Daily Insight for July 9, 2012:
Daily Insight: Airbus in Alabama and what ‘Made In America” means
Our new venture: Each weekday, Daily Insight will offer some news, some views and some information about what’s happening in U.S. manufacturing, and around the world. With manufacturing finally getting the attention it deserves, you need to know what’s happening around you to make good business decision.
Comments, items of interest and suggestions always are welcome. You can reach me at bvavra(at)cfemedia.com.
Airbus to Alabama: Is it now AirBama? The announcement this week that Airbus will build a new manufacturing plant in Mobile, Alabama is a further indication that foreign investors remain bullish on the American manufacturing market. The $600 million plant will allow the European-based Airbus to build planes in the U.S. for commercial and military functions. Airbus lost a controversial military deal to Boeing a year ago because of the furor over “made-in-America” and this deal may be strategically designed to defuse that issue.
It also is a further example of how the Mid-South and Deep South are moving the center of manufacturing. The combination of a soft dollar, less expensive labor and land, and generous tax incentives – al.com reports this deal includes $158 million in incentives for Airbus have attracted a number of manufacturers to the region. That attraction shows no signs of weakening any time soon.
Another example of this trend is the continuing growth of the auto industry in the South. Nissan’s Canton, Tenn. plant, for example, is adding a third shift and 1,000 jobs this year, according to RanklinLedger.com.
The motivation is simple: Nissan wants to increase its market share in the U.S. and increase its percentage of U.S. sales from North American-made cars to 85%. RanklinLedger.com reports it’s now at 69%.
So what’s “Made-In-America”? Our single biggest issue to overcome is this outdated notion of “Made In America” and its actual value to manufacturing. Nissan is made in America. So is Toyota, VW, BMW, Kia and Hyundia. Airbus soon will join that group.
If Caterpillar builds a plant in China to manufacture massive earth movers that would cost a fortune to ship and transport, is that any different than Nissan building in Tennessee? The idea is that we’re in a global manufacturing environment. More and more, products are being built closer to their end user. It’s not being done due to patriotism or nationalism. It’s because it’s a smart business decision.
Patent suit settled: Inpro-Seal issued a press releases this week announcing that a federal judge in Illinois has ruled the company’s Current Diverter Ring does not violate a patent held by Illinois Tool Works. After Judge James Zagel ruled last September on the scope of the protection that the ITW patent covered, ITW sincde acknowledged the scope of that ruling meant the Inpro-Seal product did not infringe on their patent.
“We are gratified that the court has re-affirmed our position on this case,” said Mark Lee, vice president and general manager of Inpro/Seal. “Inpro/Seal has always maintained the utmost respect for intellectual property and patent protection. This judgment allows Inpro/Seal to get back to the business of serving customers.”
Lab simulator at Auburn: A partnership between FFD, Inc., and Auburn University’s Industrial Engineering Manufacturing Laboratory will provide a networked installation of FFD’s Sequence Enterprise Software allowing students to author, manage and deploy standardized automotive assembly work.
“The goal of the lab is to create a fully integrated, high volume manufacturing environment that incorporates the best practices found in top Lean production systems, said Laboratory Director Tom Devall. “Our hands-on teaching modules provide the experiential learning that our students need to set them apart from the competition after graduation.”
“We are very excited to be a part of this great new facility,” says FFD President and CEO Barry Lucas. “This one-of-a-kind laboratory is the closest simulation I’ve seen to a real automotive assembly.”
“Standardized work is the foundation of a Lean practice,” Duvall adds. “We need world class software that provides the infrastructure to create benchmark standardized work. Sequence meets this need.”
Manufacturing also needs more university-manufacturing partnerships. If you participate in one, let us know.
Celebrate our Leaders Under 40: The deadline is August 1 for the 2012 Leaders Under 40 recognition by Plant Engineering. If you or someone you work with is 40 years or younger and making a significant contribution, submit the information at this link: http://www.plantengineering.com/events-and-awards/leaders-under-40.html
The honorees will be featured in the September issue of Plant Engineering.
Case Study Database
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2012 Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.