“Webb is among 80 employees poised to lose their jobs in Strongsville, Ohio, outside Cleveland, near where General Electric Co. will shut a lighting factory in favor of production in Hungary. Delphi Automotive Plc is sending parts assembly to Mexico from Flint, Michigan, and Eaton Corp. will make extra-large hydraulic cylinders in the Netherlands, not Alabama. “Manufacturing is clearly on the downswing,” said Webb, 49, who was told in April that the Strongsville Service Center would close. “Everybody I know is jumping to the service industry or taking some other kind of job.” The U.S. industrial comeback, an idea embraced by President Barack Obama and some economists as 12 years of factory-job losses gave way to three annual gains, is now sputtering. Even with nonfarm payrolls up 1.1 percent in 2013 to 136.1 million, manufacturing has stagnated at less than 12 million. Factories added more than 500,000 positions after falling in February 2010 to the lowest since 1941. That left the factory workforce through August about 13 percent smaller than the 13.7 million when the U.S. fell into recession in December 2007. In 2000, the tally was 17 million. “I know all of us are concerned about manufacturing, but it’s not going to come home to the degree that it used to be,” Federal Reserve Bank of Dallas President Richard Fisher said at a Sept. 5 event in Dallas. Cost Disadvantage Higher taxes and employee benefits boost U.S. manufacturing costs to 9 percent more than the average of the country’s nine-largest trading partners, according to a Sept. 3 report by a team of JPMorgan Chase & Co. analysts. For GE, higher U.S. expenses mean sending assembly of high- intensity discharge lamps to Budapest from a factory with 160 workers in Ravenna, Ohio. “This particular product that was at Ravenna was made more cost competitively in Hungary,” said Christopher Augustine, a spokesman for Fairfield, Connecticut-based GE. Hungary is GE’s global production center for that product line, just as fluorescent-lamp output is centered elsewhere in Ohio, in Bucyrus, Augustine said. Many of those lights go to U.S. customers, he said. Expanding Abroad Honeywell has cut its U.S. workforce by 5,000 positions to 52,000 since 2007 while adding 15,000 employees abroad, for a total of 80,000 outside the country. Strongsville is one of two avionics repair shops closing in the U.S., along with one in Irving, Texas, said Steve Brecken, a Honeywell spokesman. U.S. operations are being consolidated in Renton, Washington, and Wichita, Kansas, and part of the work is being transferred to a U.S.-based contractor, he said. Morris Township, New Jersey-based Honeywell is expanding outside the U.S. at shops in Singapore and Shanghai to meet rising demand there, Brecken said. “The world has opened up and it’s providing more choices for manufacturers that are global companies and supply a global customer base,” said Stephen Stanley, chief economist for Pierpont Securities LLC in Stamford, Connecticut. “We’re going to continue to see a globalization of manufacturing.” (...) Payrolls, Productivity One discouraging sign that manufacturing employment is recovering: the 13 percent gap between factory payrolls now and before the recession occurred amid a rebound in output, said Tim Quinlan, a Wells Fargo & Co. economist in Charlotte, North Carolina. Industrial production trails a 2007 pre-recession high by only 1.9 percentage points. “Whereas I do see manufacturing underpinning overall U.S. economic growth, I don’t see hiring in the factory sector underpinning growth in jobs,” Quinlan said. “It will be a long, long time before we get back to pre-recession highs for employment in the factory sector.” With manufacturing employment up only 0.1 percent through August, job growth is just about keeping pace with losses such as the pending shutdown in November of Delphi’s Flint factory, with 300 employees. The work is being moved to Mexico, according to a Trade Adjustment Assistance petition filed with the U.S. Labor Department. Tom Wickham, a spokesman for General Motors Co., which supplied unionized hourly workers for the plant supervised by Troy, Michigan-based Delphi, confirmed the closing. Eaton, Jabil Eaton said in a petition that it shuttered its hydraulic- cylinder plant in Decatur, Alabama, in July. Scott Schroeder, a spokesman for Dublin, Ireland-based Eaton, said consolidating production boosts efficiency. In Tempe, Arizona, contract electronics manufacturer Jabil Circuit Inc. will eliminate about 500 positions with a factory closing. “We are in the process of moving several assemblies to other Jabil facilities in Mexico and Asia in order to reduce labor costs and meet our customers’ pricing expectations,” the St. Petersburg, Florida-based company said in a Trade Adjustment Assistance petition. Beth Walters, a Jabil spokeswoman, said by e-mail that the plant will close within a year. Webb, who said he helped train Honeywell employees from abroad who now perform work once done in the U.S., can relate to displaced workers at other U.S. manufacturers. If he can’t find a job near Strongsville with equal pay, he may pursue a long- held desire to become a high school teacher. In the meantime, he goes to work each day amid the strain of a months-long wind-down before what may be the end of his career in avionics repair. “It’s like dying a death of a thousand cuts here,” Webb said, “because it’s going so slowly.””
Posted on: Sat, 21 Sep 2013 07:00:48 +0000
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