U.S. Energy’s Impact on Manufacturing

Karen Harbert, president and CEO of the Institute for 21st Century Energy, offered recent thoughts on the connection between expanding U.S. energy production and manufacturing:

The energy revolution continues to bring good economic news to an otherwise anemic economy. For years, we’ve been arguing that America’s energy revolution will bring jobs and investment to our economy. Now, there’s a new example to demonstrate just how true that is.

At the annual CERAWeek 2017 conference, ExxonMobil CEO Darren Woods announced a new Growing the Gulf initiative to increase its manufacturing capabilities in the Gulf Coast region. As part of the initiative, the company will be investing $20 billion to build or expand 11 different facilities – creating 45,000 new American jobs. So why is a giant company best known for oil production investing so much in manufacturing?

Last year, the U.S. Chamber’s Sean Hackbarth captured the essence of how America’s energy revolution has sparked a manufacturing revolution as well. The natural gas, crude oil and gas liquids being produced across the country in record amounts are the chemical building blocks to products we use every day, from clothing to cosmetics to pharmaceuticals. One needs to look no further than the aisles of a department store to see all the plastic products, and that plastic comes from natural gas and oil.

Sophisticated high-tech manufacturing facilities turn these energy resources into the products we buy every day. As we produce more home-grown energy, it is leading to more home-grown manufacturing as well. Plentiful energy resources are making it less expensive to build products in the United States, and those same resources are also providing the electricity needed to run manufacturing facilities at reduced costs.

All this manufacturing means more choices for American consumers, and it gives us an opportunity to export products. Domestic U.S. manufacturers are now competing all over the world, helping to reduce our trade deficit and creating jobs back at home. As a result, the United States, and especially the Gulf Coast, is becoming the epicenter of a manufacturing renaissance – exactly as we predicted.

In 2014, we launched our “Shale Works for US” campaign, which included a report produced with IHS CERA that quantified the far-reaching benefits from the shale revolution. It is important to note that because of our national supply chain, the benefits from investments reach each and every state, and in turn bring jobs, revenues and benefits to every corner of our nation.

It’s exciting to see these predictions borne out, and it’s a continued sign that America’s status as an energy superpower will help bring prosperity to us all – while driving innovation and technological advancement that help make America an economic superpower as well.

Calling All Manufacturers to Learn About Apprentice Program

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Apprenticeship Works is the National Advanced Manufacturing Apprenticeship Program at the Robert C. Byrd Institute for Advanced Flexible Manufacturing at Marshall University in Huntington, West Virginia. The goal: make apprenticeships more accessible and affordable for employers to help reduce skills gaps.

This national effort is funded by a $4.9 million grant from the U.S. Department of Labor.

Two information sessions on the program will take place Wednesday, April 13 at the Vincennes University Aviation Technology Campus (2175 Hoffman Road in Indianapolis). Non-food manufacturers will meet at 9:00 a.m. that day, followed by food manufacturers at 10:30.

Registration is limited. Contact Rick May (email: Richard.may@indy.gov; phone: 317-327-3701) of the Department of Metropolitan Development – City of Indianapolis for more information or to register.

Report: American Manufacturing is Still Alive and Well

According to a report from Ball State’s Center for Business and Economic Research (CBER) and Conexus Indiana, the American manufacturing industry is hardly in the downward spiral that some have projected — and they anticipate openings for new manufacturing jobs will range from 80,000 to 150,000 per year over the next 10 years.

“There are major misunderstandings among the public and the media about the manufacturing sector,” said Michael Hicks, director of CBER and the George and Frances Ball Distinguished Professor of Economics at Ball State. “The U.S. manufacturing base is not in decline, and we have recovered from the recession. Nor are jobs being outsourced because American manufacturing can’t compete internationally. Moreover, new jobs in manufacturing pay well above the average wage.”

The study notes that the Great Recession had lost its stranglehold by 2014, when U.S. manufacturers attained record levels of production.

“Changes in productivity, domestic demand and foreign trade all impact manufacturing employment in the U.S.,” Hicks said, “and it’s important to clarify those impacts in order to understand what is happening in the manufacturing and logistics industries.”

The study also found that:
• More than 87 percent of manufacturing job losses are due to productivity gains, including better supply chains, more capital investment and advanced technology.
• Only 4 percent of manufacturing jobs have been lost to international trade (also known as outsourcing) since 2000.
• Since the end of the Great Recession in 2009, the economy has added 750,000 manufacturing jobs.
• The biggest job losses occurred in low productivity sectors with low transportation costs.

The report points out baby boom generation retirees are leaving behind good, well-paying jobs in those sectors, and younger workers are filling those jobs at an unprecedented rate. Recent new hire salaries averaged $20.06 per hour — almost $42,000 a year. As millennials move into the workforce, wage gaps between new and existing jobs are primarily age- and tenure-related, he said.

The report, “The Myth and the Reality of Manufacturing in America,” and the individual state report cards may be found online.

Honda Manufacturing of Indiana Completes One Millionth Vehicle

Honda Celebrates 1 Millionth Group PhotoIn Greensburg on Wednesday, Honda Manufacturing of Indiana, LLC (HMIN) and its associates celebrated the one millionth car built at the plant.

This is quite an achievement for one of the auto industry’s premier companies — though definitely not its first major milestone in America. A release from Honda has more:

The completion of HMIN’s 1 millionth vehicle comes only six years after the start of mass production at the $800 million facility on October 9, 2008.

In addition to making the Civic, HMIN started manufacturing Acura ILX vehicles in 2012 before transferring the production to the Marysville Auto Plant in Ohio earlier this year. In total, 65,172 Acura ILX cars were built at HMIN during a three year period — helping us reach this production milestone.

“We have come a long way from where Honda Manufacturing of Indiana started in 2008 to where we are today,” said Bob Nelson, HMIN president. “Our associates have shown tremendous commitment and dedication to get us to this major milestone and we will continue to work to provide our customers with products of the highest quality. These values and beliefs are at the heart of what makes Honda great.”

Last week, at the New York International Auto Show, Honda announced the North American version of the 2016 Civic Sedan will be produced at the Indiana plant. Honda is preparing to launch its completely reimagined 10th-Generation Civic models beginning this fall.

HMIN became Honda’s fourth auto plant in the U.S. and its seventh in North America when it began production of Civic sedans in October 2008. With employment over 2,000 and capital investment exceeding $800 million, HMIN primarily manufactures automobiles for the United States, with some Civics produced for export to markets outside of North America. HMIN maintains one of the lowest environmental footprints of any automobile plant in Honda’s global production network.

78% of Hoosier Manufacturers Predict Growth in the Next Two Years

An excerpt from a report released by Katz Sapper & Miller

Just four years ago, many Hoosier manufacturers were nearly swamped by the challenges presented by the financial crisis and the resulting Great Recession.

Recovery ensued for many in 2011 and 2012, but most could not help but wonder if the improvement was simply a return to a pre-crisis normalcy or the beginning of a renaissance in manufacturing, powered by energy-cost advantages and onshoring. The 2014 Indiana Manufacturing Survey results provide more clues.

All things considered, Indiana manufacturers have experienced steady improvement, with the percentage describing their financial position as “challenged” dropping to 17%, down from 21% in both the 2013 and 2012 surveys and down from a whopping 47% in the 2011 survey. Not so coincidentally, 47% of Indiana manufacturers now describe their financial performance as “healthy,” up from 34% in 2013 and back in line with the improvement observed in 2012, when 44% responded as such (versus only 21% in 2011).

These new results confirm the trend we noted in last year’s report: Indiana manufacturing has made significant financial and operational improvements while rebounding from the recession. Raw materials, work-in-process and finished-goods inventories are under control; suppliers and accounts receivables are being paid on a timely basis; and a host of operational performance measures, from customer satisfaction to product quality, have noticeably improved. Indeed, Indiana manufacturing is on a path that could see it grow in terms of employment and economic output to levels not seen in more than a decade.

Also view this corresponding infographic.

‘Indiana Competitiveness: What Works’ Event Set for Sept. 15 in Lafayette

Ivy Tech’s Lafayette campus will host Indiana Competitiveness: What Works on Monday, Sept. 15. The event, hosted by GE and Ivy Tech, will feature remarks from Rep. Todd Rokita and a keynote address from a senior leader at GE.

Additionally, there will be a panel discussion and networking opportunities for supply chain leaders and current and prospective suppliers. Speakers will discuss the state of manufacturing in Indiana and how it can be enhanced to compete in a global economy. Rep. Susan Brooks will also be in attendance and other members of Congress have been invited.

Details:
When: Monday, Sept. 15, 10 a.m. – 1 p.m.
Where: 3101 S. Creasy Lane in Lafayette
RSVP: If you plan to attend, RSVP to Sydney.Stone@ge.com by Sept. 12 with your name, title, organization and email address.

One in Every Five Central Indiana Jobs is in Manufacturing

The manufacturing sector is a key economic driver in Indiana. Ninety-five percent of Indiana’s exports are manufactured goods. Total employment in manufacturing in Central Indiana is 106,877. And $69,320 is the average annual compensation of the manufacturing workforce in Indiana.

The issue: in a 2009 survey conducted by the National Association of Manufacturers and accounting firm Deloitte & Touche found that 32% of surveyed manufacturers couldn’t find enough qualified workers. And more than 1,000 manufacturing jobs are anticipated to become available each year for the next 10 years.

This is great news for Indiana’s workforce! The important step is that we communicate this to students and parents so they understand where the job demand is and understand what the pathways are. The Indiana Chamber Foundation and Ready Indiana are taking a step to help bridge the knowledge gap. The Chamber Foundation has released a study examining the current landscape of school counseling. Fleck Education conducted the study. This will guide The Chamber’s upcoming efforts to connect K-12 education and workforce needs.

See this infographic with Indiana manufacturing facts.

On the Right Jobs Track

Indiana’s employment picture has brightened considerably in recent months. Some numbers behind the numbers, according to the Department of Workforce Development:

  • There are over 30,000 more Hoosiers in the labor force than in March of 2000, the employment peak in the state
  • Indiana’s labor force has grown at six times the national rate over the past year
  • The number of unemployed Hoosiers (196,272) is less than 200,000 for the first since August 2008
  • Since July 2009, the low point in recent employment numbers, Indiana has added 214,600 private sector jobs (10th in the nation) at a rate of 9.2% (seventh in the nation)
  • In the manufacturing world, the state ranks third in jobs added over the past year (behind Michigan and Ohio), second (behind Michigan) in jobs added since July 2009 and ninth in growth rate over the past year

Throwback Thursday: 75 Years Since Bremen Castings Opened its Doors

You know a company is tied to its community when the community is in its own name. We’re proud to call Bremen Castings Inc. an Indiana Chamber member, and sincerely congratulate this Northern Indiana company for its milestone this month in celebrating 75 years in business.

We featured this innovative company in BizVoice magazine last year, so check out the article. And being a social media person, I enjoy seeing how Bremen Castings honors its employees in its social media feeds. A thoughtful way to include staff in the company’s messaging. Be sure to get BCI’s updates on Twitter and Facebook.

And a release from the company offers more on its anniversary:

The iron industry has been around for generations but over the years, the face of foundries has shifted away from small, family-run businesses to large corporations.  Bremen Castings Inc. (BCI) in Bremen, Indiana, is not one of them.

The family-owned foundry will be celebrating its 75th anniversary in March and James (JB) Brown, President of Bremen Castings, credits the longevity and success of the company to its forward thinking business model, streamlined day-to-day operations, and above all, having each employee feel as though they are a member of the Bremen family.

“It is crucial for everyone to be a team member and an active citizen within our communities so we strive to cast each employee into a valuable and responsible individual,” says Brown.  “We have a set of core values that we want everyone to have and appreciate.”

Originally named, Bremen Gray Iron foundry (the name was changed to Bremen Castings Inc. in 1972), the company was established on March 17, 1939 by Ellis Brown, Charles W. Kling and Harold Heckamen with an initial investment of $10,000.  Some of the first customers included Bendix Corporation, Clark Equipment, and Ford Motor Company.

Since its inception, Bremen Castings has grown from an 800 square foot building to its current 125,000 square feet with more additions planned for the future.  The company has continued to stay at the forefront of the foundry industry, having won numerous awards for its safety, technology and environment-friendly manufacturing.  Today, Bremen is still privately owned and operated by the Brown family.

$1.3 Billion Available to Help Communities Advance Manufacturing

The following is a release from the U.S. Office of the Federal Register:

Indiana is a manufacturing state. Now, there is federal assistance available to communities to support economic development strategies to expand manufacturing.

The Investing in Manufacturing Communities Partnership (IMCP) is a federal initiative designed to cultivate an environment for businesses to create well-paying manufacturing jobs in regions across the country, thereby accelerating the resurgence of U.S. manufacturing. IMCP rewards communities that employ best practices to attract and expand manufacturing through planning their economic development in concert with local government, business, universities, and other stakeholders. Such efforts also build on local assets and align investments to local industry needs, such as capital, workforce education, infrastructure and research.

To date, IMCP has awarded 44 communities a total of $7 million to support the creation of economic development strategies. In the newly opened second phase, communities will be able to compete for some $1.3 billion in federal dollars, and assistance from 10 cabinet departments and agencies. In addition, communities will have access to a playbook of federal economic development resources and a new data tool for assessing their manufacturing strengths. An announcement of the competition was released in December as were a Federal Register Notice, resource playbook, and data tools. Please note that, while the announcement indicates a March 14, 2014 deadline for applications, that deadline is no longer accurate and is in the process of being revised.

Learn more online.