Energy Is A Small Input In Manufacturing – Business Insider

Energy Is A Small Input In Manufacturing – Business Insider.

Need to Know: April 12, 2013: Main Street: Findlay, Ohio | Need to Know | PBS

Need to Know: April 12, 2013: Main Street: Findlay, Ohio | Need to Know | PBS.

Now cheap energy (fossil) will fuel manufacturing; too bad these plants produce few or no jobs and destroy the environment and produce climate instability!

From the transcript!

FINDLAY IS AT THE CENTER OF ANOTHER, SURPRISING DEVELOPMENT. AFTER DECADES OF DECLINE – THE NUMBER OF AMERICAN MANUFACTURING JOBS IS RISING. AMERICAN FACTORY JOBS ARE ACTUALLY COMING BACK.

FINDLAY WITH 150 MANUFACTURING FACILITIES, HAS BEEN UNUSUALLY SUCCESSFUL AT ATTRACTING FACTORY WORK. WHIRLPOOL, AT 4901 NORTH MAIN STREET IS THE LARGEST DISHWASHER PLANT IN THE WORLD. IT EMPLOYS MORE THAN 2,000 PEOPLE. AND LAST YEAR IT ADDED 114 NEW EMPLOYEES, AND BECAME PART OF A STORY MUCH BIGGER THAN FINDLAY, AFFECTING THOUSAND OF COMPANIES AND POTENTIALLY MILLIONS OF WORKERS.

PRESIDENT OBAMA: After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three. Caterpillar is bringing jobs back from Japan. Ford is bringing jobs back from Mexico. And this year, Apple will start making Macs in America again.

JOHN LARSOn [narration]: WHILE ONE CAN ARGUE HOW MUCH THE PRESIDEnt OR HIS ADMINISTRATION had to do with IT, at least 220 American companies have reportedly brought an estimated 50,000 jobs back to the US since January of 2010 — most coming from China. BUT WHY NOW, AFTER decades of losing FACTORY jobs?

GREG ARBURN: It’s potentially enormous.

JOHN LARSOn [narration]: Dr. Greg ARBURN is a professor of economics at the University of Findlay, on Main Street. He says, American manufacturing is returning in part because OF the tremendous EXPANSION OF domestic oil and gas production.

GREG ARBURN: For the United States, the cost of– of natural gas is much lower than it is for a lot of our competitors. Japan, the price of natural gas, China, the price of natural gas is more in the $17 range, where here in the United States it’s more in the three and a half dollar range for a million BTU. That’s a huge advantage. That’s—

JOHN LARSON: So six times less expensive here in U.S.?

GREG ARBURN: That– that’s– that’s a big deal.

JOHN LARSOn [narration]: IT’S NOT A COINCIDENCE THAT MARATHON PETROLEUM IS HEADQUARTED ON FINDLAY’S MAIN STREET. IN THE LATE 1800’S THE COMPANY FORMED TO TAKE ADVANTAGE OF RICH LOCAL OIL AND GAS FIELDS AND MANUFACTURING RUSHED TO FINDLAY, TO TAKE ADVANTAGE OF CHEAP, EVEN FREE ENERGY.

NOW, IT APPEARS IT MAY BE HAPPENING AGAIN. NEW TECHOLOGY OF HYDRAULIC FRACTURING AND SHALE OIL RECOVERY, WHILE ENVIRONMENTALLY CONTROVERSIAL, HAS TRIGGED UNPRECEDENTED OIL AND GAS DISCOVERIES, DROPPED THE PRICE OF ENERGY, AND LAUNCHED WHAT ARBURN AND OTHERS BELIEVE MAY BE A NEW ERA OF AMERICAN FACTORY JOBS.

GREG ARBURN: In the case of Ohio– estimates are t– range wildly from 20,000 to 200,000 jobs in Ohio over the next three years — especially in the natural gas industry.

JOHN LARSON: Even if you take the average of that, you’re talking about a hundred thousand jobs just in this state.

GREG ARBURN: That’s a boom. That’s a lotta jobs. That’s a lot of people with more income –puts kids through school.

JOHN LARSOn [narration]: a second reason for manufacturing growth is that American corporations are investing in technology helping American labor become even more efficient.

GREG ARBURN: One of the things that’s happened, is interest rates have gone down and gone down and gone down. And so firms have found themselves in a situation where th– with a– with a very reasonable cost and capital, they can adapt new technologies, make capital investments, become even more productive.

JOHN LARSOn [narration]: TAKE ONE LOOK AT THE BALL CORPORATION’S CAN MANUFACTURING PLANT JUST A BLOCK OFF MAIN. 24 HOURS A DAY. 7 DAYS A WEEK. 3000 CANS A MINUTE. 3 BILLION A YEAR – ITS THE LARGEST RECYCLABLE ALUMINUM CAN MANUFACTURER IN THE WORLD. BUT JUST LAST YEAR BALL INVESTED ANOTHER $14.6 MILLION DOLLARS HERE TO BRING IN MORE LINES AND FURTHER IMPROVE ITS TECHNOLOGY. THE FACTORY’S EFFICIENCY JUMPED TO UNPRECEDENTED LEVELS.

GLENN JOST: There’s a drive. All of us want to succeed. Every plant I know of out there in our division wants to do better.

JOHN LARSOn [narration]: GLENN JOST IS THE PLANT’S MANAGER. BALL RECENTLY CLOSED PLANTS IN OHIO AND FLORIDA, BUT EXPANDED THE PLANT IN FINDLAY, ADDING 30 NEW EMPLOYEES. STILL THE MASSIVE PLANT IS SO EFFICIENT THERE ARE ONLY 90 EMPLOYEES ON THE FACTORY FLOOR.

JOHN LARSON: My first reaction when I saw it was, “Wow.” And my second reaction was sorta, “Where is everybody?” You know, I expected to see 1,000 people running around these machines.

GLENN JOST: The machines to a degree run by themselves. But they don’t run unless we have people capable of programming those machines, people capable of keeping them running mechanically. Electronically, yes. It looks like it runs by itself but it doesn’t.

JOHN LARSOn [narration]: THESE HIGHLY SKILLED WORKERS OPERATE PROGRAMMABLE LOGIC CONTROLS – SOPHISTICATED COMPUTER SYSTEMS – THAT AUTOMATE THE PRODUCTION LINE, AND MAKE ADJUSTMENTS DOWN TO A MILLIONTH OF AN INCH.

AND THEN THERE ARE WAGES. JOBS ARE RETURNING TO THE U.S. IN PART BECAUSE WAGES IN CHINA ARE RISING, WHILE NATIONALLY MANUFACTING WAGES HERE IN THE U.S. ARE FALLING. GOVERNMENT STATISTICS FOR THE FINDLAY AREA REFLECT THIS, SHOWING WAGES IN LOCAL MANUFACTURING ARE SIGNIFICANTLY HIGHER THAN SERVICE INDUSTRY JOBS, FOR EXAMPLE – BUT NOT AS HIGH AS SOME MIGHT THINK, AND THE MANUFACTURING WAGES HERE ARE DROPPING.

CHRIS RENN: Their benefits package in industry is still gonna be better than if they worked in the service industry. But the reality is, all of us are– are struggling with health care and the expense of health care and the benefits packages probably are not what they used to be– all across the board.

JOHN LARSOn [narration]: FEW ARE MORE FOCUSED ON THE FUTURE OF INDUSTRY WAGES AND JOBS THAN CHRIS RENN, DIRECTOR OF FINDLAY’S MILLSTREAM CAREER CENTER.

IN 2007 THE BLANCHARD RIVER JUMPED ITS BANKS AND FLOODED FINDLAY – ONE OF THE WORST FLOODS OF THE YEAR IN THE MIDWEST. AFTER THE FLOOD, HOWEVER, VOTERS APPROVED THIS NEW 19 MILLION HIGHSCHOOL FOCUSED ON TECHNICAL TRAINING – PREPARING STUDENTS FOR A FUTURE IN, AMONG OTHERS THINGS, MANUFACTURING.

CHRIS RENN: Just in northwestern Ohio alone, over the next seven years it’s estimated there’s gonna be 59,000 job openings in manufacturing. That’s gigantic, and– most industry that we talk with– they have no idea where they’re gonna find those workers.

“Shale Gas: A Renaissance in U.S. Manufacturing

shale-gas.pdf (application/pdf Object).

“Shale Gas: A Renaissance in U.S. Manufacturing,” is based on a high level of shale gas production. The jobs would be created by companies expanding or building new plants, as well as companies bringing manufacturing jobs back to the United States, said Robert McCutcheon, U.S. industrial products leader for PricewaterhouseCoopers LLC, which produced the report with the manufacturer’s association.