After decades of decline, American manufacturing is on the upswing, thanks largely to higher oil prices and the natural gas boom that makes it cheaper to fuel a factory in the U.S. New technologies also are contributing to the resurgence.
Ohio, which lost 149,000 manufacturing jobs during the recession, has created 49,000 manufacturing jobs in the past three years, including 2,300 in advanced manufacturing in the last year, according to the latest figures from the Ohio Development Services Agency.
Michigan lost 146,000 manufacturing jobs between December 2007 and December 2009, according to the National Association of Manufacturers. But in the past three years the state has added more than 68,000 manufacturing jobs, the largest increase of any state.
Nationwide, the recession eliminated 2 million manufacturing jobs. In fact, manufacturing and construction were the hardest-hit sectors, with the worst percentage declines of the post-WWII era. But manufacturers have created half a million U.S. jobs since 2009.
To add momentum, President Barack Obama wants to create a national network of “manufacturing innovation institutes” to help companies, particularly small manufacturers, capitalize on cutting-edge technologies. The 3-D printing lab in Youngstown, Ohio, highlighted by the president in his State of the Union address is the kind of venture he has in mind. The Youngstown project beat out 11 other competitors to secure what will be a total of $45 million in federal money, becoming the country’s first such institute. The winning consortium, which includes manufacturing firms, universities, community colleges and nonprofit organizations, will put up an additional $40 million.
Ultimately the administration would like to create 15 manufacturing institutes, though Congress has to approve the $1 billion needed to pay for that many.
Critics say the federal government is ill-equipped to choose which technologies are likely to take off and create jobs.
Some governors in manufacturing states have expressed similar reservations. “We don’t need D.C.’s help,” said S.C. Gov. Nikki Haley in February. “We can do it right by ourselves,” Greenville.com reported.
And Haley thinks the state is doing plenty right. So does the Wall Street Journal. “Anyone still thinking the U.S. has lost its manufacturing chops hasn’t been to South Carolina,” the Journal said.
“South Carolina has announced (itself) as the new superstar of American manufacturing. We build things. We build planes. We build cars. We build tires. We build more ATVs than anywhere else in the world,” Haley said in her State of the State address.
Haley says one of the reasons her state is so attractive is because of its labor policies. “We’re a state that’s not going to have unions,” she has said.
The products Haley mentioned may be built in union-free South Carolina factories, but many of the companies that own the factories are foreign. It is an increasingly common phenomenon: Honda this year opened a plastic components plant in Indiana. BMW is in the midst of adding 300 workers to its plant in South Carolina, making it the company’s largest factory outside of Germany. Airbus, headquartered in France, announced last year it will build airplanes in Mobile, Ala., joining Mercedes-Benz, Honda, Toyota and Hyundai among overseas manufacturers setting up shop in Alabama in the last few years. The Brazilian aviation manufacturer Embraer opened its first U.S. assembly plant making corporate jets in Florida in 2011.
States are feverishly trying to attract foreign business and routinely sweeten the pot with tax breaks. South Carolina gave BMW $250 million in tax breaks.
Nationwide, some 2 million Americans are employed in manufacturing by the U.S. subsidiaries of global companies, accounting for more than 17 percent of the U.S. manufacturing workforce, according to the Organization for International Investment, a trade group. The manufacturing sector is the top sector for global companies investing in the United States.