imports.

The same sort of dynamic is likely to start hitting the Asian petrochemical sector in the next few years, as U.S. output ramps up on the back of cheap natural gas and producers from India to China struggle to compete given their reliance on oil-derived naphtha.

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US Swipes at China for Hacking Allegations

March 28, 2013 by Leave a comment

chinese

The U.S. has taken its first real swipe at China following accusations that the Beijing government is behind a widespread and systemic hacking campaign targeting U.S. businesses.

Buried in a spending bill signed by President Barack Obama on Tuesday is a provision that effectively bars much of the federal government from buying information technology made by companies linked to the Chinese government.

It’s unclear what impact the legislation will have, or whether it will turn out to be a symbolic gesture. The provision only affects certain non-defense government agency budgets between now and Sept. 30, when the fiscal year ends. It also allows for exceptions if an agency head determines that buying the technology is “in the national interest of the United States.”

Still, the rule could upset U.S. allies whose businesses rely on Chinese manufacturers for parts and pave the way for broader, more permanent changes in how the U.S. government buys technology.

“This is a change of direction,” said Stuart Baker, a former senior official at the Homeland Security Department now with the legal firm Steptoe and Johnson in Washington. “My guess is we’re going to keep going in this direction for a while.”

In March, the U.S. computer security firm Mandiant released details on what it said was an aggressive hacking campaign on American businesses by a Chinese military unit. Since then, Treasury Secretary Jacob Lew has used high-level meetings with Beijing officials to press the matter. Beijing has denied the allegations.

Congressional leaders have promised to push comprehensive legislation that would make it easier for industry to share threat data with the government. But those efforts have been bogged down amid concerns that too much of U.S. citizens’ private information could end up in the hands of the federal government.

As Congress and privacy advocates debate a way ahead, lawmakers tucked “section 516″ into the latest budget resolution, which enables the government to pay for day-to day operations for the rest of the fiscal year. The provision specifically prohibits the Commerce and Justice departments, NASA and the National Science Foundation from buying an information technology system that is “produced, manufactured or assembled” by any entity that is “owned, operated or subsidized” by the People’s Republic of China.

The agencies can only acquire the technology if, in consulting with the FBI, they determine that there is no risk of “cyberespionage or sabotage associated with the acquisition of the system,” according to the legislation.

The move might sound like a no-brainer. If U.S. industry and intelligence officials are right, and China is stealing America’s corporate secrets at a breathtaking pace, why reward Beijing with lucrative U.S. contracts? Furthermore, why install technical equipment that could potentially give China a secret backdoor into federal systems?

But a blanket prohibition on technology made by the Chinese government may be easier said than done. Information systems are often a complicated assembly of parts manufactured by different companies around the globe. And investigating where each part came from, and if that part is made by a company that could have ties to the Chinese government could be difficult.

Depending on how the Obama administration interprets the law, Baker said it could cause problems for the U.S. with the World Trade Organization, whose members include U.S. allies like Germany and Britain that might rely on Chinese technology to build computers or handsets.

But in the end, Baker says it could make the U.S. government safer and wiser.

“We do have to worry about buying equipment from companies that may not have our best interests at heart,” he said.

———

Follow Anne Flaherty on Twitter at https://twitter.com/AnneKFlaherty.

Also Read

 

Source: 
http://news.yahoo.com/us-swipes-china-hacking-allegations-193407762.html

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Hotels bet guests will favor furnishings made in USA

March 15, 2013 by Leave a comment

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Montague Furniture

By:Barbara Delollis USA Today

When you walk into a hotel in the U.S. today, you’ll see many items – chairs, draperies, lamps – that were made in China, Vietnam, Malaysia or elsewhere overseas.

But that’s gradually changing, hotel designers and furniture makers tell Hotel Check-In.

There’s a small but growing trend among hotels to buy more items from local, regional or U.S. vendors.

Hotel owners, developers and designers are increasingly deciding it’s worth it, even if they pay a little extra for a U.S. product.

Why? There’s time and risk involved with ordering items from overseas, plus showcasing locally made goods can give the hotel a patriotic or community-minded spin.

Examples:

  • The Hyatt Regency Minneapolis recently finished a $25 million revamp that used “Made in America” as its central theme. More than three-quarters of the items purchased for the renovation came from the USA, says designer Michael Suomi of New York-based Stonehill & Taylor. The guest bathroom counter tops, for instance, feature granite quarried locally and purchased from a century-old Minnesota company.
  • The Ritz-Carlton Lodge, Reynolds Plantation, in Greensboro, Ga., is in the midst of redecorating to give guests a lighter, more modern look with many U.S.-made products, says Megan Ybarra of the Dallas-based interior design firm Duncan Miller Ullman. The hotel found wall coverings from Kentucky, guestroom carpet from Georgia, and a Texas metalwork firm was hired to custom-make the metal branches that form the base of guestroom ottomans, she says.
  • The InterContinental Chicago’s 477-room renovation emphasizes locally-sourced materials and furniture, says Dan Egan, the hotel’s sales and marketing director. Guest rooms contain drapery from Union, Ill., headboards from Jasper, Ind., wall covering from York, Penn., and room signage in hallways from McCook, Ill.
  • Montague, a 20-year-old guestroom furniture maker, last April invested in its first-ever factory – and it’s located in North Carolina, says Misty Delbridge, who runs the company’s U.S. division. It made sense, because hotel owners are increasingly seeking products made here and the factory was in danger of closing down, she says. A Hilton hotel in Texas, for instance, is having the company prepare two model rooms for a renovation – one outfitted with furnishings made in Vietnam and the other with furnishings made in the U.S., she says. Montague still has about 70% of its products produced in China and Malaysia.

No. 1 priority: Put heads in beds

Another factor driving the growth in U.S.-sourced products is hotels’ rush to renovate in as small a window as possible so that rooms can stay filled with paying customers, says Delbridge. It’s especially true in New York City, where some hotels can be sold out or almost sold out most nights of the year.

“If the cost (to purchase U.S.-made furniture) is 10% higher and the hotel can gain revenue back in six to eight weeks, they’re all about it because then they could have a ‘Made in America’ story and gain revenue,” Delbridge says. “These companies wouldn’t do it just for the story. There’s got to be an advantage in it for them.”

Hotel renovations are faster paced than building new hotels from scratch, notes Ybarra, who worked on the Ritz-Carlton Lodge project. It typically takes about 18 months to renovate a hotel, which since the recession has been the most common activity among hoteliers, vs. about three years to build a new one, she says.

“Our clients are willing to pay an extra dollar or two to not have the hassle of waiting,” Ybarra says. There’s also the risk of complications, she says, citing long waits at U.S. Customs and a time when pirates took over containers filled with items for a Turks and Caicos hotel.

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Made in the USA: More Consumers Buying American

March 7, 2013 by Leave a comment

Chris Rank | Bloomberg | Getty Images

A curious thing is happening among American shoppers. More people are taking a moment to flip over an item or fish for a label and ask, is it “Made in the USA?”

Walmart, the nation’s largest retailer, earlier this year announced it will boost sourcing of U.S. products by $50 billion during the next 10 years. General Electricis investing $1 billion through 2014 to revitalize its U.S. appliances business and create more than 1,500 U.S. jobs.

Mom-and-pops are also engineering entire business strategies devoted to locally made goods — everything from toys to housewares. And it’s not simply patriotism and desire for perceived safer products which are altering shopping habits.

The recession, and still flat recovery for many Americans, have created a painful realization. All those cheap goods made in China and elsewhere come at a price — lost U.S. manufacturing jobs. A growing pocket of consumers, in fact, are connecting the economic dots between their shopping carts — brimming with foreign-made stuff — and America’s future.

They’re calculating the trade-offs of paying a little more for locally-made goods.“The Great Recession certainly brought that home, and highlighted the fact that so many jobs have been lost,” said James Cerruti, senior partner for strategy and research at consulting firm Brandlogic. “People have become aware of that.”

“‘Made in the USA’ is known for one thing, quality,” said Robert von Goeben, co-founder of California-based Green Toys. All of their products from teething toys to blocks are made domestically and shipped to 75 countries.

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Stalling European factories and slowing China leave world economy looking to America

March 1, 2013 by Leave a comment

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By Jonathan Cable and Koh Gui Qing | Reuters

European manufacturing appeared no closer to recovery last month while growth in Asia cooled, according to business surveys and trade data on Friday that pointed to ongoing weakness in global demand.

Purchasing managers’ reports from the United States due later, however, are expected to show growth picking up in the world’s largest economy, after a weak fourth quarter.

In China, factory growth slowed to multi-month lows. Sluggish domestic demand added pressure to already depressed foreign sales, two separate purchasing manager indexes (PMI) showed.

Worryingly for European Central Bank policymakers balancing the needs of 17 different economies, euro zone reports painted a picture of ongoing divergence, with a dire performance in France offsetting a return to growth in economic powerhouse Germany.

Markit’s Eurozone Manufacturing PMI was unchanged at January’s 47.9 last month, just pipping an earlier flash reading of 47.8, but holding below the 50 level that divides growth from contraction for the 19th month running.

Germany, Europe’s largest economy, and Ireland (OTC BB: IRLD - news) were the only two countries in the 17-nation bloc to see growth. PMIs from Spain and Italy showed activity in their factory sectors deteriorated again with the situation worsening in Italy.

The euro zone output index, which feeds into the Composite PMI, a broader gauge of the economy due out on Tuesday, sank to 47.8 from January’s 48.7.

“Most of it is driven by Germany. Germany has outperformed the rest of the euro zone for quite a while now and that divergence is going to persist,” said Evelyn Herman at BNP Paribas (Milan:BNP.MI - news) .

In other upbeat news German retail sales grew at the fastest monthly rate in more than six years in January, rebounding from a deep fall in December, confirming signs it has turned the corner after a dismal end to 2012.

But unemployment in the currency union hit a new high in January of 11.9 percent, official data showed, and the PMI data pointed to factories reducing headcount for the thirteenth month.

Some 44 out of 55 economists polled by Reuters said the European Central Bank would have to step in and buy bonds from its struggling members.

Inflation among the countries using the euro fell to 1.8 percent last month, according to official data released on Friday, below the ECB’s two percent target ceiling and giving them room to ease policy.

That said, only a handful of the 76 economists polled by Reuters this week predict the ECB will reduce rates from their current record low of 0.75 percent.

British manufacturing shrank unexpectedly in February and new orders dwindled, making it likely the sector will put a drag on economic growth in the first quarter in a country at risk of sinking into a triple-dip recession.

Chances are rising that the Bank of England will rekindle its asset purchase programme next week and the PMI data coupled with figures showing mortgage approvals for home buyers dropped in January will only increase those odds.

FRAGILE CHINA

China’s official PMI from the National Bureau of Statistics eased to 50.1 after seasonal adjustments in February, the weakest reading in five months and just above the 50-point level separating growth from contraction on a monthly basis.

A second PMI issued by HSBC (LSE: HSBA.L - news) fell to a 4-month low of 50.4 after seasonal adjustments, off January’s 2-year high and in line with a flash, or preliminary, reading late last month.

But the bigger-than-expected retreat in the purchasing managers’ indexes does not signal China’s economy is slipping into another slowdown, analysts said. Instead, they show China’s growth recovery this year would be mild, as widely expected.

The Lunar New Year holiday, China’s biggest annual holiday and widely observed across much of East Asia, fell in February this year making it harder to draw firm conclusions, even though the data was seasonally adjusted.

“Today’s data point to a stabilisation of economic activities in coming months, not a strong recovery of growth,” said Jian Chang, a Barclays (LSE: BARC.L - news) analyst.

Tim Condon, head of Asian economic research at ING in Singapore, argued China’s economic data in January and February has “a lot of noise” due to the festive season. “When it settles down we expect the data will reveal that industrial production is growing around 10 percent,” he said.

In South Korea, trade data showed a sharp fall in exports, while a PMI report from last year’s emerging market investor favourite Indonesia showed a slight improvement in manufacturing overall, but a fall in new export orders.

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China’s hacking, brought to you by U.S. trade policy.

February 28, 2013 by Leave a comment

 

 

China and US Flag

Dear Friend,

Washington still doesn’t get it. We’ve known for years that China hacks government networks, industry computers, and advocacy groups like ours.

A study released last week by a Virginia-based cyber-security company confirms this: The Chinese military is responsible for a series of sophisticated computer hacking attacks on more than 140 American companies.

These hackers have stolen everything from product design blueprints to business strategies, and have also made a persistent effort to gain access to the controls of our infrastructure, including oil and gas pipelines and our electrical grid.

The Obama administration has known about China’s cyber hacking for some time. But the White House has sat on its hands because it believes calling Beijing out for cheating could undermine our overall relationship. In fact, the Administration still sometimes refrains from specifically identifying China as the hacking extraordinaire it’s proving itself to be.

News flash: When China uses its military to steal from American companies, it undermines our relationship. And when it starts groping for a hand on our power switch, we need to rethink what we’re getting in return.

Our official strategy — twisting like a pretzel to avoid offending the Chinese government (even when we catch them stealing from us) — is clearly not working. So why not try something else?

We run an enormous trade deficit with China every year, including a record $315 billion in 2012.  China uses that money to spy on us. So here’s an idea: Why not use our trade relationship to force Beijing to play by the rules?

Contrary to what some Washington insiders suggest, getting tough on China’s cheating won’t start a trade war. Just like anyone else, China responds to pressure. In fact, when Washington has actually moved to address China’scurrency manipulation, Beijing has responded by budging the value of its currency incrementally (see the chart, above).

Yes, we have a large, complex relationship with China.  But it’s really not rocket science: Calling out Beijing for flouting the rules gets results, a point I made this morning in an editorial for CNBC.

If China’s cyber-hacking concerns you, keep yourself up to date.  Follow the conversation on our blog, ManufactureThis, and on Twitter, Facebook, Pinterest, and Tumblr.

Together, we can keep it Made in America!

Sincerely,

Scott Paul
President
Alliance for American Manufacturing (AAM)

Filed under Business, China, Aerospace, Currency Manipulation, Espionage Tagged with , , , , ,

What it Really Means to be Made in the USA

February 26, 2013 by Leave a comment

DWM logo

You often hear companies touting their products as Made in America. Recently, DWM magazine looked at the Federal Trade Commission’s “Made in USA” Act which was designed to give the agency “the power to bring law enforcement actions against false or misleading claims that a product is of U.S. origin.” But other programs are in place as well to help consumers make informed decisions and this includes, Made in USA Certified®.

Made in USA Certified® is the only registered “Made in USA Certified” Word Mark with the U.S. Patent and Trademark Office, according to the organization.

“When we say it’s ‘Made in USA,’ you can count on it,” says Julie Reiser, president and co-founder.

Any company bearing one of the USA-C™ seals has gone through a rigorous supply chain audit to ensure that the product and processes originate in the United States of America.

The designation is an independent certification system that applies proprietary audit criteria consistently across companies, and criteria are checked through the company’s supply chain. “The seal says the company has committed to American jobs and to the American economy,” says Reiser. “Displaying the seal gives consumers the option to visibly support products and services of the USA.”

The Earthwise Group LLC, a national network of locally owned, independent manufacturers of doors and windows, announced that the organization has recently been recognized as “Made in USA Certified.” The organization is the first and only door and window manufacturer to be Made in USA Certified, according to Earthwise.

Why did they do it? “Number one it’s the right thing to do,” says Mark Davis, executive director, the Earthwise Group. “We have to invest in the American economy, American worker and American jobs. If our economy is going to turn around we have to be more sensitive in investing, and that means ingesting in American products.”

He also says the consumer is more willing today to buy American.

“Due to the economic slowdown we feel that the American consumer is more motivated than ever to buy American products,” he adds. “They are beginning again to take pride in American made products and realize the benefits of that …. They have seen the result of ignoring investing in America.”

So why should other companies look at this program?

“The biggest thing I try to do is educate people that the claim of ‘Made in the USA’ is unregulated. There are so many companies just making that claim,” says Reiser. “The only way the consumer really knows is if the company does a supply chain audit .”

It’s completely different to say it than to prove it, she adds.

“It says a lot about a company’s willingness to remain transparent. For companies it’s a powerful branding tool to distinguish among those who may be making false claims,” says Reiser.

She also adds that purchasing dollars are going to support a U.S. manufacturer and create U.S. jobs “which is at the crux of our problems now.”

“One of the things this does for companies is it distinguishes them against those in their industry who may be making a false claim to gain market share,” she says. “If the company has legitimately gone through the process and awarded the seal that puts them head and shoulders above the competition.”

Source: 
http://www.dwmmag.com/index.php/what-it-really-means-to-be-made-in-the-usa/

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How Ending Currency Manipulation Will Help Manufacturers

February 26, 2013 by Leave a comment

Thomas small logo

by 

Many American economists and policymakers believe that currency manipulation by U.S. trading partners such as Japan and Singapore – and especially China – creates a drag on the U.S. economy and depresses the country’s manufacturing sector.

Currency Manipulation

Currency manipulation by U.S. trading partners such as Japan and Singapore – and especially China – creates a drag on the U.S. economy and depresses the country’s manufacturing sector.

Currency manipulation involves artificially reducing the value of a country’s own currency, in effect providing a subsidy for national exports. Currency manipulators often buy U.S. treasury bonds to prevent their own currencies from strengthening. In the case of China, the country’s trade with the U.S. brings in an excess of U.S. dollars and would normally create a shortage of yuans. But to avoid the yuan’s appreciation and prop up its manufacturing sector, China buys up U.S. treasuries to keep the yuan out of currency exchange markets, thus maintaining an artificially low value.

About one out of every six U.S. private-sector jobs is in manufacturing, 17.2 million in total, according to the National Association of Manufacturers(NAM). However, manufacturing dominates when it comes to U.S. trade goods, accounting for 86 percent of exports in 2011, the U.S. International Trade Commission (USITC) says. So a U.S. trade deficit, exacerbated by currency manipulation, has a disproportionately negative effect on the manufacturing sector.

Robert E. Scott, Helen Jorgensen, and Doug Hall of the Economic Policy Institute (EPI) explain that reviving the crucial U.S. manufacturing sector “requires eliminating a jobs-destroying U.S. trade deficit in goods,” in large part by ending currency manipulation. Currency manipulation, the group says, “distorts international trade flows by artificially lowering the cost of U.S. imports and raising the cost of U.S. exports,” thereby displacing American manufacturing jobs.

Eliminating currency manipulation would reduce the U.S. trade goods deficit by at least $190 billion and as much as $400 billion over three years, allowing the U.S. to “reap enormous benefits” without any increase in federal spending or taxation. This would reduce U.S. unemployment by 1 to 2.1 percentage points and create between 2.2 million and 4.7 million jobs; between 620,000 and 1.3 million of those jobs would be in manufacturing. In addition, U.S. GDP would increase between 1.4 percent and 3.1 percent.

The Group of Seven (G7) top industrial nations is concerned that continued currency manipulation is creating dangerous instability in the global economy. The organization, which is comprised of the U.S., Canada, France, Germany, Italy, Japan, and the U.K., recently saidits members are committed to market-determined exchange rates and “will remain oriented towards meeting our respective domestic objectives using domestic instruments.”

The G7 affirmed that they “will not target exchange rates” – meaning they themselves refuse to be involved in currency manipulation. “We are agreed that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability,” the group declared.

Artificially lowering a country’s exchange rate can make its exports cheaper and promote growth internally, but that only causes problems for other countries because one currency can fall only if another rises. This imbalance, the EPI warns, “could spark a ‘currency war’ – a destabilizing battle where countries compete against one another to get the lowest exchange rate.” This scenario “conjures up images of the 1930s, when countries pursued tit-for-tat devaluations in order to get an edge… the outcome was to decimate global trade, accentuate the depression, and sow the seeds for World War II,” according to the institute.

 

Scott Paul, president of the Alliance for American Manufacturing (AAM), argued that policymakers need to act now to prevent further harm from unfair trade practices.

“Congress is obsessed with the wrong deficit,” Paul said. “To grow jobs and boost the economy, we must eliminate the trade deficit. Ending currency manipulation will get us part of the way there, but we also need a smart manufacturing policy, one that focuses on innovation, public investment, skills, and trade enforcement.”

According to the EPI report, any U.S president could end currency manipulation with a stroke of the pen: “The president could simply declare that the United States will no longer sell Treasury bills and other government assets to China and other countries that refuse to allow the United States to purchase their government assets… Refusing to sell assets to currency manipulators would eliminate the principal tool used by foreign central banks to manipulate their currencies: purchases of Treasury bills and other government securities…”

Olli Rehn, top monetary affairs official for the European Commission (EC), told the Associated Press that joint governmental efforts are needed to fight the adverse effects of “excess volatility and disorderly movements” in exchange rates. “That’s why we need to lean on active international policy coordination in order to prevent a wave of competitive devaluations.”

 

 

Source: 
http://news.thomasnet.com/IMT/2013/02/26/how-ending-currency-manipulation-will-help-manufacturers/

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Why Siemens is expanding U.S. manufacturing

February 21, 2013 by Leave a comment

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PHOTO: Former Treasury Secretary Timothy Geithner (R) walks with Siemens Energy Director of Operations Mark A. Pringle (L) during a visit to Siemens Energy’s plant in Charlotte, North Carolina, January 25, 2012. REUTERS/Chris Keane

By Helmuth Ludwig Reuters

In his State of the Union address Tuesday, President Barack Obama talked about the importance of upgrading America’s aging infrastructure. He told the story of how our company, Siemens, recently created hundreds of manufacturing jobs in North Carolina. He quoted our U.S. CEO as saying that if America upgrades its infrastructure, we’ll bring even more jobs.

But there’s another important reason we chose North Carolina, along with more than 100 other manufacturing sites in this country. By manufacturing in the U.S., we get proximity to our largest market; highly skilled workers and crucial software engineers in the Research Triangle, educated at some of the world’s best universities; ready access to ports for export, and cutting-edge innovation that we can link directly to our manufacturing sites. All in a business-friendly atmosphere.

America is poised to lead the next manufacturing renaissance. Sophisticated software is the critical component — and that’s what America produces better than anyone. But smart public policy is also needed. So is a sharp focus on what will make U.S. factories more productive, efficient and sustainable.

When industry insiders talk about America’s improving manufacturing outlook, they usually cite four components of production that have shaped global manufacturing for the past decade. But these elements are now being radically rethought ‑ in a way that plays to U.S. strengths.

First, the idea that the world is “flat” has been supplanted by the idea that speed matters. Innovation speed is now understood to be a competitive advantage. So keeping design and manufacturing half a world apart – manufacturing in China, for example, when your design team is in California – makes less and less sense.

Second, the assumption that lower wages always correlate with lower total cost has proved to be false. Manufacturers increasingly recognize that months-long transportation chains can contribute to substantial direct and indirect costs.

Third, the belief that U.S. energy costs would be a long-term disadvantage has been deflated by unconventional fossil fuel reserves. The “shale gale” is driving U.S. natural gas prices to less than a quarter of those in much of Europe and Asia.

Fourth, the faith that outsourced “low-value” manufacturing jobs would be replaced by higher-value service jobs has been adjusted to the reality that manufacturing underpins the economy. It is crucial to create and sustain steady high-wage employment.

But the major reason why U.S. manufacturing is so well positioned for a renaissance is software that can bring the real and virtual worlds together in a way that erases all boundaries between the two. It connects everyone involved in product design and execution to the same network, sharing the same sets of data, to improve collaboration and decision-making.

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