The Devolution of the United States Manufacturing Base

[Guest J. Hogue]

A power shift has transpired beyond the politician to the new aristocracy of the multi-billion dollar business executives. The princes of supply and demand can be influenced for the betterment of the future, not by ballot, but by what you demand they supply.

[Guest Free America]

It's time for the United States and other countries around the globe to realize that the biggest threat to the free world is--without a doubt--China. Sadly, China has so much money and power because the West has an open-door policy of "trade", in which China trades and we just watch them take our jobs and industries. We've allowed them to keep their currency 25-40% below market value while they steal our technology, destroy the environment, etc. The Chinese are now infiltrating South America while they make false promises to various governments. They really only want oil and raw materials and to put South American companies out of business as they dump Chinese made products.

[Guest Gary]

It's time for the United States and other countries around the globe to realize that the biggest threat to the free world is--without a doubt--China. Sadly, China has so much money and power because the West has an open-door policy of "trade", in which China trades and we just watch them take our jobs and industries. We've allowed them to keep their currency 25-40% below market value while they steal our technology, destroy the environment, etc. The Chinese are now infiltrating South America while they make false promises to various governments. They really only want oil and raw materials and to put South American companies out of business as they dump Chinese made products.

 

Don't blame the Chinese but rather look to the quality of leadship guiding the United States policies worldwide as it's horrifing how incompedent they are.

[Guest Jesse Litchman]

Right here in northeastern Pennsylvania, we are seeing blue-collar jobs disappear, gas prices skyrocket, health insurance costs rise and inflation in the grocery stores, while wages continue to remain stagnant.

[Guest IndianaGold]

Right here in northeastern Pennsylvania, we are seeing blue-collar jobs disappear, gas prices skyrocket, health insurance costs rise and inflation in the grocery stores, while wages continue to remain stagnant.

 

Instead of investing hundreds of billions of dollars expanding oil production in the Persian Gulf and other unstable regions, America needs to be investing in revitalizing its factories to build fuel-efficient cars and its farms to create renewable fuel supply.

[Guest Robert Kuhn]

Saudi Basic Industries Corp. (SABIC), owned 70 percent by the Saudi government, is the largest listed company in the Middle East and the largest petrochemical company in the world by market cap.

 

SABIC recently acquired GE Plastics, a subsidiary of General Electric, for $11.6 billion. Headquartered in Pittsfield, Mass., the business was renamed SABIC Innovative Plastics.

[Guest Kevin54]

I am new at this posting stuff, so I wanted to check out your story. You were right. Here is their release. God help our country.

 

GE (NYSE: GE) and Saudi Basic Industries Corporation (SABIC) today announced that they had reached agreement for SABIC to acquire GE Plastics for a purchase price of $11.6 billion. Announcement of the acquisition was made by Jeff Immelt, Chairman and CEO of GE and Mohamed Al-Mady, Vice Chairman and CEO of SABIC.

 

"As a global operating company, SABIC has a long-term, strategic interest in the people, communities, customers, products, plants and technology of GE Plastics", said Mr. Al-Mady, in making the announcement. "This acquisition represents another important step in SABIC’s growth and diversification to become one of the world’s leading manufacturing companies."

 

"This business is complementary to our existing business without any overlaps. SABIC’s intention is to grow the business globally", he added. "SABIC is well-positioned to do this, while adding high-performance plastics to the product range SABIC currently offers to customers."

 

In earlier deals, SABIC has acquired DSM Petrochemicals business in Europe and the Huntsman Petrochemicals business in the UK. In each case, existing management teams continued to manage the business, and have been given SABIC’s support to implement various investment and growth initiatives.

 

"GE selected SABIC as the winner of this auction both for price as well as the company’s premier position as one the world’s fastest growing, innovative companies," said Jeff Immelt. "With a strong reputation as a safe, responsible and efficient operator of large, state-of-the-art chemical plants, coupled with a commitment to investment in technology, SABIC is the smart choice to grow the GE Plastics unit."

 

SABIC Americas, based in Houston, is the foundation for the company’s long-standing commitment to U.S. operations, having operated here for more than 20 years. SABIC also has long-term partnerships with prominent companies like ExxonMobil and Shell.

 

"SABIC has deep roots in America and extensive experience in operating in the U.S. as a leading chemical company," explained Mr. Al-Mady. SABIC currently employs more than 200 people in the U.S. through its own operations and a joint venture in New Jersey, plus another 500 people who are employed indirectly through suppliers. With the acquisition, SABIC employment will swell to almost 30,000 people. With worldwide manufacturing operations, GE Plastics is well-positioned to meet the needs of global customers under SABIC’s ownership.

 

The closing of the transaction is subject to completing regulatory approvals and is targeted to occur by the third quarter of 2007.

 

SABIC's advising bank is Citi as the investment banker, Shearman & Sterling/ Van Bael & Bellis as legal counsel, KPMG as the pension, financial and tax advisor, MERCER as the HR and Pension advisor, Jacobs Consultancy as the consultant on the plants, URS as the advisor of environmental Health and Safety and Booz Allen Hamilton as General consultant and program manager.

 

About GE Plastics

GE Plastics is a global supplier of plastic resins widely used in automotive, healthcare, consumer electronics, transportation, performance packaging, building and construction, telecommunications and optical media applications. The company manufacture and compounds polycarbonate, ABS, SAN, ASA, PPE, PC/ABS, PBT and PEI resins, as well as the LNP* line of high-performance specialty compounds. GE Plastics, Specialty Film and Sheet manufactures high-performance Lexan* sheet and film products used in thousands of demanding applications worldwide. In addition, GE Plastics’ dedicated automotive organization is an experienced, world-wide competitor, offering leading plastics solutions for five key automotive segments: body panels and glazing; under the hood applications; component; structures and interiors; and lighting.

 

About SABIC

Saudi Basic Industries Corporation (SABIC) is the largest public company in the Middle East, ranked by market capitalization (currently US$ 80 billion), and one of the world’s 10 largest petrochemicals manufacturers. The company is among the world’s market leaders in the production of polyethylene, polypropylene, glycols, methanol and fertilizers as well as the fourth largest polymer producer.

 

SABIC’s profit rose to a record US$ 5.4 billion in 2006, a six percent increase on 2005. Sales revenues for 2006 totaled US$ 23 billion, the highest revenues achieved by the company since its inception. Total assets at the end of 2006 were US$ 44.4 billion.

 

SABIC operates six interlinked strategic business units: Basic Chemicals, Intermediates, Specialty Products, Polymers, Fertilizers and Metals. The company has significant research resources and has dedicated Research and Technology centers in Riyadh, Geleen in the Netherlands, Houston USA and Vadodara in India. SABIC has more than 19,000 employees worldwide.

 

SABIC has two large production sites in Saudi Arabia – in Al-Jubail and in Yanbu – comprising 19 world-scale complexes. Some of these complexes are partnerships with multi-national joint venture partners such as ExxonMobil, Shell and Mitsubishi Chemicals. SABIC’s overall production capacity has increased from 27 million metric tons in 2001 to 49.1 million metric tons of production in 2006.

 

SABIC’s other global hubs are headquartered in Singapore for Asia Pacific with a sales office network and logistic hubs throughout the region; and in Sittard, the Netherlands, for Europe. In Europe, the company employs around 3,300 people, had a European sales office network, logistic hubs and three petrochemical manufacturing sites at Geleen (the Netherlands), Teeside (United Kingdom) and at Gelsenkirchen (Germany). SABIC Europe produces 2.5 million metric tons per annum of polyolefins and 3.3 million metric tons of basic chemicals.

 

Headquartered in Riyadh, Saudi Arabia, SABIC was founded in 1976 when the Saudi Arabian Government decided to use the hydrocarbon gases associated with its oil production as the principal feedstock for production of chemicals, polymers and fertilizers. The Saudi Arabian Government owns 70 percent of SABIC shares with the remaining 30 percent held by private investors in Saudi Arabia and other Gulf Cooperation Council countries.

[Guest Big Blue]

I hope Kentucky voters talk about losing their jobs to the candidates.

 

today announced that it was reviewing strategic options for its Appliances business. The Company is currently considering three possibilities for the unit: a strategic partnership or joint venture; spin off; or the sale of the business.

 

“This review is consistent with the strategy we have been executing to transform our portfolio for long-term growth, “ GE Chairman and CEO Jeff Immelt said. “Since 2003 we have exited slower growth and more volatile businesses, generating $52 billion in gross proceeds from dispositions. These proceeds have been reinvested into a transformed portfolio of faster growth, higher margin businesses, stock buybacks and other restructuring activities.

 

“GE Appliances has a very strong brand, great distribution, a talented leadership team and for more than 100 years, has been one of the icons associated with GE in the United States,” Immelt said. “However, it remains primarily a U.S. business, meaning its fortunes are tied to the rise and fall of a single market. We want to make this good business great again by finding the right strategic solution – a solution that will give Appliances the global reach and investment required to compete more effectively,” Immelt said.

 

“Jim Campbell and the Appliances leadership team have done a great job running the business and I am pleased that they have agreed to remain at the business,” Immelt said. “Their leadership has been critical in creating world-class products like GE Monogram®, GE Café® and a wide range of Energy Star™ certified appliances.”

 

GE Appliances is part of GE Industrial’s Consumer & Industrial division, which also includes the lighting and electrical distribution businesses. Those units will remain part of GE’s industrial platform. Both businesses are global and fit well with GE’s environmental initiative, ecomagination.

 

GE Appliances is a $7.2 billion business and employs about 13,000 people worldwide. It is headquartered in Louisville, KY.

[Guest Ron_*]

I looks like rising fuel prices and negative war view is going to cause GM to sell its Hummer Line.

 

GM Chief Executive Rick Wagoner told shareholders last week that the automaker was conducting a strategic review of Hummer and was considering all options, from revamping of the lineup to a partial or complete sale. Wagoner gave no timeline or further details.

 

"I'm not real happy with General Motors right now," said Brad Johnson, general manager of Hummer of Columbus in Dublin, Ohio. "It was a poor choice of words on their part and it's a bad decision to come out and say something when you don't know what's going to happen."

 

"GM killed the electric car and now skyrocketing gas prices have crushed the Hummer," notes Arianna Huffington, who founded the Detroit Project, an effort to pressure automakers to make more fuel-efficient cars.

 

Potential buyers could include Indian automakers Tata Motors Ltd., which just acquired Land Rover and Jaguar from Ford Motor Co., or Mahindra & Mahindra Ltd., which was in the running for Land Rover and Jaguar, according to Aaron Bragman, an auto analyst with Global Insight. Bragman said Chinese automakers also have shown some interest in acquiring an American brand.

[Luke_Wilbur]

Here is one good thing about the increase of gas prices

 

The rising cost of shipping everything from industrial-pump parts to lawn-mower batteries to living-room sofas is forcing some manufacturers to bring production back to North America and freeze plans to send even more work overseas.

 

"My cost of getting a shipping container here from China just keeps going up -- and I don't see any end in sight," says Claude Hayes, president of the retail heating division at DESA LLC. He says that cost has jumped about 15%, to about $5,300, since January and is set to increase again next month to $5,600.

 

The cost of shipping a standard, 40-foot container from Asia to the East Coast has already tripled since 2000 and will double again as oil prices head toward $200 a barrel, says Jeff Rubin, chief economist at CIBC World Markets in Toronto. He estimates transportation costs are now the equivalent of a 9% tariff on goods coming into U.S. ports, compared with the equivalent of only 3% when oil was selling for $20 a barrel in 2000.

 

"In a world of triple-digit oil prices, distance costs money," Mr. Rubin wrote in a recent report. He figures that for every 10% increase in the distance of a trip, energy costs rise 4.5%.

 

Transportation costs are just part of a larger wave of inflation sweeping global manufacturing, which has also been pounded by higher costs for basic materials, such as steel and resins.

 

The cost of doing business in China in particular has grown steadily as workers there demand higher wages and the government enforces tougher environmental and other controls. China's currency has also appreciated against the dollar -- though not as much as some critics contend it should -- increasing the cost of its products in the U.S.

 

http://online.wsj.com/article/SB121331934552070357.htm

[Guest blueskies]

It was the Democrats who started this mess with China.

 

Do you think Americans have the cohesion of the Chinese people? In your dreams! We have a lot of apathy about how things get done in our Federal government -- American politicians and American media goofs have confidence and trust ratings at the bottom of any poll!

[Guest AFL-CIO]

Obama is a strong supporter of the Employee Free Choice Act—he co-sponsored it in the Senate and voted for it last year. McCain, for all his blathering about Sarah Palin’s union-member husband, opposes unions and voted against the Employee Free Choice Act. Worse, McCain voted FOR a bill that would have eliminated unions altogether.

[Guest John McCain]

"I'm disappointed to hear of the upcoming General Motors plant closings. Hardworking people are paying the price because our country's leaders have put Washington corruption and Wall Street greed before Main Street's interests for too long. Change is coming. I know families across America are hurting and as president, I will lead members of both parties in a fight to keep and create good jobs in communities across the country. Now is not a time for words and platitudes. Now is a time for action. That is why I supported auto industry loan guarantees and will continue to work to create opportunities for American auto companies to build the car of the 21st century and put Americans back to work."

[Guest Jason Campbell]

WABCO Announces Multi-Year Strategic Agreement to Supply CNHTC, China's Largest Manufacturer of Heavy Duty Trucks

 

 

BRUSSELS, March 12 /PRNewswire-FirstCall/ -- WABCO Holdings Inc. (NYSE: WBC), a global technology leader and tier-one supplier to the commercial vehicle industry, today announced the completion of a strategic partnership agreement to supply China National Heavy Truck Corporation (CNHTC), the largest producer of heavy duty trucks in China. WABCO's strategic agreement with CNHTC extends to 2016 and is worth several hundred million U.S. dollars in cumulative sales.

 

A supplier to CNHTC since 1997, WABCO will continue to provide air management products, braking systems including anti-lock braking, and transmission control products. Further increasing their partnership, WABCO will be CNHTC's sole supplier of automated manual transmission (AMT) systems through 2016. CNHTC is the world's first original equipment manufacturer to adopt WABCO's highly advanced modular AMT system in volume production.

 

"Over the past decade, WABCO has transformed from a European export company into a global organization that successfully adapts to the requirements of the Chinese market," said Cai Dong, CNHTC President. "WABCO's local management team also has the ability to rapidly align sourcing and manufacturing capabilities with market conditions in China, further enhancing the flexibility, cost effectiveness and value that WABCO offers CNHTC."

 

"We are proud to be chosen by China's largest truck maker as their long term partner in a highly competitive market," said Jacques Esculier, WABCO Chief Executive Officer. "Partnering with CNHTC confirms our strategy of pursuing technology leadership while globalizing our capabilities in engineering, sourcing and manufacturing. CNHTC also recognizes WABCO as a local manufacturer, focused on local customer needs and powerfully connected to the Chinese market."

 

"Our long term agreement with CNHTC marks another strategic achievement as we continue to combine WABCO's global engineering capabilities with the nuanced knowledge and power of local teams," said Leon Liu, WABCO President, Asia Pacific. "CNHTC values our local sourcing and manufacturing in China, and this agreement consolidates WABCO's position in China as a global technology leader with a strategic commitment to expand appropriate capabilities in China for the long term benefit of local customers."

 

About WABCO

 

WABCO Vehicle Control Systems (NYSE: WBC) is a leading supplier of safety and control systems for commercial vehicles. For over 140 years, WABCO has pioneered breakthrough electronic, mechanical and mechatronic technologies for braking, stability, and transmission automation systems supplied to the world's leading commercial truck, trailer, and bus manufacturers. With sales of $2.6 billion in 2008, WABCO is headquartered in Brussels, Belgium. For more information, visit http://www.wabco-auto.com

[Guest HANK COX]

The United States is “missing the boat” when it comes to exporting manufactured products, the National Association of Manufacturers (NAM) Vice President for International Economic Affairs Frank Vargo told a House panel today.

 

Vargo told the House Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection that the United States ranks “dead last” among the world’s top 15 manufacturing nations in percentage of manufactured products sold abroad.

 

“Exports are vitally important to U.S. manufacturing,” Vargo said. “More than one in every five American factory workers owes his or her job to exports. And export-related jobs pay 13-18 percent more on average than non-trade related jobs.”

 

Vargo said the U.S. government spends about twice as much promoting the export of agricultural products as it does manufactured products, even though manufactured goods exports are 10 times larger than farm exports. U.S. export promotion efforts for manufactured goods, he said, “are about half of the average for other major industrial nations.”

 

In 2008, exports accounted for only 13 percent of the U.S. economy compared to 49 percent for Germany, 34 percent for the United Kingdom, 30 percent for France, and 19 percent for Japan. “We need to achieve higher rates of exports to pay for our share of imported goods,” Vargo said.

[Guest Tag]

We should convert our failing car manufacturers into wind turbine and solar producers just like we did in WWII.

[Guest Zeitgeist]

A world that is in competition with itself for labor, resources, and survival is an unsustainable system inherently, for it lacks an external conscience.

[Guest Darryll]

While there is a certain amount of civic pride in hiring american citizens, it is not a foundation of good business: appreciation of talent and labor cost is.

[Guest Prescott]

Did you know that 4,000 illegal aliens are crossing nightly in Arizona alone. Three million continue walking, crawling or tunneling across our borders this year. Their accelerating numbers undermine Arizona's and the United States ability to function.

[Guest LAW_*]

Industrial production fell 1.5 percent in March after a similar decrease in February. For the first quarter as a whole, output dropped at an annual rate of 20.0 percent, the largest quarterly decrease of the current contraction. At 97.4 percent of its 2002 average, output in March fell to its lowest level since December 1998 and was nearly 13 percent below its year-earlier level. Production in manufacturing moved down 1.7 percent in March and has registered five consecutive quarterly decreases. Broad-based declines in production continued; one exception was the output of motor vehicles and parts, which advanced slightly in March but remained well below its year-earlier level.

[Guest Mark Thoma]

The question is the degree to which a country can outsource the manufacturing of goods needed for national defense. If we do not have the capacity to produce engines, cars, tractors, and other goods that can be quickly converted to building military vehicles and aircraft, and war breaks out and those supplies are cut off, where does that leave us?

[Guest Senator John Cornyn]

Politico published an op-ed I wrote regarding President Obama's proposal to increase taxes on American businesses doing business overseas:

 

The populists and protectionists want to demonize American businesses that invest overseas. The truth is that foreign investment helps create jobs for businesses in every sector of our economy. About 95 percent of the world's consumers live outside the United States, and American workers produce the high-quality goods and services that many of them want to buy. By investing in overseas markets, American businesses can deliver more of our products to foreign consumers and create more jobs here in America. According to the National Bureau of Economic Research, each dollar that U.S. businesses invest in foreign nations generates $3.50 of additional investment here at home.

 

Our government taxes all corporations at a higher rate than most industrialized nations, and our complex tax code is badly in need of repair. American businesses operating overseas contribute $2.5 trillion to our economy and employ more than 22 million Americans, yet President Obama's recent proposals do more harm than good. Eliminating tax deferrals which allow American companies to be competitive abroad puts them - and our economy - at risk.

 

Proposals like those that the President has put forth risk American competitiveness, and American jobs. Help Republican Senators provide a vital check-and-balance to these protectionist and populist policies today.

 

Sincerely,

John Cornyn

Senator John Cornyn

Chairman

National Republican Senatorial Committee

[Guest Richard]

American's keep believing Obama and his non-sense about recovery and there is NO possible way a recovery is even possible before a massive and destructive loss of the U.S. markets. They have prolonged what shouild have happens months ago with artificial props meant to only distract peoples attention away from reality.

[Guest Ron]

This recent Department of Commerce release proves the point that even in this time of recession we are are still a consumer nation. We purchase more goods than we produce.

 

The May to June increase in exports of goods reflected increases inindustrial supplies and materials ($1.2 billion); capital goods ($0.4 billion); foods, feeds, and beverages ($0.3 billion); and automotive vehicles, parts, and engines ($0.1 billion). Consumer goods and other goods were virtually unchanged.

 

The May to June increase in imports of goods reflected increases in industrial supplies and materials ($3.9 billion); automotive vehicles, parts, and engines ($0.9 billion); foods, feeds, and beverages ($0.1 billion); and other goods ($0.1 billion).

 

Decreases occurred in consumer goods ($1.7 billion) and capital goods ($0.1 billion).

 

The June 2008 to June 2009 decrease in exports of goods reflected decreases in industrial supplies and materials ($12.4 billion); capital goods ($8.0 billion); automotive vehicles, parts, and engines ($5.3 billion); consumer goods ($1.9 billion); foods, feeds, and beverages ($1.9 billion); and other goods ($0.8 billion).

[Guest August]

Today’s report showed that U.S. exports increased by 2 percent to $125.8 billion, which closely tracked the increase in imports, which rose 2.3 percent to $152.8 billion. The trade gap widened to $27 billion from $26 billion.