The Devolution of the United States Manufacturing Base

[Guest Luke]

It is amazing to think that China is now doing our nation's infrastructure projects. Is this where all that taxpayer money went to give us jobs.

 

http://www.nytimes.c...l/26bridge.html

 

Talk about outsourcing.

 

At a sprawling manufacturing complex here, hundreds of Chinese laborers are now completing work on the San Francisco-Oakland Bay Bridge.

 

Next month, the last four of more than two dozen giant steel modules each with a roadbed segment about half the size of a football field will be loaded onto a huge ship and transported 6,500 miles to Oakland. There, they will be assembled to fit into the eastern span of the new Bay Bridge.

 

The project is part of China's continual move up the global economic value chain from cheap toys to Apple iPads to commercial jetliners as it aims to become the world's civil engineer.

 

The assembly work in California, and the pouring of the concrete road surface, will be done by Americans. But construction of the bridge decks and the materials that went into them are a Made in China affair. California officials say the state saved hundreds of millions of dollars by turning to China.

 

"They've produced a pretty impressive bridge for us," Tony Anziano, a program manager at the California Department of Transportation, said a few weeks ago. He was touring the 1.2-square-mile manufacturing site that the Chinese company created to do the bridge work. "Four years ago, there were just steel plates here and lots of orange groves."

 

On the reputation of showcase projects like Beijing's Olympic-size airport terminal and the mammoth hydroelectric Three Gorges Dam, Chinese companies have been hired to build copper mines in the Congo, high-speed rail lines in Brazil and huge apartment complexes in Saudi Arabia.

 

In New York City alone, Chinese companies have won contracts to help renovate the subway system, refurbish the Alexander Hamilton Bridge over the Harlem River and build a new Metro-North train platform near Yankee Stadium. As with the Bay Bridge, American union labor would carry out most of the work done on United States soil.

 

American steelworker unions have disparaged the Bay Bridge contract by accusing the state of California of sending good jobs overseas and settling for what they deride as poor-quality Chinese steel. Industry groups in the United States and other countries have raised questions about the safety and quality of Chinese workmanship on such projects. Indeed, China has had quality control problems ranging from tainted milk to poorly built schools.

 

But executives and officials who have awarded the various Chinese contracts say their audits have convinced them of the projects' engineering integrity. And they note that with the full financial force of the Chinese government behind its infrastructure companies, the monumental scale of the work, and the prices bid, are hard for private industry elsewhere to beat.

 

The new Bay Bridge, expected to open to traffic in 2013, will replace a structure that has never been quite the same since the 1989 Bay Area earthquake. At $7.2 billion, it will be one of the most expensive structures ever built. But California officials estimate that they will save at least $400 million by having so much of the work done in China. (California issued bonds to finance the project, and will look to recoup the cost through tolls.)

 

California authorities say they had little choice but to rebuild major sections of the bridge, despite repairs made after the earthquake caused a section of the eastern span to collapse onto the lower deck. Seismic safety testing persuaded the state that much of the bridge needed to be overhauled and made more quake-resistant.

 

Eventually, the California Department of Transportation decided to revamp the western span of the bridge (which connects San Francisco to Yerba Buena Island) and replace the 2.2-mile eastern span (which links Yerba Buena to Oakland).

 

On the eastern span, officials decided to build a suspension bridge with a complex design. The span will have a single, 525-foot tower, anchored to bedrock and supported by a single, enormous steel-wire cable that threads through the suspension bridge.

 

"We wanted something strong and secure, but we also wanted something iconic," said Bart Ney, a transportation department spokesman.

 

A joint venture between two American companies, American Bridge and Fluor Enterprises, won the prime contract for the project in early 2006. Their bid specified getting much of the fabricated steel from overseas, to save money.

 

California decided not to apply for federal funding for the project because the "Buy America" provisos would probably have required purchasing more expensive steel and fabrication from United States manufacturers.

 

China, the world's biggest steel maker, was the front-runner, particularly because it has dominated bridge building for the last decade. Several years ago, Shanghai opened a 20-mile sea bridge; the country is now planning a much longer one near Hong Kong.

 

The selection of the state-owned Shanghai Zhenhua Heavy Industries Company was a surprise, though, because the company made port cranes and had no bridge building experience.

 

But California officials and executives at American Bridge said Zhenhua's advantages included its huge steel fabrication facilities, its large low-cost work force and its solid finances. (The company even had its own port and ships.)

 

"I don't think the U.S. fabrication industry could put a project like this together," Brian A. Petersen, project director for the American Bridge/Fluor Enterprises joint venture, said in a telephone interview. "Most U.S. companies don't have these types of warehouses, equipment or the cash flow. The Chinese load the ships, and it's their ships that deliver to our piers."

 

Despite the American union complaints, former California Gov. Arnold Schwarzenegger, a Republican, strongly backed the project and even visited Zhenhua's plant last September, praising "the workers that are building our Bay Bridge."

 

Zhenhua put 3,000 employees to work on the project: steel-cutters, welders, polishers and engineers. The company built the main bridge tower, which was shipped in mid-2009, and a total of 28 bridge decks the massive triangular steel structures that will serve as the roadway platform.

 

Pan Zhongwang, a 55-year-old steel polisher, is a typical Zhenhua worker. He arrives at 7 a.m. and leaves at 11 p.m., often working seven days a week. He lives in a company dorm and earns about $12 a day.

 

"It used to be $9 a day, now it's $12," he said Wednesday morning, while polishing one of the decks for the new Bay Bridge. "Everything is getting more expensive. They should raise our pay."

 

To ensure the bridge meets safety standards, 250 employees and consultants working for the state of California and American Bridge/Fluor also took up residence in Shanghai.

 

Asked about reports that some American labor groups had blocked bridge shipments from arriving in Oakland, Mr. Anziano dismissed those as confused.

 

"That was not about China," he said. "It was a disagreement between unions about which had jurisdiction and who had the right to unload a shipment. That was resolved."

[Guest Enron Ex]

On a crushingly hot mid-August day at Foxconn's Longhua factory campus in Shenzhen — where a dutiful army of 300,000 employees eats, sleeps, and churns out iPhones, Sony PlayStations, and Dell computers.

 

Foxconn's Terry Tai-Ming Gou has a grim forecast for American manufacturing.

 

http://www.msnbc.msn...g_businessweek/

 

Gou has plans to capitalize on the changes he has wrought. Perhaps most intriguing is his plan to move additional production to the U.S. The company currently employs about 1,000 workers in a Houston plant that makes specialized high-end servers for corporate clients the company declined to disclose, and Gou envisions a fully automated plant to produce components within five years. "If I can automate in the U.S.A. and ship to China, cost-wise it can still be competitive," he says. "But I worry America has too many lawyers. I don't want to spend time having people sue me every day."

 

The of Age of Machines is coming where machines are being used in place of the people.

 

Taiwan's Foxconn Technology Group, known for assembling Apple's iPhones and iPads in China, plans to use more robots, with one report saying the company will use one million of them in the next three years, to cope with rising labor costs.

 

Foxconn's move highlights an increasing trend toward automation among Chinese companies as labor issues such as high-profile strikes and workers' suicides plague firms in sectors from autos to technology.

 

Contract manufacturers such as Foxconn, which also counts Dell, Hewlett-Packard and Nokia among its clients, are moving parts of their manufacturing to inland Chinese cities or other emerging markets.

 

They are also boosting research and development investments to lift their thin margins.

 

"Workers' wages are increasing so quickly that some companies can't take it longer," said Dan Bin, a fund manager at Shenzhen-based Eastern Bay Investment Management, which invests in technology and consumer-related shares in China and Hong Kong.

 

"Automation is a general trend in many sectors in China, such as electronics. Of course some companies will consider moving their manufacturing overseas, but it's easier said than done when the supply chain is here."

 

http://www.reuters.c...E77016B20110801

[Guest AISI]

In the week ending September 17, 2011, domestic raw steel production was 1,884,000 net tons while the capability utilization rate was 77.0 percent. Production was 1,699,000 tons in the week ending September 17, 2010, while the capability utilization then was 70.2 percent. The current week production represents a 10.9 percent increase from the same period in the previous year. Production for the week ending September 17, 2011 is up 0.8 percent from the previous week ending September 10, 2011 when production was 1,869,000 tons and the rate of capability utilization was 76.4 percent.

 

Adjusted year-to-date production through September 17, 2011 was 67,967,000 tons, at a capability utilization rate of 74.8 percent. That is a 6.5 percent increase from the 63,790,000 tons during the same period last year, when the capability utilization rate was 71.2 percent.

 

Broken down by districts, here's production for the week ending September 17, 2011 in thousands of net tons: Northeast Coast: 126; Pittsburgh/Youngstown: 146; Lake Erie: 44; Detroit: 115; Indiana/Chicago: 481; Midwest: 269; Southern: 615 and Western: 88.

 

(The Raw Steel production tonnage provided in this report is estimated. The figures are compiled from weekly production tonnage provided from 50% of the domestic producers combined with monthly production data for the remainder. Therefore, this report should be used primarily to assess production trends. The AISI production report “AIS 7,” published monthly and available by subscription, provides a more detailed summary of steel production based on data supplied by companies representing 80% of U.S. production capacity.)

[Luke_Wilbur]

The Decline in Manufacturing has been going on 40 years now. No Republican or Democrat has changed the decline. This last decade we have seen a much steeper decline due to the opening of outside markets.

 

This decline coupled with increasing government debt is spiraling our economy downward at an accelerated rate.

 

If you add to those two factors the fact that Republicans and Democrats are not working together has created a government that can no longer legislate a solution to the problem.

 

This means Harry Reid and Mitch McConnell need to step down from their governing positions.

 

This means John Boehner and Nancy Pelosi need to step down from their governing positions.

 

Both sides of the aisle need to caucus and get new leadership withing the already elected body that want to work on solutions.

[Guest DCpages Staff]

In 2000 United States represented about 13 percent of manufactured merchandise exported, which declined to about 8 percent in 2009. During this period, China's contribution to world manufacturing rose from about 5 percent in 2000 to about 13 percent in 2009.

 

Country: China

 

2000: Value of manufacturing output: $476.0 billion;

2000: Percentage of world manufacturing output: 6.7%;

2008: Value of manufacturing output: $1.5 trillion;

2008: Percentage of world manufacturing output: 15%.

 

Manufacturing's Role in the U.S. Economy and Exports:

 

Manufacturing's Share of U.S. GDP Has Declined.

 

Year: 1989;

Percentage of GDP: 17.3%.

 

Year: 1993;

Percentage of GDP: 15.9%.

 

Year: 1997;

Percentage of GDP: 15.3%.

 

Year: 2001;

Percentage of GDP: 13.1%.

 

Year: 2005;

Percentage of GDP: 12.4%.

 

Year: 2006;

Percentage of GDP: 12.3%.

 

Year: 2007;

Percentage of GDP: 12.1%.

 

Year: 2008;

Percentage of GDP: 11.5%.

 

Year: 2009;

Percentage of GDP: 11.2%.

[Guest Augustine]

Watch and read this

 

https://www.youtube.com/watch?v=2ASCQmNH2Tk

 

The labor conditions in Asia have long been a controversial topic, but they have recently come into the spotlight due to concerns over Apple's working practices in China. Back in January, the New York Times exposed new details involving what takes place in the factories of Apple's largest supplier, Foxconn.

 

Ross Eisenbrey, the Vice President of the Economic Policy Institute (EPI), told WebProNews that these conditions include 60-70 hour work weeks, chemical exposures, explosions from uncontrolled aluminum dust, and more. In an effort to raise awareness of these issues, the EPI held a forum last week in conjunction with working rights' groups.

 

According to Eisenbrey, Apple is to blame since it is in control of the situation. He told us that these issues date back to 2005 and that Apple has yet to do anything to actually resolve the conditions. What's more, the working conditions at Apple's Foxconn factories in Brazil are completely different.

 

Although Apple and Foxconn have agreed to some remediations after the Fair Labor Association conducted an investigation, Eisenbrey remains skeptical since the problems have gone on for so long. However, he is hopeful that consumers will react. When this happens, he believes Apple's eyes will be opened.

[Guest MIA]

 

The REAL State of Our Union.

[Guest Sen. Sanders]

The uniforms to be worn by U.S. athletes during the opening ceremony for the Olympics in London are red, white and blue. But they are made in China. Sen. Bernie Sanders on Thursday criticized the U.S. Olympic Committee's decision to outfit the American athletes in Chinese-made berets, blazers, pants and shoes. "The Olympics are a time when Americans take great pride in our nation's top athletes as they strive for gold," Sanders said. "At a time when millions of Americans are unemployed, there is no reason why U.S. Olympic uniforms are not being manufactured in the U.S. This action on the part of the U.S. Olympic Committee is symbolic of a disastrous trade policy which has cost us millions of decent-paying jobs and must be changed."