JOBS ACT TO BOOST STARTUP FIRMS

Miami Herald

KEN THOMAS

WASHINGTON — President Barack Obama signed bipartisan jobs legislation Thursday that will help small businesses and make it easier for startups to raise capital.

“When their ideas take root, we get inventions that can change the way we live,” Obama said in the Rose Garden, flanked by lawmakers and entrepreneurs. “And when their businesses take off, more people become employed.”

Some Democrats, however, raised concerns that the so-called JOBS Act, or Jumpstart Our Business Start-ups, softened investment protections enacted after the dot.com excesses and Wall Street meltdowns and the changes could lead to fraud and abuse.

Speaking to an invited audience that included entrepreneurs — including South Floridians Albert Santalo, founder, president and CEO of CareCloud; and Zalmi Duchman, founder and CEO of The Fresh Diet — Obama indicated that he’s aware of those concerns and has directed top officials to “keep a close eye” on how it goes into effect.

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Chinese copycats challenge U.S. small businesses

HONG KONG – SylvanSport founder Thomas Dempsey learned last summer that a product similar to one he’d patented was being made in China when a customer sent him a link to a Chinese company’s website.

On the website, Dempsey found a recreational camper trailer that looked eerily like the one he designed and patented and sells through his 8-year-old Brevard, N.C., company.

“We were shocked,” says Dempsey. “We thought at first that what we saw was our product, but as we looked at some of the video and photography, we realized that this is tooled up from scratch.”

It was the beginning of what would be a nightmare for any small-business owner. Since then, distributors inSouth Korea and Japan have opted to market the Chinese company’s product instead of Dempsey’s. A Japanese distributor mistakenly thought it was buying products from SylvanSport’s Chinese factory, says Dempsey. Confused consumers have also e-mailed SylvanSport, asking about its affiliation with the Chinese product, owned by Wuyi Tiandi Motion Apparatus, a maker of dirt bikes and camping gear in Jinhua City in eastern China.

These problems have left the promising U.S. upstart, whose camper trailers retail for about $8,000, in a precarious position. While SylvanSport expects a “break-even” year, with sales around $3 million — more than double 2011′s — business could suffer in coming years if distributors keep fleeing to the Chinese competitor, Dempsey says.

In 2011, SylvanSport got about 15% of its sales from outside the U.S. and about half of that from South Korea, Japan and Australia. Dempsey expects 30% of 2012 sales will be international.

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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.”

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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

Obama Takes Fresh Aim at China, Touts “Insourcing”

 

ReutersBy Laura MacInnis | Reuters

MILWAUKEE (Reuters) - President Barack Obama kept up his attack on Chinese trade practices during a campaign-style visit on Wednesday to a Midwest factory, where his call to bring jobs back home was intended to resonate with voters in an election year.

The day after meeting China’s leader-in-waiting, Vice President Xi Jinping, at the White House, Obama cited America’s chief rival a number of times in a speech to promote the potential of “insourcing” jobs back to America from overseas.

“I will not stand by when our competitors don’t play by the rules,” he told workers at Master Lock, a company he lauded in his State of the Union address last month for having moved back about 100 union jobs from China since mid-2010.

“That’s why I directed my administration to create a Trade Enforcement Unit with one job: investigating unfair trade practices in countries like China,” he said in prepared remarks.

Obama took a firm line over trade on Tuesday during his Oval Office meeting with Xi, who is in line to assume the Chinese presidency in March 2013.

This tough stance should appeal to voters in election battleground states like Wisconsin, where Beijing is often blamed for killing American jobs.

Republican presidential hopeful Mitt Romney, a former private equity executive, accuses Obama of being too soft on China and lacking the executive or other leadership experience to steer the U.S. economy toward lasting recovery.

Master Lock, a unit of Fortune Brands Home & Security, is the world’s largest manufacturer of padlocks and related products to secure homes, cars and bicycles. Its story is a positive one for Obama, who must tout his economic leadership to secure another White House term.

The firm says its Milwaukee plant is running at full capacity for the first time in 15 years – an example the White House is eager to replicate as the November 6 election nears.

“They’re deciding that if the cost of doing business here is no longer much different than the cost of doing business in countries like China, they’d rather place their bets on America,” said Obama.

It was his first stop in a three day campaign-style swing when the Democrat will raise funds in California and stop at aircraft manufacturer Boeing in Washington state.

How to cope with a rising China – and compete against cheap Chinese exports – is one of the toughest challenges for Obama to navigate as the election approaches, particularly as opinion polls showing rising U.S. voter frustration with the Asian economic powerhouse.

(Reporting By Laura MacInnis; Editing by Peter Cooney and Cynthia Osterman)

Can Manufacturing Jobs Come Back? What We Should Learn From Apple and Foxconn

business
The Huffington Post

David Paul – President, Fiscal Strategies Group  -  Posted: 02/13/2012 8:30 am

Apple aficionados suffered a blow a couple of weeks ago. All of those beautiful products, it turns out, are the product of an industrial complex that is nothing if not one step removed from slave labor.

But of course there is nothing new here. Walmart has long prospered as a company that found ways to drive down the cost of stuff that Americans want. And China has long been the place where companies to go to drive down cost.

For several decades, dating back to the post World War II years, relatively unfettered access to the American consumer has been the means for pulling Asian workers out of deep poverty. Japan emerged as an industrial colossus under the tutelage of Edward Deming. The Asian tigers came next. Vietnam and Sri Lanka have nibbled around the edges, while China embraced the export-led economic development model under Deng Xiaoping.

While Apple users have been beating their breasts over the revelations of labor conditions and suicides that sullied their glass screens, the truth is that Foxconn is just the most recent incarnation of outsourced manufacturing plants — textiles and Nike shoes come to mind — where working conditions are below American standards. Read more of this post

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