“What’s Geithner Thinking?” Treasury Grants China Direct Access to Buy U.S. Bonds

In an unprecedented move, in June 2011 the U.S. Treasury Department granted the Chinese government direct-bidder status to purchase U.S. Treasuries direct from the U.S. government,reports Reuters. All other central banks must purchase U.S. Treasuries through primary dealers on Wall Street, which then place bids on their behalf at Treasury auctions.

The People’s Bank of China holds roughly $1.2 trillion in U.S. debt, more than any other entity, and it is now the first foreign government with direct computer access to the U.S. government Treasury auction process. China, however, must sell U.S. Treasuries on the open market.

“It’s a big deal because the Chinese are getting very special treatment,” says Gordon Chang, Forbes columnist and author of the Coming Collapse of China, in an email to The Daily Ticker.

This special treatment does have the potential to save the Chinese government money, but not in transaction and commission costs because primary dealers are prohibited from charging its bidding customers fees. However, China could getting a better deal by keeping its purchases from Wall Street secret.

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Made in the USA: Ann Arbor firm constructing homes with products made in America

 

As Ann Arbor Builders Inc. hops aboard the slow train to economic recovery, the company wants to bring along other American businesses.

Homeowner Patrick Schutte (on left) stands with Alex de Parry of Ann Arbor Builders at the site of Schutte's new Dexter house, which is being constructed mostly of materials made in the U.S.

It’s been a tough four or five years, admitted Betsy de Parry, vice president of Ann Arbor Builders. The 40-year-old home construction company saw business drop from 20 to 30 new home starts a year to three or four since 2007.

But as the phone begins to ring again with inquiries and there is a growing number of signed contracts, de Parry said she and her husband, Alex de Parry, company president, are focusing on building homes with products made in America — with a special emphasis on products from Michigan and Washtenaw County companies.

At the same time, Patrick Schutte had a dream of building his own house from the ground up, getting it just the way he and his wife, Heather, wanted it. But Schutte wanted it to be American-made. That’s when he found Ann Arbor Builders.

The family’s four-bedroom Dexter house will be the first new project built under Ann Arbor Builders’ focus on using American-made goods. Except for the granite countertop, the microwave oven and the recessed lighting, everything will be made in America, down to the nails. Construction started in January, and the family expects to move in this summer.

The project won a few seconds of national attention this week when it appeared on an ABC network news segment about the economy heating up, adding 52,000 new construction jobs in the past two months, compared to 32,000 new jobs in all of 2011.

While the de Parrys had paid little attention to the sourcing of their home building products until a few month ago, it turned out many items already came from the U.S. Still, they knew they could do better.

After they learned from the Boston Consulting Group that 220,000 more new jobs would be created if every builder in the country increased American-made products by 5 percent, they decided to make the effort.

“If everyone did it, it would add up to be a pretty big thing,” Betsy de Parry said.

Alex de Parry, who also serves as vice president of the Builders and Remodelers Association of Greater Ann Arbor and was previously involved in the development of the controversial City Place project on South Fifth Avenue, created a comprehensive list of all the materials that went into building his houses and turned to his suppliers to find out where the materials were made.

“It was a team effort,” he said. “There was no resistance. Everyone knew it was about jobs.”

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US govt sets new tariffs on China solar panels

The low cost of labor, coupled with the massive scale of production at its 14,000-person plant, have enabled China's Suntech to become the global industry leader in solar power in just a decade

MARCY GORDON | AP Business Writer - WASHINGTON

The Commerce Department is imposing new import fees on solar panels made in China, finding that the Chinese government is improperly giving subsidies to manufacturers of the panels there.

The Commerce Department said Tuesday it has found on a preliminary basis that Chinese solar panel makers have received government subsidies of 2.9 percent to 4.73 percent. Therefore, the department said, tariffs in the same proportions will be charged on Chinese panels imported into the U.S., depending on which company makes them.

The tariff amounts are considered small, but the decision could ratchet up trade tensions between the U.S. and China. Several U.S. solar panel makers had asked the government to impose steep tariffs on Chinese imports. They are struggling against stiff competition from China as well as weakening demand in Europe and other key markets, just as President Barack Obama is working to promote renewable energy.

“Today’s announcement affirms what U.S. manufacturers have long known: Chinese manufacturers have received unfair … subsidies,” Steve Ostrenga, CEO of Helios Solar Works in Milwaukee, said in a statement. The company is a member of a group called the Coalition for American Solar Manufacturing.

On the other side, some U.S. companies argue that low-priced Chinese imports have helped consumers and promote rapid growth of the industry.

The new tariffs are low, making the Commerce Department decision “a relatively positive outcome for the U.S. solar industry and its 100,000 employees,” said Jigar Shah, president of the Coalition for Affordable Solar Energy. “However, tariffs large or small will hurt American jobs and prolong our world’s reliance on fossil fuels. Fortunately, this decision will not significantly raise solar prices in the United States.”

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american MADE CHIC summer bus tour

Summer Bus Tour

american MADE CHIC

“What we are doing isn’t political but it’s consciousness raising at a time when many people are either feeling pretty down about our nations stature — and dare I say soul”.

This summer five incredibly talented, smart, chic American women, will travel across the country in a decked out Red, White and Blue travel bus creating high impact events and awareness for jobs, manufacturing and products Made in America.

“American Made Chic” will set out to change the views of Americans and shed light on all things American. Each event will be packed with fashion, food and drink while providing a platform for sharing knowledge and information about jobs, manufacturing and American made products throughout the country. We will provide a fresh, hip, modern twist on what it means to support our country while creating loyal fans and followers.

Our tour will kick off at the Kentucky Derby on May 4th, 2012. It is important that this summer tour begin this year, as it is an election year. Our travels will include the Country Music Festival in Nashville Tennessee for the three day action packed event, Daytona NASCAR event and the grand finale in Detroit, Michigan (Motor City). We will visit manufacturing plants, tour some of our sponsor’s facilities and discover all things American.

I have attached the bios of each team member for your review. Collectively we have over 25,000 Facebook fans and the experience and knowledge to create an explosive American campaign. If you would like us to attend your event, please contact Michelle Thelen at ichooseamerican@gmail.com.

“American Made Chic” offers several ways that you can be involved.

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A $100,000 factory job. What’s uncool about that?

 By Parija Kavilanz | CNNMoney.com

 

Young Americans are shunning factory jobs because they think they are uncool. But they need to do some homework. Some positions are paying close to a six figures

What’s uncool about a $100,000 factory job? These days not much. In fact, factory jobs — once considered back-breaking and low-paying — have become high-tech and high-salaried.

Still young people don’t get it, say factory owners, who can’t find enough skilled workers.

“When I was an apprentice in the late ’70s, kids were dying to get into manufacturing. There were plenty of factory jobs,” said Joe Sedlak, a machinist who owns the Chesapeake Machine Company in Baltimore. “There are jobs for the taking today. But kids don’t want them.”

Stereotypes about factory jobs still persist. And the media isn’t helping, factory owners complain.

“On TV, kids don’t see many positive images of manufacturing,” said Bill Mach, president of Mach Mold, a manufacturer of plastics molds in Benton Harbor, Mich. A show will have a scene with “an old dark building with a bird flying out of it, and something bad happens.”

Scott Paul, executive director of the Alliance for American Manufacturing, agreed. “Pop culture has a big impact on young people,” he said, adding that the only recent positive pop culture depiction of manufacturing that he can think of has been in Iron Man.

The industry needs an image boost, and young people need to get educated about high-skilled factory jobs, experts said.

Desperately seeking factory workers

An aspiring machinist — a popular factory job — can start training at 18 and then do a one- or two-year manufacturing apprenticeship. In five years, he or she could be making more than $50,000. In 10 years, that could double to $100,000.

Not a bad salary for a 28-year-old.

“If you’re really good at your work, you could remain employed for a very long time, because there are so few of us,” said Sedlak.

Sedlak’s top worker makes $30 an hour. And annual pay at his company ranges between $70,000 and $80,000 with overtime. In 31 years, only three workers have retired from his factory.

Still, with almost 13 million unemployed Americans, including many high school graduates, he is struggling to fill positions.

A recent Manufacturing Institute and Deloitte report underscores that. Manufacturers currently have 600,000 vacancies nationwide, it said.

“When we pushed manufacturing out of the country, we pushed job opportunities out,” said Sedlak.

The downward spiral that followed was swift. With jobs gone, schools ended vocational classes. Kids lost interest in manufacturing. Many states stopped sponsoring apprentice programs in factories.

Last week, Justin Lavanway, 17, and two of his high school buddies, toured Mach Mold to learn more about manufacturing and its jobs.

His grandfather was a career machinist with Whirlpool. “I saw that it was a pretty stable career for him,” said Lavanway. “That’s why I’m keeping my options open.”

States to manufacturers: We want you!

But his friends, Joseph Johnson, 18, who is thinking about a job in medical services, and Charlie Leaf, 18, who wants pursue a career in psychiatry, are not interested in manufacturing.

“The public school system tells students that we have to go to college to be successful,” said Johnson. “Ever since you’re young, you hear that’s what you have to do to achieve the American dream.”

Johnson and Leaf also don’t think manufacturing offers stable careers.

Mach hears this often from young people, even through manufacturing is a deep-rooted profession through generations of families in Southwest Michigan.

And it’s just not true, he said. “I have 40 people in my plant. Half have been there for 15 to 25 years.”

“There’s no easy answer to how we can change manufacturing’s image problem,” said Paul. Companies themselves have to be up to that challenge, he said.

One idea is to turn to pop culture, said Paul.

“Maybe we need someone cool like Clint Eastwood to say, ‘Go work in factories’ as a follow up to his Super Bowl Chrysler ad.”

View this article on CNNMoney

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What Does the Future Hold for American Manufacturing?

The state of US manufacturing is likely to become a major campaign issue - Getty Images

The state of US manufacturing is likely to become a major campaign issue - Getty Images

Written by: BBC North America editor, Mark Mardell 

Drew Greenblatt is an enthusiast: proud of his company, Marlin Steel, and proud of the factory floor packed with state-of-the-art equipment.

I watch, fascinated, as a little white robot squeezes out a wire, putting kinks and bends in it as it emerges.

Then it hands it over to a slightly larger yellow robot, which holds it steady for a twist in the end before turning it over for another twist at the other end.

Oddly, I find this cutting-edge equipment rather cute and cartoonish.

The question is whether this endearing duo are merely the remnants of America’s industrial past or the sort of equipment that will make the USA world-beaters once again.

The factory floor space at Marlin Steel is being doubled and there is no doubt the company is doing well, prospering even, during the bad years. Read more of this post

FDA Says Brazil’s Orange Juice Is Safe, But Still Illegal

 

Antonio Scorza/AFP/Getty Images Oranges for sale at a market in Rio de Janeiro.

Antonio Scorza/AFP/Getty Images Oranges for sale at a market in Rio de Janeiro.

NPR      by DAN CHARLES  February 22, 2012

If you happen to notice sometime later this year that you’re suddenly paying a lot more for orange juice, you can blame America’s food safety authorities. The U.S. Food and Drug Administration, after several weeks of deliberation, has blocked imports of frozen, concentrated orange juice from Brazil, probably for the next 18 months or so, even though the agency says the juice is perfectly safe.

The FDA’s explanation is that its hands are legally tied. Its tests show that practically all concentrated juice from Brazil currently contains traces of the fungicide carbendazim, first detected in December by Coca-Cola, maker of Minute Maid juices. The amounts are small — so small that the U.S. Environmental Protection Agency says no consumers should be concerned.

The problem is, carbendazim has not been used on oranges in the U.S. in recent years, and the legal permission to use it on that crop has lapsed. As a result, there’s not a legal “tolerance” for residues of this pesticide in orange products. Read more of this post

How to Save U.S. Manufacturing Jobs

By Howard Wial @CNNMoney February 23, 2012: 5:34 AM ET

Howard Wial is a fellow for the Brookings Institution Metropolitan Policy Program.

At first glance, manufacturing jobs would appear to be a dying breed.

The United States lost 6 million manufacturing jobs between early 2001 and late 2009. And despite small gains during the last two years, the trend in manufacturing employment for the last 30 years has been downward.

That has led some to argue that long-term job loss in the industry is inevitable. But our research shows otherwise.

There are two common versions of the “inevitability” argument. One holds that U.S. manufacturing wages are too high to be internationally competitive. The other maintains that manufacturing job losses are the result of productivity growth. Both arguments are wrong. Read more of this post

How To Invest For Jobs Coming Back To U.S.

Brian Sozzi, Contributor   2/16/2012

The grand theme I want to put on the table is the concept of onshoring, sometimes called reshoring, which is the bringing back of U.S. jobs from overseas supply chains.

U.S. businesses have started to realize that while workers in far away lands garner miniscule wages compared to their U.S. counterparts, having operations outside of the country can be a strategic disadvantage.  The speed and structure in which information is consumed has caused U.S. consumers to demand top quality products and to want to buy them whenever they please.

Having a manufacturing plant domestically aids in the quicker movement of goods from design table to sales floor.  Furniture maker Ethan Allen is great example of a manufacturer producing most of its products in the U.S. and doing customization for clients, setting itself apart from price-point focused competitors.

Corporate managers are simply getting over their infatuation with cheap international labor and analyzing the total costs of doing business in the U.S. compared to say, China or India.

There is a dollop of icing on the cake here as well.  The topic of focusing on onshoring to boost employment levels seems to be an area of agreement between bickering Republicans and Democrats.  Republican presidential hopeful Rick Santorum, for example, wants to zero out the U.S. corporate tax for manufacturers.

Anytime the major political parties agree on anything, even the slight thing, it’s cause to sit up and take notice from an investment standpoint.  The Donkeys and Elephants may be a little apart on how to precisely shepherd along the corporate onshoring interest, but at least they are talking the same language.  It’s high time they do find common ground if the following is to be reversed:

  • Manufacturing employment has fallen by approximately 37% since 1980.
  • According to a survey done by the Manufacturing Institute and Deloitte, some 600,000 manufacturing jobs are currently unfilled due to a mismatch between job requirements and experience.

I have read a fair number of columns bantering about onshoring.  Is it overhyped?  Do we really need more jobs in the service sector U.S. economy?  The debates are almost endless.  Unfortunately, though, I have failed to stumble upon investment strategies to profit from onshoring, which has already begun to a certain extent, and could likely gain steam in the years ahead.

Buy-and-hold investors, this should be right in your wheelhouse: a highly probable future event to build positions around in companies with durable competitive advantages.

A few names that come to mind:

  • Waste Management: Owns 260 plus landfills and is the largest waste management business in the U.S.  More manufacturing production means more waste to be piled into the company’s green bins.
  • ADP: Benefits in two manners.  First, workers are hired to run new domestic manufacturing plants (hopefully by people that used the downturn to attain new technological skills).  Second, there should be a trickle down effect in the overall employment sector via a ramp in higher paying manufacturing jobs.
  • Dunkin Brands: “America Runs on Dunkin” as the brand’s slogan goes.  The company’s moat is not as wide as an ADP or Waste Management, but more U.S. manufacturers should mean more egg sandwiches (which Starbucks does not do superbly) and coffee.  Store penetration is increasing in areas of the country that are manufacturing oriented.

This Column Was 100% Made in America

A Hyundai ad that ran during Super Bowl coverage showed workers from the company's plant in Montgomery, Ala.

A Hyundai ad that ran during Super Bowl coverage showed workers from the company's plant in Montgomery, Ala.

By   Published: February 15, 2012

BLUE-COLLAR workers in fields like manufacturing — particularly when they make products on American soil — are again becoming a favorite subject for white-collar workers on Madison Avenue.

The trend was born of the economic worries that followed the financial crisis in 2008. Recently, it is gaining steam — appropriate, since the ads often use blasts of steam to signal something is being built — with proposals in Washington to offer incentives to encourage the location or relocation of factories in the United States.

“We continue to see very heavy emotional response to anything that would leverage against the bad economy,” said Robert Passikoff, president at Brand Keys, a brand and customer-loyalty consulting company in New York. Read more of this post

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