March 8, 2013

Factory work returns to altered U.S. landscape

The onshoring trend brings some manufacturing back, but machines replace workers in many plants.

By ALANA SEMUELS Los Angeles Times

GRIFFIN, Ga. - Giant machines are tearing down the old bleachery, another reminder to Chuck Smith that this old mill town doesn't make much anymore.

factory workers
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Karen Pias sews the finishing edge on a towel at 1888 Mills in Griffin, Ga. Walmart will sell 1888’s Made Here towels, as part of the onshoring trend moving some manufacturing back to the U.S., but technology advancements mean fewer workers are needed for production.

McClatchy Newspapers

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Just about everyone he knows was employed at one point making, folding or bleaching towels, until the mills started to close down in the 1990s and 2000s and family members lost their jobs. Like most of this town's residents, Smith can name all the old mills in a slow Georgia drawl.

"There was the Thomaston mill that was here, and the Dundee mill, and the Highland mill, but they tore that one down just like they did this one," he said, watching a bulldozer push piles of metal around what used to be a factory for bleaching towels. "These mills used to employ all the people in this city."

Recently, the town had a reason to be optimistic. Walmart announced that it will spend an additional $50 billion buying U.S.-made goods over the next 10 years. It cited 1888 Mills, which runs the last mill left in Griffin, as one company that would benefit from this pledge.

Walmart will sell 1888's Made Here towels, manufactured in Georgia, in 600 stores this spring and in another 600 later this year, which enables the company to add manufacturing jobs.

The retailer's effort will help businesses and "give them the nudge they need" to bring manufacturing back to the United States, Walmart U.S. Chief Executive Bill Simon said in announcing the initiative.

It's part of a much-heralded trend of "onshoring," in which companies including Apple, Lenovo, Otis Elevator and General Electric have said that growing logistics and labor costs overseas have motivated them to move some manufacturing back to the United States.

But if Griffin is any example, Walmart's much-lauded pledge isn't likely to do much to turn around a decades-long manufacturing decline here or in the rest of the country.

That's because manufacturing has changed dramatically since it left American shores, replacing workers with machines and reducing the number of jobs that people could get right out of high school.

And as much as companies pledge they're moving manufacturing back to the United States, they're mostly moving just small parts of their larger global operations, to be closer to U.S. markets.

"People talk about manufacturing being a big source of job growth. It's going to grow, but it's not going to be a big source of total employment," said Tom Runiewicz, principal for the industry practices group at IHS Global Insight. "It's just a drop in the bucket."

1888 Mills, for instance, will add just 35 jobs because of the initiative -- better than nothing, but a pittance in a town of 23,000. The company will still make 90 percent of its goods in overseas factories.

"We don't envision the entire industry going back to the United States -- low-cost Asian manufacturing will still be the base for volume," said Jonathan Simon, the CEO of 1888 Mills. "But for just-in-time service, U.S. manufacturing does make sense."

Some 400 miles away, in North Carolina, computer giant Lenovo is doing the same thing. In October the company announced plans to open a manufacturing plant in North Carolina to make specialty personal computers for the U.S. market. The initiative will create 115 jobs, 15 of which are engineering positions. But the company also is expanding research centers in Japan and China.

"It's a relatively small-volume facility. It's not going to produce millions of units," said Mark Stanton, Lenovo's director of supply chain communications.

The United States lost 6.3 million manufacturing jobs between January 1990 and the industry's low point in January 2010, a 36 percent decline, according to the Bureau of Labor Statistics. Since that low point, the industry has added nearly 500,000 jobs, an impressive number, but one that barely begins to offset the millions of losses.

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