The Devolution of the United States Manufacturing Base

[Guest Goat Boy]

Converse All Stars have gone way down since they were purchased by Nike and moved to China.

[Guest JR Dieckmann]

American manufacturing must be made affordable with non-union shops where workers are paid a fair wage, but not the outrageous wages, benefits, and pensions that unions demand. The finished product must be affordable to the average American while providing a profit margin for the company. This can only be accomplished by reducing the labor costs.

[Guest Marylou G.]

The United States is rapidly becoming the very first "post-industrial" nation on the globe. All great economic empires eventually become fat and lazy and squander the great wealth that their forefathers have left them, but the pace at which America is accomplishing this is absolutely amazing. It was America that was at the forefront of the industrial revolution. It was America that showed the world how to mass produce everything from automobiles to televisions to airplanes. It was the great American manufacturing base that crushed Germany and Japan in World War II.

 

But now we are witnessing the deindustrialization of America. Tens of thousands of factories have left the United States in the past decade alone. Millions upon millions of manufacturing jobs have been lost in the same time period. The United States has become a nation that consumes everything in sight and yet produces increasingly little. Do you know what our biggest export is today? Waste paper. Yes, trash is the number one thing that we ship out to the rest of the world as we voraciously blow our money on whatever the rest of the world wants to sell to us. The United States has become bloated and spoiled and our economy is now just a shadow of what it once was. Once upon a time America could literally out produce the rest of the world combined. Today that is no longer true, but Americans sure do consume more than anyone else in the world. If the deindustrialization of America continues at this current pace, what possible kind of a future are we going to be leaving to our children?

 

Any great nation throughout history has been great at making things. So if the United States continues to allow its manufacturing base to erode at a staggering pace how in the world can the U.S. continue to consider itself to be a great nation? We have created the biggest debt bubble in the history of the world in an effort to maintain a very high standard of living, but the current state of affairs is not anywhere close to sustainable. Every single month America goes into more debt and every single month America gets poorer.

[Guest Question]

So what happens when the debt bubble pops?

[Guest human]

Afghanistan............................

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So what happens when the debt bubble pops?

[Guest Ron]

So much for a our Green Energy campaign. Maybe our government should just public ally promote made in China.

 

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Evergreen Solar, Inc. (NasdaqCM: ESLRD), a manufacturer of String Ribbon® solar power products with its proprietary, low-cost silicon wafer technology, today announced its intent to shut down operations at its Devens manufacturing facility to better position the Company to pursue its industry standard size wafer strategy and preserve the Company’s liquidity. The Company also provided updates on its industry standard wafer development activities and selected preliminary results for the quarter ended December 31, 2010.

 

The Company intends to completely shut down the Devens manufacturing facility by the end of the first quarter of 2011. Michael El-Hillow, President and Chief Executive Officer, explained the considerations behind the Company’s decision. “While overall demand for solar may increase, we expect that significant capacity expansions in low cost manufacturing regions combined with potential adverse changes in government subsidies in several markets in Europe will likely result in continuing pressure on selling prices throughout 2011. Solar manufacturers in China have received considerable government and financial support and, together with their low manufacturing costs, have become price leaders within the industry. While the United States and other western industrial economies are beneficiaries of rapidly declining installation costs of solar energy, we expect the United States will continue to be at a disadvantage from a manufacturing standpoint.”

 

Mr. El-Hillow added, “Although production costs at our Devens facility have steadily decreased, and are now below originally planned levels and lower than most western manufacturers, they are still much higher than those of our low cost competitors in China. We have consistently stated during quarterly conference calls throughout 2010 that we would continue to manufacture in Devens as long as it was economically feasible. During the month of December, we experienced a 10% decrease in average selling prices from the beginning of the fourth quarter. As industry selling prices continue their rapid declines into 2011, panel manufacturing in Devens, either fully or partially, is no longer economically feasible, consequently requiring a complete shutdown of the facility. We believe this is the right long-term decision for the Company, and better positions the Company to complete its previously announced recapitalization plan and pursue the Company’s strategy of becoming the low cost producer of industry standard size wafers.”

 

Evergreen Solar will continue to operate its high temperature filament plant in Midland, Michigan and its wafer facility in Wuhan, China. With approximately 75 megawatts of installed wafer capacity in Wuhan, the Company will continue to supply its outsourcing partner with wafers for conversion into Evergreen Solar branded solar panels.

 

Expected Financial Impact of Devens Closure

 

As a result of the closure of the Devens manufacturing facility, the Company expects to incur non-cash charges of approximately $340 million associated with the write-off of existing building, facilities and equipment. Furthermore, approximately $150 million of intangible and cash-related prepayments associated with various silicon contracts are under review to determine whether additional non-cash charges will be required. These charges are expected to impact both the fourth quarter of 2010 and the first quarter of 2011, and the amount of the charges will be determined during the Company’s preparation of its annual financial statements for the year ended December 31, 2010.

 

In addition to the non-cash charges mentioned above, the Company expects to incur approximately $15 million of costs associated with employee severance and out placement services, facility decommissioning and other costs required to close the facility. These cash charges are expected to be incurred over a twelve month period. In total, the Company expects that approximately 800 employees will be affected by this action.

 

In addition to eliminating the risks associated with continued manufacturing in a high cost market in a period of rapidly declining prices, the Company expects that a complete facility shutdown will help preserve cash and facilitate the Company’s pursuit of the wafer strategy discussed below.

 

Wafer Technology Update

 

Development activities associated with the Company’s industry standard size String Ribbon™ wafer have progressed substantially in the second half of 2010, resulting in the production of more than 60,000 wafers manufactured using modified existing quad ribbon furnaces. These wafers are performing comparably to those produced using the Company’s existing furnaces in Devens and China. Ten prototype furnaces will be installed and the Company will begin producing industry standard size wafers in much greater quantities this quarter. Pilot production of approximately 25 megawatts is expected to begin by the fourth quarter of 2011.

 

Mr. El-Hillow commented, “We have expanded our discussions with established solar companies in low cost regions and have provided samples of our industry standard wafers for their evaluation. Preliminary results have been positive and we have also begun in-depth negotiations to obtain significant financial support for our wafer manufacturing expansion on terms similar to what we received for our current wafer facility in Wuhan. Initial interest is high as we have shared the early results of development with potential partners. Our future expansion will be based on the industry standard size wafer, which is central to our strategy of manufacturing the lowest cost wafer, in an industry standard form factor, and providing a wafer that would enable the lowest cost solar panel utilizing multi-crystalline silicon wafers.”

 

Preliminary December 2010 Quarter Results

 

Shipments for the fourth quarter of 2010 increased to approximately 47 megawatts, a new Company record, at an average selling price of approximately $1.90 per watt. Mr. El-Hillow noted, “Evergreen shipped a record volume during the quarter even in the face of adverse weather conditions in its primary markets of Europe and North America.”

 

All data for the fourth quarter of 2010 are preliminary and subject to revision based upon Evergreen Solar’s review through ordinary quarter and fiscal year-end closing procedures. The preliminary financial data included in this press release has been prepared by, and is the responsibility of, Evergreen Solar, Inc.'s management. PricewaterhouseCoopers LLP has not audited, reviewed, compiled or performed any procedures with respect to the accompanying preliminary financial data. Accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto.

 

Where You Can Find Additional Information

 

Further details regarding the terms and conditions of the recapitalization plan, including the exchange of convertible debt, can be found in the registration statement that has been filed with the SEC, and in a tender offer statement on Schedule TO that has been filed with the SEC. Any investor holding the company’s existing notes should read the registration statement, the tender offer statement and other documents the company has filed or will file with the SEC for more complete information about the issuer and the recapitalization plan.

 

The registration statement, the tender offer statement and other related documents can be obtained for free from the SEC’s Electronic Document Gathering and Retrieval System (EDGAR), which may be accessed at www.sec.gov. Documents are also available for free upon written or oral request made to the office of the Corporate Secretary, Evergreen Solar, Inc., 138 Bartlett Street, Marlboro, Massachusetts 01752 (Telephone (508) 357-2221) and from the Company’s website at www.evergreensolar.com.

[Guest GoldenTiger]

American manufacturers create wealth for their customers, owners, and employees.

[Guest Luke]

Intelligence Community Fears U.S. Manufacturing Decline

 

The Director of National Intelligence has initiated preparation of a National Intelligence Estimate to assess the security implications of waning manufacturing activity in America. National Intelligence Estimates are the most authoritative analysis prepared by the intelligence community, definitive interagency products typically reserved for the most serious threats. So the fact that the nation's top intelligence official thinks a National Intelligence Estimate is needed for manufacturing isn't a good sign. It suggests that America's industrial decline is approaching the status of a crisis.

 

http://blogs.forbes....turing-decline/

[Guest Ron]

The message is starting to take form...

 

American Manufacturing Slowly Rotting Away: How Industries Die

 

Real industries are not abstract aggregates; they are complex ecosystems of suppliers and supply chains, skills and customer relationships, long-term investments and returns. Deindustrialization is thus a more complex process than is usually realized. It is not just layoffs and crumbling buildings; industries sicken and die in complicated ways.

 

To take just one example, when American producers are pushed out of foreign markets by protectionism abroad and out of domestic markets by the export subsidies of foreign nations, it is not just immediate profits that are lost. Declining sales undermine their scale economies, driving up their costs and making them even less competitive. Less profit means less money to plow into future technology development. Less access to sophisticated foreign markets means less exposure to sophisticated foreign technology and diverse foreign buyer needs.

 

When an industry shrinks, it ceases to support the complex web of skills, many of them outside the industry itself, upon which it depends. These skills often take years to master, so they only survive if the industry (and its supporting industries, several tiers deep into the supply chain) remain in continuous operation. The same goes for specialized suppliers.

 

http://www.huffingtonpost.com/ian-fletcher/american-manufacturing-sl_b_825733.html

[Guest Justin]

It is sad when this topic is the biggest elephant in the room that Washington Post or Washington Times barely mentions. This makes me think that they have turned into political tabloids with no real meat in their stories.

[Guest Dan the Trucker]

This is a bunch of horse crap. This writer obviously sits on his butt has not seen all the industrial parks now closed throughout America. The only thing that has been increasing these past couple of years is industry. But, that is at a very small pace. In addition, all the service industry the writer is boasting about is being outsourced a faster pace than ever before.

 

This type of misinformation is going to send our country down the tubes. We need to create tangible goods of value.

 

Yet since 1987, real American manufacturing output has increased by more than 80 percent. According to the Bureau of Economic Analysis, the market value of manufactured goods, over and above the costs that went into their production, reached a record high in 2007, breaking the record set in 2006, which broke the record set in 2005, which broke the record set in 2004. The recession has affected all industries but the trend is clear—American manufacturing is thriving.

 

Manufacturing as a share of gross domestic product has been on the decline since the early 1950s when it represented about a quarter of the economy. Today manufacturing accounts for just over 10 percent of American GDP while services blossom. Manufacturing is not in decline; other sectors of the economy have simply been growing at a much faster pace.

 

http://atlanticsentinel.com/2011/03/is-american-manufacturing-doomed/

[Doug White]

Years ago the simplest of house-hold products had no planned obsolescence. People cleaned things when they got dirty, instead of trashing it and buying a new one, of whatever, without realizing that the new replacement item is actually a “consumable” with a life-span, rather than a "durable-good" designed to last. Cheap stuff never lasts as long as you needed it to, and once broken, can’t be fixed.

 

The term “durable goods” suggests “worth fixing”. Quality products, not only last as long as you need them to last, they often are intended to be periodically maintained. This in turn creates local service industry jobs, and gives consumers the opportunity to conserve their family’s wealth by not having to replace everything.

 

Some things do wear-out and need to get replaced, but somehow we become bored with the “old”, and the Jones family next door has the newest one, so we feel compelled socially to own only new stuff. That might be ok, if the money looped back through our economy instead of being funneled strait out.

 

Buy only products made in The U.S.A. and pray that it is not too late.

[Luke_Wilbur]

This is a good sign

 

Advance Report on Durable Goods Manufacturers’

 

http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf

 

look down to:

 

Table 1

 

All other durable goods:

 

Shipments………………………….. 33,942 (Jan 2011) 28,437 (Jan 2010) +16%

New Orders………………………… 33,966 (Jan 2011) 28,778 (Jan 2010) +16%

[Guest LAW]

In 1979 U.S. Manufacturing of Durable Goods was 13.1 percent of GDP. In 2009U.S. Manufacturing of Durable Goods was 6.1 percent of GDP.

 

http://www.gpo.gov/fdsys/pkg/ERP-2011/pdf/ERP-2011.pdf

 

While the United States is still the largest combined exporter of goods and services, America has slid from being the world’s leading exporter of goods at the beginning of the century to the

third position, behind China and Germany.

 

Nevertheless, the United States continues to export over $1 trillion of goods annually, more than three quarters of which are manufactured, and these exports support more than one-fourth of the manufacturing jobs in the United States.

 

Germany, the second place goods exporter, maintains a substantial share of manufacturing in

its economy and exports many of these products (including to emerging markets).

 

Manufacturing is also a larger share of the economy in Japan than it is in the United States. Like the United States, these countries have a floating currency and highly paid, high-skilled workers.

 

The growth in U.S. exports is coming from new demand, much of it from emerging economies.

Some emerging markets are quickly urbanizing and shifting away from subsistence agriculture, thus increasing foreign demand for U.S.-grown farm exports such as soybeans, corn, and wheat.

 

The expansion of home-grown businesses in emerging economies creates new demand for R&D-intensive, highly complex products, such as aircraft, turbojets, oil and gas field machinery, electronic integrated circuits, and medical instruments. these products frequently sit at the top of the U.S. export list, and U.S. exports of these products will likely sit at the top of the quality ladder.

 

The share of total U.S. exports sent to mature trading partners has been declining for decades.

the share of total U.S. goods exports consumed by the 27 countries of the European Union (eU) dropped from nearly one-third (31 percent) in 1948 to one-fifth (21 percent) in 2009, even though these economies have grown increasingly wealthy.

 

The share of total U.S. goods exports to historically important high-income economies like Japan and Canada has also shown signs of decline.

 

U.S. trade with China exemplifies this story. As late as 2000, the year before China joined the World Trade Organization (WTO) and substantially opened its market to imports, only 2 percent of all U.S. goods exports went to China. By 2009, after a decade of rapid growth, China had become the fourth-largest destination market for U.S. goods exports after the European Union, Canada, and Mexico.

 

U.S. import patterns are also experiencing a reorientation. At the end of the 1940s, Japan and the European Union countries were still devastated by World War II and far from being the mature economies they are now. After these economies rebuilt, however, they quickly became large sources for U.S. imports. the European economies peaked at supplying nearly 30 percent of U.S. goods imports in the late 1960s; Japan peaked at roughly 20 percent of U.S. imports in the mid-1980s. Imports from Canada peaked at nearly 30 percent around 1970. U.S. imports from Canada, the European Union, and Japan continue to grow, but the share of U.S. imports from these countries has declined as imports from fast-growing export markets, including China and Mexico, have increased.

 

Goods exports have been rising faster than total exports, increasing 22 percent through the first three quarters of 2010. But that total masks significant variation in exports to different regions. U.S. goods exports to the Pacific Rim (east Asia and Oceania) increased by 32 percent, to Latin America by 29 percent, to Canada and Mexico by 26 percent, but to Europe

by only 9 percent. this slow export growth to Europe means that even though it is a key export partner, the European market contributed very little to export growth in 2010. Some of this variation is attributable to the longer term, pre-crisis trends in which U.S. exports to many emerging economies were already increasing.

[Guest Eduardo]

This is a bunch of horse crap. This writer obviously sits on his butt has not seen all the industrial parks now closed throughout America. The only thing that has been increasing these past couple of years is industry. But, that is at a very small pace. In addition, all the service industry the writer is boasting about is being outsourced a faster pace than ever before.

 

This type of misinformation is going to send our country down the tubes. We need to create tangible goods of value.

 

 

You are right. I suggest the author make a list of things people buy, and then visit Walmart, BestBuy, Sears and look at the labels to see what they sell really made in the USA. Empirically, there is a reason why the trade balance is negative, and the reason is NOT high worker productivity.

[Guest Kay]

We as buyers have a lot of power, with every purchase, its like casting a vote.

[Guest EEinNJ]

I've been an industrial automation engineer for 25 years. Manufacturing, in the Northeast, at least, has been drying up for years. First operations went south, now more often they go outside the US. Our biggest customer has us busily building equipment to go to Mexico where they can pay a fraction of the wages. I don't think they worry as much about FDA inspection in Juarez, either!

 

This administration seems remarkably tone-deaf to the globalization of industry. GE's Immelt, in his speech after Obama appointed him head of his business council, admitted 60% of GE's revenue came from overseas. Then Obama goes to meet with Silicon Valley chiefs like Steve Jobs- when Apple has only 30,000 US employees and 1 million Chinese ... subcontractors actually building their overpriced junk. It just seems ironic and clueless.

[Guest davenhal]

I went to the site and found some interesting data under Gross-Domestic-Product-by-Industry Accounts. I went through the historic data and did some simple math and figured out what percentage Manufacturing was of the nations GDP. I looked at 2007 (before the recession) and went back in 10 year increments. Take a look.

 

1947- 25% of GDP

1957- 27%

1967- 25%

1977- 21%

1987- 17%

1997- 15%

2007- 12%

 

2009- 11%

 

Anybody notice a trend in these numbers?

 

Numbers in Billions of dollars

 

1947- GDP- 244.1 Manufacturing- 62.4

1957- GDP- 461.1 Manufacturing- 124.4

1967- GDP- 832.4 Manufacturing- 209.5

1977- GDP- 2030.1 Manufacturing- 439.1

1987- GDP- 4736.4 Manufacturing- 823.1

1997- GDP- 8332.4 Manufacturing- 1277.3

2007- GDP- 14061.8 Manufacturing- 1698.9

 

I did too much work! Here's the link that breaks it down by percentages-

 

http://www.bea.gov/industry/gpotables/gpo_action.cfm?anon=853618&table_id=26752&format_type=0

[Guest Steinberg]

It is apparent that Wall Street will do anything they can to make Americans believe that everything is okay and we are winning at everything.

 

[Luke_Wilbur]

I really hope people are paying attention to our erosion of status and power.

 

http://www.cnbc.com/id/42065544/

 

China has become the world’s top manufacturing country by output, returning the country to the position it occupied in the early 19th century and ending the U.S.’s 110-year run as the largest goods producer.

 

The change is revealed in a study released on Monday by IHS Global Insight, a U.S.-based economics consultancy, which estimates that China last year accounted for 19.8 per cent of world manufacturing output, fractionally ahead of the US with 19.4 per cent.

[RichardSaunders]

Reinstate tariffs instead raising taxes.

 

Tariffs Can Work!

 

When we talk about tariffs and protectionism, the standard argument offered by many people is that the U.S. cannot institute tariffs because foreign countries will retaliate and this would cause world trade to decline. This, in turn, would adversely affect economy of the US. There is also reference to the Great Depression stating that congress instituted tariffs and caused extension of the depression.

Two things are different now:

- After WW1, most European countries owed vast amounts of money to the United States.

- Europe was receiving significant funds transfers by the sales of goods in the United States.

When the U.S. instituted tariffs sales of European products declined and Europe did not have the funds to make payments on their U.S. loans. This caused cash flow problems for the U.S. banks and the U.S. government.

The current situation in the U.S. is different than it was during the Great Depression. We are in debt to foreign countries and we are buying massive amounts of oil from them. This is causing a severe negative trade deficit.

Until our trade deficit narrows we need to protect ourselves from the intense foreign competition by instituting tariffs that protect specific domestic manufacturing jobs. We also need to stop borrowing money from foreign countries and stop buying energy (oil) from overseas.

[Guest Joe Manchin]

America truly has the brightest minds and the most dedicated workforce in the world, and yet our manufacturing industry is being crippled because China refuses to play by the rules. America can’t idly stand by as manufacturers close up shop and lay off workers because of China. The legislation I have sponsored simply levels the playing field by ensuring that America’s – and West Virginia’s – manufacturers can better compete in the global economy.

 

The bill clarifies that the United States can charge import taxes on goods that come from countries known to illegally undervalue their currency. This is happening in one place in particular: The Chinese government has a demonstrated track record of manipulating their country’s currency, keeping the value of the yuan artificially low in order to reduce the price of their exports. This practice gives China an unfair trade advantage over foreign competitors.

 

As a result, America’s goods have become comparatively more expensive, leading to job losses, especially in the manufacturing sector. That has an enormous effect on West Virginia, where a total of 50,700 jobs were related to the manufacturing sector in 2009, according to the National Association of Manufacturers. That’s equal to 6.8 percent of our state’s nonfarm employment.

 

In 2008, manufacturing constituted 10.7 percent of West Virginia’s economy. And, the average compensation for manufacturing positions in 2009 was $63,143, compared to $46,921 for the rest of the workforce. That’s a significant difference.

[Guest Made in America Ornament]

Most Toledo factories are gone—Auto-Lite, Willys-Overland, Champion Spark Plug, the glass plants of Owens-Illinois and Libbey-Owens-Ford. Toledo Scales aren’t made in Toledo anymore.

 

http://www.newsweek.com/2011/03/13/the-city-toledo.html

[Doug White]

It used to be so easy. All you had to do was to just look at the label.

 

[Guest Make it in America]

National Manufacturing Summit

 

 

We can make it in America. - May 19

 

“The National Manufacturing Summit is being held to highlight the importance of the manufacturing sector to our overall economy. It provides the best jobs with the best benefits, to the most Americans.” states Mayor Pennington.

 

The summit will feature leaders from private sector, manufacturing, education, and the government. Speakers will address how these sectors can positively affect manufacturing. (Click here to learn more about our speakers) Rep. Graves will discuss proposed legislation that supports manufacturing. “It’s time to start talking about U.S. manufacturing seriously; to begin the dialogue of where we are and how we can create growth again,” Rep. Graves says. “Let’s use the entrepreneurial, free-market solutions that made us great.”

 

This event will act as an educational event designed to inspire and motivate attendees. US manufacturing is under attack by a growing government, high taxes, increasing regulations, rising energy costs, and a new global climate that is making it easier for companies to do business overseas. Event organizers believe we must educate ourselves about the current state of US manufacturing, understand the challenges that manufacturers are facing, and discuss how America can retain her manufacturing strength by learning to strengthen and grow business at home.

 

Who Should Attend?

 

The National Manufacturing Summit is an event open to senior-level manufacturing executives. If you are a CEO, COO, CTO, CIO, CFO, President, Owner, Division President, Division Director, Managing Director or Partner you are encouraged to attend. . If you cannot attend in person, you may send a designated representative from your company in your place.

 

Space is limited to the first 1000 people who register.

You Must Register!

 

Admittance to the National Manufacturing Summit is by ticket only, you will receive it upon pre-registering for the event. Unfortunately, no registration will take place the day of the event. The event is FREE! To learn more about accommodations click here. A Special hotel rate had been setup for the summit.

Location:

 

The 2011 National Manufacturing Summit will take place Thursday, May 19, 2011 @ 1:00pm – 6:00pm at the Northwest Georgia Trade & Convention Center in Dalton, Georgia.

Directions:

 

The Northwest Georgia Trade and Convention Center is easily accessible from either Chattanooga Metropolitan Airport (CHA) or Hartsfield-Jackson Atlanta International Airport (ATL). The facility is 1/4 mile from Interstate 75 at exit 333 in historic Dalton, GA.

 

After exiting I-75 at exit 333, turn West onto Walnut Avenue. Continue 1/4 mile up the hill and turn left into the convention center parking lot.