INTERVIEW (Buffalo News): A U.S. manufacturing resurgence?
In the Buffalo News this past weekend, business reporter Matthew Glynn published an interview with Alliance for American Manufacturing (AAM) President Scott Paul. Glynn was curious what Paul thought of recent news stories on a potential rebound for industrial America.
Q: You say you are optimistic about U.S. manufacturing. For what reasons?
A: There are a number of things, in no particular order. One is the strength of the auto industry, which is in better shape than we’ve seen in a long time. Even if there are not as many assembly plants in Western New York as there are in the Detroit area, there’s a huge auto supply chain here, and that stands to benefit from a strong Detroit Three. … I think the other thing is energy costs. For energy-intensive manufacturing – and most manufacturing is energy intensive – energy used to be quite a burden. Now, with the onset of abundant domestic natural gas, that dynamic has changed considerably. Now our producers are at a cost advantage compared to most producers around the world, whether you’re working in Asia, South America or Europe. Since energy can be anywhere – particularly in energy-intensive industries – up to 30 percent of the cost of production, that makes a huge difference, it makes them much more competitive.
Number three is this broader idea of “reshoring.” There’s certainly an element of (public relations) to it. People like the Made in America store [in Elma], and companies now go out of their way to advertise their products are made in America because they understand that’s what consumers want, or is at least one of the factors they are willing to consider. The other [influence], from kind of a best-practices management perspective, is that offshoring got oversold. I think a lot of companies looked at it very narrowly through the prism of cheap labor, and they didn’t realize that there are other costs associated with that. … Just in terms of employment, for a couple of decades, the help-wanted ads in manufacturing were pretty slim. The work force, as a result, is aging in manufacturing. … So there will be in manufacturing, for the first time in a generation, a fair number of new job openings.
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