Manufacturers and businesses struggle to find skilled workers

Skilled Workers

Job seekers attend a Career Source mixed-industry job fair at the Holiday Inn in Somerville on Nov. 27, 2012.

BOSTON — Dozens of people walked around a recent Somerville job fair handing out resumes. There was Jim Lundy, 53, an English teacher with a Ph.D. and 30 years of experience. When he could not find a teaching job, he started a business that sells used blue jeans, but has been unsuccessful. There was Isabel Sendao, 38, who lost her job in marketing and sales a year and a half ago and is keeping current on the latest technology while interviewing for jobs. There was Sandy Carr, 51, who worked at non-profit and social service jobs for three decades. She was laid off when a medical billing firm went under and has been doing temporary and contract work until she can find something full-time.

“Job searching’s a constant thing to be doing these days,” Carr said.

At the same time, there are businesses in Massachusetts looking for workers. Denise Petersen, who works in human resources for B&E Precision Aircraft Components in Southwick, said her company is looking for computer numerically controlled machinists and burr hands, a type of skilled laborer. The company is competing with other local tool companies and having a hard time finding workers with the necessary skills. “As experienced or skilled workers leave, it’s getting more difficult to find people in those areas that have experience,” Petersen said.

The “skills gap” is a fact of life in the recovering economy. Jobs are opening up and workers are seeking them. But the unemployed workers do not always have the same skills that employers are looking for. In some cases, industries have shifted during the recession, some recovering faster than others. In other cases, the recession actually delayed the skills gap, as older workers pushed off retirement. With the recovery, some of those workers are preparing to leave.

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Is Apple Prepping a ‘Made in USA’ Boom?

It could hinge on whether it picks Intel to make more chips for it

Dec 4, 2012, 9:42 am EST  |  By Brad Moon, InvestorPlace Contributor

Two potentially huge Apple (NASDAQ:APPL) items hit the radar in quick succession over the past few days.

First came rumors that the company was in talks with Intel (NASDAQ:INTC) to replace Samsung as the processor supplier for its mobile devices. Then, as the first shipments of Apple’s new iMac PCs arrived, reports rolled out that at least some of them bore an “Assembled in USA” sticker. CEO Tim Cook rose to prominence at Apple for moving production to China, but could the company be on the verge of a shift back to “Made in America?”

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If Intel manages to score the coup of becoming the chip supplier for Apple’s mobile devices, that would be a big story for both Intel and U.S. manufacturing. It was only weeks ago that Apple was supposedly in talks with Taiwanese chipmaker TSMC(NYSE:TSM) about the possibility of replacing Intel CPUs in its PCs with TSMC chips based on ARM (NASDAQ:ARMH) architecture.

Intel CEO Paul Otellini (the guy who brought Apple into the Intel fold but failed to break into the mobile market) retires, and all of a sudden Apple and Intel appear to be making up for lost time. With most of Intel’s chip fabrication plants in the U.S. (including factories in Oregon, New Mexico and Arizona), domestic manufacturing would benefit tremendously. Apple sold 43 million iOS devices last quarter alone — that’s a lot of chips.

Then there’s the story of the “Assembled in USA” iMacs that’s burning up the tech sites right now. Some (but not all) of Apple’s latest iMacs have been arriving on doorsteps adorned with the usual “Designed by Apple in California” message. But instead of “Assembled in China,” they’re marked “Assembled in USA.”

The FTC has very specific rules about how to qualify for that label. To comply, Apple has to be doing much more than just screwing bases onto cases. A factory somewhere in the U.S. has to be building these things.

How could you justify assembling a computer in the U.S. if you can pay ridiculously low wages in China? First of all, those low wages aren’t as low as they used to be. According to The Atlantic,they’re five times what they were in 2000 and expected to continue rising at the rate of 18% per year. At the same time, U.S. labor productivity has risen, while U.S. manufacturing wages over the past five years are now back at the level they were in 2000, adjusted for inflation.

Earlier this year, The New York Times did the math and calculated that if Foxconn workers were paid equivalent U.S wages, it would add $65 to the cost of an iPhone. On a $649 device (the price of a base iPhone 4S at the time) with an estimated materials cost of $203, this would require Apple to either hike prices or bite the difference, cutting into its margins significantly.

However, an iMac is much more expensive. The cheapest is $1,299, so a potential uptick in labor costs may be less noticeable. And then there’s its size.

To get a sense of what it must cost Apple to ship one of these all the way from China, I tried an experiment using FedEx‘s (NYSE:FDXshipping calculator to compare the cost of shipping a 1.4-pound box (iPhone) and a 42-pound box (27-inch iMac) from Foxconn in Shenzhen to the FedEx hub in Memphis. The result: $448.732 vs. $2,620.72.

Obviously, Apple isn’t paying anything near the rate Joe Public would, and it also uses other shipping companies. But the point is clear.

Shipping an iMac costs six times what it costs to ship an iPhone. If a worker at Foxconn in China ismaking $2.50 an hour compared to an average U.S. manufacturing wage of $19.15 (a difference of $16.65), so long as an iMac took 3.5 hours or so of labor to assemble, Apple would be breaking even by shifting manufacturing back to the U.S. based on the savings in shipping costs.

That’s all hypothetical. But it shows how plausible it is that under current conditions, Apple might shift production of bigger products from China back home. Plus, Apple was facing limited supply of the new iMacs based on problems at Foxconn, so maybe it’s decided to take matters into its own hands. Perhaps a hit on margins is worth the insurance against a hit on revenue if Foxconn can’t keep up.

It doesn’t hurt that the iMac is a relatively low-volume product (compared to iPads and iPhones) and that Apple already has an assembly facility in Elk Grove, Calif., where it built iMacs until 2004 and once employed 1,500 workers. Apple continues to refurbish iMacs for resale at this site, so it retains some technical and distribution capability. As TechCrunch notes, employment at that facility has jumped 50% this year, suggesting something is up.

While it’s possible that Apple merely messed up on its iMac labeling or that Intel Inside iOS devices is wishful thinking on Intel’s part, it’s also possible that between the company’s flagship PC and its determination to free itself from all vestiges of bitter rival Samsung, Apple is shifting toward “Made in America.” If so, here are a few things to watch for:

  • Without a doubt, Intel shares would surge. The company has been largely shut out of mobile, and gaining Apple’s business — even if it does so under license from ARM — would immediately vault Intel into a market leader. If it inked a mobile deal with Apple, those rumors about Apple seeking to shift its iMacs and MacBooks away from Intel would likely go away as well.
  • Apple’s margins could well take a hit, and even a small decrease could spook investors. Still, computers make up less than a quarter of Apple’s total revenue (and iMacs are a small subset of that), so the actual bottom-line impact of assembling PCs in the U.S. would likely be minimal and may well be offset by “Made in America” goodwill among domestic consumers.
  • Shipping companies could actually take a hit from any loss of Apple business. During the iPad 3 launch, for example, it was reported that Apple’s massive shipments form China (at premium rates) boosted the price DHL charged customers for international shipments by 20%. A steady stream of Apple shipments come from China to the U.S., and the vast majority (if not all) is by air.

At the time of writing, Apple hadn’t officially commented on either the “Assembled in USA” iMacs or the Intel talks. Expect all eyes to be on Cupertino for Cook’s response to both. In the meantime, the search is already on for a way to identify the U.S.-assembled iMacs while still in the box, so that consumers can choose them — and send Apple the message that they prefer to buy American.

As of this writing, Brad Moon from http://www.investorplace.com didn’t own any securities mentioned here.

Made in USA Certified:  www.USA-C.com

Made in the U.S.A. Bucking a 30-year Trend

Jeremy Quittner | Inc.com

For Lumitec, a lighting product company in Delray Beach, Florida, manufacturing in the U.S. is essential, but so is exporting to clients overseas.

Lumitec’s products, which are designed for extreme environments, require exact specifications that need frequent product monitoring. So the lag time to make changes typically associated with manufacturing thousands of miles away in China is not an option. To accommodate these needs, Lumitec’s headquarters are in a 10,000-square foot facility that can handle the customization and assembly that clients require.

Lumitec is like an increasing number of small companies that are manufacturing in the United States, and bucking a 30-year trend of outsourcing such production overseas.

These companies find increased control, quality, and production standards domestically that may cancel out the cost savings that could come with manufacturing overseas. They are also turning the table on recent history in other ways, by exploiting sales in international markets, and uncovering opportunities by selling their goods to other countries in addition to domestically. They find the ‘Made in the U.S.A.’ stamp brings them unexpected cachet.

“We attend trade shows outside of the U.S. and people are always pleasantly surprised that we manufacture in the U.S.,” says John Kujawa, chief executive of Lumitec, which exports its lighting products to more than 30 countries. “it is understood that many products manufactured in the U.S. are greater quality than those from certain other countries.”

John Kujawa founded Delray Beach, FL – based Lumitec Inc.

Manufacturing businesses have added 500,000 jobs in the United States since 2009, though the sector has a lot of ground to make up, having lost 2.3 million jobs since the start of the recession. States that led the way were Michigan, Ohio, Indiana, Texas, and Illinois, which combined added a quarter of a million of those jobs over the same period.

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What it takes to be ‘Made in USA’

Athletic shoe maker New Balance says stamping Made in USA on its labels draws in customers

NEW YORK (CNNMoney) — With so much talk about the need to revive U.S. manufacturing and create jobs, more companies are touting their American-made roots in order to lure customers.

The notion that buying something made domestically will boost the economy has become an article of faith during the economic crisis. And many businesses are trying to capitalize on that by attaching a “Made in USA” label to their products.

Buying American-made goods has become personal, according to Dave Schiff, chief creative officer at Made Movement, a website that markets and sells only American-made products. Shoppers believe that supporting businesses that manufacture domestically could help them in return.

People are looking for “Made in USA” labels because they know that’s how jobs are created, he said. They think, “My son who is unemployed could benefit if I pay attention to a label. The economy at large gets a shot in the arm.”

But before a company can use the iconic label, it must comply with a complex set of rules that dictates its use.

The Federal Trade Commission has a dizzying 44-page rulebook that lays out the guidelines — and the specifics are enough to make your head spin.

For instance, domestically-made textiles, wool, fur or automobiles must, by law, have a “Made in USA” label. Companies aren’t required to disclose country of origin for most other products, but many choose to tout their American-made status in order to appeal to customers.

Companies looking for that boost from the label have to be able to prove that their final products are assembled or processed in the United States, according to the FTC. The agency doesn’t spot-check items that claim to be made in the United States, but it does investigate complaints.

Related: 7 hot Made-in-the-USA toys for the holidays

Of course, many manufacturers now rely on global supply chains, which makes it much harder to determine when a company can rightly make the claim. Regulators try to assess how much of a product’s total manufacturing cost comes from the United States.

For goods that have parts made in many different countries, the FTC relies on what it calls a “one step removed” rule. For instance, if a shirt is made with fabric from overseas, but sewn together in the United States, it can’t be labeled “Made in USA.”

But if a manufacturer uses U.S.-made fabric that is sewn together domestically using thread made overseas, it would be permitted to use the “Made in the USA” label.

Companies that can’t get all of their component parts domestically can use what the FTC calls qualified “Made in USA” claims, such as “Made in USA from imported parts” or “Assembled in the USA.”

Related: The manufacturing jobs boom is for real

While the distinctions may be minor, a failure to follow the rules can cost businesses a ton of money.

If the FTC finds a label to be deceptive, it can file a lawsuit and ask for a court-ordered fine or consumer redress. According to Matt Wilshire, an FTC staff attorney, fines go as high as $16,000 per mislabeled item sold, or for every day that the item was advertised.

“This could become a very large figure very quickly,” he said, citing one case that ended up costing a business nearly $400,000 in fines.

As costly as a labeling mistake could be, many feel like the regulations protect smaller businesses in the long run.

Brian Meck, who co-owns Fessler USA, a private-label manufacturer that makes clothing for retailers like Urban Outfitters (URBN), says that the regulations reward companies who pay higher costs to manufacture domestically by safeguarding the Made in USA claim. Without the rules, he said, big brands could benefit from the label while sourcing cheaper imported materials to cut costs, without anyone knowing the difference.

Meck also said that the regulations not only protect businesses, but also help consumers. “They give [consumers] the ability to know where their dollars are going and what they’re really supporting.”

For New Balance Athletic Shoe, which is the last U.S.- made athletic footwear brand, the pros of manufacturing domestically outweigh the drawbacks.

“From a cost perspective, you add different burdens — regulatory schemes, wage and benefits — compared to competitors,” said spokesman Matt LeBretton. “But the feedback that we get is pretty outstanding, so we do everything to make that continue to work.”

Source:
http://money.cnn.com/2012/09/18/smallbusiness/made-in-usa-label/index.html

 

 

Chinese students enroll in record numbers at U.S. colleges


The number of Chinese undergraduates on U.S. campuses in the last school year increased 43 percent from the previous year, according to the annual Institute of International Education Open Doors report that was released today.

Chinese undergraduates, like most international students, are highly attractive to universities: They are usually well-educated and well-traveled, bringing a global point-of-view and sophistication to campuses. Their helicopter parents are on the other side of the world. And they hardly ever tap university resources to fund their education.

View Photo Gallery: Chinese students enroll in record numbers at U.S. colleges.

(In fact, some universities became so zealous in their recruitment of international students that they hired commercial recruiting agents who charged hefty fees, Bloomberg reported in May.)

At the beginning of this school year, I tagged along with a group ofChinese students traveling from Dulles International Airport to the University of Virginia. In the last decade, U-Va. has seen its international student population increase 44 percent, with China being the most popular country of origin.

With that influx, it becomes easy for international students to just hang out with each other and speak their native language. At U-Va. I heard many gentle reminders for students to get out of their comfort zones and meet American students.

Some other numbers from the Open Doors report:

723,277: The total number of international students in the United States last school year. That’s a 4.7-percent increase from the previous year when there were 690,923 international students.

32 percent: The growth in the number of international students in the past decade.

$21 billion: The amount of money international students spend in the United States on tuition, fees, housing and living expenses.

70 percent: The percentage of international students whose primarysource of funding for college is from their personal funds, family, government and other foreign sources.

157,558: The number of students from China, a group that makes up 22 percent of all international students. (This group grew 23 percent in one year for all Chinese students and 43 percent for undergraduates.) Other popular countries of origin are: India with 103,895 students, South Korea with 73,351 and Canada with 27,546.

8,615: The number of international students at the University of Southern California, the most popular host school last year.

For even more higher education news, follow me on Twitter andFacebook.

By   |  01:35 PM ET, 11/14/2011

More Trade Actions – Wind Turbine Towers, Washing Machines

More Trade Actions – Wind Turbine Towers, Washing Machines

Dave Johnson  |  July 31, 2012  |  Campaign for America’s Future

The game is to underprice your product until your competitors go out of business (like Solyndra & other solar companies). Then you own the market. This is about a lot more than just jobs. Our government is finally doing something about leveling the playing field!

This week, in separate actions, our Commerce Department imposed “anti-dumping” tariffs on wind turbine towers and washing machines. The wind turbine towers were coming in from China and Vietnam, the washing machines from Mexico and South Korea.

Why Sell Under Cost?

Dumping is when a product is sold for less than it costs to evenmake the product. The idea is that your competitors will go out of business and the manufacturing ecosystem of suppliers, knowledge and infrastructure moves to you, so you’ll come out ahead in the long run.

It takes enormous investment to open up a manufacturing operation because you need the proper facilities, the right local utilities, the tools and machines, the skilled workforce, the suppliers, the local infrastructure, the channels to markets, and all the rest of the ecosystem that supports manufacturing. When that is lost to another country it is very, very difficult to get it back. Especially in a country with a Congress that refuses to understand the need for a national industrial policy.

This is the game that countries like China have been playing with their national industrial policies designed to capture strategic industries like solar and wind energy. By selling lower than cost for several years you gain market share and shed competitors. The suppliers, knowledge base, and jobs move their way. Eventually they build or strengthen an entire ecosystem and it is just too costly for others to try to compete.

At first it is attractive to take advantage of the lower prices, later the jobs, factories, companies and entire industries are gone along with the jobs and economic power they bring. Or, in other words, look around at what has happened to us.

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Beware the Amish-Made Label

(Image Credit: Richard Ellis/Getty Images)

From food to furniture to clothing, more and more goods are showing up in stores with an Amish label attached to their name. The problem: Most of these goods are not Amish and are, in reality, being created without the input or knowledge of the Amish people.

“This is certainly nothing new,” said Brad Igou, president of the Amish Experience, which provides tours of legitimately Amish-owned and -operated businesses in Bird-in-Hand, Pa.

“The word Amish implies honesty, integrity and well-made durable goods,” he added as explanation for the popularity of the term. “People who don’t do their homework might be buying things that are not Amish-made.”

The term “Amish Country” is popular among companies that are not selling the genuine article because it refers to a geographical location rather than to the people themselves, according to AmishAmerica.com.

The website quoted one Amish entrepreneur as saying, “I see this in the food industry.  There’s quite a few organizations here locally that will sell using ‘Amish.’  And what they’re trying to do is create the perception that it does come from Amish producers, when it doesn’t.  They don’t explicitly say so, they just say ‘Amish Country’ this, ‘Amish Country’ that. … ‘Amish’ is big, ‘Country’ is small.  So, the customer that buys this, his perception … is this comes from an Amish farm or an Amish producer.”

Aside from watching it being made or knowing the producer, there’s no way to know for sure. One of the best signs, however, is also the most counterintuitive.

“Most of the time,” Igou said, “Amish do not use the term Amish in the name of their business.”

source 
http://abcnews.go.com/blogs/headlines/2012/07/beware-the-amish-made-label/

 

Made in America: Outfitting Olympic Gymnasts

For over two decades, GK Elite has made bright, fun leotards for the world’s top Olympic gymnasts.

Based in Reading, Pennsylvania, GK Elite designs and manufactures gymnastics leotards for a dozen of countries.

From dazzling sequins embedded over bold colors to nude bodysuits embellished with crystals, the leotards worn by gymnasts during the Olympics are almost as fascinating as the Olympians that wear them. The garments have to be comfortable and flexible, while accentuating the movements of the athletes.

While you might assume these complex designs come from a French fashion house or a haute couture designer, a majority of these leotards are actually made by a 30-year-old apparel company based in Reading, Pennsylvania.

GK Elite Sportswear has designed and manufactured the leotards for the world’s top Olympic gymnasts for two decades. For the London Games at the end of the month,GK Elite produced uniforms for nine teams, including Russia, Britain, Greece, and, of course, Team U.S.A. “Gymnastics is one of the most watched sports during the Olympics,” says CEO Dan Casciano. “It always surprises people that a good number of those teams’ leotards are made right here in the U.S.A.”

The Best Kind of Marketing

It all began in 1989, when the then-8-year-old company inked its first deal with the U.S.A Gymnastics, the sport’s governing body, to supply the American national team with leotards. This led to the company’s debut Olympic leotards at the Barcelona Games in 1992, and soon other national teams approached GK Elite for leotards. By 2000, GK Elite was supplying dozens of countries with women and men’s leotards, and it also became the sole manufacturer of all adidas-branded national team gymnastics apparel.

Behind the scenes, the company spends years (yes, years) developing, designing, and manufacturing these high-profile uniforms.

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Olympics committee commits to manufacturing future uniforms in USA

 

The United States Olympic Committee (USOC) on Monday announced they have voluntarily adopted rules proposed by Congress to ensure that future clothing for Team USA is made in America.

“After listening to feedback from members of Congress, we have committed, along with our partners at Ralph Lauren, to make future parade uniforms in the United States,” USOC CEO Scott Blackmun said in a statement.

Many members of Congress protested following reports that the Ralph Lauren-designed clothing that Team USA will wear in the opening and closing ceremonies of the Olympics were made in China. Sen. Robert Menendez (D-N.J), along with 12 other Senators representing both sides of the aisle, earlier this month announced legislation called the Made in America Act to require that future uniforms worn by Olympians and Paralympians to be made in America.

“I’m incredibly pleased that the USOC has formally adopted the requirements outlined in the Team USA Made in America Act,” Menendez said in a statement. “My goal was to ensure that while our Olympians and Paralympians are representing the best of American athleticism and sportsmanship, they also proudly represent the best of American manufacturing and workmanship. This new policy – which will not be altered without informing the Congress –  is a clear win for both America’s athletes and America’s workers.“

According to Menendez’s office, the senator met with the Olympic Committee last week to discuss the agreement. The USOC has committed to manufacturing all future uniforms in the United States unless essential materials are not available or obtaining them would cause “undue delay.”

Team USA will still wear the China-manufactured uniforms in this year’s Olympics. The opening ceremonies are set for Friday in London.

The Factory Factor: Why Outsourcing and ‘Made in America’ Could Decide this Election

Scott Paul

Executive Director, Alliance for American Manufacturing

American manufacturing is like apple pie to American voters: we love it and want more of it regardless of our politics, race, gender, income, or hometown. If you live in a swing state like Ohio, you already know that, because both presidential candidates have flooded the airwaves with ads labeling the other guy as the “outsourcer-in-chief.”

Beneath the recent accusations and counter-accusations on outsourcing, there is a simple truth: citizens believe manufacturing is central to our nation’s economic health, that America is in economic decline, that outsourcing to China is largely responsible for this condition, and they want their elected leaders to do something bold about it.

Voters of all political stripes are far ahead of the debate inside Washington, D.C. More importantly, perhaps, is that nearly all Americans — not only working-class Ohioans – share this view.

So don’t be surprised if both campaigns escalate the rhetoric and attacks on shipping jobs overseas in the coming weeks, in part to mask their own shortcomings.

That’s because no one is a knight in shining Made in America armor when it comes to this issue. Mitt Romney (rightly) criticizes President Obama for not labeling China as a currency manipulator, but glosses over the fact that Republican leaders in Congress are blocking a bipartisan currency bill that would pass overwhelmingly. Romney has also been on the wrong side of Administration decisions to defend American tire workers against China’s cheating and successfully rescue Chrysler and General Motors.

The GOP hypocritically accuses Obama of sending stimulus dollars overseas, while Republican Senators tried to block Buy America requirements for stimulus spending.

The fact is, accusing your political opponent of shipping jobs overseas is now an established American campaign tradition. What is missing is an honest debate about what could actually be done to promote American manufacturing jobs. Voters are ready for such a dialogue.

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