Category Archives: Offshoring

Evergreen Solar – Road Kill in the Green Energy Highway

Posted on August 25, 2011 | 1 Comment

In January, I talked about Evergreen Solar, and their shameful outsourcing of jobs to China, even though they received tens of millions in government subsidies and incentives.  Last week, the Metrowest Daily News reported that Evermore has filed for bankruptcy.

Evergreen Solar Inc. has filed for...

The Chapter 11 filing is hardly surprising.  Trying to kick-start a company to prosperity by throwing money at it, despite a lack of competitive manufacturing practices and a clear misunderstanding of the pricing structure and the market that they were in was just plain bad judgement.  Interestingly enough, the Chinese joint venture may remain open, with only the US subsidiary going down the toilet.

The US and Massachusetts governments seems to pick who gets money by whether the state or business owner is red or blue, and how many possible jobs it supports under the company forecast, no matter how unrealistic it seems.  Wouldn’t it make more sense to develop an overall manufacturing and energy strategy with experts in those areas instead of politicians deciding on what incentives and investments will really pay off in the long run?

I think so, what about you?

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Posted in Alternative Fuels, Green Manunfacturing, Lean Manufacturing, Offshoring

Singapore Pushes Green Manufacturing

Posted on August 21, 2011 | Leave a comment

Singapore has joined the push for sustainability in a major way.  In a recent article in Eco-Business.com, the Minster for the Environment and Water Resources explains what the country is doing to incentivise and train manufacturers to be green.

In addition to the training program, which provides a 400% tax credit for participation, Singapore has scaled its Certified Productivity and Innovation program down to support the estimated 7000 Small to Mid sized Enterprises (SME) in the country.  This program, called SME Qiang or “SME Quality Initiative to Assist and Nurture Growth” program, looks to teach lean and siz sigma techniques.

Contrast this to the US approach of providing penalties and dis-incentives for non-conformance.  It is time for the US to understand that  when done properly, green can save money.and lead to increased profitability.  By focusing on incentives and training, manufacturers will learn the benefits of green.  In order to increase US manufacturing competitiveness, manufacturers have to be trained in green and lean techniques.  A US manufacturing strategy that includes green would be a great start.

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Posted in Environment, Green Manunfacturing, Lean Manufacturing, Offshoring

Green Manufacturing Tax Credits Left Unused

Posted on December 21, 2010 | Leave a comment

A recent story on the Fox newswire shows a significant number of companies that qualified for green energy tax credits for producing renewable energy products did not have enough tax liability to make use of the credits.  For many emerging technology companies, they are simply not profitable yet.  Therefore, no tax liability and no help.  This in turn gives them more incentive to seek subsidies and manufacturing capacity in Mexico and overseas. 

Other firms simply cannot fix the green investment to bring their projects to capacity.  It is increasingly difficult for US manufacturers to compete, when Chinese companies are getting credit subsidies from the government.  LDK Solar in China received an $8.9B credit facility from the China Development Bank.  Contrast this with a total of $2.3B approved for a total of 183 projects submitted under the DOE’s 48C program.  Working capital loans for manufacturing companies continues to be a problem that slows economic recovery.  Availability of cash in loans (not handouts) allows US manufacturers to grow and create jobs.  It’s time we looked at putting our money where the mouths we feed are and focus on loan programs for successful manufacturing companies that create US-based jobs.

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Posted in Alternative Fuels, Environment, Green Manunfacturing, Leadership, Offshoring

The Fight for US Manufacturing

Posted on September 17, 2010 | 1 Comment

An new article in the Washington Post highlights the fight for manufacturing jobs being waged by foreign countries will ing to invest in manufacturing companies for the purpose of job creation.  With traditional manufacturing jobs disappearing to offshore, near shore and other outsourcing models, the fight to retain US Manufacturing competitiveness is tougher than ever. 

While China and Mexico are willing to offer cash incentives to attract companies, the best incentives the US seems to be able to offer are secured loans that are available as long as the company has sufficient collateral.  This will rarely be the case in a new and growing company.  It’s time that the government levels the playing field for all manufacturing companies, not just subsidies to money losing entities like the airlines and auto makers.  Where are the incentives for growing companies that can create real US jobs?  It’s time Washington looks at the fight we are in to maintain the country as a cornerstone of manufacturing.  It’s time to mobilize manufacturing as a political force with the ability to create the jobs lost over the last decade.  Let your congressman know how you feel.

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Posted in Environment, Green Manunfacturing, Leadership, Offshoring

DESA Comes Back From China

Posted on December 16, 2008 | Leave a comment

Well, the swing back to American manufacturing continues.  DESA Heating, a Kentucky based manufacturer of heaters has signed a two year contract with the Sheet Metal Workers International Association to move jobs back to Kentucky in order to cut costs.

Across the country, manufacturing companies are starting to look at costs differently.  Low cost regions are not always the best answer.  When you have to ship raw materials halfway across the globe and tie up your money for  six to eight weeks or more, those costs begin to add up.  During the height of the rise In gas prices, it was not unusual to see fuel surcharges that added more than 20% to the cost of shipping.  When this cost is not factored in, it can wreak havoc with your bottom line.

In  recent posts, I have been talking repeatedly about Toyota, and what I deem the new American manufacturing model.  This model balances low cost regions with other alternatives.  In the new global economy, there will always be a need for low cost labor regions for manually intensive production, but one size does not necessarily fit all.  Manufacturers need to look at all aspects of their supply chain  and devise the supply chain scenario that is most cost effective for them.  China is great for some products, Mexico for others and the United States for yet more alternatives.  

Look at your total cost of acquisition, including logistics, cost of capital and warehouse space to hold larger orders.    You may find that in the words of Dorothy, “There’s no place like home.”  At least for some of your products.  It is a lesson my customers understand, and yours should too. 

Brad

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Posted in Green Manunfacturing, Leadership, Offshoring