The Canadians Feel Our Pain

I only know Rhode Island from the Farrelly brothers movies. They are famous native sons.

This article from The Globe and Mail highlights Rhode Island's manufacturing problems:

...more than 11 per cent of its work force is jobless, the worst anywhere in a
state that rivals economically battered Michigan for the highest unemployment
rate in the country.

...few feel the pain quite like Rhode Island, a southern neighbour to Massachusetts that lost its manufacturing base in the 1960s and 1970s and is struggling to find a new economic engine.
The state reported a record 53,000 people out of work in October and its unemployment rate of 9.3 per cent tied with Michigan, home of the devastated auto industry, for the highest rate in the country.

Dominos

The large consumer product companies, of which automotive is the largest, were the first hurt by the credit crisis and then by the consumer confidence crisis. Now watch as their contractions affect the rest of the economy: (By Courtney Schlisserman and Bob Willis,Dec. 15 (Bloomberg))

Manufacturing in the U.S. slumped further in November as exports tumbled and automakers slashed their assembly rate to the lowest level in more than 18 years.

As consumers tighten their belts, so do the companies:

“Companies are cutting back on investment, capital, inventories and production and you should see this number going down,” said Lindsey Piegza, a market analyst at FTN Financial in New York. “The crisis has spread to all parts of the production line and we’re really going to have to cut back more.”

Well, at least exports will remain strong. Right?

As a recession spreads across the globe, the overseas demand for American products that had sustained U.S. manufacturing growth is drying up. The Commerce Department reported last week that American exports declined in October for the third straight month.

Hooverites

At Talking Points Memo, Josh Marshal discusses and article by Ed Kilgore regarding the Republicans' recent behaviour regarding actions to confront the credit crisis.

There's an interesting and I think important question here as to whether neo-Hooverite Republicans are pushing Hooverite policies for strictly economic reasons (creditors can do well in a deflationary economy), moral reasons (need a good hard recession to re-teach the poor moral values) or just because they're economic illiterates who just don't feel right echoing the calls of centrist and liberal economists.

Watching Senator Shelby's performance makes you wonder.

Plant Closing #17

From the Daily Journal in Northeast Mississippi:

SHERMAN - When furniture maker and retailer La-Z-Boy announced last month it was going to cut 850 employees company wide, this small community braced for what could happen to the Bauhaus upholstered furniture plant.

It turns out that furniture, especially La-Z-Boy loungers, is another discretionary consumer item being hurt in this downturn.

More on Forging

Regarding the Pakistan Ordnance Factory video I posted yesterday, I had a question about one of the processes. I think the process was probably hot forging. Here are a few other examples:
Brass Hot Forging:


Steel Forging: (although more of a Blacksmith method in this vid)


Aluminium Forging:

Plant Closing #16

Fleetwood is announcing some severe cuts. If automotive is hurting, I can understand how recreational vehicles would be killed. I drove by an RV sales lot on the way to Midnight Madness. The floodlights lit the behemoths.....

Fleetwood Enterprises Inc., the third-largest U.S. maker of recreational vehicles, said it’s closing 8 of its 24 plants because of reduced demand for travel trailers and factory-built housing.
The company expects to cut about 760 jobs, or 13 percent of the 5,700 positions it had at the end of August, as production is consolidated at other facilities.

Pilgrim's Pride Chapter 11

I posted about Pilgrim's Pride a few weeks ago. At the time they announced about 300 layoffs due to sluggish sales. Now:

The poultry giant, Marshall County’s largest employer, is seeking Chapter 11 protection. That would free the company from the threat of creditors’ lawsuits while it reorganizes its finances.

Matt Arnold, president and CEO of the Marshall County Economic Development Council, said Pilgrim’s Pride is in relatively good shape because its assets outweigh its debts.

“It’s just a matter of liquidity,” he said. “They need some cash to get them through a tough spot right now.

“I think we just keep plugging along. A lot of these farmers who had Gold Kist stock when it was cooperative kept their stock, and now that stock’s not worth a whole lot, but it’s going to come back up.”

What about the rest?

The car manufacturers appear in DC starting tomorrow.

Joe Murrey of The Bulletin, a Philadelphia paper, has a commentary about the prognosis for U.S. manufacturing entitled: "Can US Manufacturing Industry Be Saved? "

But if the Big Three fail what will be left of the U.S. manufacturing base? Televisions, computers, cell phones, radios and other electronics have already been ceded to Asia, particularly to China. The U.S. barely makes cruise ships, Boeing is becoming a relic, and U.S. factories dwindle as China assumes her spot as the factory floor to the world.

Joe's last sentence:

As for the U.S., its greatest trade surpluses with China stem from corn, wheat, animal feeds, hides and skins, pulp, cotton, meat and soybeans - what Paul Craig Roberts called the "export profile of a 19th century Third World colony."

Pakistani Manufacturing

Here is a promotional video from the Pakistan Ordinance Factory.
These vids make me smile because they are so earnest, "internationally recognized for quality and reliability", and the music is cheesy. But, still, interesting.
I could not imbed it, so here is the link.

I wouldn't mind working in the small arms plant, but the artillery factory might make me nervous.

I am sure many of you work in the defense industry.

http://www.youtube.com/watch?v=3wy8i8EXuPM

At about 2:53, is that semi-solid casting? or forging?

Plant Closing #15

Magna announces some plant closings:

Magna International Inc., battered by production cuts at Chrysler and General Motors, will shut two auto parts plants in the Toronto area next June, eliminating 850 jobs in the latest example of how the U.S. auto slump is creating fallout on this side of the border.

Since 2007??

ummm.... I can understand not being able to predict something, but how can it take a year to understand we are in a recession?

WASHINGTON -- The U.S. economy has been in a recession since December 2007, the National Bureau of Economic Research said Monday.

What good is it for a group of economist to spend the time and expense conferring to announce something that is a year old? There has to be a Monty Python skit that relates to this.

Plant Toilet Tails

I posted about the server room that was accessed through the woman's handicapped restroom. Here is another comment about a plant toilet.

My favorite restroom cubicle was on the far side of the tool and die shop. You went up a worn concrete stairwell. The men's room must have had 24 stalls, three double sided rows or 4 stalls. When the plant was built there must have been a heck-of-a-lot more laborers in the plant, and with stricter break schedules, that required so many stalls for peak usage times. At the time I worked there you hardly even ran into another user. Plus, the ambient plant noise gave you a sense of auditory "privacy".

What is your favorite spot?

Plant Closing #14

Plant Closing #14 is an automotive glass factory;

Pittsburgh Glass Works, the former auto glass unit of PPG Industries Inc., announced three plant closings and 150 layoffs to keep pace with slumping auto demand.
PGW will shutter production at its Oshawa, Ontario glass fabrication site in the first quarter of 2009, and close two satellite assembly plants in Newark, Del., and Cambridge, Ontario later in 2009.

I know GM is closing a vehicle plant in Oshawa. The Newark Delaware plant closing may related to the Chrysler plant closure there at the end of December.

Boosting U.S. Exports

The November 24 issue of Fortune magazine has a commentary by Ram Charan (with Jia Lynn Yang) titled "A Goal We Can Believe In". You can find it here.

The two page article discusses some ideas to help boost U.S. exports. This is especially important now in this time of crisis that highlights an area of weakness in our economy. We have consumed too much and produced too little. And now,

We are now experiencing a full-blown crisis of confidence in America's economy. It shows up in consumer spending, which fell more than 3% in the third quarter, the sharpest drop since the dark days of 1980. Corporations are cutting their capital investments drastically for 2009. People see unemployment rising and have good reason to think it could happen to them, if it hasn't already. By September, 760,000 jobs had been lost in the U.S. this year, with more mass layoffs announced every day.

Ram and Jia propose this for the new President: (And from what I have seen of Barack Obama's capability I am VERY hopeful that President Obama will have focused, capable, empowered cabinet, staff, and advising members that will be considering just this sort of thing):

The new President... needs to restore faith in America's economic engine. He must show real leadership to do that. But what does that mean in a situation like this? It may seem counter intuitive at the moment, when there are so many short-term dangers, to get Americans focused on the long run. But that's what the new President needs to do. As Obama himself said during the campaign, "It is going to be part of the President's job to deal with more than one thing at once." Confidence depends not only on urgent, short-term patchwork but also on the pursuit of believable and attainable goals. That's what a true leader does: sets a goal that is clear and then inspires people to focus on achieving it. That's how great organizations are run, and that's what this great country desperately needs at this moment. The next President can get us out of this psychological and economic funk by pointing the way ahead, especially with one overarching objective.

With the concern over "socialism" and the view that "government is the problem"* can we please get some leadership to help the U.S. compete with other economic organizations?

Here is their proposal:

Here's what I propose: Set a goal to get our fair share of exports and jobs in the world. That means putting aside our protectionist impulses and rolling up our sleeves to compete with the rest of the globe. Americans can do this: Our productivity is still among the highest in the world. And according to the Bureau of Labor Statistics, business sector productivity in the U.S. increased 19% from 2000 to 2007. The U.S. is the best in the world at nurturing new businesses and technologies, we have the best institutions of higher learning, and even our labor cost is competitive with Europe and Japan. But somehow all that doesn't translate into an ability to capitalize fully on our strengths.

They lay out some specific ideas. You should take a read. I like the idea of looking at our competitiveness as a matter of national security. "Rename [the Department of Commerce] the Department of Exports and Imports and make this cabinet post as critical as Treasury or Defense."


* This quote from Ronald Reagan's First Inaugural Address, January 20, 1981, is often misquoted to mean that there is no need for government oversight, regulation, or leadership.